The Northwestern Mutual Life Insurance Company – Milwaukee, WI Steps you can take to ensure your...

The Northwestern Mutual Life Insurance Company – Milwaukee, WI

Steps you can take to ensure your financial security

Oscar Biondolillo

Thomas J. Canale, Clu, CFP, ChFcThe McTigue Financial Group

Conducting an Effective Career Search (REV July 2011)

The Northwestern Mutual Life Insurance Company – Milwaukee, WI

Take Control of Your Financial Future• Use the Internet to obtain information– Northwesternmutual.com

– Themint.org

• Seek advice from a professional

– accountant, lawyer, financial professional

Conducting an Effective Career Search (REV July 2011)

The Northwestern Mutual Life Insurance Company – Milwaukee, WI

What does money mean to you?

• What impact have finances played on your life so far?

• How does it tie into your vision for the future and the goals you have for your self?

Conducting an Effective Career Search (REV July 2011)

The Northwestern Mutual Life Insurance Company – Milwaukee, WI

What We’ll Cover

• Identify your financial planning “personality”

• Actions you can take today

• Highlight what to get ready for as you step into your career

Conducting an Effective Career Search (REV July 2011)

The Northwestern Mutual Life Insurance Company – Milwaukee, WI

4 Different Approaches to Your Financial Future

• Goal Setters• Procrastinators• Dreamers• Pretenders

• Which approach do you take?

Conducting an Effective Career Search (REV July 2011)

The Northwestern Mutual Life Insurance Company – Milwaukee, WI

Goal-Setters

• Place priority onfinancial well-being

• Know what theywant for their future

• Create detailed plans to achieve dreams

• Need to review plans for re-balancing

Conducting an Effective Career Search (REV July 2011)

The Northwestern Mutual Life Insurance Company – Milwaukee, WI

Procrastinators

• Know what makes for financial health

• Find it difficult to shake unhealthy financial habits

• Need a dose of discipline

Conducting an Effective Career Search (REV July 2011)

The Northwestern Mutual Life Insurance Company – Milwaukee, WI

Dreamers

• Can imagine the future: the cars, the house, the vacations, the lifestyle, etc…

• Feel their financial health slipping away

• Haven’t taken the necessary steps to accomplish their goals

• Often don’t know where to start

Conducting an Effective Career Search (REV July 2011)

The Northwestern Mutual Life Insurance Company – Milwaukee, WI

Pretenders

• False optimists live for today with no thought of the future

• Assume there is plenty of time to work out the details to achieve their dreams

• Believe in the possibility of finding miracle cures to their financial woes

Conducting an Effective Career Search (REV July 2011)

The Northwestern Mutual Life Insurance Company – Milwaukee, WI

Behavioral Economics

Not just WHAT, but WHY we behavethe way we do can help us gain a new understanding of money management!

People are rational

» Smart decision makers

» Learn quickly

» Choose right financial products, career, level of savings

People are people

» Prone to error, irrationality and emotion

» Act in ways inconsistent with financial well-being

Conducting an Effective Career Search (REV July 2011)

The Northwestern Mutual Life Insurance Company – Milwaukee, WI

Basic Fundamentals

• Objective is to have freedom to choose

• It’s never too soon or late to start

• Taking simple steps will help ensure financial health

• There’s no “magic pill.” Individuals need to determine tactics that will meet their own lifestyle and address chronic behaviors

• Concept analogous to dieting

Conducting an Effective Career Search (REV July 2011)

The Northwestern Mutual Life Insurance Company – Milwaukee, WI

What You Can Do Today

• Create a budget and determine your net worth…

– What do you think you spend vs actually spend?

– What have you saved, relative to what you have earned?

Conducting an Effective Career Search (REV July 2011)

The Northwestern Mutual Life Insurance Company – Milwaukee, WI

Creating a Budget• Complete the budget worksheet

being handed out– Can you account for the money you are

spending each month?– How does your savings/income compare

to your monthly costs?

• Build Good Habits– Start saving money NOW– Establish/preserve good credit– Live within your means

Conducting an Effective Career Search (REV July 2011)

The Northwestern Mutual Life Insurance Company – Milwaukee, WI

Determine your net worth

• What have you earned to date?

• How have you saved AND invested in the past?

• Begin Putting Money in Buckets– Short-term– Mid-term– Long-term

Conducting an Effective Career Search (REV July 2011)

The Northwestern Mutual Life Insurance Company – Milwaukee, WI

Fill Your Buckets

• Activity: Think about the next 1, 5 and 10 years of your life

– What personal, professional and financial goals do you have for yourself at those different milestones?

– What action do you need to take today in order to achieve those goals?

– How much money will need to go into each savings bucket for you to achieve those goals?

Conducting an Effective Career Search (REV July 2011)

The Northwestern Mutual Life Insurance Company – Milwaukee, WI

Your Most Important Asset

• What do you think will be your most valuable asset throughout your life?– Vehicles: What would your dream car

cost?

– Home: How expensive do you think your home will be?

– Financial Portfolio: What would you like your net worth to be?

How will you be able to afford all of these things?

Conducting an Effective Career Search (REV July 2011)

The Northwestern Mutual Life Insurance Company – Milwaukee, WI

Your Most Important Asset

Age$30,000 Yearly

$50,000 Yearly

$100,000 Yearly

$150,000 Yearly

$250,000 Yearly

20 $1,350,000 $2,250,000 $4,500,000 $6,750,000 $11,250,000

21 1,320,000 2,200,000 4,400,000 6,600,000 11,000,000

22 1,290,000 2,150,000 4,300,000 6,450,000 10,750,000

23 1,260,000 2,100,000 4,200,000 6,300,000 10,500,000

24 1,230,000 2,050,000 4,100,000 6,150,000 10,250,000

Conducting an Effective Career Search (REV July 2011)

The Northwestern Mutual Life Insurance Company – Milwaukee, WI

Starting With Your First Paycheck

• Enroll in your retirement plan

• Talk with a financial expert about additional insurance coverage

• Pay yourself first. Make saving part of your regular budget -- just like payingthe electric bill – and leverage the savings “buckets” you created.

Conducting an Effective Career Search (REV July 2011)

The Northwestern Mutual Life Insurance Company – Milwaukee, WI

What to Plan for as you enter your full-time career

• Leverage Company Benefits

• Understand “Good Debt” vs. “Bad Debt”

• Plan for the stuff no one tells you to plan for– Professional Attire– Cost of Your Job– Weddings: Yours & Other People’s

• Understand and protect your most important asset

Conducting an Effective Career Search (REV July 2011)

The Northwestern Mutual Life Insurance Company – Milwaukee, WI

Women should pay particular attention to these points…

• Women are likely to live longer than men, hence require additional retirement savings

• Women often prefer to work with another female professional