APICS Financial Planning Presentation -1

APICS Financial Planning Presentation -1 - Personal...

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Personal Financial Personal Financial Planning Planning H. Swint Friday, Ph.D., CFP Associate Professor of Finance College of Business Texas A&M University – Corpus Christi
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Island Views   
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Why Plan? “If you don't know where you are going, you'll probably end up somewhere else.” Yogi Berra
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Millionaire Success Factors Allocate time, energy and money efficiently Strive for financial independence rather than social status by Living below your means Investing 20% of your annual income Choose the right occupations *The Millionaire Next Door
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The Benefits of Financial Planning Get control of your time, energy and finances Improved financial position Increased future financial security Accumulate wealth for heirs Reduced stress and better state of mind
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The Financial Planning Lifecycle Age Income 10 20 30 40 50 60 70 80 Income Stream Retirement/ Estate Tax Savings/ Investmen t Benefits Employment Periods
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The Financial Planning Process Assess current financial condition Develop realistic and measurable goals Prioritize financial goals Identify strategies to achieve goals Enact goal achieving strategies in rank order Monitor financial progress Reassess goals and priorities at different life events
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Controlling Expenses "Diligence is the basis of wealth, and thrift the source of riches." Chinese proverb.
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Living Below Your Means How We Spend Our Income Food 13.5% Housing 33% Transportation 18.6% Health care 5.4% Entertainment 4.9% Personal insurance 1.1% Pensions/Social Security 8.4% Other 10.4%
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A $ Spent is a Lot of $’s Not Saved Monthly spending choices from age 30 to 65 One soft drink a day ($15) @ 8% return $34,408 Dinner for 2 once a month ($60) @ 8% return $137,633 A Café Latte a day ($100) @ 8% return $229,388 The monthly payments on a Intrepid versus a Navigator ($348) @ 8% return $798,271
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The Law of Large Numbers Look to the large numbers to find savings Big Ticket Items Housing Transportation Buy less than you can afford Diversify portfolio by investing the difference High Volume Expenditures Dining and Café Latte’s Entertainment and Clothing Cut back on the numbers Find more cost effective substitutes
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Pitfalls in Retirement Planning Starting too late. Putting away too little. Investing too conservatively (especially when you are younger). Investing too aggressively (at any age) Rule of Thumb at retirement (7 to 10 years of low risk investments to cover living expenses)
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10% 29% 20% 41% Government still provides the largest portion—right now. Government Assistance,
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APICS Financial Planning Presentation -1 - Personal...

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