bills jerrold johnson, cfp jn fund managers limited july 18, 2009 planning for financial success
TRANSCRIPT
Bills
Jerrold Johnson, CFPJN Fund Managers Limited
July 18, 2009
Planning for Financial Planning for Financial SuccessSuccess
Planning for Financial Planning for Financial SuccessSuccess
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HOW WOULD YOU LIKE TO
PLANNING FOR FINANCIAL SUCCESSPLANNING FOR FINANCIAL SUCCESS
Isaac sowed in the time of famine and, received in the same year an hundredfold harvest, because the LORD blessed him.
Gen 26:12 ( Paraphrased)
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HOW WOULD YOU LIKE TO
PLANNING FOR FINANCIAL SUCCESSPLANNING FOR FINANCIAL SUCCESS
• Reframe your thinking (renew your minds)
• Have a realistic financial goal
• Count the cost
• Look for places in your budget to save money
• Increase your Financial IQ
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1. Know what is going on
2. Control
3. Organization
4. Communication
5. Take advantage of opportunities
6. Extra time
7. Extra money
Budgeting/Counting the CostBudgeting/Counting the Cost
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• Income/Salary• Contributions• Investments • Insurance • Entertainment• Rent/Mortgage• Food
• Children’s Expenses• Personal Care• Transportation• Financial Obligations • Health• Vacation• Cell Phone/Credit
Making a BudgetMaking a Budget
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• Track your spending for three (3) monthso Save your receipts and tally them weekly
o Update your actual spending on your budget weekly
• Operate at least four (4) accountsoSalaryoRegular SpendingoSavingsoEmergency Cash
Budgeting TipsBudgeting Tips
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INCOMEINCOME $$
Salary - Everton 35,000
Other Income 5,000
TOTAL INCOME 40,000
EXPENSESEXPENSES $$
Tithe 4,000
Mortgage/Rent 10,000
Savings 1,000
Life Insurance 0
Health Insurance 0
Loans 0
JPSCo 3000
EXPENSES Con’tEXPENSES Con’t $$
Cable 2,500
Internet 0
Helper 0
Childcare 0
Groceries 8,000
Barber/Hairdresser 1,200
Transportation/Gas 6,000
Cell Phone 3,000
TOTAL EXPENSES 38,700
SURPLUS/ SHORTAGE 1,300
Everton’s Budget
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INCOMEINCOME $
Salary 65,000
Other Income 20,000
TOTAL INCOME 85,000
EXPENSESEXPENSES $
Mortgage/Rent 25,000
Savings 5,000
Life Insurance 4,000
Health Insurance 6,000
Loans 5,000
JPSCo 6,000
LIME 4,000
EXPENSES Con’tEXPENSES Con’t $$
Cable 2,500
Internet 2,000
Helper 8,000
Groceries 8,000
Entertainment 4,000
Barber/Hairdresser 2,000
Transportation/Gas 5,000
Phone Credit 5,000
TOTAL EXPENSES 91,500
SURPLUS/ SHORTAGE 6,500
Upton’s Budget
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INCOME $
Salary 130,000
Other Income 40,000
TOTAL INCOME 170,000
EXPENSESEXPENSES $$
Mortgage/Rent 40,000
Savings 15,000
Life Insurance 4,000
Health Insurance 8,000
Loans 35,000
JPSCo 6,000
LIME 4,000
EXPENSES Con’t $
Cable 2,500
Internet 2,000
Helper 10,000
Childcare 20,000
Groceries 10,000
Barber/Hairdresser 4,000
Transportation/Gas 5,000
Phone Credit 2,000
TOTAL EXPENSES 167,500
SURPLUS/ SHORTAGE 2,500
Kay-Ann’s Budget
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INCOMEINCOME $$
Salary - Jack 105,000
Salary – Jill 130,000
TOTAL INCOME 235,000
EXPENSESEXPENSES $$
Tithe 23,500
Mortgage/Rent 40,000
Savings 5,000
Life Insurance 8,000
Health Insurance 10,000
Loans 11,500
JPSCo 12,000
LIME 6,000
EXPENSES Con’tEXPENSES Con’t $$
Cable 2,500
Internet 2,000
Helper 20,000
Childcare 25,000
Groceries 20,000
Barber/Hairdresser 6,000
Transportation/Gas 15,000
Cell Phone 6,000
TOTAL EXPENSES 212,500
SURPLUS/ SHORTAGE 22,500
Jack & Jill’s Budget
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Saving vs. Investing
Saving is setting aside money for future use.
Investing is taking what you have and doing something with it to increase the value.
Savings vs. InvestmentsSavings vs. Investments
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Saving & InvestmentSaving & Investment• 10% of Income• Choosing Investments
o Safe/secure institutiono Higher the returns: higher the risk
• Discounts • Fees
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• Have a budget• Set realistic financial goals• Pay yourself first• Grocery shopping• Look and ask for discounts• Be a member of JNBS• Be a member of JAA• Conservation
o Utilitieso Foodo Clothing
Ways to SaveWays to Save
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STRATEGY• Free ATM transactions• Free Point of Sale transactions• Free JN Money Transfer Card• Internet Banking
JN Member BenefitsJN Member Benefits
……Our Our
Members Members
are are
EverythinEverythin
g!g!
• Discounts from NEM Insurance Co. (Ja.) Ltd. • Discounts from Jamaica Automobile Association (JAA)
• Member discounts linked to JN Teller 24/7 ATM and JN Money Transfer cards
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TACTICS• Roadside Assistance• Accident Assistance• Document Renewal Services• Discounts on Purchases
o 15-20% at auto centerso 10% at Pharmacieso 10% at travel agencieso “Show Your Card and Save”… (AAA)…155,000 merchants
MembershipMembership
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• National Health Fund Card
o Illnesses covered include:
Arthritis, Asthma, Benign Prostatic Hyperplasia, Diabetes, Epilepsy,
Glaucoma, High Cholesterol, Hypertension, Ischemic Heart Disease, Major
Depression, Prostate Cancer, Psychosis, Rheumatic Heart Disease, Vascular
Disease
HealthHealth
Options
• JN Health o Health coverage family members
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• Savings accounts • Fixed Deposits• GOJ Investments• Foreign Mutual Funds, Money Market funds,
Unit Trust• Equity Markets (JSE)• Entrepreneurship• Real Estate
Investment OptionsInvestment Options
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Building Blocks for Investing• Use a portfolio approach to investing
Equities (stocks) Real Estate Fixed-income (bonds) Cash equivalents (money market instruments)
Asset Classes
Building blocks for investingBuilding blocks for investing
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Time Horizon & Investing• When do I need the money I invested back
in my hands? • The longer one has to invest the more risk
they can choose to take• Match your type of investment you choose
to the time horizon
Time HorizonTime Horizon
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The 'Rule of 72' is a simplified way to find out how long an investment will take to double.
Dividing 72 by the annual interest rate, gives you a rough estimate of how many years it will
take for an investment to double.
The Rule of 72The Rule of 72
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If you are getting 12% interest on your investment it will take 6 years for your initial
investment to double.
The Rule of 72The Rule of 72
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Based on interest rates offered by the Government of Jamaica (20.875% p.a.) today
it will take approximate 3.5 years for your initial investment to double.
The Rule of 72The Rule of 72
7217.875
= 4 years
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Note: These figures are based on achieving a monthly retirement income of the equivalent of $50,000 per month in 2009. Figures are
calculated based on 11.59% inflation per year.
Years to Retirement
Monthly Income needed at
Retirement
Rate of Return on Savings
Total Amount needed for 25 years of
Retirement
10 $158,453.60 12% p.a. $15,044,622.85
20 $502,150.84 12% p.a. $47,677,490.47
30 $1,591,352.13 12% p.a. $151,093,396.58
Monthly Investment Needed to Reach Total Amount Needed At Retirement
Retirement PlanningRetirement Planning
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• Refinance debtoLower interest rates
• Limit the use of credit cards
• JN Mortgage Options• Upkeep savings• Moratorium on monthly mortgage payments• Capitalization• Re-advance• Extension of mortgage loan term• Interest Rate Adjustments
Debt ManagementDebt Management
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Managing DebtTwo types of Debt:
Good Debt - An investment that creates value and builds WEALTH (ie, student loan, home and business loans).
Bad Debt - Purchase that goes down in value or has NO potential to increase in value (ie, disposable or durable goods).
Debt ManagementDebt Management
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Reaching Your Financial Goals
• Decide what you want to achieve?• Determine when you want to achieve it by?• Put a cost to your goal.• Choose the appropriate investments.• Begin saving and investing towards it.
Reaching Your Financial GoalsReaching Your Financial Goals
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"As long as the earth endures, seedtime and harvest, cold and heat, summer and winter, day and night will never cease."
Gen 8:22
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THANK YOU!