Presentation on theme: "The 15 Minute Round the World Intro to Financial Planning for Entrepreneurs: Burleson Business Builders Jason Hull Hull Financial Planning www.hullfinancialplanning.com."— Presentation transcript:
The 15 Minute Round the World Intro to Financial Planning for Entrepreneurs: Burleson Business Builders Jason Hull Hull Financial Planning
Who Is This Presentation For? Anyone who doesn’t feel like their personal finances are in a rock solid position Anyone who doesn’t feel like their business is in a rock solid position …in other words… YOU!
What Will You Learn? Common personal finance mistakes and how to avoid them Ideas for how to squeeze that little bit more out of your budget Ideas for how to make your business work for you
Who Am I? Army veteran Founded and sold a software development company Financial planner, CFP® candidate Personal finance columnist, U.S. News & World Report
Common Personal Finance Mistakes: No Plan No budget = money controls you If you don’t have a budget, you’re actually in the majority (51%) of Americans!* Don’t overcomplicate – Use a simple spreadsheet – Start with income – Then known “must pay” expenses – Then variable expenses – Don’t forget to save!
Common Personal Finance Mistakes: No Plan No retirement plan = don’t know if or when you can quit 4 out of 10 Americans have no plan besides Social Security* 30% say they will have to work into 80s to retire; however, 22.5% between report employment disability Start with the goal and work backwards – expenses in retirement and how much you have to save to get there
Common Personal Finance Mistakes: Risk Management The risk ostrich = you may be underinsured Optimism bias affects future thinking 70% of people over age 65 require long-term care* 43% of people who need to use their LTC policies are under age % of people age can’t work because of disability or poor health Look at appropriate term life, disability, and long-term care insurance – If someone tries to sell you something other than term life, make them show you quantitative aftcast to show superior performance
Common Personal Finance Mistakes: Retirement Saving If you save, are you saving enough? Only 51% save for retirement* 21% of workers covered by 401(k) don’t participate IRA limits – $5,500/year/person – $6,500/year/person if age 50 or older 401(k)/403(b)/457/TSP limits – Your contribution: $17,500/age 50+ catchup: $5,500 – Total contribution (+ employer contrib): $51,000/$56,500 Set aside money every month so you don’t have to think about it – automate! Think about your future self before making a decision on how much to set aside for retirement savings.
Common Personal Finance Mistakes: Investing Mistakes Fees and timing are your portfolio’s silent killer DO NOT PAY FOR LOADS IN MUTUAL FUNDS! Look at 12-b(1) fees Trying to time the market = -35.8% performance vs value cost averaging* In 2012, 89.8% of actively managed stock funds underperformed their index counterparts Depending on trading frequency, it takes between years to determine skill vs. luck in investing. Do you have that much time to waste on a gamble? Value cost average into INDEX funds with LOW FEES.
Squeeze More Out of Your Budget Remove recurring costs you don’t need Do you need cable TV? – Try Netflix, Hulu, PlayOn, and stations’ websites Paying for more cell phone than you need? – Lower minutes – Get Google Voice – Remove landline Gym membership you don’t use? – Plyometrics, body weight exercise, home Crossfit
Squeeze More Out of Your Budget Automate your finances Set up side accounts – Christmas fund – Home/car insurance fund – Roof/car replacement fund Have investments automatically withdrawn Set up automatic bill pays so you don’t have to remember when to pay them
Squeeze More Out of Your Budget DEBT SUCKS KILL YOUR DEBT OR IT WILL KILL YOU 46.7% of American households carry a credit card balance Pay absolutely everything you can towards debt (credit card, personal loan, car loan, mortgage) Look at total interest payments first before deciding which one to pay down/off – combines psychology and math
The Reality Check of Small Business Often Bounces *http://smallbiztrends.com/wp-content/uploads/2012/08/survival- by-sector.png
Simple Formula for Succeeding in Business You must… Provide something… Which other people will pay you for… That you can provide or produce… At a profit… While giving them value.
Make Your Small Business Work Who? – Customers want to connect on a personal level. Make sure that your voice comes through. What? – Nobody cares about the what. It doesn’t make you special. It is mandatory, but not differentiating. Why? – The drive, the passion, what makes you tick. It’s your purpose and will resonate with customers.
Make Your Small Business Work
Make Your Small Business Work
Make Your Small Business Work Who you don’t serve is as important as who you serve If you’re everything to everyone, then you’re nothing to anyone Trolls should live under the bridge Create the in-group bias
Small Business and Money
Make Your Small Business Work Don’t let self-employment tax kill your runway Create the right corporate structure Understand the difference between salary and distributions Are you taking all the deductions you can? Don’t let the tax tail wag the business dog
How to Reach Me (817) If you want to read more about the topics in this presentation, go to