Master of Invention

HANDLE THE UNEXPECTED WITH CONFIDENCE

HANDLE THE UNEXPECTED WITH CONFIDENCE

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As a young lawyer in international finance, Homa Dashtaki thought she had a long, rewarding career ahead of her. Then the 2008 financial crisis hit, and she was out of a job. But she wasn’t out of options. Instead of panicking and taking any job she could find, she was able to pause, reassess, and embrace a sense of possibility. Having saved a bit of her income, she was able to buy herself some time to explore her options.

On a journey of trial and error, Homa reflected on what money, work, and happiness meant to her. Following in a family tradition, she began making yogurt and selling small batches of it at local farmer markets. Out of necessity, she invented a new life for herself, discovering a great sense of mastery and satisfaction.

Faced with the loss of your current way of life, what might you do? Do you feel financially fit to face the unexpected with a sense of possibility and mastery over your own life? The time to have those financial conversations—with yourself, your family, and your financial advisor—may be right now.

Watch Homa’s story and be inspired.

The Get-Started-and-Keep- Going Investing Guide

These tips can help you take charge of your finances and expect the unexpected with more confidence.

A WORD FROM OUR EXPERT

A WORD FROM OUR EXPERT

"Pay yourself first." KATHERINE ROY, Chief Retirement Strategist, J.P. Morgan Asset Management

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Like many people, you may find thinking about finances stressful and complex. In fact, according to Chase’s 2016 Generational Money Talks study,* Also referred to as the Chase-University of Colorado Boulder’s Center for Research on Consumer Financial Decision Making study which captures how different generations talk and feel about money, 63% of Gen X women and 75% of Millennial women feel stressed about money. The study also found that women tend to play the role of household CFO, which may make them better planners and well suited for the discipline of long-term planning and investing. So you may be a stronger investor than you know. Whether you want to buy a house, send your kids to college, or save for retirement, taking charge of your goals can be empowering. Here are some ideas about how to get started.

What do you want? And how much do you want it?

You can’t plan a vacation without knowing where you want to go, and that principle holds for creating a financial strategy as well. Your first step is to set clear goals. An effective financial goal should be specific and achievable. For example, if retirement is your goal, saying “I want to retire comfortably” isn’t as helpful as “I want to retire at age 65 with an income of $5,000 a month.” Take some time to consider your overall financial situation, come up with specific goals, and prioritize them.

Investing your savings gives your money the potential to grow at a faster rate than inflation.

How to get there

With specific goals in mind, you can create a saving and investment strategy. You’ll want to set aside money each month, and then invest that money to help you reach your goals. To get started, estimate how much you need to save, including possible returns if you invest those savings.

Investing in your future

Investing your savings gives your money the potential to grow at a faster rate than inflation. If you keep your money as cash, in 10 years that money may have less buying power because the cost of goods and services typically will rise over time. But if you invest that money and it grows, it may retain or increase buying power.

You don’t need to know everything about financial markets to invest. One investment option is a mutual fund—a professionally managed diverse collection of investments. You might also consider individual stocks, individual bonds, or bond funds. Each type of investment offers different advantages and drawbacks. (Investing involves market risk, including possible loss of principal, and there is no guarantee that investment objectives will be achieved.) Don’t hesitate to contact a financial advisor to learn more about your options and for help in getting started.

Investing in your future

The easiest way to save

Pay yourself first,” says Katherine Roy, Chief Retirement Strategist for J.P. Morgan Asset Management. Make a commitment to yourself by setting up automatic distributions of part of every paycheck into your investment account. And if your workplace offers a retirement plan, set up an automatic distribution for that. Often employers will contribute an equivalent amount or “match” to your account, and these accounts are often tax-advantaged, so opting in is a no-brainer as more people are discovering. According to Chase's 2016 Generational Money Talks study, Millennials started saving 17 years earlier than Baby Boomers, and seven years earlier than Gen Xers. Even if you don’t have a retirement account option, many financial institutions, including JPMorgan Chase & Co., have advisors who can help you find other retirement options. A retirement strategy helps you stick to a plan so the money will be there when you need it.

5 SIMPLE STRATEGIES TO BOOST YOUR SAVINGS

5 SIMPLE STRATEGIES TO BOOST YOUR SAVINGS

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Stay connected

Review your investing statements every three months to make sure that your strategy still fits your goals, and sit down at the beginning of every year to go over your financial situation. It also pays to review your overall finances regularly, to see where your money is going and to ask if you could save more. Regularly reviewing your finances can reinforce your sense of achievement.

Having a solid strategy can help you pursue your goals, and better prepare you to weather life’s inevitable ups and downs.

My Financial
Buddy System

A strong financial support network can help you hone healthy money habits no matter what comes your way.

Tapping into your network for advice can really help.

With more women taking on the role of household CFO—and the pressure that comes with it—there’s never been a better time to increase your financial knowledge, so you can manage those challenges with less stress and more awareness. Tapping into your network for advice can really help. Here, four women share how financial “buddies” helped them overcome their money challenges—and how you might, too.

An HR consultant

An HR consultant

“I needed to continue bringing in income even when I was on [maternity] leave, but my HR department wasn’t much help,” says Amy R. of Los Angeles. Unsure of her options, she met with an HR consultant who launched an organization that helps women maximize their maternity leave policies. “They worked with me to make sure no income or time-off potential was missed. They told me what forms to complete and when, and I was able to take 24 weeks off—with pay!” says Amy.

Friends & colleagues

Friends & colleagues

Starting a new business is stressful—especially in the hospitality industry, where the failure rate is high. Before opening their Atlanta restaurant, Jenn S. and her husband reached out to fellow restaurateurs, mentors, and a professional advisor. “They were able to give us real figures of what they each spent in different areas—construction, equipment, permits,” she says. “It gave us a parameter for reasonable and outrageous costs.” Knowing what made sense let Jenn and her husband make smarter financial choices.

An accountant

An accountant

“It’s intimidating to be in charge of all the financial aspects that come with running your own company,” says Anna G., a small business owner in San Diego. For guidance, she turned to an accountant referred by a friend. “She’s been incredibly open and patient with me, making sure I understand everything. I feel much more confident knowing we’re following laws correctly and paying taxes on time. It’s really important to find someone you can trust, who will empower you to learn.”

A financial advisor

A financial advisor

“I got a lot of advice from well-meaning friends and family about saving for retirement, but it felt like the blind leading the blind,” says Irene H. of Philadelphia. She made a choice that, according to Chase's 2016 Generational Money Talks study, 79% of Millennial women make—she turned to a financial advisor. “He helped me figure out the best way to save—such as maxing out my 401(k) and Roth IRAs—and I realized I’d been missing out on investment opportunities.” A financial advisor can bring a higher level of expertise, help you execute your goals and adjust them accordingly if your priorities shift.

A buddy system for financial support can be just as helpful.

Women often have a network of friends for emotional support. A buddy system for financial support can be just as helpful. Whether you’re reaching out to others in similar situations or connecting with financial professionals, the more you know, the more in control you can be, and the better you’ll feel.

How Financially Resilient Are You?

Stress-test your financial fitness in case life throws you a curveball.

PRIORITIZE YOUR SPENDING NOW

PRIORITIZE YOUR SPENDING NOW

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Unexpected financial stressors can crop up any time,” says Kimberly Palmer, author of Smart Mom, Rich Mom: How to Build Wealth While Raising a Family. When the unexpected occurs, you’re probably able to handle it—or to learn how to do so by having the money talk, whether it’s with yourself, your family, or your financial advisor. Take this quiz to gauge how you might respond and learn more from Palmer about financial resilience.

1

What would you do if your partner left you?

Select one of the following.

A

Call a lawyer.

A

Calling your lawyer is a good first step, says Palmer, but it’s also important to know the state of your finances, and to be prepared.

B

Make sure you know the whereabouts of all of your mutual assets and investments.

B

Good choice. “The worst scenario is to let your partner take over the finances, to the point where you don’t know how much you have or even the passwords to find out,” Palmer says.

C

Have a drink with your girlfriends and refuse to worry; he’s always been fair.

C

Don’t think this can’t happen to you, or assume that you are protected if it does, Palmer warns. You’re responsible for protecting yourself.

D

Create a profile on Match.com.

D

Save this move until after you know that you and your children are taken care of.

2

Are you prepared for the sudden, unexpected death of your partner?

Select one of the following.

A

Yes, we both have life insurance policies that we took out when we got married.

A

Your needs may have changed since you got married; your 20-year-old policy probably doesn’t provide enough.

B

We have savings; I’m not worried.

B

If you have any debt, savings may not be enough. Better to prepare with insurance that can cover more.

C

He’s got insurance through work; I’m sure it’s enough.

C

“No one likes thinking about a loved one dying,” Palmer says, “but trust me, it is more painful if you are not financially prepared.” Taking care of yourself and your family means making sure you’ve made those preparations. Often workplace insurance doesn’t cover enough.

D

We update our life insurance policy every few years to make sure all costs and debts are covered.

D

Yes! “Most people radically underestimate how much life insurance they need,” says Palmer. “Write down everything you need covered, present and future.” That includes mortgage, college, outstanding debts, and monthly living expenses.

3

What will you do if one or both of your parents suddenly fall ill?

Select one of the following.

A

That’s not an issue; my folks are in great health.

A

Denial is the enemy of us all, Palmer says. “The worst thing you can do is shut your eyes, not talk to them, and trust that everything will be okay.” Have a conversation with your folks, sooner rather than later.

B

My parents have both signed health proxies, living wills, and power of attorney agreements.

B

Yes! You're in the best possible position to help your parents and to protect their estate plan. “It’s important to know their preferences,” Palmer says.

C

My parents yelled at me when I brought it up, so I snuck into their den and reviewed their financials, and they seem pretty set.

C

While sneaking into your parents’ filing cabinet is no substitute for an open conversation, it’s true that you need to know what’s going on. You might try bringing in a financial advisor to make the conversation easier.

D

I’m too busy with my own life.

D

Nearly 30% of all adults care for an elderly parent, and some two-thirds of those caregivers are women. “You need to know that one day you might be responsible,” Palmer says.

4

Your child is showing signs of a learning disability and will require special education, which can cost more per year than college. What will you do?

Select one of the following.

A

Not my child; she comes from intelligent genes.

A

Your child’s learning difference is not a reflection of yourself. Ignoring the evidence won’t help you take care of her.

B

I’ll keep her in her current school until she grows out of it.

B

“It is a popular misconception that children outgrow learning issues. They will probably be with her the rest of her life but she will find ways to compensate as she gets older.” But, says Palmer, “under the Individuals with Disabilities Education Act (IDEA), our nation’s special education law, your child is entitled to free services for educational needs.”

C

I’ll take out a home equity loan to cover the costs.

C

Going into debt—especially when there are other affordable options—should never be a first choice.

D

I'll talk to the school district to learn more about special education programs.

D

A wise choice. There may be inexpensive, or even free, special education programs within or even beyond your school district that your family might access. Also consider contacting a special needs counselor for advice.

5

A serious illness sidelines you from work for a few months. What do you do?

Select one of the following.

A

Impossible; I’m the healthiest person I know.

A

The average person has a one in four chance of disability during her working life, according to Palmer. Don’t think it can’t happen to you.

B

My partner makes a lot of money; I’m not worried about not working for a while.

B

Money can run dry quickly when someone is seriously ill, especially if your health insurance has a high deductible or if you need treatments that aren’t covered.

C

I have a great disability plan where I work.

C

Yes! Disability insurance usually comes through work and can provide for lost income. “Thinking you’ll never get sick can destroy you financially,” warns Palmer.

D

I’m not worried; I have health insurance.

D

Health insurance is not enough if you have to miss weeks or months of work due to illness, because it doesn’t cover lost income. Know your health insurance policy and what it does and doesn’t cover. If you work for yourself, purchase a disability policy.

6

A flood has destroyed your home and possessions. Now what?

Select one of the following.

A

My insurance covers me for all man-made and natural disasters, and every time I acquire something valuable I add a rider to the policy.

A

“You want a homeowners policy that covers every possible situation” and will adequately replace your belongings, Palmer says. "Read the fine print for exclusions and keep receipts, appraisals, and photographs of valuables for reimbursement." Also consider the National Flood Insurance Program.

B

I bought a homeowners policy when I bought my house 20 years ago.

B

“People often don’t realize until after disaster strikes that their homeowners insurance contains several exclusions,” Palmer says. An old policy neglected for two decades might not provide the coverage your current life demands.

C

We weren’t required to get flood insurance.

C

“The worst thing is learning you have an exclusion clause for flooding after a hurricane hits and your basement is underwater,” Palmer says. Make sure you’re covered for every kind of disaster.

D

I have no insurance, because I don’t live in a flood area.

D

“Never go without insurance,” Palmer insists. A disaster that causes loss of a major asset—and everything inside—can be impossible to recover from.

Disclaimer: The information provided here does not reflect the opinions of JPMorgan Chase & Co. Examples and advice are not appropriate for all situations.

1

What would you do if your partner left you?

Select one of the following.

A

Call a lawyer.

A

Calling your lawyer is a good first step, says Palmer, but it’s also important to know the state of your finances, and to be prepared.

B

Make sure you know the whereabouts of all of your mutual assets and investments.

B

Good choice. “The worst scenario is to let your partner take over the finances, to the point where you don’t know how much you have or even the passwords to find out,” Palmer says.

C

Have a drink with your girlfriends and refuse to worry; he’s always been fair.

C

Don’t think this can’t happen to you, or assume that you are protected if it does, Palmer warns. You’re responsible for protecting yourself.

D

Create a profile on Match.com.

D

Save this move until after you know that you and your children are taken care of.

2

Are you prepared for the sudden, unexpected death of your partner?

Select one of the following.

A

Yes, we both have life insurance policies that we took out when we got married.

A

Your needs may have changed since you got married; your 20-year-old policy probably doesn’t provide enough.

B

We have savings; I’m not worried.

B

If you have any debt, savings may not be enough. Better to prepare with insurance that can cover more.

C

He’s got insurance through work; I’m sure it’s enough.

C

“No one likes thinking about a loved one dying,” Palmer says, “but trust me, it is more painful if you are not financially prepared.” Taking care of yourself and your family means making sure you’ve made those preparations. Often workplace insurance doesn’t cover enough.

D

We update our life insurance policy every few years to make sure all costs and debts are covered.

D

Yes! “Most people radically underestimate how much life insurance they need,” says Palmer. “Write down everything you need covered, present and future.” That includes mortgage, college, outstanding debts, and monthly living expenses.

3

What will you do if one or both of your parents suddenly fall ill?

Select one of the following.

A

That’s not an issue; my folks are in great health.

A

Denial is the enemy of us all, Palmer says. “The worst thing you can do is shut your eyes, not talk to them, and trust that everything will be okay.” Have a conversation with your folks, sooner rather than later.

B

My parents have both signed health proxies, living wills, and power of attorney agreements.

B

Yes! You're in the best possible position to help your parents and to protect their estate plan. “It’s important to know their preferences,” Palmer says.

C

My parents yelled at me when I brought it up, so I snuck into their den and reviewed their financials, and they seem pretty set.

C

While sneaking into your parents’ filing cabinet is no substitute for an open conversation, it’s true that you need to know what’s going on. You might try bringing in a financial advisor to make the conversation easier.

D

I’m too busy with my own life.

D

Nearly 30% of all adults care for an elderly parent, and some two-thirds of those caregivers are women. “You need to know that one day you might be responsible,” Palmer says.

4

Your child is showing signs of a learning disability and will require special education, which can cost more per year than college. What will you do?

Select one of the following.

A

Not my child; she comes from intelligent genes.

A

Your child’s learning difference is not a reflection of yourself. Ignoring the evidence won’t help you take care of her.

B

I’ll keep her in her current school until she grows out of it.

B

“It is a popular misconception that children outgrow learning issues. They will probably be with her the rest of her life but she will find ways to compensate as she gets older.” But, says Palmer, “under the Individuals with Disabilities Education Act (IDEA), our nation’s special education law, your child is entitled to free services for educational needs.”

C

I’ll take out a home equity loan to cover the costs.

C

Going into debt—especially when there are other affordable options—should never be a first choice.

D

I'll talk to the school district to learn more about special education programs.

D

A wise choice. There may be inexpensive, or even free, special education programs within or even beyond your school district that your family might access. Also consider contacting a special needs counselor for advice.

5

A serious illness sidelines you from work for a few months. What do you do?

Select one of the following.

A

Impossible; I’m the healthiest person I know.

A

The average person has a one in four chance of disability during her working life, according to Palmer. Don’t think it can’t happen to you.

B

My partner makes a lot of money; I’m not worried about not working for a while.

B

Money can run dry quickly when someone is seriously ill, especially if your health insurance has a high deductible or if you need treatments that aren’t covered.

C

I have a great disability plan where I work.

C

Yes! Disability insurance usually comes through work and can provide for lost income. “Thinking you’ll never get sick can destroy you financially,” warns Palmer.

D

I’m not worried; I have health insurance.

D

Health insurance is not enough if you have to miss weeks or months of work due to illness, because it doesn’t cover lost income. Know your health insurance policy and what it does and doesn’t cover. If you work for yourself, purchase a disability policy.

6

A flood has destroyed your home and possessions. Now what?

Select one of the following.

A

My insurance covers me for all man-made and natural disasters, and every time I acquire something valuable I add a rider to the policy.

A

“You want a homeowners policy that covers every possible situation” and will adequately replace your belongings, Palmer says. "Read the fine print for exclusions and keep receipts, appraisals, and photographs of valuables for reimbursement." Also consider the National Flood Insurance Program.

B

I bought a homeowners policy when I bought my house 20 years ago.

B

“People often don’t realize until after disaster strikes that their homeowners insurance contains several exclusions,” Palmer says. An old policy neglected for two decades might not provide the coverage your current life demands.

C

We weren’t required to get flood insurance.

C

“The worst thing is learning you have an exclusion clause for flooding after a hurricane hits and your basement is underwater,” Palmer says. Make sure you’re covered for every kind of disaster.

D

I have no insurance, because I don’t live in a flood area.

D

“Never go without insurance,” Palmer insists. A disaster that causes loss of a major asset—and everything inside—can be impossible to recover from.

Disclaimer: The information provided here does not reflect the opinions of JPMorgan Chase & Co. Examples and advice are not appropriate for all situations.

Bouncing Back from 5 Common Money Missteps

When it comes to managing money, everyone has a few blind spots. These considerations may help you change course.

You have no emergency savings

1. You have no emergency savings

SAVING FOR AN EMERGENCY FUND

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Nothing can derail a financial strategy faster than an unexpected expense. Without an emergency fund that can cover six to nine months’ worth of living expenses in a safe, insured savings account, you could end up strapped for cash when you need it most, leaving you assuming high-interest debt to cover your bills.

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There are several online tools that can help make saving for an emergency fund automatic and (relatively) painless. For example, some apps use algorithms to move small amounts of money from checking to savings based on your spending habits. Or you can set up an automatic transfer from your checking account to a savings account. Through your Chase bank account, you can transfer as little as $25 a month with no service fee.

You’re stuck at your 401(k)’s default savings rate

2. You’re Stuck at your 401(k)’s default contribution rate

Consider this: A 30-year-old making $50,000 a year, contributing 3% of her salary and expecting a 2% annual raise, assuming a 7% annualized return with no withdrawals, would retire at age 65 with around $280,000. Boost the contribution by 10%, assume the exact same return and lack of withdrawals, and the balance jumps to more than $1 million.

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Try to use at least a portion of every raise to increase your savings. And don’t ignore catch-up opportunities, notes Linda Ward, head of Retirement & Planning Solutions for JPMorgan Chase. If you’re age 50 or older, you can add an extra $1,000 to the current $5,500 maximum contribution limit for individual retirement accounts (IRAs), and an extra $6,000 a year to your 401(k).* All calculations based on this online calculator

You don’t have a financial strategy—and you don’t know how to get one

3. You don’t have a financial strategy—and you don’t know how to get one

You can’t hit a target that you can’t see. And you can’t tell if you’re on track to meet your financial goals if you don’t know how much money you’ll need or when you’ll need it. This is even harder if you don’t know where to turn for help.

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You can often meet with a financial advisor at no cost for an evaluation or initial consultation to begin creating a strategy tailored to your specific needs. Jump-start the process by writing down your goals, from your dream vacation to putting the kids through college and retiring, specifying the amounts you’ll need to save and the time lines, then prioritize them. (Hint: Retirement should always come first. Read more here about preparing for your first meeting with a financial advisor.) “I think every person has some sort of financial goal,” says Josh Palmer, CFP®, head of Chase Wealth Advisory. “Every dollar that a person has, whether they know it or not, is going to be spent by someone, so having a long-term goal for those funds is important.”

You’re missing out on tax breaks

4. You’re missing out on tax breaks

Taking advantage of tax-deferred investment options, such as 401(k)s or IRAs, can mean more money in retirement.

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Consider starting or contributing more to a tax-deferred plan, which allows pre-tax contributions to compound over time. Say, for example, you save $5,500 per year in a tax-deferred retirement account over 30 years. Assuming you take no withdrawals and earn 7% return each year, your plan would grow to $555,902 in 30 years. Though you would pay taxes when you withdraw the money in retirement, even a 33% tax rate would give you $426,904 in after-tax dollars. By contrast, investing in a taxable account means you would have to pay tax on that $5,500 each year before putting it into your account—thus taking a bite out of your yearly contribution before it’s had a chance to grow. Assuming the same 7% annual returns, with no withdrawals, you’d have $362,798.* Source: J.P. Morgan Asset Management, 2016. Assumes $5,500 after-tax contributions at the beginning of each year for 30 years and 7% annual investment return. IRA account balance is taken as a lump sum and taxed at the 25% and 33% federal tax rate, respectively, at time of withdrawal. Taxable account contributions are after-tax and assume a 33% federal tax rate during accumulation. This hypothetical illustration is not indicative of any specific investment and does not reflect the impact of fees or expenses. Past performance is no guarantee of future results.

You’re investing too conservatively

5. You’re investing too conservatively

Think the stock market is too risky? Think again. There are many types of financial risk to consider, including the risk of not having enough savings when you retire and the risk that inflation will erode your money’s spending power over time (women tend to live longer than men, remember).

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While all investments involve risk and stocks can be volatile on a day-to-day basis, history shows that over the long-term they consistently outpace inflation.

From 1928 to 2015, the average annual return on the S&P 500 was 7%, adjusted for inflation, while the average rate of inflation was 3.22%, so for the past nearly nine decades, stocks have outpaced inflation by almost four percentage points. Also be aware that past performance is no guarantee of future results.* Sources:
Investopedia
Federal Reserve database in St. Louis
InflationData.com, 2016

Financial guidance to help you master the unexpected.

Together with a J.P. Morgan Private Client Advisor, develop an investment strategy tailored to helping you reach your goals and anticipate the unexpected scenarios you might encounter along the way.

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Chapter 1

MASTER YOURFAMILY’S FUTURE

Building on family values as well as wealth, Stephan is creating and shaping his very own personal legacy.

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Chapter 1

MASTER THEUNEXPECTED

Suddenly facing job loss, Huma invented a deliciously satisfying new career.

Learn More
Chapter 1

MASTER YOURRETIREMENT

Because they saved and invested wisely, Tim and Lynne

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Chapter 1

MASTER YOURPASSION

By letting go of fear and embracing her life passion, Annette is living her Bucket List now.

Learn More
Chapter 2

MASTER YOURFAMILY’S FUTURE

Building on family values as well as wealth, Stephan is creating and shaping his very own personal legacy.

Learn More
Chapter 2

MASTER THEUNEXPECTED

Suddenly facing job loss, Huma invented a deliciously satisfying new career.

Learn More
Chapter 2

MASTER YOURRETIREMENT

Because they saved and invested wisely, Tim and Lynne

Learn More
Chapter 2

MASTER YOURPASSION

By letting go of fear and embracing her life passion, Annette is living her Bucket List now.

Learn More