The Rubiks Cube And Your Money


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Financial lessons from the famous plastic cube!

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The Rubiks Cube And Your Money

  1. 1. Rubik’s Cube<br />
  2. 2. Rubik’s Cube<br />You’ve no doubt heard of the Rubik’s Cube<br />
  3. 3. Rubik’s Cube<br />Most likely you’ve even played with one…..<br />
  4. 4. Rubik’s Cube<br />Unless you are a some sort of “Wizard” the way you learned (if you learned) to win was <br />by someone teaching you how it works….<br />
  5. 5. Rubik’s Cube<br />Arranging all the colors properly in a Rubik’s cube is done by a series of Algorithms. <br />
  6. 6. Rubik’s Cube<br />The most simple of the algorithms is a series of 4 moves, the most difficult is a series of <br />10 moves.<br />
  7. 7. In many respects<br />Financial Planning<br />has become like a Rubik's cube<br />By coming up with all sorts of products to dazzle and confuse us……<br />It’s almost as if the industry is trying to complicate things…..<br />
  8. 8. In many respects<br />Financial Planning<br />has become like a Rubik's cube<br />A typical Financial Planning approach is this:<br />1. Have a fact finding or data gathering conversation with you…..this is a great start<br />2. Determine your risk tolerance – How much money you are “willing” to lose, if any?<br />3. The time frame you have to invest – How many years can you let them manage your money?<br />4. Determine your investment experience to see how sophisticated you are in <br /> understanding the many financial products offered today.<br />
  9. 9. In many respects<br />Financial Planning<br />has become like a Rubik's cube<br />Once this is completed then the next step is to<br />come back to you with some recommendations……<br />
  10. 10. Here is where it gets<br />complicated<br />……they come back with a whole series of investments choices<br />Such as……<br />Bonds<br />Real Estate DPP’s<br />Stocks<br />UIT’s<br />Gold<br />REIT’s<br />Mutual Funds<br />Equipment DPP’s<br />Annuities<br />Life Insurance<br />……and the list goes on and on……<br />
  11. 11. Looking at Mutual Funds<br />alone becomes another discussion<br />that can be extremely<br />complicated and confusing…….<br />Within this category we have:<br />Growth Funds<br />Income Funds<br />Growth and Income Funds<br />Corporate Bond Funds<br />Municipal Bond Funds<br />High Yield Bond Funds<br />R.E. Funds<br />Gold/Mineral Funds<br />Hybrid Funds<br />Socially Conscience Funds<br />Next we have to determine:<br />Asset Allocation<br />Diversification<br />Risk Tolerance<br />Beta Factors<br />Past Performance<br />Management Style<br />Sector Quadrant<br />All of this is done to essentially make<br />you feel all warm and cozy about putting your<br />money at….<br />RISK!<br />
  12. 12. Meanwhile…….<br />….at the same time they are making you feel safe with all the “tools” and “techniques” <br />used to invest your money and take control away from you…….<br />….you have expenses and purchases that you are making either through<br />paying cash or financing…..<br />The financial industry is trying increase your rate of return <br /> through risk of your money, but the amount you are losing through <br />“financing” has never been addressed…..<br />
  13. 13. For instance…<br />How are you paying for personal things such as…..<br />Repairs<br />Appliances<br />Cars<br />Furniture<br />College Education<br />Remolding<br />Motorcycles<br />Boats<br />Vacations<br />Medical/Dental<br />
  14. 14. As a business owner…<br />How do you pay for……<br />Office Space<br />Cars/Trucks<br />Insurance Premiums<br />Machinery<br />Employee Benefits<br />Payroll<br />Furniture<br />Phone System<br />Computers<br />
  15. 15. At the same time that<br />you are trying to get a rate<br />of return on your savings….<br />There are $1,000’s of dollars<br />being lost because of paying cash or<br />financing your business and<br />personal lives…..<br />
  16. 16. If all you did was save<br />“LOST MONEY” your wealth<br />would increase almost<br />accidently…..without risk!<br />
  17. 17. So what’s happening is…<br />…the Financial Industry<br />has been trying to teach you<br />how to complete the Rubik’s Cube<br />puzzle with just a few turns of the cube….<br />
  18. 18. So what’s happening is…<br />You need to understand all<br />the turns to complete the puzzle<br />
  19. 19. So what’s happening is…<br />….trying to obtain wealth by <br />focusing on rate of return and<br />ignoring lost wealth due to paying<br />cash, debt, and interest…<br />
  20. 20. So what’s happening is…<br /> like trying to complete<br />a Rubik’s Cube with a couple of rotations.<br />
  21. 21. Rubik’s Cube<br />Ron Doerksen<br />Sustainable Finances<br />360.306.5642<br /><br />