The "Couch Potato" low-cost portfolio described by Scott Burns ("How simple can pay off," Jan. 27) concludes that you can do nothing and everything will work out. He does not disclose what the investments were or exactly how the calculations were done. The conclusions may lead a reader to act on this to her detriment.
Using his assumptions, I recalculated the 20-year performance results of the 10 largest stock mutual funds as of 2000. Included are both actively and passively managed funds. These are likely to be the most widely used fund investments. Performance is from Morningstar and Yahoo Finance. Burns appears to increase the withdrawals by the rate of inflation. His average withdrawal was $6,397 per year. Starting with $100,000 in 2001 and withdrawing $6,397 at the end of each year, eight of the 10 mutual funds ran out of money by 2020. The S&P 500 index fund only lasted until the 12th year. The two surviving funds had ending balances of $22,734 and $5,867. My personal conclusions are that neither fund will last much longer, and the investors who paid higher fees got something for their money. This is not theoretical. These are the real investments widely used by real people.
This is serious stuff. What does a person do when they run out of money? It is difficult to live on Social Security alone. Journalists and other financial writers have articles that appear plausible but are often unsupported. Rules of thumb and myths should not be repeated. The editors should be careful what they print. Many may be harmed if they believe this stuff.
These investors could have done better; however, that is the subject of another article.
Herbert Schechter, Minnetonka
The writer is a certified public accountant.
MINNEAPOLIS CITY CHARTER
Better lines of mayoral, council responsibility must be drawn
Thank you to the Star Tribune Editorial Board for its endorsement of much-needed and overdue changes to Minneapolis governance proposed by the Minneapolis Charter Commission ("Seeking a stronger Mpls. City Hall," Feb. 12). The goal of more clearly defining lines of accountability at City Hall has been studied and advocated for by urban studies scholars, the League of Women Voters and many thoughtful political leaders past and present. As the editorial describes, the consequences of ill-defined lines of responsibility in city governance is degrading the quality of our representative democracy. Thoughtful structural change is badly needed. The Charter Commission proposals deserve both scrutiny and support.
Charlie Meyers, Minneapolis
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I don't oppose giving Minneapolis voters a chance to amend the city charter in the November municipal elections. I believe it will give them an official voice with which to respond to the death of George Floyd.
My objection goes to the content of the amendments. For instance, there is one provision that if any City Council member "publicly or privately, directly or indirectly … attempt[s] or purport[s] to direct or supervise advocate the hiring or promotion … of any employee … except by communication with the Mayor," it is "a misdemeanor upon conviction of which a Council member forfeits his or her office."
