DiscussMormonism.com

How does a $450,000 IRA become $21-102 million dollars? Until will see Romney's taxes, we'll never know.

A little background: Romney said he worked at Bain from 1984 to 1999. Bain used something called a SEP-IRA, which is entirely employer funded, and has maximum contribution of $30,000 a year, which would be $450,0000 for Romney's tenure at Bain.

While yearly contributions are limited to $30,000 there is no limit to how much interest your capital can earn in an IRA. But a typical IRA would have been lucky to have a modest gain in value, given the stock market roller coaster of the past decade. If you look at the yearly yields for IRA management, it seems, to be polite, rather incredible that Romney's IRA increased in value by up to 227 times.

Keep in mind, the SEP-IRA is entirely employer funded. Now if Bain ONLY put money in the account that came from the absolute CREAM of Bain investments, it MIGHT be possible to get this type of return on investment. For example, if Bain ONLY put the stock from the Dominos Pizza acquisition in his IRA in 1999, he would have received a very nice return in 1994 when Dominos went public.

But in order for you to believe the exponential growth of Romney's IRA, you have to believe that Bain picked the absolute CREAM of investments EVERY year for 10 years. And if this is a 'employer' controlled IRA, did the other employee's IRAs perform as well as Mitt's?

If someone rolls a twelve 10 times in a row, I want to take a look at the dice.

MeDotOrg wrote:How does a $450,000 IRA become $21-102 million dollars? Until will see Romney's taxes, we'll never know.

If he earned 20% per year, every year, a $30,000 annual contribution from 1984 to 1999 would be about $20,000,000 by the end of 2011. He'd need to make 28% per year, every year, to accumulate $100,000,000.

Plausible I suppose. By comparison, Warren Buffett has averaged a 21% return over his lifetime.

We "need" to see Romney's taxes less than we need to see all the records Obama won't release about himself.

Analytics wrote:If he earned 20% per year, every year, a $30,000 annual contribution from 1984 to 1999 would be about $20,000,000 by the end of 2011. He'd need to make 28% per year, every year, to accumulate $100,000,000.

Plausible I suppose. By comparison, Warren Buffett has averaged a 21% return over his lifetime.

It is possible. But probable or likely? I have grave doubts.

I guess one thing to do would be compare the return of investment for Bain investors and compare that to the performance of Romney's IRA. Did Bain's investments perform as well for their investors as they did for his IRA?

bcspace wrote:We "need" to see Romney's taxes less than we need to see all the records Obama won't release about himself.

So you agree, people in charge of large groups of populous should give a proper financial accounting?

MeDotOrg wrote:

Analytics wrote:If he earned 20% per year, every year, a $30,000 annual contribution from 1984 to 1999 would be about $20,000,000 by the end of 2011. He'd need to make 28% per year, every year, to accumulate $100,000,000.

Plausible I suppose. By comparison, Warren Buffett has averaged a 21% return over his lifetime.

It is possible. But probable or likely? I have grave doubts.

I guess one thing to do would be compare the return of investment for Bain investors and compare that to the performance of Romney's IRA. Did Bain's investments perform as well for their investors as they did for his IRA?

He had full control over how he invested the IRA funds, right? If that's the case, what are you insinuating? Flat-out fraud would be contributing more than the legal limit, or investing in some sort of a fake security that was designed to do the same thing (as a hypothetical example, Bain could create a bond that pays a guaranteed 25%, but can only be sold into the IRAs of Bain's executives). What else? Trading on insider information? Arbitrage? Just being a really, really good investor?