You Cannot Control
But You Can Control
The future of Social Security
Saving for retirement
Your employer
Taxes
Inflation
Rising costs
The risk of a single investment
2
Other sources of income
Ways to reduce your taxes
Maximizing your savings
Saving more
Diversity of your investment choices
Diversification does not assure a profit or protect against loss.
Take Control
1. Pay Yourself First
2. Adjust Your Priorities
3. Change Your Thinking
4. Adjust Your Lifestyle
5. Earn Additional Income
6. Avoid the Credit Trap
7. Set Goals and Have a Plan
3
The Three Accounts You Need
To have a complete savings program,
most people need three types of basic accounts.
• Emergency Fund
• Short-Term Savings
• Long-Term Savings/Investments
4
Investing entails risk including loss of principal. Shares, when redeemed, may be worth more or less than original value.
Bypass the Middleman
Your
Money
5
Global
Economy
The “Time Value” of Money
Investor A
Individual A:
Started
contributing
At Age 22
Individual A:
Stopped
contributing
At Age 29
Total
Contributions
6
Total Accumulation
At Age 67
Age
Annual
Payment
22
23
24
25
26
27
28
29
$5,500
5,500
5,500
5,500
5,500
5,500
5,500
5,500
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
Investor B
End of Year
Accumulation
Age
Annual
Payment
End of Year
Accumulation
$6,020
12,600
19,790
27,670
36,280
45,700
56,000
67,270
22
23
24
25
26
27
28
29
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
73,580
80,480
88,030
96,290
105,320
115,200
126,010
137,830
150,760
164,900
180,370
197,290
215,790
236,040
258,180
282,400
308,890
337,870
369,560
404,230
442,150
483,620
528,990
578,610
632,890
692,260
757,200
828,230
905,920
990,900
1,083,860
1,185,530
1,296,740
1,418,380
1,551,440
1,696,970
1,856,160
2,030,280
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
$5,500
5,500
5,500
5,500
5,500
5,500
5,500
5,500
5,500
5,500
5,500
5,500
5,500
5,500
5,500
5,500
5,500
5,500
5,500
5,500
5,500
5,500
5,500
5,500
5,500
5,500
5,500
5,500
5,500
5,500
5,500
5,500
5,500
5,500
5,500
5,500
5,500
5,500
$6,020
12,600
19,790
27,670
36,280
45,700
56,000
67,270
79,590
93,080
107,820
123,950
141,600
160,900
182,010
205,100
230,350
257,980
288,190
321,240
357,390
396,930
440,190
487,490
539,240
595,840
657,750
725,470
799,540
880,560
969,170
1,066,110
1,172,130
1,288,100
1,414,950
1,553,700
1,705,460
1,871,460
$209,000
$44,000
$2,030,280
$1,871,460
Individual B:
Started
contributing
At Age 30
The hypothetical 9% nominal rate of
return, compounded monthly, and taxdeferred accumulation shown for both
IRA accounts are not guaranteed or
intended to demonstrate the
performance of any actual investment.
Unlike actual investments, the accounts
show a constant rate of return without
any fees or charges. Any tax-deductible
contributions are taxed and taxdeferred growth may be taxed upon
withdrawal. Withdrawals prior to age
59 1/2 may be subject to a 10% penalty
tax. Assumes payments are made at the
beginning of each year. Investing
entails risk, including loss of principal.
Shares, when redeemed, may be worth
more or less than their original value.
Individual B:
Stopped
contributing
At Age 67
Total
Contributions
Don’t Pay the
High Cost of Waiting
If your goal is to save $500,000 for retirement
at age 67, look at the difference time makes:
Monthly Savings Required
Begin at
7
Save
Cost to wait
Age 25
$89
Age 35
$224
more than 2 times more
Age 45
$602
nearly 7 times more
Age 55
$1,926
more than 21 times more
The Importance of
Rate of Return
$406,400
A one-time $1,000
investment with a
3%, 6% and 9%
rate of return.
$55,100
$7,400
3%
8
6%
9%
Hypothetical percentage rates and values. Rate of return is a nominal interest rate compounded on a monthly basis.
These results are not indicative of any specific investment and show a constant rate of return, where an actual
investment will fluctuate in value. It does not include fees and taxes, which would lower results. Investing entails risk
including loss of principal. Shares, when redeemed, may be worth more or less than original value.
Do You Know the Rule of 72?
Dividing 72
by the
interest rate
Years
3%
6%
0
$10,000
6
$20,000
18
$
24
$20,000
$40,000
$80,000
$40,000
30
$160,000
$320,000
36
$80,000
42
48
$10,000
$20,000
12
equals the
number of
years it
takes your
money to
double.
$10,000
12%
$640,000
$1,280,000
$40,000
$160,000
$2,560,000
This table serves as a demonstration of how the Rule of 72 concept works from a mathematical standpoint. It is not intended to represent an
investment. The chart uses constant rates of return, unlike actual investments which will fluctuate in value. It does not include fees or taxes,
which would lower performance. It is unlikely that an investment would grow 10% or more on a consistent basis.
9
What Is a Mutual Fund?
A mutual fund is an opportunity for you, together with
many other investors, to pool your money.
Mutual Fund
Individual
Investors
10
Pooled Assets
Global
Economy
Investing entails risk including loss of principal. Shares, when redeemed, may be worth more or less than their original value.
The Three “Ds” of Investing
A good way to keep your focus on your goals is to
remember the three “Ds” of investing:
• Dollar-Cost Averaging
• Discipline
• Diversification
Dollar-cost averaging does not assure a profit or protect against loss. Investors should consider their ability to continue investing
during a declining market. Diversification does not assure a profit or protect against loss. Investing entails risk including loss of
principal. Shares, when redeemed, may be worth more or less than their original value.
11
Budget
1. Know your Income
2. Know your Expenses
3. Don’t Spend more than You Make
12
The 5 Most Common
Credit Mistakes
1. Not valuing your credit
2. Raising credit card limits
3. Not monitoring your credit history
4. Not monitoring your credit score
5. Not knowing your interest rate and fees
13
Revolving Debt vs. Fixed Debt
Look at how revolving debt can erode your financial security:
Revolving Debt
$12,500
17 years and
in interest paid 2 months to pay off
$17,000 @ 18%
Pay $595/month*
Fixed Debt
$17,000 @ 18%
Pay $595/month fixed**
14
$5,370
3 years and
in interest paid 2 months to pay off
*Assumes revolving payment (minimum) is 3.5% of the remaining balance or $20, whichever is greater. First month’s payment is shown and
term assumes continued payment of minimum amount. No additional debt incurred and payments decrease over time period. **Assumes
payment of 3.5% of initial loan amount, no additional debt incurred and initial payment amount remains fixed throughout term of loan.
The Debt Stacking Concept*
$220
$220
+ $220
Credit Card 2
$353
$353
$573
+ $573
Car Loan
$551
$551
$551
$1,124
+ $1,124
Credit Card 1
$303
$303
$303
$303
$1,427
+ $1,427
Mortgage
$1,293
$1,293
$1,293
$1,293
$1,293
$2,720
Total
$2,720
$2,720
$2,720
$2,720
$2,720
Target Account
15
As each debt is paid off, you
apply the amount you were
paying to that debt to the
payment that you were making
on the next target account.
Retail Card 1
Extra Debt Payment
*The above example is for illustrative purposes only. The Debt Stacking concept assumes that: (1) you make consistent
payments on all of your debts, (2) when you pay off the first debt in your plan, you add the payment you were making toward
that debt to your existing payment on the next debt in your plan (therefore you make the same total monthly payment each
month toward your debts) (3) you continue this process until you have eliminated all of the debts in your plan. In the example
above, when the retail card 1 is paid off, the $220 is applied to credit card 2, accelerating its payment to $573. After credit
card 2 is paid off, the $573 is applied to car loan for a total payment of $1,124. The process is then continued until all debts
are paid off. Note that the total payment per month remains constant.
The Theory of
Decreasing Responsibility
16
Today
1. Young children
2. High debt
3. House mortgage
At Retirement
1. Grown children
2. Lower debt
3. Mortgage paid
Loss of income
would be devastating
Retirement income needed
Habits of Success
1. Get up Early
2. Daily To-Do List
3. Set Long Term Goals
4. No Gossip
5. Healthy Lifestyle
6. Productive Off Hours
7. Embrace Change
8. Take Risk
9. Charitable Giving
10.Income
11.Budget
17
You Can Do It!
• The path to financial independence starts
with understanding a few basic concepts —
and implementing them.
• Winning the financial “war” is the result of
winning tiny battles day-to-day.
• If you put together a simple plan and follow it,
you’ll be amazed at the progress you can make.
18
Thank You
Janet Gibson
Investment Advisor Representative
818-239-3847
primericarvp@earthlink.net
19
Endnotes
Securities offered by PFS Investments Inc.
Primerica representatives market term insurance underwritten by the following affiliated companies in these respective
jurisdictions: National Benefit Life Insurance Company (Home Office: Long Island City, NY) in New York; Primerica Life
Insurance Company (Executive Offices: Duluth, GA) in all other U.S. jurisdictions; Primerica Life Insurance Company of
Canada (Home Office: Mississauga, ON) in Canada.
An investor should consider a mutual fund ’s risks, investment objectives, and fee expenses carefully before investing.
The prospectus and/or summary prospectus contains this and other information about the mutual fund. You may
obtain a prospectus from your PFS Investments representative or by contacting PFS Investments at 770-381-1000. You
should read and consider the prospectus, and/or summary prospectus, carefully before investing.
www.primerica.com
Not for use in New York State.
20
© 2003-2015 Primerica/49581/2.15/US/11POL270-8
You Can…
You Can
get out of debt.
You Can
build savings.
You Can
get on the path
to financial independence!
21
The Debt Stacking Concept
Without Debt Stacking
Payoff
Interest Saved
Interest Paid
Monthly Payments
22
With Debt Stacking
9 years
23 years
14 Years Sooner
$0
$130,643
$214,442
$83,799
$2,720
$2,720
*This hypothetical assumes a constant nominal 9% rate of return compounded monthly, unlike actual investments
which will fluctuate in value, and does not include taxes or fees which would reduce returns.