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Improving Financial Literacy
Transcript of Improving Financial Literacy
40% of Americans say they live beyond their means.
50% say they live paycheck to paycheck.
Fewer than 50% of Americans have calculated how much they need for retirement.
The average American spends 20 years in retirement.
It is the ability to use knowledge and skills to manage financial resources effectively for a lifetime of financial well-being.
Spend less than you're bringing in.
Planning for the long and short term.
Secretary of State
Improving Financial Literacy
Do you know how to plan for retirement?
What is Financial Literacy?
What knowledge and skills can help you to be financially literate?
When Budgeting Fails
Failure to prioritize expenses
Failure to budget practically for normal out-of-pocket expenses
Failure to plan for unexpected events
Spending more money than you make
How to Budget
Car loan/car licensing fees/fuel
List total of each expense & due date
Evaluate discretionary expenses
Cut down on grocery or personal items
Carpool or use public transportation
Make Your Budget WORK
Credit is a powerful tool that gives you access to student loans, mortgages, credit cards, auto loans, etc.
Why Is Good Credit Important?
Saves you money by getting best interest rates
Limit the number of credit cards
For debt, look into 0% transfer programs
Annual Membership Fees
Pay at least the minimum every month
Pay extra on the card with the highest interest rate
Credit Card Management
A credit freeze allows you to keep identity thieves and new creditors from accessing your credit report without your permission.
Monitor Your Credit
Annual Credit Report Request Service
P.O. Box 105281
Atlanta, GA 30348-5281
Protect Your Credit Online
Proper anti-virus & anti-spyware software
Strong passwords and user names
Using secure connections
Saving confirmation numbers to monitor online purchases
Avoid phishing emails
By law, any Indiana resident can request a credit freeze free of charge.
Why should you invest your money?
Puts your money to work for you
Great way to build wealth for retirement
What risks are involved?
Can either lose or earn money
How does one invest wisely?
Become a SMART investor
Before You Invest
Answer These Questions
What are my goals?
What is my risk tolerance?
Are the investment & person selling it registered?
Now you're ready to start investing, right?
WAIT! HIT THE BRAKES!
Are you ready to lose every dime you have ever saved to an investment scam?
Didn't think so...
Pay early investors with money raised from later investors.
Only people making money are those who set the scheme in motion.
An estimated 85 million Americans INVEST in the stock market.
Americans LOSE an estimated $40 billion each year to investment fraud.
CASE: Marcus Schrenker
SCAM: Sold unauthorized foreign currency fund; falsified documents
TACTIC: Ponzi scheme/Affinity Fraud
VICTIMS: Just over $4 million
VERDICT: Guilty on 5 felony counts of securities fraud; sentenced to 20 years in prison
CASE: Alanar (Vaughn Reeves and sons)
SCAM: Former pastor and three sons sold church bonds and pocketed the money
TACTIC: Used faith-based appeals/Ponzi scheme
VICTIMS: $120 million lost
VERDICT: Guilty on nine felony counts of securities fraud; sentenced to 54 years in prison
CASE: Thomas Redmond Jr.
SCAM: Claimed he was investing money
TACTIC: Affinity fraud/used shared Christian beliefs to gain trust
VICTIMS: $580,000 lost; 10 victims (9 were seniors)
VERDICT: Convicted on 8 felony counts; sentenced to 5 years in prison followed by 6 years of work release
Online guides and financial calculators
Tools specific for newlyweds, seniors, and home buyers
License and registration databases
Schedule an investor education meeting
Avoid Being Scammed!
Hang up on unsolicited calls
Get information in writing
Meet the individual in person
File A Complaint
302 W. Washington St. Room E-111
Indianapolis, Indiana 46204
Phone: (317) 232-6681
Toll Free: (800) 223-8791
Fax: (317) 233-3675
Indiana Investment Watch
Credit Card Debt and Regrets
Questions and Answers
Would you rather have a million dollars right now or a penny doubled every day for 30 days?
What is compound interest?
Interest is paid on original amount of deposit plus any interest earned.
(Original $ Amount + Earned Interest) x Interest Rate x Length of Time = Amount Earned
Let's Do The Math!
Why is good credit important?
How does compound interest work?
What is a Ponzi scheme?
How can you protect yourself from becoming a victim?
What should you do if you think you are a victim of a Ponzi scheme?
Day 1 = 1 cent
Day 7 = 64 cents
Day 14 = $81.92
Day 21 = $10,485.76
Day 30 = $5,368,709.12
How a Ponzi Scheme Works