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Jerrold Johnson, CFPJN Fund Managers Limited

July 18, 2009

Planning for Financial Planning for Financial SuccessSuccess

Planning for Financial Planning for Financial SuccessSuccess

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HOW WOULD YOU LIKE TO

PLANNING FOR FINANCIAL SUCCESSPLANNING FOR FINANCIAL SUCCESS

Isaac sowed in the time of famine and, received in the same year an hundredfold harvest, because the LORD blessed him.

Gen 26:12 ( Paraphrased)

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HOW WOULD YOU LIKE TO

PLANNING FOR FINANCIAL SUCCESSPLANNING FOR FINANCIAL SUCCESS

• Reframe your thinking (renew your minds)

• Have a realistic financial goal

• Count the cost

• Look for places in your budget to save money

• Increase your Financial IQ

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1. Know what is going on

2. Control

3. Organization

4. Communication

5. Take advantage of opportunities

6. Extra time

7. Extra money

Budgeting/Counting the CostBudgeting/Counting the Cost

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• Income/Salary• Contributions• Investments • Insurance • Entertainment• Rent/Mortgage• Food

• Children’s Expenses• Personal Care• Transportation• Financial Obligations • Health• Vacation• Cell Phone/Credit

Making a BudgetMaking a Budget

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• Track your spending for three (3) monthso Save your receipts and tally them weekly

o Update your actual spending on your budget weekly

• Operate at least four (4) accountsoSalaryoRegular SpendingoSavingsoEmergency Cash

Budgeting TipsBudgeting Tips

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INCOMEINCOME $$

Salary - Everton 35,000

Other Income 5,000

TOTAL INCOME 40,000

EXPENSESEXPENSES $$

Tithe 4,000

Mortgage/Rent 10,000

Savings 1,000

Life Insurance 0

Health Insurance 0

Loans 0

JPSCo 3000

EXPENSES Con’tEXPENSES Con’t $$

Cable 2,500

Internet 0

Helper 0

Childcare 0

Groceries 8,000

Barber/Hairdresser 1,200

Transportation/Gas 6,000

Cell Phone 3,000

TOTAL EXPENSES 38,700

SURPLUS/ SHORTAGE 1,300

Everton’s Budget

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INCOMEINCOME $

Salary 65,000

Other Income 20,000

TOTAL INCOME 85,000

EXPENSESEXPENSES $

Mortgage/Rent 25,000

Savings 5,000

Life Insurance 4,000

Health Insurance 6,000

Loans 5,000

JPSCo 6,000

LIME 4,000

EXPENSES Con’tEXPENSES Con’t $$

Cable 2,500

Internet 2,000

Helper 8,000

Groceries 8,000

Entertainment 4,000

Barber/Hairdresser 2,000

Transportation/Gas 5,000

Phone Credit 5,000

TOTAL EXPENSES 91,500

SURPLUS/ SHORTAGE 6,500

Upton’s Budget

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INCOME $

Salary 130,000

Other Income 40,000

TOTAL INCOME 170,000

EXPENSESEXPENSES $$

Mortgage/Rent 40,000

Savings 15,000

Life Insurance 4,000

Health Insurance 8,000

Loans 35,000

JPSCo 6,000

LIME 4,000

EXPENSES Con’t $

Cable 2,500

Internet 2,000

Helper 10,000

Childcare 20,000

Groceries 10,000

Barber/Hairdresser 4,000

Transportation/Gas 5,000

Phone Credit 2,000

TOTAL EXPENSES 167,500

SURPLUS/ SHORTAGE 2,500

Kay-Ann’s Budget

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INCOMEINCOME $$

Salary - Jack 105,000

Salary – Jill 130,000

TOTAL INCOME 235,000

EXPENSESEXPENSES $$

Tithe 23,500

Mortgage/Rent 40,000

Savings 5,000

Life Insurance 8,000

Health Insurance 10,000

Loans 11,500

JPSCo 12,000

LIME 6,000

EXPENSES Con’tEXPENSES Con’t $$

Cable 2,500

Internet 2,000

Helper 20,000

Childcare 25,000

Groceries 20,000

Barber/Hairdresser 6,000

Transportation/Gas 15,000

Cell Phone 6,000

TOTAL EXPENSES 212,500

SURPLUS/ SHORTAGE 22,500

Jack & Jill’s Budget

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Saving vs. Investing

Saving is setting aside money for future use.

Investing is taking what you have and doing something with it to increase the value.

Savings vs. InvestmentsSavings vs. Investments

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Saving & InvestmentSaving & Investment• 10% of Income• Choosing Investments

o Safe/secure institutiono Higher the returns: higher the risk

• Discounts • Fees

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• Have a budget• Set realistic financial goals• Pay yourself first• Grocery shopping• Look and ask for discounts• Be a member of JNBS• Be a member of JAA• Conservation

o Utilitieso Foodo Clothing

Ways to SaveWays to Save

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STRATEGY• Free ATM transactions• Free Point of Sale transactions• Free JN Money Transfer Card• Internet Banking

JN Member BenefitsJN Member Benefits

……Our Our

Members Members

are are

EverythinEverythin

g!g!

• Discounts from NEM Insurance Co. (Ja.) Ltd. • Discounts from Jamaica Automobile Association (JAA)

• Member discounts linked to JN Teller 24/7 ATM and JN Money Transfer cards

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TACTICS• Roadside Assistance• Accident Assistance• Document Renewal Services• Discounts on Purchases

o 15-20% at auto centerso 10% at Pharmacieso 10% at travel agencieso “Show Your Card and Save”… (AAA)…155,000 merchants

MembershipMembership

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• National Health Fund Card

o Illnesses covered include:

Arthritis, Asthma, Benign Prostatic Hyperplasia, Diabetes, Epilepsy,

Glaucoma, High Cholesterol, Hypertension, Ischemic Heart Disease, Major

Depression, Prostate Cancer, Psychosis, Rheumatic Heart Disease, Vascular

Disease

HealthHealth

Options

• JN Health o Health coverage family members

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• Savings accounts • Fixed Deposits• GOJ Investments• Foreign Mutual Funds, Money Market funds,

Unit Trust• Equity Markets (JSE)• Entrepreneurship• Real Estate

Investment OptionsInvestment Options

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Building Blocks for Investing• Use a portfolio approach to investing

Equities (stocks) Real Estate Fixed-income (bonds) Cash equivalents (money market instruments)

Asset Classes

Building blocks for investingBuilding blocks for investing

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Time Horizon & Investing• When do I need the money I invested back

in my hands? • The longer one has to invest the more risk

they can choose to take• Match your type of investment you choose

to the time horizon

Time HorizonTime Horizon

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The 'Rule of 72' is a simplified way to find out how long an investment will take to double.

Dividing 72 by the annual interest rate, gives you a rough estimate of how many years it will

take for an investment to double.

The Rule of 72The Rule of 72

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If you are getting 12% interest on your investment it will take 6 years for your initial

investment to double.

The Rule of 72The Rule of 72

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Based on interest rates offered by the Government of Jamaica (20.875% p.a.) today

it will take approximate 3.5 years for your initial investment to double.

The Rule of 72The Rule of 72

7217.875

= 4 years

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Note: These figures are based on achieving a monthly retirement income of the equivalent of $50,000 per month in 2009. Figures are

calculated based on 11.59% inflation per year.

Years to Retirement

Monthly Income needed at

Retirement

Rate of Return on Savings

Total Amount needed for 25 years of

Retirement

10 $158,453.60 12% p.a. $15,044,622.85

20 $502,150.84 12% p.a. $47,677,490.47

30 $1,591,352.13 12% p.a. $151,093,396.58

Monthly Investment Needed to Reach Total Amount Needed At Retirement

Retirement PlanningRetirement Planning

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• Refinance debtoLower interest rates

• Limit the use of credit cards

• JN Mortgage Options• Upkeep savings• Moratorium on monthly mortgage payments• Capitalization• Re-advance• Extension of mortgage loan term• Interest Rate Adjustments

Debt ManagementDebt Management

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Managing DebtTwo types of Debt:

Good Debt - An investment that creates value and builds WEALTH (ie, student loan, home and business loans).

Bad Debt - Purchase that goes down in value or has NO potential to increase in value (ie, disposable or durable goods).

Debt ManagementDebt Management

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Reaching Your Financial Goals

• Decide what you want to achieve?• Determine when you want to achieve it by?• Put a cost to your goal.• Choose the appropriate investments.• Begin saving and investing towards it.

Reaching Your Financial GoalsReaching Your Financial Goals

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"As long as the earth endures, seedtime and harvest, cold and heat, summer and winter, day and night will never cease."

Gen 8:22

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THANK YOU!