Finance 101

For The Under 30 Crowd

Presented by:

James J. Holtzman, CFP®, CPA

James J. Holtzman, CFP®, CPA

Jim has also been previously selected twice by Pittsburgh Magazine as one of the Pittsburgh area’s FIVE STAR

Wealth Managers, a list that represents the most elite financial advisors in Pittsburgh.

As a Wealth Advisor and with over 20 years of experience, Jim assists all types of clients with their financial

planning and investment needs. Jim’s extensive skill set includes providing financial advice to retirement-

focused clients, medical and dental practices, and businesses.

Jim serves as the firm’s Income Tax and Education Funding and Planning Specialist.

Jim’s previous professional experience includes employment with various CPA and Financial Advisory

organizations where he provided tax, accounting, auditing and financial consulting services to individuals and

businesses. Jim has also provided financial advice to various Fortune 500 and public company executives.

Jim’s areas of concentration include income tax planning, estate planning, stock option exercise planning,

insurance, retirement planning and Section 529 Plans.

Mr. Holtzman was selected by Pittsburgh Business Times as one of the 2013 Fast Tracker's, which honors

leaders in the Pittsburgh area's business community who've had a significant impact on the growth of their

organization.

James J. Holtzman, CFP®, CPA is a Wealth Advisor and Shareholder

with Legend Financial Advisors, Inc.® and Emerging Wealth Investment

Management, Inc.

Jim has been selected seven consecutive times by Medical Economics

as one of “The 150 Best Financial Advisors for Doctors in America.”

Mr. Holtzman has been selected three times by Dental Practice Report

as one of “The Best Financial Advisors for Dentists in America”.

CASH FLOW PLANNING AND BUDGETING

1. Keep Track Of Expenses.

2. Mint.com, Software Through Your Bank Can Help Expense Tracking

3. Use Debit Card In Order To Track Expenses

4. Avoid ATM Withdrawals

5. Create Budget

EMERGENCY FUND

1. 3-6 Months Worth Of Expenses At Minimum

2. Provides Support In Case Of Job Loss

3. Provides Support In Case Of Disability

SAVING EARLY

1. Save A Little Each Paycheck – Start Immediately

2. Prepare For Retirement Plan Opportunities

Example:

a. Average Starting Salary: $45,000.00

b. Recommended Saving Rate: 20.0%

c. Recommended Savings: $9,000.00 ($45,000.00 X 20.0%)

INVESTMENT VEHICLES

1. Stocks

2. Bonds

3. Mutual Funds

4. Exchange-Traded Funds

INVESTMENT PLANNING

1. Diversification

2. Risk Tolerance

3. Research Investments

4. If It Sounds Too Good To Be True, It Probably Is

ROTH IRA ACCOUNTS

1. Need Earned Income To Qualify

2. Tax-Deferred

3. Income Limits

4. Tax-Free Withdrawal Potential

TRADITIONAL IRA

1. Need Earned Income To Qualify

2. Tax-Deferred

3. Income Limits For Deductible IRA

4. No Income Limits For Non-Deductible IRA

5. Withdrawals Will Be Taxable (Except For After-Tax Contributions)

WORK SPONSORED RETIREMENT PLANS

1. 401(k), 403(b), 457(b)

2. Roth 401(k) Versus Traditional 401(k)

3. Matching Contributions From Employer (Average 3.0% Match)

4. Pre-Tax Deductions: Traditional 401(k)

5. Tax-Deferred Accounts

6. Automatic Contribution From Paycheck

7. Increase Contribution Percentage As Pay Increases

8. 10.0% Penalty

READ PERSONAL FINANCE MAGAZINES, WEBSITES

1. www.kiplinger.com – Personal Finance

2. www.morningstar.com – Investment Research, Personal Finance

3. www.wsj.com:

4. www.bloomberg.com – Investment Research

5. www.inc.com – Inc Magazine – Small Business Planning

6. www.Mint.Com – Keeps Track Of Spending

PAYING BILLS

1. Set Up Strict Payment Schedule

2. Avoid Late Fees

3. Late Payments = Damaged Credit Score

4. Online Bill Pay

MINIMIZE DEBT

1. Don’t Obtain Numerous Credit Cards

2. Pay Down Highest Interest Rate First

3. Don’t Compare To Your Peers

STUDENT LOANS

1. Few Students Graduate Without Debt

2. Equate Debt To Expected Earning Potential

3. Increase Future Earning Potential While Decreasing Your Present Debt

4. Only Use Student Loan Debt For School Expenses

5. Average Student Loan Debt

6. Repayment Plans

CAR PURCHASE

1. Don’t Immediately Purchase Brand New Car After First Job.

2. Review Total Debt Burden

HOUSE PURCHASE

1. Costs More Than Renting

2. Owning Home = Less Mobility

3. New Job In New City

4. Future Partner Might Not Like Your House

AVOID CREDIT CARDS

1. Can Become Vicious Cycle

2. Easy To Run Up Charges

3. High Interest Rates

4. Pay For Purchases From Monthly Cash Flow /Savings Or Don’t Make

The Purchase

RENTER’S INSURANCE

1. Landlord’s Insurance Will Not Cover Belongings

2. Liability Protection

3. Personal Property

AUTOMOBILE INSURANCE

1. Required By Almost Every State.

2. Type Of Car Influences Premium.

3. Liability Protection, Collision, Comprehensive, Uninsured,

Underinsured

HEALTH INSURANCE

1. No One Is Invincible.

2. If Healthy, There Are High Deductible Plans That Will Not Cost Much

3. Affordable Care Act Allows Dependent On Parent’s Health Insurance

If Under Age 26

4. Use Healthcare Exchanges

DISABILITY INSURANCE

1. Replaces Income If Disabled

2. Employer Might Offer As Employee Benefit (Usually Not Portable)

3. Purchase individually (portable)

4. Short-Term And Long-Term

LIFE INSURANCE

1. Financial Security For Beneficiaries

2. Consider Purchasing Some Life Insurance While Insurable

3. Pay Off Specific Debt

INCOME TAX PLANNING

1. Student Loan Interest Deduction

2. IRA Deduction

3. Pre-tax Work-sponsored Retirement Plan

4. Flexible Spending Account

5. Job Hunting Expenses: Subsequent Jobs Hunting Costs Can Be Deducted If

In Same Field.

6. Unreimbursed Moving Expenses: First Job (Greater Than 50 Miles)

MACROECONOMICS

1. Definition: Concerned With The Economy As A Whole

2. Monetary Policy

3. Fiscal Policy

4. Inflation

UNEMPLOYMENT (APRIL, 2015)

1. Unemployment

a. U-3: Total Unemployed, As A Percentage Of Civilian Work Force: 5.4%

b. U-6: Total Unemployed, Plus

a. Persons Discouraged And Stopped Looking For Work

b.Total Employed Part Time For Economic Reasons

c. As Percentage Of Civilian Work Force Plus Persons Marginally

Attached To Labor Force: 10.8%

c. College Graduate Unemployment Rate: 12.4%

d. College Graduate Underemployment Rate (Have Job But Not In Field Of

Study: 45.0%-50.0%

ENHANCING EARNING POTENTIAL

1. Will Probably Earn More From Your Career Than Any Investment

2. Invest In Yourself

GRADUATE SCHOOL

1. Weigh The Costs And Potential Benefits.

2. Tough Job Market – Not A Reason For Grad. School.

3. Some Graduate Schools Require Work Experience.

JOB HUNTING

1. Build A Network (Teachers, Classmates, Etc.)

2. Don’t Abandon Your School Once You Graduate

3. Research Potential Employer

4. Leverage Social Media

5. Ask Someone To Proof Resume And Cover Letter.

SOCIAL MEDIA

1. Be Careful Of Your Profile

2. LinkedIn: Used Mainly For Business

3. Build Network

4. Join Groups

5. Job Hunting, Career Planning

WRITING SKILLS

1. Writing Skills

2. E-mail Writing Skills

FINANCIAL MENTOR

1. Find Somebody To Discuss Financial Matters With Before Making Big

Decisions.

TYPES OF IDENTITY THEFT

1. Financial

2. Insurance

3. Medical

4. Criminal

5. Driver’s License

6. Social Security

7. Synthetic

HOW TO RECOGNIZE IDENTITY THEFT

1. Receiving Collection Calls About Accounts That You Are Not Aware Of

2. Unknown Accounts On Credit Report

3. Denied Credit

4. Credit Report Inquiries From Unknown Companies

5. Stop Receiving Mail From Credit Cards

6. Credit Or Debit Cards Are Missing

7. Receive Bills For Accounts That Aren’t Yours

8. Bank Statement Transactions

HOW TO RECOGNIZE IDENTITY THEFT (Continued)

9. Bank Calls You About Irregular Activity

10.Medical Insurance Explanation Of Benefit Statement

11.Medicare Insurance Benefit Maximum

12.Tax Return Is Filed Before You Are Complete With Tax Return

13.You Are Arrested For A Crime That You Did Not Commit

STRATEGIES TO PREVENT IDENTITY THEFT

1. Never Give Out Social Security Number

2. Don’t Write Passwords Down

3. ATM Machine Precautions

4. Avoid Online Prizes

5. Garbage Surfing

6. Keep Credit Card In Sight

7. Don’t Sign Credit Cards But Write Request Photo ID

8. Shred Everything

STRATEGIES TO PREVENT IDENTITY THEFT (Continued)

9. Safe Disposal Of Computer, External Hard Drive, Etc.,

10. Don’t Leave Paid Bills In The Mailbox

11. Don’t Write Social Security Number Or Drivers License Number On Checks

12. Do Not Carry Social Security Card In Your Wallet

13. Avoid Social Security Number In Usernames Or Passwords

14. Store Personal Information In A Safe Place

15. Don’t Respond To Unsolicited Requests For Information Online, Phone, Etc.

16. Virus Detection Software

17. Firewalls On Your Computer

18. Do Not Carry Unused Credit Cards

19. Operating System Is Up To Date: Example: Microsoft Not Supporting

Windows XP After April 8, 2014

20. Credit Freeze

21. IRS Does Not Contact By E-mail, Social Media, Texting, Or Telephone

22. Purchase A Locking Mailbox

23. Don’t Carry Checkbook With You

24. Use Encrypted E-mail

25. Pick Up New Checks At The Bank

STRATEGIES TO PREVENT IDENTITY THEFT (Continued)

26.Opt Out Of Prescreened Credit Offers: Can Opt Out For 5 Years Or

Permanently

27.Anti-Spyware Software

28.Don’t Open Links To Emails That You Do Not Know

29.Find Out How To Properly Dispose Of Smart Phone (Get Rid Of Memory Card)

STRATEGIES TO PREVENT IDENTITY THEFT (Continued)

STOLEN CREDIT, ATM AND

DEBIT CARDS

1. Report Loss To Card Issuer

2. Review Statements For Illegal Transactions

REPAIR IDENTITY THEFT

1. Change Online Username And Passwords

2. Fraud Alert

3. Close Affected Bank Accounts

4. Obtain Credit Report

5. File Complaint With FTC

6. File Criminal Report With The Police

7. Notify All Credit Reporting Agencies

8. Provide All Debt Collectors With Police Reports And FTC Complaints

9. Put Disputes In Writing

10.Hire An Attorney

IDENTITY THEFT SERVICES

Most Popular: Equifax, Experian, TransUnion, Lifelock

Typical Services

1. Fraud Monitoring

2. Fraud Alerts

3. Resolution Services

4. Stolen Wallet Assistance

5. Insurance

6. Mail List Removal

7. Credit Monitoring

8. Credit History Reports

9. 24/7 Phone Support

10.Daily Monitoring

11.Social Security Number Monitoring

MEDICAL IDENTITY THEFT

1. Medical Providers Required To Provide Medical Records

2. Request “Accounting Of Disclosures” From Health Insurance And

Healthcare Providers. This Shows Who Receives Your Medical Records

3. Employees Steal And Sell Information On The Black Market

4. 45% Of All Data Breaches Are Medical-Related

5. Medical Identities Are 20 To 50 Times More Valuable Than Financial

Identities

6. Replacement Health Insurance Card Typically Does Not Change Policy

Numbers

TYPES OF MEDICAL IDENTITY THEFTS

1. Bill Health Insurance For Fake Claims

2. Prescription Drugs

3. Free Treatment

4. Employee Error

5. Stolen Computer Device – Exaggerated With Electronic Medical Records

MEDICAL IDENTITY THEFT CONSEQUENCES

1. Unpaid Bills

2. Max Out Coverage Limits

3. Incorrect Medical Advice

4. Increased Health Insurance Premiums

WAYS TO IDENTIFY MEDICAL IDENTITY THEFT

1. Reaching Benefit Limit

2. Debt Collection Call

3. Insurance Detail

4. Review Explanation Of Benefits Statement

5. Request Health Insurance Benefits Statement

6. Request Medical Records

7. Review Credit Report

CHILD IDENTITY THEFT

Carnegie Mellon University Describes How Bad It Is:

"Based On Scans Of More Than 42,000 U.S. Minors' Social Security Numbers

(SSN) Made By Debix, An ID Protection Company, A Recent Report By Power

Illuminated Some Shocking Findings.

More Than 10 Percent Of The Sample Children Had Another Individual Using Their

SSN.

Child Identities Were Used For Everything From Purchasing Homes And Cars To

Obtaining Credit Card Accounts And Driver's Licenses."

CHILD IDENTITY THEFT

1. Parents Aren’t Paying Attention

2. Problems Can Impact Employment And Credit History

3. Stolen Social Security Numbers Are Sold To Human Traffickers Or Thieves

4. In June 2011, The Social Security Administration Started Randomizing

Issuance

5. Before June 2011, Social Security Numbers Have Been Issued In A Predictable

Sequence Based On When And Where A Child Was Born

CHILD IDENTITY THEFT (Continued)

7. Health Care Providers And Schools Are Targets

8. It Can Take Years To Fix The Identity

9. Parent Must Prove They Are The Parent Or Guardian

10.Fraud Alert

11.Credit Reporting Services: Add Child For Additional Fee Per Month

HOW TO IDENTIFY CHILD IDENTITY THEFT

1. Child Receive Pre-Approved Credit Cards

2. Account Opening Denial

3. Credit Report Exists Yet No Credit Has Been Ever Applied For

4. Receive Bills For Products The Child Does Not Use

5. IRS Notice

HOW TO REVIEW YOUR CREDIT REPORT

1. Review Name (Especially Middle Initial)

2. Address

3. Social Security Number

4. Employers

5. Accounts That Are Not Yours

6. Late Payment

7. Go To www.Annualcreditreport.Com Or Call 1-877-322-8228

For Free Credit Report

HOW IDENTITY THEFT AFFECTS YOUR CREDIT SCORE

1. Can Lose Hundreds Of Points From Credit Score

2. Higher Balances On Credit Cards

3. New Accounts

4. Late Payments On New Accounts Opened

5. Too Many Inquiries

6. File Tax Returns – Unpaid Liability

7. Obtain Bogus Checks

8. Open A Fake Business In Your Name And Use Credit

CREDIT SCORE

1. Lenders, Employers And Landlords Will Review.

2. Good Credit Score Is 720 Or Better.

3. No Credit History Can Be A Problem.

ONLINE SHOPPING

As You Enter Personal Information To Make A Purchase, The URL Should Switch

From HTTP To HTTPS, Which Indicates The Information Is Encrypted

Legend Financial Advisors, Inc.®

5700 Corporate Drive,

Suite 350

Pittsburgh, PA 15237-5829

Phone: (412) 635-9210

E-mail: legend@legend-financial.com

www.legend-financial.com

CONTACT INFORMATION

EmergingWealth Investment

Management, Inc.

5700 Corporate Drive,

Suite 360

Pittsburgh, PA 15237-5829

Phone: (412) 548-1386