Pay yourself one hour's worth of income each day

[Nutria]

It isn't a lie. It's a theoretical comparison, not a guarantee.

The first thing that popped to mind when reading that was, "Lies, damned lies, and Statistics". That graph is a lie. As a minister of the Gospel, you should know the difference between sins of commission and since of omission.

(Amusingly, when I typed "how to lie" into my browser search bar, the first suggestion was "how to lie with statistics". https://www.fastcompany.com/1822354/...nd-get-away-it https://faculty.washington.edu/chudler/stat3.html https://archive.org/details/HowToLieWithStatistics)

[GoodSteward]

The first thing that popped to mind when reading that was, "Lies, damned lies, and Statistics". That graph is a lie. As a minister of the Gospel, you should know the difference between sins of commission and since of omission. (Or do they only teach that in seminaries?)


(Amusingly, when I typed "how to lie" into my browser search bar, the first suggestion was "how to lie with statistics". https://www.fastcompany.com/1822354/...nd-get-away-it https://faculty.washington.edu/chudler/stat3.html https://archive.org/details/HowToLieWithStatistics)

1. It is a graph to prove a point. Stop assuming it's a brochure or some actual mutual fund selling material. That company also has material at 3% and 7% on other slides they use to explain similar points of waiting to start. It's a visual aid using numbers, nothing more. A best case scenario, because people have gotten that before.

2. Don't use my ministry or personal religious views as some way to argue your point, and make me out to be something I am not just because you misunderstand. You overstepped with that. Do not do it again, please.

In what way are you saying it(or me indirectly) is lying? Is the math wrong? Did it mention a mutual fund it can be done with, but you can prove can't? Did it say you can even earn that amount yourself, guaranteed?

You actually would be lying to tell someone it is impossible to get that percentage because none of us know for sure. Historically, it has happened. I tell people it is unlikely, but it isn't impossible. You're reading too much into that thing. It's just for teaching purposes. It's like you using the example if you had 2million dollars how to invest. It isn't saying you will get 2 million, it's just showing you the numbers in a hypothetical situation.

[Nutria]

2. Don't use my ministry or personal religious views as some way to argue your point, and make me out to be something I am not just because you misunderstand. You overstepped with that. Do not do it again, please.

I removed the insulting sentence when, after re-reading, I realized it was an insult.

Still, I stand by "you should know the difference between sins of commission and since of omission" because truthful deceits are completely relevant to how people lie with statistics.

[Nutria]

In what way are you saying it(or me indirectly) is lying? Is the math wrong?

By those sentences, you clearly demonstrate that you don't understand "lying with statistics", and "sins of omission".

[GoodSteward]

By those sentences, you clearly demonstrate that you don't understand "lying with statistics", and "sins of omission".

By all means please provide proof that it is misleading or lying indirectly, and if you can I will no longer use that slide.

I don't believe you will be able to because it is a visual representation of two choices, not advice on how to invest and what to expect. I really believe you are over-thinking what that slide is. I'm surprised nobody else has chimed in on this.

[GoodSteward]

Just for the sake of this, I pulled up an article I found talking about what return you can reasonably expect. In that article, he prefers to use 8% to be safe but shows a graph(through the end of 2014) of the S&P 500 getting just over 9% over the last 25 years. I didn't look to see what they look like now, but I am sure they are not far off since we haven't had another recession. We calculate based on what we can see now, and 8-9% is within reason. I am like you and personally look more to 7% range.

[Nutria]

Just for the sake of this, I pulled up an article I found talking about what return you can reasonably expect. In that article, he prefers to use 8% to be safe but shows a graph(through the end of 2014) of the S&P 500 getting just over 9% over the last 25 years.

Over the past 25 years (03 Jan 1992 to current day), a 9% per annum return would mean that the S&P500 would currently be at 3,942. Obviously, S&P 500 is nowhere near 3942.

https://finance.yahoo.com/chart/^GSPC and a little math shows what it really is.

419*(1+.09/12)^(25*12) = 3942

From 419 (it's end on 03 Jan 1992) to today's 2,267 is 6.77% per annum.

419*(1+.0677/12)^(25*12) = 2265

From 340 (EOY 1989) to 2068 (EOY 2014) is not 9% or even more than 7.5% (where you can round to 8%). It's 7.25%.

340*(1+.0725/12)^(25*12) = 2071

q.e.d., nowhere near 9%.

[Nutria]

By all means please provide proof that it is misleading or lying indirectly, and if you can I will no longer use that slide.

I don't believe you will be able to because it is a visual representation of two choices, not advice on how to invest and what to expect.

You need to read those links I provided on lying with statistics. https://faculty.washington.edu/chudler/stat3.html specifically the section "Games with Graphics". The very first sentence reads, "Misusing and abusing graphics are easy ways to mislead people. People like to see graphs for a quick way to evaluate a set of numbers. But BEWARE! Make sure you are not fooled."

I really believe you are over-thinking what that slide is.

Never.

I'm surprised nobody else has chimed in on this.

They are awed into speechlessness by my superior intellect...

[GoodSteward]

SP 500 Calc

[Nutria]

SP 500 Calc

OK. I was just calculating closing values.

One other issue is that no one invests only in the S&P500. What would it look like with 20% invested in a broad market bond fund?

[GoodSteward]

The point of that slide was to give a theoretical return given those scenarios. You argued with me, very emphatically and IMO inappropriately, that it was a flat out lie. I have shown it technically is possible, therefore not a lie. Not what I would use to figure someone's retirement, but is fine just for teaching.

I don't feel there is any need to keep this going since it wasn't about investment advice. It was just to show the value of compound interest and starting sooner.

[StormRichards]

They are awed into speechlessness by my superior intellect...

[StormRichards]

OK. I was just calculating closing values.

[StormRichards]

One other issue is that no one invests only in the S&P500. What would it look like with 20% invested in a broad market bond fund?

So you were proven wrong so now it is time to change your argument.

[Nutria]

So you were proven wrong so now it is time to change your argument.

The argument is whether it's reasonable for people to have 9% growth for 20 years. The answer is, "yes", if you keep 100% of your money in an S&P 500 fund for 25 years.