Secure Your Financial Futurea discussion with

Fellows & Residents

October 7th, 2013Charles R. Korger, CFP®

Are you wondering?

1. How do I best save for retirement?

2. Should I pay off my school loans?

3. When can I afford a home?

4. How do I fund my child’s education?

5. What if something happens to me?

6. How do I balance these priorities?

What steps can I take to get myducks in a row?

Three Steps to a Secure Financial Future

1. Focus Your Approach

2. Use Rigorous Planning Techniques

3. Stay Disciplined

Five Common Financial Planning Mistakes

1. Lack of a Comprehensive Process

2. Emotional Decisions about Money

3. Speculating rather than Investing

4. Failure to understand Costs

5. Not Revisiting the Plan

STEP 1: FOCUS YOUR APPROACH

How does wealth management fit into your life?

Travel

Fund Children’s Education

Retirement

Time with Family

Maintain Health

Hobbies

Time with Friends

ManageCareer

People normally address financial planning after big change happens…

Focus on being proactive

Reactive financial decision making is expensivePerformance of the S&P 500 IndexDaily: January 1, 1970-December 31, 2011

$50,662

$45,431

$32,940

$19,130

$12,068

$9,190

Gro

wth

of

$1,0

00

Performance data for January 1970-August 2008 provided by CRSP; performance data for September 2008-December 2011 provided by Bloomberg. The S&P data are provided by Standard & Poor’s Index Services Group. US bonds and bills data © Stocks, Bonds, Bills, and Inflation Yearbook™, Ibbotson Associates, Chicago (annually updated work by Roger G. Ibbotson and Rex A. Sinquefield). Indexes are not available for direct investment. Their performance does not reflect the expenses associated with the management of an actual portfolio. Dimensional Fund Advisors is an investment advisor registered with the Securities and Exchange Commission. Information contained herein is compiled from sources believed to be reliable and current, but accuracy should be placed in the context of underlying assumptions. This publication is distributed for educational purposes and shouldnot be considered investment advice or an offer of any security for sale. Past performance is not a guarantee of future results. Unauthorized copying, reproducing, duplicating, or transmitting of thismaterial is prohibited. Date of first use: June 1, 2006.

Focus on the issues that matter

THESE

Relationships

Values

Diversification

Long-Term Goals

Discipline The “Sure Thing”

Getting Rich Quick

Following a proactive process can help you achieve your financial goals

PROCESS SETS YOU FREE

Identify and organize your issues

Goals

Values

Relationshi

ps

Interests

Advisors

Address them Comprehensively and Focus on the Important Issues

ValuesInterests

ProcessWealth

Management

What is comprehensive?

STEP 2: USE RIGOROUS PLANNING TECHNIQUES

NOT ALL PLANNING IS CREATED EQUAL…

The central questions in planning are:

Applying probability based simulations to wealth management gives you the

framework for a plan…Or, does a 90%

probability of success give you more comfort?

Is a 50% chance of accomplishing your goals

enough Clarity?…

19

Sample Plan Scenario Results

20

Sample Results - Detailed

21

Sample Results – Choosing a Portfolio

For illustration purposes only. Source: J.P. Morgan Asset Management. Bonds are subject to interest rate risks. Bond prices generally fall when interest rates rise. The price of equity securities may rise or fall because of changes in the broad market or changes in a company’s financial condition, sometimes rapidly or unpredictably. Equity securities are subject to “stock market risk,” meaning that stock prices in general may decline over short or extended periods of time. Investing in alternative assets involves higher risks than traditional investments and are suitable only for the long term. They are not tax efficient and have higher fees than traditional investments. They may also be highly leveraged and engage in speculative investment techniques, which can magnify the potential for investment loss or gain.

Match Your Investments to Your Planning Needs

Coordination Must Exist

Account Structure •Estate planning

•Optimal Titling

Tax-Managed Investing

•Tax Loss Harvesting•Capital gains management

Asset Placement •Taxable – Muni Bonds•Deferred - Corporates

Much less effective without coordination

Taxable Account Value: $2,287,927Tax-Deferred Account Value: $5,031,328

Are you maximizing tax-advantaged opportunities?• Tax deferral has a major impact over time• For example: Look at the growth of $500,000 in a

taxable vs. tax-deferred portfolio over 30 years.

(assumes 8% annualized return and the 35% tax bracket)

STEP 3: STAY DISCIPLINED

The financial services industry and the news media want you to be undisciplined

Most investors aren’t disciplined

Indexes used are as follows: REITS: NAREIT Equity REIT Index, EAFE: MSCI EAFE, Oil: WTI Index, Bonds: Barclays Capital U.S. Aggregate Index, Homes: median sale price of existing single-family homes, Gold: USD/troy oz, Inflation: CPI. Average asset allocation investor return is based on an analysis by Dalbar Inc., which utilizes the net of aggregate mutual fund sales, redemptions and exchanges each month as a measure of investor behavior. Returns are annualized (and total return where applicable) and represent the 20-year period ending 12/31/11 to match Dalbar’s most recent analysis.

Return and RiskPeriodic Table of Investment ReturnsAnnual returns for selected asset classes (1993 – 2012)Ranked in order of performance (best to worst)

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

MSCI EAFE

MSCI EAFE

Large Value

RealEstate

Large Value

S&P 500

MSCI EAFE

RealEstate

SmallValue

USBonds

Russell 2000

RealEstate

MSCI EAFE

RealEstate

MSCI EAFE

USBonds

MSCI EAFE

Real Estate

Real Estate

SmallValue

32.94% 8.06% 38.36% 37.05% 35.18% 28.58% 27.30% 31.04% 14.02% 11.02% 47.25% 33.16% 14.02% 35.97% 11.63% 5.70% 32.46% 28.07% 9.37% 18.05%

SmallValue

RealEstate

S&P 500

S&P 500

S&P 500

MSCI EAFE

Russell 2000

SmallValue

RealEstate

RealEstate

SmallValue

SmallValue

RealEstate

MSCI EAFE

USBonds

Small Value

Real Estate

Russell2000

USBonds

MSCI EAFE

23.85% 2.66% 37.58% 22.96% 33.36% 20.33% 21.26% 22.80% 12.35% 3.58% 46.02% 22.25% 13.82% 26.86% 7.23% -28.92% 28.46% 26.85% 8.74% 17.90%

Russell 2000

S&P 500

Russell 2000

Large Value

SmallValue

Large Value

S&P 500

USBonds

USBonds

SmallValue

MSCI EAFE

MSCI EAFE

Equally Weighted Portfolio

SmallValue

S&P 500

Equally Weighted Portfolio

Russell2000

SmallValue

S&P 500

Large Value

18.89% 1.32% 28.45% 21.65% 31.80% 15.65% 21.04% 11.84% 8.51% -11.42% 39.17% 20.70%7.58%

23.48% 5.49%-30.17%

27.17% 24.50% 2.11% 17.51%

Equally Weighted Portfolio

Equally Weighted Portfolio

SmallValue

SmallValue

Russell 2000

USBonds

Equally Weighted Portfolio

Large Value

Russell 2000

Equally Weighted Portfolio

RealEstate

Russell 2000

Large Value

Large Value

Large Value

Russell2000

S&P 500

Equally Weighted Portfolio

Large Value

Real Estate

18.69%0.59%

25.75% 21.37% 22.38% 9.47%9.90%

7.02% 2.49%-10.12%

36.18% 18.32% 7.03% 22.24% -0.17% -33.79% 26.46%18.00%

0.39% 17.12%

Large Value

Russell 2000

Equally Weighted Portfolio

Equally Weighted Portfolio

Equally Weighted Portfolio

Equally Weighted Portfolio

Large Value

Equally Weighted Portfolio

Equally Weighted Portfolio

Large Value

Equally Weighted Portfolio

Equally Weighted Portfolio

SmallValue

Equally Weighted Portfolio

Equally Weighted Portfolio

Large Value

Equally Weighted Portfolio

Large Value

Equally Weighted Portfolio

Russell2000

18.12% -1.82%24.43% 18.25% 21.83% 6.54%

7.35%6.77% -0.58%

-15.53%32.39% 17.96%

4.71%20.75% -0.63%

-36.85%22.57%

15.51%0.07%

16.35%

RealEstate

SmallValue

USBonds

Russell 2000

RealEstate

Russell 2000

SmallValue

Russell 2000

Large Value

MSCI EAFE

Large Value

Large Value

S&P 500

Russell 2000

Russell 2000

S&P 500

SmallValue

S&P 500

Russell2000

S&P 500

15.14% -1.54% 19.24% 16.54% 19.66% -2.56% -1.49% -3.03% -5.59% -15.66% 30.03% 16.49% 4.91% 18.37% -1.56% -37.00% 20.56% 15.06% -4.18% 16.00%

USBonds

Large Value

RealEstate

MSCI EAFE

USBonds

SmallValue

USBonds

S&P 500

S&P 500

Russell 2000

S&P 500

S&P 500

Russell 2000

S&P 500

SmallValue

Real Estate

Large Value

MSCI EAFE

SmallValue

Equally Weighted Portfolio

10.98% -2.00% 12.24% 6.36% 9.75% -6.44% -2.15% -9.10% -11.89% -20.48% 28.69% 10.88% 4.55% 15.80% -9.78% -39.20% 19.69% 8.21% -5.50%15.55%

S&P 500

USBonds

MSCI EAFE

USBonds

MSCI EAFE

RealEstate

RealEstate

MSCI EAFE

MSCI EAFE

S&P 500

USBonds

USBonds

USBonds

USBonds

RealEstate

MSCI EAFE

USBonds

USBonds

MSCI EAFE

USBonds

10.07% -3.51% 11.55% 2.91% 2.06% -17.01% -2.58% -13.96% -21.21% -22.10% 4.68% 4.20% 2.37% 3.78% -17.55% -43.06% 4.52% 6.59% -11.73% 4.84%

U.S. Small Value Stocks (Russell 2000 Small Value) U.S. Small Stock (Russell 2000)

U.S. Large Stocks (S&P 500 Index) Securitized Real Estate (Dow Jones US Select REIT Index)

U.S. Large Value Stocks (Russell 1000 Large Value) Large International Stocks (MSCI EAFE Index)

U.S. Bonds (Barclays Government/ Credit Index) Equally Weighted PortfolioSource: DFA Returns Program

2008/2009Investors in 2008 who were able to go back to their “Plan”, stayed disciplined and benefited from the recovery. They were far better off than those who panicked and tried to “Time the Market”.

Investors continue to be undisciplined

Source: Dalbar 2012

Create a plan that will keep you on track

Garbage in / Garbage out

You can only set your course after you have a realistic range of possibilities

Stated Goals % Chance of Success Comfortable Retirement… 97%Pass $7MM to Heirs… 76%

* Science would agree that an 80% chance of success is a high degree of probability when forecasting 30 (or more) years into the future.

The plan will be “wrong”Retirement can be 30 years or more - Forecasting that far down the road WILL require adjustment…

It must be reviewed in the event of:Extreme Market Turbulence

Death or Divorce

Relocation

Change in Goals

Retirement or other Milestones

Health and Disability issues

The next steps

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RESOURCES

http://www.independenceadvisors.com/resources/anesthesiologist-planning-resources

RESOURCES – GENERAL TOPICS

RESOURCES – EARLY CAREER

RESOURCES – NEARING RETIREMENT

RESOURCES – RECOMMENDED READING

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Disclosures

Asset class returns and allocations are shown for illustrative purposes only. Actual account allocations and returns vary based on investment objectives and individual portfolio construction.

Any probabilities shown are inherently speculative and shown for illustrative purposes only.

This analysis may include forward-looking statements.  All statements other than statements of historical fact are forward-looking statements (including words such as “believe,” “estimate,” “anticipate,” “may,” “will,” “should,” and “expect”).  Although we believe that the expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct.  Various factors could cause actual results or performance to differ materially from those discussed in such forward-looking statements.

 Views regarding the economy, securities markets or other specialized areas, like all predictors of future events, cannot be guaranteed to be accurate and may result in economic loss to the investor.

Investment in securities, including mutual funds, involves the risk of loss. 

Expected returns are based on historical market performance of a similarly situated portfolio.  Clients should understand that Independence Advisors, LLC cannot and does not guarantee that actual performance of their portfolio will equal or exceed expected returns indicated in this presentation.

Any information provided by Independence Advisor’s LLC regarding historical market performance is for illustrative and education purposes only.  Clients or prospective clients should not assume that their performance will equal or exceed historical market results and/or averages.

The projections or other information generated by Monte Carlo analysis tools regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results and are not guarantees of future results.  Results may vary with each use and over time.  Monte Carlo simulations are a deterministic approach where historical figures are used as a guide to estimate portfolio’s future returns.  The relevant calculations may be impacted greatly if assumed variables such as capital contributions, withdrawal amounts, inflation rates, expected rate of return, and volatility deviate from expectations.