Mac Coiner's personal financial planning class attracted students at night for 17 years to Virginia Commonwealth University.
Those who waited too long to take the class, or who heard about it too late, have been kicking themselves since the'80s.
"I have students come back to me and say I saved them lots of money," he says. "That's very gratifying to me.
"I spent my career in banking, but I'm basically a teacher. Even when I was a private banker at the end of my career, I was teaching. And learning. The people who were very successful who were my clients taught me a lot, especially about the attitude needed to achieve financial independence."
But the reason for this interview on his Hanover County porch is not to discuss his class, but its valuable content:
Coiner, one of Virginia's first bankers to earn the certified financial planner designation, has put "most of what I know about personal financial management" in a book titled "Chairman of Your Board: Ten $trategie$ to Run 'You Inc.'" (Autumn House, $21.50).
The title emphasizes his money credo: Manage your personal financial affairs as if you were chairman of a successful company. Just as his millionaire clients did.
"You Inc." is you - your personal financial situation." It's a 'company' you'll head for life.
The 186-page book is designed, he says, "as much for the financially savvy as it is for those with no dollar sense."
The more advanced material is detailed in the book, but here are the basics of his "financial strategies for success model":
- Take action: Name yourself "chairman" of your personal finances, with the mission "to organize, protect and improve your financial condition."
- Establish written goals: One of them, he says, is to follow the time-tested procedures below as you go through the stages of life of spending, accumulating, preserving, withdrawing and transferring your assets.
Set short-term and long-term goals. Choose financial advisers for your board of directors: a banker, stockbroker, lawyer, accountant, insurance agent, friend, spouse and even parents, the people who have known you longest. (Typically, you will consult them separately; there's no need to hold meetings of busy people around your kitchen table).
List short-term investments of less than five years and long-term investments you'll hold longer than that. List your "use assets," such as house and car.
- Liabilities: List your debts - secured ones, such as mortgages and home equities, and unsecured ones, such as credit-card debt, taxes and student loans.
- Expenses: Tabulate your income and business and personal expenses.
- Safe-deposit box: What goes in it? Ask this: " 'If I keep it at home, can I afford to lose it, have it stolen or chance it being destroyed?' If the answer is no, or if you're not sure, then that item deserves the extra protection of safe-deposit storage," he advises.
- Investing: "Investing is very complex. Most people don't understand it. Even people who think they understand it still make mistakes," he says.
He recommends the Vanguard Group's Investor Questionnaire at www.vanguard.com to help tailor asset allocation to your specific needs.
If you don't have a computer, most public librarians will print the information for you for a nominal fee.
From the information you glean from these worksheets, you'll develop a financial action plan, a plan for retirement and an estate plan.
That's the big picture, but hearing what Coiner and the millionaires have to say about money management is a lesson in common sense:
- Frugality matters: Live beneath your means - not just "within" your means.
"Reduce your wants," Coiner urges. "How? By analyzing your spending habits. Are you spending money to buy happiness? Are you spending money because of peer pressure?"
He recommends learning to live on 70 percent of your income and investing the rest: "That isn't easy to do."
- Autopilot: Set up an automatic withdrawal from your paycheck and into mutual funds. Employer-sponsored 401(k) defined contribution plans are an additional way to invest automatically.
- Budget: "It's not something you like to do, but you have to know where your money is going," Coiner says. After tracking expenses, most people who haven't budgeted find they've been spending and frittering away far more than they realized.
Use only one credit card. Pay off the balance every month. OK, say you can't do that: Then reduce your credit limit or cut the card up and use a debit card that limits spending to what's in your checking account.
- Buy used cars: Read Consumer Reports on maintenance problems and resale values. Visit www.consumerreports.com.
- Bargain for everything: Try negotiating loans, delivery charges on appliances, cars and more.
- Stocks: Chosen wisely, equities have the most promise of reaping the biggest return over the decades, he continues.
Investing wisely means studying basic investing principles, knowing your goals, diversifying your holdings to reduce risk and to increase returns and developing a blueprint for where you'll invest.
"A word of caution: Before investing money wisely, you should use your available cash to restructure your loans and pay off all credit cards and other high-interest loans. It makes no sense to begin an investment program until then."
To start, save at least 10 percent of everything you make. Understand that the longer you invest at the highest safe return, the more you'll earn.
Coiner recommends maxxing out on 401(k) or 403(b) retirement plans at work, getting the employer match. Then invest for the long term. Consider an S&P 500 or total stock market index fund.
- Bottom line: "Do yourself a big favor and start investing for your future as soon as possible. Keep it up every month and you can have financial security."
