woc 2016: the heart and soul of financial planning

1 www.womenofcolor.netwww.womenofcolor.net

The Heart and Soul of

Financial Planning

October 13-15, 2016

Detroit Marriott

Renaissance Center

Detroit, MI

http://www.womenofcolor.net


2 www.womenofcolor.net

AT THE END OF THIS SEMINAR,

PARTICIPANTS WILL BE ABLE TO:

Use finance fundamentals.

List ways to build financial portfolios.

Explore beginner investment best practices (retirement).

Examine how personal habits and values may impact a strong

financial future.

Create an action plan and financial goals.



Benjamin D. Brown, MBA

- Rate Case and Benefits Financial Management

for Consumers Energy, Michigan’s Largest Utility

- Over 28 years experience in Controller and Financial

Roles for Fortune 500 Companies, State Government,

a Non-Profit and Small Businesses

- Small Business and Investment Property Owner

- Board Member, Treasurer for Town of Farmington, New

York and Private Chemung Valley Montessori School

- Personal Finance mentor and coach for individuals and

church groups

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Davyd J. Jones, AAMS®

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-Wealth Advisor, Raymond James Investments

- Fiduciary responsibility of acting in clients best and only interest

- Advise foundations/charities, families, and municipalities on making fiscally-sound decisions for their financial future

- Junior Achievement volunteer: work with economic teachers to help educate high school seniors make sound-educated decisions for the next phase in their lives

- Urban League: Project Ready Mentor – develop relationship with a child focusing on preparing them for college, work and life

-Euell A Wilson Center: helping inspire teens by focusing on their talents and encouraging them on the possibilities life offers. From entrepreneurship and business to raising a family.

-Former Ball State University Football Alum and team captain 2010’



Lindsay B. H. May, Ph.D.

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- Systems Engineer at Northrop Grumman Corporation,

7 years experience

- Motivation: I believe that everyone should proactively

manage their finances, which begins with a basic

understanding of personal finances. I encourage you

to formulate a goal and first/next step toward reaching

that goal before leaving here today.

- My only “expertise” is my personal experience.



Let’s start thinking about finances!

- WHO:

- Has debt (mortgage, student loans, car loans,

credit card, other)?

- Contributes to an employer sponsored retirement

plan?

- Has life insurance?

- Could deal with a $500 unexpected expense?

- Has a budget that is written down?

- Tracks monthly expenditures?

- WRITE DOWN A PERSONAL FINANCIAL GOAL

(KEEP THIS IN MIND THROUGHOUT)



EMPOWER

EDUCATE YOURSELF AND OTHERS;

MANAGE INCOME &EXPENSES;

PLAN FOR THE UNKNOWN;

OWN YOUR CHOICES AND USE

WISDOM; CONTROLLING

EMOTIONAL SPENDING AND

REAP THE DIVIDENDS

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Educate Yourself and Others Fundamentals of Finance

- Income > Expenses

- Do you track expenses on a regular basis?

- Daily behaviors and financial impact

Financial Plans Include the following Basic Elements:

- Goals: Long Term and Short Term

- Monthly Budget [Bi-Weekly (if easier)]

- Accountability Check In

- Debt elimination

- Building wealth

Customize your plan to your goals!!

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Dispel the Myths

CHANGE YOUR MIND

- I’M ONLY A HIGH SCHOOL

STUDENT

- I JUST STARTED COLLEGE

- I AM GOING BACK TO SCHOOL AND

HAVE ALREADY MADE CREDIT

DECISIONS

- I ALREADY HAVE STUDENT LOAN

DEBT.

- I DO NOT HAVE A LOT OF MONEY

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Wife, Kids,

Post Graduate

Education,

Grooming

Student Loans,

Car Note,

Rent/Mortgage,

Entertainment,

Hygiene

Dependent

Care and

Elder Care

- Why should I invest?- How can I invest?- What should I invest in?- Am I going to lose my money?



Manage Your Income and ExpensesYou Do the Math…..

MONTHLY BUDGET– What to include

• Rent/Mortgage

• Day-To Day Expenses

• Student Loans

• Unsecured Debt

• Secured Debt

SAVINGS

• Spend for “You”

• Emergency Fund

• Survival Kits

• Retirement

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- WHO?- YOU need one!!

- WHEN?- NOW! (Start now if you don’t already have one)

- WHAT?- Fund to equip you to deal with emergencies without going

in to debt

- HOW MUCH?- 3 – 6 – 9 rule (LearnVest)

- WHY?- Peace of mind and to keep you from accumulating more

debt

- HOW TO GET STARTED?

- WHERE DO I PUT IT?

More on Savings: Emergency Fund



HOW TO GET STARTED?

- START WITH A MORE MODEST GOAL (SAY $500); MAKE A 3 OR 6 MONTH EMERGENCY FUND A LONGER-TERM GOAL.

- How much do you need a week to make this goal?

- Where can this come from?- Change a habit

- Lower a bill (negotiate or change provider or service level)

- Try alternate transportation

- Use a grocery list

- Be creative

- Sell things?

- Piggy bank

- Make it automatic

- MAKE THE MONEY HARD TO GET TO

More on Savings: Emergency Fund



- NEEDS TO BE EASILY ACCESSIBLE AND NOT RISKY

- IDEAS:

- Savings account

- Pros: safe and accessible

- Cons: little to no interest

- Other thoughts: online banks or credit unions often offer higher rates

- CD

- Pros: safe; higher interest rate than most savings accounts

- Cons: not easily accessible

- Other thoughts: no penalty CDs (lower interest rate than regular CDs,

but money accessible)

- Invest

- Pros: potential for earnings

- Cons: not safe or easily accessible

Emergency Fund – where do I put it?Lindsay’s Testimonial



- ASSESSMENT

- Savings account

- Currently have our emergency fund in 2 accounts: - A money market at a credit union (so rate is better than national banks,

but not immediately accessible)

- A national bank’s interest bearing checking account (very poor interest

rate but very easily accessible)

- Can I find an online bank or credit union with a better rate? - Most credit unions have eligibility requirements

- Some with great rates and easy eligibility have requirements like a minimum

number of debit transactions – don’t want to have to deal with that; also would

be mixing emergency fund and savings.

- CD

- No-penalty interest rate too low; “risk free” doesn’t meet needs

- Invest – will not be pursuing this strategy at this time

- Strategy of investing 130% of amount you need to mitigate risk

- Coming up with 30% more is not realistic in the short term

Emergency Fund – where do I put it?



Strategies for Financial Success and Stability- Categorize Your Money; How do you Classify Your Money

- Paying down debt

- Planning Proactively

- Smart Use of Credit Cards

- Smart use of Student Loans

- Smart Use of Retirement Funds

- Insurance Plans

- Budgeting for Others (BFO) (family, friend loans)

- Just say No

- Provide Other Resources

- BFO Responsibly

- Strategies for Saving – Accounts in the Market, Taxes

- Discipline

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STREAMS OF INCOME– Work Study

– Part Time Employment

– Steady Employment

• Salary Negotiations

• Signing Bonuses

• Retention Payments

– Entrepreneurs

– 401 K; Roth; My IRA Contributions

– Insurances

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OWN Your Choices

Real Talk for Real Money Issues

THE PANEL GETS OPEN ABOUT MONEY

MISTAKES

- Transparency in the Mirror

- Learn from Other’s Choices, Experiences

and Outcomes

– Your Own Experience Does not Always have

to be the Best Teacher

- LESSONS LEARNED

- TAKE AWAYS

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Wisdom; Controlling Emotional Spending

Investment or Impulse….

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- Really….what are you spending your money on?

- Are you forward thinking on all your purchases?

- Let’s talk about rewarding yourself within the realms of still making smart money decisions?

- Retail Therapy?? Image?? Status?



Reap the DIVIDENDS

WHAT’S IN IT FOR YOU??

- Written Goals

- Your Definition of

Success

- Financial Stability

- Debt Free

- Accomplishment

- Reduced Mental

Stressors

- Enjoy Life

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EMPOWER

APPS AND WEBSITES (MANY HAVE A COST)

SPREADSHEET GOODBUDGET

LEVEL MONEY WALLY

BILLGUARD HOMEBUDGET WITH SYNC

MINT.COM LOAN CALCULATOR PRO

YOUNEEDABUDGET CREDIT KARMA

MVELOPES DIGIT

SPENDEE BDGT

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REFLECT

LOOK BACK AT YOUR GOAL

WRITE DOWN THE NEXT STEP YOU WILL TAKE

TOWARDS ACHIEVING YOUR GOAL

WRITE DOWN YOUR DEADLINE FOR TAKING THIS NEXT

STEP

DO IT!!

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BACKUP



Interest Scenarios

Credit Debt versus Investment Returns

CREDIT

$5K AUTO LOAN

– @ 7% intr. For 5yrs =

$940 in interest

$5K CREDIT CARD

– @ 17% intr paying

minimum of 4% rate of

$200/mo = 130/mo with

total pmt of $7,627.46

$5K STUDENT LOAN

– 5yrs @ 6% = $799.84

INVESTMENT

$5K LOCKHEED MARTIN CORP (LMT)

– Feb 12, 2011 – Feb 11, 2016 = $12,000

$5K CD

– @ .25% for 5yrs compounded = $5,062

$5K INVESTMENT

– @ average 6.5% for 5yrs = $6,850

$5K RETIREMENT W/ $100/MO

– @ average 6.5% for 30yrs = $139,700

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- PAY OFF DEBT- Example: If you charge $5226.16 on a credit card with a 13.24%

interest rate and pay only the minimum payment, it will take you 18 years to pay off the debt and cost you $10,310 total. Paying it off more quickly means you’ll pay less in total.

- Snowball

- Invest the money once you’ve finished paying off debt

- RETIREMENT SAVINGS

- CDs- CD ladder

- EXCHANGE-TRADED FUNDS

- MUTUAL FUNDS

Investing once the emergency fund is established


woc 2016: the heart and soul of financial planning

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