Professional Documents
Culture Documents
Charles Heldridge
Taylor Kirk
James Morgan
Table of Contents
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Housing Ratio 1
14.81%
100%
HR 1
Salary
Housing Ratio 2
27.96%
100%
HR 2
Salary
Ratios
14.81%
46.57%
27.96%
10.67%
Housing Ratio
1
Housing Ratio
2
Savings Ratio
Total Salary
600%
Emergency Fund
Ratio
200%
316.61% 300%
100%
0%
6
Months
EF
Ratio
3
Months
This is your Emergency Fund Ratio (E.F. Ratio). This displays how
many months worth of salary is saved in the instance that both
of you lose your income. You currently have a little over three
months worth saved at this point. The optimal amount to have
saved is between three to six months.
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44.25%
55.75%
Total Assets
Debt
This is a diagram that displays the total amount of debt you have to the
total amount of assets you own. Simply put, this is showing you that
over 55% of the total assets you is still owed to creditors. The 55% is
appropriate, even if it may seem to be relatively high. This ratio is
commonly high for younger people at or about 80%, where as it is
commonly low for those nearing retirement at or about 10%.
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44.25%
55.75%
Net Worth
Total Assets
10
Current Ratio
40.81%
59.19%
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Monthly Payments
Discretionary
Cash Flow
Credit Card
33.99%
55.19%
Vehicle
3.29%
Income
7.53%
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At this point I would like to address the concerns you mentioned in our initial
discussions. Specifically, you were uneasy about commission charges and some of
the stories you have heard regarding the financial services industry.
Unlike many financial planners in the financial services industry, I am a
Certified Financial Planner (CFP). There are a series of educational requirements
for becoming a CFP, the first of which is a bachelors degree. Following that, an
aspiring CFP must complete an educational program overseen by the CFP board. In
addition, they must pass the CFP examination after completing these programs.
Still, before a CFP can actually become certified, they must have at least two years
of experience helping people create financial plans. The CFP certification next to my
credentials means that I have met both the educational and experience
requirements, and am ready to help you with your financial plan.
There are a series of different licenses that allow a financial planner to work with
clients. The series 6 and 7 licenses allow a planner to receive compensation with
either a fee-based or commission-based fee structure. Many of your concerns about
planners with commission-based charges must be considered when dealing with
these type of licenses. Youll notice I dont have either one of these licenses
attached to my name. I hold a series 66 license, which mandates that its holder
receive fee-based compensation only. A licensee with a series 66 is not allowed to
charge based on commission. My license actually prevents me from working on
commission or directly selling you any type of securities, removing a major conflict of
interest. In addition, this license comes with a fiduciary requirement as a registered
investment advisor. Basically, this fiduciary requirement mandates that a financial
planner act with the clients best interests in mind, rather than their own interests.
This requirement is backed and enforced by the CFP Board.
The horror stories you reference actually dont involve true financial planners.
Unfortunately, the CFP designation is not well regulated at this time, so many can
legally claim to be financial planners without having actually completed the
requirements to become a CFP Professional. However, you can determine who the
real financial planners are by looking at the CFP designation and the licenses next
to their name. For example, I have the CFP designation and a Series 66 license,
which signals that not only am I an accredited CFP Professional, but I have a
fiduciary responsibility as a registered investment advisor.
Ultimately, most of your concerns are addressed by the requirements of my
accreditation and license. Becoming a CFP Professional requires an educational
requirement beyond a bachelors degree and an experience requirement of at least
two years of working directly with clients to create financial plans. The license I hold
requires me to put your interest firsts and will not allow me or any colleagues with
the same license to charge on commission. When it comes to your financial plan,
your needs will come first in every step of the process.
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Financial Record
Keeping
Since you are concerned with financial record keeping, here are a few steps that should
help you organize and secure your confidential financial information:
1.
Collect all your financial documents together and store them in an
accessible yet protected place. A fireproof safe would be an ideal location for
these documents. If you want to keep paperless records, set up a file system on
your computer (and back it up on a secured device).
2.
Organize all financial information into separate files. Some suggested
examples for these files:
Your financial goals childrens college funds, retirement plan, and debt
repayment plan
Install antivirus software and keep your computer updated at all times to
protect electronic information.
Refinancing Your
Home
15 year
4.2% loan is $1391
per month
HR1: 12%
HR2: 25%
Savings Ratio:
10%
Lifetime Savings:
Over $150,000
30 year
4.6% loan is $951
per month
HR1: 8%
HR2: 21%
Savings Ratio:
18%
Lifetime Savings:
Over $60,000
Insurance
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Settlement Options
Checking accounts
Savings accounts
Certificates of deposit
Mutual Funds
Annuities
Stocks
Bonds