Financial Literacy

People don't plan to fail, they fail to plan

Financial Literacy: Building a healthy finance

What is Financial Literacy?

* Refers to the set of skills and knowledge that lets someone make good decisions with all of their money.

* The ability to understand how money works in the world.

* How someone earns it

* How we manage it

* How we invest it

* How we protect ourselves and our $

* How that person donates or spends it

Understand the "real" rate of return...

Canada inflation Rate : 2% (March 2017)

If you save $100

At 1% rate of return +1.00

Pay tax at 25% -.25

__________

100.75

Inflation at 2% -2.00

one must get about 2.5% or more in

interest to beat taxes and inflation

Actual Return $98.75

What is inflation ?

The rate at which the general level of prices for goods and services is rising, and, subsequently, purchasing power is falling.

Power of

Compounding Interest

72 ÷ 4 =18

Rule of 72

rate of return

money double every 18yrs

Manage your debt

Control your debt or your debt will control you

Wealth Formula

Money

+ Time

+/- Rate of Return

- Inflation

- Taxes

_____________________

Wealth

Example: $4,500 Credit Card Balance

Intreast Rate 18%

Special Thanks to:

Pay minimum

(2.5% per month): $112.50

Pay back time: 25 years

Interest Paid Over: $6,000

Fiancial Educator - Jessica Hsueh

for more information please contect jessica.kc.hsueh@gmail.com

2017

Presentation created by Kai Hsueh

Person A

Pay a little more than minimum

(2.5% per month): $145/month

Pay back time: less than 4 years

Interest Paid: $1,600

Person B

Discipline and Consistency are the keys

Small changes, big money

What if you can make small changes in your spending habits and start saving $10/day ($300/month) ?

Saving money might be easy for some people, and really tough for others. Here are some tips on how to resist those temptations.

$600/month at 8%

in 30 years

$300/month at 8%

in 30 years

* Pay the necessities and put aside the saving first

* The less expenses you have, the more you can save

* Keep track of where it goes- make a spending journal

* Cut back on what you can live without (ie. bottled water, pop, lattes, eating out, partying, cigarettes...)

* When you do spend, be smart

$894,214

$447,107

Build it right

Protection: Have proper insurance to protect your family.

Debt Management: Pay more than the minimum, reduce debt sooner.

Emergency Fund: One should set aside 3-6 months income to help cope with unexpected changes.

Wealth & Responsibility

Investment: when investing think about growth, safty, tax-advantage and protection.

One must take care of your responsibility while building your wealth

Law

of

wealth

decreasing

Younger

building

Older

Generally less secure

take care of your family

Generally more secure

take care of your future

of

Law

responsibility

Build it from the ground up

Foundation