Financial Planning Begins with Making Money Six Steps to Controlling your assets Take an Inventory of Your Financial Assets Keep Track of All Your Expenses Prepare a Budget Pay Off Your Debts Start a Savings Plan Borrow Only to Buy Assets that Increase in Value or Generate Income
Real Estate: Historically, a Relatively Secure Investment real estate bust of 2008-2009 history shows that home prices are likely to rise again and will continue to provide several investment benefits Tax Deductions and Homeownership Benefits How the Government Helps
Learning to Manage Credit Credit cards are an important element in your personal financial system, even if you rarely use them Advantages and Disadvantages Where to Put Your Savings Contrarian Approach – buying stock when everyone else is selling or vice versa
TYPES OF INSURANCE HEALTH INSURANCE Term Insurance- is the simplest and Health Maintenance least expensive form of insurance. It is pure insurance for a given number of years. Organizations (HMOs)- are less Whole Life Insurance- is a expensive than other health insurance providers, combination of a pure insurance plan and a but the members can not choose their own savings plan. This type of insurance is great doctors. for people who find it hard to save money. With a universal policy, you can choose how Preferred Provider much of the money you pay goes to insurance and how much goes toward Organizations (PPOs)- are little more investments. costly, and members are required to pay a co- Variable Life Insurance- is a form pay. The members of PPOs are allowed to of whole life insurance that invests the cash value choose their own doctors. of the policy in stocks or other high-yielding securities. Insurance companies began selling Disability Insurance -is a annuities because they realized, people wanted to supplement for health insurance policies. Disability protect themselves from running out of money before they die. insurance pays part of the cost of a long-term sickness or an accident. The cost is low when you think about the benefits it supplies.
Homeowner’s or Renter’s InsuranceGuarenteed replacement cost – theinsurance company with give you whatever it costs to buyreplacement items newDepriciated cost - the current value of the item isreturned to you Other InsuranceAutoUmbrella policy - a broadly based insurance policy thatsaves you money because you buy all your insurance from onecompany
Social Security the term used to describe the Old-Age, Survivors, and Disability Insurance Program established by the Social Security Act of 1935 62 years old Individual Retirement Accounts (IRAs) 59.5 years old+ Roth Traditional ▪ tax deferred contributions – retirement account deposits for which you pay no current taxes, but the earnings gained are taxed as regular income when they are withdrawn at retirement
401 K Plans – a savings plan that allows you to deposit pretaxdollars and whose earnings compound tax free until withdrawal,when the money is taxed at ordinary income tax rates - Keogh Plans - Financial Planners - Estate Planning - will: a document that names the guardian for your children, states how you want your assets distributed, and names the executor for your estate - executor: a person who assembles and values your estate, files income and other taxes, and distributes assets