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The Sensitivity of Indexed Universal Life – Part 2
The following table is something I reference when talking with anyone about the time value of money. When I was in my 20s, I had the conversation with my siblings as well as with my wife’s siblings and their spouses. More recently I had the conversation with my own kids.
This isn’t going to be a revelation to anyone familiar with finance but a lot of people are surprised by it. At a glance, it shows numbers that are almost unbelievable and, to an extent, defy logic for those unfamiliar with it. For example, how can accumulating at 12% over 10 years be only 57% greater than at 4% when at the 60-year duration it’s 3,381% greater? Or that from Year 10 to Year 60, 4% grows 20 fold when at 12% it grows more than 400 fold? I mean, 12% is three times 4%, but over 10 years it only grows the pot by a fifth of that but at 60 years it grows the pot by over ten times the three times. This is pretty cool stuff. For full post, click here…