HSC Finance Presentation

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  • Smart is our series of seminar & workshops. We have them for college students, recent college grads, young professional women, couples, and gay & lesbian couples. If you like what you see in the next hour and would like us to present at one of your organizations, hit me up afterwards.
  • I don’t really like talking about myself, so let’s get through this fast.Tony AguilarFounder of Amiti AdvisingI went to Indiana University studied finance, business law, & economicsProfessional poker player throughout college and a little afterwards. I wasn’t living up to my potential and I wasn’t fulfilling my life’s purpose, so became a financial advisor. I’ve worked for two of the largest financial advisory’s in the country and loved it. Learned a lot, but I was able to help people who I really wanted to help. And that was my generation.Looked for another financial advisory that would allow me to.None existed.So I decided to create on that did.Geocaching is just the coolest thing in the world. For those of you who like the outdoors this is a new way to hike.Twitter
  • Amiti AdvisingHow we got started. FA for big finance. Friends and family who needed help could not afford it or did not have enough in assets to work with me. At the firms I worked for, so I wondered if there was a firm that I could work for. There’s not. Their biz model is based on investments.What we do.Our goal. My goal is simple – to make quality, financial education, guidance, and support accessible to every household. It is one of the most important aspects of our life. We will use it everyday.Crazy thing, we’re not taught personal finance. When’s the last time you were taught about investing, 401k, car notes, insurance,Amiti comes from Amity. Means friendship.
  • So what are we going to talk about today.We’re going to find your financial personality. It’s important to know the way you think about money, because that will determine how hard you have to work on creating good financial habits. And we’ll go into that a little later.I’ll explain to you what your financial house is and how to grow it.We’re going to go over how to create spending plan and the free tools to use. Creating a budget is a lot more work than most people think, but once you get it down you’ll be alright.Next we’re going to go over the most common question I get, do I save or pay off debt. I’ll give the step by step of what to do.Credit Crunch – everything you need to know about credit and how to start building it now.Investing and why it’s sooooo important to start doing it now.
  • Text in your responses. Questions.Personal finance is obviously a very personal topic, so if you’re not comfortable asking the question in front of the group text it in.
  • With that sheet of paper split your paper into 3 sections and write your goals. The bottom section will be short-term goals. Now – 5 years out.Intermediate goals = 6-20 yearsLong-term goals – 20+ yearsI know we’re talking about personal finance today, but I don’t want just your financial goals. Everything you want to acccomplish and experience in your life. Everything that is going to make you happy.5 minutesPlay Ghostwriterhttp://www.youtube.com/watch?v=uKJeLG8-M5I&list=PL7CFC8F3B1A75B44D&index=46
  • What is a money personality?It’s the way you think about money?And to find out the true perception that you have about money is to take a look at your habits. Here’s the key about personal finance. Are you ready? Personal finance is all about habits. Not money.Whitney – This girl knows it all. She has everything in order. Penny – This girl can save. She cuts those coupons. Needs to improve in some areas.Will – Average person. Doesn’t have a budget. Doesn’t overspend too much. Kind of knows how much is coming in and how much is going out. If there is something he wants he’ll go buy it. He’s kind of saving, but not for any particular reason.Barney – This is the guy you want to go dt with. He drives a nice car and buys the drinks at the bar. He dresses real nice, but he puts everything on his credit cards. Better yet he uses student loans to live this lavish lifestyle. He pays the minimum on all his cc’s, is late on a couple of bills. EtcChris – This is the guy we don’t want to be. He’s so behind on everything his cc’s and student loans are going into default. His credit is so damaged he can’t get into an apt,
  • How do we develop this money personality.80% of our attitude/our perception/our habits come from our direct environment.. The people who raised you, your closest friends, Now this does not mean that you can call mom and be like all this credit card debt I have is your fault. I don’t have anything saved up because of you.Goes both ways, sometimes things were so tough that you decided that you weren’t going to live like that. So you made a conscious effort. Now that is more rare, but it definitely can happen.Finance is not about numbers. It’s not about equations. It’s not about budgets. Debits and credits. Well it is, but the most important part of personal finance is habits and understand how a transaction or decision you make effects your financial situation
  • Your financial house is made up of three key areas.The first area is your foundation. It’s your house, it needs a strong foundation. It is the most important part of your entire financial situation. We are the stage of life where we’re building this.The second area is your future planning. This is the walls and furuniture of your house.Everyones financial house is built the exact same way, but the way it looks inside and out is totally different. The furniture the colors, etc. This is where all the fun stuff happens. This is where you save and invest for the things that you want to experience. Buying a new house, a car, vacations, sending your future kids to college.And the last part of your financial house is the retirement/legacy part. We’re so young we don’t have to start thinking about this right? We do and we’ll get into why later.
  • So now, we’re going to break down your financial house, so you can see really what its made of.Your spending plan is just a cool way of putting budget. Budget has this negative connotation to it, doesn’t it? I don’t want to budget. I want to spend money. When we put a budget together we just put a spending limit on ourselves. Hence spending plan. And next we’ll go into how to create a solid one.Next is debt repayment plan. Most people just go through life paying min on everything without realizing how much they are over paying for everything if they do this. So we’ll talk about different methods we can use to pay off debt. Insurance – Oh yuck. No one likes to talk about this, but we have to go through it briefly. If you’re on your parents plans stay on them as long as you can. HI you have until age 26 to stay on their plans. I have to get off my dads in Feb. I was so sad. HI is so important. Tonsils, car wreck, appendicitis.Credit management – we’ll talk about what our credit is, how its scored, and how we can make it as good as possible.Emergency fund. This is one of the most important parts of your financial situation and we’ll talk about it later.Savings plan – this is the best section. This is where you save for the really fun stuff. New car, new home, vacations, business, land, Investments and eduacation funding – this kind of goes along with your savings plan. If some goals are a little further out in the future, we’re going to want to invest the money so It can grow and not lose 3% a year because of inflation.Does anyone know how much it takes to raise a kid from birth to 18 years old. It will be close to $285k. And then paying for college. A big chunk of our generation is going to be paying for their student loans as they send their kids to college.Tax planning – yuck. We’re not going to talk much about that. But I will show you how to make sure you’re not spending too much on taxes and now and that you’re not getting taxed too much when you retire.
  • I really want to go into this. This is first step in creating good personal finance habits. The first step in building your financial home is creating a spending plan (budget).The first mistake that most people make is they just want to put a budget together with limits on what they want to spend. But here’s the problem with that & I’ll use one of our recent customers. They’re a couple who makes pretty good money, and they eat out and go out a lot. They wanted to spend $250/mo on going out to eat and drinks. I said fine, let’s look at what you’re currently spending and we’ll adjust. We tracked their spending history for the previous 4 months and they were averaging $700/mo. Analyze your spending habits. Find out what your true spending habits are. Believe me, you will surprise yourself.Now cutting your budget by half is pretty tough. Going to have to cook 3x the amount of time you’re cooking now. Track your spending history is the first step. How do you do this. I recommend that all of my clients use Mint.com. Talk about mint.BofA
  • The first step in building your financial home is creating a spending plan (budget).The first mistake that most people make is they just want to put a budget together with limits on what they want to spend. But here’s the problem with that & I’ll use one of our recent customers. They’re a couple who makes pretty good money, and they eat out and go out a lot. They wanted to spend $250/mo on going out to eat and drinks. I said fine, let’s look at what you’re currently spending and we’ll adjust. We tracked their spending history for the previous 4 months and they were averaging $700/mo. Analyze your spending habits. Find out what your true spending habits are. Believe me, you will surprise yourself.Now cutting your budget by half is pretty tough. Going to have to cook 3x the amount of time you’re cooking now. Track your spending history is the first step. How do you do this. I recommend that all of my clients use Mint.com. Talk about mint.BofA
  • Student loans are usually a great investment.  Your earning potential can be double or triple that of a high school degree.Do an example of loan amount with set interest rate. Stafford LoansSubsidized v Unsubsidized Find info on all your loanswww.studentclearinghouse.orgwww.nslds.ed.gov DeferrmentIs entitlement meaning that if you qualify they have to grant it.  Unemployment, disabled, military, law enforcement, peace corps...subsidized comes into play ForberanceIf you do not qualify for defferment you can apply for forberance.  It is up to your lender.  Doesn't matter if it is subsidized or not.   You need to contact your lender for the criteria. Interest Rates are variable on federal loans??? Income-Based Repayment - This awesome new program seems to good to be true.  It limits the amount you need to pay during your repayment (the formula calculates your gross income and subtracts it from 150% of the federal poverty guidelines). And after 25 years of making on-time payments, your federal loan will be forgiven.  That's right, forgiven.  If you have not paid off the full amount by then Uncle Sam lets it slide.  Income-Sensitive Repayment - We know how tough it is to get a job right now.  This program is for you.  If you took advantage of the Federal Family Education Loan Program your monthly payments will be capped at 25% of your monthly income (the figure depends on your expenses).  Now don't think that you'll be given this rate forever.  Your monthly payment may increase over time to compensate for these smaller payments.  It's better to use this program only for a short time.Contingent Repayment - This program allows you to extend your federal loans for 25 years at a fixed interest rate.  Just like the income-based repayment plan your loans will be forgiven after the 25 years.  If you have the option, take advantage of the income-based Plan.Standard Repayment - This plain vanilla plan puts you a schedule to pay your federal loans in ten years.  Oh yeah, your minimum payment must be at least $50. Extended Repayment - If your going to have trouble paying off your loans in 10 years you need to apply for an extended repayment plan.  A heads-up, by extending your repayment period your interest rate will increase as well as the total amount of cash you fork over.  Graduated Repayment - If you know that paying your dues for a few years will land with a high paying job and a corner office this repayment plan is for you.  Your monthly bills will be small for two years and will gradually increase.  The only downfall is the total amount of interest you have to pay will increase, because of the smaller early payments.Prepaying Your Loans -  If you have the cash (or if you parents do) start paying back some loans, or at least, the interest while you are still in school.  This will make your loan bills more manageable once you enter the real world.Loans can only be consolidated with the same type of loan.  Federal with federal and private with private.  No mixing and matching.Can only consolidate once.Lose your grace period once you consolidate.Lose your subsidized benefits once you consolidate.Consolidating usually causes your repayment period to be extended.  More repayment options.Locked in interest rate for the life of the repayment period.One bill to pay per month.If you consolidate during your grace period you can get a lower interest rate.  Remember that once you do this you waive your grace period and your payment period starts immediately.  May have new options for deferment.

Transcript

  • 1. SmartChange™
    Presented by
    Tony Aguilar
    Founder of Amiti Advising
    Amiti Advising loves you. © 2011
  • 2. Tony Aguilar
    • Indiana University
    • 3. Finance, business law, economics
    • 4. Professional Poker Player
    • 5. Financial Advisor 3+ Years
    Twitter
    • @TonyAguilar
    • 6. @AmitiAdvising
    Amiti Advising loves you. © 2011
  • 7. amitiadvising
    First affordable financial advising firm that is focused on young professionals, young families, & college students.
    Our goal is simple, to make quality financial education, guidance, & support accessible to everyone.
    Amity - A friendly relationship; friendship.
    www.LiveYoungLiveSmart.com
    Live Young | Live Smart™
    Amiti Advising loves you. © 2011
  • 8. Overview
    • What’s your money personality?
    • 9. Tools for Building Your Financial House
    • 10. Save or Pay-off Debt?
    • 11. Credit Crunch
    • 12. Intelligent Investing
    Amiti Advising loves you. © 2011
  • 13. Take out your cell phones
    Text questions to 96362.
    Text ‘Amiti’ followed by your question.
    Amiti Advising loves you. © 2011
  • 14. Goals
    Long-Term
    20+ Years
    __________________________
    Intermediate
    6-20 Years
    __________________________
    Short-Term
    1-5 Years
    Amiti Advising loves you. © 2011
  • 15. What is your money personality?
    Accountability
  • 16. Where does our money personality come from?
    • 80% comes from our direct environment
    • 17. Finance is about habits and understanding cause and effect – NOT about numbers
    • 18. You can change
    • 19. Take advantage of it NOW!
    Amiti Advising loves you. © 2011
  • 20. Financial
    House
    Amiti Advising loves you. © 2011
  • 21. Financial
    House
    Amiti Advising loves you. © 2011
  • 22. Spending Plan
    Track your spending history.
    Analyze your spending habits.
    Project future income.
    Project future expenses.
    Create desired budget.
    Track spending.
    Accountability partner.
    Amiti Advising loves you. © 2011
  • 23. Budget Breakdown
    Amiti Advising loves you. © 2011
  • 36. MoneyU.com
    • Online Financial Literacy Course
    • 37. Interactive Game
    • 38. Unbiased
    • 39. Self Directed
    • 40. $15 for HSC
    • 41. Text ‘MoneyU’ if interested
    Amiti Advising loves you. © 2011
  • 42. Do I save or do I pay-off debt???
    Amiti Advising loves you. © 2011
  • 43. Deceiving Debt Cycle
    Put together debt repayment plan.
    Begin making extra payments on debt with no savings.
    Life happens.
    Swipe credit card and increase debt amount again.
    Amiti Advising loves you. © 2011
  • 44. Emergency Fund
    Figure out how much you need to save.
    Rule of Thumb – Amount of Deductibles.
    Save more depending on your situation.
    Piece of mind.
    Open savings account.
    Online banks.
    Amiti Advising loves you. © 2011
  • 45. Debt Repayment Strategies
    Amiti Advising loves you. © 2011
  • 57. Student Loans
    • Federal vs Private
    • 58. Subsidized vs Unsubsidized
    • 59. Information
    • 60. studentclearinghouse.org
    • 61. www.nslds.ed.gov
    • 62. Deferment & Forbearance
    • 63. Repayment Plans
    • 64. Consolidation
    Amiti Advising loves you. © 2011
  • 65. Credit Crunch
    Amiti Advising loves you. © 2011
  • 74. Ready for Retirement?
    • 25 Years Old
    • 75. Retire at Age 65
    • 76. Live Until 90
    • 77. $75,000/year Lifestyle
    • 78. How much do you need saved up?
    $3,397,107
    Amiti Advising loves you. © 2011
  • 79. Intelligent Investing
    • Start Now
    • 80. Compounding Interest
    • 81. Einstein – “The most powerful force in the universe is compound interest”
    At Age 65
    $579,000
    At Age 65
    $470,000
    Amiti Advising loves you. © 2011
  • 82. Intelligent Investing
    Amiti Advising loves you. © 2011
  • 90. Tony Aguilar
    @TonyAguilar
    @AmitiAdvising
    tony@amitiadvising.com
    817-905-3064