Polsky Personal Investing Method

1. Polsky Personal Investing Method LESSONS FOR LIFE are not being taught in colleges – you are preparing for your future through a college degree but NOW you should begin protecting your own future by NOT depending on government Social Security or Medicare and employer’s 401(k). Norman & Elaine Polsky Family Supporting Foundation Slides by: Andrew, Ryan, Mitch & Trent Students In Free Enterprise (SIFE)

2. OBJECTIVES: • To encourage fellow students in all disciplines to start NOW their Roth IRA. • To continue investing monthly to become financially independent past the age of 100. • Attain self-sufficiency and to be able to make a difference in helping not-for-profits (i.e. SIFE) by contributing their money and time by being active on boards of directors and other services.

3. Why Is This Important To Me? • It always seems to come down to MONEY. • Mom says to Dad, “I think Daughter has a gift for music. She wants to take piano lessons. What do you think?” Dad’s first question: “How much will it cost?” The answer, high or low, determines Dad’s position. • Sure, Dad’s in favor of Daughter getting whatever she needs and deserves, but it’s MONEY that decides.

4. A Note About Money • People say they are willing to do anything to have money. • Some of them prove it. • They will cheat, lie, steal and embezzle. They will perjure themselves; defraud friends, partners or employers; marry for money; divorce for money; and betray their country for money. They will counterfeit, extort, kidnap and commit murder – literally go to hell and throw away the key – for money. • What most people will not do – what they flatly refuse to do – is muster a little SELF-DISCIPLINE.

5. It’s Not Money’s Fault • How did MONEY get so much authority? • How can it wield such power? • MONEY is as inanimate as a brick and has no behavior of its own. • Money has no demeanor outside your own conduct. • Ralph Waldo Emerson said, “Money can be an obedient servant, but a harsh taskmaster.” • What money does or does not do is entirely dependant on you. • If you don’t own your money, money will own you. • When it comes to money, there is no substitute for self-discipline.

6. Manage Your Mind • Always remember: • The goal is accumulation, not just acquirement. • There are only two laws of accumulation: • Don’t spend all I earn • Don’t lose what I save

7. MAGIC OF TIME– College Students Have Time Advantage of 30 years to become MILLIONAIRES! $250/Mo = 3,000/Yr Invested

8. What Is A Mutual Fund? • The theory behind mutual funds is simple: • You need the advantage of being able to pool your money together with that of a lot of other investors. • A professional manager can invest that money across enough investments to reduce the risk of being wiped out by any single bad bet. • The fund is essentially a corporation whose sole business is to collect and invest money. • You join the pool by buying shares in the fund. • Your money is invested by a team of professionals, who research stocks, and then place the money as wisely as they can.

9. How To Choose A Fund For 20%+ ROR? • At least 3 years history • Does better than S&P 500 Index in up/down markets • Not a hot fund this year. • Steady management • Does not invest strictly for Value. Growth! • Diversify into mutuals investing: • In Mid Cap stocks, which are companies with $2-$10 billion market value (share price x number of shares) • Large Cap stocks having market values over $10 billion • Small Cap under $2 billion • Obtain for $1 the Wall Street Journal (WSJ) on the Monday following the close of each quarter, which has all 10,000 Mutual • http://finance.yahoo.com/ • BUFSX • Or http://www.morningstar.com/

10. Invest Your Mutual Funds In A Roth IRA • Roth IRA (no taxes) is a must for you, your spouse and each child • Requirements: • You can contribute past age 70 ½, and start at any age. • Adjusted gross income must be below $95,000 single IRS filing OR $150,000 joint IRS filing (If you make more than this you shouldn’t be here!) • No income tax ever on withdrawal of principal after 59 ½ age, and interest earnings after only 5 years of investing • No withdrawal requirements as to when and how much except beneficiaries must withdraw all in their lifetime • Can name beneficiaries including grandchildren which is generation skipping and one of few ways to avoid taxes to them. • Maximum contributions allowed $3,000 • Changes to $4,000 in 2005 • Changes to $5,000 in 2008

11. Invest Your Mutual Funds In A Roth IRA • Non-taxable withdrawals monthly not touching principal: • At 10YRS $1,558 (93,450 x .20 /12) • At 20YRS $11,201 (672,060 x .20/12) • At 30YRS $70,913 • If you believe you have plenty of financial security, consider if you live past 100, costly medical expenses and 3.1% inflation in the past 60 years! • Don’t rely on Social Security or Medicare, which may not be in existence when you need them. • Call one mutual fund company for application but when it reaches $100,000 (about age 30) call 800-843-3548 to open a Fidelity Brokerage or Other Broker, and invest in another mutual for more diversification.

12. 11 GOLDEN RULES • You CAN save $8.22/day x 365 = $3,000/year - your 30 year investment $90,000 worth $4 million @ 20% • The best time to invest is when young, right NOW • 20-30 years invested in IRA can be in addition to your 401(k) or other retirement plans • Look for mutual funds under $10 billion assets & with 3 years annualized average at least @ 20% Rate of Return (ROR) • Evaluate your mutual funds quarterly • Remember more ROR is more financial independence for your family or for your charity to afford more programs for their members • Inflation 3.1% over past 60 years reduces future dollar purchasing power • New Prudent Investment Act passed Missouri & Kansas + 30 other states dictates diversification and investing in today’s market opportunities • Have a reserve of liquid money for emergencies so that you won’t be forced to sell your mutual funds that are invested for the long term • Patience is a virtue – over time stocks ALWAYS seek new highs in spite of ups and downs • “Yes, You Can Achieve Financial Independence” book by Jim Stowers, Chairman American Century Mutual Funds, is the investment bible!