Retirement Gap Booklet

By David Holmes

August 2015A.D.

Note: Basically, I put together this booklet when I read the enclosed Editors Note in
Investment News that most retirement plans will not work.
The editor says,
entirely new financial planning models will have to be created.
I say, Not so. Some are already doing differently and successfully. But, people will have to
pay attention to who they are listening to with attention to identified goals and needs.
The included pages speak to the Gap Issue and personal responsibility with specifics.

Contents
2. Contents

Front Page

3. Editors Note/ Facing Age-Facts

4. Shopping Basket

5. New Life Policy Review

6. Explanations & Perceptions

7. Intro to Psalm Twenty Three Program

8. Tale of Two Sisters

9. First Class Investor Advice, to avoid

10. Most Advisors Say 5%

11. Psalm Twenty Three Solution

12. Fundamental Research Missing

13. No Substitute for Gains

14. Assessing Long-Term Gains vs. Fear

16. Retirement, Stuff and Money Missing

Facing Age-Facts

Shopping

by David Holmes Registered Investment Advisor June 8, 2015A.D. Money

The included Editors Note should be read by all over 40 and especially those near 60. His conclusion, most
retirement plans will not work, especially as life expectancies increase to 100 and beyond thats
those living today! He mentions the need for a good set of knees as well as
a full set of teeth. Still listening?
Todays 4 usual Savings/Investing assumptions are well known though
not so clearly stated:
1. Average 5% annual gains,

2. Save 15 to 20% annually for 40 years,

3. Realize Social Security is very inadequate,

4. Can withdraw no more than 4 to 5% annually.

The arithmetic is straightforward. Estimating a $50,000 annual income

and needing $50,000 in retirement, withdrawing 5% requires a beginning
estate of $1,000,000. Withdrawing more than the 5% assures that the fund
will go bust and soon!
The facts are stubborn: If the estate is to be built in 20 years earning 5%,
annual savings must be $28,802, a little over of income! If saved for 40
years, then only $7,884 yearly for 40 years, about 16% of annual income. Facts
are facts.
Some relevant old news: according to a GAO Report and the Federal
Reserves 2013 Survey of Consumer FinancesMost Older Americans , CNBC.com, by
Tom Anderson, June 2015

one third to two thirds of workers (now age 55

and older) are at risk of falling short of their retirement savings

targets .
In English, they are going to be running out of private funds. Arithmetic
is arithmetic. Arithmetic is not a cure but it gives us light.

The 55 and older are up against arithmetic and time. They do not
have 40 years to save over half of their income before taxes and FICA.
Usual and accepted 5% gains obviously and clearly are not going to work.
Major issue: largely unaddressed by these professionals is the usual and
accepted 5% Average Annual Gains.
Consider that saving the maximum $6,500 allowed for IRAs in 10 years
with 20% gains grows to $202,477, but with 5% gains, grows to only
$85,844.
In 20 years, the $6,500 with 20% gains is expected to grow to
$1,456,166. With 5% gains, it will only grow to $225,675.
Present savings of $100,000 with 20% gains are expected to grow in 10
years to $619,173 vs. $162,889 with 5% gains.
Further, $500,000 with 20% Average Annual Gains would allow
$85,000 indefinite annual withdrawals (17% of funds) but with 5%, only a $25,000 annual withdrawal.
Finally, the editor mentions entirely new financial planning models will have to be created. However, the
Berkshire fund has averaged annual gains of over 20% for several decades! Others do well from time to
time. So, how about looking at management that cant promise but learns, adapts, acts and expects Average
Annual Gains of 20% or more? The Psalm 23 Program is doing this.
It is choice, not fate

Life Insurance Shopping Basket

By David Holmes Licensed Life Insurance Agent in 49 states

August 7, 2015A.D.

800327-8963

The below summary chart (I call it the Holmes Life Insurance Shopping Basket) shows the different
annual premiums for $300,000 Face Amount of life insurance (Male, SuperPref, NT) and different
approaches with any Cash Value Savings in 20 years plus separate savings using the market and the Psalm
23 Program which I manage with the 20% Average Annual Gains goal. It is relevant to remember that the
notable Warren Buffetts fund has averaged 20% or more for years, even decades. With the Basket, family
alternatives can be better weighed and viewed.
Pure
U/L to 121 TA 20 yr TrendStr
TA
Whole Life
20 yr term
LB
Index U/L
Age 40

$241

$523

$363

???

$3,600

Pure Savings
Using Mkt
$2,400 annual

Savings
in 20 yrs

None

None

None

$52,335

$537,661

The Pure Term is the low-price life insurance only product. It provides the most insurance for the money.
The U/L to 121 shows what guaranteed pure life insurance costs to age 121.
The TA LB 20 year TrendSetter LB is truly different and valuable with its included Living Benefits relating to Chronic
Illnesses, Critical Illness and Terminal illness Accelerated Death Benefits. To the best of my knowledge, its the only policy on
the market that has the 3 benefits included as integral to the policy. With, what I consider as acceptable additional cost above the
pure term product, the TrendSetter provides modified provisions for Long Term HealthCare from Chronic illnesses, Permanent
Unemployment from critical illnesses and a lump sum early payment for Terminal illness. As I understand the provisions, a
$300,000 policy would provide up to $270,000 of accelerate benefits in 4 annual payments of about $67,500 each ($5,625
monthly). In event of Terminal Illness, the full face amount is available.
The TA Index U/L is a Combination product of Savings & Life Insurance and interesting as discussed in the WSJ article. Current
prices and savings illustrations are not available.
The Whole Life is a typical combination policy with the specified life insurance and indicated Cash Value.
The Pure Savings is just that: only savings using the market for the longer term with the goal of 20% Average Annual Gains
to build a productive, profitable family estate.

The cost or prices of pure life insurance and pure savings are shown separately so that the included costs of
additional products/provisions may be more clearly seen and identified.
Many salespersons will assure you that you get what you pay for I say, You get what you buy. Always check
under the hood. If $300,000 of 20 year level pure life insurance is bought; its one price. If $300,000 of a
combination policy is bought, its lots more. If someone is confused whether to buy a pickup or an 18 wheeler, beware.
Thus, when a $100,000 Whole Life policy for $4,000 annually is bought for the family because of its down-the-road
cash value rather than the necessary $300,000 estate needed for the family, confusion reigns and the family is in
jeopardy!

Life insurance is to make affordable but temporary life-provisions for the family in the event of a dads early
departure. I say, look and plan 20 years down the road or age 70.
Savings: long-term purpose is to build an owned, enduring, productive family estate for moral provisions
especially in the later years.

Practical Application: whether $300,000 of Life Insurance for a widow or $300,000 of productive
savings (earning 20% or more annually), $300,000
monthly) indefinitely and still slowly grow.

is expected to provide $51,000 of annual income ($4,250

Because I realize that everyone doesnt prefer a Ford, I am happy to show different choices. Further, I am
unable to say which policy is the right choice for everyone. However, when dad is buying to provide a
replacement income sum for the family, if adequate life insurance is not obtained, there is a moral issue.
Forensically that sum is obtained by dividing his current income by the Average Annual Gains he expects to
receive on his savings and the widows sum. For example: if 6% then $70,000/.06 = $1,666,667; if 20%,
then $70,000/.20 = $350,000

A New Life Insurance Policy Reviewed

By David Holmes

Licensed Life Insurance Agent in 49 states

August 8, 2015A.D,

LifeIns

800327-8963

The TransAmerica TrendSetter LB is truly different and valuable. With its included Living
Benefits relating to Chronic Illnesses, Critical Illness and Terminal illness Accelerated Death
Benefits, it offers substantial benefits to the insured and family without the death of the insured with
the specific illnesses qualifications stated in the policies! Policy must be in force two years before
Chronic Illness benefits are available and 30 days for the Critical Illness unless caused by accidental
injury.
To the best of my knowledge, its the only policy on the market that has the 3 benefits included as
integral to the policy. With, what I consider as acceptable additional cost above a pure term
product, the TrendSetter LB provides modified provisions for
(a)Temp Long Term HealthCare for Chronic illnesses,
(b)Temp Disability for Permanent Unemployment from Critical illnesses and
(c)Lump sum early payment for Terminal illness.
As I understand these three Living Benefit provisions, a $300,000 policy would provide up to
$270,000 of accelerate benefits in 4 annual payments of about $67,500 each ($5,625 monthly). In
event of Terminal Illness, the full face amount is available.
Generally, new policies are available from ages 18 to 58 in 4 bands:
Band 1: $25,000 to $99,999
Band 2: $100,000 to $249,000
Band 3: $250,000 to $499,000
Band 4: $500,000 to $999,999
With level Premium options: 10, 15, 20, 25 and 30 year level offers.

Note:

the latest issue of 30 year level policy is age 58 with the level premium insurance continuing to age 87, then the
premium increases every year since this is a U/L policy. (Of course the policy can be discontinued at any time by the insured.)

Again, these policies provide the substantial benefits to the insured and family prior to the death
of the insured in the event of significant failing health! An alternative to these provisions is the
family having an owned productive family estate of at least $500,000 that would provide on-going
similar sums from 17% annual withdrawals.
Below are listed TrendSetter LB 100k, 200k, 300k and $500,000 policies at the ages and for 20 year level period and best health.
For perspective purposes, the Pure Term column shows the current lowest priced $300,000, 20 year level policy. All prices are
for a male, No Tobacco, Preferred Plus health subject to Company underwriting. All policies may not be available in all states. The
SAVINGS columns shows the annual savings required to build $300,000 in 20 years with 20% & 6% Average Annual Gains
respectively. (AAG are not promised or guaranteed; they are illustrations for comparisons.)

Age $100,000 $200,000 $300,000 $500,000

35
40
45
50
55
60
65
70

LB

LB

LB

LB

150
195
261
373
571
944
1,703
2,568

270
360
492
716
1,112
1,858
3,376
5,106

$267
$363
$468
$708
$1,122
$1,962
$3,705
$6,057

380
500
845
1,080
1,745
3,135
6,065
9,865

$300,000
Savings20% Savings6%
Pure Term 20 yr lvl

$181
$241
$390
$573
$908
$1,587
$2,994
$5,667

1,339
1,339
1,339
1,339
1,339
1,339
1,339
1,339

7,694
7,694
7,694
7,694
7,694
7,694
7,694
7,695

Explanations and Perceptions

The Psalm 23 Stewardship Program Perception Explained
By David Holmes

Registered Investment Advisor 800327-8963

July 20, 2015A.D.

This is a superb illustration.

I call this the gap made by accepting 6% gains !

Do continue to read the following are important facts and perceptions,
with significant remedies and alternatives for those with grace and faith.
Investing is not new. Recall the Parable of the Talents in Matthew 25 and
Jesus identification of the wicked and slothful servant,
and
The faithful profitable servants, Jesus rewarded!

Introducing the Psalm 23 Program

www.davidholmesagency.com
By David Holmes, Registered Investment Advisor
Cross Plains TX 76443 254725-7141 August 8, 2014A.D.

A new investor asked me to explain the Psalm 23 Program. It all started with my understanding and making life
insurance work for my family. I realized having a policy was not meaningful; it had to compute practically to
replace my income, buy the necessary and usual daily needs: food, rent, etc. as opposed to luck and welfare. And, it
had to be affordable and available.
Years ago (1972), when I left the Navy, I realized that my $50,000 Whole Life policy which I had bought at age 34 and
costing me $100 a month did not make understandable and adequate cash grocery provisions for my wife and 3
children in event of my unlikely early death. This is the moral purpose of Life Insurance for families.
For weeks and months, I struggled and searched. Agents wanted to sell me more of the same (Whole Life) but no
policy that was both affordable and practical. I answered ads and called more insurance offices as I diligently sought a
meaningful larger and more affordable policy. I finally found one, a $100,000, 30 year Decreasing Term policy for
about $30 a month! I doubled my insurance and halved my cost but more importantly, to the best of my
understanding, I now had meaningful, understandable and affordable provisions for my family. Thats largely
why I entered the Life Insurance ministry, to both (1)make known and understandable the affordable use of Life
Insurance and to (2)make available the low cost, affordable policies that were disdained by the industry,
unexplained and difficult to discover and buy for the benefit of the family and according to ones responsibility and
ability. As the years passed and the industry changed, ART (Annual Renewable Term) passed, the 10, 20 and 30 year
level term policies became the affordable and practical policies for most. Furthermore, to march to this goal, it became
obvious that I would have to be an independent agent, able and free to advise those interested as I saw and
understood the moral use and purpose of life insurance.
Meanwhile, as I examined and studied the arithmetic limitations of both Whole Life and Term life insurance, I
began to realize that the prudent and consistent use of some stock mutual funds offered long-term amazing
meaningful savings opportunities for most working families. Thus, while term life insurance provided excellent
and affordable but temporary immediate estate provisions and protection, successful, goal-oriented, long-term
investing could likely provide long-term, understandable and moral estate retirement provisions. That is, (A)sufficient
capital from which to both withdraw adequate monthly expense money and (B) leave an inheritance for the family as
opposed to redistributive welfare and being a burden to ones family or neighbors.
Again, working as a Registered Rep in the usual investment office like IDS or Merrill Lynch was too restrictive
intellectually, morally and product-wise. They wanted their world understanding and products sold. (I realized the
retiree with $50 million in savings 1 probably didnt need my idea and services.) The idea, my idea of the American family
using lo-cost term (life insurance) as an immediate but temporary estate while separately building a long-term,
enduring-estate with mutual funds of American companies that would provide both enduring Retirement-age funds
and a family inheritance didnt fit their purposes. Thus, I had to train and qualify as a Registered Investment Advisor
(Series 65) to publically both teach and offer investment products and services I understood as productive and
beneficial for the family. It seemed clear to me that the growing emphasis on technical Tax and Financial Planning
rather than building to an identified family sum missed the boat of moral and meaningful family security.
Why? Without an identified sum-goal built in a specified time period (I specify 20 years) that would provide
enduring living funds for the family in the known events of death or the lengthy Retirement period, it is just

vain rhetoric and magical chairs. Thus, it became a logical necessity to identify a specific 20% AAR (Average
Annual Return) as opposed to 5 stars, feelings and more rhetoric and appearances. Meanwhile, I had to start the
Psalm 23 Program which I could manage and make the investment decisions. It includes straight
investments, traditional and ROTH IRAs, Rollover 401ks and the Variable Annuity. I teach
stewardship profit-goals first, then tax reduction advantages. (Until I changed my Analysis program parameters in
December 2012, my investment performance was not satisfactory. We made 80% for 2013, 30% for 2014 and are on track for
2015.)

The family with $50 Million can likely afford 5% earnings and withdrawals and steady returns from bonds. 5% of $50M is $2,500,000 annually. Anyone except the Clintons could exist
on such.

Review, A Tale of Two Sisters

www.davidholmesagency.com

By David Holmes Registered Investment Advisor October 27, 2014A.D.

r.11/4/14 Money

Its gonna be the best of times, its gonna be the worst of times. Two sisters, not twins, but ages are

close. Both with about $15,000 in transferrable 401ks. Neither one is adding any funds. One rolled over to
me with reasoned trust in my judgment and for my minimum 20% average annual gains goal. The other is
fearful of the market and feels my 20% is too good to be true. She keeps it with a usual big name firm with
the usual 5% average annual gains. Likely result after 20 years when they are beginning their sixties:
$575,000 vs. $40,000!
Bad Stock-Market Timing Fueled Wealth Disparity
Research Shows Many Households Sold Shares During Downturn
Beware, the government is eying
WSJ.com 10/26/14 by Josh Zumbrun Money Invest
your 401k savings accounts! Read Millions of Americans inadvertently made a classic investment mistake that contributed to todays widening
the WSJ article. Family assets are not economic inequality: They bought high and sold low. Late in the stock-market booms of the 1990s and 2000s,
more U.S. families clambered into stocks as indexes surged. Then, once markets tumbled, many households sold and
equal and the disparity is getting took losses. Those that held on during the most recent collapses reaped the benefits as stocks nearly tripled between
2009 and today. The split path is one driver of stark inequality in the U.S. Many workers have seen their wealth
bigger! While not stated in this and
incomes drop despite more than five years of economic expansion in the U.S. Some fear the gap, widening for
article, a solution has already been decades, could fracture society and slow the nations potential for economic growth in the long run.
One unfortunate effect of recessions and stock-market declines is they often induce people to exit the market at
floated: nationalizing your 401ks!
exactly the wrong time, said Dean Maki, chief U.S. economist at Barclays and a former Fed researcher on consumer
The idea is for the government to
credit the owners with the highest
current value for the all-equal new
Annuity. It will guarantee a nominal
average return, maybe 3%. All
guaranteed. Thus, families will be
equal and equally poor. Reflect how
well the government has done with
our FICA contributions!
The WSJ article sees the reasons for
the wealth disparity as personal:
investment decisions, fear, unequal
gains, bad timing, and low average
market gains. All are true!
But, government pawns seek to
justify a new all-average-andequal annuity program for all. No
more unequal private property,
unequal gains and unequal wealth
from their choices in the stock
market.

balance sheets. In retrospect, anyway, the right thing to do would have been to buy more equities at the trough, not
to sell equities at the trough.
With markets again gone wobbly after a half-decade surge in stocks, the pattern threatens to repeat. The S&P 500
index closed down as much as 7.4% from its mid-September peak until mid-October, unsettling some investors.
New research from the Federal Reserve and the University of Michigan shows the role that panic about the
market played in widening wealth inequality. The Feds Survey of Consumer Finances shows that among the
bottom 90% of households by wealth, families bailed out of the stock market between 2007 and 2010the
central banks study is conducted every three yearsand between 2010 and 2013. The total share with stockholdings
declined by 4.4 percentage points. Thats the equivalent of 5.4 million households selling stocks, even as the market
rebounded. Only households in the top 10% have been increasingly likely to own stocks.
To be sure, some households that sold stocks had little choice. The 2007-2009 recession pushed the
unemployment rate to 10% just as equities declined more than 50%. Families struggling with job loss or
mortgage problems may have had no choice other than selling at a loss.
But the data suggest some investors simply sold at the wrong moment. Even at the worst of the recession, most
people still had jobs, said Mr. Maki. Certainly, some of the people who got out of the equity market were doing it
because of fear rather than need. Thats also the finding of new research from economists Bing Chen and Frank
Stafford at the University of Michigan. They plumbed the Panel Study of Income Dynamics, a survey that tracks the
same households over time, to evaluate the factors behind their fluctuating incomes and wealth.
Households with the highest education and strong portfolios to begin with were likely to keep buying stocks during
the decline, they found. Those with less education and smaller account balances were more likely to sell during the
downturn. When the subsequent rebound happened, the already rich got even richer. The finding holds even after
controlling for job loss or mortgage distress, meaning some families simply sold at the wrong time. Even those
that outearn 80% of other familiesan income of about $120,000 a yearare 5% less likely to own stocks now than
in 2007, according to the Feds survey. Mr. Stafford speculates that many households, after being burned by the
market, wont have anything to do with it. The Feds survey suggests many of these households have bailed from
traditional assets and only increased the amount of saving that they are doing in transaction accounts.
Imagine two well-off households, each with $100,000 in the stock market in 2007. A family that sold in 2009
after losing half its portfolios value may now have $50,000 in a savings account. A family that held on would now
have about $130,000 in stocks. The inequality has yawned merely because of the investing decisions. In the long
run, those savings accounts have a vanishingly small chance of outperforming stocks. Stocks plunged on March 2,
2009, days before starting a long rebound. BLOOMBERG NEWS
I have colleagues who say that these small-scale guys got burned and wont come back, and I dont think thats the
right answer, said Mr. Stafford. Unless we get a flash of brilliance for a new pension system, stocks are a
really important ingredient. The gains in wealth have especially accrued to just the top 3% of families in recent
decades, according to the Fed. Those families held 54% of wealth in 2013, up from 45% in 1989. The bottom 90%
now hold 25% of wealth, down from 33%.

Note: the growing magnitude

of disparity of $40,000 vs. $575,000 is caused, not by the market or ignorance but by irrational fear,
media propaganda, personal attitudes and bad choices! Freedom vs. tyranny. Vision vs. fear. Faith in Gods
order vs. excuses.Mt.26 How sad! How instructive! How totally American! Beware, liberals want to make us
all losers with no risks, no inequalities; walk with the fearful sister and be dependent on government
handouts.
Just remember, had the present Social Security recipients had private accounts placed in the SP500 over the
last 40 years, most would be quite well off. As the study showed, the worker with a $25,000 income would
have over $444,000 in his/her account vs. being thankful for their paltry $900 monthly check that
doesnt provide! Moral informed living needed!

First Class Investor Advice to Avoid

Review by: David Holmes

Jan. 2011

According to the Morningstar Advisor, Dec/Jan 2011, pp. 34,35 an advisor in Newton, Mass gives her
150 clients first-class advice for their $950 million in assets. Superlatives are frequent.
Focus, service and no-expense-spared intense
research mark Mrs. Kaplans practice. And to
support the praise and adulation, the writer states
that Mrs. Kaplan has been featured in the Wall
Street Journal, Barrons Top 100 Independent
Advisors and Louis Rykeysers Mutual Funds as
well as being a co-host of a weekly radio show in
Boston.
But, not a single performance figure is given.
Not one! Nearly a Billion dollars under advisement and high
praise but no substance. (My tacky: The article did have a
picture of Mrs. Kaplan who appears to be a very good
looking, long haired blond. But I dont consider that as the
same as giving excellent investment advice.) More likely
she is recognized because she manages $950 million. But,
does she make clients money?

This article Research Over Chocolates tweeked my

curiosity especially after reading a Kiplingers
article 12 New Rules For Your Money, 09.2010, p.69 saying: Think
Single-Digit Returns. Therein the author said, You
should be happy to get 6% a year if youve dialed
down risk in preparation for retirement and downright joyous if your overall investments
earn 8% annually over the next ten years.
Thus, I wrote a paper: Most Advisors Say 6% and showed that 6% would put most savers,
widows and retirees on welfare because they would run out of money.
In keeping with my curiosity, I analyzed the 5 year performance of Ms. Kaplans selfidentified eight favorite funds. I was offended. 2.35% was the dismaying five year gross
Annual Average Return of her choice funds. (Returns thru 1/25/11)
Now note, the article stated that no two clients had the same portfolio. So it would not be correct to say that
2.35% is what her clients averaged before fees! But, my thinking is, it likely is close. After fees, how much is
left! Any??

Arithmetically and factually, 2.3% is a disaster even if her average client has $6.3 million.
2.3% does not even offset inflation and it will earn only $82,333 average annually on the $6.3 million for a
millionaire family to live on before fees! So I suspect, like multitudes across America, most of these clients
are actually consuming their principal and gasping for understanding beyond such first class advice.
Theirs is the bitter fruit of less than 20% Average Annual Returns I warn my readers about! It seems most
have no light, no standard, no vision and no money left!

Most Advisors Say 6%

REVIEW by David Holmes

Registered Investment Advisor 9/2010

800327-8963

Lets say and agree that the majority of respected investment advisors, popular writers and major financial
magazines are correct. Agree that they are right! They understand! They have it together! Investors should
only expect to make 6% Average Annual Returns for their savings and retirements. Kiplingers Personal Finance,
9/2010, p.69 Think Single Digit Returns
The Kiplinger article says,
Reality Check. You should be happy to get 6% a year if youve dialed down risk in preparation for
retirement and downright joyous if your overall investments earn 8% annually over the next ten years.
So? What does it mean that 6% annual returns 2 is all Americans can expect? Whether 45, 70 or in between,
this 6% pronouncement deserves serious examination. My clients and I are told that our expected and
aimed for 2% monthly/20% annually is too good to be true. My reply, (1)we are doing it and (2) 6%
returns wont work.
Just this week I had 3 families call with investment assets of about $200,000.
1)One is a new widow under 55, formerly a stay-at-home mom. So, no high paying skills.
2)The second a retired and widowed minister about 70. Thus, not preaching much, needs more income.
3)A 56 year old married executive, still working wondering if his $200,000 will provide for his wife.

The Kiplingers writer said Reality Check! Impressive! He means its good news? Bad news! Wake up!
This is a change? Doesnt have a clue? Or, maybe hes just selling another article to the ignorant or to fill up
space?
Let us make it meaningful. Well do family-income-arithmetic with 6% returns using the $200,000
my families have. The table illustrates the disaster 6% returns means!!!
1.If we use only the 6% returns to live on, well have $12,000 annually to live on unless we take out
more! $1000 a month. The paper money may last forever! But, 4% inflation will eat the buying power fast.
2. With increasing taxes, food prices, medical expenses, transportation they have to have at least $2,000 a
month. $24,000 annually minimum living expenses. Family-arithmetic shows that the $200,000 will be
gone in just 16 years if $2,000 monthly will work. Anything more withdrawn and anything less than 6%
made annually and the money is gone sooner. The table illustrates Bad News 6% annual returns
means for retirees and widows!
Yr
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16

Beginning
200,000
188,000
175,280
161,797
157,213
142,646
135,763
128,054
119,420
109,751
98,921
86,792
73,207
57,992
40,951
21,866

6% Gains
12,000
11,280
10,517
9,708
9,433
8,559
8,146
7,683
7,165
6,585
5,935
5,028
4,392
3,479
2,457
1,312

$24,000 Withdrawals
24,000
24,000
24,000
24,000
24,000
24,000
24,000
24,000
24,000
24,000
24,000
24,000
24,000
24,000
24,000
24,000

net Withdrawals
12,000
12,720
13,483
14,292
14,567
15,441
15,854
16,317
16,834
17,415
18,064
18,792
19,607
20,520
21,542
22,688

Net End of year

188,000
175,280
161,797
157,213
142,646
135,763
128,054
119,420
109,751
98,921
86,792
73,207
57,992
40,951
21,866
490

17

490

$29.40

Out of money

No $ available

Broke

Sadly, most widows spend the

$200,000 from life insurance, pay
off their mortgage and bills, buy a
decent car and have no funds to
invest and shrilly complain how
bad their husband was and hard life
is!
More, 6% annual returns means that
to build a $200,000 fund in 20
years, $5,129 of annual savings are
required. $430 monthly on what
income?

Those who wish they had $200,000, could with repentance, time and my program.

2
No investment guarantees returns whether 4% or 30%. Goals and estimates are not promises. Past performance does not assure like returns in the future. Money, principal can be
lost. Safety of other savings runs out when the money runs out or the organization goes broke, whichever. Arithmetic analysis shows that 20% AARs are required for a retirement to
be viable.

The Psalm 23 Program Solution

A sought-to-be godly family programMt. 6:33 managed and run by David Holmes with a 20% Average Annual gains target

Lets use the same $200,000! Clearly my approach is very different from most. Guided by Scripture to
make provisions1Tim.5:8 and the light of arithmetic, I seek 2% monthly gains or 20% Average Annual
Returns. Arithmetic analysis demonstrates that minimum 20% AARs are required to either build a working
elder-years fund in 20 years or to live on the elder-years funds returns. Relative standing with other funds
providing less than 20% AARs is meaningless and/or misleading in any evaluation judging ones retirement
funds appropriateness and effectiveness! It is blindness and darkness to seek less than what is needed.
The earlier page begins to show the dismal meanings of 6% AARs. Lets examine also having the same
Year
Beginning 20%
17% of fund Annual End of year $200,000 but with 20% AARs and not
of year
Gains
Withdrawn
Gain
sum
spending 3% of it to offset inflation,
If the funds are
fees, low months and expected
1
200,000
6,000
206,000
40,000
34,000
variations. Thus, well start withdrawing
2
206,000
7,200
213,200
41,200
34,000
$34,000 annually (2,833 monthly) and
3
213,300
8,529
221,729
42,640
34,000

go from there. Annual withdrawals

4
221,729
10,345
232,078
44,345
34,000
can be adjusted.
5
232,078
12,415
244,493
46,415
34,000
If the funds are in a Roth IRA, no taxes are owed. Otherwise taxes on the annual gains will be due at then current rates. If the
funds are in an IRA, taxes are only due on the funds withdrawn. Otherwise, without a Roth or IRA, the more we make, the more is
due every year. But such is far superior to 6%, few or no taxes and running out of money in my judgment.

I already showed on the previous page that building a $200,000 Retirement Fund with 6% AAR over a
period of 20 years demands $5,129 a year. But, the reality is worse than that. Arithmetic analysis has
already shown that with 6% returns, $200,000 doesnt work unless you only need $12,000 a year and there
is no inflation and no increases in expenses and taxes.
So, for a very modest income of $3,000 monthly or $36,000 annually, what size fund is required to produce $36,000 annually
with 6% returns and not run out of money? Since we have to keep back a minimum of 3 to 4% to offset inflation, avoid
overwithdrawing, increased expenses and taxes, only 2% is left for withdrawing. $36,000/.02 = $1,800,000. Cross checking:
$1,800,000 x .02 = $36,000 Yes, a million eight hundred thou!
And, what annual savings is required to build such a fund with 6%? A huge $72,629 annually! Absurd at best!

However, accepting the arithmetic determined minimum of 20% AAR with 3% also kept back, a sum
of $225,000 is required. Double checking: $225,000 x .16 = $36,000.
What annual savings is required to build the $225,000 fund with 20% AAR? $1,681 annually.
Cross checking: $225,000 x .16 = $36,000 and the fund grows annually. It will work.
The moral, spiritual and intellectual point is, whether popular or not, (1) 6% AARs do not work to build
a retirement in 20 years. (2) Neither will 6% maintain a retirement fund. It will run out of funds. The
conclusion is 6% is a clear failure happening! Check the tables.
Thus, if the minimum required 20% AAR cannot be obtained with the participative ownership and
management of stocks, other means must be sought but not ignoring the facts and truth: trusting politicians
or luck to take and redistribute our neighbors property for us is evil!
But, Good News! The annual saving requirement of $1,681 ($140 monthly) is affordable for prudent families.
Secondly, since making the change to the monthly target with daily management, we have been graciously blessed by God with
returns exceeding the 20% minimum 3. In doing this, we have been blessed to avoid the several buy-hold and dip-dips fear that
plague those who blundered on or just gave up and sold out.

No investment guarantees returns whether 4% or 30%. Goals and estimates are not promises. Past performance does not assure like returns
in the future. Money, principal can be lost. Safety of other savings runs out when the money runs out or the organization goes broke,
whichever.

Fundamental Research of Financial Professionals

By David Holmes Registered Investment Advisor

February 5, 2015A.D.

www.davidholmesagency.com

Money

There is no published definitive study that shows the choosing of stocks,

Investment grade or US Bonds safety with interest returns of to 7% over
periods of 5 to 20 years provide net-after-inflation-returns that satisfy the
net-returns-required to build a Retirement/Family Estate that will likely and
indefinitely provide the necessary family income needs (minimum 85% of
before-age 65 remuneration) for ages 65 thru 97. None! In fact, the studies show
only failure.
Alarming Arithmetic Reality! Families require Average gains exceeding 15 to
20% annually or they will run out of money!
Politicians, investment, savings, Insurance professionals or organizations refuse
to discuss the specifics of this moral, personal, family and national issue and any
alternative than more government!
Further, it is ridiculous to assume or imply that anyone could save 50 to 75% of
income over a period of 20 years for such an elder-years income estate or that
no such estate is needed. Dishonest! Thus, the Democrat assumption and
promises that the government can and will provide such income and fair
pensions is dishonest, impossible!
Thirdly, most major corporations are or have terminated their pension and
medical care provisions beyond 401ks. Likely, all will or will wish they had.
Why? Should governments do likewise? Should the Military? What about FICA?
What about Unions, Schools?
Lastly, it is just as delusional and dishonest, not faith, that families expect to
have access to such income in their elder years without specific personal assets
being built. Note, for the dad averaging an annual income of $50,000, the 85%
elder-year income requires assets that will yield $42,500 annually: in 20 years
with 5%: $850,000 Principal and $24,482 annually saved; with 20%: $212,000 Principal and only $946 annually.

Of course, using the Democrat BALD responses: Bluster-Arrogance-Lies-Denial,

there is no problem, just more disasters!
Every responsible and intellectually-honest individual is interested in
known, available, moral, understandable, affordable and working/needed elderyears solutions! Everyone.

No Substitutes for Gains

not magic, not good intentions, not 5 Stars, not anything!
By David Holmes

rev. 4/30/20015A.D.

www.davidholmesagency.com

Most Americans are ignorant of the advantages of family focus, defined financial purposes,
understanding the interrelationships of low-cost term life insurance and long term investing
guided by understanding the marketplace. Thus the gigantic difference between usual low
returns and anticipated 20% Average Annual profits are ignored. They ignore the Market and
resulting contrasting consequences, but trust magic (retiring with 5% gains), Entitlements, FDIC
Guarantees, more vain, deceptive, unkeepable political promises like Social Security and
ObamaCare and presuming-faith. Note the empty, unfulfilled and failed Democrat promises
since LBJ of their claimed war on poverty. Nonetheless, the very good news:
BigCharts.com chart shows available choices and actual choice-consequences of 5
American funds over the 5 year period.
Illuminating truth in the present darkness and the necessity of management!
Factually, $100,000 property in the market, changed as shown: $100,000 for bonds;
$178,000 for the SP500; $218,000 for the NDX100 and over $362,000 for the Dynamic
RYVYX. Each a choice. But truly, vastly different from what the media and screamers

5 Years: April 15, 2010 thru April 15, 2015

say and said!

Confidentially, my Trend Analysis Management Program is designed to significantly
minimize (no one can totally avoid) declines like that of 2008 while capturing the longer term
on-going gains. But, note how all the funds temporarily decline from time to time and
RYVYX the most. Thats choice, knowledge, property and freedom in America and the
ever-responding market; it changes, sneezes and offers opportunities to whosoever will. My
opinion: I believe that the two faithful and profitable stewards of the Parable of the
TalentsMt. 25 would be participating, sneezes, roller coaster and all.
With my revised management program, I anticipate limiting periodic temporary declines to
about 15 to 20% of the NDX. Of course it still is a lot and I never like even lesser temporary
declines. But, keep focused: just look at the longer term. Even without management, the

$100,000 still grew to $280,000. (The only savers who actually lost are those fearful, lost sheep who left.) Since
the March 2009 market trend change, all the unmanaged funds gained significantly and the
RYVYX the most. Who could know? Who would dare? Who are shown to be wise and good
stewards faithful to God and His instructions
Since March 5, 2009, $100,000 invested in the RYVYX has grown to about $820,000! As I
see it, this is the ongoing fruit of property, faithfulness, freedom, wisdom, the advantage of
the market, exercised faith in Gods orderly world and blessed by the Living God. Not luck
but all the foregoing.Heb.11:6
Americans and particularly freedom and truth loving Americans committed to Christ dont
need, shouldnt want and cant afford government programs. I have forensically
demonstrated that just with market returns, workers would be well off with their FICA taxes
in separate invested market accounts! Rich! Its 6 and 12% of their pay, forever gone not
invested! Meanwhile, politicians, advisors, experts with many initials claim they feel for the
average American and the poor! They lie! More of the same is cruel and unusual
miseducation and misdirection assuring their failure and dependence.
The 5 year chart exposes why the faithless, slothful, fearful, Democrats and media slander
the Market and every change! There are no substitutes for initiative, faith, private property,
defined goals and profits. Americans dont need more government and handouts. Significant
Profits are still a choice and more likely with a committed and experienced 20% Investment
professional! Finally, there just are no substitutes for gains. None!

Faces of the
David Holmes
Agency
Team
April 2015A.D.

www.davidholmesagency.com

Assessing the L-T Effects of Lo-Returns, Not Investing

By David Holmes

Registered Investment Advisor

800327-8963

5/19/15

The 5 year chart shows the actual changes in the included funds market values including the
bellwether SP500 ($175,000),
the largest bond fund in the world: PMTPX ($98,000),
the former mutual fund rock star Magellan: FMAGX ($138,000),
Warren Buffetts struggling long-term winner: BRKA ($178,000),
Precious metals index: XAU ($40,000) and
the Psalm 23 Programs base fund: RYVYX ($380,000). Each starting with $100,000.

The compound differences over time are clear, stark and instructive.
No savings is an island. Each and all are affected by the vast and innumerable multitude of real and perceived
changing daily events, demands, taxation, decisions, and needs. However, in evaluating these actual changes of 5 year
market gains and declines, it continues to appear that the compound gains of the high yielding funds far outweigh the
declines and low gains motivated by fearfulness.
It further appears that the attempt to attain financial safety by CD or bond stability ignoring returns as with the
PMTPX or the XAU fund is at best, misguided, misunderstood and maybe delusional particularly in light of the above
data. Such chasing of stability would be crushing, particularly to those withdrawing funds for living expenses as they
would periodically have to consume and consume more and more of
their declining stable principal Note: two minus two equals zero.
I note that the RYVYX could

I note that the RYVYX could experience a 50% decline (todays

$380,000 to $190,000) and still remain well ahead of all the
others! However, as stated earlier, no fund is an island. Further, these
other assets would not retain their maximum attained value though
their market value decline would be less. Hence, the issue: who can
afford or justify the emotionally motivated safety or chasing of
stability?

experience a 50% decline

(todays $380,000 to a
tomorrows $190,000) and still
remain well ahead of the
original $100,000 and other
funds!

The Market and Market value are complex daily issues increasingly
compounded by the Congressionally-allowed huge Federal debt, Federal spendings, Fed-set low interest rates, povertyguaranteeing Social Security and the persisting practice of both politicians and money advisors to effectively ignore
the growing elderly poverty issue and injustice to the youth while pushing usual low returns and silence to the ongoing FICA scandal. The two last as much a personal lack of personal rationality as they are industry and political
corruptness.
In conclusion, an article in a recent FORBES

GRANTs LAW: 1920s RECORD, 1/19/2015,

says, I summarize: the accepted

unconstitutional government intervention practices since the 1930s of stimuli, inflation, etc. are proven destructive and
counterproductive as demonstrated by the 1920s two year correction vs. the 1930s 10 year Depression and the present on-going 7
year malaise! Thus, make hay while the sun shines!

Retirement, Things & Money-Need

By David Holmes Registered Investment Advisor Bible Studies Teacher 800327-8964

www.davidholmesagency.com

In spite of what we see and experience around us throughout our unpondered lives, it seems that many expect
life to be largely automatic, uneventful and void of negative consequences from bad decisions or refusals to
make decisions, especially longer term decisions. Worse, the evil expectation has been nurtured and matured
that the government will take care of those in need. The cartoon and article, both in the Investment News,
jiggled my thinking on the subjects. Further, I find
the statement in the article both offensive and
misleading: Its only Social Security that guarantees you
have an income until your last days.

But, money wanted for things and living is neither

a new matter nor restricted to the elderly. And, it is
not just elderly members of my family that refuse to
critically evaluate the gross existing and future failure
of Social Security that most everyone concurs does
not provide adequate funds for living, even though
over 6% and 12% have been and is taken from all
income and those funds have been spent already!
In the article, the experts tell us we need to save 15%
to prepare for our elder years! Logic assures us that
something is wrong with such thinking. 10% for the
church, 12% for Social Security, 15% for savings
thats 37% and we havent eaten nor got a bed to say
nothing about other taxes, utility expenses, car,
clothes, medical .!
No wonder those without a solid Christian faith and
applied teaching see Obamas offers of free food,
redistributions, low cost labor from illegals and more
unlimited government as light in their darkness and
possible answers particularly as the old style
pensions are gone and elder medical care is expected
to consume huge sums.

In blessed contrast, a live traditional family and

traditional church with truth, grace, self-control,
budgeting, a skill/trade, honest money and freedom to
work standards enable both youth and the older to
prepare, succeed, shine, witness and rejoice in the
present darkness no less than Paul did in the first
century and as did our Christian American forefathers.
It is only Christ Who alone gives peace and
contentmentPhil. 3 in all circumstances with a vigorous
faith and grace to go forward with Him in His will.
Without a doubt, the silence of pulpits to faith and
morals has gravely contributed to the present
lawlessness, fears and evil destructive fruits thereof!

In closing, the ball is in your court and I can help.

Do tell me what you desire to do.