Ways to Plan and Prosper: Insights from a Financial Planner. PRESENTED BY: KRISTY S. O BRIEN CREW CAPITAL MANAGEMENT, LTD.

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1 Ways to Plan and Prosper: Insights from a Financial Planner. PRESENTED BY: KRISTY S. O BRIEN CREW CAPITAL MANAGEMENT, LTD.

2 This presentation is for educational purposes only. It is not intended as explicit or implicit investment advice. It also should not be relied upon as specific advice.

3 What is Financial Planning? Worst Definition: Financial planning is the process of estimating the capital required and determining its completion. It is the process of framing financial policies in relation to procurement, investment, and the administration of funds of an enterprise.

capital required and determining its completion.

4 Image courtesy of David Castillo Dominici at FreeDigitalPhotos.net

5 Kristy s Definition: Financial planning is simply a means to an end in successfully putting your hard earned money to work in best achieving your life goals.

7 Money is emotional What s important to you?

8 Timeless money rules and things to keep in mind: Rule of 72 (based on one time contribution of $1,000): Dictates how fast your money can double. Sometimes referred to as the 8 th Wonder of the World. Coined by Albert Einstein 3% 24 yrs= $2, yrs= $4, yrs= $6,000 6% 12 yrs= $2, yrs= $4, yrs= $8, yrs= $16, yrs= $32, yrs= $64,000 8% 9 yrs= $2, yrs= $4, yrs= $8, yrs= $16, yrs= $32, yrs= $64, yrs= $128,000

Coined by Albert Einstein 3% 24 yrs= $2,000 48 yrs= $4,000 72 yrs= $6,000 6% 12 yrs= $2,000 24 yrs= $4,000 36 yrs=

9 Pay Yourself First!! oenroll in employer sponsored retirement plans (i.e. 401K, 403B, SEP pre tax money and tax deferred growth. Maximum contributions are $18K for 2015 and an additional $6K for age 50 and older). oroth IRA oira o529 Plans obrokerage Accounts ohealth Savings Accounts

Maximum contributions are $18K for 2015 and an additional $6K for age

10 Live Within Your Means oavoid bad debt. ohave one credit card. odon t spend what you don t have. oborrow only to buy assets that have the potential to appreciate for the long term.

11 Have an Emergency Fund o Savings of 4 6 months salary.

12 Just Do It! Plan and Commit! o Have a written plan with goals and time tables. o Higher probability of success if goals are written down. o Hire a financial coach.

13 Different Economies need Different Investments Four Primary Asset Allocation Groups: 1.Cash Safe Haven/Opportunity 2.Equites Growth 3.Fixed Income Deflation 4.Alternative Equites Inflation

14 History of Go it Alone Investors

15 Investing 101: Types of Investments 1. Stocks: Ownership with two sources of profit Dividends & Gains (Also gives you voting rights). Common and Preferred 2. Bonds: a loan that earns interest. Corporate Bonds Government Bonds Municipal

16 Investing 101 (cont d): 3. Mutual Funds Provides easy way for diversification. Investment contract that allows an investor to allow a professional manager to buy and sell individual stocks. Low to high risk 4. Real Estate investment Trusts Similar to mutual funds. Invests in real estate vs individual stocks.

to buy and sell individual stocks. Low to high risk 4.

17 Two key factors to remember when investing: 1. Asset Allocation is the overwhelmingly dominant contributor in total return. 2. Keep a long term perspective be able to take bumps and volatility.

18 Asset Allocation

20 Protecting and Preserving Wealth Life Insurance Protect income upon unexpected death. Do NOT be fooled with the notion that this is an investment! Estate planning needs for illiquid estates. Types of Life Insurance Term Life: Protection of set period of time. Benefit is payable only if you die during that term. Provides the largest immediate death protection for your dollar.

Estate planning needs for illiquid estates.

21 Protecting and Preserving Wealth Whole Life Insurance Pay all of your life. Protects you as long as you live. Builds up cash value. Borrowing power. Universal Life Insurance: Premiums earn interest. Variable Life Insurance Death benefit and cash value depend upon the performance of the investments (i.e. stocks & bonds).

22 Protecting and Preserving Wealth Disability Provides income if unable to work. Purpose is to protect income while you are living. Your chance of getting hurt or ill at some point during your working career is much higher than you expect. Something to note: If one buys long term disability insurance with after tax dollars, your benefits will usually be tax free. Types of Disability Short Term benefits from 2 weeks up to 2 years. Long Term coverage of 5 years or when one becomes 65.

23 Important Reminders: Review your needs and circumstances. Choose the kind of policy with benefits that clearly meet your needs. Shop around: Examine what kinds of policies are available. Don t buy unless you intend to maintain the policy.

24 Educational Planning 529 Plans Tax deferred growth. Tax free distributions for higher education expenses. Each state has its own plan (freedom to choose any state sponsored plan). Owner of 529 plans can change beneficiaries at anytime. Can be an effective estate planning tool. Simple to start online (you can start with as little as $25 a month). Coverdale IRA Limited to $2000 a year. Can be used for elementary secondary and higher qualified education. Must be established before 18 years of age.

25 Educational Planning Federal Student Aid Programs Grants (don t have to be repaid). Campus based aid. Stafford loans. Hope Credit. Lifetime learning credit.

26 Estate Planning Last Will and Testament A legal document that determines the distribution of property at death. Living Will and Testament (also know as Health Care Directive) A legal documents that states an individuals wishes regarding life prolonging medical treatments. Power of Attorney/Durable Power of Attorney A document that allows you to appoint a person or organization to act as an agent in handling your business affairs while you are not available or capable. This power is limited and temporary. Durable Power of Attorney grants the same powers as power of attorney, but is permanent. The agent maintains power should the grantor become physically or mentally incapacitated. Important: Power ends at grantor s death. Be sure all IRA and 401K/403B beneficiaries are updated!

27 Questions to Ask in Choosing an Advisor Are you a fiduciary? How do you get paid? Experiences, licenses and credentials? What services do you provide? Could I see an example of a financial plan? What is your investment approach? How often do you contact your clients? Tell me about your team? What makes your client experience unique? Why would I want to work with you?

28 Thank you for coming!!! Kristy O Brien Partner kobrien@crewcapital.com

Fixed Deferred Annuities

Buyer Buyer s Guide to: s Guide to: Fixed Deferred Annuities Prepared by the Prepared by the National Association of Insurance Commissioners The National Association of Insurance Commissioners is an association