the 30 minute round the world intro to financial planning: bell helicopter jason hull hull financial...

The 30 Minute Round the World Intro to Financial Planning:

Bell Helicopter

Jason HullHull Financial Planning

http://www.hullfinancialplanning.com

http://www.hullfinancialplanning.com/

Who Is This Presentation For?

• Anyone who doesn’t feel like their personal finances are in a rock solid position

…in other words…

YOU!



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



Who Am I?

• Army veteran• Founded and sold a software development

company• Financial planner, CFP® candidate• Personal finance columnist, U.S. News &

World Report



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/http://www.hullfinancialplanning.com


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/http://www.hullfinancialplanning.com


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.aspxhttp://www.hullfinancialplanning.com


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.htmhttp://www.hullfinancialplanning.com


Common Personal Finance Mistakes:Retirement Saving


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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-investorshttp://www.hullfinancialplanning.com


Common Personal Finance Mistakes:Hopping on the Hedonic Treadmill

Don’t stuff a huge house full of furniture!• Once we graduate from college, we feel like

we’ve “earned” a lifestyle upgrade• We buy – a nice new car– a big house– and rooms full of furniture

• Instead of paying off debt and investing



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




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




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



Questions From the Audience

How to invest for personal wealth?• Don’t try to hit a 7 run home run• You, statistically speaking, won’t beat the

market over the long run• Fees and loads kill performance• 5% rule – if you want to speculate, do it with

<= 5% of your investable assets




Do you have tips for making a budget and sticking to it?

• Keep it relatively simple – the fewer categories, the better

• I use Mint to track spending• Do budget review 1x/month WITH YOUR

SPOUSE (where applicable)• Automate payments, then carry cash




Why do you need a financial planner?• Reason #1: Trade money for time. You can spend

hundreds of hours getting answers from reading/Internet or pay to get them applied to your situation.

• Reason #2: You’re not succeeding as a DIY• Reason #3: You’re not really a planner (I don’t mean

financial planner, either)• Reason #4: You have an out-of-the-ordinary situation

(chronic illness, large inheritance, etc.)http://www.hullfinancialplanning.com



How do you choose a financial planner? How can you really trust them?

• Ask the following:– How are you getting paid?– You’re going to sign a legally binding, fiduciary

contract with me, right?– What is your net worth?– How did you get the net worth?

• CFP, CLU, ChFC certifications goodhttp://www.hullfinancialplanning.com



Are the 2040, 2050, etc. 401K investments good options?

• Look at– Fees of fund compared to index brethren– TDF 2015 to see equity allocation

• Match to what you want to do– Will you buy annuities at retirement?– Will you invest in equities heavier to try to grow nest

egg?• Reasonable “lazy portfolio” solution




Advice on getting out of debt early on or going after the matching contribution.

• As long as you– Have income > expenses– Won’t take on MORE debt– Have sufficient assets outside of retirement

account(s) to tap in emergency• …then contribute up to match first




Are there better funds out there to be in versus the company sponsored ones? Leverage the

opportunities available through Fidelity Brokerage Link.

• Yes, but…• Company match means breakeven of globally

optimal funds is a long, long time• 401k more efficient if you plan on retiring early

(age 55 + terminate employment vs. age 59 ½)




Roth versus Traditional IRA/401k• Roth = pay taxes now, withdraw tax-free in future• Traditional = tax deduction now, pay ordinary

income tax rate on withdrawals in future• I recommend mixing due to tax efficient retirement

withdrawal strategies, but lean towards Roth where possible

• Front load with Roth, because when AGI > $127k for singles and $188k for married, can’t use Roth IRA. Can still use Roth 401k.




Percent of annual income to be putting away into tax deferred savings

• Depends on goals– If planning on working until age 55 or 59 ½, then as much

as possible (subject to IRS limits)– If planning on retiring earlier, will need some taxable

accounts to draw on• If this is the case, roughly (retirement age – current age) / (90 –

current age) is % for taxable accounts

• Can always save more in taxable accounts once you hit IRS contribution limits




Do you think that the government will change the Roth advantages or take them away?

Eventually taxing them like social security was not supposed to be.

• I’m not a politician!• I expect changes to Roths eventually• I do not expect retroactive treatment• But maybe not…Roth = taxes now.




Recommended books. Paid Investment advising programs that were useful.

• Total Money Makeover by Dave Ramsey (though I don’t agree with his investment or retirement withdrawal advice)

• Think and Grow Rich by Napoleon Hill• Secrets of Closing the Sale by Zig Ziglar• (SHAMELESS SELF-PROMOTION ALERT!) Winning

With Money course by me – coming out in August



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/bhipres



mailto:[email protected]

http://www.hullfinancialplanning.com/bbbpres

http://www.hullfinancialplanning.com/bbbpres


the 30 minute round the world intro to financial planning: bell helicopter jason hull hull financial...

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