1. What’s Your Investment I.Q.?

2. $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $

3. Prerequisites to Investments  Prepare financial statements  Set financial goals  Establish a spending plan  Organize financial records  Establish a positive credit history  Maintain adequate insurance coverage

4. Financial Foundation Goals Emergency Fund Budget Financial Records Credit Record Life Disability Health Property Liability Financial PlanInsurance Insured Savings, Savings Bonds, Money Market Funds, Certificates of Deposits Life Insurance Investments Government Securities High Quality Corporate Stocks, Bonds and Mutual Funds Real Estate Aggressive Growth, Junk Bonds, Stocks and Mutual Funds Futures Contracts Collectibles Pyramid of Investment Risk Increased Risk

5. Emergency Fund Financial Foundation GoalsBudget Financial Plan Financial Statements Financial Records Credit Record LifeHealth Insurance Disability Property Liability

6. Financial Foundation Goals Emergency Fund Budget Financial Records Credit Record Life Disability Health Property Liability Financial PlanInsurance Insured Savings, Savings Bonds, Money Market Funds, Certificates of Deposits Life Insurance Investments Government Securities High Quality Corporate Stocks, Bonds and Mutual Funds Real Estate Aggressive Growth, Junk Bonds, Stocks and Mutual Funds Futures Contracts Collectibles Pyramid of Investment Risk Increased Risk

7. Every Little Bit Counts! Every Little Bit Counts!

8. Pay Yourself First at 5% interest Save this each weekIn 10 years, you will have $ 7.00$ 4,720 $14.00$ 9,440 $21.00$14,160 $28.00$18,880 $35.00$23,600

9. Interest Rate5 years10 years15 years20 years If you invest $1,000/year ($19.20/week) 5%$5,52412,57821,57833,065 6%$5,63713,18123,27636,786 7%$5,75113,81625,12940,995 8%$5,86714,48727,15245,762 9%$5,98515,19326,36151,160 10%$6,10515,93731,77257,257 11%$6,22816,72234,40564,203 12%$6,35317,54837,27975,052

10. The Rule of 72 (years to double your money) 72 = Years to double money Interest Rate

11. The Rule of 72 (interest rate needed based on time) 72 = Interest Rate Required Years to double Money

12. Investments Actively Manage Understand Risk Know Your Tax Bracket Appropriate For Your Timeline Protect Against Inflation

13. It’s Not What You Earn, It’s What You Keep

14. Rate of Return to Account for Inflation and Taxes Inflation Rate 100 - Federal, State & Local Tax Brackets

15. Rate of Return to Account for Inflation and Taxes 3 100 - (28+5+2.5) RR = 4.65%

16. Tax Free Vs. Taxable Yield Tax Equivalent = Yield tax free rate (5%) 100 - (tax rate) (28%) 5 = 6.9% 72

17. TAX DEFERRAL MAGIC $2,000 Annual Investment @ 5% 5$11,603.83$11,133.26$ 470.57 1026,413.5724,420.081,993.49 1545,314.9840,277.045,037.94 2069,438.4959,201.2810,237.21 25100,226.9081,786.1418,440.76 30139,521.55108,739.6930,781.86 35189,672.58140,906.9848,765.60 40253,679.42179,296.5674,382.86 YearsTax DeferredTaxed InvestedInvestmentInvestmentSavings

18. Time is a valuable tool

19. EARLY INVESTOR Depositing $1,000 a year at 8% $1,083 $6,397 $15,939 Depositing nothing more but building at 8% $17,267 $35,471 $78,934 $175,656 $390,895 LATE INVESTOR Depositing nothing $0 Depositing $1,000 a year at 8% $1,083 $15,939 $51,939 $130,344 $306,000 Year 1 Year 5 Year 10 Year 11 Year 20 Year 30 Year 40 Year 50

20. INVESTING NOW versus INVESTING LATER AT 9% INTEREST Monthly TotalEnd Result Beginning Amount Contribution in 20 Yrs Now $ 50.00 $12,000 $33,394 In 10 years $150.00 $18,000 $29,027

21. Invest $1,000 a year @ 6% for 20 years =$36,790 You have earned $16,790!!!

22. Investment Alternatives Mutual Funds Stocks and Bonds Treasury Certificates Real Estate Futures Collectibles

23. Portfolio Selection

24. Low Risk $ Insured Savings $ Savings Bonds $ Certificates of Deposit $ Money Market Deposit Accounts

25. Limited Risk  Blue chip stocks  High quality bonds  Conservative mutual funds  Government securities

26. Moderate Risk Growth stocks Real estate Mutual funds Medium rated corporate, municipal and zero-coupon bonds Small company stocks

27. High Risk * Futures, options, and derivatives * Aggressive growth, stocks and mutual funds *Junk or low rated bonds *Collectibles, precious metals

28. RiskReward

29. Investment Strategies  Invest regularly by dollar-cost averaging  Diversify your portfolio  Stay invested during down markets  Check your investments regularly  Be patient

30. Since 1950, if stocks were held for : 10 years -- no risk of loss 5 years -- 5% chance of loss 1 year -- 23% chance of loss Time makes a Difference!

31. MUTUAL FUNDS TypeObjectiveInvestments Type of Investor BalancedConserve principal,One-third bonds,Older, income- some growthtwo-third stocksoriented Income-Moderate growthCommon StocksMiddle-aged, growthwith income(blue chip)conservative GrowthHigh growth,Common stocksYounger, low income (speculative) aggressive BondIncomeBondsOlder, income- oriented

32. MUTUAL FUNDS TypeObjectiveInvestmentsType of Investor PreferredIncomePreferred stockOlder, income-oriented SpecializedVariousGold stocks,Depends on objective, specializedbut should only be a industry stocks,small portion of convertible bonds,investments etc. Money marketIncome and Money marketAnyone needing income safety ofinstrumentsand safety principal

33. Limited Risk Portfolio

34. Moderate Risk Portfolio

35. High Risk Portfolio

36. Where can you go for Financial Planning Information?

37. Who would you want to be your financial professional? 1.A chartered life underwriter 2. A certified financial planner 3.An attorney 4.An accredited financial counselor 5.A financial manager 6.An accountant 7.A real estate broker 8. A stock broker 1.A chartered life underwriter 2. A certified financial planner 3.An attorney 4.An accredited financial counselor 5.A financial manager 6.An accountant 7.A real estate broker 8. A stock broker

38. CRITERIA FOR SELECTING FINANCIAL ADVISORS Training Professional Improvement Registrations/licenses Types of clients and income of clients References Professional designations Length of time in business Form of compensation

39. Questions to Ask Your Potential Financial Professional 1.What is your professional background? 2.How long have you been doing financial planning? 3.How long have you been in the community? 4.Who can vouch for your professional reputation? 5.Will you provide references from three or more clients that you have counseled for at least two years?

40. More Questions for a Financial Professional… 6. Will you manage my account(s) or will it be an associate? 7. May I see examples of your plans and monitoring reports you have drawn up for other investors? 8. Are you a member of any financial planning trade organizations? 9. If you earn commissions, from whom? 10.What level of investment risk do you generally use?

41. How is a Financial Professional Paid? Fee Only Planner Commission Only Planner Fee and Commission Planner

42. Keys to Success

43. What’s Your Investment I.Q.?