An Uncommon Approach to Financial Decision Making
Find Real Balance . . .. . . to protect against the unexpectedwhile growing your wealth.An Uncommon View . . .. . . to challenge traditional thinkingand offer a refreshingly new approachto financial decision making.
Common vs Uncommon...Today, >90% of the wealth in the country <10%is owned by of the peopleThis smaller group thinks about money and wealth building in an uncommon manner.Learning their secrets may be the key to unlocking your full ﬁnancial potential.Common Financial Myths... “My money only needs to keep pace with inﬂation.” “I will be in a lower income tax bracket at retirement.” “My 401(k) plan creates a tax savings, which can be spent or invested.” “Compounding interest creates a ﬁnancial miracle.” “I won’t need life insurance when I retire.” “A 15 year mortgage costs less than a 30 year mortgage.” “Disinvesting is the same as investing.” “Rate of return on my assets is more important than regular savings habits.” “To increase protection, my cash ﬂow will suffer.” 1
Traditional Needs/Goal Planning Financial Target College? Retirement? Death? Goal = Time x Money x ROR Problems: Goal Incorrect Linear Math Inefficient Minimum Protection Requires Guesswork No Financial Cushion Promotes Risk Reviews & Updates2
Impact of Needs/Goal Planning Optimal Results Financial Target Actual Results Goal = Time x Money x ROR Threats to Your Money: Financial Disorganization: Multiple financial institutions, constant change, bias, hype, inefficiencies, money locked up, confusion, costs, penalties Real Cost of Living: Inflation, PLUS taxes, new inventions, things wearing out, support for children, improved lifestyle, unexpected life events Failed Products and Strategies: Compound Interest, credit card debt, subprime, low savings, high risk asset allocation, term and invest difference, misuse of qualified plans 3
An Uncommon Perspective: We start with your BALANCE SHEET... Assets Liabilities Net Worth ...And then add your PROTECTION and CASH FLOW decisions, to create a WIDE ANGLE VIEW of your finances PROTECTION Assets Liabilities Net Worth CASH FLOW The Real Goal: To move toward, and then maintain, an improved level of FINANCIAL BALANCE4
Achieving Financial Balance Four Interdependent Domains Financial Balance Rules Protection Liabilities First Priority Eliminate debt Full Replacement Avoid taxes Lifetime Coverage Mortgage selection Assets Cash Flow Rate of return Redeploy Income Minimal risk Minimize protection costs Avoid taxes Improved savings Liquidity Lower debt and taxes Budgeted lifestyle 5
The Living Balance Sheet... Results: Optimal Financial Balance Wide Angle View Economic Based Financial Rules Lower Risk Efficiency/Cost Avoidance Assumes Unexpected Life Events6
Quick FactsClient Name (First/Last): Date of Birth/Age: /Spouse’s Name (First/Last): Date of Birth/Age: /Client E-mail: Spouse E-mail: Total Maximum Health Coverage Death Benefit Client A: Total Monthly Disability Income Client A: Death Benefit Client B: Total Monthly Disability Income Client B: PROTECTION Property and Casualty Health and Disability Legal Life Insurance Insurance Documents Insurance ASSETS LIABILITIES Personal Property Short Term Savings Taxes Investments Mortgages Retirement Business Debt Real Estate Total Business NET WORTH Total CASH FLOW Gross Income Protection Assets Liabilities Net Income Gross Income Client A: Income Tax: Gross Income Client B: Short Term: Mortgages: Business Debt:
The Living Balance Sheet Design Tools Data Gathering Simple to complete Fact Finder auto-populates a series of reports, calculators and vignettes. Strategic Solutions Your Financial Representative is fully equipped to offer creative strategies and solutions designed to improve financial results. Action Steps To assist with implementing financial decisions, The Living Balance Sheet instantly creates an Action Step Score Card. Once established, automated alerts track changing financial circumstances.