Wednesday, May 3, 2017


2 hours preparation | 5-10 minutes presentation

Title page 

Analysis of the family financial health
The foundation of any good financial plan is A) examining net worth through a balance sheet and B) examining the ability to build upon net worth via a cash flow statement
Balance sheet
  • Assets: Cash (in the bank, money market accounts, or CDs), All investments (mutual funds, college savings accounts, individual securities), Home value (the resale value of your home), Automobile value (the resale value of your car), Personal Property Value (resale value of jewelry, household items, etc), Other assets
  • Liabilities: Remaining mortgage balance, Car loans, Student loans, Any other personal loans, Credit card balances
Cash Flow
  • Salary
  • AGI (Total Adjusted Gross Income)
  • Taxable Income
  • After Tax Cash Flow
Rationale for the advice the financial planners will give to the family; in other words explain the recommendations or the options the family might consider
  • Contribute retirement up to match
  • Pay off high interest debt
  • Any additional saving for retirement
  • Saving for college
How to get there:
  • Reduce spending
  • Increase saving
  • Refinance Debt


Stock market: average 7% returns
Rest save for college or retirement/kids
College: if low income, coverdell educational ira -Coverdell ESAs allow money to grow tax deferred and proceeds to be withdrawn tax free for qualified education expenses at a qualified institution below 30 years old
Medium income: American opportunity credit (tax credit for college)
High income: 529 plan for retirement – no tax credit for money put in, but all money used tax-free when grown and used for college

Don’t want to reserve enough money to pay for entire college education
        If put too much money, too much money in 529 (not gonna be used) and penalty to take out
Roth IRA: put money in after tax, grows tax deductible forever
        Income limitations
        If people have a job, match into retirement plan (401k, if nonprofit 403V, all the flavors have same rule and companies offer match
        Even if have debt, always recommend put in money up to company’s match (free return immediately)
All financial planning built on cash flow and balance sheet
        Build balance sheet (net worth) first, then build cash flow statement (ability to build net worth); determine positive or negative cash flow
        If positive, then opportunity to build balance sheet
        If negative, need to address (refinance debt, lower high expenses, i.e. high car payments – smaller car)
        Need to get to positive cash flow
Then address issues
College, retirement always more important than saving for college
College can always be financed, retirement cannot so wanna take care of
Need to take care of high interest debt (>7%) first besides match
Only healthy debt is mortgage, student loans (tax deductible), even high ones can be consolidated to lower ones to below 5% and then build other areas of balance sheets
Analyze health: balance sheet and cash flow
Recommendations to improve cash flow and clean up balance sheet
Only goals are retirement, college, paying down debt
Assume have match ~ 3%
Basic rule of 401k: safe harbor – guarantee level of match, allows highly paid people to max out 401k (protection for lower people)
Can’t discriminate vs poorer people
In order for rich people to max out, need poor people to match (3-4%)

Contribute retirement up to match
Pay off high interest debt
Any additional saving for retirement
Saving for college

If negative cash flow, preliminary recommendations

Salaries; assumption for federal, state taxes, income taxes, add in deduction (standard deduction), exemption for each member of family ~$200,000 / year full exemption and deduction; take salary and deduct out what contributing to 401k and deductions (if $100,000, contribute $3000/yr to 401k, at $97000, another $6000, deduct stuff) taxable income ~$81,000 and get adjuncted growth income; federal and state income taxes come off as, deduct expenses,
Search for standard deduction and exemption?
2017 tax exemptions
Deduct per person from taxable income ($4000 per person? X 4 = $16000)
Tax write off for mortgages, property taxes
Categories of things that can itemized
Safe to assume 3%, stress test at 4% inflation
        If were to average 4%
30 yr mortgage 4%
2007: money market account was paying 5.5% and now could refinance 4%

Capital market assumptions
Around 7-9% return on money higher for younger, lower for older and will outweigh mortgage payments
Recommendation for money
If young, more aggressive 80% stocks, 20% bonds 20 (100% stocks), 30 (90% stocks) 60 (60, 40) (look up average returns for this portfolio)
Domestic stocks (S&P 500), European stocks SPY index, emerging markets (EPM?), EFA (global developed European markets), Russell 2000

Hypothetical: 80% 20% of 80%, 60% in S&P 500, 10% in Russell, 20% in Europe, rest in emerging markets and small cap
Maintain ratio from 80% to 70% (i.e. always 5% in emerging, 5% in Russell, 5% in EFA)
Then 70%, 30%, later 60%, 40% and no lower

Charge planning fee?????

Slide – foundation of any good financial plan is A) balance sheet, B) cash flow
Next two slides show them
More important to show individual year
Current cash flow more important
Leverage to pull: goal to retire by __ age. Work longer, save more, spending less (in retirement too)
Riskiness of portfolio

Not much control over: market returns, house, live to 80-95? Die earlier

Wednesday, May 27, 2015

Just keep dreaming.

Children are the biological reason for anyone on Earth to continue being on Earth. Children are the paths to tomorrow, the future leaders of the world. Teachers and educators should take great honor in their positions in society, because they are literally shaping the future of all humanity. No adult should ever tell a child to stop dreaming, their dreams are the future discoveries of science, classic novels, or end to famine. In fact, although any child is best at dreaming, everyone should be doing it. Think up new and exciting things is what makes life really worth it. The things we learn enable us to put to use the things we dream up. As the school year comes to a close, remember that although learning may stop, thinking does not have to. This is a message widely known to the population, and continually expressed through speeches and media. These speeches below are just some of the few. The new movie Tomorrowland focuses on the dreamers of this world. People, however, usually do not get the message. Start thinking, start dreaming, start doing things that can change the world for all of us or change your world. Stay hungry, stay foolish, keep thinking.

Thursday, May 14, 2015


This post is going to go a little off topic, as recent testing has opened my eyes to some issues.
Throughout high-school we are taught to constantly be thinking about our future, constantly be thinking about what we plan for our lives. As always, there are two sides to this story. One side believes that the future, and what we do with it, can be planned for, controlled. On the other side stand those who believe that destiny is a cruel mistress, that already has a path planned for all of us. If our destiny is in our own hands, then we should do everything in our power to best ourselves and set out on the correct path. If we cannot control destiny, then why try to, why strive to be the best possible if all we can do is sit along for the ride. Here lies the problem in believing in predestination. A lack of work output results in an overall lack of effort. This lack causes the disappointment seen in many teachers faces when students show up without any effort put into their work. A separate, usually overlooked, problem with the school system, is the overuse of tests. These tests mandated by suit-wearing politicians and business professionals do not aid in evaluating the understanding of a subject. Many students may know all of the subject material but are simply not good test-takers, they then have no power to get good scores or grades. Many companies have even begun to monopolize testing, turning it into an industry instead of an education. This video discusses many of these topics in further detail, with some added satire.

Thursday, May 7, 2015

The Big What If

In John Green's best-selling novel, Looking for Alaska, he addresses a concept called "the Great Perhaps". On a side note, this novel, while some may view it as uneventful, contains many exquisite outlooks on life. The Great Perhaps is a concept that embraces the randomness of the universe. Statistics allows for predictability, however, in the end, the universe does everything based on randomness, unpredictability. The Great Perhaps can be interpreted in multiple ways by different people. To some, this perhaps may be the future, an unknown to everyone. To others, this perhaps could be life. Life, governed by the unpredictable universe, is unprecedented in its ability to surprise us. Life can be something wonderful or something terrible, usually a combination of both, the important thing is how we view it. Everything has a reaction, a chain of events that follow. These events can always be viewed in a positive and in a negative way. It is up to the individual to view the occurrences in their lives as positive or negative, and as such, view the entirety of their lives as well-lived or a waste. This viewpoint on life a mystery determined by subconscious. If we are able to realize this, however, we can grasp our outlook and change it for the better. Lastly, the Great Perhaps can be interpreted as death, death which is the most unknown and most feared thing by all living things. For all living things have a programmed desire to live. Many go into this Great Perhaps unready and unwillingly, but what for all humanity knows, it could be something wonderful. For death should not be feared. All of us are going to die, it is one of the many inevitability of life, a gift granted at our first breath. The important thing, is to accept this death as an incentive to do great things in the short time available on this Earth and in the known reality. Perhaps the Great Perhaps is not meant to mean one thing, it is meant to leave us wondering, exploring, striving, living.

Thursday, April 30, 2015

The Big Crash

Many people know of the Large Hadron Collider (LHC) located near Geneva, Switzerland. However, few understand its true purpose. There are rumors that this collider may allow us to create black holes or unlock the secrets of time travel. The current truth is much more realistic, but just as interesting. This collider is a result of research conducted by CERN, the nuclear research organization for the European Union. CERN employs over 10,000 people from dozens of countries to work on the LHC, essentially a huge particle accelerator. The LHC is an underground ring stretching 17 miles in circumference. It is designed to model the first few moments of the Big Bang. Utilizing thousands of enormous superconducting magnets, each cooled using liquid helium to a temperature colder than space itself, the accelerator can smash protons together at nearly the speed of light (99.9999991% light speed, to be exact). In recent years the collider has brought forth new information regarding the composition of atoms. We learn in school that atoms are the smallest form of matter. However, new information from the LHC reveals that this is not entirely true. There are even smaller things, called quarks, that make up the protons and neutrons found in the nucleus of an atom. The discovery of these quarks has led to much deeper understandings in the field of quantum physics.  In addition to quarks, many pairs of anti-quarks appear and disappear at random inside a proton. Additionally, the LHC has led to the discovery of the Higgs Boson, initially only theorized. This is the substance thought to be the fundamental source of mass. The LHC has had the ability to make these discoveries due to the aid of one of the largest computer-grids ever created. This grid has the ability to process the 25 petabytes of information produced by the LHC each year, that's 25,000,000 gigabytes. The new understandings resulting from this huge amount of data may not yet lead to the creation of black holes or time travel, but it is providing us with new ways to view the world around us, and the universe beyond. The study of quarks and Higgs Boson may seem far removed from our daily lives, but could one day lead to inventions that now seem the stuff of science fiction.

Thursday, April 23, 2015

Looking Up to the Stars

Our universe has been the subject of study since the dawn of agriculture, once people needed to know when to plant and harvest, they had to memorize the stars during a certain time of year. As a species, we have been craning our head up for centuries, wondering what is out there? Until the middle of the second millennium, all thought relating to the cosmos has been associated with a form of divine power. The invention of the telescope that corresponded to the enlightenment period, a time when educated persons began to question the church and its teachings. These ideas were again reinvented shortly after WW1, when Albert Einstein came up with his ideas of relativity. In short, he presented the idea that what we see and perceive, may not be what is truly there. M. C. Escher portrayed this in his paintings such as this one shown. The direction of the staircase all depends on who is perceiving the staircase in the first place. Nowadays, Physicists widely accept that our universe is made up of about five percent matter and atoms, twenty-five percent dark matter, and seventy percent dark energy. What we are able to perceive and interact with is matter, and while looking through a telescope, one can see thousands and thousands of galaxies each filled with billions of stars and trillions of planets, this is a mere five percent of the universe. Of the other ninety-five percent, dark matter is the least understood- it is a postulated particle which would interact very weakly with normal matter. This dark matter has been researched through careful observation of the speed at which objects orbit the center of a galaxy. This speed is used to calculate the amount of mass the object about which things rotate holds, however, this calculation brings to light a large piece of missing mass (now thought to be dark matter). Dark energy, on the other hand, is much more perceivable.  First off, ever since the big bang happened fourteen billion years ago, the universe has been expanding, we know this because of the hue of stellar objects as they move towards and away from us. According to the laws of physics the majority of the people know, this expansion should be slowing down. Upon research of Super Nova explosions to trace this expansion, scientists have discovered that the speed at which the universe is expanding is actually speeding up.

sources:   (painting)

Thursday, April 16, 2015

Coolest Post Around

Temperature, is defined as the energy contained in the movement of atomic particles. Basically, how fast the little atoms that make up every perceivable object in this universe are moving. The colder something is, the less these atoms are moving, hence solid ice when water is frozen. The hotter something gets, the more these atoms move, and we end up with gases, like water vapor. While most people use the Fahrenheit or Celsius measurements to measure heat, scientists use a different scale called kelvin. The intervals of Kelvin are sized the same way as those of celsius except are 273.15 degrees lower because in this scale, 0 is absolute zero. Absolute zero is the theoretical phenomenon that would occur if an object's atoms were cooled to the point where there was absolutely no movement in them. While scientists have never reached it yet, Wolfgang Ketterle, a German physicist, led a team of researchers in 2003 that cooled sodium atoms to 450 picokelvins. Written out that would be .00000000045 kelvin, less than one billionth of 1 degree. This research has led to the discovery of new forms of matter such as Bose-Einstein condensates which form at extremely cold temperatures and have zero viscosity, meaning they are as slippery as physically possible. To show how cold that really is, take space, an empty void filled with nothing but photons blasting off from other stars. Space lies at -451.81 degrees Fahrenheit (-270.45 degrees celsius). In Kelvin, space in 2.7 degrees, meaning that space itself is warmer than the temperatures required to obtain absolute zero.