The Ultimate Financial Plan: Balancing Your Money and Life

PRAISE FOR The Ultimate Financial Plan

"Jim Stovall is one of the most extraordinary men of our era."
Steve Forbes, President and CEO, Forbes magazine

"Jim Stovall is one of the greatest and most inspiring authors of all time. I love reading and re–reading his brilliance. If you are ready to make your life work magnificently and have money flow into your experience read this masterpiece and share it with those you love and care about."
Mark Victor Hansen, Co–creator, Chicken Soup for the Soul

"Money is a tool, and here′s a helpful toolbox to put it to good use. Tune out the frenzied stock traders on TV and read this book."
Chris Guillebeau, blogger and author of The Art of Non–Conformity

"Jim Stovall and Tim Maurer′s financial know–how and ability to explain it in a way that inspires you to make changes is unmatched. Whether you′re looking for ways to boost your own wealth or just want a better handle on the world of personal finance, this book is for you."
Kimberly Palmer, author of Generation Earn and personal finance columnist at US News & World Report

"Money is not the root of all evil nor the answer to all your problems. But it is a crucial tool to making your life what you want it to be. This is the message of The Ultimate Financial Plan, but it′s not just a book about the ′philosophy of money.′ It′s full of practical, powerful advice for using money to its best advantage without letting it take over your life."
Robert Brokamp, CFP, Senior Advisor, The Motley Fool

Foreword xi

Preface xv

Acknowledgments xix

Introduction xxi

Chapter 1 The Gift of Money: Money 101 1

The Value of Money 3

Money Beliefs 4

Chapter 2 The Gift of Purpose: Personal Principles and Goals 7

Personal Principles 7

Goals 10

Chapter 3 The Gift of Discipline: Household Cash Flow 17

Personal Financial Statements 17

Financial Crises 25

Chapter 4 The Gift of Enough: Debt and Financial Freedom 27

Financial Freedom 28

The Danger of Discontent 29

Emergency Reserves 32

Bad Debt 35

Better Debt 39

Economics and Emotions 41

The Cure for More 43

Chapter 5 The Gift of Discernment: Risk Management Decisions 45

The Accident 47

Risk Management Techniques 48

How Insurance Works 50

Chapter 6 The Gift of Security: Life Insurance 55

Life Insurance: Why? 55

Life Insurance Needs 59

Life Insurance: How? 62

Life Insurance Wants 67

Different Types of Life Insurance 70

Purchasing Life Insurance 73

Chapter 7 The Gift of Certainty: Auto, Home, and Liability Insurance 77

Auto Insurance 79

Homeowner s Insurance 82

Excess Liability (Umbrella) Insurance 84

Chapter 8 The Gift of Health: Health, Disability Income, and Long–Term Care Insurance 87

Health Insurance 89

Types of Plans 89

HSAs and FSAs 90

Recent Health Insurance Changes 93

Disability Income Insurance 95

DI Moving Pieces 96

Social Security, Medicaid, and Medicare 99

Long–Term Care Insurance 100

LTC Moving Pieces 101

Chapter 9 The Gift of Clarity: Investing and Portfolio Management 107

Stocks and Bonds 109

All Things Considered Equal? 111

Mutual Funds 112

Economic Analysis 115

Market Valuation Analysis 117

Technical Market Analysis 118

Efficient or Not? 119

Passive versus Active 119

Investing with Style 121

Relative Return versus Absolute Return 123

Index Huggers, Return Chasers, and Risk Managers 126

Decisions, Decisions 128

Chapter 10 The Gift of Transparency: Annuities 131

Immediate Annuities 134

Fixed Annuities 136

Variable Annuities 137

Equity Indexed Annuities 140

Annuity Disadvantages 141

Annuity Advantages 143

Chapter 11 The Gift of Preparation: Tax Planning 147

Tax Myths 150

Tax Rules 155

Chapter 12 The Gift of Learning: Education Planning 159

Family Education Policy 162

Having The Talk (no, not that talk) 166

Education Savings Plan 169

The 50 Percent Rule 172

Chapter 13 The Gift of Fulfillment: Retirement Planning 175

Retirement Past 179

Retirement Present 180

Retirement Future 180

Employer–Sponsored Retirement Plans 181

401k Rollovers 182

Traditional IRAs 184

Roth IRAs 185

Traditional versus Roth 186

Roth IRA Conversions 187

Fulfillment Planning 189

Retirement Makeover 193

Chapter 14 The Ultimate Gift: Estate Planning 197

Wills 200

Durable Powers of Attorney 205

Advance Directives 206

Beneficiary Designations 208

Probate 212

Estate Tax 214

Chapter 15 The Gift of Discretion: Choosing a Financial Advisor 217

"The Big Three" 222

Financial Planner Compensation 224

Finding a Professional Planner 228

Chapter 16 The Gift of Action: Your Plan for Money and Life 233

Fundamental and Practical Change 234

Reprise 235

Stay Connected 238

Notes 241

About the Web Site 245

About the Authors 247

Index 249

Jim Stovall is among today′s most sought–after motivational speakers. The author of fifteen books, including the bestselling The Ultimate Gift and The Ultimate Life, both of which have been made into major motion pictures by 20th Century Fox, he has been a champion Olympic weightlifter, a successful investment broker, and an entrepreneur. He is the cofounder and President of the Emmy Award winning Narrative Television Network, which makes movies and television accessible for America′s thirteen million blind and visually impaired people and their families. In June 2000, Stovall was selected as the International Humanitarian of the Year.

Tim Maurer is a financial planner, educator, and blogger. He is Vice President of the Financial Consulate, a Fee–Only financial management firm in Hunt Valley, Maryland. He teaches financial planning at his alma mater, Towson University, and educates through his blog, TimMaurer.com. Maurer has been a frequent guest on CNBC and featured on ABC′s Nightline. The co–host of Money, Riches & Wealth, a weekly Baltimore radio show, he has contributed to the Wall Street Journal, the New York Times, the Washington Post, and Money magazine, among other leading publications.