The 30 Minute Round the World Intro to Financial Planning: Bell Helicopter

1. The 30 Minute Round the World Intro to Financial Planning: Bell Helicopter Jason Hull Hull Financial Planning http://www.hullfinancialplanning.com

2. Who Is This Presentation For? Anyone who doesn’t feel like their personal finances are in a rock solid position …in other words… YOU! http://www.hullfinancialplanning.com

3. What Will You Learn? Common personal finance mistakes and how to avoid them Ideas for how to squeeze that little bit more out of your budget Ideas for how to make your business work for you http://www.hullfinancialplanning.com

4. Who Am I? Army veteran Founded and sold a software development company Financial planner, CFP® candidate Personal finance columnist, U.S. News & World Report http://www.hullfinancialplanning.com

5. Common Personal Finance Mistakes:No Plan No budget = money controls you • If you don’t have a budget, you’re actually in the majority (51%) of Americans!* • Don’t overcomplicate • Use a simple spreadsheet • Start with income • Then known “must pay” expenses • Then variable expenses • Don’t forget to save! http://www.hullfinancialplanning.com http://www.pewsocialtrends.org/2007/02/07/what-americans-pay-for-and-how/306-3/

6. Common Personal Finance Mistakes:No Plan No retirement plan = don’t know if or when you can quit 4 out of 10 Americans have no plan besides Social Security* 30% say they will have to work into 80s to retire; however, 22.5% between 60-84 report employment disability Start with the goal and work backwards – expenses in retirement and how much you have to save to get there http://www.hullfinancialplanning.com http://www.pewsocialtrends.org/2007/01/04/most-americans-moderately-upbeat-about-family-finances-in-2007/

7. Common Personal Finance Mistakes:Risk Management The risk ostrich = you may be underinsured • Optimism bias affects future thinking • 70% of people over age 65 require long-term care* • 43% of people who need to use their LTC policies are under age 64 • 10.2% of people age 19-64 can’t work because of disability or poor health • Look at appropriate term life, disability, and long-term care insurance • If someone tries to sell you something other than term life, make them show you quantitative aftcast to show superior performance http://www.hullfinancialplanning.com http://www.longtermcare.gov/LTC/Main_Site/Understanding/Definition/Know.aspx

8. Common Personal Finance Mistakes:Retirement Saving If you save, are you saving enough? • Only 51% save for retirement* • 21% of workers covered by 401(k) don’t participate • IRA limits • $5,500/year/person • $6,500/year/person if age 50 or older • 401(k)/403(b)/457/TSP limits • Your contribution: $17,500/age 50+ catchup: $5,500 • Total contribution (+ employer contrib): $51,000/$56,500 • Set aside money every month so you don’t have to think about it – automate! • Think about your future self before making a decision on how much to set aside for retirement savings. http://www.hullfinancialplanning.com http://money.cnn.com/2012/05/10/retirement/saving-retire/index.htm

9. Common Personal Finance Mistakes:Retirement Saving Vs. http://www.hullfinancialplanning.com

10. Common Personal Finance Mistakes:Investing Mistakes Fees and timing are your portfolio’s silent killer DO NOT PAY FOR LOADS IN MUTUAL FUNDS! Look at 12-b(1) fees Trying to time the market = -35.8% performance vs value cost averaging* In 2012, 89.8% of actively managed stock funds underperformed their index counterparts Depending on trading frequency, it takes between 20-25 years to determine skill vs. luck in investing. Do you have that much time to waste on a gamble? Value cost average into INDEX funds with LOW FEES. http://www.hullfinancialplanning.com http://money.usnews.com/money/blogs/the-smarter-mutual-fund-investor/2012/11/05/herd-behavior-hurts-fund-investors

11. Common Personal Finance Mistakes:Hopping on the Hedonic Treadmill Don’t stuff a huge house full of furniture! • Once we graduate from college, we feel like we’ve “earned” a lifestyle upgrade • We buy • a nice new car • a big house • and rooms full of furniture • Instead of paying off debt and investing http://www.hullfinancialplanning.com

12. Squeeze More Out of Your Budget Remove recurring costs you don’t need • Do you need cable TV? • Try Netflix, Hulu, PlayOn, and stations’ websites • Paying for more cell phone than you need? • Lower minutes • Get Google Voice • Remove landline • Gym membership you don’t use? • Plyometrics, body weight exercise, home Crossfit http://www.hullfinancialplanning.com

13. Squeeze More Out of Your Budget Automate your finances • Set up side accounts • Christmas fund • Home/car insurance fund • Roof/car replacement fund • Have investments automatically withdrawn • Set up automatic bill pays so you don’t have to remember when to pay them http://www.hullfinancialplanning.com

14. Squeeze More Out of Your Budget DEBT SUCKS KILL YOUR DEBT OR IT WILL KILL YOU 46.7% of American households carry a credit card balance Pay absolutely everything you can towards debt (credit card, personal loan, car loan, mortgage) Look at total interest payments first before deciding which one to pay down/off – combines psychology and math http://www.hullfinancialplanning.com

15. Questions From the Audience How to invest for personal wealth? Don’t try to hit a 7 run home run You, statistically speaking, won’t beat the market over the long run Fees and loads kill performance 5% rule – if you want to speculate, do it with <= 5% of your investable assets http://www.hullfinancialplanning.com

16. Questions From the Audience Do you have tips for making a budget and sticking to it? Keep it relatively simple – the fewer categories, the better I use Mint to track spending Do budget review 1x/month WITH YOUR SPOUSE (where applicable) Automate payments, then carry cash http://www.hullfinancialplanning.com

17. Questions From the Audience Why do you need a financial planner? Reason #1: Trade money for time. You can spend hundreds of hours getting answers from reading/Internet or pay to get them applied to your situation. Reason #2: You’re not succeeding as a DIY Reason #3: You’re not really a planner (I don’t mean financial planner, either) Reason #4: You have an out-of-the-ordinary situation (chronic illness, large inheritance, etc.) http://www.hullfinancialplanning.com

18. Questions From the Audience How do you choose a financial planner? How can you really trust them? • Ask the following: • How are you getting paid? • You’re going to sign a legally binding, fiduciary contract with me, right? • What is your net worth? • How did you get the net worth? • CFP, CLU, ChFC certifications good http://www.hullfinancialplanning.com

19. Questions From the Audience Are the 2040, 2050, etc. 401K investments good options? • Look at • Fees of fund compared to index brethren • TDF 2015 to see equity allocation • Match to what you want to do • Will you buy annuities at retirement? • Will you invest in equities heavier to try to grow nest egg? • Reasonable “lazy portfolio” solution http://www.hullfinancialplanning.com

20. Questions From the Audience Advice on getting out of debt early on or going after the matching contribution. • As long as you • Have income > expenses • Won’t take on MORE debt • Have sufficient assets outside of retirement account(s) to tap in emergency • …then contribute up to match first http://www.hullfinancialplanning.com

21. Questions From the Audience Are there better funds out there to be in versus the company sponsored ones? Leverage the opportunities available through Fidelity Brokerage Link. Yes, but… Company match means breakeven of globally optimal funds is a long, long time 401k more efficient if you plan on retiring early (age 55 + terminate employment vs. age 59 ½) http://www.hullfinancialplanning.com

22. Questions From the Audience Roth versus Traditional IRA/401k Roth = pay taxes now, withdraw tax-free in future Traditional = tax deduction now, pay ordinary income tax rate on withdrawals in future I recommend mixing due to tax efficient retirement withdrawal strategies, but lean towards Roth where possible Front load with Roth, because when AGI > $127k for singles and $188k for married, can’t use Roth IRA. Can still use Roth 401k. http://www.hullfinancialplanning.com

23. Questions From the Audience Percent of annual income to be putting away into tax deferred savings • Depends on goals • If planning on working until age 55 or 59 ½, then as much as possible (subject to IRS limits) • If planning on retiring earlier, will need some taxable accounts to draw on • If this is the case, roughly (retirement age – current age) / (90 – current age) is % for taxable accounts • Can always save more in taxable accounts once you hit IRS contribution limits http://www.hullfinancialplanning.com

24. Questions From the Audience Do you think that the government will change the Roth advantages or take them away? Eventually taxing them like social security was not supposed to be. I’m not a politician! I expect changes to Roths eventually I do not expect retroactive treatment But maybe not…Roth = taxes now. http://www.hullfinancialplanning.com

25. Questions From the Audience Recommended books. Paid Investment advising programs that were useful. Total Money Makeover by Dave Ramsey (though I don’t agree with his investment or retirement withdrawal advice) Think and Grow Rich by Napoleon Hill Secrets of Closing the Sale by ZigZiglar (SHAMELESS SELF-PROMOTION ALERT!) Winning With Money course by me – coming out in August http://www.hullfinancialplanning.com

26. How to Reach Me http://www.hullfinancialplanning.com jhull@hullfinancialplanning.com (817)476-0584 If you want to read more about the topics in this presentation, go to http://www.hullfinancialplanning.com/bhipres http://www.hullfinancialplanning.com