Financial lessons from the famous plastic cube!

1. Rubik’s Cube

2. Rubik’s Cube You’ve no doubt heard of the Rubik’s Cube

3. Rubik’s Cube Most likely you’ve even played with one…..

4. Rubik’s Cube Unless you are a some sort of “Wizard” the way you learned (if you learned) to win was by someone teaching you how it works….

5. Rubik’s Cube Arranging all the colors properly in a Rubik’s cube is done by a series of Algorithms.

6. Rubik’s Cube The most simple of the algorithms is a series of 4 moves, the most difficult is a series of 10 moves.

7. In many respects Financial Planning has become like a Rubik's cube By coming up with all sorts of products to dazzle and confuse us…… It’s almost as if the industry is trying to complicate things…..

8. In many respects Financial Planning has become like a Rubik's cube A typical Financial Planning approach is this: 1. Have a fact finding or data gathering conversation with you…..this is a great start 2. Determine your risk tolerance – How much money you are “willing” to lose, if any? 3. The time frame you have to invest – How many years can you let them manage your money? 4. Determine your investment experience to see how sophisticated you are in understanding the many financial products offered today.

9. In many respects Financial Planning has become like a Rubik's cube Once this is completed then the next step is to come back to you with some recommendations……

10. Here is where it gets complicated ……they come back with a whole series of investments choices Such as…… Bonds Real Estate DPP’s Stocks UIT’s Gold REIT’s Mutual Funds Equipment DPP’s Annuities Life Insurance ……and the list goes on and on……

11. Looking at Mutual Funds alone becomes another discussion that can be extremely complicated and confusing……. Within this category we have: Growth Funds Income Funds Growth and Income Funds Corporate Bond Funds Municipal Bond Funds High Yield Bond Funds R.E. Funds Gold/Mineral Funds Hybrid Funds Socially Conscience Funds Next we have to determine: Asset Allocation Diversification Risk Tolerance Beta Factors Past Performance Management Style Sector Quadrant All of this is done to essentially make you feel all warm and cozy about putting your money at…. RISK!

12. Meanwhile……. ….at the same time they are making you feel safe with all the “tools” and “techniques” used to invest your money and take control away from you……. ….you have expenses and purchases that you are making either through paying cash or financing….. The financial industry is trying increase your rate of return through risk of your money, but the amount you are losing through “financing” has never been addressed…..

13. For instance… How are you paying for personal things such as….. Repairs Appliances Cars Furniture College Education Remolding Motorcycles Boats Vacations Medical/Dental

14. As a business owner… How do you pay for…… Office Space Cars/Trucks Insurance Premiums Machinery Employee Benefits Payroll Furniture Phone System Computers

15. At the same time that you are trying to get a rate of return on your savings…. There are $1,000’s of dollars being lost because of paying cash or financing your business and personal lives…..

16. If all you did was save “LOST MONEY” your wealth would increase almost accidently…..without risk!

17. So what’s happening is… …the Financial Industry has been trying to teach you how to complete the Rubik’s Cube puzzle with just a few turns of the cube….

18. So what’s happening is… You need to understand all the turns to complete the puzzle

19. So what’s happening is… ….trying to obtain wealth by focusing on rate of return and ignoring lost wealth due to paying cash, debt, and interest…

20. So what’s happening is… ...is like trying to complete a Rubik’s Cube with a couple of rotations.

21. Rubik’s Cube Ron Doerksen Sustainable Finances 360.306.5642 SustainableFinances@comcast.net