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Minnesota physician and financial planner Joel Greenwald helps medical and dental professionals reach their long-term financial goals. In this handout he walks through several financial planning scenarios for physicians and dentists that he often sees in his financial planning practice, Greenwald Wealth Management. If you would like to meet to discuss your financial situation, contact us at 952-641-7595 or www.joelgreenwald.com to schedule a no-obligation consultation. DISCLAIMER: This communication is strictly intended for individuals residing in the states of CA, FL, IL, MN, NJ, NY, OH, OR, PA, SD, TX, and WI. No offers may be made or accepted from any resident outside these states due to various state regulations and registration requirements regarding investment products and services. Securities and Advisory Services offered through Commonwealth Financial Network ®, Member www.FINRA.org/www.SIPC.org, a Registered Investment Adviser. Greenwald Wealth Management, Inc. 1660 South Highway 100, Suite 270 St. Louis Park, MN 55416. Please review our Terms of Use here: http://www.commonwealth.com/termsofuse.html.
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Wealth Management
www.joelgreenwald.com
Case Studies inFinancial Planning
Joel Greenwald, MD CFP®Greenwald Wealth Management
1660 South Highway 100, Suite 270St. Louis Park, MN 55416Telephone: 952 641 [email protected] www.joelgreenwald.com
Securities and Advisory Services Offered Through Commonwealth Financial Network, Member FINRA/SIPC, a Registered Investment Adviser. Fixed Insurance products and services offered by Greenwald Wealth Management are separate and unrelated toCommonwealth. The following does not represent actual clients but a hypothetical composite of various client experiences and issues. Any resemblance to actual people or situation is purely coincidental.
Wealth Management
www.joelgreenwald.com
Meet M.J.
28 year old 1st year family practice resident-Single-$100,00 student debt, with interest rates ranging from 2.8% and 6.8%-Salary of $48,000 per year-Residency program provides:
A. $50,000 term life policyB. Group disability insurance C. 403(b) with match
This hypothetical report is not indicative of any security’s performance and is based on information believed reliable. Future performance cannot be guaranteed and investment yields will fluctuate with market conditions. This hypothetical example is for illustrative purpose only and should not be construed as specific investment advice. Your individual circumstances should be taken into consideration before any investment plan is implemented.
Wealth Management
www.joelgreenwald.com
Things to consider:
A. Should M.J. pay off debt or start investing?
B. Emergency Fund- What is it, and how much should I have?
C. How much should M.J. aim to save each year?
D. Investment Vehicles
403(b) vs. Roth IRA
Importance of signing up for 403(b)
E. How to invest?
Asset Allocation
F. Life Insurance- Does she need it?
G. Disability Insurance- What are the benefits of an individual policy
This hypothetical report is not indicative of any security’s performance and is based on information believed reliable. Future performance cannot be guaranteed and investment yields will fluctuate with market conditions. This hypothetical example is for illustrative purpose only and should not be construed as specific investment advice. Your individual circumstances should be taken into consideration before any investment plan is implemented.
Wealth Management
www.joelgreenwald.com
Meet B.D.
29 year old 1st year family practice resident
- Same resident program as M.J.- Married to psychiatry resident- Two children, ages 2 & 4
This hypothetical report is not indicative of any security’s performance and is based on information believed reliable. Future performance cannot be guaranteed and investment yields will fluctuate with market conditions. This hypothetical example is for illustrative purpose only and should not be construed as specific investment advice. Your individual circumstances should be taken into consideration before any investment plan is implemented.
Things to consider:A. Life InsuranceB. Wills C. Education Planning- 529
plans
Wealth Management
www.joelgreenwald.com
I ask myself…
• When should I start paying attention to this sort of stuff?
• Should I work with a financial planner?
• How do I find the right financial planner?
• How is a financial planner compensated?
Wealth Management
www.joelgreenwald.com
Investors’ Behavior Undermine Their Goals
$-
$100,000.00
$200,000.00
$300,000.00
$400,000.00
$500,000.00
$600,000.00
Equity Investor S&P 500 Index
4.25% 8.21%
Source: DALBAR, Inc., Quantitative Analysis of Investor Behavior 2013Average equity investor performance was used from the DALBAR study, Quantitative Analysis of Investor Behavior (QAIB), 2013. QAIB calculates investor returns as the change in assets after excluding sales, redemptions and exchange. This method of calculation captures realized and unrealized capital gains, dividends, interest, trading costs, sales charges, fees, expenses, and other costs, annualized over the period. The Standard & Poor’s 500 Index (“S&P 500”) is an unmanaged index of 500 common stocks generally representative of the U.S. stock market. You cannot directly invest in the S&P 500 index. Inflation is measured by the CPI index. Past performance does not guarantee future results.
Annualized Returns January 1993 – December 2012
$229,891
$484,560
30
Wealth Management
www.joelgreenwald.com
Range of Investor Emotions
Hope, Optimism –People are making money in stocks; I should invest too.
Confident –I’ve already made money! This is Great!
Thrilled – I should put more money in stocks!
Euphoric – This is easy! It’s different this time! Why do we invest in bonds?!
Concerned – I didn’t think it could drop that fast!
Panic, Hopelessness, Fear – My account is down how much? I think I might lose it all!
Surprised – I think I lost a little money. It’ll come back.
Defeated/Capitulation – Get me out! I can’t take this anymore! It’s different this time!
Encouraged –Maybe I should invest in the market again.
Hope, Optimism –Maybe everything will be OK.
Wealth Management
www.joelgreenwald.com
Wealth Management
www.joelgreenwald.com
Source: MPI Stylus and FactSet.
This example is for illustrative purposesonly. Performance data quotedrepresents past performance. Pastperformance does not guaranteefuture returns. Investors should note thatdiversification does not assure againstmarket loss and that there is no guaranteethat a diversified portfoliowill outperform a nondiversified portfolio.The return and value of investmentproducts will fluctuate with marketconditions. Indices are unmanagedand investors cannot invest directly in anindex. The above asset classes arerepresented by the following indices:Large-Cap – Russell 1000;Mid-Cap – Russell Midcap; Small-Cap –Russell 2000; World Stock – MSCI EAFE;Emerging Markets – MSCI EM;Intermediate-TermBonds – Barclays Capital U.S. AggregateBond Index; Muni National Intermediate –Barclays Capital U.S. Municipal Bond; RealEstate – MSCI USREIT; High-Yield Bond – BofA US HY MasterII; Money Market – BofA US 3–Month T-Bill; Long/Short – DJ Credit SuisseLong/Short;Managed Futures – DJ Credit SuisseManaged Futures; Market Neutral –Morningstar Market Neutral; Commodities– Dow Jones UBSCommodity Index.
