Personal Financial Management

1. Personal Financial Management Bringing It All Together

2. Personal Finance Workshops • Budgeting and Debt Reduction • Saving and Investing • Personal Financial Management • Stewardship • Charitable Giving

3. Our mission today • Financial planning • Overcoming the fear factor! • Building a solid foundation • Where to go for more help

4. People don’t plan to fail…..they fail to plan! • Only 28% of households have a comprehensive financial plan • Only 19% express an interest in having a financial plan • Don’t understand the value • Don’t know what a comprehensive plan is • Believe the cost of having such a plan developed by a financial professional is high

5. Did you know? • God provides us with the knowledge and tools in the bible for sound money management. • New testament: • 215 verses pertaining to faith • 218 verses pertaining to salvation • 2084 versus dealing with stewardship of and accountability for money and finance

6. How do we create a financial plan? • Define financial planning • Structure of a sound financial plan • Commit to action • Who can help?

7. What is financial planning? • Where you are today? • Examine your personal finances • Where you want to go? • Define short and long-term goals • Creating the plan to get you from today into tomorrow • Action steps to reach those goals

8. Your plan will move with you through the various life stages

9. Speculation Financial Goals & Priorities Protecting Financial Security Key components of a plan

10. Speculation Financial Goals & Priorities Protecting Financial Security Key components of a plan

11. Key components of a plan Speculation Financial Goals & Priorities Protecting Financial Security

12. Pharaoh's dream Genesis 41:25-36: “...seven cows, fat and sleek came up out of the Nile; and they grazed in the marsh grass…, seven other cows came up after them, poor and very ugly and gaunt…; and the lean and ugly cows ate up the first seven fat cows. Yet when they had devoured them, it could not be detected that they had devoured them; for they were just as ugly as before….I saw also in my dream seven ears, full and good, came up on a single stalk; and lo, seven ears, withered, thin, and scorched by the east wind, sprouted up after them; and the thin ears swallowed the seven good ears.”

13. Savings and Investments for Retirement Goals, Education, etc. Long Term Care to preserve dignity and family ties at old age (stream of income) Disability Insurance for income preservation while living (stream of income) Life Insurance for income and estate protection on death (lump-sum) Risk Management

14. Life insurance Financial protection for: Your family and loved ones • Can supplement lost income • Provide funding for child’s education • Debt relief – mortgage, credit cards • Money for funeral and final expenses and taxes

15. Critical Illness Facts Over 70,000 heart attacks in Canada each year 73,000 died of Heart Disease and Stroke in 2003 159,900 new cases of cancer diagnosed and 72,700 deaths in 2007 Statistics Canada, Canadian Cancer Society, Heart and Stroke Foundation

16. The need – advances in medicine We are more likely to survive critical illnesses: • Today 59% of people diagnosed with cancer will survive as compared to 1 in 3 in the 1960’s • 80% of heart attack victims survive when admitted to hospital • 75% of stroke victims will survive the initial event, but 60% will be left with a disability We are survivors! Sources: Statistics Canada; Canadian Cancer Society; Heart and Stroke Foundation of Canada

17. Critical Illness Insurance Pay the bills and more! • Provides you with options • Allows you to focus on getting well • Eliminates money worries • Return of premium option

18. Wills and Power of Attorney • A Will helps ensure your personal wishes are followed. If you own a personal asset or have children, you should have a Will. • A property power of attorney will make financial decisions on your behalf. • A healthcare power of attorney will take care of your healthcare needs.

19. Truth about savings and debt Trend #1: Less Saving • Savings rates: 20.2% in the 1982 to 1.2% in 2005 • Half of all Canadians have less than $2500 in savings Trend #2: More Debt • Canadians spend, on average 127% of their income every year • Money is the #1 cause of marital conflict Source: www.crowncanada.ca / Statistics Canada

20. Key components of a plan Speculation Financial Goals & Priorities Protecting Financial Security

21. The Parable of the Talents Matthew 25:14: • 5 talents – put his money to work and gained 5 more • 2 talents – put his money to work and gained 2 more • 1 talent – went out, dug a hole and hid the money For the 2 who put the money to work… “Well done, good and faithful servant! You have been faithful with a few things. I will put you in charge of many things. For the 1 who didn’t…. ‘Evil and lazy servant!.... Then you should have deposited my money with the bankers, and on my return I would have received my money back with interest!’

22. Wealth creation • The Power of Time • The Power of Compounding • The Importance of Rate of Return

23. 2% 4% 6% 72 / % Interest 8% 10% Time, Compounding and Return Rule of 72 • Dramatic effect of time, compounding and rate of return. • Your money will approximately DOUBLE at a point in time determined by dividing 72 by the percent interest you earn. Values are for illustrative purposes only and may be subject to applicable taxes.

24. Putting money to work Who Has More at 65? • Investor “A” invests $1,000/year from age 40 to 50 and stops to let it grow or • Investor “B” invests $1,000/year from age 50 to 65?

25. Retirement savings Most people begin their career with the hope of a good retirement. However by age 65: • 25% have died • 19% have incomes less than $10,000 • 49% have incomes of $10,000 - $35,000 • 7% have incomes of over $35,000 Source – National Council of Welfare, Canada Customs and Revenue Agency, 2001

26. If you fail to plan… • Inefficient use of resources • Risk of not meeting financial objectives • Unprepared for the storms of life • Pay higher taxes than necessary • Delay retirement; live on less money • May be difficult fulfilling God’s purpose for your life

27. Commit to action Concrete steps for action • Set goals – spiritual and practical • Assess current situation • Develop action plans • Put your plan into action • Track your progress • Celebrate your successes

28. Who can help? “Plans fail for lack of counsel, but with many advisors they succeed” Proverbs 15:22

29. Want to go deeper? To review or start your plan – consider FaithLife Financial Go Green - www.faithlifefinancial.ca • download financial tools • view seminars • calculators • great financial articles