Financial Independence (Getting to Point X): An Advisors Guide to Comprehensive Wealth Management

Praise for Financial Independence

"A clear, concise, step–by–step approach to developing a financial life plan, Financial Independence: Getting to Point X provides readers with practical action steps to make progress in addressing their goals. The book not only provides a road map, but also includes real examples of how to implement the strategies based upon your situation. A must–read for everyone who wants to educate themselves with a practical approach to identifying and pursuing their goals."
Roger Ochs, President and CEO, H.D. Vest Financial Services

"A critical read dealing with one of the most dangerous threats to our nation and its citizens financial literacy. No matter where you are in your financial life, you will find this book contains advice and wisdom that is timeless."
Sarano Kelley, founder, The Kelley Group

"The book is an excellent resource for anybody, whether just entering the business world or you need an explanation that is understandable. The case studies are informative and really summarize the chapters. I know that I will recommend it to my students in my practice management program."
Dr. Eric S. Studley, Associate Clinical Professor, G.P. Director, Director of Practice Management, Director of Ergonomics, New York University College of Dentistry

"Financial Independence is simply a must–read! John Vento has done a marvelous job in providing the necessary up–to–date tools needed by all Americans of all ages in fulfilling their dreams. This book is written in simple language and offers definitions, anecdotes, tips, guidance, and solutions to life–cycle′s financial issues and concerns. Bravo John!"
Mary L. Lo Re, PhD, Chairperson, Department of Business Administration, Professor of Finance, and Periclean Leader, Wagner College

"John Vento has done a terrific job in providing practical insights and sound advice about the pathways to achieve financial independence. This book should be on the ′must–read′ list for anyone seeking insight into comprehensive wealth management in these difficult economic times. I applaud him for his thoughtful approach to the subject."
Dean L. Balsamini Sr., Director, Small Business Development Center, College of Staten Island

Preface: Living the American Dream xiii

Acknowledgments xvii

Introduction Getting to Point X xix

Financial Literacy and the New Norm xx

Point X: Our Fundamental Financial Goal xxi

Ten Key Issues to Comprehensive Wealth Management xxii

Our Biggest Expense xxiii

Take a Financial Planning Checkup xxiv

The Power of This Book xxvii

Chapter 1 Committing to Living within Your Means 1

The American Dream Becomes the American Nightmare 1

Living within Your Means: The Essential Step 2

Simple Saving 6

Chapter 2 Understanding Taxes 11

A Brief History of the U.S. Tax System 12

Organizing and Retaining Your Records 15

Tax–Preparation Services 16

Accumulating Wealth through Tax Planning 18

Chapter 3 Determining Your Financial Position 23

Figuring Your Financial Net Worth 24

Case Study: How One Couple Learned They Were Spending More Than They Earned 24

Making Sense of Cash Flow 35

Establishing Your Financial Goals 57

Finding Trusted Advisors 61

Chapter 4 Managing Debt 67

Case Study: How Two Doctors Went Bankrupt in Only a Few Years What Not to Do 67

Basic Principles for Managing Debt 71

Good Debt versus Bad Debt 73

Credit–Card Debt 74

Auto Loans 80

Student Loans 81

Home Mortgage Loans 82

Business and Investment Loans 86

Understanding Credit 87

Your Credit Report and Your Credit Score 89

Preventing Identity Theft 93

Analyzing Your Debt 94

Chapter 5 Insuring Your Health and Life 99

Choosing a Health Insurance Plan 100

Long–Term Care Insurance 111

Disability Insurance 118

Life Insurance 122

Buying Insurance Policies 128

Chapter 6 Protecting Your Property with Insurance 133

Case Study: How a Lack of Insurance Wiped Out One Woman s Life Savings 134

Homeowner s Insurance 136

Automobile Insurance 140

Umbrella Liability Insurance 144

Buying Insurance Policies 147

Chapter 7 Paying for College 153

Case Study: How Not Saving for Your Child s Education Can Ruin Your Finances and Your Child s 156

Conducting a Needs Analysis for Your Children s College Educations 160

Strategies for Saving Money for College Education 162

Education Tax Deductions and Credits 179

Chapter 8 Planning for Retirement 187

Case Study: Saving versus Not Saving for Retirement: The $1.7 Million Difference 187

Retirement Equation: Calculating Your Personal Point X 191

The High Cost of Waiting to Save for Retirement 193

What You Can Expect to Receive from Social Security 196

Qualified Retirement Plans 198

The Difference between Traditional IRAs and Roth IRAs 203

Fixed and Variable Annuities 209

Retirement Funding: Needs Analysis 212

Chapter 9 Managing Your Investments 221

Analyzing Your Risk Tolerance 222

Stocks, Bonds, Mutual Funds, and Exchange–Traded Funds 226

Diversification and Modern Portfolio Theory 234

Asset Allocation and Rebalancing 237

Dollar–Cost Averaging 243

Inflation and Taxes: The Biggest Drains on Investment Return 245

Medicare Surtax on Net Investment Income 246

Chapter 10 Preserving Your Estate 251

The Federal Gift and Estate Tax System 252

Legal Documents to Consider for Estate Planning 252

The Probate and Administration Process and Why You May Want to Avoid It 257

Using a Planned Gifting Strategy 261

Ownership of Property and How It Is Transferred 262

Reasons for Creating a Trust 265

Benefit from a Family Limited Partnership 277

Estate Tax Planning and Life Insurance 278

Chapter 11 The Time Value of Money 285

The Rule of 72 286

Appendix A: Selecting a Trusted Advisor 301

Appendix B: 101 Ways to Save $20 or More per Week 311

Appendix C: Basic Concepts and Definitions of Various Types of Taxes 321

About the Author 341

Index 343

JOHN J. VENTO is the President and CEO of the certified public accounting firm, John J. Vento CPA, P.C., and the certified financial planning firm of Comprehensive Wealth Management, Ltd. Mr. Vento is a New York State Certified Public Accountant (CPA), holds a Master of Business Administration (MBA) in Taxation, and is a Certified Financial Planner (CFP). Today, after nearly three decades, Vento′s practice concentrates on servicing more than 200 small–to–midsize businesses, and more than 1,000 individuals. His organization is focused on professional practices, high net–worth individuals, and those committed to becoming financially independent.
John has been ranked among the most successful advisors of a nationwide investment service firm and has held this distinction since 2008. He has been an adjunct professor at St. Francis College as well as Wagner College. He has been the keynote speaker at various seminars and conferences throughout the United States that focus on tax and financial strategies that create wealth. He also lectures on investing and financial planning throughout New York City as part of the New York Public Library′s initiative on financial literacy.