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Questioning your Financial Future? Consult with your CPA to stay on track.

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Presentation on theme: "Questioning your Financial Future? Consult with your CPA to stay on track."— Presentation transcript:

1 Questioning your Financial Future? Consult with your CPA to stay on track

2 CP Financial Services, LLP Tax Planning Risk Management Asset Management Retirement Planning Estate Planning Your CPA is the key to the relationship Securities offered through ProEquities, Inc., a Registered Broker Dealer and member FINRA and SIPC. Advisory Services offered through Honkamp Krueger Financial Services, Inc., a Registered Investment Advisor. Honkamp Krueger Financial Services, Inc and Erpelding Voigt & Co. are independent of ProEquities, Inc.

3 N. Dakota Illinois Minnesota Wisconsin S. Dakota Missouri Wyoming Nebraska Kansas Iowa Colorado HKFS Office Locations 2

4 Will I Be OK? The only way to find out what all this means to you, your family and your future lifestyle is to... Create your personal Financial Plan! Yes? No? Maybe? How Do You Know?

5 A Day in Time

6 The Problem Why does it feel like The Sky is Falling? Because you get constant bad news from... Media Friends Home Value And, worst of all, your own Investment Statements

7 How Investors React to Good & Bad News Expansive Have It All Goal Expectations Restrained Have Enough Irrational Exuberance Unreasonable Fear Risk Tolerance Unlimited None Emotional State BAD NEWS! GOOD NEWS!

8 What’s Your Greatest Fear? “I’ll be eating dog food!” = “I’m going to end up broke!”

9 What Should You Do? Sell Stocks? Retire Later? Spend Less? Fire Your Advisor? Worry More ? First, here’s what you should not do. Don’t let short-term losses and unreasonable fear mislead you into poor investment decisions. Don’t make decisions that may feel good in the moment (like dumping all your stocks), but hurt you in the long- run (like running out of money).

10 Market Review August 2008 – May 2010 S&P 500 Emerging Markets Nat’l Resources Bonds

11 The Periodic Table of Investment Returns Annual Returns for Key Indicies (2000 - 2009) Ranked in order of Performance (Best to Worst) Helping Smooth Out the Ride Please see disclaimers on the last page of this presentation.

12 12 Asset Allocation is the Primary Determinant of Total Portfolio Performance & Volatility Source: Brinson, Singer, and Beebower (1991) Security Selection 4.6% Market Timing 1.8% Other 2.1% Asset Allocation 91.5%

13 What Should You Do? Let’s review how a Financial Plan is developed. There are 6 Simple Steps. Create a Financial Plan! It can help you enjoy life today and Restore your CONFIDENCE in the future

14 Step 1: Goals - Goals - Goals We’ll begin with a conversation about your Goals. You’re unique and your Goals are unique. First, we’ll find out (if you’re not retired yet) the earliest you’d like to retire the latest you could retire and still be satisfied

15 Step 1: Goals – Goals - Goals Then, most importantly, we’ll identify all of your Financial Goals. These are the purchases and activities that will make your retirement years more enjoyable.

16 Step 1: Goals For each Goal, you’ll establish Ideal and Acceptable amounts. Lifestyle GoalsIdeal Basic Living Expenses$$$ Car$$$ Travel$$$ Boat$$$ Lifestyle GoalsIdealAcceptable Basic Living Expenses$$$$ Car$$$$ Travel$$$$ Boat$$$$ Acceptable Range The amount you’d really like The least that would still be OK Lifestyle Goals Basic Living Expenses Car Travel Boat

17 For each Lifestyle Goal, you’ll rate it’s importance from High (10) to Low (1). Step 1: Goals This allows us to group your Goals into….. Needs Wants Wishes so we can make certain your most important Goals are funded first. Goal Importance Scale

18 Step 2: Risk & Return Discussion What kind of investor are you? Very Conservative ConservativeModerate AggressiveVery Aggressive Can you get the RETURN you need at the RISK level you’re willing to accept?

19 Step 2: Risk & Return Discussion What’s the right balance so you can... Sleep Well Now NOT OR but still... Eat well in the future

20 Identify the RESOURCES you have to fund your Goals. Step 3: Resources Savings & Investments Financial Plans (401k, 403b) Brokerage Accounts IRA Roth Bank Accounts Annuities Retirement Income Social Security Pension Part-time Work Other Sources Property to Sell Inheritance Stock Options

21 Calculate your results in many different ways Analyze, compare, and test many scenarios Recommend a scenario that meets your needs Step 4: Calculate – Analyze - Recommend Here’s where heavy lifting is done. What is done?

22 Step 5: Present and Review Results You’d like to be CERTAIN you’ll have enough money to reach your Goals! Unfortunately, because FUTURE RETURNS ARE UNPREDICTABLE, you can never be CERTAIN. But you can be CONFIDENT. Here’s how... We’ll simulate thousands of Trials using different return sequences. Each Trial represents one possible outcome for your plan. Your Probability of Success equals the percentage of Trials that funded all your Goals. Probability of Success = 78% SAMPLE

23 Step 5: Present and Review Results We’ll create a plan with a Probability of Success in your Confidence Zone*. When you’re in the Zone, you can be CONFIDENT (but still not certain) you’ll have enough money to fund your future Goals without sacrificing more than necessary today. We’ll Put You In Your Confidence Zone SAMPLE *The Confidence Zone is the range of probabilities that you and your advisor select as your target range for the Probability of Success result in your plan.

24 Step 5: Present and Review Results Being in your Confidence Zone is not quite enough. Testing a plan in several ways is important: Acceptable Goal Result – What’s the likelihood you can attain your Acceptable Goals? Loss Cushion – How much could you lose today and still be confident you can attain your goals?

25 Sample: Financial Plan Meet John and Mary 57 year old couple They live in Greeley, Colorado. They have a 3-year-old grandson, Timmy, and a handsome German Shepherd

26 Sample: Financial Plan Acceptable Range Retirement AgeIdealAcceptableHow willing are you to retire later? John6466Very Willing Mary6466Very Willing Retirement AgeIdealAcceptable John6466 Mary6466 Retirement AgeIdeal John64 Mary64 This is for illustrative purposes only and not indicative of any investment.

27 ImportanceLifestyle GoalsIdealAcceptable Needs 10Basic Living Expense$70,000$66,000 8Mary’s Lexus$30,000$25,000 Wants 7Annual Travel Fund$18,000$12,000 6John’s Saturn$25,000 Wishes 3Renovate Kitchen$50,000$25,000 2Gifts to Timmy$10,000$0 Total Spending for Life of Plan$2,615,000$2,130,000 19% < Ideal ImportanceLifestyle GoalsIdealAcceptable Needs 10Basic Living Expense$70,000$66,000 8Mary’s Lexus$30,000$25,000 Wants 7Annual Travel Fund$18,000$12,000 6John’s Saturn$25,000 Wishes 3Renovate Kitchen$50,000$25,000 2Gifts to Timmy$10,000$0 ImportanceLifestyle GoalsIdeal Needs 10Basic Living Expense$70,000 8Mary’s Lexus$30,000 Wants 7Annual Travel Fund$18,000 6John’s Saturn$25,000 Wishes 3Renovate Kitchen$50,000 2Gifts to Timmy$10,000 Sample: Financial Plan Acceptable Range This is for illustrative purposes only and not indicative of any investment.

28 Sample: Financial Plan After a discussion of Risk and Return, John and Mary felt comfortable with a moderate level of risk. They selected a Target Portfolio with 55% stock. Target Portfolio - Moderate Cash Bonds Stocks This is for illustrative purposes only and not indicative of any investment.

29 Sample: Financial Plan ResourcesJohnMary Investment Assets$850,000 Annual Savings$18,000 Social Security$28,000$22,000 This is for illustrative purposes only and not indicative of any investment.

30 Recommended Plan Retirement Age Goals (Total Spending for Life of Plan) John Mary 65 Recommended Plan Retirement Age Goals (Total Spending for Life of Plan) John Mary 65 $2,479,785 5% < Ideal Current Plan Retirement Age Goals (Total Spending for Life of Plan) SavingsInvestment John Mary 64 $2,615,000$18,00044% Stock$850,000 Sample: Results Recommended Plan Retirement Age Goals (Total Spending for Life of Plan) Savings John Mary 65 $2,479,785 5% < Ideal $22,805 Recommended Plan Retirement Age Goals (Total Spending for Life of Plan) SavingsInvestment John Mary 65 $2,479,785 5% < Ideal $22,80545% Stock$850,000 This is for illustrative purposes only and not indicative of any investment.

31 Sample: Acceptable Goal Result Set All Goals To Acceptable Portfolio $850,000 Result for Recommended Plan Portfolio $850,000 Result with Acceptable Goals This is for illustrative purposes only and not indicative of any investment.

32 Sample: Loss Cushion Loss -$371,875 Loss Cushion - 44% How big is your LOSS CUSHION? What’s the most you could lose tomorrow and still be OK? Portfolio $850,000 Acceptable Goals Result Now Portfolio $478,125 Acceptable Goals Result After Loss This is for illustrative purposes only and not indicative of any investment.

33 Sample: Loss Cushion When you have a good Loss Cushion: You can enjoy life more today, and Be more confident you’ll meet your future goals.

34 Retirement Lifestyle Take control of your future with a Financial Plan.

35 With a Financial Plan, you’re likely to discover that: Retirement Lifestyle While you might not be as well-off as you’d like... You’re usually better-off than you feared And, with some good planning, you can be OK.

36 Your Financial Plan Should Cover Tax Planning Risk Management Asset Management Retirement Planning Estate Planning Your CPA is the key to the relationship, in partnership with HKFS

37 Financial Advisor Russ Pixler Sr. Financial Advisor Russ Pixler is a Senior Financial Advisor. He works directly with CPA’s to assess the financial situations of their clients and he also develops strategies to create, protect, and transfer wealth through the implementation of insurance and investment vehicles. Russ is responsible for the territories of Northwest Iowa and Eastern South Dakota. Russ holds Series 7 & 66 Securities Licenses and is a Registered Representative with ProEquities, Inc. He is a licensed Health, Life, and Variable Insurance Agent. Currently, Russ is working to achieve the ii College for Financial Planning Board Certification. Russ earned a Bachelor of Science Degree in Business Administration with an emphasis on Economics from the University of South Dakota. Prior to joining HKFS in March 2003, Russ was a Financial Advisor with Merrill Lynch. Securities offered through ProEquities, Inc., a Registered Broker Dealer and member FINRA and SIPC. Advisory Services offered through Honkamp Krueger Financial Services, Inc., a Registered Investment Advisor. Honkamp Krueger Financial Services, Inc. is independent of ProEquities, Inc.

38 Disclaimers Securities offered through ProEquities, Inc., a Registered Broker Dealer and member FINRA and SIPC. Advisory Services offered through Honkamp Krueger Financial Services, Inc., a Registered Investment Advisor. Honkamp Krueger Financial Services, Inc. and Erpelding, Voigt & Co., L.L.P. are independent of ProEquities, Inc. Page 10 charts provided by Yahoo! Inc. Page 11: The Periodic Table of Investment Returns provided by JP Morgan: Erpelding, Voigt & Co., L.L.P. Advisory Services offered through Honkamp Krueger Financial Services, Inc., a Registered Investment Advisor, 2355 J.F.K. Road, Dubuque, IA 52002, (563) 582-2855


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