7/23/19 YOUR FINANCES 101 Managing Your Financial Future Key - - PDF document
7/23/19 YOUR FINANCES 101 Managing Your Financial Future Key Question: What do I need to do to be sure to have enough money for the rest of my life? 1 7/23/19 WHERE TO START Creating a Long-term Financial Plan STEP 1: Knowing your
Key Question:
What do I need to do to be sure to have enough money for the rest of my life?
STEP 1:
WHERE TO START Creating a Long-term Financial Plan
q Sources of Future Income q Investment Returns q Pensions q Social Security (maximizing) q Earned income?
q Brokerage Account Investments q IRAs and other Retirement Accounts q Cash Value from Life Insurance q Annuities q Real Estate q Other Tangible Assets
q Day-to-day Living q Riderwood Expenses q Health Care/Additional LTC q Family Related q Travel/Entertainment q Other
Do you want to:
q Live the fullest life you can q Leave something for heirs
Family Gifting:
q Your needs vs family q Lifetime vs bequests – tax and other considerations
Key Considerations in Estate Planning
q Selecting Fiduciaries q Determining amount of control q Providing for special protections or needs
q Life insurance – may no longer need – permanent vs term q Long-term care – hard to qualify and expensive after 60’s q Property casualty and liability insurance – important to maintain q Health insurance – reevaluate each year – good resource
As an investor, assume you expect in Portfolio A (Blue Bars) and Portfolio B (Orange Bars) to have the above returns over the next 18 years.
Which investment would you choose? If you are like many investors, you probably would choose Portfolio A. Portfolio A outperformed Portfolio B a majority of the time and posted a several very high performance years, but Portfolio B would generate more wealth over these 18 years. Here are the real numbers for a $1,000,000 investment:
This is a $169,768 difference!
INCOME FOR INVESTORS WHO:
stable level of current income and capital preservation
portfolio as a significant source of current income CORE FOR INVESTORS WHO:
portfolio with an emphasis on income and capital preservation
supplement their income with portfolio assets ACCUMULATION FOR INVESTORS WHO:
portfolio with an emphasis towards
investments
accumulation stage or do not have a current need to supplement their income with portfolio assets LONG-TERM GROWTH FOR INVESTORS WHO:
appreciation and wealth accumulation
accumulation years and still adding to their portfolio Distribution Phase Accumulation Phase Lower Volatility Higher Volatility
Targeted 25% Equity Allocation Targeted 40% Equity Allocation Targeted 60% Equity Allocation Targeted 80% Equity Allocation
Goal-Based Investment Allocations
Cash Equivalents to provide liquidity for trading and to accommodate client withdrawals Loans to Governments and businesses Equity interests in businesses around the world Security ownership
as precious metals, natural resources and real estate A variety of defensive and non-correlated investments
MUTUAL FUND ATTRIBUTES VS. PEERS:
better than peer average
and fund manager
at least 80% in their defined asset class
average
Narrowing the Focus: Mutual Funds
Hiring Professionals: Understanding different types of financial professionals
Insurance agent /broker
q Agent is captive, q Broker will look at best carrier for you
Bank
q Look at fees and access – q Do you go in or online – q Choose best one for your preferences
Do you need a financial planner/advisor?
q What can a financial planner do for you q What does it cost – is it worth it?
Other financial support possibilities
q Bill payment q Do you need a tax preparer?
Disclosures
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historical performance level(s). Certain portions of the presentation may contain a discussion of positions and/or recommendations as of a specific prior date. Due to various factors, including changing market conditions, such discussion may no longer be reflective of current position(s) and/or recommendation(s). Moreover, no client or prospective client should assume that any such discussion serves as the receipt of, or a substitute for, personalized advice from Company, or from any other investment professional. Company is neither an attorney nor an accountant, and no portion of the web site content should be interpreted as legal, accounting or tax advice. Past performance may not be indicative of future results. Different types of investments involve varying degrees of risk. Therefore, it should not be assumed that future performance of any specific investment or investment strategy (including the investments and/or investment strategies recommended and/or undertaken by FAI Wealth Management), or any non-investment related services, will be profitable, equal any corresponding indicate historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. FAI Wealth Management is neither a law firm nor accounting firm, and no portion of its services should be construed as legal or accounting advice. A copy of our current written disclosure statement discussing our advisory services and fees is available upon request. The scope of the services to be provided depends upon the terms of the engagement.