Family Financial Fitness Wrkshp

F Family INANCIAL Fitness ©The Northwestern Mutual Life Insurance Company - Milwaukee, WI

Today’s Workout ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Getting Grownups Into Shape ,[object Object],[object Object],[object Object],[object Object],February 2001 Northwestern Mutual Financial Network’s “Money Maladies” Study reveals: Source: Northwestern Mutual Financial Network’s Money Maladies Study (2001)

Curing Money Maladies ,[object Object],[object Object],[object Object],[object Object],[object Object],Source: Northwestern Mutual Financial Network’s Money Maladies Study (2001)

The Chessboard of Financial Life

This exercise is for illustration purposes only. It does not take into consideration fees, taxes, commissions, etc. and does not represent any specific product or investment. Chessboard of Financial Life X .01

Chessboard of Financial Life X 1.28 .32 .08 .02 .64 .16 .04 .01

Chessboard of Financial Life X 163.84 40.96 10.24 2.56 1.28 .32 .08 .02 327.68 81.92 20.48 5.12 .64 .16 .04 .01

Chessboard of Financial Life 85M 10.7M X 20971.52 5242.88 1310.72 163.84 40.96 10.24 2.56 1.28 .32 .08 .02 1.3M 41943.04 10485.76 2621.44 655.36 327.68 81.92 20.48 5.12 .64 .16 .04 .01

The Magic of Compound Interest ,[object Object],[object Object],[object Object],[object Object]

Rule of 72 (72 ÷ Interest Rate = Yrs) Passbook Savings 3 % 24 Money Market 6 12 U.S. Treasury Bond 7 10 Stock Market 10 7 Interest Years Investment Rate Double This exercise is for illustration purposes only. It does not take into consideration fees, taxes, commissions, etc. and does not represent any specific product or investment.

Save Early and Often ,[object Object],[object Object],[object Object],Factors that affect how much savings grow:

Net Worth ,[object Object],[object Object],[object Object],Individuals can have a large income and, due to their liabilities, still have a low net worth.

How To Really Be A M ILLIONAIRE

[object Object],[object Object],1 True Most millionaires are college graduates True OR False?

2 False Most millionaires work fewer than 40 hours a week ,[object Object],True OR False?

3 False Most millionaires received financial help from their families - like inheriting a trust fund or estate ,[object Object],True OR False?

4 False Gift money, tax refunds, earnings from winnings are “found money.” ,[object Object],True OR False?

5 False More millionaires have American Express Gold Cards than Sears Cards. ,[object Object],True OR False?

6 False More millionaires drive Cadillacs than Fords ,[object Object],[object Object],[object Object],True OR False?

7 False Most millionaires work in glamorous jobs, such as sports, entertainment, or high tech True OR False? ,[object Object]

8 False Wealth builders always keep 2 to 3 credit cards to allow for a large line of credit for use in emergencies ,[object Object],[object Object],True OR False?

9 True OR False? False ,[object Object],Many poor people become millionaires by winning the lottery

10 False ,[object Object],True OR False? College graduates earn about 33% more than high school graduates

11 False Most millionaires work for large, Fortune 500 companies ,[object Object],[object Object],True OR False?

12 Day traders usually beat the stock market and many of them become millionaires. ,[object Object],True OR False? False

13 False If you want to be a millionaire, avoid the risky stock market. ,[object Object],[object Object],True OR False?

Hypothetical example. This example does not take into consideration fees, taxes, commissions, etc. and does not represent any specific product or investment. 14 True If you save $2,000 a year from age 22 to age 65 at 8% interest, your savings will be over $700,000 at age 65. ,[object Object],True OR False? ,[object Object]

Questions 1-15: Belsky & Gilovich. Why Smart People Make Big Money Mistakes . Simon & Schuster, 1999. Lee & McKenzie. Getting Rich in America . HarperBusiness, 1999. Stanley & Danko. The Millionaire Next Door. Longstreet Press, 1996. 15 False Most millionaires are single ,[object Object],True OR False? ,[object Object]

Rules for Improving Your Financial Life ,[object Object],[object Object],[object Object],[object Object],[object Object]

Solving the mysteries of finance and economics Does This Make Cents?

Does This Make Cents? ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Why does the kid who skipped college earn big bucks playing games while others -- nurses, police officers and teachers -- make far less? Source: National Council on Economic Education and NBC Nightly News (2001)

Does This Make Cents ,[object Object],[object Object],[object Object],[object Object],[object Object],Why do we have high interest rates with credit cards when other rates are so much lower? Source: National Council on Economic Education and NBC Nightly News (2001)

Does This Make Cents Why do people struggle to find special gifts when it would be easier and more efficient just to give money? ,[object Object],[object Object],[object Object],[object Object]

Review ,[object Object],[object Object],[object Object],[object Object]

Additional Sources ,[object Object],www.themint.org Sign up for SmartCents newsletter.

TheMint.org Why the Mint? Because what our kids don’t know will hurt them down the road.

TheMint.org ,[object Object],[object Object],Kids certainly know how to spend money- 1. U.S. Bancorp Piper Jaffray, 2002 2 Kipp Cheng,”Setting Their Sights in GenerationY” AdWeek, 1999

TheMint.org ,[object Object],[object Object],[object Object],Consider these facts- 1 Consumer Reports , 1997 2 V. Rice, Kids, Money and the Web, cited in Understanding money in everyday family life , April 2001, Kid Capital, Anne Schorr) 3 2002 Personal Finance Survey, Jump$tart Coalition

TheMint.org ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],TheMint.org can help kids understand-

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