Moving Up to Millions

Better ways to progress down the path to a secure financial future

In Moving Up to Millions: The Life Calculator Guide to Wealth financial guru and former California State Controller Kathleen Connell outlines a dynamic and digitally accessible interactive approach to securing anyone’s financial future. It contains practical advice on overcoming life’s adverse financial events as well as a winning game plan that can be instantly updated for these uncertain times. It also includes a sophisticated, yet easy-to-use financial calculator that enables readers to create an unlimited number of personalized, real-time “what if” scenarios and calculate their optimal financial plan.

Aimed at readers in their peak earning years to those a few years away from retirement, this book offers both profiles of individuals and families who address financial challenges and reposition their careers and personal lifestyles to redeem their finances, as well as the actionable tips they follow on the road to financial freedom. A digital platform encourages readers to access weekly on-line expert panels and blog sites where they can interact with the author and access extensive web references for further education.

Kathleen Connell Washington, D.C is currently President of the Connell Group, an investment advisory firm located in Washington, D.C. and teaches International Finance at the U.C. Berkeley Haas Graduate School of Business and at the Georgetown University McDonough Graduate School of Business. Dr. Connell has twenty-five years of experience in the field of finance and served as a trustee for CalPERS and CalSTRS for eight years, which together comprise the largest pool of retirement assets in the world.

Introduction ix

The Life Calculator Online Program xiv

Acknowledgments xv

Chapter 1 Meet Your Neighbors 1

Moving Up to Millions 5

You, Too, Can Be a Millionaire! 6

Not All Millionaires Are Equal 8

Do You Really Need a Million Dollars? 13

The Four Rules of Making Millions 16

Chapter 2 Threats to Millionaire Status 23

Why Your Life Cycle Is Not Like Your Parents' 24

It's More Than Just a Number, It's a Life Plan 36

The "Number" 36

Let's Get Started—Becoming Your Own Financial Advisor 38

Chapter 3 Click Your Way to Personal Wealth 41

The Three Es of Financial Planning 42

Power Your Future: The Life Calculator Is Your Personal Financial Advisor 43

How to Start 47

What the Life Calculator Will Show You 48

Identify Your Optimum Future 49

LifeCalculator.Net 49

Ten Guiding Principles 51

Chapter 4 Calculating Your Odds of Disaster and Preparing for Life Changes 55

The Dirty Dozen Adverse Events 55

Adverse Events Planning 56

Potential Windfalls 68

Your Best-Case Scenario—Is It Enough? 69

Optimum Strategies for Getting from Here to There 70

Chapter 5 It's a Blur between Work and Play 73

Say Hello to Phased Careers and

Delayed Retirement 73

Working to 70 and Beyond 75

Targeting Growth Industries 78

What Industry Sectors Show Promising Job Growth? 80

Benefit-Rich Industries 82

Flexible Careers 84

Enhancing Your Skills 87

Chapter 6 Home Is More than the Place You Live 89

Too Much Housing—A Risky Bet? 89

Timing the Market: Cashing Out at the Peak 92

Sometimes It Pays to Be a Renter in a Mobile Society 95

New Kind of Commune: This Time You Want to Belong 97

Assisted Living: What's Likely to Happen? 99

Bringing Your Parents Home 101

Your Home Can Stay in the Family 102

Berlitz Crash Course: Retiring Abroad 105

Tax-Friendly States Beckon 107

Living Where You Want: Connecting to Where You Need to Be 109

Chapter 7 Insurance: Protecting Against Downside Exposure 111

You're on Your Own—Employers AWOL on Healthcare Insurance 111

Long-term Care Insurance—The Best Investment You'll Make 116

Disability Insurance—More Important than You Realize 121

Anti-aging Science and Virtual Medicine 122

Life Insurance You May Outlive—or Sell for Cash 123

Longevity Insurance 126

Estate Planning: Taking Care of Those You Care About 128

Chapter 8 Meet the Forties and the Fifties: Fearless and Fantastic Years 131

Forties Decade: Child Rearing and Career Advancement 131

Forties Profiles 132

Fifties Decade: Maximum Earnings and Retirement Savings 144

Fifties Profiles 145

Chapter 9 Join the Sixties and Seventies: A Successful and Safe Life 155

Sixties Decade: Transitioning into a Second Career 155

Sixties Profiles 157

Seventies Decade: A Time of Enjoyment 162

Seventies Profiles 162

Endnotes 171

Index 183

Kathleen Connell is currently President of the Connell Group, an investment advisory firm located in Washington, DC. She also teaches international finance and corporate goverance at the UC Berkeley Haas Graduate School of Business. Dr. Connell has twenty-five years of experience in the field of finance and served as a trustee for CalPERS and CalSTRS for eight years, which together comprise the largest pool of retirement assets in the world. She was recently honored by SmartMoney magazine as one of the thirty smartest people in investing.

The dynamics of changing life events—divorce, sudden family expenses, uncovered healthcare costs, major disability, and investment losses, to name only a few—cannot always be anticipated. While you may have achieved years of high returns on an investment portfolio, failure to mitigate the unforeseen risks that occur over your lifetime can quickly offset any accumulation of investment gains. In Moving Up to Millions, former California State Controller and respected financial advisor Kathleen Connell offers four principles of financial success that, if mastered and executed on a continuing basis, will guide you to economic security.

The rules are deceptively simple: Own your future. Make time your ally. Reduce risk. Master change. To help accomplish this, Moving Up to Millions provides an invaluable interactive tool for predicting risks and offsetting them with pragmatic action strategies: the Life Calculator. Available on the author's web site (www.LifeCalculator.net) the Life Calculator is the only financial engine that incorporates both investment advice and personal "What If" scenario simulations on life events. It provides you with sophisticated financial advice while including the additional capability of calculating the impact of a range of future life scenarios on your retirement savings, potential second career plans, and investment opportunities.

The life profiles of ten hypothetical American families and individuals whose life experiences may mirror your own are recreated throughout the book to illustrate how the Life Calculator works. Using varied income, career, geography, lifestyle, and personal finances, the examples describe profiles for each of the decades from people in their 40s through 70s. By seeing the financial challenges they face and their responses to adverse events, you will be educated to various financial strategies that can be employed in your own life to mitigate negative events.

Whether you have limited savings in the bank when you begin reading this book or have accumulated millions in investments, Connell's customized, sophisticated Life Calculator tools and strategies will increase your wealth and insure your financial future.

Praise for Moving Up to Millions

"A powerful tool for achieving financial success, offering the customized advice available only to the largest pension funds and wealthiest investors. A great buy!"
—Jack Ehnes CEO, California State Teachers' Retirement System (CalSTRS), and Board Chairman of the Council of Institutional Investors

"American families today—from the working poor to all but those at the highest economic levels—are uncertain about their ability to achieve the American Dream. Kathleen Connell provides essential, accessible tools to help working people achieve their goals in the complex maze of our twenty-first-century economy."
—Andy Stern President, Service Employees International Union

"Connell has produced a web-based approach that will help families manage the events of life and the accumulation of lifetime wealth in a constructive and informed manner. The ease and completeness of the Connell Life Calculator algorithm is awesome... widely used, this software will eradicate financial illiteracy and, properly applied, will increase savings and the ability of people to assure their own future."
—Al Osborne, PhD Senior Associate Dean, Associate Professor of Global Economics and Management, founder and Faculty Director, Harold Price Center for Entrepreneurial Studies, UCLA Anderson School of Management

"In this book, Kathleen provides us with sophisticated, tailor-made financial advice. She shows how to grow and maintain wealth and provides a path for comfortable retirement. Good stuff!"
—Larry ElderHost, The Larry Elder Show, KABC Talk Radio

"Moving Up to Millions is a how-to-survive text for all the financial risks of modern America. The web-based applications with which it is linked will allow millions of readers to plan systematically for their financial security."
—Tom Campbell, PhDDean, UC Berkeley Haas School of Business