SEVEN FAT YEARS

According to Social Security records,

85 out of 100 Americans have less

than $250 when they reach age 65.

SEVEN FAT YEARS

Take up the fifth part of the land of Egypt in the seven plenteous years.

– Genesis 41:34

That the land perish not through the famine.– Genesis 41:36

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Joseph Principle:

Save during FAT years

for lean years

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• Saving vs. Hoarding

Genesis 41:46-57 Joseph saved 20%

Luke 12:16-21 Rich man had to build bigger barns

• How are these situations similar?

• How are they different?

• Why was God pleased with one, displeased with other?

SEVEN FAT YEARS

“…thou shalt lend unto many nations, and thou shalt not borrow.”

– Deuteronomy 28:12b

• Biblical definition of investing is to lend.

SEVEN FAT YEARS

Make Friends with Money

“Make to yourselves friends of the mammon of unrighteousness.”

– Luke 16:9

Educate yourself in money matters.

Generational Numbers

48 Million “Mature”

81 Million “Boomers”

38 Million “X-ers”

Previous Generation finances the retirement of present generation.

SEVEN FAT YEARS

SEVEN FAT YEARS

Social SecurityEmployer PlanIndividual

30%Employer

Plan

30%Social

Security

40%Individual

SEVEN FAT YEARS

ParentsIncome rose 524%

(age 20-30)

49 workers support 1 retiree

Average age at death 63

Peak earnings after kids gone

Homes appreciated greatly

(Buy Your Second Home First)

Paid Debt with inflated $

You34%

2.7 workers(2018)

90/95

still paying for kids

0-3% per yr.

1998 inflation 1.7%

SEVEN FAT YEARSHow Much Do I Need?

_____ 75% of gross

_____ + adjust for inflation 4% per year

_____ - subtract Social Security Earnings 1 (800) 772-1213 / www.ssa.gov

_____ - Employer - Call Human Resource

_____ - GapGap x 12 mo. Divided % return = savings needed.

$2000 x 12 = 24000 divided 12% = 200,000

SEVEN FAT YEARS

$200,000 @ 12% 20 years = $911.21

$200,000 divided $911.21 = $219.49 per month

amount need to save

$200,000 x 12% = $24,000

Not using principal

SEVEN FAT YEARS

Three plans for making a million by age 65, assuming the money ears 12% a year

• Age 25, start investing $59 a month

• Age 40, put $10,000 down AND

invest $493 a month

• Age 50, put $50,000 down AND

invest $1,540 a month

Three Principles for Lean Years

• Spend less than you earn - 5 to 20%– Pastor $8000 per year income– $1,663,000 liquid assets

• Remember the cost of lost opportunity

• Consider cost of making a mistake

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• 401 (K) - Modern Day Pension

• 403 (b)

• Employer Match

• Move funds if job changes

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• 401(K)

• 403(b)

• ROTH IRA-no tax on earnings from IRA

• IRA-no tax on contribution to IRA

Vehicle for investment

NOT the investment

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Current Contributions

• Pre-Tax Deferral Percent 7% of pay

• After-Tax Contribution Percent 0% of pay

• YTD Employee Contributions

$3,282.44

• YTD Company Contributions

$4,274.63

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Balances as of December 31, 1998

• Your Contributions Since 1/1/88 to REVSOP: $20,861.94

• Your Total REVSOP Balance:

$157,677.55

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Ways to invest IRA, 401(K), 403(b)• Cash- CD, Money Market• Annuity - contract with insurance co.• Mutual Funds

– very conservative - money market

– conservative - money market, bonds, stocks

– moderate - income producing stocks, large cap stocks

– growth - large cap stocks, mid-cap stocks

– aggressive - small cap stocks

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$166 month automatic withdrawal =

$2,000 per year

$332 month = $4,000 per year for two

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98 3yr 5yr 10yr

Washington Mutual (5.75%) 18 24 22 18

1-800-421-4120

Am. Century Inc/Grth 27 29 23

1-800-345-2021

Legg-Mason Value 47 41 32 21

1-800-577-8589

Janus Twenty 75 43 30 26

1-800-525-8983

Legg-Mason Value$10,000 Grew to $254,865 17yr

0

50,000

100,000

150,000

200,000

250,000

300,000

Value of Shares

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$0

$5,000

$10,000

$15,000

$20,000

$25,000In

flat

ion

Rat

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U.S

.T

reas

ury

Lon

g-T

erm

Gov

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ent

Lar

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ompa

ny

Growth of $1000(1973-1997)

SEVEN FAT YEARSUnderstanding Risk

-40%-30%-20%-10%

0%10%20%30%40%50%60%70%

SmallStocks

INTLStocks

LargeStocks

Bonds T Bills

PositiveAverageNegative

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$1,000 Deposited Each Year

End of Year Values

5 yrs 10 yrs 15 yrs 20 yrs

18% 7,154 23,521 60,965 146,628

20% 7,442 25,959 72,035 186,688

22% 7,740 28,657 85,192 237,989

24% 8,048 31,643 100,815 303,601

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Rule of 72

Divide 72 by rate of return =

# of years to double money

72 divide 18% = 4 years

72 divide 15% = 4.8 years

72 divide 12% = 6 years

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$130,000 - 4 yr 260,000 Age 40

- 8 yr 520,000 Age 44

- 12 yr 1,040,000 Age 48

- 16 yr 2,080,000 Age 52

- 20 yr 4,160,000 Age 56

- 24 yr 8,320,000 Age 60

- 28 yr 16,640,000 Age 64

SEVEN FAT YEARS

BEGIN

WITH THE NEXT PAY RAISE