Action - FaithLife Financial

honeydewscreenManagement

Nov 9, 2013 (3 years and 8 months ago)

68 views

Personal
Financial
Management


Bringing It
All Together

Personal Finance Workshops

A.
Budgeting and Debt
Reduction

B.
Saving and Investing

C.
Personal Financial
Management


D.
Stewardship

E.
Charitable Giving

Our mission today




Financial planning


Overcoming the fear factor!


Building a solid foundation


Where to go for more help


People don’t plan to fail…..

they fail to plan!




Only 28% of households have a
comprehensive financial plan


Only 19% express an interest in having a
financial plan


Don’t understand the value


Don’t know what a comprehensive plan is


Believe the cost of having such a plan
developed by a financial professional is high




Did you know?




God provides us with the knowledge and
tools in the bible for sound money
management.


New testament:


215 verses pertaining to faith


218 verses pertaining to salvation


2084

versus dealing with stewardship of and
accountability for money and finance


How do we create a

financial plan?


Define financial
planning


Structure of a sound
financial plan


Commit to action


Who can help?

What is financial planning?

1.
Where you are today?


Examine your personal finances


2.
Where you want to go?


Define short and long
-
term goals


3.
Creating the plan to get you from
today into tomorrow


Action

steps to reach those goals

Your plan will move with you
through the various life stages




Life cycle planning periods
retirement
Pre-retirement
Peak
accumulation
mid career
early career
Life cycles
Disposable income
Key components of a plan

Speculation

Financial Goals &
Priorities

Protecting
Financial
Security

Key components of a plan

Speculation

Financial Goals
& Priorities

Protecting
Financial
Security

Key components of a plan

Speculation

Financial Goals
& Priorities

Protecting
Financial
Security

Pharaoh's dream


Genesis 41:25
-
36:

“...seven cows, fat and sleek came up out of the Nile;
and they grazed in the marsh grass…, seven other
cows came up after them, poor and very ugly and
gaunt…; and the lean and ugly cows ate up the first
seven fat cows. Yet when they had devoured them, it
could not be detected that they had devoured them;
for they were just as ugly as before….I saw also in my
dream seven ears, full and good, came up on a single
stalk; and lo, seven ears, withered, thin, and scorched
by the east wind, sprouted up after them; and the thin
ears swallowed the seven good ears.”

Savings and
Investments for
Retirement Goals,
Education, etc.

Long Term Care to preserve
dignity and family ties at old
age (stream of income)

Disability Insurance for
income preservation while
living (stream of income)

Life Insurance for income and estate
protection on death (lump
-
sum)

Risk Management

Life insurance

Financial protection for:

Your family and loved ones


Can supplement lost
income


Provide funding for child’s
education


Debt relief


mortgage,
credit cards


Money for funeral and
final expenses and taxes

Critical Illness Facts

73,000 died of
Heart Disease
and Stroke in
2003

159,900 new
cases of cancer
diagnosed and
72,700 deaths in
2007

Over 70,000
heart attacks in
Canada each
year

Statistics Canada, Canadian Cancer Society, Heart and Stroke Foundation

The need


advances in
medicine

We are more likely to survive critical illnesses:


Today 59% of people diagnosed with cancer
will survive as compared to 1 in 3 in the 1960’s


80% of heart attack victims survive when
admitted to hospital


75% of stroke victims will survive the initial
event, but 60% will be left with a disability

We are survivors!


Sources: Statistics Canada; Canadian Cancer Society; Heart and Stroke Foundation of Canada

Critical Illness Insurance

Pay the bills and more!



Provides you with options


Allows you to focus on getting well


Eliminates money worries


Return of premium option

Wills and Power of Attorney


A Will helps ensure your personal
wishes are followed. If you own a
personal asset or have children, you
should have a Will.



A
property

power of attorney will
make financial decisions on your
behalf.



A
healthcare

power of attorney will
take care of your healthcare needs.

Truth about savings and debt

Trend #1:

Less Saving



Savings rates: 20.2% in the 1982 to 1.2% in 2005


Half of all Canadians have less than $2500 in
savings


Trend #2:

More Debt


Canadians spend, on average 127% of their
income every year


Money is the #1 cause of marital conflict


Source:
www.crowncanada.ca

/ Statistics Canada

Key components of a plan

Speculation

Financial Goals
& Priorities

Protecting
Financial
Security

The Parable of the Talents

Matthew 25:14:



5 talents


put his money to work and gained 5 more


2 talents


put his money to work and gained 2 more


1 talent


went out, dug a hole and hid the money


For the 2 who put the money to work… “Well done, good
and faithful servant! You have been faithful with a few
things. I will put you in charge of many things.


For the 1 who didn’t…. ‘Evil and lazy servant!.... Then you
should have deposited my money with the bankers, and
on my return I would have received my money back with
interest!’

Wealth creation


The Power of Time



The Power of Compounding



The Importance of Rate of Return

Rule of 72



Dramatic effect of time, compounding and rate of return.


Your money will approximately DOUBLE at a point in time
determined by dividing 72 by the percent interest you
earn.

Values are for
illustrative
purposes only and
may be subject to
applicable taxes.

Time, Compounding and Return

7.2
9
12
18
36
0
10
20
30
40

Your Money Will Double In…Years
2%

4%

6%

8%

10%

72 / % Interest

Who Has More at 65?



Investor “A” invests
$1,000/year from age 40 to
50 and stops to let it grow

or



Investor “B” invests
$1,000/year from age 50 to
65?

Putting money to work

0
5000
10000
15000
20000
25000
30000
35000
40000
45000
Investor A
Investor B
Assumes 7% Annual Return
Inside an RRSP
Invested
Grew To
Retirement savings


25% have died


19% have incomes less than $10,000


49% have incomes of $10,000
-

$35,000


7% have incomes of over $35,000

Most people begin their career with the hope
of a good retirement. However by age 65:

19%
25%
7%
49%
Source


National Council of Welfare, Canada Customs and Revenue Agency, 2001

If you fail to plan…


Inefficient use of resources


Risk of not meeting financial objectives


Unprepared for the storms of life


Pay higher taxes than necessary


Delay retirement; live on less money


May be difficult fulfilling God’s purpose
for your life



Commit to action

Concrete steps for action


Set goals


spiritual and
practical


Assess current situation


Develop action plans


Put your plan into action


Track your progress


Celebrate your successes

Who can help?

“Plans fail for lack of counsel, but with
many advisors they succeed”


Proverbs 15:22


Want to go deeper?

To review or start your plan



consider FaithLife Financial


Go Green

-

www.faithlifefinancial.ca



download financial tools



view seminars



calculators



great financial articles