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Israeli FinancialPlanning Seminar Baruch Labinsky MBA, TEP Licensed by the Israel Securities Authority Financial Planner/Investment Manager December 2012 www.Labinsky.com

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What is Financial Planning?Not an event but a process  Paradigm shift  Creating a personalized roadmap Align lifestyle to goals  Financial success is implementing goals  Your definition of success  Wants vs needs  Long term vs short term

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Planning over time Short term plan  1 year plan  Emergency funds  Housing  Cashflow  Employment vs ulpan Long Term plan  Spend less than earn  Retirement  Weddings, simchas, special events etc  Special needs, family obligations  Education  Debt payments

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Budgeting!! Why critical in Israel?  Awareness  Solving financial problems  Improves control over resources  Prioritizing  Improves family communication  Goal tracking  Long term and unexpected  Most important tool you have!

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Budgeting 101 How do we get started  Step 1: Create categories  Step 2: Estimate your budget  Step 3: Start recording  Step 4: Re-set goals  Step 5: Go back to Step 2 and adjust your plan

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Yearly Budget Budget Jan Feb March April May June July August Sept Oct Nov Dec Total Revenue Husbands Rev Wifes revenue Betuach Leumi Savings/Investment income Total Revenue Mortgage Telephone Cell Telephone Gas - stove Arnona and water Schools Tzedaka Vaad Bait Health insurance Life insurance bus passes Loans Subtotal fixed expenses Food Electricity taxis Cleaning help Newspaper Dentist Mitapelet/Babysitter Gan/Art supplies House Maintenance Entertainment Clothing Medication/cometics Shiurim Books, computer disks etc Presents Spending money/shalom bayit Vacation Other UnexpectedSubtotal Variable expense Total Expenses Balance Monthly Yearly to Date profit or loss

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Yearly Budget Budget January February March April May June July August September October November December Total Revenue Husbands Rev 0 Wifes revenue 0 Betuach Leumi 0 Savings/Investment income 0 Revenue Subtotal 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Mortgage 0 Arnona and water 0 Electricity 0 Gas - stove 0Home Telephone 0 Cell Telephone 0 Vaad Bait 0 Cleaning help 0 House Maintenance 0 Home Subtotal 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Food 0 Schools 0Living Chugim/swimming 0 Mitapelet/Babysitter 0 Haircuts 0 Living Subtotal 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Kupat cholim 0 Health ins/Meuhedet 0Health Medication 0 Life insurance 0 Health Subtotal 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Car insurance/license 0Transport Gas Car 0 Shiurim 0 Car Maintenance 0 Trans Subtotal 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Tzedaka 0 Dentist 0Personal Vacation 0 Books, computer disks etc 0 Presents 0 Clothing 0 Personal Subtotal 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Machon Rakefet 0 Newspaper 0Extras Entertainment 0 Misc/shalom bayit 0 Extras Subtotal 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Pay myself 0Financial Loans 0 CC 0 Keren Hishtalmut/Pension 0 Financial Subtotal 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Total Expenses 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Balance Monthly 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Yearly to Date profit or loss 0 0 0 0 0 0 0 0 0 0 0 0

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How to make it work Discipline to track Mutual responsibility If you can‟t afford it … Use tools that work for you Give yourself a buffer Don‟t forget about the revenue!

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General tips Live within your budget Research prices - internet, friends Negotiate everything! Buy used - janglo, groopbuy.co.il, ebay Check your bills Plan ahead Cash is king

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The Israeli System Understand Israeli system  No universal reporting requirement  Teum mas  Tax credits, women vs men  Donations  10 year tax “holiday” for Olim Bituach Leumi  When start paying… or collecting  Income supplements  Maternity leave  Handicaps  Special exceptions committee  Pensions

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EMPLOYMENT BENEFITSo Understand the Israeli employment benefits! o Types of standard benefits – significant savingso Long term retirement savings plans o Bituach Menahalim o Keren Pensia o Keren Hishtalmuto Self employed business structuring options

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The Big Ticket Items Cutting your food budget, Transportation expenses  Can I afford a car or two?  Real cost of owning Mortgage – brokers? Insurance Banking and financial services  Online  Shop around

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Utilities etc Electrical  Discounted rates – 9 categories Water – discounts? Arnona – municipal taxes Home Gas Cell and regular phones

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Be creative Gemachim Schools – discounts, negotiate, used books Chugim/classes – hosting, swapping, coop Clothing Entertainment – free … Household

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Debt Management How much do I owe? What is it costing me? Urgency Debt pyramid Debt consolidation

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QUICK TIPS Find a „guardian angel‟ Educate yourself  Investigate Oleh discounts  Research before committing Accounts and policy information

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Annual Statement of Net Worth Monitoring your financial progress Is the issue temporary or system Easier to create reward system for an enjoyable process

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Importance of Tracking

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Importance of Tracking

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Importance of Tracking

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Annual Statement of worthAssets 2012 2013 2014Short term Reserves Bank accounts Money market accounts Cash value of life insuranceTaxable investments Stocks Bonds Mutual funds Hedge funds Others Kupot GemelTax defer-exempt inv Bituach menahalim Keren Hishtalmut OthersPersonal Property Principle Home Rental property Partnerships Business ownership Cars, vehicles Home furnishings Jewelry, antiques OthersTotal Assets 0 0 0LiabilitiesCurrent Credit card balances Mas hachnasa-BL owed Outstanding bills OverdraftLong term Home mortgage balance Mortgages on rental property Car loans Tuition loans Gemachim Other Long term OthersTotal Liabilities 0 0 0Total Net Worth (assets - liabilities) 0 0 0

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Available in stores in Israel and abroad

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Questions?? More information and mailing list signup at www.labinsky.com