1. CLASSES TO GO Compound Growth Rates and Yield Jim Thomas National Volunteer

2. BETTERINVESTING NATIONAL CONVENTION Disclaimer The information in this presentation is for educational purposes only and is not intended to be a recommendation to purchase or sell any of the stocks, mutual funds, or other securities that may be referenced. The securities of companies referenced or featured in the seminar materials are for illustrative purposes only and are not to be considered endorsed or recommended for purchase or sale by BetterInvesting™ National Association of Investors Corporation (“BI”) or the BetterInvesting Volunteer Advisory Board, its volunteer advisory board (“BIVA”). The views expressed are those of the instructors, commentators, guests and participants, as the case may be, and do not necessarily represent those of BetterInvesting™ or BIVA. Investors should conduct their own review and analysis of any company of interest before making an investment decision. Securities discussed may be held by the instructors in their own personal portfolios or in those of their clients. BI presenters and volunteers are held to a strict code of conduct that precludes benefiting financially from educational presentations or public activities via any BetterInvesting programs, events and/or educational sessions in which they participate. Any violation is strictly prohibited and should be reported to the President of BetterInvesting or the Manager of Volunteer Relations.

3. BETTERINVESTING NATIONAL CONVENTION NAIC Principles Invest Regularly Reinvest All Earnings Invest in Quality Growth Companies Diversify to Reduce Risk

4. BETTERINVESTING NATIONAL CONVENTION What are “Earnings” Proceeds from companies you sell Earnings produced by companies you own, which are either … –Paid to you as dividends, or … –Retained by the company and reinvested your behalf

5. BETTERINVESTING NATIONAL CONVENTION Why Reinvest Earnings? Compound Growth! Money (earnings) not invested doesn’t grow Reinvesting means taking money produced by an investment and investing that money too (not necessarily in the same thing!)

6. BETTERINVESTING NATIONAL CONVENTION Example $100 investment with 6% price growth and 4% dividend yield –Investment worth $106 after one year –Plus $4 received as dividends Reinvesting the $4 allows $110 to grow (rather than just $106)

7. BETTERINVESTING NATIONAL CONVENTION Example Results Over Time $100 investment 6% price growth 4% dividend yield Dividends reinvested vs. putting them “in a mattress” Years D i v i d e n d s ReinvestedMattress 5$161$156 10$259$232 15$418$333 20$673$468 25$1,083$649 30$1,745$891 40$4,526$1,648 50$11,739$3,003

8. What about the SSG? How do Dividends, Reinvesting and Compound Growth relate to the SSG?

9. BETTERINVESTING NATIONAL CONVENTION Percent Payout Annual dividend … as a percentage of annual earnings $0.15 dividend (paid during a year) $1.00 earnings (during that year) 15% payout (i.e., 15% of earnings were paid as dividends)

10. BETTERINVESTING NATIONAL CONVENTION SSG Section 3G: % Payout Annual dividend (F) as a percentage of annual earnings (C), or F ÷ C.

11. BETTERINVESTING NATIONAL CONVENTION Dividend Yield Annual dividend … as a percentage of dollars invested to produce that dividend $3 dividend (paid over a year) $200 invested 1.5% annual dividend yield (i.e., $3 ÷ $200 = 1.5%)

12. BETTERINVESTING NATIONAL CONVENTION SSG Section 3H: % High Yield Annual dividend (F) as a percentage of annual low price (B), or F ÷ B.

13. BETTERINVESTING NATIONAL CONVENTION SSG Section 5A: Present Yield Dividend expected to be paid next year … as a percentage of the current stock price.

14. BETTERINVESTING NATIONAL CONVENTION SSG Section 5B: Avg. % Payout This is a judgment item; you may want to change it. How does it compare with the average from section 3G?

15. BETTERINVESTING NATIONAL CONVENTION SSG Section 5C: Compound Annual Total Return Potential Avg. Annual Yield … combined with … Potential Annual Price Appreciation.

16. BETTERINVESTING NATIONAL CONVENTION SSG Section 5C: Compound Annual Total Return The computer calculates compound return. Your job is to provide the judgments that flow into this calculation.

17. BETTERINVESTING NATIONAL CONVENTION Make A Difference In Someone’s Life If you have benefited from BETTERINVESTING, Please pick up some BETTERINVESTING materials and introduce others to this opportunity.