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Finance Workshop #2

Personal Finance J. Qin. Finance Workshop #2. Areas of Personal Finance. 1. Financial Planning 2. Insurance 3. Taxes 4. Retirement 5. Investments 6. Estate. Is MONEY = WEALTH ?. Wealth Formula. Debt management Credit card Student loans Estate refinancing. Financial Planning.

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Finance Workshop #2

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  1. Personal Finance J. Qin Finance Workshop #2

  2. Areas of Personal Finance • 1. Financial Planning • 2. Insurance • 3. Taxes • 4. Retirement • 5. Investments • 6. Estate

  3. Is MONEY = WEALTH ?

  4. Wealth Formula

  5. Debt management Credit card Student loans Estate refinancing Financial Planning • Setting a budget • Fixed expenses • Variable expenses • Emergency fund • Cash flow

  6. Variable Expenses Gas Groceries Going out Utilities Clothing Misc Setting a Budget • Fixed Expenses • Rent • Tuition • Car • Car insurance • Debt • Netflix • SAVINGS

  7. Question Yourself: • What are your fixed and variable expenses? • What do you NEED? • What is your budgetary goal? • What is your long term financial objective? • Track spending • Do you have enough for what you want?

  8. Rules for Setting a Budget • 1. Create a budget • 2. Use a software (e.g. Excel, Mint.com) • 3. Watch out for cash leakage • 4. Don't spend more than what you bring in • 5. Get rid of 'luxuries' disguised as necessities • 6. Save (x)10% of your income • 7. Don't count on windfalls • 8. Beware of spending creep • 9.Don't go crazy

  9. Debt Management • Your #1 priority in life • Compound interest • How do banks make MONEY? • Value of time • Credit Card: Never pay only the min. payment • Never keep your balance above 50% of your Line of Credit

  10. What do we do with MONEY!? • Mutual funds • ETFs • 401(k) • Roth • IRA • Stocks • Bonds • And the list goes on...

  11. Roth IRA (Pro+Con) • Pro • An early start to retirement • No TAX (within conditions) • Age must be above 59 ½ (for tax-free withdrawal on the growth portion above principal) • Small perks (e.g. $10k tax-free for principal first-home purchase) • Con: • Deposits not tax-deductible • Can't be used for financial-leveraging

  12. Alternatives & Tax • Mutual Funds / ETFs / Stocks • Taxed initially (capital gains) • 401(k) • Untaxed initially, taxed when withdrawn

  13. Addressing Retirement Early

  14. Addressing Retirement Early

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