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  • 1. The Rules of Money© 2012 Wealth Education Foundation
  • 2. Name That Celebrity! How much? Approx. $100 Million Bankruptcy Never paid attention to his money or money managers. It just disappeared.After finding he had no money left, he found out he owed the IRS $13 Million to IRS. Possible jail time. Free Willie! Willie Aide! 2
  • 3. Name That Celebrity!How much? Approx. $200 Million Huge Posse, Massive Spending Sprees Divorce Couldn’t Pay His $860,000 Jewelry Bill 3
  • 4. Name That Celebrity!How much? Approx. $40 Million $20 Million to buy the town of Braselton, GA Sold it a few years later for $1 Million Kimmy-Wood? Really?! 4
  • 5. Name That Celebrity!How much? Approx. $300 Million Mansions, Cars, Tigers, Jewelry, Posse $13 Million to IRS $9 Million to Divorce $9 Million Legal Fees Unethical Managers 5
  • 6. Name That Celebrity!How much? Approx. $?00’s Millions $400 Million in debt when he died $35 Million in improvements to Neverland Ranch 6
  • 7. What Does “ ” Mean? 7
  • 8. Does Money Equal Happiness?• NO – Scientifically proven!• But money problems make everything hard – #1 cause of divorce – Depression – Inability to make choices – Life’s hardships become overwhelming• Money security eliminates many causes of unhappiness – You can make the choice to have financial security 8
  • 9. Where Do Millionaires Come From?• Most millionaires did NOT inherit or win their money – 80% of Americans worth at least $5 million grew up in middle-class or lesser households – 33% of millionaires are entrepreneurs – A small fraction of millionaires are sports or entertainment figures• There are rules for accumulating wealth – Money works in a certain way. If you don’t get it, you’ll never have money – The rules are easy to learn… following the rules CONSISTENTLY is hard!• How much you make definitely matters – More important is what you do with what you make – More education equals more income and less unemployment 9
  • 10. How Important Is Education?You decide. Here are some facts…∙ Average Yearly Income in the United States (over age 25)  High School drop out - $20,321  High School Graduate - $26,505  Bachelor’s Degree - $43,143  Master’s Degree - $52,390  Doctorate Degree (Phd) - $70,853  Professional Degree - $82,473 (MD, JD)  Overall - $32,140∙ Unemployment rate is approximately 8.3%  13% unemployment rate for those with no college degree  3% for those with a college degree  Those with no degree are unemployed 25% longer 10
  • 11. The Rules of MoneyRule 1: A portion of all the money you make is yours to keep • Most of your money is not yours… not really. • Mandatory expenses will suck most of your money into a black hole! – Rent, Electricity, Water, Heat, Gas, Car, etc., etc. • 10% to 20% of all the money you make must be kept for you! • You need to have some of what you want also – Understand the decisions you make – There are causes and consequences for each decision you make… do you know what they are? • If you have organized your finances in such a way that the Rules are automatically handled, you can probably afford to do things you want to do a reasonable amount of the time. 11
  • 12. The Rules of MoneyRule 2: Make your money work hard for you, while you work hard for money.• The KEY to getting rich is INVESTING! – Markets (Stocks, Bonds) – Real Estate • Home ownership (Watch out for the trap… extra expenses!) • Later on, rental properties.• What if someone handed you a bag of money every year? – Investing is like handing yourself a bag of money. It just shows up. – Don’t forget the risks, but don’t let fear stop you.• Investing is about the Time Value of Money (TVM) – How much Money, how much Time, what is your Rate of Return? – Time is the most important of the three. Rate of Return once you have a lot. – NOTE: Debt is TVM being used against you to make someone else rich. 12
  • 13. The Rules of Money Rule 3: Get good advice.• The more money you have, the more important your investment decisions become.• Figuring out if you’re getting good advice is HARD!• Rate of Return increases in importance as funds grow in size.• Is the person you’re talking to an expert? – Get multiple opinions before forming your own!• If it all goes wrong, start again! – Life happens – Never give up! 13
  • 14. The Rules of Money1. A portion of all the money you make is yours to keep2. Make your money work hard for you, while you work hard for money3. Get good advice now What? 14
  • 15. Putting It All TogetherThe 3 Account system for following…The Rules of Money! 15
  • 16. 3 Accounts for Organizing Your Life Using The Rules of Money Life Checking Account Expenses. 10% MinimumSavings Account Investment Account(s) 16
  • 17. 3 Accounts for Organizing Your Life Using The Rules of MoneyMoney comes in… Life is expensive! Most of your moneypaychecks, bonuses, gifts, etc. disappears into a black hole. Life Money Expenses. Goes Out… (Don’t let them get so large that you can’t follow Rule #1. Have a budget!) Account #1 Your Life Rent, water, heat, electricity, car, gas, (Checking Account) insurance, food, movies, trips, repairs, television, Don’t forget Rule #1! restaurants, presents, “A portion of all the money clothes, shoes… and on you make is yours to keep.” and on and on! (At least 10%) Account #2 Account # 3 Investments Savings Account Rule #2: “Make your money work hard for Emergency Money = you, while you work hard for money.” 6 months Life Expenses This keeps emergencies from throwing you off track. Rule #3: “Get good advice.” 17
  • 18. The Rules of Money1. A portion of all the money you make is yours to keep2. Make your money work hard for you, while you work hard for money3. Get good advice Make it Automatic! 18
  • 19. The Rules of Money1. A portion of all the money you make is yours to keep2. Make your money work hard for you, while you work hard for money3. Get good advice Make The Choice to Make it Happen! 19
  • 20. The Rules of Money1. A portion of all the money you make is yours to keep2. Make your money work hard for you, while you work hard for money3. Get good advice Make The Choice to Make it Happen! 20