Core Financial Concepts

A Transamerica Company

Charting your financial future begins with these core concepts

1

Are you asking the right questions and making the right moves for your future?

The 6 Steps to Financial Independence1

Build Wealth• Strive to outpace inflation & reduce taxes

• Professional money management

Proper Protection• Protect against loss of income

• Protect family assets

Debt Management• Consolidate debt

• Strive to eliminate debt

Emergency Fund• Save 3-6 months’ income

• Prepare for unexpected expenses

Cash Flow• Earn additional income

• Manage expenses

Preserve Wealth• Reduce taxation

• Build a family legacy

When investing, there are certain risks, fees and charges, and limitations that one must take into consideration.

2

Age, health, debts, dependents, income and a variety of other factors should all be considered.

Life InsuranceHow much do you need?2

However, the basic

rule of thumb is

approximately

10X

your annual

family income.

3

The 3-Legged StoolA Broken Traditional Retirement Model

Personal Savings

Social Security

Company Pensions

Past retirees often enjoyed a combination of a company pension, a Social Security check, and their personal savings. With this traditional model all but gone, a new retirement strategy focused on personal responsibility is needed.

4

Here is an example of how the monthly amount required to reach $1 million for retirement changes with how much time you have to hit that goal in an 8% tax-deferred hypothetical account. The best way to put time on your side is to start saving today.

$2,889.85/mo.

$286.45/mo.

$435.94/mo.

$670.98/mo.

$1,051.50/mo.

$1,697.73/mo.

$5,466.09/mo.

$13,609.73/mo.

40 35 30 25 20 15 10 5

Years Until $1 Mill ion Retirement Goal Met

The High Cost of WaitingTime: Your worst enemy or greatest ally3

5

This new era brings a turbulent market of ups and downs. There is a need to protect against down markets.

Ibbotson® SBBR® Stocks, Bonds, Bills and Inflation 1926-2013

Past performance is no guarantee of future results. Hypothetical value of $1 invested at the beginning of 1926. Assumes reinvestment of income and no transaction costs or taxes. This is for illustrative purposes only and not indicative of any investment. An investment cannot be made directly in an index. ©2014 Morningstar. All Rights Reserved.

0.10

1

10

100

1k

$100k

1926 1936 1946 1956 1966 1976 1986 1996 2006

Ibbotson® SBBR®

Stocks, Bonds, Bills, and Inflation 1926-2013

Past performance is no guarantee of future results. Hypothetical value of $1 invested at the beginning of 1926. Assumes reinvestment of incomeand no transaction costs or taxes. This is for illustrative purposes only and not indicative of any investment. An investment cannot be made directly in anindex. © 2014 Morningstar. All Rights Reserved.

$26,641

$4,677

$21$13

$109

Compound annual return

• Small stocks 12.3%• Large stocks• Government bonds• Treasury bills• Inflation

10.15.53.53.0

10k

$393

$834

$30

1

10

100

$1,000

1950 1960 1970 1980 1990 2000

Canadian Market PerspectiveJan 1950–June 2013

All values are represented in CAD. Past performance is no guarantee of future results. Hypothetical value of $1 invested at the beginning of 1950.Assumes reinvestment of income and no transaction costs or taxes. This is for illustrative purposes only and not indicative of any investment. An investment cannot be made directly in an index. © 2013 Morningstar. All Rights Reserved. 9/1/2013

Compound annual returnCompound annual return

11.2%• U.S. stocks9.9• Canadian stocks9.5• Balanced portfolio7.5• Canadian bonds

5.5• Treasury bills3.7• Canadian inflation

6.7• 5-year GICs$62

2010

$327

$98

$10

6

So, if you made a $10,000 investment at age 29, with an 8% rate of return, it should grow to about $160,000 by age 65.

$20k

38 47 56 65

$40k

$80k

$160k

For example, the Rule of 72 tells us that an investment earning a constant 8% rate of return should double approximately every 9 years.

The Rule of 72It’s important to manage your rate of return and riskIf you divide 72 by the rate of return being earned, you will obtain the approximate number of years required for your initial savings to double.

The Rule of 72 is a mathematical concept that approximates the number of years it will take to double the principal at a constant rate of return compounded over time. All figures are for illustrative purposes only, and do not reflect the risks, expenses or charges associated with an actual investment. The rate of return of investments fluctuates over time and, as a result, the actual time it will take an investment to double in value cannot be predicted with any certainty. Results are rounded for illustrative purposes. Actual results in each case are slightly higher or lower.

7

How many times will your money double?

$10,000

$20,000

$20,000

$40,000

$10,000

$40,000

$10,000

$320,000

$80,000

$20,000

$20,000

$10,000

$80,000

$40,000

65

59

56

53

47

41

38

35

29

$160,000

AG

E

$5,000 $5,000 $5,000$5,000

4% 8% 6% 12%

Notice how a $5,000 investment at age 29 doubles more often as the rate of return increases.

That’s exciting to think about. But consider the interest rate on your credit card. Is it 18%? Higher? The Rule of 72 can work against you just as powerfully as it can work for you. Debt management is still important.

The Rule of 72 doesn’t consider taxes. Taxes can increase the amount of time it takes for money to double. Your financial professional can help you develop a strategy that considers the impact of taxes.4

8

50%Loss

$10,000$10,000 50%Gain

100%Gain

$5,000

$7,500

The Impact of LossesIt hurts more than you think

If you lose 50% of $10,000, what rate of return does it take to get back to $10,000?

A 50% gain only gets you back to $7,500.

A 100% gain is required to fully recover a 50% loss.

9

3 Options For Your FutureWhich one is right for you?

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Click here for the WFG Associate Membership Agreement

10

World Financial Group, Inc. (WFG) is a financial services marketing company whose affiliates offer a broad array of financial products and services.

Insurance products offered through World Financial Group Insurance Agency, Inc., World Financial Group Insurance Agency of Hawaii, Inc., World Financial Group Insurance Agency of Massachusetts, Inc., World Financial Group Insurance Agency of Wyoming, Inc., World Financial Insurance Agency, Inc. and/or WFG Insurance Agency of Puerto Rico, Inc. - collectively WFGIA.

WFG and WFGIA are affiliated companies.

Headquarters: 11315 Johns Creek Parkway, Johns Creek, GA 30097-1517. Phone: 770.453.9300

For use in the United States only.

©2014 World Financial Group, Inc. 2896/6.14

1 When investing, there are certain risks, fees, charges, and limitations that one must take into consideration.

2 There are many variables that affect your life insurance needs. You may be more or less insurance depending on any existing savings, assets, retirement funds and whether the purpose of the death benefit is to replace income or perhaps for estate planning.

3 In this hypothetical example, an 8% compounded rate of return is assumed on hypothetical monthly investments over different time periods. The example is for illustrative purposes only and does not represent any specific investment. It is unlikely that any one rate of return will be sustained over time. This example does not reflect any taxes, or fees and charges associated with any investment. If they had been applied, the period of time to reach a $1 million retirement goal would be longer. Also, keep in mind, that income taxes are due on any gains when withdrawn.

4 Tax and/or legal advice are not offered by World Financial Group, Inc., their affiliated companies or their independent associates. Please consult with your personal tax and/or legal professional for further guidance.