3. The Lowdown
Jones
• College Degrees
• Married at age 25
• Both currently work
• Total annual income:
$48,000
• Monthly Income = $4,000
Simpletons
• College Degrees
• Married at age 25
• Both currently work
• Total annual income:
$48,000
• Monthly Income = $4,000
4. The Houses
Jones
• House Cost $200,000
• 20% Down = $40,000
• Mortgage- $160,000
• 5% Rate for 30 Yrs.
• Bought House 1 year into
marriage
• Monthly Payment = $858.91
– Not including taxes & ins.
Simpletons
• House Cost $125,000
• 20% Down = $25,000
• Mortgage - $100,000
• 5% Rate for 30 Yrs.
• Bought House 3 years into
marriage
• Monthly Payment = $536.82
– Not including taxes & ins.
5. Transportation
Jones
• Bought 2 new cars every 5
years
• 2 cars at $15k each = $30k
• $30k at 6% for 5 years
• $579.98 total monthly
payment
Simpletons
• Bought 2 used cars every 5
years
• 2 cars at $7k each = $14
• $14k at 6% for 5 years
• $264 total monthly
payment
6. Eating Out
Jones
• Dine out 8 times per month
• 4 times at an expensive
restaurant
– Avg. meal = $100
• 2 times at moderate
– Avg. meal = $50
• 2 times at modest
– Avg. meal = $25
• Total cost per month = $550
Simpletons
• Dine out 4 times per month
– 1 expensive restaurant = $100
– 1 moderate = $50
– 2 modest ($25 each) = $50
• Total cost per month = $200
7. Vacations
Jones
• One expensive vacation per
year
• Average cost per year =
$4,500
• $4,500/12 = $375 per
month
Simpletons
• Two vacations per year
• One with family = $1500
• One simple one= $500
• $2,000/12 = $166.67 per
month
8. Entertainment
Jones
• Expanded Cable and
Internet Package = $150
• 2 Movies Per Month = $30
• Golf 2x Per Month = $100
• Total Monthly = $280
Simpletons
• Simple Cable & Internet
Package = $50
• 2 Movie Rentals per month
= $5
• Golf 1x per month = $50
• Total Monthly = $105
9. Shopping
Jones
• Clothing $50
• Groceries - $500
• Items for House - $50
• Miscellaneous personal
items = $200
• Total Monthly = $700
Simpletons
• Clothing $20
• Groceries - $300
• Items for House - $20
• Miscellaneous personal
items = $60
• Total Monthly = $400
11. The Comparison
• Simpletons Spend Less Each Month:
– House: $322.09 Less
– Transportation:$315.98 Less
– Eating Out: $350 Less
– Vacations:$208.33 Less
– Entertainment:$175 Less
– Shopping:$300 Less
Total = $1,721.40
12. The Potential Impact
• $1,721.40 Additional margin
• Save/Invest $1,000 per month
– At 6% in 10 years = $162K
• Paid an additional $200 towards mortgage each month
– Home is paid off 13 years earlier
• Gave rest to their church
– In 10 years they’ve given over $60,000
– Doesn’t include paying cash for cars or education
savings
– All by the age of 41
13. Savings Growth Over 30 Years
$0.00
$200,000.00
$400,000.00
$600,000.00
$800,000.00
$1,000,000.00
$1,200,000.00
Year
1
3 5 7 9 11 13 15 17 19 21 23 25 27 29
Plus a Paid Off House
