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Ten Weeks to Financial Awakening

Money Attention Page(MAP)

Table of ContentsWeek Five—Credit & Loans

MAP 5-1Some Debt Management Techniques

477

MAP 5-2Mortgage Planning Tips

478

MAP 5-3Types of Mortgages

481

MAP 5-4The Bi-Weekly Mortgage

483

MAP 5-5Mortgage Indebtedness—Tax Rules

484

MAP 5-6Credit Cards

490

MAP 5-7How Can I Get a Copy of My Credit Report?

493

MAP 5-8What Should I Do if I Find Mistakes in my Credit Report?

494

MAP 5-9Financing an Auto

496

Week Six—InvestmentsMAP 6-1

The Natural Investing Services, Inc. Social Rating499

468 Ten Weeks to Financial Awakening

MAP 6-2Socially Responsible Investing Resources

503

MAP 6-3Index of the Indexes

504

MAP 6-4Many Faces of Risk

505

MAP 6-5Mutual Fund Investing

507

MAP 6-6Types of Bonds

510

MAP 6-7Treasury Inflation Protection Securities (TIPS)

513

MAP 6-8Bonds 101

515

MAP 6-9Bond Maturity and Duration

516

MAP 6-10Categories of Equity Investments

518

MAP 6-11Advantages and Disadvantages of Investing in Real Estate

519

MAP 6-12Real Estate Investment (REIT) Trust

520

MAP 6-13The Key to Investing—Invest

521

MAP 6-14What Are Mutual Fund Sales Charges and Loads?

523

MAP Table of Contents 469

MAP 6-15What Are Mutual Fund Annual Operating Expenses?

524

MAP 6-16Comparing Index Funds and Actively Managed Funds

525

MAP 6-17Comparing Variable Annuities and Mutual Funds

527

MAP 6-18Dollar-Cost Averaging and Dividend Reinvestment Plans

529

MAP 6-19Glossary of Investment Terms

530

Week Seven—InsuranceMAP 7-1

Guide to Insurance Needs540

MAP 7-2Insurance Do’s & Don’ts

541

MAP 7-3Who Should Be the Beneficiary of the Life Insurance Policy?

542

MAP 7-4Types of Life Insurance Policies

544

MAP 7-5Shopping for Insurance

548

MAP 7-6Upgrade Insurance Policies with a Section 1035 Exchange

550

MAP 7-7Auto Insurance Buying Tips

551

MAP 7-8Homeowner’s Insurance Buying Tips

552


MAP 7-9Personal Umbrella Liability Policy

554

MAP 7-10Health Insurance Basics

555

MAP 7-11Long-term Care Insurance

559

MAP 7-12Long-term Care Insurance—A Financial Analysis

561

MAP 7-13Long-term Care Insurance—Policy Comparison

563

MAP 7-14Importance of Disability Insurance

567

MAP 7-15Disability Insurance 101

568

MAP 7-16Disability Insurance Policy Checklist

570

MAP 7-17Disability Insurance Annual Premiums

571

MAP 7-18Social Security Disability

572

MAP 7-19Overview of Medicare

573

MAP 7-20Standard Medigap Policies

577

MAP 7-21Family Limited Partnership with You as General Partner

578


MAP 7-22Advantages and Disadvantages of Family Partnerships

580

MAP 7-23Entity Comparison Chart

581

MAP 7-24Annuities

583

MAP 7-25Checklist of Factors Indicating that a Buy-Sell Is Needed

585

Week Eight—TaxesMAP 8-1

Pension Plan Comparison Chart—2001 Tax Act Changes586

MAP 8-2Traditional IRA Flowchart

587

MAP 8-3Overview of Roth IRAs

591

MAP 8-4Roth IRAs vs. Deductible IRAs

591

MAP 8-5Education IRA (Coverdell ESA) Flowchart

592

MAP 8-6What Is a 401(k) Plan?

593

MAP 8-7Qualified Retirement Plans

596

MAP 8-8Comparison of SEPs and SIMPLE IRAs

597


MAP 8-9Inherited Retirement Plan Decision Tree—Death Before Required Beginning Date

600

MAP 8-10Inherited Retirement Plan Decision Tree—Death After Required Beginning Date

601

MAP 8-11Rollovers and Transfers

602

MAP 8-12Withdrawals and Distributions

605

MAP 8-13New Simplified Rules for Calculating Required Minimum Distributions

607

MAP 8-14Retirement Plan Contribution Summary

608

MAP 8-15Education Tax Incentives

609

MAP 8-16Steps in Applying for Financial Aid

610

MAP 8-17Financial Aid Application

611

MAP 8-18What Is a Qualified Tuition Program?

613

MAP 8-19Summary of Federal Loan Programs

616

MAP 8-20Buying a Home

618

MAP 8-21Calculating the Principal Residence Gain Exclusion

622


MAP 8-22Real Estate Comparison Chart

624

MAP 8-23Like-kind Exchanges

626

MAP 8-24$25,000 Special Loss Allowance for Real Estate

628

MAP 8-25Electric and Clean-burning Vehicles

629

MAP 8-26Top 10 Individual Tax Savings Ideas

631

MAP 8-27Top 10 Business Tax Savings Ideas

632

MAP 8-28“Being” in Business

633

MAP 8-29Jobs and Growth Tax Relief Reconciliation Act of 2003

634

MAP 8-30How You Do Business Matters

638

Week Nine—RetirementMAP 9-1

Quickchart of Social Security Retirement Benefits639

MAP 9-2Quickchart of Social Security Family, Survivor, and Disability Benefits

640

MAP 9-3Social Security Benefits as a Percentage of PIA

641

MAP 9-4Applying for Social Security Benefits

642


MAP 9-5When Will Principal Balance Equal Zero?

643

MAP 9-6Early Retirement

644

MAP 9-7Fear of Transformation

645

MAP 9-8Pension Maximization

646

MAP 9-9Top 10 Nonfinancial Retirement Issues

649

Week Ten—Estate PlanningMAP 10-1

Quick Facts on Estate Planning651

MAP 10-2Questions to Answer Before You See an Attorney

654

MAP 10-3Types of Wills

656

MAP 10-4What Happens Without a Will

658

MAP 10-5Functions of a Will

659

MAP 10-6What a Will Cannot Do

660

MAP 10-7Direct Transfers

661

MAP 10-8Tips on Handling a Will

662


MAP 10-9Probate

663

MAP 10-10Avoid Probate and Save?—Maybe Not

665

MAP 10-11Planning for Illness and Disability

666

MAP 10-12Common Forms of Co-Ownership

668

MAP 10-13Disadvantages to Joint Tenancies

669

MAP 10-14Community Property and Asset Ownership

670

MAP 10-14aBasic Structure of Estate Plan for Married Couples

671

MAP 10-15Flowchart of Basic A-B Trust Planning Structure

675

MAP 10-16Flowchart of Basic A-B-C Trust Planning Structure

676

MAP 10-17Trusts677

MAP 10-18Types of Estate Planning Trusts

678

MAP 10-19Irrevocable Life Insurance Trusts

679

MAP 10-20Comparison of Various Types of Transfers to Minors

681

MAP 10-21UGMA/UTMA Transfers

683

MAP 10-22Lifetime Gifts and Annual Exclusion

684

MAP 10-23Transfers at Death vs. Lifetime Gifts

685

MAP 10-24Charitable Gifts and Bequests—Partial Interests

686

MAP 10-25Estate Planning with Life Insurance

688

MAP 10-26Unmarried Couples Should Consider Living-Together Documents

689

MAP 10-27Helpful Estate Planning Articles

691

MAP 10-28What Is the Federal Estate Tax?

692

MAP 10-29What Is the Federal Gift Tax?

694


Pay off all outstanding credit card balances. Consolidate credit card debt into one line ofcredit (either personal or home equity) through a bank or savings and loan. Many finan-cial institutions now offer both personal and home equity lines of credit at rates signifi-cantly lower than credit card interest rates. You should be aware that some credit cardissuers charge punitive interest rates of up to 10 percent over their standard credit cardrate. Punitive rates may be charged if the cardholder is determined to be a high creditrisk. This determination is based on an analysis of the cardholder’s credit history orrepayment activity.

Negotiate a lower interest rate on credit card balances. Many credit card companies willreduce their interest rates for customers who have good credit and payment histories.The companies, of course, do not advertise this, but may make the offer if the customerrequests to have his account canceled or balance transferred to another card because ofhigh rates. A listing of low-rate credit cards called CardTrak is available from RAMResearch. The list is available via the Internet (at no cost) at www.ramresearch.com.Alternatively, it can be ordered by calling Ram Research at (800) 344-7714.

Discontinue the use of credit cards. Establish a definite amount to be paid monthly onoutstanding credit card balances that exceed the minimum monthly payment required.

Lease or defer the purchase of a new car rather than purchase. The monthly paymenton a leased automobile can be 25–35 percent lower than the monthly payment on apurchase. Also, the deposit required to lease a car may be significantly less than thedown payment necessary to finance the purchase of the car. (Of course, your circum-stances [e.g., high mileage] and the lease terms might be such that leasing would not bebeneficial despite a smaller deposit and lower monthly payments.)

Develop strong banking relationships. You should not overlook the importance of astrong banking relationship. Establish such a relationship with an officer of your bank ifyou do not already have one. The relationship should be at the officer level since youwill want to deal with someone who has knowledge of all the bank’s services and prod-ucts and who also has authority to act for the bank. Benefits of this relationship caninclude bank assistance in obtaining credit or resolving credit problems, assistance withthe record keeping necessary in the PFP process, and complete information on any bankservices or products that might be of value to you.

477

Week FiveMAP 5-1*

Some Debt Management Techniques(refer to page 200)

Copyright © 2002 by Practitioners Publishing Company. All Rights Reserved. Reprinted with permission from Tax & FinancialPlanning Client Presentations. For product information, call (800) 323-8724 or visit www.ppcnet.com.