Million Dollar Sailor

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Million Dollar Sailor
Saving and Investing

• A personal wealth building program for Sailors
  and family members.

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Agenda
What Does it Take to be a Millionaire? Starting
Early Compound Interest Building Sound
Plan Investing for Long Term
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How to Make 1Million by 60
2,623 87.43 472, 140
848 28.27 254,400
507 16.90 182,520
308 10.27 129,360
155 5.16 78,120
Assumes a 10 Rate of Return
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Compound Interest
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Compound Interest and Time
228,033
Thousand
83,673
36,000
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Should I Spend That Nest Egg?
228,033
94,144LOST!
133,889
Thousand
Spend nest egg ona car
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Building a Solid Financial Plan
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Saving versus Investing
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Building a Solid Financial Plan
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Savings Tools
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Tools of Investing
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Asset Classes
Everything else is a combination of these three!
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Fixed-Income Bonds
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Equity Stocks
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Mutual Funds
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Mutual Funds

• Disadvantages
• Cost Despite Negative Returns
• Lack of Control
• Price Uncertainty
• Not Insured
• Complex Records

• Advantages
• Professional Management
• Diversification
• Liquidity
• Affordability
• Benefits Small Investor

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Choosing a Mutual Fund

• Goals/ Objectives
• Performance/ Risk
• Management
• Cost Loads and Fees
• Services

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Deciding Among Options

• There are no good or bad tools, just good or bad
  uses
• There is always a trade-off between S-L-Y
• Well-balanced portfolios have a combination of
  all asset classes
• Higher potential for earnings over the long-term
  with stocks
• Steady income stream provided by bonds is great
  for retirement
• Focus on the Long Term
• Investing can be complex, but doesnt have to be!

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Planning for Retirement
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Steps to Retirement Planning
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Consider the Factors

• Pre-Retirement Income (60-70)
• Retirement Date
• Life Expectancy
• Compound Interest
• Time

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Sources of Retirement Income
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Ballpark Estimate
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Committing to Your Goals
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Thrift Savings Plan

• Pre- tax Contribution
• Tax Deferred Growth
• Low Administrative Costs
• Easy to Manage
• Flexible
• Portable

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The TSP Investment Options
Returns are as of end of year 2006. For
up-to-date returns go to www.tsp.gov.
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Personal Retirement Accounts

• Traditional IRA
• Rollover IRA
• Roth IRA

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Focus on the Long Term

• Pay Yourself First
• The Military Saves Campaign
• Maximize Tax-Deferred Opportunities
• Make Disciplined,
• Regular Monthly Investments
• That Fit in Your Budget

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Steps to Retirement Planning

• Reevaluate
• Are the factors still realistic?
• Has there been a change in income needed?
• Is it time to try a different tool ?

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Take Action!
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Sources of Help

• Command Financial Specialist
• Fleet and Family Support Center
• Internet Resources
• Certified Financial Planner

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Saving and Investing Roadblocks and Road Signs