Universal Model for Personal Financial Success
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Universal Model for Personal Financial Success
description
Universal Model for Personal Financial Success. The information presented is for illustration and discussion purposes only. Before investing, you should discuss your specific situation with a professional investment advisor. Spiritual Theoretical Practical. Spiritual Foundation - PowerPoint PPT Presentation
Transcript of Universal Model for Personal Financial Success
Universal Modelfor
Personal Financial Success
The information presented is for illustration and discussion purposes only. Before investing, you should discuss your specific situation with a professional
investment advisor.
Spiritual
Theoretical
Practical
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Spiritual Foundation
1)Placing God First (Mathew 6:33)“But Seek First his Kingdom and his
Righteousness, and all these things will be given to you as well.”
2)Trusting God’s ProvisionBe faithful, do not complain, and be
certain that God will provide for your financial need.
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Spiritual Foundation
3) God’s Desire to Bless (Psalm 37:4)“Delight Yourself in the Lord and He Will
Give you the Desires of your heart.”
4) Be Financially Responsive (Deut 8:18-20)
Acknowledge God, Follow his Commands and Remember that he alone gives you the ability to earn a living.
….For Where Your Treasure is, There Your Heart Will Be Also…….Mathew 6:19-21
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Spiritual Foundation
5)Be Diligent (Proverbs 6:6-11,10:4-5)Deligent hands, like the ant, avoid
scarcity
6) Be Prudent (Proverbs 24:27 NLT)“Develop your business first before
building your house.”
“The wise have wealth and luxury, but fools spend whatever they get.”
Prov 21:20 NLT
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Universal Model for Personal Financial Success
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Practical Rules of Money
Albert Einstein Called Compound Interest the most powerful force in the Universe
He Said, “Those who understand it will earn it, and those who don’t will pay it”
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Practical Rules of Money
The Rule of 72 is the first rule of Money.....
This rule provides an estimate of the number of years it will take for your investment or cost to double based on an assumed rate of return or interest.
72 / interest rate = est yrs to double invstmnt
For a 10% Rate of Return, you can expect to double your investment in 72/10=7.2 yrs
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Practical Rules of Money
You Are Walking Down the Street and Find $10,000. You Want to Use This Money to
Help Kickoff Your Retirement Fund. What would You Do?
Type of Investment
Rate of Return
Amt of Time
InvestmentValue
New Car $0 $0
Savings/CD 1.3% 7 yrs 10,952
Annuity 5% 7 yrs $14,180
Investment Portfolio
10% 7 yrs $20,079
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Practical Rules of Money
Over the long term, the impact is much more significant!!
Type of Investment
Rate of Return
Amt of Time
InvestmentValue
New Car $0 $0
Savings/CD 1.3% 55 yrs $20,347
Annuity 5% 55yrs $146,356
Investment Portfolio
10% 55yrs $1,890,591
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Practical Rules of Money
Time and Consistency are the fuels that drive Compounded Interest.
Start Investing @ Age 35Invest $2000 per year til age 65 (30 yrs)@ 10% rate of returnAccumulated Value = $328,988.04 You Put in $2000 x 30 = $60,000 But Your Account is worth $328,988.04!!!!!
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Practical Rules of Money
What Happens if You Had Started 10 yrs Sooner @ Age 25? Start Investing @ Age 25Invest $2000 per year til age 65 (40 yrs)@ 10% rate of returnAccumulated Value = $885,185.11 Wow, start 10 yrs earlier, You Put in $2000 x 10 = $20,000 more money But Your Account is worth $556,197.07 more!!!!!
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Practical Rules of MoneyMotto: Invest Early and Invest Often
Don’t Delay, Start Now!!!
It pays to Start Early If You Start Investing @ Age 25Invest $2000 per year til age 34 then Stop@ 10% rate of returnAccumulated Value @ 65 = $521,298.26
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Strategy Start
Age
Stop Age
Total Invested
Acct Value @Age 65
Base Case
35 65 $60,000 $328,988.04
Start Early and Stop
25 34 $18,000 $521,298.26
Start Early and
Keep Going
25 65 $80,000 $885,185.11
The Value of Starting Now!!Investing $2000/yr @ 10%
ROR
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Rate of Return
Acct Value @Age 65
Good 9% $675,764.89
Better 10% $885,185.11
Best 12% $1,534,182.84
The Value of 1% Investing $2000/yr over 40
yrs
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Bank A• $300,000 Home
• 4% Interest• $1432.25 per
month• Owe Nothing
after 30 yrs
Bank B•$300,000 Home
•4% Interest•$1000 per month
•Owe $300k after 30 yrs
Which would You Choose?
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What You Do With The Savings Makes All
Difference!!Choice Rate of Return
Acct Value over 30 yrs
New Car 0% $0
Saving/Bank CD 1.3% $190,190.94
Annuity 5% $359,743.79
Investment Portfolio
10% $977,095.90
Life Insurance A Key Wealth Protector
Bank A – Bundled Policy Bank B – Unbundled Policy
Insurance w Savings or Investment Wrapped In
Cash Value Build Up100% Loss Yr1 Cost to Borrow Savings
Pure Insurance Only
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$500K Face Amount
Time
Savings
$150Per
month
$500K Face Amount
$50Per
month
$200K
Time
$100per
month
For Illustration Only
$200K
Investment
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Reference MaterialAll The Financial Scriptures in the Bible by Rich Brott
The Intelligent Investor by Benjamin GrahamThe 100 Absolutely Unbreakable Laws of Business Success
by Brian TracyInvestopedia.com
The Motley Fool (Fool.com)
