www.hullfinancialplanning.com
The 15 Minute Round the World Intro to Financial Planning for Entrepreneurs: Burleson
Business Builders
Jason HullHull Financial Planning
www.hullfinancialplanning.com
Who Is This Presentation For?
• Anyone who doesn’t feel like their personal finances are in a rock solid position
• Anyone who doesn’t feel like their business is in a rock solid position
…in other words…
YOU!
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What Will You Learn?
• Common personal finance mistakes and how to avoid them
• Ideas for how to squeeze that little bit more out of your budget
• Ideas for how to make your business work for you
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Who Am I?
• Army veteran• Founded and sold a software development
company• Financial planner, CFP® candidate• Personal finance columnist, U.S. News &
World Report
www.hullfinancialplanning.com
Common Personal Finance Mistakes:No Plan
No budget = money controls you• If you don’t have a budget, you’re actually in
the majority (51%) of Americans!*• Don’t overcomplicate– Use a simple spreadsheet– Start with income– Then known “must pay” expenses– Then variable expenses– Don’t forget to save!
http://www.pewsocialtrends.org/2007/02/07/what-americans-pay-for-and-how/306-3/
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Common Personal Finance Mistakes:No Plan
No retirement plan = don’t know if or when you can quit
• 4 out of 10 Americans have no plan besides Social Security*
• 30% say they will have to work into 80s to retire; however, 22.5% between 60-84 report employment disability
• Start with the goal and work backwards – expenses in retirement and how much you have to save to get there
http://www.pewsocialtrends.org/2007/01/04/most-americans-moderately-upbeat-about-family-finances-in-2007/
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Common Personal Finance Mistakes:Risk Management
The risk ostrich = you may be underinsured• Optimism bias affects future thinking• 70% of people over age 65 require long-term care*• 43% of people who need to use their LTC policies are under
age 64• 10.2% of people age 19-64 can’t work because of disability
or poor health• Look at appropriate term life, disability, and long-term care
insurance– If someone tries to sell you something other than term life, make
them show you quantitative aftcast to show superior performance
http://www.longtermcare.gov/LTC/Main_Site/Understanding/Definition/Know.aspx
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Common Personal Finance Mistakes:Retirement Saving
If you save, are you saving enough?• Only 51% save for retirement*• 21% of workers covered by 401(k) don’t participate• IRA limits
– $5,500/year/person– $6,500/year/person if age 50 or older
• 401(k)/403(b)/457/TSP limits– Your contribution: $17,500/age 50+ catchup: $5,500– Total contribution (+ employer contrib): $51,000/$56,500
• Set aside money every month so you don’t have to think about it – automate!
• Think about your future self before making a decision on how much to set aside for retirement savings.
http://money.cnn.com/2012/05/10/retirement/saving-retire/index.htm
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Common Personal Finance Mistakes:Investing Mistakes
Fees and timing are your portfolio’s silent killer• DO NOT PAY FOR LOADS IN MUTUAL FUNDS!• Look at 12-b(1) fees• Trying to time the market = -35.8% performance vs value
cost averaging*• In 2012, 89.8% of actively managed stock funds
underperformed their index counterparts• Depending on trading frequency, it takes between 20-25
years to determine skill vs. luck in investing. Do you have that much time to waste on a gamble?
• Value cost average into INDEX funds with LOW FEES.
http://money.usnews.com/money/blogs/the-smarter-mutual-fund-investor/2012/11/05/herd-behavior-hurts-fund-investors
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Squeeze More Out of Your Budget
Remove recurring costs you don’t need• Do you need cable TV?– Try Netflix, Hulu, PlayOn, and stations’ websites
• Paying for more cell phone than you need?– Lower minutes– Get Google Voice– Remove landline
• Gym membership you don’t use?– Plyometrics, body weight exercise, home Crossfit
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Squeeze More Out of Your Budget
Automate your finances• Set up side accounts– Christmas fund– Home/car insurance fund– Roof/car replacement fund
• Have investments automatically withdrawn• Set up automatic bill pays so you don’t have to
remember when to pay them
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Squeeze More Out of Your Budget
DEBT SUCKS• KILL YOUR DEBT OR IT WILL KILL YOU• 46.7% of American households carry a credit card
balance• Pay absolutely everything you can towards debt
(credit card, personal loan, car loan, mortgage)• Look at total interest payments first before
deciding which one to pay down/off – combines psychology and math
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The Reality Check of Small Business Often Bounces
*http://smallbiztrends.com/wp-content/uploads/2012/08/survival-by-sector.png
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Simple Formula for Succeeding in Business
• You must…• Provide something…• Which other people will pay you for…• That you can provide or produce…• At a profit…• While giving them value.
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Make Your Small Business Work
• Who?– Customers want to connect on a personal level.
Make sure that your voice comes through.• What?– Nobody cares about the what. It doesn’t make you
special. It is mandatory, but not differentiating.• Why?– The drive, the passion, what makes you tick. It’s
your purpose and will resonate with customers.
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Make Your Small Business Work
WHY AM I A FINANCIAL PLANNER?
Because I want people to get good advice at a rea-sonable price and not be screwed by unscrupulous salespeople
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Make Your Small Business Work
What's Your Why?
Because …
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Make Your Small Business Work
Who you don’t serve is as important as who you serve
• If you’re everything to everyone, then you’re nothing to anyone
• Trolls should live under the bridge• Create the in-group bias
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Small Business and Money
*http://www.flickr.com/photos/84263554@N00/255847189/
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Make Your Small Business Work
Don’t let self-employment tax kill your runway• Create the right corporate structure• Understand the difference between salary and
distributions• Are you taking all the deductions you can?• Don’t let the tax tail wag the business dog
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How to Reach Me
• http://www.hullfinancialplanning.com• [email protected]• (817)476-0584
If you want to read more about the topics in this presentation, go to http://www.hullfinancialplanning.com/bbbpres