Build Personal Wealth

Understanding The Need For Building Personal Wealth

To keep up in a fast-paced world, you have to spend most of your time and energy focusing on the immediate concerns of daily life. That's why future goals and dreams often get pushed aside until it's too late. You need a strategy and a solid plan to put you on track and keep you there.

A disciplined financial plan helps you invest regularly in savings vehicles that support your financial goals. Once your plan is in place, you can focus on the day-to-day concerns.

Focusing On Major Goals

How much you will need for the future and how you will accumulate it depend on your financial goals and your personal investment style. One of the most important goals many people share is funding their children's education. With college costs rising, (see chart below) early planning is the key. Saving regularly allows your money to grow so that when the time comes, you'll be ready.

Expected College Costs

School Year (Fall)	4-Year Cost (Public College)	4-Year Cost (Private College)
2004	$61,066	$129,932
2005	$64,120	$136,428
2006	$67,326	$143,250
2007	$70,692	$150,412
2008	$74,226	$157,933
2009	$77,938	$165,830
2010	$81,835	$174,121
2011	$85,296	$182,827
2012	$90,223	$191,968
2013	$94,734	$201,567
2014	$99,470	$211,645
2015	$104,444	$222,228
2016	$109,666	$233,339
2017	$115,150	$245,006
2018	$120,908	$257,256
2019	$126,953	$270,119
Projected costs based on the 1999-2000 average four-year public and private college costs, as reported by the U.S. Department of Education.

Reaching Your Dreams

Most of us have personal goals we would like to pursue. You may dream of a secure retirement, a second career or continuing your education. Your personal objectives will determine the amount you'll need to fulfill your dreams. How you build your savings will depend on the strategies you choose to get there. Whatever you do, good planning is the key to making your dreams come true.

Directing Your Money Wisely

Saving money is only the first step in acquiring wealth and reaching your dreams. You also have to make sure your money is working hard for you. Here are the major factors affecting the growth of your assets:

Interest. Your assets can grow by earning interest. This is a percentage earned on the amount you've invested.

Appreciation. Your assets can grow through appreciation or gaining value over time.

Tax Deferral. Your assets can grow through tax deferral. The less money you pay in taxes today, the more money you'll have working for you tomorrow.

Wealth-Building Strategies

Does 2% really matter? When it comes to building personal wealth, it may. In the early years of accumulation, a 2% difference in return may not make a large impact on your growth. But, over time, compound interest combined with an additional 2% in return can make a large difference in the outcome. Just look at the effect over time of interest rates on the growth of a $10,000 one-time investment.

The interest illustrated here is compounded annually. Accumulated values are shown at the end of the periods indicated and reflect interest only, without taxes or charges. The rates are hypothetical and are not indicative of any particular investment.

Tax Deferral

It's also wise to take advantage of opportunities for tax-deferred savings. This chart shows the dramatic difference tax-deferred compounding can make in a long-term savings plan.

Please note that this chart does not reflect state income taxes or applicable charges, which vary by product and may include an annual administrative fee, surrender charges for the first several years, and - for variable products - a mortality and expense charge on money in variable portfolios. These taxes and fees, if included, would reduce the return on the tax-deferred annuity. In addition, certain kinds of currently taxable investments may be taxed at lower capital gains tax rates, which could make the return for such investments more favorable, thereby reducing the differences between the investments shown. When you're ready to withdraw the money from the tax-deferred investment, it will be taxed as ordinary income and there may be IRS penalties if you make a withdrawal before you're 59½. You should consider your time horizon and tax brackets, both current and anticipated, when making an investment decision.

Systematic Investing Helps To Minimize Risk

Higher rates of return are generally associated with higher risk investments when measured over a long period of time. So if you tend to take a more conservative approach to investing, how can you take risks that may offer the potential for a higher return and still feel comfortable with your decision?

Dollar cost averaging can be an effective strategy. Using dollar cost averaging, you can buy fewer units when prices are high and more when prices are low, with the goal of lowering the average cost by investing over time. Keep in mind that dollar cost averaging does not assure a profit or protect against loss. Since a dollar cost averaging plan involves continuous investment in securities regardless of fluctuating prices, the investor should consider his or her financial ability to continue purchases through periods of low price levels.

Here's how it works:

Your Strategy For Success

There are a number of effective ways you can choose to build wealth. There are also a variety of vehicles to get you there. They may include a combination of annuities, mutual funds, life insurance, a 401(k) plan, stocks, bonds, certificates of deposit and others. Your individual goals and objectives will help determine the best strategy for you. The key is to save regularly and invest wisely.

Where Do You Go From Here?

Don't just dream about the future – plan for it. Talk with an experienced financial representative today about your goals and expectations. Together, you can create a plan for your financial freedom. The sooner you start, the sooner you'll achieve it!

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