SAVING WISELY Chris Andrews CFP Wealth Management Advisor

SAVING WISELY Chris Andrews, CFP® Wealth Management Advisor Northwestern Mutual Silicon Valley, CA

ABOUT THE SPEAKER • Chris Andrews • 2004 graduate from Stanford • Wealth Management Advisor with Northwestern Mutual since 2007 • Lives in Menlo Park with his wife Erinn (BA ’ 04, MA ‘ 09) and their two kids, Izzy (4) and Ashton (2) • Loves good wine, singing, and everything about Stanford sports

KEY POINTS • Key Concepts – What am I saving for? – Why start early? • Behavior – How do I save by design? – How do I build good saving habits? • Strategies/Options – Where should my short-, mid-, and longterm money go?

SAVING CONCEPTS

SAVING CONCEPTS • Two Phases in Life – People at work (Career) – Money at work (Retirement) • 3 buckets – Short-, mid-, and long-term money • Timing the market vs. Time in the market No investment strategy can guarantee a profit or protect against loss. All investments carry some level of risk including the potential loss of principal invested.

POWER OF COMPOUNDING HYPOTHETICAL INVESTMENT IN STOCKS Past performance is no guarantee of future results. This is for illustrative purposes only and not indicative of any investment. © 2016 Morningstar. All Rights Reserved. Stocks are represented by the Ibbotson® Large Company Stock Index. An investment cannot be made directly in an index.

WHAT IS THE RULE OF 72? How long would it take your savings to double assuming different rates of return? RATE OF RETURN RULE OF 72 (72 / RATE OF RETURN) YEARS TO DOUBLE 3% 72 / 3 24 7% 72 / 7 10. 3 12% 72 / 12 6 The use of the Rule of 72 is for illustrative purposes only and is intended to use a mathematical concept to approximate percentage rates relative to time. Investments and corresponding rates of return may fluctuate over time.

WHAT A DIFFERENCE 2% CAN MAKE $200 a month invested for 20 years… At 2% $58, 959 At 4% $73, 355 At 6% $92, 408 At 8% $117, 804 At 10% $151, 874 Assumes a monthly investment of $200 and reinvestment of all dividends and capital gains. The hypothetical returns are for illustrative purposes only and are not intended to represent the return of any specific investment.

BEHAVIOR

Shaping Your Savings Behavior • Starting small still makes a difference • Put together a budget • How much can you afford to set aside? • Clarify your savings goals • Which of the 3 “buckets” are you saving toward? • Automate your savings • Saving by design rather than default

Avoid budget pitfalls When life throws you curveballs, sticking to a budget can become a challenge. Make sure your budget accounts for: • • Listed items under-calculated Impulse purchases Forgotten bills Emergencies

Strategies / Options

What’s The Right Fit for Each Bucket? • Short-term savings • Checking account for monthly expenses • Online savings accounts for the emergency cushion (higher interest, out-of-sight out-of-mind, ability to automate)

What’s The Right Fit for Each Bucket? • Long-term savings • Any retirement plans available through your part-time or summer employer (401 k, 403 b, etc)? • ROTH IRA • Mid-term savings • Brokerage accounts • Mutual funds, Index funds, ETFs, stocks, bonds, etc. No investment strategy can guarantee a profit or protect against loss. All investments carry some level of risk including the potential loss of principal invested.

Questions? Chris Andrews Phone: (650) 264 -4902 Email: chris. andrews@nm. com Website: www. chrisandrews-nm. com Northwestern Mutual is the marketing name for The Northwestern Mutual Life Insurance Company, Milwaukee, WI (NM) (life and disability insurance, annuities) and its subsidiaries. Chris Andrews is an Insurance Agent of NM and Northwestern Long Term Care Insurance Company, Milwaukee, WI (long-term care insurance), a subsidiary of NM. Registered Representative and may also be an Investment Adviser Representative of Northwestern Mutual Investment Services, LLC (securities), a subsidiary of NM, broker-dealer, registered investment adviser, member FINRA and SIPC. Representative of Northwestern Mutual Wealth Management Company®, Milwaukee, WI, a subsidiary of NM and limited purpose federal savings bank that provides financial planning, investment management, and trust services. There may be instances when this agent represents companies in addition to NM or its subsidiaries.