the most dangerous trends that destroy your personal finance, and 5 simple things you can do to...

Copyright 2013 Financial Freedom Now Ltd (Happy Financially)

The Most Dangerous Trends That Destroy Your Personal Finance, and 5 Simple Things You Can Do to Become Financially Free, Rich, and Retire Much

Earlier!These are the facts you must know about money and personal finance,

that nobody has told you!

(2013)


Disclaimer

All information on happyfinancially.com, including everything in this presentation is the opinion of the authors only. It is for informational purposes only and is not financial, medical, investment, or any other form of advice. For any relevant question you may have, anything that you are not certain about, or for anything you wish to find out more about, please consult a qualified professional in each respective field. Happy financially is for informational purposes only.At Happy Financially we believe in what we write, but we are not professionals, and as such this is not any form of financial or other advice. We disclaim responsibility for any and all actions taken as a result of using this site in any way. By doing anything as a result of using this site you do so at your own risk and on your own good judgement. There is no guarantee that anything on this site will be beneficial for you.Any references made on this site (to other sites, third parties or products) are subject to change without notice. We try to keep our information up to date, but it’s outside of our control what other sites and third parties do.


Areas covered

• How much money does life cost?• Low income in the US• Average household debt may shock you!• Are we getting poorer?• High interest charges waste your money!• Medical healthcare could be costing you

more than you think!• How likely are you to lose your job?• Expensive emergencies, are you

prepared?• Are you prepared for retirement?

• Debt affects retirement!• Recent graduates, expect very late

retirement• When do you expect to retire?• What if you start saving for retirement

late?• An article by PBS about financial

advisors• Being wealthy helps you in more ways

than you think!• How much money does life cost 2?

(Estimate)


Part 1 - The most dangerous trends that destroy your

personal finance!


How much money does life cost? (Estimate)• Lifetime costs: $625,000 (Includes mortgage, house down-payment, credit cards, student loans, car

loans, wedding, honeymoon, medical bills and interest charges)

• Retirement contributions: $180,000 (estimate from Aon Hewitt’s guidelines)

• Total: $805,000(These costs do not include day-to-day costs such as groceries, kid’s education, any insurances (except medical), any services, gas, utilities, vacations, and leisure money.)

Note: For details on each of these costs and sources/references, see later in the presentation on their respective pages.


Low income in the US (Inflation adjusted.)

• Median income in 2012 was the lowest since 1999.• Same income as 1989.

[1]

19831986

19891992

19951998

20012004

20072010

$44,000.00

$46,000.00

$48,000.00

$50,000.00

$52,000.00

$54,000.00

$56,000.00

$58,000.00

Last 30 Years

Year

Med

ium

Inco

me

20072009

201150000

51000

52000

53000

54000

55000

56000

Last 5 Years

Year

Med

ium

Inco

me


Average household debt may shock you!• Average debt per household:• Credit cards: $15,279 (but $7,128 is typical) [2]

• Student loans: $32,140 [2]

• Mortgage: $149,456 [2]

• Auto loan: $27,430 [3]

• Average household debt total: $224,305• Typically, 21% of monthly income goes to debt payments. [4]

Credit card Mortgage Student loans Car Loan Total$0

$50,000

$100,000

$150,000

$200,000

$250,000

Average debt per household


Are we getting poorer?

• 146.4 million Americans (almost 1 in 2 people) are either poor or low-income. [5]

• Since 1970, there are at least 7 times as many people on food stamps. [6]

• More than 1 in 4 children are enrolled on a food stamp program. [7]

• 1 in 5 children (14.7 million children) are poor. [8]

2000 20130

5000000100000001500000020000000250000003000000035000000400000004500000050000000

Number of people on food stamps

Year

Num

ber o

f peo

ple


High interest charges waste your money!• Typical interest charges paid in a lifetime: $155,000 (estimate)

(These can easily be calculated with many repayment calculators available on the internet. Just input the average interest rate for each respective debt.)

Renewing credit card

balance

Car Loan Credit cards Student Loans

Mortgage Total$0

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

$140,000

$160,000

$5,000 $5,000 $10,000 $12,000

$123,000

$155,000

Total Interest charges paid in a lifetime


Medical healthcare could be costing you more than you think!• Average employer-based coverage costs you $9,144. ($3,600 out-of-pocket expenses.) [9]

• Costs doubled in the last 10 years (for a typical family of four). [10]

• Estimated an additional medical spending total of $7,450 until 2022. [11]

• Estimated average insurance claim increase of 32%, over the next 4 years. [12]

• Additional 40% excise tax on employer-based coverage, starting 2018. [13]

• 3 out of 5 bankruptcies (estimated) are caused because of medical healthcare costs. [14]

• Predicted that 56 million adults, would struggle with medical bills in 2013. [15] 2008 2009 2010 2011 2012 2013 2014

$15,000

$16,000

$17,000

$18,000

$19,000

$20,000

$21,000

$22,000

$23,000

$16,771

$18,074

$19,393

$20,728

$22,030

Medical cost for a family of four

Year

Cost


How likely are you to lose your job?

• More than 1 in 3 working Americans separated from their job in 2012. [16]

• 1 in 6.5 working Americans got sacked. (2012) [16]

Sacked15%

Other sepa-rations

22%

Not seperated

63%

Job separations and sackings

SackedOther separationsNot seperated


Expensive emergencies, are you prepared?It’s recommended to save 6 months worth of household expenses in case of a job separation, medical emergency etc. (Less than 1 out of 4 people have saved this much.) [17]

• 1 in 4 people have no savings at all. [17]

• 46% of people have less than $800 saved. [17]


High costs most people face!

• The average wedding costs $28,000. [18]

• The average honeymoon costs $4,000 to $6,000. [19]

• For a traditional 20% down-payment on a $200,000 house, that’s $40,000.

Total: $73,000

Wedding Honeymoon House down-payment Total$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

$70,000

$80,000

Costs most people face


Are you prepared for retirement?

• Median retirement savings for people 10 years away from retirement is $12,000. [20]

• 46% of people have saved less than $10,000 for retirement. [21]

• 29% of American workers have saved less than $1,000 for retirement. [21]

• 40% of Baby Boomers plan to work as long as they live. [21]

• 36% of all Americans don’t contribute to retirement savings. [21]


Debt affects retirement!

• 60% of households accumulated more debt than retirement savings (2010-2011). [22]

• These households save 50% less of their annual income than their counterparts.

• 20% of households accumulated more credit card debt than retirement savings (2010-2011). [22]

• 69% increase in monthly debt payments for households near retirement (1992-2010). [22]

• Debt can severely reduce how long your retirement savings will last.


Recent graduates, expect very late retirement.• Expected retirement age is 73, for recent graduates (average life

expectancy is 84). [23]

• $23,300 median student loan debt, costs you $115,000 by retirement (current dollars). [23]

• In the past 30 years: [23]

• College tuition fees increased 200%.• Number of graduates in 4-year courses increased by 11%.• Unemployment at graduation: 18%

• 7 million students in default (unable to pay back student loans). [23]


When do you expect to retire?

• The typical household near retirement has $120,000 in retirement savings.• $120,000 in retirement only gives you $7,000 a year! (for 18 years)

• 62% of Americans aged 45 to 60 say they plan to delay retirement. (42% increase from 2010.) [24]

• Expected retirement age:• Mid 1990s – 60• 2003 – 63 [21]

• 2013 – 67 [21]

• Recent graduates: 73 [23]


What if you start saving for retirement late?• Aon Hewitt’s guidelines on saving for retirement (includes employer’s

match:• Save 11 times your salary by retirement. [25]

• Start saving 15% of your salary at age 25, until age 65. If you start at 30, you should save 19%.

• If you start at 45, you should save 31%. [26]

• Less than 1 in 3 people save 6% - 19% of their salary. [4]


An article by PBS about financial advisors• http://www.pbs.org/wgbh/pages/frontline/business-economy-financi

al-crisis/retirement-gamble/the-retirement-gamble-facing-us-all/• Read that.• 85% of financial advisors operate with a suitability standard. [27]

• Meaning they do not necessarily have your best interest in mind. [27]

• 70% of people who invest in mutual funds are unaware they’re paying fees. [27]

http://www.pbs.org/wgbh/pages/frontline/business-economy-financial-crisis/retirement-gamble/the-retirement-gamble-facing-us-all/




Being wealthy helps you in more ways than you think!

Research shows:• Poorer people may be faced with some very difficult financial decisions that can

ruin marriages. [28]

• Wealthy people are more likely to be healthy and to live longer. [29]

• Wealthy men are better lovers, and their partners experience deeper and more frequent pleasure. [30]

• Poorer and less educated people are more likely to be obese. [32]

• Children in poorer families could be subject to chronic stress. [31]

• Children in wealthier families are more likely to complete higher education. [30]

• Wealthy men are typically in relationships with younger, and more attractive partners.• More men than ever before marry women with higher income and education

than them. [33]


How much money does life cost 2? (Estimate)• Lifetime costs: $625,000

• Mortgage: $150,000• Student loans: $32,000• Car loan: $28,000• Credit card: $7,000• Wedding: $28,000• Honeymoon: $5,000• House down-payment: $40,000• Medical bills: $180,000 (employer-based coverage, family of four, 20 years cost)• Interest charges: $155,000

• Retirement contributions: $180,000 (9% salary for 40 years, without employer’s match.)

• Total: $805,000(These costs do not include day-to-day costs like groceries, kid’s education, any insurances (except medical), any services, gas, utilities, vacations, and leisure money.)

Note: For details on each of these costs and sources/references, see earlier in the presentation on their respective pages.


Part 2 - 5 simple things you can do to become financially free, rich, and retire much earlier!


1. Learn to invest better – how investments could scale…• Doing a simple compound interest calculation, 40 years of $7,000 annual

deposits, you’re left with (left column is average annual interest rate):• 3% - $536,343.91• 5% - $868,324.38• 8% - $1,891,041.45 – More than triple the 3% investment• 10% - $3,263,502.34

(These are simplified calculations which don’t include fees.)

• If you learn how to invest better and manage to invest at a higher average return, you may be able to accumulate a multiple of the amount of money you would otherwise have had.

Disclaimer: This is not investment or financial advice, it is for informational purposes only.

3% 5% 8% 10%$0.00

$500,000.00

$1,000,000.00

$1,500,000.00

$2,000,000.00

$2,500,000.00

$3,000,000.00

$3,500,000.00

Compound interest calculation - invest $7,000 annually, 40 years

Average annual interest rate

Resu

lting

mon

ey


2. Keep some emergency savings

• Unexpected emergencies (especially expensive ones) can wreak havoc on your finances if you’re not prepared for them.

• They can get you deep into debt, unable to pay bills and unable to catch up.• What if you get fired from your job (1 in 3 working Americans separated from their job in

2012), or your car breaks down and needs a replaced engine (thousands of dollars), or there is a medical emergency, or you forget your insurance is due for renewal, you spent too much for Christmas, or anything else happens?

• 1 in 4 people have no savings at all.• 46% of people have less than $800 saved.


3. Spend less, save more.

• Spending less means more money can go into savings or paying off your debt.• Simple steps you can take:

1. Sit down and note your expenses for last month.2. Cut out all the stuff you don’t care about (some subscriptions perhaps).3. Try and get better deals on things that you can.4. Reward yourself by spending a small portion of the money you save, put

the rest into savings, investments, and debt payments.


4. Start investing as early as you can.• If you invest $7,000 annually, at an 8% interest rate, for 40 years

instead of 30 years. You end up with $1,000,000 more! ($1.8 million instead of $0.8 million.)

• Starting early, with a good return on investment, can multiply your earnings.

• (You can do this calculation with any calculator such as: http://www.thecalculatorsite.com/finance/calculators/compoundinterestcalculator.php)

Disclaimer: This is not investment or financial advice, it is for informational purposes only.

http://www.thecalculatorsite.com/finance/calculators/compoundinterestcalculator.php


5. Most importantly - get out of debt

• If you were out of debt you would be much closer to financial freedom.• You’ll pay an estimated $155,000 just in debt interest charges in your

life. The result:• You would need much less money for retirement (because you’re no longer

making debt payments or paying interest on them).• You would have 21% of your income that you didn’t have before, to invest or

spend for your pleasure.


Part 3 - Looking for a “Get out of debt”

program


The 5 things to look for in a “get out of debt” program.A program that will help you get out of debt should:

1. Be effective.2. Be simple to use for you.3. Work regardless of your circumstances.4. Be from a credible source.5. Have a 100% money-back guarantee, just in case you’re not satisfied.


The Happy Financially report/short book:“How To Get Out Of Debt, In The Fastest Possible

Way!”

• It gives you all the information you need to get out of debt as fast as possible.• It works regardless of your circumstances because these tactics are

universal. Anyone can use them to get equally out of debt.• It streamlines your personal finance so you don’t need to think about

money management, and makes getting rid of debt as easy and simple as possible.• It’s made by Happy Financially.• It has a 2 month, 100% money-back guarantee, just in case you are

not satisfied with it.


Where to get“How To Get Out Of Debt, In The Fastest Possible

Way!”.

• You can read more about the short book or buy it at: happyfinancially.com/become-debt-free.

• Soon you’ll be well on your way to:• Becoming completely debt free.• Developing a great personal finance system, that ensures everything is always

taken care of, while automatically making you richer.• Potentially achieving complete financial freedom.

http://www.happyfinancially.com/become-debt-free


Subscribe for extra tips.

• Subscribe for extra tips on:• How to get out of debt.• How to develop a great personal finance system.• How to save money effectively.• How to make money, so you can increase your income.• How to achieve financial freedom.• And much more…

• Subscribe at http://www.happyfinancially.com/sign-up

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Happy FinanciallyAutomatically building a financially free future.

http://www.HappyFinancially.com


References[1] http://www.census.gov/ - Statistics and data about median income since 1983.[2] http://www.nerdwallet.com/blog/credit-card-data/average-credit-card-debt-household/ [3] http://www.cnbc.com/id/101461972 [4] https://about.scottrade.com/news/releases/2012/Scottrade-Research-Finds-Americans-Struggle-to-Save-for-Retirement.html[5] http://usnews.nbcnews.com/_news/2011/12/15/9461848-dismal-prospects-1-in-2-americans-are-now-poor-or-low-income[6] http://rt.com/usa/us-poverty-kids-health-687/ [7] http://rt.com/usa/us-poverty-kids-health-687/ [8] http://www.nbcnews.com/id/44171347#.U3PA2fldWSq [9] http://www.milliman.com/mmi/[10] http://www.forbes.com/sites/danmunro/2013/05/22/annual-healthcare-costs-surpasses-22000/[11] http://www.forbes.com/sites/theapothecary/2013/09/23/its-official-obamacare-will-increase-health-spending-by-7450-for-a-typical-family-of-four/[12] http://www.forbes.com/sites/robertlenzner/2013/11/02/obamacare-will-raise-average-health-insurance-premiums-by-32-for-21-million-people/[13] http://www.pbs.org/newshour/rundown/what-to-know-as-the-health-law-takes-effect/[14] http://www.nerdwallet.com/blog/health/2014/03/26/medical-bankruptcy/[15] http://www.cnbc.com/id/100840148[16] http://www.bls.gov/jlt/data.htm[17] http://money.cnn.com/2013/06/24/pf/emergency-savings/

[18] http://money.cnn.com/2013/03/10/pf/wedding-cost/ [19] http://www.discoveryourhoneymoon.com/average-honeymoon-costs-how-much-you-should-expect-to-pay/ [20] http://www.usatoday.com/story/money/personalfinance/2013/07/01/retirement-savings-shortfall-crisis-catch-u0p/2464119/[21] http://www.zerohedge.com/news/2013-01-11/so-you-want-retire-five-disturbing-statistics-about-retirement-infographic[22] http://www.zerohedge.com/news/2013-10-25/60-401k-participants-accumulated-more-debt-retirement-savings[23] http://www.nerdwallet.com/blog/investing/2013/73-retirement-norm-millennials/[24] http://online.wsj.com/news/articles/SB10001424127887323926104578276241741448064[25] http://www.marketwatch.com/story/retirement-savings-how-much-is-enough-2012-09-12[26] http://crr.bc.edu/wp-content/uploads/2011/11/IB_11-13-508.pdf[27] http://www.pbs.org/wgbh/pages/frontline/business-economy-financial-crisis/retirement-gamble/the-retirement-gamble-facing-us-all/[28] http://www.nytimes.com/2009/11/07/your-money/household-budgeting/07money.html?_r=2&[29] http://usatoday30.usatoday.com/news/health/painter/2008-03-23-your-health_N.htm[30] http://jezebel.com/5134284/women-orgasm-more-with-rich-men-claim-researchers[31] http://www.irp.wisc.edu/publications/focus/pdfs/foc272e.pdf[32] https://theconversation.com/education-wealth-and-the-place-you-live-can-affect-your-weight-7941[33] http://www.pewsocialtrends.org/2010/01/19/women-men-and-the-new-economics-of-marriage/

http://www.census.gov/

http://www.nerdwallet.com/blog/credit-card-data/average-credit-card-debt-household/

http://www.cnbc.com/id/101461972

https://about.scottrade.com/news/releases/2012/Scottrade-Research-Finds-Americans-Struggle-to-Save-for-Retirement.html

https://about.scottrade.com/news/releases/2012/Scottrade-Research-Finds-Americans-Struggle-to-Save-for-Retirement.html

http://usnews.nbcnews.com/_news/2011/12/15/9461848-dismal-prospects-1-in-2-americans-are-now-poor-or-low-income

http://usnews.nbcnews.com/_news/2011/12/15/9461848-dismal-prospects-1-in-2-americans-are-now-poor-or-low-income

http://rt.com/usa/us-poverty-kids-health-687/

http://rt.com/usa/us-poverty-kids-health-687/

http://www.nbcnews.com/id/44171347#.U3PA2fldWSq

http://www.milliman.com/mmi/

http://www.forbes.com/sites/danmunro/2013/05/22/annual-healthcare-costs-surpasses-22000/

http://www.forbes.com/sites/danmunro/2013/05/22/annual-healthcare-costs-surpasses-22000/

http://www.forbes.com/sites/theapothecary/2013/09/23/its-official-obamacare-will-increase-health-spending-by-7450-for-a-typical-family-of-four/

http://www.forbes.com/sites/theapothecary/2013/09/23/its-official-obamacare-will-increase-health-spending-by-7450-for-a-typical-family-of-four/

http://www.forbes.com/sites/robertlenzner/2013/11/02/obamacare-will-raise-average-health-insurance-premiums-by-32-for-21-million-people/

http://www.forbes.com/sites/robertlenzner/2013/11/02/obamacare-will-raise-average-health-insurance-premiums-by-32-for-21-million-people/

http://www.pbs.org/newshour/rundown/what-to-know-as-the-health-law-takes-effect/

http://www.nerdwallet.com/blog/health/2014/03/26/medical-bankruptcy/

http://www.cnbc.com/id/100840148

http://www.bls.gov/jlt/data.htm

http://money.cnn.com/2013/06/24/pf/emergency-savings/

http://money.cnn.com/2013/06/24/pf/emergency-savings/

http://money.cnn.com/2013/03/10/pf/wedding-cost/

http://www.discoveryourhoneymoon.com/average-honeymoon-costs-how-much-you-should-expect-to-pay/

http://www.discoveryourhoneymoon.com/average-honeymoon-costs-how-much-you-should-expect-to-pay/

http://www.usatoday.com/story/money/personalfinance/2013/07/01/retirement-savings-shortfall-crisis-catch-u0p/2464119/

http://www.usatoday.com/story/money/personalfinance/2013/07/01/retirement-savings-shortfall-crisis-catch-u0p/2464119/

http://www.zerohedge.com/news/2013-01-11/so-you-want-retire-five-disturbing-statistics-about-retirement-infographic

http://www.zerohedge.com/news/2013-01-11/so-you-want-retire-five-disturbing-statistics-about-retirement-infographic

http://www.zerohedge.com/news/2013-10-25/60-401k-participants-accumulated-more-debt-retirement-savings

http://www.zerohedge.com/news/2013-10-25/60-401k-participants-accumulated-more-debt-retirement-savings

http://www.nerdwallet.com/blog/investing/2013/73-retirement-norm-millennials/

http://online.wsj.com/news/articles/SB10001424127887323926104578276241741448064

http://www.marketwatch.com/story/retirement-savings-how-much-is-enough-2012-09-12

http://crr.bc.edu/wp-content/uploads/2011/11/IB_11-13-508.pdf



http://www.nytimes.com/2009/11/07/your-money/household-budgeting/07money.html?_r=2&

http://www.nytimes.com/2009/11/07/your-money/household-budgeting/07money.html?_r=2&

http://usatoday30.usatoday.com/news/health/painter/2008-03-23-your-health_N.htm

http://jezebel.com/5134284/women-orgasm-more-with-rich-men-claim-researchers

http://www.irp.wisc.edu/publications/focus/pdfs/foc272e.pdf

https://theconversation.com/education-wealth-and-the-place-you-live-can-affect-your-weight-7941

https://theconversation.com/education-wealth-and-the-place-you-live-can-affect-your-weight-7941

http://www.pewsocialtrends.org/2010/01/19/women-men-and-the-new-economics-of-marriage/



the most dangerous trends that destroy your personal finance, and 5 simple things you can do to...

Economy & Finance