Why Personal Financial Why Personal Financial Planning Makes SensePlanning Makes Sense

Mark Mark VanderbergVanderberg

Paul FrenchPaul French

IntroductionIntroduction

Session One: Managing Your MoneySession One: Managing Your Money

Session Two: Protecting YourselfSession Two: Protecting Yourself

Session Three: InvestmentsSession Three: Investments

Managing Your Money: A Managing Your Money: A Holistic PerspectiveHolistic Perspective

Human Capital Human Capital Life PhasesLife PhasesLife StylesLife StylesCareer Goals and Career Goals and ObjectivesObjectives

Financial CapitalFinancial CapitalFinancial LiteracyFinancial LiteracyCurrent Current vsvs Future Future ConsumptionConsumptionWants Wants vsvs MeansMeans

Time Value of MoneyTime Value of Money

Investor Behavior is the DOMINANT

Factor affecting Real Lifetime Returns

Chasing performance is not a goal

Trying to time the markets is not a goal

Having your investments perform better than your neighbor is not a goal

Chasing performance is not a goal

Trying to time the markets is not a goal

Having your investments perform better than your neighbor is not a goal

Creating wealth that you do not outlive in retirement, that will send your kids to college, and that will provide something for those you must one day leave behind. That is a goal.

Chasing performance is not a goal

Trying to time the markets is not a goal

Having your investments perform better than your neighbor is not a goal

Creating wealth that you do not outlive in retirement, that will send your kids to college, and that will provide something for those you must one day leave behind. That is a goal.

To do that, you need to plan

Road Map to Financial HealthRoad Map to Financial Health

Step OneStep One: : Where are you Where are you now?now?Step TwoStep Two: : Where do you Where do you want to be?want to be?Step ThreeStep Three: : Develop a Develop a Road MapRoad MapStep Four:Step Four: Begin the Begin the JourneyJourneyStep Five: Step Five: Check Your Check Your ProgressProgress

Life PhasesLife PhasesEarly YearsEarly Years

Golden YearsGolden Years

Retirement YearsRetirement Years

Early YearsEarly Years

Job and CareerJob and CareerFamilyFamilyTaxesTaxesUnexpected EventsUnexpected Events

Principles Every Young Person Principles Every Young Person Should KnowShould Know

1.1.

Know your takeKnow your take--home pay.home pay.

2.2.

Pay yourself first.Pay yourself first.

3.3.

Start saving young.Start saving young.

Principles Every Young Person Principles Every Young Person Should KnowShould Know

4.4.

Compare interest rates.Compare interest rates.

5.5.

DonDon’’t borrow what you t borrow what you cancan’’t repay.t repay.

6. Budget your money.6. Budget your money.

Principles Every Young Person Principles Every Young Person Should KnowShould Know

7. Money doubles by the 7. Money doubles by the ““Rule of 72Rule of 72””..

8. High returns equal high 8. High returns equal high risks.risks.

9. Don9. Don’’t expect something t expect something for nothing.for nothing.

Principles Every Young Person Principles Every Young Person Should KnowShould Know

10. Map your financial 10. Map your financial future.future.

11. Your credit past is your 11. Your credit past is your credit future.credit future.

12. Stay insured.12. Stay insured.

ReferenceReference

BooksBooksPersonal Finance: Turning Money Into WealthPersonal Finance: Turning Money Into Wealth-- Arthur J. Arthur J. KeownKeownWall Street Journal Guide To Understanding Personal FinanceWall Street Journal Guide To Understanding Personal FinanceThe Only Other Investment Guide YouThe Only Other Investment Guide You’’ll Never Needll Never Need-- Andrew TobiasAndrew TobiasSmart Couples Finish RichSmart Couples Finish Rich-- David BachDavid BachAsset Allocation: Balancing Financial RiskAsset Allocation: Balancing Financial Risk-- Roger C. GibsonRoger C. Gibson

MagazinesMagazinesMoney MagazineMoney MagazineKiplinger Personal FinanceKiplinger Personal FinanceSmart MoneySmart Money

WebsitesWebsiteshttp://www.billshrink.com/blog/16http://www.billshrink.com/blog/16--depressiondepression--eraera--moneymoney--savingsaving--tips/#moretips/#more--22402240www.360financialliteracy.orgwww.360financialliteracy.orgwww.morningstar.comwww.morningstar.com

Questions?Questions? Rule of 72 = MC2?