Steer clear of blank checks from credit card companies, the

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What is wealth?

• What does wealth mean to you?
• Every individual will probably define in
  different ways
• According to Webster an abundance of valuable
  material possessions or resources

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Assets and Liabilities

• General assets are things you own of value
• Wealth-creating these are assets that increase
  in value
• Examples House, Retirement Account, etc.

• Also called Debts
• This is money that you owe
• Examples Mortgage, car loan, credit card
  balances, etc.

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Net Worth/Wealth

• Net Worth is found by filling out a Balance
  Sheet
• Assets Liabilities Net Worth
• In a financial sense Net Worth is the same as
  Wealth

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Setting Financial Goals

• Net Worth goal
• Where do you want to be in 5 years, or in 10?
• Short-term goal
• Wish to obtain within 1-3 years
• Long-term goal
• Wish to obtain after 3 years

• Keep in mind these guidelines
• Be realistic
• Establish time frames
• Devise a plan
• Be flexible goals can change

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What type are you?

• Planner

• Struggler

• Denier

• Impulsive

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Budgeting

• To develop you need to
• Calculate your monthly income
• Track your monthly expenses
• Determine how much you spend on monthly bills

• Allows you to
• Understand where your money goes
• Ensure you dont spend more than you make
• Find uses for your money that will increase your
  wealth

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Monthly Income
Add up all of the household TAKE-HOME pay to find
your monthly income.
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Track Day-to-Day Spending
Keep a mini notebook with you to keep track of
all of the times you spend money.
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Creating the Budget
Use the information you have already collected to
create your budget.
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Revising the Budget
If you find that you are spending more than you
take home you will need to revise your budget.
REMEMBER the more you can save, the better!
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Save Invest

• Investing means to
• Put the money you save to work making more money
  and increasing your wealth
• An investment is
• Anything you acquire for future income or benefit

• Saving allows you to
• Have money saved for an emergency
• Have money for an important purchase
• Live more comfortably when your income decreases

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Investment Information
Compound Interest
Risk vs. Return

• Helps you build wealth more quickly
• Is when interest is being paid on previously
  earned interest
• Can work for you investments OR
• Can work against you credit card debt

• Risk is the possibility of loss on an investment
• Return is the profit made on an investment
• Higher risk can potentially earn a higher return
• Low risk typically means a lower return

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Determining Your Risk
Financial Goals
Time Horizon

• How much money do you want to accumulate?

• How long can you leave your money invested?

Financial Risk Tolerance
Inflation Risk

• Will your return be higher than the rate of
  inflation?

• Can you afford to take more of a gamble?

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Tools For Saving

• Saving Account (general)
• - access at any time
• - earns interest
• Money Market Savings Account
• - higher minimum balance
• - higher interest rate (than regular savings)
• Certificate of Deposit (CD)
• - Must leave in for term
• - higher interest rate (than regular savings or
  money market accounts)

All 3 of these options are insured by the FDIC
for up to 100,000.
These options are low risk with a low return.
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Tools For Investing

• Remember, when investing in any of these
• Find good information to make informed decisions
• Know and understand all costs associated with
  buying, selling, and managing accounts
• Beware - if it seems too good to be true, it
  probably is!

• Stocks
• - dividends
• - stock options
• Bonds
• - IOUs
• - may be tax advantages
• Mutual Funds
• - diversification
• - may be hidden costs

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Investing for Retirement

• How much money will you need when you retire?
• The sooner you start, the better!
• How old are you?
• How far away from retirement are you?
• What lifestyle are you used to living?

• IRA (individual retirement account)
• - traditional
• - spousal
• - Roth
• - education
• 401(k)
• - employer-based - taken straight from your pay
• - many companies match certain amounts
• Keogh
• - for self-employed

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Other Investments
Investing In Your House
Other Investment Alternatives

• Housing (depending on location and upkeep)
  typically rises in value
• Equity - how much value you own (figured by
  market value mortgage owed)

• Other things that may rise in value
• Land
• Rare Coins
• Antiques
• Art

Investing in Your Business

• Can be very risky
• Can have high returns

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Track Financial Investments
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Take Control Of Debt

• How people get into debt
• Financial Stresses
• Unemployment
• Medical bills
• Divorce
• Uncontrollable spending
• Did not plan for future
• Did not save
• Lacked knowledge about finances and credit

• Wealth-Building Tips
• Make a budget and stick to it
• Have 3-6 months of pay in an emergency fund
• Choose a lower model with less debt than a higher
  model with more debt
• Pay off balances monthly
• Learn all about loans before you borrow

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Speaking of Interest

• Interest is the amount charged for lending you
  money
• Interest is based on a percentage of the
  principal or amount you borrowed
• Interest can add up if you dont pay it off

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Watch Out!

• To Reduce Credit Card Debt
• - Pay more than your minimum balances
• - Pay cash for new purchases
• - Set a monthly limit on using credit cards
• - Limit the number of cards you have/carry
• - Choose a card with the lowest interest rate
  and no annual fee
• - Dont apply just for a free gift/discount on
  purchases
• - Steer clear of blank checks from credit card
  companies, they carry a high interest rate

• Beware of
• Payday Loans they have VERY high interest rates
• Predatory Lenders typically charge high
  interest rates and excessive fees
• Credit Card Debt

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Credit Reports
Check your credit report for accuracy and clear
errors as soon as possible.
Information found on a credit report

• Free credit report annually
• www.annualcreditreport.com
• 1-800-322-8228
• Annual Credit Report Request Service PO
  Box 105281, Atlanta, GA 30348-5281
• Fee to get credit score with report

• Identification Employment Info
• Account information Payment history
• Inquiries from creditors/ potential employers
• Public Record

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Controlling Debt
Choose the right loan
Pay off loans early
Create a strategy

• By doing this you will save on interest
  expenses

Shop and negotiate to get the best (lowest)
interest rate possible
By having a strategy to control debt you can
begin to grow wealth
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Review

• My definition of wealth is
• My short-term goals are
• My strategies for building wealth are
• My strategies for controlling debt are