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  • How We Work… If you should decide to work with us, we are only paid on solutions that work, You’ll Never write a check to us personally and we do not charge to work with your CPA or Attorney. We are here to serve YOUR needs!
  • This is really a 3 day Educational course that we’ve shorten to give you an overview or an introduction to some of the basic concepts… Our Goal Is To Provide Every Family With The Strategies, training and Help They Need To: Be Debt Free, Reduce Income Taxes, Establish A Source of Emergency Funds and Maximize Retirement Savings. We believe every family should have the opportunity to be financially secure…
  • Now there's another interesting question . . . ADVANCE SLIDE . . .that we have to ask if more and more of us are going to be living longer and longer which is, how old is old? Think back to when you were a kid, how old did you think old was? Twenty-five? Thirty-two? It turns out that most of us walk around with a number in our minds, and the number is 65. Sixty-five, where did that age come from?
  • First let’s talk about The Facts Of Life in the USA… We have several huge problems. Is there any question that Consumer Debt is out of control? I read somewhere that the average American family has 7 credit cards, with balances totaling over $10,000. Do you think that is the main reason why most people aren’t able to save any money? And, then there’s then recent loses in the stock market. How many of you lost money in the recent stock market decline? Are you even back to where you where 5 years ago? How many of you have moved some, or all, of your money into money market accounts, CDs or savings accounts? Are you happy with the low interest rates you are getting? How many of you are paying less in income taxes than you were 10 years ago? Do you see taxes going up with the problems we face with the social security system?
  • First let’s talk about The Facts Of Life in the USA… We have several huge problems. Is there any question that Consumer Debt is out of control? I read somewhere that the average American family has 7 credit cards, with balances totaling over $10,000. Do you think that is the main reason why most people aren’t able to save any money? And, then there’s then recent loses in the stock market. How many of you lost money in the recent stock market decline? Are you even back to where you where 5 years ago? How many of you have moved some, or all, of your money into money market accounts, CDs or savings accounts? Are you happy with the low interest rates you are getting? How many of you are paying less in income taxes than you were 10 years ago? Do you see taxes going up with the problems we face with the social security system?
  • Let’s take a quick quiz… How many of you believe… (read the questions on the slide) (You might consider giving a prize to whoever answers all of these correctly…)
  • So, How Do We Keep The Great American Dream Alive? It’s a whole new ballgame. We Need To Rethink The Old Traditional Ways We Managed Our Money and we need to Find Ways To Make All Of Our Money and Assets Work For Us…
  • Reason #1: Mortgages don't lower home values. Your house will grow in value (or not) whether or not you have a mortgage. In fact, most people discover that, over time, their mortgage balance falls while their home value rises - creating substantial wealth they never expected. Reason #2: Your mortgage is the cheapest money you'll ever buy. Most people need to borrow money during their lives, so why pay 18% to credit cards when you can borrow at rates of 7% or even less? Reason #3: Your mortgage is the best way you can lower your taxes. Interest you pay on personal loans, auto loans and credit cards is not tax-deductible, but for most of us, interest you pay on mortgage loans is fully tax-deductible, making the cheapest loan you'll ever get, even cheaper. Imagine borrowing money for a net cost of less then 5%1 You can do it with a mortgage loan! Reason #4: Get the cash out of the house - while you still can. The main reason people turn to borrowing is because they have little or no income. But if you ever suffer a job loss, major medical or other financial crisis, you could find yourself unable to get a home loan. That's because lenders don't like to lend money if you are already in financial difficulty. That's why you should get a big mortgage now, before you need it - while you still can. Reason #5: Your mortgage becomes even cheaper over time. Depending on the loan you choose, your payment never rises - but your income likely will. That means todays mortgage payment becomes increasingly easy to pay over time. The rules of money have changed. And nowhere is that more true than with mortgages. Reason #1: Mortgages don't lower home values. Your house will grow in value (or not) whether or not you have a mortgage. In fact, most people discover that, over time, their mortgage balance falls while their home value rises - creating substantial wealth they never expected. Reason #2: Your mortgage is the cheapest money you'll ever buy. Most people need to borrow money during their lives, so why pay 18% to credit cards when you can borrow at rates of 7% or even less? Reason #3: Your mortgage is the best way you can lower your taxes. Interest you pay on personal loans, auto loans and credit cards is not tax-deductible, but for most of us, interest you pay on mortgage loans is fully tax-deductible, making the cheapest loan you'll ever get, even cheaper. Imagine borrowing money for a net cost of less then 5%1 You can do it with a mortgage loan! Reason #4: Get the cash out of the house - while you still can. The main reason people turn to borrowing is because they have little or no income. But if you ever suffer a job loss, major medical or other financial crisis, you could find yourself unable to get a home loan. That's because lenders don't like to lend money if you are already in financial difficulty. That's why you should get a big mortgage now, before you need it - while you still can. Reason #5: Your mortgage becomes even cheaper over time. Depending on the loan you choose, your payment never rises - but your income likely will. That means todays mortgage payment becomes increasingly easy to pay over time. The rules of money have changed. And nowhere is that more true than with mortgages. Reason #1: Mortgages don't lower home values. Your house will grow in value (or not) whether or not you have a mortgage. In fact, most people discover that, over time, their mortgage balance falls while their home value rises - creating substantial wealth they never expected. Reason #2: Your mortgage is the cheapest money you'll ever buy. Most people need to borrow money during their lives, so why pay 18% to credit cards when you can borrow at rates of 7% or even less? Reason #3: Your mortgage is the best way you can lower your taxes. Interest you pay on personal loans, auto loans and credit cards is not tax-deductible, but for most of us, interest you pay on mortgage loans is fully tax-deductible, making the cheapest loan you'll ever get, even cheaper. Imagine borrowing money for a net cost of less then 5%1 You can do it with a mortgage loan! Reason #4: Get the cash out of the house - while you still can. The main reason people turn to borrowing is because they have little or no income. But if you ever suffer a job loss, major medical or other financial crisis, you could find yourself unable to get a home loan. That's because lenders don't like to lend money if you are already in financial difficulty. That's why you should get a big mortgage now, before you need it - while you still can. Reason #5: Your mortgage becomes even cheaper over time. Depending on the loan you choose, your payment never rises - but your income likely will. That means todays mortgage payment becomes increasingly easy to pay over time. The rules of money have changed. And nowhere is that more true than with mortgages.
  • Let’s Understand a little more about Home Equity… If You Build Up Equity In Your Home, Is It Going To Help Your Home To Appreciate In Value?
  • The Truth Is… Your Home Is Going To Appreciate The Same Amount, Whether You Have Equity Built Up Or Not!
  • Consider… If Having Equity In Your Home Isn’t Helping It To Appreciate In Value, …Then What Is Your Equity Doing?
  • It’s A Missed Opportunity… It Is Just Sitting There Earning ZERO! And Worse Yet, It’s Losing You Money! From A Financial Or Business Perspective Does That Make Any Sense?
  • Question: True or False Equity in your home enhances your net worth. Reality: Equity in your home does not enhance your net worth at all. Separated from your home, however, it has the ability to dramatically enhance your net worth over time.”
  • Why Wouldn’t You Do This? More Advantages… You Would Have A Greater Income Tax Write Off During The Entire 30 Years … If You Are Laid-Off or Injured You Always Have The Money To Make The Mortgage Payments… You Are In A Better Position To Take Advantage Of Other Money Making Opportunities… You Can Always Pay Off The Mortgage Early , If You Ever Want To…
  • Best Of All… In Most Cases… All Of This Can Be Accomplished Without You Spending A Penny more Than You Are Spending Today!
  • Read Slide
  • So, what do you think is the single biggest change that's going to happen in our lives as a result of greater longevity?
  • Historically, we've lived a linear life plan . Life was short. Biologic clocks were ticking away. And we tended to organize our lives in a relatively predictable fashion.
  • First we learned. We did that once.
  • Then we fell in love, got married, and it always lasted forever.
  • We divided up the responsibilities --"Honey, you take care of the home. I'll go out and earn the money. Those were our jobs." Our kids always turned out perfect. And right before we died—
  • We took a cruise. That ‘s what life was .
  • But what if you knew you might live to be 90 or 100? Would you be in a hurry to get to be old just so you could be old for an extra 20 years? No one ever says that they can’t wait to have more longevity so that they can be “older” a really long time. What people say is they want to be young longer. They want to be middle-aged longer. The truth is, people don’t want to be any age at all. They just want to have the freedom to do all the things they want to do with their lives. I think the biggest change you’re going to see is the end of the linear life plan and the emergence of what I’ll call . . .
  • . . . a cyclic life plan in which people go back to school two, three, four times in their lives. In which people who might find themselves widowed or divorced fall in love again. In which people retire and then get tired of it and start new lives, new careers. They reinvent themselves.
  • Caregiving.” The average American today actually has more parents than children. Yet the average person in this country has given almost no thought to long-term care and financing it, which could break the bank.
  • . . . “Emptynesting.” As life grows longer, many couples will find themselves spending more years together - after the kids have left the nest - than all the years they spent actively parenting. It’s often a time when most couples sit down and rethink both their lifestyle priorities and and possibly reshaping their financial plans.
  • “ Singlehood.” We have 18 million singles over the age of 50. This next part might upset some of you.
  • When we pass away, these new modern women go through a period of very deep grief and bereavement —
  • . . . for about a year and a half. And then they get on with their lives.
  • ADVANCE SLIDE “Grandparenthood.” How about grandparenthood? Are any of you grandparents? Presenter Notes The National Center for Public Policy and Higher Education reports that the number of high-income families borrowing for college has grown from 16% in 1990 to 45% in 2000. With the rising cost of college education today, this is an ideal spot to provide examples of attractive approaches that you have used in your practice and resulted in win/wins for your client, their children and their grandchildren.
  • This gal sitting down in the blue dress is named Sarah Knauss. She’s 118 years old. Her daughter, Kitty, in the red dress is 95. Standing at the top is her grandson, Bob. He’s 73. He’s holding the great granddaughter, Kathy. She’s 49. The great-great granddaughter, Christina, is sitting on the floor. She’s 27. And the great-great-great grandson, Bradley, is 3. Six-generation families. Have you begun to contemplate how you would manage your wealth across two, three, four-generation families?
  • “ Retirement” is certainly one of the big adult lifestages that is being reinvented. In fact, I believe we are witnessing the birth of a new era of retirement right now.
  • Note that according to Webster’s Unabridged Dictionary, “retirement” officially means : “to disappear,” “to go away,” “to withdraw.” For a growing number of people, this is not what they’re hoping for with their extended longevity. What about you?
  • Assuming you followed through, you’d need to put away $467 per month (if you were in a combined 30% tax bracket) This would be the after-tax cost of your mortgage payment at 8%. Let’s see the results…
  • Your investment account would to $662,025 in 30 years. Had you gone the first route, borrowed the $100,000 and put it immediately to work, your wealth would have grown to $1,093,573. That’s over 60% more!
  • If you are a farmer and you had to go to the local feed store to buy some seed, to plant in your corn fields. And when you got to the counter to pay for the seed, the clerk ask you: Would you like to pay tax on the Seed now and get the harvest tax free or get the seed tax free and pay Tax on the harvest?
  • I Rather Pay Tax on the seed and get the harvest tax free! But the is just the opposite of how Qualified or Regulated Retirement plans work! Regulated Retirements plan let you get a tax break on the fund your contributing, but when you retire here comes uncle Sam with a wheel barrel to collect his taxes! Uncle Sam Has conditioned us to believe that qualified/ Regulated plans are god for us, when it is actually uncle Sam’s best retirement savings plan.
  • Each now had his own opinion, firmly based on his own experience, of what an elephant is really like. For after all, each had felt the elephant for himself and knew that he was right!
  • Let Me Ask You This Question Is: {READ THE SCREEN!!!!} Let me ask you this questions too: What are taxes going to be 10, 15, 20 years from now? Higher or lower? More the likely than not they will be higher! What has the IRS done to us in the last 10 years? Lowered tax brackets while increasing effective tax rates, Taken away deduction, increased taxation of social security, and more Alt. Minimum Taxes
  • More ‘Smart Money’ Choices … Now Imagine What Could Happen, If You… Increased the Deductibles On Your Home Owners Insurance, Auto Insurance, Health Insurance, Disability Insurance, etc… Positioned Your Assets And Income To Qualify For College Financial Aid… Took Advantage Of The Free Money In A 401K… Reduced Your Income Taxes…
  • And, It Gets Even Better… Become Your Own Banker! How About The Next Time You Decide To Buy A Car, Make A Major Purchase or Need Money For A Business Opportunity… You Borrow The Money From Yourself Instead Of A Bank! Then You Pay Yourself The Principal And Interest You Would Have Paid The Bank! How Much Better Off Would You Be?
  • Read Slide
  • So, How Do We Keep The Great American Dream Alive? It’s a whole new ballgame. We Need To Rethink The Old Traditional Ways We Managed Our Money and we need to Find Ways To Make All Of Our Money and Assets Work For Us…
  • Read Slide
  • Mindful test readonly

    1. 1. Turbocharge Your Wealth Presented by: Kim DeBroux
    2. 2. Live Debt Free & Retire Wealthy
    3. 3. Tonight At This Seminar I will: <ul><li>NOT tell you to skip a cappuccino-a-day! </li></ul><ul><li>NOT teach you to buy no-money down investment real estate and flip it! </li></ul><ul><li>NOT tell you to search for undervalued properties and become a landlord! </li></ul><ul><li>NOT teach you to trade in the stock or futures markets! </li></ul><ul><li>NOT tell you to quit your job, create legal entities and open a business that could fail! </li></ul>
    4. 4. Workshop Objective… <ul><li>Dispel common myth’s by learning the New Rules of Money </li></ul><ul><li>Teach you 3 strategies millionaires use to create wealth </li></ul><ul><li>How to accumulate, access and transfer your money TAX FREE! </li></ul><ul><li>Increase your net spendable retirement income by as much as 50% </li></ul>
    5. 5. Know The Facts
    6. 6. The Facts… <ul><li>Out Of Control Consumer Debt </li></ul>
    7. 8. Consumer Credit Source: Federal Reserve Statistical Release, 2001 <ul><ul><li>1945-2001 </li></ul></ul>
    8. 9. The Facts… <ul><li>Out Of Control Consumer Debt </li></ul><ul><li>Minimal Savings </li></ul>
    9. 10. 1970 1980 1990 2000 U.S. Personal Savings Rate % of Disposal Personal Income <ul><ul><li>1970 - 2000 </li></ul></ul>Source: Bureau of Economic Analysis, 2000 11 10 9 8 7 6 5 4 3 2 1 0 9.4% 7.8% 10.2% . 3%
    10. 11. Retirement Savings <ul><li>Currently 52% of Americans stated that they were worried about outliving their retirement *. </li></ul><ul><li>The average worker in the US between age 45 and 60 has $1,844 in personal savings outside their house, and 23% have negative net worth . </li></ul><ul><li>58% Don’t have $100,000 in savings by retirement </li></ul>Source: Retirement Confidence Survey (2005) 19% 16% 10% 4% 11% $250,000 or more 23% 17% 10% 5% 12% $100,000-$249,999 7% 13% 14% 9% 11% $50,000-$99,000 12% 14% 15% 12% 13% $25,000-$49,999 39% 41% 50% 70% 52% Less than $25,000 55+ 45-54 35-44 25-34 All age groups Retirement Savings
    11. 12. America’s Wealth 31% of America’s wealth is now in the house. 67% of Americans have more wealth in their house than in all other investments combined. Preferred Non-Preferred
    12. 13. Key Findings: <ul><li>We have a society of homeowners who will accomplish the goal of owning their home free and clear, but without the savings they needed for retirement. </li></ul>
    13. 14. Strategy #1: Use Your Home To Turbocharge Your Wealth
    14. 15. Mortgage Quiz! True False <ul><li>A large down payment will save you more money on </li></ul><ul><li>your mortgage over time than a small down payment. </li></ul><ul><li>A 15-year mortgage will save more money over time </li></ul><ul><li>than a 30-year mortgage. </li></ul>3. Making extra principal payments saves you money. 4. The interest rate is the main factor in determining the cost of a mortgage. 5. You are more secure having your home paid off than financed 100% X X X X X True or False?
    15. 16. Wealth Vision “ The real voyage of discovery consists not in seeking new landscapes but in having new eyes.” - Marcel Proust French novelist and Author, 1871-1922
    16. 17. <ul><li>We grew up hearing: </li></ul><ul><ul><li>Get the lowest-rate mortgage... </li></ul></ul><ul><ul><li>Then, start a bi-weekly mortgage program... </li></ul></ul><ul><ul><li>And, send in additional money whenever possible to reduce the principal balance... </li></ul></ul><ul><ul><li>ALL so you can pay off the mortgage as soon as possible. </li></ul></ul>This Depression Era mindset has been burned into the American psyche by our parents and grandparents. But, is it possible this is exactly what you should NOT be doing? The New Rules Of Money
    17. 18. <ul><li>The rules have changed. Now... </li></ul><ul><ul><li>Choose the best mortgage, not necessarily the one with the lowest rate. </li></ul></ul><ul><ul><li>Stay away from bi-weekly mortgage plans. </li></ul></ul><ul><ul><li>Never send extra money to your mortgage company. </li></ul></ul><ul><ul><li>Paying off your loan is like putting money under your mattress. </li></ul></ul>The New Rules Of Money
    18. 19. New Millennium Brings 3 Opportunities Turbocharge Your Wealth <ul><li>Huge Source of tax-free money now available in your home </li></ul><ul><li>New lending programs that: </li></ul><ul><ul><li>Accesses more equity </li></ul></ul><ul><ul><li>Lowers your payment </li></ul></ul><ul><ul><li>Increases your tax deduction </li></ul></ul><ul><li>3. Investment vehicles that have: </li></ul><ul><ul><li>stock market gains </li></ul></ul><ul><ul><li>No Risk of principle </li></ul></ul><ul><ul><li>Tax Free Growth </li></ul></ul><ul><ul><li>Tax Free Withdraws </li></ul></ul>
    19. 20. New Rules: Tale of Two Brothers
    20. 21. Tale of Two Brothers <ul><li>Our story begins with two brothers: </li></ul><ul><li>Each earn $70,000 a year. </li></ul><ul><li>They each have $40,000 in savings </li></ul><ul><li>Both are buying $200,000 homes. </li></ul>
    21. 22. Who made the right decision? <ul><li>$40,000 big down payment </li></ul><ul><li>$0 left to invest </li></ul><ul><li>$1,275 monthly payment (56% is tax deductible first year/28% average) </li></ul><ul><li>$1,153 average monthly net after-tax cost 2 </li></ul><ul><li>Sends $100 monthly to lender in effort to eliminate mortgage sooner </li></ul><ul><li>$10,000 small down payment </li></ul><ul><li>$30,000 remaining to invest </li></ul><ul><li>$967 monthly payment (100% is tax-deductible first 15 years/59% average) </li></ul><ul><li>$657 monthly net after-tax cost 3 </li></ul><ul><li>Adds $100 monthly to investments, plus $496 saved from lower mortgage payment, where account earns 8% rate of return 4 </li></ul><ul><li>15-year mortgage at 5.12% (5.44% APR) </li></ul><ul><li>30-year interest-only loan at 6.11% (6.29% APR 1 ) </li></ul>The above hypothetical examples are for illustrative purposes only. Plans vary based on the needs and wants of the customer. Illustrated interest rates compiled by Freddie Mac for April 2003. 1 This example is based on a Fannie Mae Interest First loan fixed at6.11% APR. Interest only for 15 years, then the first loan converts to a 15-year amortizing loan on the 15th anniversary with a mo. payment of $1,753. 2 Assumes combined federal/state income tax rate of 32%. 3 Assumes combined federal/state income tax rate of 32%. Net after-tax cost shown is for years 1-15; average for years 16-30 is $1,470. 4 Assumes 8% rate of return. Rate of return may vary based on type of investment. Tale of Two Brothers Brother “A” Believes in “The Old Way” – paying off the mortgage as soon as possible Brother “B” Believes in “The New Way” – carrying a big, long mortgage and never paying it off
    22. 23. <ul><li>Results After Just 5 Years </li></ul>The above hypothetical examples are for illustrative purposes only. Plans vary based on the needs and wants of the customer. 1 Assumes combined federal/state income tax rate of 32%. 2 Assumes 8% rate of return. Rate of return may vary based on type of investment. <ul><li>Received $11,286 in tax savings 1 </li></ul><ul><li>Received $18,574 in tax savings 1 </li></ul>What if both brothers suddenly lose their jobs? <ul><li>Has no savings to get through crisis </li></ul><ul><li>Has $88,428 in savings to tide him over 2 </li></ul><ul><li>How ironic: Brother “A”, who never wanted a mortgage in the first place, is now in financial jeopardy because he was trying to get rid of his loan too quickly! </li></ul><ul><li>Has $0 in savings and investments 2 </li></ul><ul><li>Has $88,428 in savings and investments 2 </li></ul><ul><li>Can’t get a loan–even though he has $87,247 more in equity than his brother – because he has no job </li></ul><ul><li>Must sell his home or face foreclosure because he can’t make payments </li></ul><ul><li>At this point, it’s a fire sale, so he must sell at a discount, then pay real estate commissions (6-7%) </li></ul><ul><li>Doesn’t need a loan </li></ul><ul><li>Can easily make his mortgage payment even if he’s unemployed for years </li></ul><ul><li>Has no reason to panic since he’s still in control — remember … Cash is King! </li></ul>Tale of Two Brothers Brother “A” Believes in “The Old Way” – paying off the mortgage as soon as possible Brother “B” Believes in “The New Way” – carrying a big, long mortgage and never paying it off
    23. 24. Now...which do you think is the right course of action <ul><li>Received $19,702 in tax savings 1 </li></ul><ul><li>Received $55,723 in tax savings 1 </li></ul><ul><li>Received $19,702 in tax savings 1 </li></ul><ul><li>Received $87,927 in tax savings 1 </li></ul><ul><li>Has $27,592 in savings and investments 2 </li></ul><ul><li>Owns home outright </li></ul><ul><li>Has $305,154 in savings and investments 2 </li></ul><ul><li>Remaining mortgage balance is $190,000 – and he has enough savings to pay it off and still have $115,154 left over, free and clear. </li></ul><ul><li>Has $567,148 in savings and investments 2 </li></ul><ul><li>Owns home outright </li></ul><ul><li>Has $1,215,069 in savings and investments 2 </li></ul><ul><li>Owns home outright – so starts fresh and enjoys the same benefits once again. </li></ul>The above hypothetical examples are for illustrative purposes only. Plans vary based on the needs and wants of the customer. 1 Assumed combined federal/state income tax rate of 32%. 2 Assumes 8% rate of return. Rate of return may vary based on type of investment. Results After 15 Years Tale of Two Brothers Brother “A” Believes in “The Old Way” – paying off the mortgage as soon as possible Brother “B” Believes in “The New Way” – carrying a big, long mortgage and never paying it off Brother “A” Brother “B” Results After 30 Years
    24. 25. Value of Money
    25. 26. Traditional Amortization Loan Balance $234,027 30 year fixed at 6.50% $140,000
    26. 27. $32,101 Hypothetical 8% Rate of Return on $434 Paying 5.00% Interest Only Loan Investing The Difference:
    27. 28. $32,101 Hypothetical 8% Rate of Return on $434 Paying 5.00% $250,000 Interest Only Loan Investing The Difference:
    28. 29. $32,101 Hypothetical 8% Rate of Return on $434 Paying 5.00% $250,000 $651,128 Interest Only Loan Investing The Difference:
    29. 30. Understanding Home Equity… If You Build Up Equity In Your Home, Is It Going To Help Your Home To Appreciate In Value?
    30. 31. <ul><li>Your Home Is Going To Appreciate The Same Amount, Whether You Have Equity Built Up Or Not! </li></ul>The Truth Is…
    31. 32. Consider… <ul><li>If Having Equity In Your Home Isn’t Helping It To Appreciate In Value, </li></ul><ul><li>… Then What Is Your Equity Doing? </li></ul>
    32. 33. <ul><li>It Is Just Sitting There Earning </li></ul><ul><li>ZERO, ZILCH, NADA! </li></ul><ul><li>And Worse Yet, It’s Losing You Money! </li></ul><ul><li>From A Financial Or Business Perspective Does That Make Any Sense? </li></ul>It’s A Missed Opportunity…
    33. 34. Value of Money:
    34. 35. Value of Money “ Time is the greatest ally when it comes to saving for retirement. A worker who saves $1,000 a year from age 20 through age through age 30 then stops, will have more at retirement than someone that starts a age 30 and saves the amount for 35 years Straight.” - Elaine L. Chao, U.S. Secretary of Labor
    35. 36. $32,101 Hypothetical 8% Rate of Return on $434 Paying 5.00% $250,000 $651,128 Interest Only Loan Investing The Difference:
    36. 37. $146,933 Hypothetical 8% Rate of Return $100,000 Equity Liberated $1,006,266 $250,000 Idle Equity Liberated And Invested at 8%:
    37. 38. $146,933 Hypothetical 8% Rate of Return $100,000 Equity Liberated $1,006,266 $250,000 Idle Equity Liberated And Invested at 8%:
    38. 39. Home Insecurity “ That was my nest egg. It was about half my net worth. I have a $400,000 loss after the flood insurance. Its appraised value was probably $600,000 to $700,000, but I had been offered more to sell it. That house was the first thing I ever had that was paid for. The hurricane certainly complicated my decision across the board. From a personal standpoint, I need a little more income.”- Trent Lott, U.S. Senator, SunHerald.com
    39. 40. Answer : False Equity in your home does not enhance your net worth at all. Separated from your home, however, it has the ability to dramatically enhance your net worth over time.&quot; Question: True or False Equity in your home enhances your net worth.
    40. 41. Why Wouldn’t You Do This? <ul><li>More Advantages… </li></ul><ul><li>You Would Have A Greater Income Tax Write Off During The Entire 30 Years … </li></ul><ul><li>If You Are Laid-Off or Injured You Always Have The Money To Make The Mortgage Payments… </li></ul><ul><li>You Are In A Better Position To Take Advantage Of Other Money Making Opportunities… </li></ul><ul><li>You Can Always Pay Off The Mortgage Early , If You Ever Want To… </li></ul>
    41. 42. Best Of All… <ul><ul><ul><ul><ul><li>In Most Cases… </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>All Of This Can Be Accomplished Without You Spending A Penny More Than You Are Spending Today! </li></ul></ul></ul></ul></ul>
    42. 43. You Have The Choice… You Can Work To Pay Your Mortgage! or You Can Make Your Mortgage Work For You!
    43. 44. <ul><li>How long will it take for your money to double? </li></ul><ul><li>72 divided by 8% Interest= 9 years </li></ul><ul><li>72 divided by 6% Interest= 12 years </li></ul><ul><li>72 divided by 4% Interest= 18 years </li></ul><ul><li>*With an 8% compounded interest rate earned, it will </li></ul><ul><li>Take about 9 years for you money to double. </li></ul>Rule of 72
    44. 45. “ Rule of 72” Applied To Future Cost of Living *rounded up to 15 $2,500 per month Your Living Cost Today $5,000 per month Cost of living in 15 years $10,000 Cost of living in 30 years Doubles every 15 years 72 divided by 5 = 14.4*
    45. 46. Life Stages
    46. 47. Linear Lifeplan Education Work Leisure 0 10 20 30 40 50 60 70 Age
    47. 52. Linear Lifeplan Education Work Leisure 0 10 20 30 40 50 60 70 Age
    48. 53. Cyclic Lifeplan Education Work Leisure 0 10 20 30 40 50 60 70 Age 80
    49. 54. Caregiving
    50. 55. Empty Nesting
    51. 56. Singlehood
    52. 59. Grandparenthood
    53. 60. Six Generations Source: New York Times, 2001 Sara Knauss, 118 Bob Butz Grandson, 73 Kathy Jacoby Great-granddaughter, 49 Kitty Sullivan Daughter, 95 Kristina Patton Great-great granddaughter, 27 Bradley Patton Great-great-great grandson, 3
    54. 61. Retirement
    55. 62. Webster's Definition of Retirement <ul><li>to disappear </li></ul>Source: Webster's New Twentieth Century Dictionary <ul><li>to go away </li></ul><ul><li>to withdraw </li></ul>
    56. 63. Idle Equity Liberated and Invested at 8%:
    57. 64. <ul><li>“ What about the additional mortgage payment I have to make to get this $100,000 mortgage?” </li></ul><ul><li>“ What if I invested that same amount every month instead?” </li></ul>Common Question:
    58. 65. Market Risk Evaluation Annuities U.S. Treasury Bills X Equity in House Money Market Funds Investment Grade Life Insurance CD’s X Mutual Funds X High Grade Bonds X Blue Chip Stocks Investment Real Estate X Lower Quality Bonds X Speculative Common Stocks Raw Land Limited Partnerships Business Ventures X Commodities Rate of Return Liquidity Safety Investment
    59. 66. Market Risk Evaluation Annuities U.S. Treasury Bills X X Equity in House Money Market Funds Investment Grade Life Insurance CD’s X Mutual Funds X High Grade Bonds X Blue Chip Stocks X Investment Real Estate X Lower Quality Bonds X Speculative Common Stocks X Raw Land X Limited Partnerships X Business Ventures X Commodities Rate of Return Liquidity Safety Investment
    60. 67. Market Risk Evaluation Annuities X U.S. Treasury Bills X X X Equity in House X Money Market Funds Investment Grade Life Insurance CD’s X Mutual Funds X High Grade Bonds X Blue Chip Stocks X Investment Real Estate X Lower Quality Bonds X Speculative Common Stocks X Raw Land X Limited Partnerships X Business Ventures X Commodities Rate of Return Liquidity Safety Investment
    61. 68. Equity Liberated vs. Saving Monthly Earning 8%:
    62. 69. Secret #2 The Ultimate Investment
    63. 70. Risk and Return Before a single dime of your critical cash is invested, 3 factors need to be considered:
    64. 71. Risk and Return Before a single dime of your critical cash is invested, 3 factors need to be considered: the risk of loss of your investment Safety
    65. 72. Risk and Return Before a single dime of your critical cash is invested, 3 factors need to be considered: the use and control of your investment the risk of loss of your investment Liquidity Safety
    66. 73. Risk and Return Before a single dime of your critical cash is invested, 3 factors need to be considered: the earnings on your investment the use and control of your investment the risk of loss of your investment Return Liquidity Safety
    67. 74. Market Risk Evaluation Annuities U.S. Treasury Bills Equity in House Money Market Funds Investment Grade Life Insurance CD’s Mutual Funds High Grade Bonds Blue Chip Stocks Investment Real Estate Lower Quality Bonds Speculative Common Stocks Raw Land Limited Partnerships Business Ventures Commodities Rate of Return Liquidity Safety Investment
    68. 75. Market Risk Evaluation Annuities U.S. Treasury Bills X Equity in House Money Market Funds Investment Grade Life Insurance CD’s X Mutual Funds X High Grade Bonds X Blue Chip Stocks Investment Real Estate X Lower Quality Bonds X Speculative Common Stocks Raw Land Limited Partnerships Business Ventures X Commodities Rate of Return Liquidity Safety Investment
    69. 76. Market Risk Evaluation Annuities U.S. Treasury Bills X X Equity in House Money Market Funds Investment Grade Life Insurance CD’s X Mutual Funds X High Grade Bonds X Blue Chip Stocks X Investment Real Estate X Lower Quality Bonds X Speculative Common Stocks X Raw Land X Limited Partnerships X Business Ventures X Commodities Rate of Return Liquidity Safety Investment
    70. 77. Market Risk Evaluation Annuities X U.S. Treasury Bills X X X Equity in House X Money Market Funds Investment Grade Life Insurance CD’s X Mutual Funds X High Grade Bonds X Blue Chip Stocks X Investment Real Estate X Lower Quality Bonds X Speculative Common Stocks X Raw Land X Limited Partnerships X Business Ventures X Commodities Rate of Return Liquidity Safety Investment
    71. 78. Test For Conservative Long-Term Accumulation 9.61% 7.45-13.75% FIFO Investment Grade Life Insurance 7% 5 to 9.3% LIFO Annuity 5% 1-18% As Earned CD Average Range of Return Taxation Investment
    72. 79. Test For Conservative Long-Term Accumulation Earned Income Tax 9.61% 7.45-13.75% FIFO Investment Grade Life Insurance 7% 5 to 9.3% LIFO Annuity 5% 1-18% As Earned CD Average Range of Return Taxation Investment
    73. 80. Test For Conservative Long-Term Accumulation Income Taxes Due On Interest Earned 10% early withdrawal similar to a IRA or 401(k) prior to 59 ½ 9.61% 7.45-13.75% FIFO Investment Grade Life Insurance 7% 5 to 9.3% LIFO Annuity 5% 1-18% As Earned CD Average Range of Return Taxation Investment
    74. 81. Test For Conservative Long-Term Accumulation TAX FREE 9.61% 7.45-13.75% FIFO Investment Grade Life Insurance 7% 5 to 9.3% LIFO Annuity 5% 1-18% As Earned CD Average Range of Return Taxation Investment
    75. 82. Equity Index Life <ul><li>A Universal Life contract where the funds in the accumulation account are linked to the growth of an Equity Index. (S&P, NASDAQ, Dow) </li></ul><ul><li>Principal Guarantee. </li></ul><ul><li>Annual lock in of index gains, annual reset of index. </li></ul><ul><li>Minimum rate of return combined with maximum cap on gains. </li></ul><ul><li>Contractual “No Cost Loans” </li></ul>
    76. 83. Section 72(e) and 7702 <ul><li>The most unique feature of permanent life insurance is that under Section 72(e) and 7702 of the Internal Revenue Code the accumulation of cash inside the insurance contract is tax advantaged. Not only can the cash value accumulate tax free, but the cash can also be accessed tax free. </li></ul><ul><li>Hence, the beauty and magic of life insurance: It is a unique vehicle that allows tax free account value accumulation, allows you to access your money tax free, and, when you die, blossoms in value and transfers income tax free! </li></ul>
    77. 84. Floor 1% Goal: To have some potential for market gain without risk of principal Ceiling 13% “ Maximum Cap” <ul><li>Use of index like Standard and </li></ul><ul><li>Poor’s 500 </li></ul><ul><li>Principal guaranteed </li></ul><ul><li>against loss </li></ul><ul><li>Annual Lock in of index gains, </li></ul><ul><li>annual reset of index. </li></ul><ul><li>Contractual “No Cost Loans” </li></ul>“ Minimum Rate of Return” Equity Index Universal Life
    78. 85. $100,000 Gains Become Principal That is a $12,750 difference because of the annual lock in and reset. 10% The Powerful Advantage of Annual Lock in and Reset of the S&P Index $110,000 $99,000 -10% 1% $111,100 13% $116,655 $103,950 5% 5%
    79. 86. S&P 500 Index vs. EIUL Contract 1999-2005 12.99% EIUL Contract $112,990 $112,990 12.99% 1999 $100,000 Basis $100,000 Basis S&P500 Index Year
    80. 87. S&P 500 Index vs. EIUL Contract 1999-2005 $114,120 1.00% $106,050 -6.14% 2000 12.99% EIUL Contract $112,990 $112,990 12.99% 1999 $100,000 Basis $100,000 Basis S&P500 Index Year
    81. 88. S&P 500 Index vs. EIUL Contract 1999-2005 $114,120 1.00% $106,050 -6.14% 2000 1.00% 12.99% EIUL Contract $115,261 $89,252 -15.84% 2001 $112,990 $112,990 12.99% 1999 $100,000 Basis $100,000 Basis S&P500 Index Year
    82. 89. S&P 500 Index vs. EIUL Contract 1999-2005 $114,120 1.00% $106,050 -6.14% 2000 $116,414 1.00% $67,485 -24.39% 2002 1.00% 12.99% EIUL Contract $115,261 $89,252 -15.84% 2001 $112,990 $112,990 12.99% 1999 $100,000 Basis $100,000 Basis S&P500 Index Year
    83. 90. S&P 500 Index vs. EIUL Contract 1999-2005 $114,120 1.00% $106,050 -6.14% 2000 $116,414 1.00% $67,485 -24.39% 2002 $136,204 17% $92,617 37.24% 2003 1.00% 12.99% EIUL Contract $115,261 $89,252 -15.84% 2001 $112,990 $112,990 12.99% 1999 $100,000 Basis $100,000 Basis S&P500 Index Year
    84. 91. S&P 500 Index vs. EIUL Contract 1999-2005 $114,120 1.00% $106,050 -6.14% 2000 $116,414 1.00% $67,485 -24.39% 2002 $136,204 17% $92,617 37.24% 2003 $143,382 5.27% $97,494 5.27% 2004 1.00% 12.99% EIUL Contract $115,261 $89,252 -15.84% 2001 $112,990 $112,990 12.99% 1999 $100,000 Basis $100,000 Basis S&P500 Index Year
    85. 92. S&P 500 Index vs. EIUL Contract 1999-2005 $151,956 5.98% $103,320 5.98% 2005 $114,120 1.00% $106,050 -6.14% 2000 $116,414 1.00% $67,485 -24.39% 2002 $136,204 17% $92,617 37.24% 2003 $143,382 5.27% $97,494 5.27% 2004 1.00% 12.99% EIUL Contract $115,261 $89,252 -15.84% 2001 $112,990 $112,990 12.99% 1999 $100,000 Basis $100,000 Basis S&P500 Index Year
    86. 93. S&P 500 Index vs. EIUL Contract 1999-2005 $151,956 5.98% $103,320 5.98% 2005 $114,120 1.00% $106,050 -6.14% 2000 $116,414 1.00% $67,485 -24.39% 2002 $136,204 17% $92,617 37.24% 2003 $143,382 5.27% $97,494 5.27% 2004 1.00% 12.99% EIUL Contract $115,261 $89,252 -15.84% 2001 $112,990 $112,990 12.99% 1999 $100,000 Basis $100,000 Basis S&P500 Index Year
    87. 94. S&P 500 Index vs. EIUL Contract 1999-2005 $48,636 Difference $151,956 5.98% $103,320 5.98% 2005 $114,120 1.00% $106,050 -6.14% 2000 $116,414 1.00% $67,485 -24.39% 2002 $136,204 17% $92,617 37.24% 2003 $143,382 5.27% $97,494 5.27% 2004 1.00% 12.99% EIUL Contract $115,261 $89,252 -15.84% 2001 $112,990 $112,990 12.99% 1999 $100,000 Basis $100,000 Basis S&P500 Index Year
    88. 95. S&P 500 vs. EIUL
    89. 96. Strategy #3: Recycle And Explode Into Millions!
    90. 97. One-Time Effects On $100K Liberated at 7.5%: If Once Is Great, Why Stop There? <ul><li>Tax Bracket: 32% </li></ul><ul><li>Appreciation Rate: 5% </li></ul><ul><li>Earning Rate: 7.5% </li></ul><ul><li>Initial Mortgage Balance:$140,000 </li></ul>$1,020 $1,020 $1,020 $1,020 $1,020 $1,020 After Tax Payment 30 25 20 15 10 5 At Year $1,433,962 $240,000 65 $1,300,000 $956,531 $240,000 60 $1,015,000 $635,583 $240,000 55 $800,000 $414,742 $240,000 50 $625,000 $264,763 $240,000 45 $488,000 $165,438 $240,000 40 $380,000 Side Fund Cash Value Mortgage Balance By Age $300K House Appreciating at 5%
    91. 98. Stair-Stepped Effects: Liberating Equity Every 5 Years at 7.5%: <ul><li>Tax Bracket: 32% </li></ul><ul><li>Appreciation Rate: 5% </li></ul><ul><li>Earning Rate: 7.5% </li></ul><ul><li>Initial Mortgage Balance:$140,000 </li></ul>Side Fund More Than Doubled! $3,625 $2,840 $2,225 $1,660 $1,300 $1,020 After Tax Payment 30 25 20 15 10 5 At Year $3,500,532 $850,000 65 $1,300,000 $2,163,108 $668,600 60 $1,015,000 $1,280,911 $520,000 55 $800,000 $702,380 $390,900 50 $625,000 $367,315 $306,300 45 $488,000 $165,438 $240,000 40 $380,000 Side Fund Cash Value Mortgage Balance By Age $300K House Appreciating at 5%
    92. 99. One-Time vs. a Stair Stepped Plan:
    93. 100. How are our solutions superior to IRAs
    94. 101. S
    95. 102. Would You Rather Pay Tax On The Seed Or The Harvest? vs.
    96. 103. Pay Tax on the seed now and Get all the corn TAX FREE!!!
    97. 104. Contribution:$667 Assumptions:30% tax bracket 7.5% earnings Final Results: $904,363 Pre-Tax Regular Pre-tax IRA:
    98. 105. Our Solution: Contribution:$667 Assumptions:30% tax bracket 7.5% earnings Final Results: $960,055 ($1074,055 -$114,000 )
    99. 106. Our Solution Compared To IRA Deposits:
    100. 107. Our Solution Compared To IRA Deposits: 30% Tax Bracket $67,827 Annual Withdrawal $3,956 7.5% $904,363 Regular IRA Net Monthly Income Rate of Return Balance Investment
    101. 108. Our Solution Compared To IRA Deposits: 30% 30% Tax Bracket $47,497 $67,827 Annual Withdrawal $3,958 7.5% $633,054 Roth IRA $3,956 7.5% $904,363 Regular IRA Net Monthly Income Rate of Return Balance Investment
    102. 109. 50% More Income For Life! Our Solution Compared To IRA Deposits: 30% 30% 30% Tax Bracket $72,004 $47,497 $67,827 Annual Withdrawal $6,000 7.5% $960,055 Our Solution $3,958 7.5% $633,054 Roth IRA $3,956 7.5% $904,363 Regular IRA Net Monthly Income Rate of Return Balance Investment
    103. 110. Our Solution Compared To IRA Deposits: 30% 30% 30% Tax Bracket $72,004 $47,497 $67,827 Annual Withdrawal $6,000 7.5% $960,055 Our Solution $3,958 7.5% $633,054 Roth IRA $3,956 7.5% $904,363 Regular IRA Net Monthly Income Rate of Return Balance Investment
    104. 111. How long will $1 million last? Comparison with tax-deferred IRA/401K 120 115 110 105 100 95 90 85 80 75 70 65
    105. 112. How long will $1 million last? Comparison with tax-deferred IRA/401K 120 115 110 105 100 95 90 85 80 75 70 65 Age 81 35% Tax Bracket
    106. 113. How long will $1 million last? Comparison with tax-deferred IRA/401K 120 115 110 105 100 95 90 85 80 75 70 65 Age 81 Age 82 35% Tax Bracket 30% Tax Bracket
    107. 114. How long will $1 million last? Comparison with tax-deferred IRA/401K 120 115 110 105 100 95 90 85 80 75 70 65 Age 81 Age 84 Age 82 35% Tax Bracket 30% Tax Bracket 25% Tax Bracket
    108. 115. How long will $1 million last? Comparison with tax-deferred IRA/401K 120 115 110 105 100 95 90 85 80 75 70 65 Age 81 Age 84 Age 82 35% Tax Bracket 30% Tax Bracket 25% Tax Bracket <ul><ul><li>Provides $75K </li></ul></ul><ul><ul><li>annually into perpetuity </li></ul></ul>35% Tax Bracket
    109. 117. <ul><li>Blind Men who were presented with the head answered: “Sir, an elephant like a pot.” </li></ul><ul><li>The men who observed the side replied: “An elephant is like a wall.” </li></ul><ul><li>Those who had been presented with the tusk said it was a ploughshare. </li></ul><ul><li>Those who knew only the trunk said it was a snake </li></ul><ul><li>Others said the foot was a pillar; the ear, a fan; the tail, a rope the tuft of the tail, a brush… </li></ul>Parable Of The Blind Men And The Elephant:
    110. 118. If you do a good job saving for retirement , Will you be in a higher or lower tax bracket? Answer : Most of us will be in the same tax bracket or possibly higher.
    111. 119. More ‘Smart Money’ Choices … <ul><li>Now Imagine What Could Happen, If You… </li></ul><ul><li>Increased the Deductibles On Your Home Owners Insurance, Auto Insurance, Health Insurance, Disability Insurance, etc… </li></ul><ul><li>Positioned Your Assets And Income To Qualify For College Financial Aid… </li></ul><ul><li>Took Advantage Of The Free Money In A 401K… </li></ul><ul><li>Reduced Your Income Taxes… </li></ul>
    112. 120. And, It Gets Even Better… <ul><li>Become Your Own Banker! </li></ul><ul><li>How About The Next Time You Decide To Buy A Car, Make A Major Purchase or Need Money For A Business Opportunity… </li></ul><ul><li>You Borrow The Money From Yourself Instead Of A Bank! </li></ul><ul><li>Then You Pay Yourself The Principal And Interest You Would Have Paid The Bank! </li></ul>How Much Better Off Would You Be?
    113. 121. The ‘Found Money Management’ System Is Ideal For… <ul><li>People With Heavy Consumer Debt… </li></ul><ul><li>People Who Are Concerned About Funding Their Retirement… </li></ul><ul><li>Families Who Are Concerned About Funding College And Qualifying For Financial Aid… </li></ul><ul><li>Commissioned and Self Employed People… </li></ul><ul><li>People Who Want The Better Things In Life… </li></ul>
    114. 122. New Millennium Brings 3 Opportunities Turbocharge Your Wealth <ul><li>Huge Source of tax-free money now available in your home </li></ul><ul><li>New lending programs that: </li></ul><ul><ul><li>Accesses more equity </li></ul></ul><ul><ul><li>Lowers your payment </li></ul></ul><ul><ul><li>Increases your tax deduction </li></ul></ul><ul><li>3. Investment vehicles that have: </li></ul><ul><ul><li>stock market gains </li></ul></ul><ul><ul><li>No Risk of principle </li></ul></ul><ul><ul><li>Tax Free Growth </li></ul></ul><ul><ul><li>Tax Free Withdraws </li></ul></ul>
    115. 123. Needed: Financial Wake-Up Call
    116. 124. So, What’s The Next Step? <ul><li>Is It Worth 40 Minutes Of Your Time To See If You Can… </li></ul><ul><li>Reduce or Eliminate Your Debt! </li></ul><ul><li>Reduce Your Income Taxes! </li></ul><ul><li>Increase Your Net Worth! </li></ul><ul><li>And </li></ul><ul><li>Have The Better Things In Life! </li></ul>
    117. 125. Step 1 home equity line Consider the amount borrowed and the tax preferences of that money. credit cards car loans student loans installment loans A smart loan amount when used to shelter bad debt can increase Safety, Liquidity and Return.
    118. 126. A simple rule of thumb, multiply current gross income by 4 for an availability estimate. Consider what portion of the wealth might be available to you. liquidity – liquidity – liquidity location – location – location Step 2
    119. 127. Step 3 Consider that wealth in the house, is only safe if you have use and control. lawsuit divorce disability job loss foreclosure depreciation A smart protection strategy is to have a 100% HELOC that is updated when equity increases by 5%.
    120. 128. Net Gross Internest Paid* Interest Earned Year 10 $46,200 $96,715 Year 20 $92,400 $286,968 Year 30 $138,600 $761,226 *Assumes a 27% marginal tax bracket and 7% state tax rate, after deducting applicable interest for tax purposes 30 year Interest Only vs. 30 year fixed: Equity Removed:$100,000 Interest-Only Payment:$583 Tax Bracket: 34% Net Earned $46,200 $92,400 $138,600

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