Financial Independence (Getting to Point X): An Advisor's Guide to Comprehensive Wealth Management
Financial Independence (Getting to Point X): An Advisor's Guide to Comprehensive Wealth Management
ISBN: 978-1-118-52638-5
Mar 2013
384 pages
$26.99
Description
Discover the ten key issues to achieving your financial goals and how to use them to realize your dream of financial independenceFrom saving to purchase a first car, to putting kids through college to planning for retirement, to preserving your estate for your loved ones, our financial goals change from one stage of life to the next. While those goals and the challenges we face in achieving them may differ, all of them have certain things in common. Saving, budgeting, managing debt, minimizing taxes and living within your means. These are a few of the 10 Key Wealth Management Issues which come into play (to varying degrees) when working toward specific financial goals. But there's one goal for which success relies on all ten keys coming together in perfect harmony: financial independence, also known as "Point X." No matter how you define it—whether it's a retirement income of $25,000 a year, or an estate worth $250 million—your future financial independence requires that you deal effectively with all ten key issues. And now this book shows you how to get it done, along with the guidance of a trusted advisor.
- Supplies you with a complete roadmap for arriving at "Point X," financial independence with key milestones and important twists and turns clearly defined
- Identifies the 10 key wealth management issues and offers priceless advice and guidance on negotiating each on your road to financial independence
- Provides you with both success and failure stories so you can learn from others' real life experiences
- Provides you with tax planning facts and strategies within the wealth management issues that will show you how to minimize your most significant expense and at the same time maximize your savings on the road to your "Point X"
Preface: Living the American Dream xiii
Acknowledgments xvii
Introduction Getting to Point X xix
Financial Literacy and the New Norm xx
Point X: Our Fundamental Financial Goal xxi
Ten Key Issues to Comprehensive Wealth Management xxii
Our Biggest Expense xxiii
Take a Financial Planning Checkup xxiv
The Power of This Book xxvii
Chapter 1 Committing to Living within Your Means 1
The American Dream Becomes the American Nightmare 1
Living within Your Means: The Essential Step 2
Simple Saving 6
Chapter 2 Understanding Taxes 11
A Brief History of the U.S. Tax System 12
Organizing and Retaining Your Records 15
Tax-Preparation Services 16
Accumulating Wealth through Tax Planning 18
Chapter 3 Determining Your Financial Position 23
Figuring Your Financial Net Worth 24
Case Study: How One Couple Learned They Were Spending More Than They Earned 24
Making Sense of Cash Flow 35
Establishing Your Financial Goals 57
Finding Trusted Advisors 61
Chapter 4 Managing Debt 67
Case Study: How Two Doctors Went Bankrupt in Only a Few Years—What Not to Do 67
Basic Principles for Managing Debt 71
Good Debt versus Bad Debt 73
Credit-Card Debt 74
Auto Loans 80
Student Loans 81
Home Mortgage Loans 82
Business and Investment Loans 86
Understanding Credit 87
Your Credit Report and Your Credit Score 89
Preventing Identity Theft 93
Analyzing Your Debt 94
Chapter 5 Insuring Your Health and Life 99
Choosing a Health Insurance Plan 100
Long-Term Care Insurance 111
Disability Insurance 118
Life Insurance 122
Buying Insurance Policies 128
Chapter 6 Protecting Your Property with Insurance 133
Case Study: How a Lack of Insurance Wiped Out One Woman’s Life Savings 134
Homeowner’s Insurance 136
Automobile Insurance 140
Umbrella Liability Insurance 144
Buying Insurance Policies 147
Chapter 7 Paying for College 153
Case Study: How Not Saving for Your Child’s Education Can Ruin Your Finances—and Your Child’s 156
Conducting a “Needs Analysis” for Your Children’s College Educations 160
Strategies for Saving Money for College Education 162
Education Tax Deductions and Credits 179
Chapter 8 Planning for Retirement 187
Case Study: Saving versus Not Saving for Retirement: The $1.7 Million Difference 187
Retirement Equation: Calculating Your Personal Point X 191
The High Cost of Waiting to Save for Retirement 193
What You Can Expect to Receive from Social Security 196
Qualified Retirement Plans 198
The Difference between Traditional IRAs and Roth IRAs 203
Fixed and Variable Annuities 209
Retirement Funding: “Needs Analysis” 212
Chapter 9 Managing Your Investments 221
Analyzing Your Risk Tolerance 222
Stocks, Bonds, Mutual Funds, and Exchange-Traded Funds 226
Diversification and Modern Portfolio Theory 234
Asset Allocation and Rebalancing 237
Dollar-Cost Averaging 243
Inflation and Taxes: The Biggest Drains on Investment Return 245
Medicare Surtax on Net Investment Income 246
Chapter 10 Preserving Your Estate 251
The Federal Gift and Estate Tax System 252
Legal Documents to Consider for Estate Planning 252
The Probate and Administration Process and Why You May Want to Avoid It 257
Using a Planned Gifting Strategy 261
Ownership of Property and How It Is Transferred 262
Reasons for Creating a Trust 265
Benefit from a Family Limited Partnership 277
Estate Tax Planning and Life Insurance 278
Chapter 11 The Time Value of Money 285
The Rule of 72 286
Appendix A: Selecting a Trusted Advisor 301
Appendix B: 101 Ways to Save $20 or More per Week 311
Appendix C: Basic Concepts and Definitions of Various Types of Taxes 321
About the Author 341
Index 343