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Projections
See Notes Below
This couple will get an annual statement
this year showing the value to be $105,000. What the Catalyst
wants them to see is a statement for years 5, 10, 15, and 20 and
the net results to their heirs if they keep this asset.
Without Catalyst:
If they die next year after income and estate tax, their children
will get $59,976. Remember that the couple invested $70,000 five
years ago. Twenty years from now; at least they don't have
a loss. However, the $265,330 (column 1) 20th year value is
reduced to $132,702 (column 7) after taxes. If the current
$100,000 value produces $132,702 net to heirs 20 years from now,
that's a whopping .0145 annual rate of return! Now that we
have disillusioned them it is not likely that based on their
goals, this underperforming asset will be kept. It's time
to reposition.
Now let's examine an alternative.
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