1. Achieve your personal goals

2. Make a short list 2

3.  Income to: ◦ Provide for basic needs  Food  Shelter  Clothing ◦ Achieve your personal goals  Home ownership  Travel  Retirement  Children’s Education 3

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5.  Goals should be SMART: ◦ Specific: know what your goals are to create a plan ◦ Measurable: with a specific amount ◦ Action-oriented: identify the personal financial activities ◦ Realistic: utilizing your income and life situation ◦ Time-based: identify the time frame to achieve the goal Example: To save $20,000 by 2015 to make a down payment on a house by increasing savings by $200/month. 1-5

6.  Write a short-term goal  Write an intermediate goal  Write a long-term goal  Include an action plan of how to achieve each 6

7.  “Pay Yourself First” ◦ What does this mean to you? ◦ Why is it important?  Definition: Set aside a certain dollar amount each pay period to save and invest for the future.  Ideally, have the amount automatically deducted from your check so that you never see the money 7

8.  Needs vs Wants ◦ Focus on Needs ◦ Set goals to meet Wants ◦ Keep a daily spending diary for at least a month to determine where your money goes ◦ Reduce spending, increase savings 8

9.  Spend—Reduce  Save--Increase  Share—Support  Sacrifice--Required 9

10.  Challenge: ◦ Begin a Daily Spending Diary Today ◦ Track Every Penny You Spend ◦ Determine things that you can reduce ◦ Save that money and begin paying yourself  So, what can you do without? (50-30-20) ◦ 50% on Needs ◦ 30% on Wants ◦ 20% on Savings and Debt Repayment 10

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12. “Let’s assume you make $50,000 a year. That’s about $2,000 every two weeks, so to save 10 percent of your income, you’d have to save $200 every two weeks or $14 a day. Result: Invest $200 every two weeks for 35 years in a retirement account that earned an annual return of 10 percent what would you have? $1,678,293.78.” Source: D. Bach, “The Automatic Millionaire”: 12

13.  Savings accts and certificates of deposit  U.S. savings bonds  United States treasury bills  Municipal bonds  Corporate bonds  Preferred and income common stocks  Income mutual funds  Real estate rental property 13

14.  Growth means increase in value  Growth companies pay little or no dividends, but reinvest in the company  Mutual funds, government and corporate bonds, and real estate offer growth potential  Gemstones and collectibles - more speculative  Real Estate lacks liquidity 14

15.  The process of placing your assets among several types of investments which lessens your risk in different market cycles  Dependent on: ◦ Time Factor—the longer the better ◦ Your Age—type will change as you age ◦ Financial Goals ◦ Risk Tolerance—How comfortable are you with exposure? Are you young enough to recover? 15

16.  My expenses will decrease when I retire  My retirement will only last 15 years  Social Security & my pension will pay for my basic living expenses  My pension benefits will increase to keep pace with inflation  My employers health insurance plan and Medicare will cover my medical expenses  There’s plenty of time for me to start saving for retirement  Saving just a little bit won’t help 16

17.  If from age 25 to 65 you invest $300 a month (9%), at age 65 you’ll have a nest egg of $1.4 million  Wait ten years until age 35 to start and you’ll have about $550,000 at age 65  Wait twenty years until age 45 and you’ll have only $201,000 at age 65 17

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19.  Many people are concerned about the future of Social Security.  Longer life expectancies means retirees collect benefits longer  People are retiring earlier and entering the system sooner and staying longer  The baby boomers will begin retiring soon and the ratio of workers to retirees is doing down ◦ In 1945 there were 42 workers per retiree, ◦ In 2008 there are three workers per retiree, by 2032 it will drop to 2.1 workers per retiree 19

20.  Employer Pension Plan  401K  IRAs  Social Security  Annuities 20

21.  Pay yourself first ◦ Start Small if you must ◦ Find ways to cut spending ◦ Set goals to guide your saving/spending  Time Value of Money ◦ The earlier you begin, the more likely to achieve your goals  Monitor, review and revise annually 21