Monezy Financial Analysis Brochure for Insurance, Benefits and Financial Assessments

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F I N A N C I A L

N E E D S

A N A L Y S I S

F I N A N C I A L N E E D S A N A LY S I S The foundation for our future financial wellness starts today!

PERSONAL ASSETS (HOME, CAR)

INVESTMENTS (RRSP, TFSA, MUTUAL FUNDS)

LIFE, MORTGAGE + DISABILITY INSURANCE

GOVERNMENT PROGRAMS

WHAT WE OWN

Roadblocks while alive: Inflation Taxes Bad Investments Disability Spending your savings Lack of discipline Debt (credit cards, car loans, etc.)

Monthly living expenses

Cash needed at times of need (Disability, death): Immediate Money Fund Debt Liquidation Fund Emergency Fund Mortgage/Rent Payment Fund Child/Home Care Fund Educational/Vocational Fund Quality of Life Fund

BE PREPARED TO HAVE MONEY WHEN IT’S NEEDED Retirement, Dreams Protecting the financial wellness of yourself and your family

G E N E R A L I N F O R M AT I O N Your Name: ____________________________________________________________ Your DOB: _____________________________________________________________ Your Spouse’ Name: _____________________________________________________ Your Residence Address: _________________________________________________ ______________________________________________________________________ Your Email Address: _____________________________________________________ Your Website (optional): __________________________________________________ Child Child Child Child Child Child Child Child

1 Name: ___________________________ Child 1 DOB: ____________________ 2 Name: ___________________________ Child 2 DOB: ____________________ 3 Name: ___________________________ Child 3 DOB: ____________________ 4 Name: ___________________________ Child 4 DOB: ____________________ 5 Name: ___________________________ Child 5 DOB: ____________________ 6 Name: ___________________________ Child 6 DOB: ____________________ 7 Name: ___________________________ Child 7 DOB: ____________________ 8 Name: ___________________________ Child 8 DOB: ____________________

Living at Home Renting Own Home Monthly Rental $ _______________ Mort. Bal. $ ____________ Int. Rate _____% Do you have a will? Y/N Executor’s Name: ____________________________ Does your spouse have a will? Y/N Executor’s Name: ____________________ Have your will been reviewed? Y/N Has your wife’s will been reviewed? Y/N

O CC U PAT I O N A L I N F O R M AT I O N Employer: _______________________________ Title: __________________ Employer Phone: ____________ Business Address: ____________________ Spouse’ Employer: __________________________ Title: __________________ Spouse’ Employer Ph: _________ Spouse’ Bus. Address: ________________ Social Insurance #: _________________Spouse’ S.I.N.: ___________________ Do you have a RRSP? Y/N What’s the balance? _______________________ Does your wife have a RRSP? Y/N What’s the value? _________________ Where is RRSP invested? _________________________ Rate: __________% Where is spouse’ RRSP invested? __________________ Rate: __________% Are you a member of a registered pension plan? Y/N Is your wife a member of a registered pension plan? Y/N

I N S U R A N C E I N F O R M AT I O N Let us borrow your policies for review Life Insurance

Company

Disability Insurance

Policy No.

Company

Mutual Funds

Date

Policy No.

Type of Insurance

Date

Stocks

Monthly Payment

Monthly Benefit

Beneficiary

Owner

Type

Annual Premium

Total Coverage

Wait Period

Benefit Duration

Savings/Chequing Account

CPP/QPP Death Benefit: _________________________________________________________ Car Insurance: _________________________________________________________________ Home Insurance: ________________________________________________________________ Medical: ______________________________________________________________________

QUICK TIP

Insurance companies will not pay the life insurance, critical illness or disability claim unless YOU tell them. So make sure your family knows your policy numbers and the number to the insurance company you are with.

F I N A N C I A L I N F O R M AT I O N Your Annual Income: ____________ Spouse’ Annual Income: _______________ Projected Earnings to Retirement (P.E.R.) ($_______ x ___ years) $ _________ Spouse’ P.E.R. ($_______ x ___ years) $ __________ Savings: _____________ How did you save your money?

Weekly Monthly Satisfied which amount accumulated to date? Y/N Amout that can be set aside: $_________________

Other Weekly

Monthly

Next salary review: _______________ Anticipated increases: _______________

Savings: $ _________________ RPP’s: $ ___________________ GIC’s: $ ____________________ Mutual Funds: $ _____________ Other: $ ____________________

QUICK TIP Find out your credit score. Go to Equifax/TransUnion online. You can sign up for free through Credit Karma or check with your local bank for free credit monitoring.

C O N S I D E R YO U R G OA L S What are some of the financial goals you want to achieve in your life? Make a list and prioritize the things you want to pay-off and how you want your life to look like after they are paid off.

Financial obligations to consider: 1. Pay off your mortgage 2. Pay off your car loans 3. Pay off your line of credit and/or credit cards 4. Pay off any other debt Things you would want to do once these debts are paid off: 1. Travel, Go RVing 2. Pay for Children’s College/University 3. Finish those projects around the house 4. Spend more time with your children/grandchildren 5. Take a cooking class

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FINANCIAL GOALS + INFO 1. What do you feel is your most important personal goal?

2. How do you feel about saving for your children’s education?

3. How do you feel about renting versus buying a home?

4. How do you feel about your career?

5. Have you had your government pension plan benefits verified recently?

6. How do you feel about saving for retirement?

7. At what age do you wish to retire?

8. What do you want your life insurance to do for you?

9. How do you feel about insurance an a spouse and children?

10. How long could you live on your reserves if you were disabled tomorrow?

11. If I could show you a better buy for your auto and home insurance, wou1d you be interested?

12. In your opinion, what percentage of income should be saved?

13. When investing money would you take risks that might cause you to lose some or all of your capital, not any risk, or are you somewhere in between?

14. What is the most important thing to you in this world -- bar nothing?

15. Do you have bank mortgage insurance?

16. Do you have any creditor insurance that you are paying monthly from your credit cards or both?

Next, we will get into your cash needs and evaluate your situation >>

Goals & Dreams

Goals & Dreams

CASH NEEDS Immediate money fund This fund is for the bills presented after death, which will have to be paid. They may include: • • • • • •

Burial expenses Attorney’s/Executor’s fees Federal taxes Provincial taxes Surrogate ·court costs Medical and hospital expenses

Debt liquidation • Total of installment credit • Unpaid notes • School and auto loans • Outstanding bills Emergency fund This fund is for unexpected bills not readily payable from current income. Such things as: • Major repairs to the home or automobile • Medical emergencies, etc.

50% of annual incomes may be sufficient or 3 months income Mortgage, rent/payment fund What would it take to pay your mortgage off today? or What amount is sufficient for a ten year rent fund?

Monthly rent $__________ x 120 mths = $____________

CASH NEEDS Child/Home care fund To pay for new expenses created as a result of the death of a spouse formerly performing these duties without any cash outlay.

You: ‘Amount per year’ $____________ x ____________ = $____________ Spouse: ‘Amount par year’ $____________ x ____________ = $____________

Number of years until the child is 18 Discount Factors

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.93 1.8 2.6 3.4 4.1 4.8 5.4 6.0 6.5 7.0 7.5 7.9 8.4 8.8 9.1 9.5 9.8 10.1

Educational/Vocational fund The cost of a four year undergraduate education or comparable vocational training will vary by province and type of school. $30,000 - median average

Subtotal Total of current savings, other liquid assets, government benefits and existing life insurance New capital required (optional)

RESPS 47% of those planning on post-secondary education for themselves or children, anticipate using their savings to pay for their education. Likewise, 40% plan to borrow to pay for a portion of their education and 12% don’t have any plan at all.

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INCOME NEEDS Income objective: Based on a study by a group of economists’, the following are typical income objectives in order to permit a family to “remain in their own world” after the death of a wage earner. Assumption is the mortgage on residence is paid, or a rent fund has been established, and educational expenses are provided for separately.

Annual gross income Up to $35,000 $35,001 to $39,000 $39,001 to $43,000 $43,001 to $48,000 $48,001 to $100,000 $100,001 to $200,000

% of gross income required: 70% 66% 63% 60% 57% 54%

Mortgage insurance need (mortgage balance) $ A related study has found two-income households generally outspend their one-earlier counterparts. Therefore, if both spouses are presently working, 70% of their total gross income should be provided regardless of the income level.

Present income (all income of both wage earners)

$

Income objective (57% of above)

$

Anticipated annual Government Pension

$

Preliminary income shortage

$

Total annual income shortage Amount of capital required to provide this income $

/

%

$ $

Cash needs requirement

$

Total new capital required

$

H OW M U C H W I L L YO U E A R N Over your lifetime you will earn a fortune $____________ x ____________ = $____________ Avg annual earnings

A spouse may add to that fortune

Working years to retirement

$____________ x ____________ = $____________ Avg annual earnings

Working years to retirement

Total projected earnings

= $____________

H OW M U C H W I L L YO U K E E P ?

L I F E - T H E E C O N O M I C R O L L E R C OA S T E R

spend

e sav

Career starting point 18-22 ---------------------------------------------------> 60-70 (Retirement) 100 people -----------------> 29 dead | 68 financially disappointed | 3 financially successful

T H E P R O B L E M & S O LU T I O N AS ILLUSTRATED above, at different times in our lives we are likely to save and invest a great deal of money.

UNFORTUNATELY, when we most need these funds to live on, we may have spent them on other things.

WHAT’S NEEDED is a plan to help assure money will be there when we really need it.

TYPES OF INSURANCE MANY DOLLARS GOING FOR NAUGHT! Arthur L. Williams, Associate Professor of Insurance at Penn State University, has published an article for the Journal of Risk and Insurance regarding the fate of Term Insurance Policies.

Here are the conclusions: 1. After 5 years, 58% of all policies were terminated or converted.

2. After 20 years, less than 2% of all policies were in force.

3. After 20 years, less than 1% of term policies resulted in death claims.

IN OTHER WORDS...

The odds are 100 to 1 against Term Insurance ever becoming a claim

1 Year term insurance policies do not last Insurance companies have known for years that term insurance doesn’t last! Buying oneyear term insurance that eventually becomes too expensive to afford is a poor plan for any family. Some companies do this because term insurance with smaller term years are cheaper, and one-year term insurance is the cheapest insurance one can buy. Making it seem like you are getting way more coverage for a great deal. The fact is that if it’s not converted at some point to a LEVEL cost of insurance product, what seamed like a great deal with one-year term insurance can turn into a disaster. If the salespersons mutual fund illustration (which is not guaranteed) fails, or if the client uses any of their money then they could end up with no insurance in the future because of skyrocketing premiums. premiums. You may ask “why would they do that?”. Well, they do that because it puts more money in their pocket and takes more out of yours.

TYPES OF INSURANCE Insurance definition: (Investopedia) “Insurance policies are used to hedge against the risk of financial losses” Investments: an asset or item acquired with the goal of generating income or appreciation through measured risk! (known as Beta) Why would anyone want to combine something that takes away risk (insurance) and then add back on a product that adds risk (investments/mutual funds) its counter productive, don’t combine the two.

THESE ARE THE TYPES OF LIFE INSURANCE 1. Term Insurance – Temporary insurance used for temporary solutions that expires or renews after a set period of years For example: • 10yr or 20yr Term lasts 10/20 years and then the price goes up dramatically or it ends completely • Bank mortgage Insurance – can expire when you no longer have a mortgage and then you won’t have any more coverage and the beneficiary is the bank, not your spouse. So you don’t get to choose how to spend your money in the worst times of need 2. Permanent Insurance – you will have this insurance until you pass on. It will not go up in monthly cost.

The Birnco Way: what we recommend is inexpensive term insurance for covering life needs on the insurance life cycle (see the following diagram to help you) and a reasonable amount of affordable permanent insurance. (This means the monthly cost will never go up and you won’t be stuck with no insurance in the future, because your term insurance expired or was YRT/ART, and also because unaffordable yearly renewable term.

Conclusion: Term and permanent insurance both are extremely important, but should be purchased with a specific goal in mind.

YO U R B U D G E T What’s your budget for your term and permanent insurance? $________________ $________________ $________________ $________________

Because life insurance gets more expensive as we age, buying kids a permanent policy (preferably paid up if it’s in the budget) early can take away the future expense from them when they are older.

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Life Insurance - Life Cycle

INCOME & DEBT LEVELS

Young Singles Young Couples

Young Family

Middle Aged Family

Pre-retirees

Life & TPD Insurance

Make sure it’s permanent for surviving spouses and last expenses

Trauma Insurance

Building a career No dependants Short term debt

Mortgage Starting a family Young children

Mortgage reducing Children close to finishing school

Retirees

Mortgage almost paid off or fully paid off Low debt Independent children Large surplus income

Debt completely extinguished No longer working income is from existing savings and other assets

Term needs less now because kids are on their own (adults now have to make sure they have permanent solution in force so no burden on family)

Make sure it’s permanent life insurance for your surviving spouses and last expenses + final expense costs

Income Protection

AGE Buy a permanent solution here: T100/whole life, universal life, not YRT while young and affordable

Make sure you have a permanent solution for the future and affordable term for your spouse or partner

Biggest term insurance need for your mortgage and children’s education and upbringing

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R E T I R E M E N T A N A LY S I S Desired retirement age Monthly amount that can be set aside

$

Number of years to retirement

$

Cash fund created at your retirement to supplement • Government benefits • Pension plans • Other savings and investments (assumed interest rate

$ %)

Tax savings (if any) created by plan (monthly tax deductible amount $ bracket

x your top tax $

%)

If these tax savings are set aside in a

plan $

*the retirement cash fund will be increased by If the plan selected includes life insurance, it will create an immediate death benefit of $

$

Total cash fund created at your retirement Annual lifetime income provided by cash fund (cash fund $

x expected rate of return

%

$

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FA C T O R S

F O R A C C U M U L AT I O N / E D U C AT I O N A L A N A LY S I S Monthly amount required to accumulate $1 Years to midpoint Rate of Return 6% 8% 10% 12% 6% 8% 10% 12%

1 2 3 4 5 6 7 8 9 10 .08066 .03913 .02530 .01839 .01426 .01152 .00956 .00810 .00692 .00607 .07979 .03831 .02451 .01763 .01352 .01080 .00886 .00742 .00631 .00543 .07893 .03750 .02374 .01689 .01281 .01011 .00820 .00678 .00570 .00484 .07807 .03671 .02298 .01617 .01212 .00946 .00758 .00619 .00513 .00430 11 12 13 14 15 16 17 18 19 20 .00534 .00474 .00423 .00379 .00342 .00310 .00282 .00257 .00235 .00215 .00472 .00413 .00364 .00323 .00287 .00257 .00230 .00207 .00187 .00169 .00415 .00359 .00312 .00273 .00239 .00211 .00186 .00165 .00147 .00131 .00364 .00310 .00266 .00229 .00198 .00172 .00150 .00131 .00114 .00100

Child’s name and years to midpoint

__________ ____________ ___________

Amount to be accumulated

$_________ $___________ $__________

Multiplied by monthly factor (from table above)

x_________ x___________ x__________

Equals monthly amount required

$_________ $___________ $__________

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FA C T O R S

F O R R E T I R E M E N T A N A LY S I S Monthly amount required to accumulate $1 Rate of Return 6% 8% 10% 12% 6% 8% 10% 12% 6% 8% 10% 12% 6% 8% 10% 12% 6% 8% 10% 12%

1 2 3 12.3 25.6 39.5 12.5 26.1 40.8 12.7 26.7 42.1 12.8 27.2 43.5 10 11 12 164.7 187.3 211.2 184.2 212.0 242.1 206.6 240.8 287.7 232.3 274.7 322.2 19 20 21 425.7 464.3 505.3 535.9 593.1 654.9 681.7 785.7 858.4 875.7 999.0 1139.0 28 29 30 872.6 939.0 1010.1 1256.3 1373.6 1499.3 1845.0 2053.4 2277.9 2754.8 3125.0 3533.6 37 38 39 1639.3 1754.4 1872.7 2732.2 2976.2 3236.2 4694.8 5208.3 5747.1 8264.5 9345.8 10526.3

Years to midpoint 4 54.4 56.7 59.2 61.8 13 236.6 274.7 320.6 375.9 22 548.8 721.5 961.5 1295.3 31 1084.6 1636.7 2531.6 3984.1 40 2000.0 3508.8 6369.4 11904.8

5 70.1 74.0 78.1 82.5 14 263.6 274.7 320.6 375.9 23 595.2 794.3 1074.1 1472.8 32 1162.8 1785.7 2809.0 4504.5 41 2136.8 3816.8 7042.3 13333.3

6 86.8 92.6 98.9 105.8 15 292.3 348.3 417.9 504.5 24 644.3 872.6 1199.0 1672.2 33 1246.9 1945.5 3115.3 5102.0 42 2283.1 4149.4 7812.5 15151.5

7 104.6 112.9 122.0 132.0 16 322.7 389.9 474.4 581.4 25 696.4 956.9 1338.7 1897.5 34 1336.9 2118.6 3448.3 5747.1 43 2433.1 4504.5 8620.7 16949.2

8 9 123.4 144.4 134.8 158.5 147.4 175.5 161.5 194.8 17 18 355.0 389.3 434.6 483.3 536.8 605.7 668.0 765.7 26 27 751.9 810.4 1049.3 1149.4 1490.3 1658.4 2150.5 2439.

35 36 1432.7 1531.4 2309.5 2512.6 3831.4 4237.3 6493.5 7299.3 44 45 2597.4 2770.1 4878.0 5319.1 9523.8 10526.3 19230.8 21739.1

Monthly amount to be set aside

$__________

Multiplied by growth factor (from table above)

x__________

Equals cash fund created

$__________

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A P L A N T O H E L P A S S U R E YO U R

FUTURE FINANCIAL SECURITY The three cornerstone of financial planning are: Accumulation

Benefits available from this policy for each cornerstone

Cash to assist you in paying for:

• Education • Other financial objective Amount available in

Retirement

years

$

Cash for your retirement at age to supplement: • Government benefits • Pension plans • Other savings & investments

Protection

$

Cash to help assure your obligations are met in the event of: $ • Death - Total immediate benefits: You Spouse $

$

Monthly premium

$

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AC C U M U L AT I O N A N A LYS I S Accumulation purpose

__________ ____________ ___________ $_________ $___________ $__________

Amount desired

x_________ x___________ x__________

Years

$_________ $___________ $__________

Monthly amount required (assumed interest rate ______%) Total monthly amount required for all objectives

$__________

E D U C AT I O N A L F U N D I N G A N A LY S I S

L I V I N G S O LU T I O N S In addition to the possible use of current income, loansand scholarships during the ‘Educational Years’ most people want to build a fund for their children’s education.

Child’s name and age Amount desired Funds

__________ ____________ ___________ $_________ $___________ $__________ x_________ x___________ x__________ $_________ $___________ $__________

Additional funds required Funds will normally be needed between your children’s ages 18-22 Years until child starts education

__________ ____________ ___________

Years until child completes education

__________ ____________ ___________

Years to midpoint of education period

__________ ____________ ___________

Monthly amount required (assumed interest rate ______%)

$_________ $___________ $__________

Total monthly amount required for all children

$__________

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DISABILITY & CRITICAL ILLNESS Present annual income (not including spouse’ income)

$_________ x___________ $__________

Income objective (_______% of above)

__% of above) $__________ $_________ ($___________

Income presently provided: • Government pension

$_________

$__________

• Present long term disability income insurance

$_________

$__________

• Other income

$_________

$__________

Total income

$_________

$__________

Income shortage

$_________

$__________

Amount of capital required at ______% the day disability commences to provide this income ($_____________ /______________%)

$_________ x___________ $__________

Income shortage

( $___ / ___%) $__________ $_________ $___________

Assumed interest rate

Income Assumed shortage interest rate

Monthly premium required to provide disability income payments equal to $______ / $______a year payable at $_________ $__________ the rate of $______ / $______ per month

* If there are children, this amount reduces to $________ / $________ when youngest child reaches 18, (25 if full-time student). See government Pension Disability Table.

Disability income objective: Based on a study by a group of economists’, the following are typical income objectives in order to permit a family to “remain in their own world” after the onset of a disability.

Annual gross income Up to $35,000 $35,001 to $39,000 $39,001 to $43,000 $43,001 to $48,000 $48,001 to $100,000 $100,001 to $200,000

% of gross income required: 80% 76% 72% 68% 65% 62%

APPEARANCES CAN BE DECEIVING! If you make monthly deposits, which of the following equity markets will provide the best investment return?

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MARKET INCREASES

UNIT VALUE

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5

0 0 12 24 36 48 60 72 84 96 108 120 Months

UNIT VALUE

10

MARKET FLUCTUATES

5

0 0 12 24 36 48 60 72 84 96 108 120 Months

UNIT VALUE

10

MARKET DECLINES, THEN RECOVERS

5

0 0 12 24 36 48 60 72 84 96 108 120 Months

INVESTMENT PLAN THAT WORKS D O L L A R C O S T AV E R A G I N G Objective: Make money in an unpredictable market.

Strategy:

Consistent, repetitive deposits in the Equity Fund over a specified period of time.

Benefits:

• • • •

Example:

Monthly deposits of $100 for 10 years Total investment: $12,000 Initial unit value: $5

Profit from markets that fluctuate or even decline Significant gains in value on your investments Higher long term returns than GIC’s Investment growth is eligible for the Capital Gains Exemption

TREND

UNIT VALUE

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IN 10 YEARS

MARKET INCREASES

Final unit value: Number of units: Purchased: Value of investment: Increase in value:

5

$10 1,669 $16,690 39%

0 0 12 24 36 48 60 72 84 96 108 120 Months

UNIT VALUE

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MARKET FLUCTUATES

Final unit value: Number of units: Purchased: Value of investment: Increase in value:

5

0

$10 2,076 $20,760 73%

0 12 24 36 48 60 72 84 96 108 120 Months

UNIT VALUE

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MARKET DECLINES, THEN RECOVERS

Final unit value: Number of units: Purchased: Value of investment: Increase in value:

5

0 0 12 24 36 48 60 72 84 96 108 120 Months

$5 4,829 $24,145 101%

Notes

Notes

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