The document provides tips for personal finance management. It discusses the importance of education for career success, creating budgets and savings plans, investing in assets like real estate that appreciate over time, using insurance to protect assets, and planning for retirement through Social Security, IRAs, 401ks, and estate planning with wills. The key steps outlined are taking an inventory of finances, tracking expenses, preparing a budget, paying off debts, starting savings, and only borrowing to purchase income-generating assets.

1. Managing Personal
Finance

2. Finance Facts
 U.S. is the largest capitalist country
 Secret to capital (money) is SUCCESS!

3. Financial Planning
 Secret to a good job is a good education
 Typical full time worker in U.S. with a 4 year college
degree earns about $50,000. (62% more than one with
high school diploma)
 Finish college.
 Government will be more likely to help with tax breaks like
free education accounts.
 Make money, then work on saving, investing, and
spending.

4. 6 steps to controlling assets
 1. take an inventory of your financial assets
 Develop balance sheet. (Assets=liabilities +owners
equity)
 List tangible assets
 List liabilities
 Create income statement
 List revenues and expenses
 Subtract expenses from revenues
 Get you profit

5. 6 steps to controlling assets
 2. Keep track of all expenses
 List everything you spend money on
 Make spending categories

6. 6 steps to controlling assets
 3. Prepare a budget
 Make budget for food, spending, payments

7. 6 steps to controlling assets
 4. Pay off debts
 5. Start a savings plan
 Save money each month and put in separate account for
bigger purchases

8. 6 steps to controlling assets
 6. Borrow only to buy assets that increase in value or
generate income.
 Car repairs, health care costs

9. Building Financial Base
 Best way to a capitalist system is to have capital to
invest
 Planning
 Sacrifice

10. Real Estate
 A home is an investment you can live in
 Once you buy a home, mortgage payments are fixed.
 As income goes up, mortgage is easier to pay.
 A home is a good asset to use when applying for a
business loan.
 Buying older homes and fixing them up to sell is a good
way for financial security.

11. Tax Deductions and
Homeownership
 Buying a home is the biggest investment
 Government is willing to help
 Interest on a home is tax deductible
 Location is best way to get optimal return on a home.

12. What to do with savings?
 Worst place for young people is a savings bank
 Best to have 6 months of money made saved up for
emergencies or other payments
 Best places to invest is stock market.
 Greater the risk, greater the return
 When stock is low, it is the best time to buy

13. Learning to manage credit
 Credit cards are very useful
 Most places require credit cards to ensure payment.
 Keeps track of purchases
 More convenient to carry
 Sometimes gives you 5% back.
 Danger with credit cards=debt!

14. Protecting your financial base:
buying insurance
 Life insurance
 Least expensive form
 Whole life insurance
 Pure insurance and savings
 Variable life insurance
 whole life insurance that invests the cash value of the
policy in stocks
 Annuities
 Contract to make regular payments to a person for life or
a fixed period

15. Protecting your financial base:
buying insurance
 Health insurance
 Blue Cross Blue Shield
 Disabilities insurance
 insurance that pays part of the cost of a long-term sickness
or an accident

16. Protecting your financial base:
buying insurance
 Homeowners or renters insurance
 Can have guaranteed replacement
 Other insurance
 Most states require automobile insurance
 Liability insurance
 Protect against getting sued
 Umbrella policy
 Broad insurance policy that saves you money

17. Planning Retirement
 Social Security
 Continuous flow of money coming in and being paid out
 Old age, survivors, disability insurance program
established by social security act of 1935

18. Planning Retirement
 Individual retirement accounts (IRAs)
 tax deferred investment plan that enables you to save
part of income for retirement.
 Tax-defered contributions
 Those for which you pay no current taxes but the earnings
gained from IRA are taxed as income when they are withdrawn
from IRA after retirement.
 Roth IRA
 No up from deductions from taxes but the earnings grow
tax-free when they are withdrawn

19. Planning Retirement
 Advantage of IRAs
 Cant take money from any type of IRA until 59 ½ years
old without paying 10% penalty

20. Planning Retirement
 401k plans
 Allows you to deposit a set amount of pretax dollars and
collect compounded earnings tax free until withdrawal,
when the money is taxed at ordinary income tax rates.
 Has 3 benefits
 Your contributions reduce your present taxable income
 Tax is defered on the earnings
 More than 80% of employers will match your contributions.

21. Planning Retirement
 Koegh plans
 IRA for entrepreneurs
 Can invest up to $40,000 per year
 Not taxed till withdrawn

22. Planning Retirement
 Estate planning
 Ensuring everything that you own has a place to go
(inheriting)
 Will
 Document that names the guardian for children and stated how
you want your assets distributed, and names the executor for
estate
 Executor- person who assembles and values your estate and
other taxes and distributes assets.
 Prepare a durable power of attorney
 Document that gives an individual you name the power to take
over your finances if you become incapacitated.

23. END
 Get a financial planner to help if needed.