[an error occurred while processing this directive] ZEPHYR Magazine
                              T H E
                           Z E P H Y R
                  __     M A G A Z I N E
                 Issue #21                7-11-86
            A weekly electronic magazine for users of 
                        THE ZEPHYR II BBS 
                    (Mesa, AZ - 602-894-6526)
                owned and operated by T. H. Smith
                    Editor - Gene B. Williams 
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                            (c) 1986

   We have another guest author this week - Bob E.shtmlan. The 
topic is something that most people don't care to think about,
until it's too late. Financial planning for the future.
   After all, it's so much easier to run out and get that new 
stereo today than to worry about a few loaves of bread 10 years 
from now, right? Problem is, when you *need* those loaves of 
bread, having the luscious stereo isn't going to do much good. 
It doesn't even bake well and is a bit difficult to digest.
   Then there's the excuse that you are too young to worry about 
it - or the one about barely having enough to pay the rent and 
bills that you have. Think about either for just a few minutes 
and you'll soon come to realize just how appropriate this week's
issue is to you. If you can't spare a couple of dollars now, while
you're young and in your prime, what will you do when you're 
old and crochety (like me?). And if you're not earning enough 
to pay the bills now, how about in 30 years when you not only 
will be out of work, but will also have no prospects of earning 
a living?
   Seriously! Don't pass up this week's issue. In fact, I urge 
that you download it and keep it for future reference. For that 
matter, there couldn't be a better week to spread the word about 
The Zephyr Magazine among all your friends. 

                       FINANCIAL PLANNING:
                           An Overview
                         Robert E.shtmlan
   Personal financial planning is the development and implementa-
tion of total, coordinated plans for the achievement of one's 
overall financial objectives.
   Everyone's financial objectives are different depending upon
his or her individual circumstances, goals, attitudes, and needs. 
However, the major objectives of most people can be categorized 
as follows:
1. Protection against the personal risks of
   a. Premature death
   b. Loss of income due to disability
   c. Medical care expenses
   d. Property and liability losses
   e. Unemployment
2. Capital accumulation for
   a. Establishing an emergency fund
   b. Family purposes
   c. Building a general inv.shtmlent portfolio
3. Provision for income after retirement
4. Reduction of tax burden
   a. During one's lifetime
   b. After one's death
5. Estate planning (planning for your heirs)
6. Inv.shtmlent/property management
   Consider this. In the U.S. today about 95% of retirees
have under $250 in savings at the time of retirement. If
these people had started on course of financial planning 30
or 40 years ago I doubt that they would be in the shape their
in now, relying on Social Security, living from check to
   You know the things you want. What you wish to accomplish.
Now is the time to start building what is known as a capital
base to achieve them. The old tradition " work hard and save
your money" just doesn't work anymore. You can't put your
savings in the bank earning 5 to 6 percent and expect to get
where you want to go.
   The past few years have seen an increased desire by many
Americans to participate in the inv.shtmlent process. They have
learned that putting today's money to work helps build
tomorrow's secure financial base. And a great feeling it is
   But investing wisely isn't easy. Not in today's economy.
Not with:
1. Inflation - creating artificial increases in income with
   losses n purchasing power.
2. Middle-income Americans are being pushed into higher tax
3. The increasing complexity of tax laws.
4. The difficulty of saving for retirement.
5. An economy that gets more complex. So complex that even
   the so-called experts can't agree as to what direction it
   will take.
   For many of us, the inflationary spiral of recent decades
has undermined not only our hopes for a secure retirement but
also our ability to make ends meet, accumulate savings, reduce 
taxes, send our children to school or expand our businesses.
   Whatever your goals are, the big question is: What can a
person depend on?
       Not just Social Security.
       Not just pension plans.
       Not just life insurance.
       Not just inv.shtmlents.
   Enter financial planning - a comprehensive study and
analysis of your current financial situation, with an eye to
building the future that you want.
   Financial planning involves the whole picture. Money
matters such as cash flow (how much is coming in and going
out each month), budget, net worth, inv.shtmlents, savings,
taxes, insurance, retirement and estate planning to name a
   Consider this: Do you have a will? Are you over or under
insured? Is kind of insurance you have appropriate? If your
out of work due to sickness or injury do you have adequate
disability coverage? Are the things you own properly
protected? Do you spend more than you earn (or come close to
it?) Due you have enough money to set aside for inv.shtmlent
purposes? Is it enough?
   List the things that you want to accomplish. You know what
you want. How much will it cost to achieve your objectives?
Development of a financial plan can turn your wants and
desires into specific objectives that can be measured in
dollars and sense.
   By now you're probably thinking about how much it's going
to cost you to achieve your goals. Think about the following:
1. What do you need to do at present to generate cash flow
   that will make investing possible? With tax planning,
   careful budgeting, and saying "NO" to those urges to
   spend, you will find it possible.
2. To maintain your present lifestyle after retirement, how
   much retirement income will you need? For most of us,
   Social Security won't be enough.
3. What will it cost to send your children to school?
   Financial planning can help determine how much you'll need
   and when you'll need it. You will know how much to set
   aside to account for inflation and rising costs.
4. For most of us, financing a home is the first major
   inv.shtmlent decision. If you already own a home, you may
   want a larger one (especially those of you with growing
   families).  For some people it would mean significant tax
   savings as well as building a capital base through the
   buildup of equity in the home.
5. Your personal estate. You want your assets secure so you
   can pass them down to your descendents and provide for
   your beneficiaries. Financial planning can show you how.

   For you readers with annual incomes of at least $25,000. I
would recommend a visit with a good financial planner. I'm
sure you'll find it very worthwhile and will soon be on the
road to achieving your goals whatever they may be. Fees
charged by financial planners very but I think it is safe to
say most people can look to a fee of from $200 to $500. Those
readers who are just starting out in life, whether just
completing college or starting a family, I will be writing a
series of articles which will explain in detail the concepts
   Even though most of you are probably just out of high
school or still in college, if you start now to get a handle
on your financial goals you will be that much further along
in the years to come. It doesn't take a lot of money to begin
saving for the future. There are several ways someone earning
even minimum wages can earn higher rates of interest than a
passbook savings account in a bank.
   One form of inv.shtmlent that pays higher rates of interest
is United States Savings Bonds. They can be purchased for as
little as $25 (for a $50 bond). The holder is quaranteed a
minimum of 7.5% interest if the bond is held for 5 years.
Not bad considering most big bank certificates of deposit
($500 - $1000) minimum are currently earning little more
interest than that.

   Another way you can invest in a small way is by purchasing
shares in a mutual fund. A mutual fund is a inv.shtmlent fund
operated by an inv.shtmlent company. The inv.shtmlent company
buys stock in many different companies on the stock exchange
with the money it takes in from it's investors. The wonderful
thing about mutual funds is that most funds don't charge a
sales fee. These are called "no-load" funds. There are a lot
of funds where you can open an account for as little as $50.
There is even a mutual fund (the Wade Fund) that you can open
for $1.00! If you would like to learn more about mutual funds
I highly recommend the William Donaque "No-Load Mutual Fund
Guide". It can be found in B. Dalton or Waldenbook stores for
about $5. I have my IRA in a mutual fund and in 1985 the fund
earned a 25% return. Try getting that at your local bank.
   For those of you who would like further information on
investing and financial planning in general I highly
recommend Money magazine and Sylvia Porter's Personal
Financial Planning magazine. Both have a lot of helpful
information for the small investor and young people just
getting started in life.
   My next article will focus on budgeting. Creating a budget
is the first step towards getting where you would like to be
   In conclusion I would like to leave you with something my
grandfather told me when I was a kid.  During the early
1920's my grandfather had a job in which he earned one dollar
per week. When his father asked him a couple of days later
how much he had left, my grandfather replied, "5 cents." His
father then told him, "That 5 cents you have left is what you
   From that time on my grandfather has saved 10% of
everything he earned. He retired at the age of 55 has always
paid cash whenever he buys anything, even his home.


   Ahhhh, that's what I needed. A quickie run-through to 
correct a couple of typos, but no other work on my part 
required other than the opening and ending (and posting). I
think Bob did a fine job for us this week. And those of you 
who agree, take a moment to let him know that his efforts 
have been appreciated.
   If you have any questions, drop Bob a message on the 
magazine board here, or in E-Mail.

   Next time around? Well, it will probably be as much a 
surprise to me as it will be to you. I have 3 issues written 
ahead at this point, and another in mind to slam together 
this next week.

Zephyr Magazine is © Gene Williams. All rights reserved.