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Financial Literacy
Financial Literacy
Our Observations
� Conscious participation
� Living on the Edge (not in a good way)
� Cozy with debt
� Technology – a tool, not a solution
� Investing – I have plenty of time
Financial Literacy
Paris HiltonTerrell OwensOr other relevant celebrity who is or was broke
Warren BuffetWhere am I?
Win Big Lose Small� Education
� Home Purchase
� Insurance
� Career Path
� Saving
� Impulse purchase
� Starbucks
� Net flicks
� Eating Out
� 0% Interest “Deal”
Financial Literacy – Conscious participation
Good Bad
� Option Arm
� Annuity
� Lease
� High deductible
� Permanent life insurance
� Timeshare
� Fixed rate
� “No Load” funds
� Buy
� Low deductible
� Term insurance
Conscious participation - Have a Plan
Theo’s Holiday - I’m Going To Be A Model!
"To invest successfully over a lifetime does not require a stratospheric IQ, unusual business insights, or inside information. What's needed is a sound intellectual framework for making decisions and the ability to keep emotions from corroding that framework." - Warren Buffet
“Aim Small, Miss Small” – The Patriot
Conscious Participation
� Substitution
� Sleep on it
� Talk to a trusted advisor
� Is bigger better
� Cost vs. cash flow
Conscious Participation� “that phone would cost you $700 to replace at retail”
� Insurance: $10/month
� Deductible: $200
� Total Cost: $440
Consider Instead:
- Manufacture warranty
- Buy used
Living on The Edge� Having A Plan B
I got a job at a Fortune 500 company!
I got a promotion!!!
I found out what RIF means
I don’t have any benefits
New job at a small company!!!
I’m having twins!
I can’t afford twins!
Living on The Edge
�Insurance – Play What If?
�Rainy Day – Small is better than none
�Save the first dollar, spend the last� The news
� 38% Live paycheck to paycheck
� Over half are behind on retirement savings
� 43% don’t have enough to weather a financial emergencyHuffington Post 07/25/2012
Debt allows us a lifestyle we otherwise couldn’t afford
Cozy with Debt
Cozy with Debt - College
“I wish someone would have told me……”
The Facts:- We have more kids in student loan debt than then the number of
people living in Canada (Huffpost.com 1/22/2014)- Student loans delay purchases, household formation, and Range
Rovers- More Than Half of Student Loans are in deferral or
delinquent(Forbes.com 02/01/2013)
Technology – A Tool Not a Solution
A world without tip calculators, what do you do?
Investing Basics- Costs matter, but only if you are investing.- Save with a goal in mind, not “just to get started”- Starting early with little > starting late with a lot- Compound interest and the snowball effect
Time -------------------�
“You want me to buy a sock?” Grace Fober - future bookie
Conclusion- Back to the future (share your successes and your failures)- Junior Achievement - Yes You Can Raise Financially Aware Kids Curriculum
- yesyoucanonline.info