Investment Planning for Everyone -The Basics - MyFRS

[Pages:42]Investment Planning for Everyone - The Basics

Reasons Why People Don't Invest

1. They're already paying a lot into Social Security 2. They "invest" $10 per week in lottery tickets and it

should pay off soon 3. They believe that inflation means their money is

growing 4. Their money is safely under the mattress 5. Their rich Aunt Mabel isn't feeling so well lately

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Workshop Objectives

? Learn a process for investing

? 6 simple steps

? Review the free resources available to you

? Provided by the FRS

? Create an easy to follow action plan

? Customized to meet your investment goals

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Personal Action Plan

Action Steps

Done

1) Find your 6-digit PIN and create a

account. (If already

registered, use User Id and Password

created.)

Action Step

? See Appendix A for your own Personal Action Plan.

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Resources Available to You - FREE MyFRS Financial Guidance Program

Advisor Service Choice Services FAQ's, Calculators

Toll-free MyFRS Financial Guidance Line,

staffed by Ernst & Young financial planners and the Division

of Retirement

Employee workshops: Visit for an updated list of workshops,

locations and dates

Action Step

Print and e-mail communications

All resources are available to FRS Pension & Investment Plan Members

? See Appendix B to learn more about the MyFRS Financial Guidance Line.

MyFRS Financial Guidance Line: 1-866-446-9377

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The Importance of Saving AND Investing

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How Do Your Goals Influence Your Investment Decisions?

Goals

Monthly Bills Car Purchase

Vacation Home Purchase

College Fund Retirement

Short-Term (1-3 years) Immediate

Intermediate Term Long-Term

(3-7 years)

(7 or more years)

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Traditional Savings Vehicles

? Savings Accounts

? Checking Accounts

? Money Market Accounts / Funds

? Certificates of Deposits (CDs)

? Treasury Bills

Volatility Risk LOW

Inflation Risk HIGH

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How Will Inflation Affect You?

$25,000 Year 1

$37,000 Year 10

$54,800 Year 20

$81,100 Year 30

Assumption: 4% rate of inflation. Rounded to the nearest $100.

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How Investment Returns Affect Buying Power

? Assumes a starting balance of $10,000 and 4% inflation

Nominal Return

"Growing Poor

Safely"

0% 2%

4%

6%

8%

10%

10 Years $6,800 $8,200 $10,000 $12,100 $14,600 $17,500

20 Years $4,600 $6,800 $10,000 $14,600 $21,300 $30,700

Rounded to the nearest $100.

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