Personal Finance

1. The rich are rich not because they make a lot of money, but because they save a lot of money.

2. 4 - Credit

2.1. Own your home but first understand difference between affordability and borrow-ability

2.2. Have a charge card, something you pay the balance in full every month. Let the budget rule the card not the card mess up your budget.

3. 7 - Insurance

3.1. Life Insurance by Employer

3.2. Medical Insurance

3.3. Disability Insurance (if your job doesn't provide one, get some)

3.4. Umbrella insurance, if you own business or have assets greater than 100K.

3.5. Life Insurance purchased by you. If you can afford it, don't count on employer's insurance only. Buy TERM only, a term of 20 or 30 years.

4. 5 - Housing

4.1. Again, own your home.

4.2. Pay off early if you can. Add what you can to payments.

4.3. You don't need a castle, just enough space to live comfortable. Stay between 2 to 3 times your annual salary.

5. 0 - Perform Needs Analysis

5.1. Create list of short term goals

5.1.1. Emergency Fund

5.1.2. Vacation Fund

5.1.3. Other Large Purchases

5.2. Long Term Goals

5.2.1. Retirement

5.2.2. College Savings

6. Miscellaneous

6.1. Money by itself is useless. What having money does is take away $ worries and allow you to focus energy in other things.

6.2. Hobbies and Leisure. Once all important items are addressed, enjoy your money responsibly.

7. 8 - Estate Planning

7.1. Create a Living Will

7.1.1. Children

7.1.2. Spouse

7.1.3. Parents

7.1.4. Siblings

7.1.5. Legacy

7.1.6. Business Partners

7.1.7. Special People

7.2. Create a Health Care Proxy

7.2.1. Designates a person to make medical decisions for you if you are unable to do so.

7.3. If you own a business, consider creating a DURABLE power of attorney, which gets activated when you are incapacitated.

8. 3 - Savings

8.1. Retirement - Make it automatic. Understand taxes on tax deferred and tax free accounts.

8.1.1. Start with the end in mind. How much would you need monthly once retired?

8.2. College Savings

8.3. Savings not in patrimony - This should be another account where you save for big items. Vacations, gadgets, Iphones, etc

8.3.1. Track ALL your expenses by using a simple piece of paper in your wallet or use FREE automated application, such as Mint or Yodlee.

8.4. Look into Trusts to pass generational wealth

9. 1 - Monthly/Daily Expenses

9.1. Create a budget. Email me and I'll send you a spreadsheet to help you

9.2. A budget is a way to tell the money how it will be spent. If you don't have a budget, "money" is doing this on its own.

9.3. STOP BUYING STUFF and enjoy what you have at home. Shopping is not a hobby, it's a chore.

9.4. Managing one's personal finance doesn't just mean paying your bills.

10. 6 - Car

10.1. Buy used cars ONLY, if you absolutely need it.

10.2. Use a company provided car and SAVE your money.

10.3. If your city allows it, use public transportation.

11. 2 - Investments

11.1. Brokerage Accounts through Vanguard

11.2. Real Estate - My Own Home

11.3. Real Estate - Rentals