money wi$e workshop
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Money Wi$e Workshop
Build Wealth Not Debt
$$ Wealth Creation $$ Budget to Save
$$ Take Control of Debt $$ Save and Invest
Get the facts !! Accumulating wealth is the key to obtaining financial independence. It is necessary to understand the language of money and have a systematic approach to saving and investing in order to meet your financial goals. Building wealth requires having the right information, planning, and then making MoneyWi$e choices.
The Language of Money
S____ o_ S____ pend
ave
r
Net WorthAssets
– Liabilities= Net Worth Or Wealth
It’s YOUR Choices
CourageEducationVocationFamily
LifestyleFrugality
Here’s how to Build Wealth not Debt
Determine Short Term Goals
Determine Long Term Goals
1. Pay yourself first.2. Spend less than you make.3. Know the difference between
needs and wants.4. Know the difference between
good debt and bad debt.
Pay Yourself First1. At least 10% of your Income
Saving – Emergency Fund and
Short Term Goals
Investing – Retirement and Long Term Goals
Spend Less than you MakeWhat determines your WEALTH is not how much you make but how much you keep of what you make!!
Before you spend money ask yourself three questions:1. Is it a need, want or a luxury?
2. How much of my life is this worth?(How many hours do I have to work to pay for it?)
3. If I spend this money which of my goals is it advancing? In other words where is it getting me?(Am I only receiving instant gratification or am I making progress toward building wealth?)
Know the difference betweenneeds and wants
1. Opportunity Cost
2. Time Value of Money
Opportunity CostThere is a cost and consequence to any money decision you make. The cost is the best forgone opportunity. What else could you have done with the money and what opportunity have you given up because you do not have the money to invest in an asset? Good decisions require a clear understanding of alternatives. It’s all about choices – manage your choices and you will manage your life!!
Cost Benefit Analysis
Cost/BenefitHow much does it cost?
What is the benefit?
SubstituteSomething different I can choose.
Benefit I will receive
Time Value of Money The secret to becoming a Millionaire
Invest $166 a month in the S & P 500 in a tax-deferred retirement fund.
From age 24 to 65 – never touch it
History says you will earn 10% on your investment.
With the Magic of Compounding
At age 65 you will be a $$$ MILLIONAIRE $$$
Know the difference between GOOD debt and
BAD debtThe only thing you borrow money for are things that appreciate in value.
1. Education2. Real Estate3. Your Business
Education attainment for Stephens County
59.4% High School Diploma or less22.7% Some College/Technical13.8% Bachelor’s Degree 4.2% Graduate or Professional Degree
Lead the Fieldby Earl Nightingale
The Socioeconomic Pyramid
Top5%
Over $100,000
Upper Middle Class$30,000 - $100,000
Lower Middle ClassOklahoma’s average income: $29,200
Source: Okla. Dept. of Commerce
Low IncomePoverty level for a family of four: $18,200
Source: Census Bureau
What section of the pyramid do you want to live in? You have the freedom to choose your lifestyle. The desire to succeed and education (either formal or self-directed learning) will get you to the top. It’s up to you to make the choices that determine your future.
People who need to be helped by the rest of us,Elderly – Disabled - TANF
What Bankers Evaluate Character – TRRFCC
Trustworthiness – Responsibility – Respect Fairness – Caring - Citizenship
Capacity to Pay Based on your income, employment history, expenses, debts, credit report and credit score. www.myfico.com and www.annualcreditreport.com
Capital The amount of cash you have and your debt to income ratio 33% or below. If you have three times as much debt as capital – history says you will fail.
Collateral Assets pledged to secure the loan; like a car or real estate. You don’t pay they take away.
Conditions General economic conditions is the economy growing or are we in a recession.
What Bankers Evaluate
Resourceswww.creditcompass.comwww.mindyourfinances.comwww.mapping-your-future.org www.entrepreneurU.org
Jackie Jacobi, Business Development SpecialistRed River Technology Center3300 W. Bois D’ArcDuncan, OK 73533(580) 255-2903 Ext 271jjacobi@rrtc.edu
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