1. The Savings
Waterfall Contact:
nirav@owlinvest.com
832-630-7841
by www.owlinvest.com
Nirav Batavia, CFA

2. Disclaimer
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS, AND ANY
EXPECTED RETURNS OR PROBABILITY PROJECTIONS MAY NOT REFLECT
ACTUAL FUTURE PERFORMANCE. FURTHERMORE, PAST RETURNS REFLECT
THE PERFORMANCE OF ASSETS FOR A FINITE TIME, DURING A PERIOD OF
EXTREME MARKET ACTIVITY. ALL INVESTMENTS INVOLVE RISK AND MAY
LOSE MONEY. There can be no assurance that an investment plan or any projected
or actual performance shown on the Site will lead to the expected results shown or
perform in any predictable manner. It should not be assumed that investors will
experience returns in the future, if any, comparable to those shown or that any or all
of Owl's customers experienced such returns. The opinions voiced in this material are
for general information only and are not intended to provide specific advice or
recommendations for any individual. To determine which investment(s) may be
appropriate for you, consult your financial advisor prior to investing.

3. About Nirav Batavia
• BS in Economics (Finance Concentration) from
Wharton, May 2003
Education • MBA University of Chicago, Booth School of
Business, June 2012
• CFA Charterholder
• Over 10 years in finance
Experience • Sales & Trading, Hedge Fund, Chartered Financial
Analyst
• Disciplined Financial Planning
Passion • Helping you “Invest Wisely”
• Keep More of Your Hard-Earned Money

4. The Background of Owl
Get expert, personalized, unbiased advice at a
reasonable cost online
• Advice is based on Nobel Prize-Winning research
used by the top financial institutions for their
wealthy clients
Nirav Batavia (CEO) • Focus on maximizing returns while minimizing risk
Chartered Financial Analyst
Founder • We keep costs low through our online platform
• We do not accept commissions, so we are on your
side
Owl Finance, Inc is a SEC-registered investment advisor

5. The Keys to Financial Security
Financial Security Does Not It Does Come From Getting The
Come from Skipping Lattes Big Decisions Right

6. The Savings Waterfall
1. Where you put your savings will make
MILLIONS of dollars in difference in your long-
term outcome.
2. For most households, these decisions matter
MORE than what you actually invest in.
3. Understanding where to invest and what to
invest in are two sides of the same coin. Focus
on both to maximize your financial security.
4. Whether you are just starting or have millions
you can make the savings waterfall work for you
(Waterfall Image)

7. Step 1: 401(K)/403(B)/Profit Sharing Match
You Always Want to Get FREE Money
a. The company match is FREE Money, do not pass it up
b. Borrow, Beg, Steal but make sure you contribute enough to get
your full match
c. Average Company Match is 4.1% of Employee Salary
Biggest Mistakes People Make
a. Not Getting The Full Match
b. Putting away additional money into 401(K) before getting through
the rest of the list (401k logo)

8. Step 2: Debt Paydown (of any debt >5%)
Investing while carrying high cost debt is MATHEMATICALLY INSANE
a. Realistic future expected returns are 7%-8% for stocks
3%-4% for bonds PRETAX (after-tax is obviously lower)
b. Debt above 5% provides an after-tax return of the
interest rate with no risk (unlike an investment
portfolio)
c. Generally this includes Credit Cards and Most Student
Loans (but not most Mortgages and Car Loans)
(Image of Credit Card and Student Loan)

9. Step 3a: Set Up an Emergency Fund
Rule of Thumb is that Emergency Fund = 3-6 months of expenses
a. A household can expect to have a major
unexpected expense (replacing a vehicle,
unexpected illness, etc.) every 10 years or so
b. You don’t want to take out credit cards or
loans against your 401(k) because it can take
years to get back on track

10. Step 3b: Fund Any Near Term Financial Obligations
You should not risk money that you need soon
a. These are major obligations like down
payment on a house, buying a car, paying
for higher education, etc.
b. Our rule of thumb is to set aside 100% for
any expenses inside a year, 2/3rd for any
expenses that are 1-2 years out, and 1/3rd
for anything 2-3 years out.
c. Again, just like the emergency fund, put it
in checking and do not touch it.

11. Step 4-8: Invest Whatever is Left Over
Take advantage of the best investment vehicles for your savings.
a. Step 1 Covered FREE money
b. Step 2 Covered High Interest Debt
c. Step 3 Covered Any Set Asides
(Emergency Fund + Major
Obligations)
d. Now we focus on putting your money
in the right types of investment
accounts so that you minimize taxes

12. Step 4: A 529 Plan
If you have a child, set up a 529 Plan for higher education
a. You can set up a plan for any state, and it can be
applied to a college in any state
b. In some cases there a State Income Tax
Deductions for 529 and for some tuition discounts
as well (look it up at savingsforcollege.com)
c. Generally, contribution limits are based on gift tax
exemption ($14,000 for 2013)
d. Rule of Thumb: you need approximately $60,000
initially to fund higher education, also use NY and
Utah plans if you are not benefited by in-state
deductions

13. Step 5: Roth IRA
A Roth IRA investment means no taxes EVER
a. An individual can contribute up to $5,500 in 2013
($6,500 if 50 or older)
b. Income limits are the biggest problem ($125,000
for single filers and $183,000 for married, with
phaseouts starting at $110,000 and $173,000
respectively)
c. All contributions are after-tax (still preferable to
traditional IRA or 401(k) with no match if you
meet income qualifications)
d. You cannot generally access money until you hit
59½

14. Step 6: Max out your 401(K)/Roth 401(k)
401(k)s and Roth 401(k)s have higher limits than IRAs
a. An individual can contribute up to
$17,500 in 2013 ($23,000 if 50 or older)
b. All contributions are pre-tax for 401(k),
after-tax for Roth 401(k)
c. You cannot generally access money until
you hit 59½

15. Step 7: Backdoor Roth IRA
This is a complex strategy only for people who are above the income limits to
contribute to a Roth IRA
a. This is a 2-step process
i. Contribute to a non-deductible IRA after-tax (up to $5,500/$6,500
over 50 for 2013)
ii. Convert the IRA assets to Roth IRA
b. Since IRA contribution was after-tax, no additional tax on
conversion
c. Money that would have been in a brokerage account and subject
to taxes is now in a Roth IRA (no taxes EVER)
d. WARNING: You cannot do this if you have existing Traditional IRAs

16. Step 8: A Brokerage Account
The final step if you still have savings left over is to invest it in a brokerage
account
a. Brokerage accounts are taxable so you will pay capital gains on
any gains and qualified dividends, and ordinary income taxes on
interest income
b. DO NOT put bonds unless you have to in this account (and if you
do put a municipal bond ETF)
c. Minimize trading to defer any tax consequences (do trades and
rebalancings in other accounts)

17. A Simple Example
How the “Savings Waterfall” Works
a. Monthly Savings = Income (after-tax) – Expenses = $2500/month
b. Step 1: 401(k) Match = $200/month
c. Step 2: High Interest Debt and Step 3: (Emergency Fund and Big
Purchases) = None
d. Step 4: No kids so no 529 contribution
e. Step 5: Roth IRA ($5,500/year) = approx. $460/month
f. Step 6: Max out 401(k) = additional $1,145/month
g. Step 7: Already made Roth contribution so no backdoor Roth
h. Step 8: Put the remainder ($695/month) in your brokerage
account

18. The Payoff
Getting the “Savings Waterfall” right is worth millions
a. Getting your full match is worth 3-4% of salary
over a 30 year career (approximate value for
someone earning $60,000 ($500,000 over
career)
b. Roth IRA Contributions with no taxes ever saves
you $600,000 in taxes vs. a brokerage account
c. Paying off debt and setting aside emergency
fund reduces potential interest payments (very
situational)

19. Standard Costs Owl Invest
Lowering fees: The average fund charges
1.15% in expenses + the average advisor 1%. $21,500 $6,000
We try to keep combined fees at 0.6%. cost cost
Tax-Efficient Allocation: By allocating
Net benefit to ordinary income investments to deferred $4,375 $0
customers is $26,575 accounts and moving capital gains cost cost
annually1 (2.65%) investments to tax-exempt accounts.
with easy to
implement, high quality
investment advice. Diversification and rebalancing: The $0 +$6,700
Benefits of Rebalancing(Buetow 2002) cost benefit
1 For a customer with $1.00MM in
Investible Assets 50%/50%
allocation and 50% in deferred
Annual Difference $25,875 +$700
accounts and in 35% tax bracket. cost benefit
Assumes a 5% return on bonds.

20. $800,000 With Owl Invest 41%
MORE
$700,000 Without Owl Invest
ASSETS
$600,000
Investment Size
Owl Invest
$500,000
BUILDS
CUSTOMERS $400,000 5%
MORE
WEALTH $300,000
ASSETS
$200,000
$100,000
$0
0 5 10 15 20 25 30
Years

21. Follow-Up
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22. THANK YOU
Contact:
Invest Wisely nirav@owlinvest.com
832-630-7841
www.owlinvest.com