It's all relative, really. 8.7% would be a spectacular return on government bond holdings. 8.7% is mediocre or worse compared to the averaged return of the Dow Jones or Standard & Poor's averages over the last couple of decades. I realize that doesn't help you much, but that's investing for ya.

For what it's worth, though, many retirement calculators and the like assume that people investing are doing okay if they get an average 6% return on their investments. So if your 8.7% has lasted for a few years, you're doing well above average.

Did you make a one-time contribution to this fund, or have you added to it each year/frequently?

Starting with your original investment, suppose it was $1,000. and it was invested for two years before you made the next deposit.

If you enter $1,000 x 8.7% and press "=" twice, you'll find what the amount should have been at the end of two years. If the period is three years, press "=" three times, etc.

If one period is only 10 months instead of 12, multiply 8.7 X 10, then divide by twelve, then multiply by the amount in the account at the beginning of that partial year.

If the result is lower than your account shows, it was growing at less than 8.7%; if higher, it was growing at more than 8.7%.

Change percentage rates until you get the figure to come out to the amount in the account just before the fresh deposit was made.

Then enter the new amount, after the fresh deposit has been made, juggle various percentage rates till you produce the amount that was in your account just prior to the next influx of cash.

If one period was two years, multiply the rate that you achieved during that period by 2, if another period was only one year, add that amount, and if a third period was three years, multiply the rate that you developed by 3, then add to the earlier amount.

Then divide the total by 6, the total number of years you've worked on, which will give you approximately the average rate that your investment earned, overall.

Not many have done well over several years, recently, so don't be too surprised - or disappointed - if your rate turns out to be less than 8.7%.

Sorry if this has gotten a bit complicated - if you have questions, message me, asking precisely what it is that you don't understand.

By the way - a good financial calculator costs about $30. or less, and makes much such figuring much easier.

A good investment for anyone doing any level of investing, it seems to me.

Learning how money works: an interesting hobby (that pays well!!!).

ole joyful

Yes, joyful is right -- it's difficult to know your rate of return on an account that isn't stagnant. The IRA figuring may be possible, but I have only a vague idea of true return on a brokerage account that we add to and distribute from. I end up just dividing the "earnings" by the capital and get four to five percent -- on a very conservative portfolio.

We once employed a financial adviser until I realized what a waste that was if you have only conservative investments.

ChiSue,

If your financial advisor's approach to investing was enough similar to your own that you felt comfortable with his/her ideas, perhaps you missed out on an opportunity.

S/he might have been able to make some suggestions that would have enabled you to have developed a somewhat better rate of return/growth on part of your stable of investments.

And allowed you to sleep nights without chewing your fingernails.

Including some types of income that might have been taxed at a lower rate.

Or have tax deferred until some time later - e.g. I bought stock in a solid Canadian bank some 38 years ago, for about $4.00 per share, paying about 2 - 3% annual rate (taxed at a much lower rate than interest earnings).

Recent value has been around $75.00. They took about a 10% drop becasue they had substantial exposure to the Enron debacle, they'd made provision for something like 300 million charge, were assessed at something over 2 billion (and I'm wondering whether U.S. banks were assessed in similar proportion).

I haven't had to talk to the tax people until I either sell them (or die, in which case, lacking a spouse, all of my investments are assumed to have been liquidated on the day previous). Don't figure to do either, this week or next.

Though it might be wise to sell some of my investments currently, take the tax hit on the capital gain, at a lower tax rate now than it will likely be at my death, for a substantial portion of my estate then will be taxed at top rate.

Trouble is, if I sell some now, I must pay commission going out, then again when buying, plus I'll have less to invest after I've paid the tax on that realized capital gain.

Further - back when I bought those shares, the annual dividend was about 6 cents to a dime. A few years ago they went from 80 cents to a dollar, later $1.60, now they pay me $2.40 annual dividend - I'm not complaining about that.

And it's taxed, as I said, at a lower rate than employment, pension or interest earnings (the kinds of income that most folks have).

The rich and the governments have their linkages - who do you think gains most from the recently developed tax cuts?

I've said for years that I'd like to have ordinary guys make use of some of the financial games that the rich play.

Have a great holiday season: it ain't the "stuff" that counts - it's the spirit.

ole joyful

8% isn't too bad, considering how the stock market's been in recent years.

You might want to diversify the 'aggressive' part of your asset allocation with an international fund. A lot of foreign economies are growing a lot faster than N. America. Just watch out for fees--a lot of int'l funds charge too much (2% or more). An international index fund might be the best way to go.

joyful -- The hitch with the advisor was that he was being paid a monthly percentage of the account. I appreciate that he didn't try to churn it, however it was a very staid and stagnant account; his big advice was to ladder bonds...duh! (As though we weren't already doing that.)

I guess we didn't lose much employing him. We had one "free" year, during which we had commission-free sales of stocks we liquidated to buy our new house. Now, *that* turned out to be the biggest savings we made, given the decline in the market and the rise in real estate!

I really think the market is no different than Monte Carlo, and financial "predictions" little different from the touts at the horseracing track.

Chisue,

Granted, there are some risky situations in the markets.

There are some scoundrels out there, and they find smart accountants and lawyers to help them run scams. And sometimes the difference between those who break the rules and those who run what most of us would call scoundrelly systems while staying within the rules are rather slim.

However, if one buys several quality stocks, usually the growth rate works out fairly well, over a number of years.

Recently I visited the downtown branch of one of our major nationwide Canadian banks to attend a seminar on investing.

When I asked the person at the information desk the location of the seminar, after she'd directed me, I spoke more quietly, with rather an air of confidentiality, to ask, "Do you know what's better than putting one's money in the bank?".

"No, what?", she inquired.

There were two within earshot who heard my reply, "Buying bank shares!".

Both laughed aloud and the one to whom I'd been speaking replied, "That's for sure!", enthusiastically.

Some of us who are older suggest that the value stocks, which often pay a higher rate of dividend and usually are less volatile, are a wiser style of investing than using the growth style of stocks.

Actually, they may be better as well for the ones willing to bear some more risk, feeling that they have time to invest later to make up for losses and still obtain a good result in the long run.

A number of analysts say that the rate of return on a number of the value stocks over a number of years is actually better than that of a large number of the growth stocks.

Perhaps it may be something like the shootings - we hear in most of the media of people being shot in our cities, so we get all upset.

But not a word of all the good people who have lived their lives responsibly, possibly not living merely following the dictum of "Live and let live", but by the even more responsible one of, "Live and help live".

But that's what we need to build comunities and societies where people like to live, for their is peace, happiness and prosperity to be found there.

We hear a lot of people talking about freedom and their demands that they have more of it, and more rights.

But not much talk of the the sense of responsibility that needs to go along with the freedom if we are to build happy communities.

Often there are tax breaks that go along with investing and the style of wealth-building used by the wealthy - for the government builds rules that are helpful to their friends. Guess which classes mainly benefitted from the recent and much-touted tax cuts? That is, the concept was highly touted, but they didn't tell of the major ones enjoyed by the wealthy - mainly the much smaller ones that benefitted tose of the middle class.

Part of my game as a personal financial advisor was to tell the ordinary folks of some of the simpler rules used by the rich to enhance their incomes and reduce their tax loads, encouraging the ordinary folks to use them, as well.

Every person is in business for themselves - many are employed, but if they have a few dollars in hand, those dollars are employees. If we use them to buy food, fuel, go on vacation, etc. they work for us once.

If we use some of them to buy a car that lasts for a time, they work for us for a (not long, in relation to the number of dollars invested) period. If we use them to buy a table or a house, which last longer in relation to the number of dollars invested, they work for us for a long time - and may have a higher proportion of their initial value still available when we sell them, years later, or may even have gone up in value.

And if we can arrange things so that we can send fewer of those employees out to pay income tax, that's an advantage. Or if we can arrange to have those employees that will be used to pay income tax not pay it now, but stay with us now and go to the income tax people only some years later, that's an even bigger advantage.

Evading income tax sends one to jail - or, more frequently, costs heavily in terms of paying the unpaid taxes plus penalties and interest. Avoiding tax, however, is legal - and should be practised by every person, except ...

... people who are able legally to avoid paying taxes altogether. Which usually, unless they were dirt-poor, resulted from their use of various tax-avoidance systems.

Have a really beautiful New Year.

ole joyful

Hi Chisue,

Granted, there are some risky situations in the markets.

There are some scoundrels out there, and they find smart accountants and lawyers to help them run scams. And sometimes the difference between those who break the rules and those who run what most of us would call scoundrelly systems while staying within the rules are rather slim.

However, if one buys several quality stocks, usually the growth rate works out fairly well, over a number of years.

Recently I visited the downtown branch of one of our major nationwide Canadian banks to attend a seminar on investing.

When I asked the person at the information desk the location of the seminar, after she'd directed me, I spoke more quietly, with rather an air of confidentiality, to ask, "Do you know what's better than putting one's money in the bank?".

"No, what?", she inquired.

There were two within earshot who heard my reply, "Buying bank shares!".

Both laughed aloud and the one to whom I'd been speaking replied, "That's for sure!", enthusiastically.

Some of us who are older suggest that the value stocks, which often pay a higher rate of dividend and usually are less volatile, are a wiser style of investing than using the growth style of stocks.

Actually, they may be better as well for the ones willing to bear some more risk, feeling that they have time to invest later to make up for losses and still obtain a good result in the long run.

A number of analysts say that the rate of return on a number of the value stocks over a number of years is actually better than that of a large number of the growth stocks.

Perhaps it may be something like the shootings - we hear in most of the media of people being shot in our cities, so we get all upset.

But not a word of all the good people who have lived their lives responsibly, possibly not living merely following the dictum of "Live and let live", but by the even more responsible one of, "Live and help live".

But that's what we need to build comunities and societies where people like to live, for their is peace, happiness and prosperity to be found there.

We hear a lot of people talking about freedom and their demands that they have more of it, and more rights.

But not much talk of the the sense of responsibility that needs to go along with the freedom if we are to build happy communities.

Often there are tax breaks that go along with investing and the style of wealth-building used by the wealthy - for the government builds rules that are helpful to their friends. Guess which classes mainly benefitted from the recent and much-touted tax cuts? That is, the concept was highly touted, but they didn't tell of the major ones enjoyed by the wealthy - mainly the much smaller ones that benefitted tose of the middle class.

Part of my game as a personal financial advisor was to tell the ordinary folks of some of the simpler rules used by the rich to enhance their incomes and reduce their tax loads, encouraging the ordinary folks to use them, as well.

Every person is in business for themselves - many are employed, but if they have a few dollars in hand, those dollars are employees. If we use them to buy food, fuel, go on vacation, etc. they work for us once.

If we use some of them to buy a car that lasts for a time, they work for us for a (not long, in relation to the number of dollars invested) period. If we use them to buy a table or a house, which last longer in relation to the number of dollars invested, they work for us for a long time - and may have a higher proportion of their initial value still available when we sell them, years later, or may even have gone up in value.

And if we can arrange things so that we can send fewer of those employees out to pay income tax, that's an advantage. Or if we can arrange to have those employees that will be used to pay income tax not pay it now, but stay with us now and go to the income tax people only some years later, that's an even bigger advantage.

Evading income tax sends one to jail - or, more frequently, costs heavily in terms of paying the unpaid taxes plus penalties and interest. Avoiding tax, however, is legal - and should be practised by every person, except ...

... people who are able legally to avoid paying taxes altogether. Which usually, unless they were dirt-poor, resulted from their use of various tax-avoidance systems.

Have a really beautiful New Year.

ole joyful