PERSONAL FINANCE SPEAKERS
Why you should book a personal finance speaker.

With all the confusion on Wall Street and Washington, with IRAs and 401(k) s crashing, the economy tumbling home prices, and stock funds taking a historic dive whipping out much of your value, you probably need help in building a nest egg and to find out how to manage his or her money in the future. This is why hiring a personal finance speaker is important for your next meeting or special event.

That empty feeling of losing money may have happened to you often in the past couple years, but personal finance speakers know someone who has an answer: Warren Buffett, the most famous investor in America. He puts first things first.

Rule Number 1: Don’t Lose Money. When someone asked him what was Rule Number 2, Buffett said, Rule Number 2: Don’t forget Rule number 1

Sometime we can’t see the obvious because we can’t see the future from where we stand in the present. Just think of the hard-earned money you’ve lost in the market that won’t be there when you retire. Then think about the money you could have made on the money you lost over the last twenty years.

Let’s be honest, Warren Buffett is on to something when he says don’t lose money in the market. In fact, personal finance speakers believe this is the really big factor in building your future financial life.

You only have to look at 2008 to see how Buffett’s rule comes into play. According to Lipper, who has been tracking stock mutual funds since 1959, if you had $100,000 in your 401(k) plan at the start of that year, you’ve lost $39,500 by the end of the year.

But the full effect of Buffett’s rule becomes clear when you consider you’ll have to earn a 66 percent return in the next year on your new balance of $60,500 just to get your account back to where it was a year earlier. What if you can’t beat the experts on the Street and earn 66 percent on your 401(k) assets in one year? If you can earn an average annual return of 9 percent you’ll need an additional 6 years to turn the $60,500 back into $100,000. Personal finance speakers would stress that another painful lesson for buy-and-hold investors is that under this example you just lost 6 years of earning a return on your original 401(k) money.

Let’s use the $39,000 loss and say you have about 25 years until you collect Social Security. You’re probably wondering what it costs to lose this money when you retire because you sat on your hands and were afraid to do anything. If you can earn an average 9 percent annual return until you collect Social Security, the money you lost could amount to a cool $350,000 when you hit retirement age.

The scary part is that, on average each year over that 25-year period, your average annual return on that initial $39,500 could be $14,000 a year! And from the floor of the New York Stock Exchange, that’s an average annual return of 36 percent that can make you rich!

Personal finance speakers explain it this way. Every dollar you lose in the market this year could be ten dollars you won’t have at retirement. That’s why every dollar counts. If you have any money to invest, no matter how much or how little, this compounding principle can still work for you.

If you forget to save a few bucks each week toward building a nest egg, personal finance speakers would like you to keep this fresh in your mind: 80 to 90 percent of the money that ends up in your retirement nest egg could be money you never saved or invested in the first place.