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

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