FINANCE,It’s a Personal Thing !

WHICH WAY IS NORTH ?

TIME IS MONEY $$$

19 2000 2,240 0 0

20 2000 4,749 0 0

21 2000 7,558 0 0

22 2000 10,706 0 0

23 2000 14,230 0 0

24 2000 18,178 0 0

25 2000 22,599 0 0

26 2000 27,551 0 0

27 0 30,857 2000 2,240

28 0 34,560 2000 4,749

29 0 38,708 2000 7,558

AGE BEN RETURN ARTHUR RETURN

BEN AND ARTHUR---BOTH SAVE AT 12% PER YEAR!BEN STARTS AT AGE 19 AND ENDS AT AGE 27ARTHUR STARTS AT AGE 27 AND STOPS AT 65

60 0 1,298,83 2000 861,31761 0 1,454,69 2000 966,91562 0 1,629,26 2000 1,085,1863 0 1,824,77 2000 1,217,6464 0 2,043,74 2000 1,366,0065 0 2,288,99 2000 1,532,16

...AND HE NEVER

CAUGHT UP!

AGE BEN RETURN ARTHUR RETURN

18% interest is not 3 times better than 6% interest!

$1,000 one time investment, no withdrawalAge 25 to Age 65 (40 years)

18% 12% 6%

0

100000

200000

300000

400000

500000

600000

700000

800000

18% = $750,378

12% = $ 93,050

6% = $ 10,285

Money Management Strategy: Financial Statements and Budgeting

Long Term

Save and Invest

Future Income

Lost Interest

Major Money Management Activities

Creating and implementing

a plan forspending, and saving (budgeting).

Creatingpersonalfinancial

statements(balance

sheets andcash flow

statements of income

and outflow).

3-4

Storingand

maintainingpersonalfinancialrecords

anddocuments.

Report

Measure

Maintain

Provide

Assets

Liabilities

Assets – Liabilities

Net Income

Fixed & Variable

Future

Emergency

Fixed

Variable

Variances

Flexible

“Baby Steps”

Step One: $1,000 in an “Emergency Fund”

Step Two: Pay off all debt (except the house)

utilizing the “ Debt Snowball”

Step Three: 3 -6 months expenses (necessities only) in savings

“Baby Steps”

Step Four: Invest 15% of Household Income into ROTH IRA’s and Pre-tax retirement plans

Step Five: College FundingStep Six: Pay-off Home EarlyStep Seven: Build Wealth! (Mutual Funds/

Real Estate)

MAJOR COMPONENTS OF A

HEALTHY FINANCIAL PLAN

Teach My Children

Retirement Funding

Life Insurance

Written Cash Flow PlanWill and/or Estate Plan

Debt Reduction PlanTax Reduction PlanEmergency Funding

Charitable Giving

Health InsuranceDisability Insurance

Auto InsuranceHomeowners Insurance

IAMNOWHERE

I AM NOWHERE

I AM NOW HERE