Wednesday, October 22, 2008

Capital Guaranteed Saving ...

Nowadays, more and more people complains about drop of their investment value.  This would be a good learning experience that you may not be able to take the risk you thought you could ...

A few days ago, I came across this Capital Guaranteed Saving Plan by Prudential called Pru-Retirement something.  May be this kind of plan is suitable for those who cann't stand recent market crashes ...

click on the image to view in bigger size

Basically this example is like this :

1.  You save $500 every month for 20 years.  So you have save a total of $120,000
A - if market drops
2a. If market crashes and your investment value is less than $120,000 then the Guaranteed value is $120,000
3a. This particular plan adds some extra value to the $120,000 so what you get is actually slightly more than what you have saved, ie. $139,200
4a.  As a result, the Minimum you will get back is $580 every month for 20 years !!
B - if market is good
2b. If market is good and your investment value worth more, ie. $230,000 or 6% increase every year.
3b. Calculation is the same except your capital is now higher.
4b. In this case, you will get $1,111 every month for the next 20 years - comparing to your initial saving of $500 only.
The good things about this kind of plan are :

. You will NEVER lose less than what you have put in !
. Better still, you will at least get back slightly more than what you put in !
. In good time, you still get to Earn More with the up trend !

Super Great and Perfect isn't it !?  Well, do your homework, future post will re-look into this kind plan with its pros and cons.