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The Problem

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Joe All American Learns About Money!

Joe All American Learns About Money!

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  • 1. « There are twoprovenpaths to building wealth:<br />You canincrease the amount of money youmake,<br />Or youcanincrease the amount of money youkeep. »<br />Stop overpaying the IRS<br />By Justin Martin<br />February 25 2008<br />Fortune Small Business<br />
  • 2. The Challenge<br />Of Joe All American<br />
  • 3. Joe’s Background<br />Age: 29<br />Net Income: $28,500<br />The Big Question is…<br />
  • 4. How Is This IncomeSpent?<br />
  • 5. Transportation<br />28 %<br />
  • 6. Housing<br />30 %<br />
  • 7. Cost Of Living<br />42 %<br />
  • 8. PreferredMethod Of Finance<br />Credit Cards And Loans<br />
  • 9. Alternative Means Of Payment<br />Ca$h<br />
  • 10. DisposableIncomeSaved<br />5 %<br />
  • 11. The Problem<br />Joe ispayingsomeoneelse to finance hisneeds<br />
  • 12. Joe’s Car<br />Cost: $10,550<br />LoanTerm: 48 months<br />APR: 8.5%<br />Payments: $260.05<br />Interest Per Payment: 20%<br />Volume of interestis a major issue!<br />
  • 13. Joe’sHousing<br />30 yearfixed rate mortgage<br />Mortgageamount: $93,000<br />APR: 7%<br />Payments: $618.75<br />Closingcosts: $2,500<br />Interestcost per dollar: 86%<br />Volume of interestis major issue<br />
  • 14. Joe’sCost Of Living<br />Interest on luxury items<br />Non-deductibledebtpayments i.e. CreditCards<br />Lowdeductible, high premium insurance<br />Meals out<br />Entertainment<br />Vacation<br />Lostopportunitycost<br />Inflation<br />
  • 15. Joe’sDilemma<br />34.5 cents of everydisposable dollar ispaid out in interest!<br />
  • 16. What if…<br />Joe created a private financing system that:<br />Allowed recovery of percentage of the lost 34.5%<br />Allowed him to save for retirement<br />Reduced his taxes<br />Protected his assets from creditors<br />Enabled him to pass on a legacy to his family<br />This how Joe did it &gt;&gt;&gt;&gt;<br />
  • 17. Joe’s IBC Bank<br />Permanent Whole Life Policy<br />$5,000 annual premium ($400+/mo)<br />Premium paid 7 years<br />Cash value end of year 7 = $35,960<br />
  • 18. Let’s look at buying a lifetime of cars…<br />
  • 19. Vehicle <br />Purchases<br />LEASE<br />FINANCE<br />vs.<br />Joe’s Family Bank<br />PAYCASH<br />
  • 20. SIMPLE COMPARISON<br />- No down payment<br /> - No trade-in<br /> - No inflation<br />FINANCING CONSIDERATIONS<br /><ul><li>Between ages 23 to 67 you purchase a new vehicle
  • 21. This happens every 4 years
  • 22. The vehicles cost $10,500 each time
  • 23. Averaging a historical interest rate of 8.5% </li></li></ul><li>”You don’t have to be rich to create a banking system that can handle all your needs for financing.” <br />COMPARISON<br />IBC<br />PAY CASH<br />FINANCE<br />LEASE<br />$<br />$<br />$<br />$<br />$<br />$<br />LOST<br />$-116,000<br />LOST<br />$-138,000<br />LOST<br />$-175,000<br />
  • 24. GAIN<br />$+552,000<br />TAX FREE<br />“ … create your own banking system <br />so that you can control 100% of your needs.”<br />$<br />$<br />$<br />$<br />$<br />$<br />COMPARISON<br />LEASE<br />FINANCE<br />PAY CASH<br />IBC<br />Remember this example <br />was for 1 CAR!<br />After 4 years, you’d never have to go to a finance company to finance a car again.<br />$<br />$<br />$<br />$<br />$<br />$<br />LOST<br />$-116,000<br />What if you did this with <br />2 CARS?<br />LOST<br />$-138,000<br />LOST<br />$-175,000<br />
  • 25. Joe’s Sunset Years<br />Financed all his cars and recovererd the %<br />$987,757.00 in Cash Value<br />$650,000.00 private pension (13x50K)<br />$1,365,057.00 to nextgeneration<br />
  • 26. Couldthisbebetter?<br />YES!!!<br />The more Joe fundshisprivatefinancing system the more hecanrecover dollars from the lost 34.5%<br />By usingthis as much as possible Joe canavoidpaying to use otherpeople’s money.<br />He canalsoavoidopportunitycostincurred by using cash thatwasearning % elsewhere.<br />
  • 27. SUSTAINABLE FINANCES<br />Ron Doerksen<br />1706 Front St #478<br />Lynden, WA 98264<br />360.306.5642<br />866.561.3754<br />SustainableFinances@comcast.net<br />

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