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The 30 Minute Round the World
Intro to Financial Planning:
Bell Helicopter
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
…in other words…
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
Who Am I?
• Army veteran
• Founded and sold a software development
• 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
• 4 out of 10 Americans have no plan besides Social
• 30% say they will have to work into 80s to retire;
however, 22.5% between 60-84 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 64
10.2% of people age 19-64 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
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 –
• Think about your future self before making a decision on how much
to set aside for retirement savings.
Common Personal Finance Mistakes:
Retirement Saving
Starting Investing at Age 50
Retirement Age
Savings Rate
Retirement Age
Retirement Age
Starting Investing at Age 40
Savings Rate
Starting Investing at Age 30
Savings Rate
Common Personal Finance Mistakes:
Investing Mistakes
Fees and timing are your portfolio’s silent killer
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 2025 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.
Common Personal Finance Mistakes:
Hopping on the Hedonic Treadmill
Don’t stuff a huge house full of furniture!
• Once we graduate from college, we feel like
we’ve “earned” a lifestyle upgrade
• We buy
– a nice new car
– a big house
– and rooms full of furniture
• Instead of paying off debt and investing
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
46.7% of American households carry a credit card
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
Questions From the Audience
How to invest for personal wealth?
Don’t try to hit a 7 run home run
You, statistically speaking, won’t beat the
market over the long run
Fees and loads kill performance
5% rule – if you want to speculate, do it with
<= 5% of your investable assets
Questions From the Audience
Do you have tips for making a budget and
sticking to it?
Keep it relatively simple – the fewer
categories, the better
I use Mint to track spending
Do budget review 1x/month WITH YOUR
SPOUSE (where applicable)
Automate payments, then carry cash
Questions From the Audience
Why do you need a financial planner?
Reason #1: Trade money for time. You can spend
hundreds of hours getting answers from
reading/Internet or pay to get them applied to
your situation.
Reason #2: You’re not succeeding as a DIY
Reason #3: You’re not really a planner (I don’t
mean financial planner, either)
Reason #4: You have an out-of-the-ordinary
situation (chronic illness, large inheritance, etc.)
Questions From the Audience
How do you choose a financial planner? How
can you really trust them?
• Ask the following:
– How are you getting paid?
– You’re going to sign a legally binding, fiduciary
contract with me, right?
– What is your net worth?
– How did you get the net worth?
• CFP, CLU, ChFC certifications good
Questions From the Audience
Are the 2040, 2050, etc. 401K investments good
• Look at
– Fees of fund compared to index brethren
– TDF 2015 to see equity allocation
• Match to what you want to do
– Will you buy annuities at retirement?
– Will you invest in equities heavier to try to grow nest
• Reasonable “lazy portfolio” solution
Questions From the Audience
Advice on getting out of debt early on or going
after the matching contribution.
• As long as you
– Have income > expenses
– Won’t take on MORE debt
– Have sufficient assets outside of retirement
account(s) to tap in emergency
• …then contribute up to match first
Questions From the Audience
Are there better funds out there to be in versus the
company sponsored ones? Leverage the
opportunities available through Fidelity Brokerage
• Yes, but…
• Company match means breakeven of globally
optimal funds is a long, long time
• 401k more efficient if you plan on retiring early
(age 55 + terminate employment vs. age 59 ½)
Questions From the Audience
Roth versus Traditional IRA/401k
Roth = pay taxes now, withdraw tax-free in future
Traditional = tax deduction now, pay ordinary
income tax rate on withdrawals in future
I recommend mixing due to tax efficient
retirement withdrawal strategies, but lean
towards Roth where possible
Front load with Roth, because when AGI > $127k
for singles and $188k for married, can’t use Roth
IRA. Can still use Roth 401k.
Questions From the Audience
Percent of annual income to be putting away into
tax deferred savings
• Depends on goals
– If planning on working until age 55 or 59 ½, then as
much as possible (subject to IRS limits)
– If planning on retiring earlier, will need some taxable
accounts to draw on
• If this is the case, roughly (retirement age – current age) /
(90 – current age) is % for taxable accounts
• Can always save more in taxable accounts once
you hit IRS contribution limits
Questions From the Audience
Do you think that the government will change
the Roth advantages or take them away?
Eventually taxing them like social security was
not supposed to be.
• I’m not a politician!
• I expect changes to Roths eventually
• I do not expect retroactive treatment
• But maybe not…Roth = taxes now.
Questions From the Audience
Recommended books. Paid Investment advising
programs that were useful.
Total Money Makeover by Dave Ramsey (though I
don’t agree with his investment or retirement
withdrawal advice)
Think and Grow Rich by Napoleon Hill
Secrets of Closing the Sale by Zig Ziglar
With Money course by me – coming out in
How to Reach Me
• [email protected]
• (817)476-0584
If you want to read more about the topics in this
presentation, go to