I'm not a professional financial planner or adviser
Generalized advice (may not apply to everyone)
I have not implemented everything
Do your own due diligence (Then tell me your findings :)
Always use a fee-based fiduciary (be critical of free advice, including this)
Why
Why this talk
Pending Recession (Debt Cycle)
Everyone has a plan until they get punched in the mouth - Mike Tyson
Money
Median Income
Inflation (Tax on savers)
Difference between assets and liabilities
Good vs Bad debt. (good debt is associated with assets)
Where does money come from? How it is made?
Warren Buffet Rule
Velocity Banking, BYOB/IBC, Fire Movement
Credit Card Interest (6,500 debit = 70k savings)
Simple budgeting techniques (debit cards)
Know your net worth
Monitor everything
Real Cost of Coffee (Income tax, sales tax, opportunity cost)
More Money
If you want to spend less, pay with cash
Self Mortgage (Auto Pay Yourself)
Teach your kids (Nobody else will)
10, 10, 10, Fun Envelopes
Giving, Long Term, Short Term, Fun Money
Credit
30% credit utilization
Never close a card, spend a little every year.
Every year ask for more credit and lower interest
Credit Freezes (Not Locks): Free and easy DIY
CreditKarma
Due Date / Recording Date
2 months of zero balance on due date
90 days of balances matter
Disposable credit card numbers
Avoid Co-Signing (Even with your spouse) (lawsuits)
Hard Pulls when shopping (14 days)
Hold Cards with different institutions
Taxes
Single biggest life expense
Governments incentivize certain behavior with the tax code
Kids can make 12k tax free
Home Buying
Look at > 10 houses before buying (preferably more) Fight Fatigue
Get your own title company
Do the numbers if it would make sense as a rental
Primary homes with mortgages can become a rentals in 1-2 years
Locks you into the economy
In the US you don't own property, you rent it from the Gov.
Homestead Laws & Lawsuit risk (OR 4-50k WA 125k)
Mortgages
Death Pledge
10 Loans (per person)
3 mortgage quotes
Inflations effect on debt
Escrow costs money (Also causes you to pay attention to costs associated with taxes and insurance)
No limit to mortgage deductions on investment properties
Loan modifications
Mortgages are a hedge against the dollar (Shorting)
Debt Cliff
30 year fixed mortgages are rare in the world
recoverable non-recoverable << wrong term
Insurance
Use high deductibles (Self Insure, rating, credit)
Umbrella Coverage is cheap (Why?) (outside of a Home & Car: liable tweets, negative reviews, photo tagging, recording video/audio, dog bites, skiing accidents)
Do not disclose your umbrella (1-5 mil)
Insurance companies sometimes help the other side
Save when paying once a year and autopay
Insurance (Continued)
You can be liable
Landlord policies do not cover you
Landlords can tap your policy
Renter's insurance
Insurance (Continued)
Wealth building
Diversification
Protection from creditors
Fund your own loans (Emergency Fund)
Seasoned
Tax free withdraws for life
Whole Life / IBC
Investing
Down markets means cheap buys
Dollar Cost Averaging
Consider down sides first (Can you withstand a 40% correction, two times?)
Pay attention to fee ratios of funds
Bid/Ask Spread and Market Makers
Bulls & Bears
Gambler's Ruin (10>11, 20>25, 50>100 )
Investing (Continued)
Limit Orders are fake stop losses
Married Puts as insurance (How some Annuities work)
All Weather Portfolio / Rebalancing
-2.5% inflation -2.5% opportunity costs
Roth might be better than college savings plans
401(k) & Fidelity
401(k) a.k.a Salary Reduction Plan
Median 55-65 has 60k
Taxed at Ordinary Income with capital gains risk
Lock Accounts
Quick and easy direct institutional transfers (Keeps assets)
Auto Rebalancing (Once a year)
401(k) & Fidelity
Increase saving with every raise
Protected from creditors
IRA / Roths can invest in any traded asset
Company Match 80-120% ROI
401(k) Loan
50% up to 50k of balance
60 month term $955 payment @5.5%
85 month term $719 payment @5.5%
Counts a seasoned funds
Not on credit report
Pay up when you leave the company
Avoid PMI on a mortgage
Tax hit
Once per 12 month period
Action Items
$1000 Emergency Fund (Or mortgage / rent)
$2500 Self Insurance Fund
Set deductibles to $2500
Create debit card sending funds (Food, Clothing, Fund Money, with Auto Pay)
Bring credit cards under 30% (boosts credit)
Pay of bad debt
Use a modified snowball payoff strategy
Government Loans first
Action Items (continued)
Determine monthly expenses
Build Emergency Fund (3 months expenses)
Payoff Credit Cards Each month
Live on 80% or less
Long Term Savings (Investment Savings with Auto Pay)
Increase 401(k) for full match
Refinance to lower payment (Cash out??)
Inspirations & Credits
Dave Ramsey / Susie Orman (great for starting out financially)