2. Financial Planning Begins with Making Money
Six Steps to Controlling your assets
Take an Inventory of Your Financial Assets
Keep Track of All Your Expenses
Prepare a Budget
Pay Off Your Debts
Start a Savings Plan
Borrow Only to Buy Assets that Increase in Value or
Generate Income
3. Real Estate: Historically, a Relatively Secure
Investment
real estate bust of 2008-2009
history shows that home prices are likely to rise
again and will continue to provide several
investment benefits
Tax Deductions and Homeownership
Benefits
How the Government Helps
4. Learning to Manage Credit
Credit cards are an important element in your
personal financial system, even if you rarely use
them
Advantages and Disadvantages
Where to Put Your Savings
Contrarian Approach – buying stock when
everyone else is selling or vice versa
5. TYPES OF INSURANCE HEALTH INSURANCE
Term Insurance- is the simplest and Health Maintenance
least expensive form of insurance. It is pure
insurance for a given number of years. Organizations (HMO's)- are less
Whole Life Insurance- is a expensive than other health insurance providers,
combination of a pure insurance plan and a but the members can not choose their own
savings plan. This type of insurance is great doctors.
for people who find it hard to save money.
With a universal policy, you can choose how Preferred Provider
much of the money you pay goes to
insurance and how much goes toward Organizations (PPO's)- are little more
investments. costly, and members are required to pay a co-
Variable Life Insurance- is a form pay. The members of PPO's are allowed to
of whole life insurance that invests the cash value choose their own doctors.
of the policy in stocks or other high-yielding
securities. Insurance companies began selling Disability Insurance -is a
annuities because they realized, people wanted to supplement for health insurance policies. Disability
protect themselves from running out of money
before they die. insurance pays part of the cost of a long-term
sickness or an accident. The cost is low when you
think about the benefits it supplies.
6. Homeowner’s or Renter’s Insurance
Guarenteed replacement cost – the
insurance company with give you whatever it costs to buy
replacement items new
Depriciated cost - the current value of the item is
returned to you
Other Insurance
Auto
Umbrella policy - a broadly based insurance policy that
saves you money because you buy all your insurance from one
company
7. Social Security
the term used to describe the Old-Age, Survivors, and Disability Insurance
Program established by the Social Security Act of 1935
62 years old
Individual Retirement Accounts (IRAs)
59.5 years old+
Roth
Traditional
▪ tax deferred contributions – retirement account deposits for
which you pay no current taxes, but the earnings gained are
taxed as regular income when they are withdrawn at
retirement
8. 401 K Plans – a savings plan that allows you to deposit pretax
dollars and whose earnings compound tax free until withdrawal,
when the money is taxed at ordinary income tax rates
- Keogh Plans
- Financial Planners
- Estate Planning
- will: a document that names
the guardian for your children, states how
you want your assets distributed, and
names the executor for your estate
- executor: a person who
assembles and values your estate, files
income and other taxes, and distributes
assets