Money Wi$e Workshop

Money Wi$e Workshop

Build Wealth Not Debt

$$ Wealth Creation $$ Budget to Save

$$ Take Control of Debt $$ Save and Invest

Get the facts !! Accumulating wealth is the key to

obtaining financial independence. It is necessary to

understand the language of money and have a

systematic approach to saving and investing in order to

meet your financial goals. Building wealth requires

having the right information, planning, and then making

MoneyWi$e choices.

The Language of Money

S____ o_ S____ pend

ave

r

Net Worth

Assets – Liabilities

= Net Worth Or Wealth

It’s YOUR Choices

CourageEducationVocationFamily

LifestyleFrugality

Here’s how to Build Wealth not Debt

Determine Short Term Goals

Determine Long Term Goals

1. Pay yourself first.

2. Spend less than you make.

3. Know the difference between needs and wants.

4. Know the difference between good debt and bad debt.

Pay Yourself First

1. At least 10% of your Income

Saving – Emergency Fund and

Short Term Goals

Investing – Retirement and Long Term Goals

Spend Less than you Make

What determines your WEALTH is not how much you make but how much you keep of what you make!!

Before you spend money ask yourself three questions:

1. Is it a need, want or a luxury?

2. How much of my life is this worth?(How many hours do I have to work to pay for it?)

3. If I spend this money which of my goals is it advancing? In other words where is it getting me?(Am I only receiving instant gratification or am I making progress toward building wealth?)

Know the difference betweenneeds and wants

1. Opportunity Cost

2. Time Value of Money

Opportunity Cost

There is a cost and consequence to any money decision you make. The cost is the best forgone opportunity. What else could you have done with the money and what opportunity have you given up because you do not have the money to invest in an asset? Good decisions require a clear understanding of alternatives. It’s all about choices – manage your choices and you will manage your life!!

Cost Benefit Analysis

Cost/BenefitHow much does it cost?

What is the benefit?

SubstituteSomething different I can choose.

Benefit I will receive

Time Value of Money The secret to becoming a Millionaire

Invest $166 a month in the S & P 500 in a tax-deferred retirement fund.

From age 24 to 65 – never touch it

History says you will earn 10% on your investment.

With the Magic of Compounding

At age 65 you will be a $$$ MILLIONAIRE $$$

Know the difference between GOOD debt and

BAD debt

The only thing you borrow money for are things that appreciate in value.

1. Education

2. Real Estate

3. Your Business

Education attainment for Stephens County

59.4% High School Diploma or less22.7% Some College/Technical13.8% Bachelor’s Degree 4.2% Graduate or Professional Degree

Lead the Fieldby Earl Nightingale

The Socioeconomic Pyramid

Top5%

Over $100,000

Upper Middle Class$30,000 - $100,000

Lower Middle ClassOklahoma’s average income: $29,200

Source: Okla. Dept. of Commerce

Low IncomePoverty level for a family of four: $18,200

Source: Census Bureau

What section of the pyramid do you want to live in? You have the freedom to choose your lifestyle. The desire to succeed and education (either formal or self-directed learning) will get you to the top. It’s up to you to make the choices that determine your future.

People who need to be helped by the rest of us,Elderly – Disabled - TANF

What Bankers Evaluate

Character – TRRFCC Trustworthiness – Responsibility – Respect Fairness – Caring - Citizenship

Capacity to Pay Based on your income, employment history, expenses, debts, credit report and credit score. www.myfico.com and www.annualcreditreport.com

Capital The amount of cash you have and your debt to income ratio 33% or below. If you have three times as much debt as capital – history says you will fail.

Collateral Assets pledged to secure the loan; like a car or real estate. You don’t pay they take away.

Conditions General economic conditions is the economy growing or are we in a recession. HSH Associates – Financial Publishers www.hsh.com

What Bankers Evaluate

Resources

www.creditcompass.com

www.mindyourfinances.com

www.mapping-your-future.org

www.entrepreneurU.org

Jackie Jacobi, Business TrainerRed River Technology Center3300 W. Bois D’ArcDuncan, OK 73533(580) 255-2903 Ext 271jjacobi@redriver.tec.ok.us