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MONEY 101

Your Money, Your Future

Master the basics and set yourself up for sucess!

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How to generate money?

Money comes from how you work and how you invest. Where are you now and where do you want to be?

MEET JOHN, AN EMPLOYEE

John has a steady job with a reliable paycheck, but he only get paid as long as he keeps working. If he stops, the money stops too.

MEET ROB, A BUSINESS OWNER

Robed hires people or build systems to do majority of the work so he’s not tied down by the clock. His business keeps running, and the money keeps coming in, even when he’s not working.

MEET SARAH, SELF-EMPLOYED

Though she is her own boss, Sarah is still trading time for money. If she stops working hard in getting a client, the income stops too.

MEET KIM, AN INVESTOR

Kim’s money works for her since she invested it well. She invested it wisely, and now it’s paying her without doing much at all! Her wealth keeps on growing even when she’s sleeping!

To generate money effectively, the goal is to move from

E (Employed)
S (Self-employed)

B (Business Owner)
I (Investor)

"The average American loses $1,506 annually due to a lack of basic financial literacy."

Fidelity, 2024

How to generate money?

Money comes from how you work and how you invest.
Where are you now and where do you want to be?

Finally, with a secure structure in place, you can start investing—adding the finishing touches that increase your house’s value over time. Investing allows your money to grow over time, helping you achieve long-term financial goals. Proper investments build wealth and ensure a comfortable future.

Then, you create an emergency fund. This is your safety net, like having a reliable roof that keeps you dry during a storm. It covers unexpected expenses, such as medical bills or job loss, without needing to rely on credit. It’s crucial for maintaining financial stability and peace of mind.

Next, you focus on debt management. Just like clearing the land around your house to prevent anything from weakening your foundation, effectively managing and reducing debt prevents it from becoming a financial burden.

Imagine you're building a strong, secured house. The first thing you do is lay a solid foundation. In the same way, when it comes to your finances, the first step is protection—this includes insurance (health, life, and property) to protect against unexpected events that could derail your financial stability. This is like putting up sturdy walls to keep everything safe inside.

How can you build wealth?

You have options for how your wealth grows—which one do you prefer?

Wealth Formula

Here’s a simple formula to find out how your money can grow:

This is the starting point—the amount of money you have to invest or save. The more money you can set aside for wealth-building, the stronger your starting point.

Time is a crucial factor in wealth building. The earlier you start saving or investing, the more time your money has to grow.
This refers to the percentage of profit (or loss) you make on an investment over a certain period of time. For example, if you invest $100 and a year later it's worth $110, your rate of return is 10%. It shows how well (or poorly) your investment has performed.
Inflation decreases the value of your money, while taxes can also take a bite out of your returns. Minimizing tax impact through smart financial strategies is key to keeping more of your wealth.

3 Ways Money Grow

Your money grows depending on the growth account you choose—whether you want safety, growth, or a mix of both. It's all about finding what works best for your goals!

FIXED ACCOUNTS

Your money grows at a set rate that doesn’t change. It’s safe and steady, but the growth is slower.
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  • Savings
  • Bonds
  • Whole Life
  • Guaranteed Universal Life (GUL)
  • Fixed Annuities

VARIABLE ACCOUNTS

Your money grows based on how well the stock market or other investments do. It can grow a lot, but there’s also a chance of losing money.
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  • 401k, 403b, 457
  • Brokerage
  • REITS
  • Variable annuities
  • Variable Universal Life (VUL)
  • - 529 Plans

INDEX ACCOUNTS

Your money’s growth is tied to the stock market, but with some limits. You won’t lose money if the market drops, but your gains are capped.
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  • Index Universal Life (IUL)
  • Index annuities

Rule of 72

Want to know how long it’ll take to double your money? Use the Rule of 72—your financial fast track! Check how long it will take for your money to double based on your interest rate.

72%

72 ÷
2%
= 36 years to double

72 ÷
4%
= 18 years to double

72 ÷
6%
= 12 years to double

72 ÷
8%
= 09 years to double

72 ÷
10%
= 7.2 years to double

72 ÷
12%
= 06 years to double

3 Ways Money Get Taxed

Keep more of your money by picking the right tax bucket for you.

Tax Now

Money taxed right away, like income or interest.

Tax Later

Money grows tax-deferred, and you pay taxes when you withdraw it.

Tax Never

Money grows tax-free, and you don't pay taxes when you take it out.

Money Glossary

APR (Annual Percentage Rate)
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This is the total yearly cost of borrowing money, including interest and fees, expressed as a percentage. It helps you compare the cost of loans or credit cards.

Compound Interest
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Interest calculated on both the initial principal and the accumulated interest from previous periods. It allows your money to grow faster over time.

Amortization
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The process of gradually paying off a debt over time through regular payments. Part of each payment goes towards interest, and part goes towards reducing the principal.

Liquidity
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How easily you can convert an asset into cash without affecting its price. Cash is the most liquid asset, while real estate is less liquid because it takes time to sell.

Asset Allocation
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The way you divide your investments among different categories, like stocks, bonds, and cash. It’s a strategy to balance risk and reward based on your goals and risk tolerance.

Equity
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The ownership value in an asset, such as the portion of your home that you truly own after accounting for any mortgage debt. In a business, equity refers to the ownership interest held by shareholders.

FICO Score
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A type of credit score that lenders use to assess your credit risk. It ranges from 300 to 850, with higher scores indicating better creditworthiness.

Diversification
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The practice of spreading your investments across various assets to reduce risk. By not putting all your money in one type of investment, you lower the impact of any single investment’s poor performance.

Dollar-Cost Averaging
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A strategy of investing a fixed amount of money regularly, regardless of the market conditions. This reduces the risk of investing a large amount in a single investment at the wrong time.

Rebalancing
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The process of adjusting your investment portfolio back to your target asset allocation. As markets change, your portfolio’s original balance might shift, so rebalancing brings it back in line with your goals.

Which group do you want to be part of?

VS

70% of Americans who are facing financial stress daily

Those with a solid financial plan and feel confident about reaching their goals
Take the next step now! Reach out today and let’s start building your financial success story!
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