1. INTRODUCTORY QUESTIONS
Going through Life without a Financial
Plan is like being lost in the ocean
without a destination and a paddle.
When you turn 65 – will you be ready to retire or continue
to Work?
Will your retirement income be at least $50,000 a year or
more?
Will you be “Debt Free” when you leave your job.
Should you get seriously ill, will you have to sell your
assets to fund your Care?
2. Welcome
• THIS BRIEFING IS ABOUT HOW TO
• Ensure you have the Financial Knowledge to achieve
a Financial Freedom
• Ensure that there will be enough INCOME when you
decide to Retire Comfortably - should you live long
• Ensure you are covered in any MEDICAL EVENTS
Chronic – Critical or Terminal Illness
• Ensure you do not leave DEBTS to family or love
ones should you die.
3. THE VALUE PROPOSITION
• SHOW YOU HOW YOU CAN RETIRE TAX FREE AND
COMFORTABLY WITH AT LEAST ANOTHER $20,000 TO
$50,000 A YEAR INCOME PLUS YOUR SOCIAL SECURITY
CHECK YOU EXPECT TO RECEIVE WHEN YOU RETIRE.
• SHOW YOU HOW YOU CAN BE COVERED IN THE EVENT
OF SERIOUS ILLNESS (CHRONIC, CRITICAL OR
TERMINAL) WORRY FREE AND REPLACE YOUR INCOME
IF SUCH EVENT HAPPENS TO YOU.
• SHOW YOU HOW YOU CAN PURCHASE YOUR HOME
EFFORTLESSLY AND IF YOU DIE, THE PROPERTY IS
PAID OFF.
• SHOW YOU HOW NOT TO OUTLIVE YOUR INCOME
(LIFE TIME INCOME)
4. FACTS AND MORE FACTS
• The average worker who will retire at 65 will not have
enough money to last for retirement.
• Out of 100 people, 54 will depend on family, friends or the
government for assistance.
• 36 will wind up having to work for the rest of their lives.
• 5 will die too soon due to worries and lack.
• 4 will be financially fit
• 1 will be wealthy
WHY ONLY A FEW WHO ARE FINANCIALLY FIT?
All because they lack financial knowledge, too much debt, no
discipline to save
5. MORE FACTS
• Unexpected expenses can seriously set a family today.
• 70% of Divorce today was due to not enough Money
• Many people lost half to ¾ of their 401K value during the financial crisis.
• Most people spend all the money they earn – sometimes over what they make.
• The average savings of people in the US under 35 yrs old is
$6000.00
• The average savings of people in the US 35 – 45 is $ 22,000
• The average savings of people in the US 46 - 54 yrs old is $ 44,000
• The average savings of people in the US 55 - 64 yrs old is $ 70,000 (Retired?)
• For 65 – 75 their income goes down because they have to spend all savings to
survive.
39% of all people in the US age 55 and above have less than $25,000
in their retirement account.
6. MORE FACTS AND STATS
Most People
• Are Living Longer beyond 90 years old
• Have 40 Hrs a week Job and live Pay Check to Pay Check
• Per Capita Income in Las Vegas is $27,422 (Low) $63,888 (High)
• Only 8.4% of Americans are able to save money
• Largest part of American Household Budget are Homes , Cars, Medical
Insurance
• The Poverty Level in the US is between $11,490 to $39,630
• More and more EMPLOYERS are not sponsoring Employee Retirement Plans
• More Children are living in their Parents Homes because they can’t find good
jobs after college (Financial Stress to parents)
• People are worried they will not have enough money to Retire
7. Realities
People work 40 hrs a week for an average income of $25,000 a year.
To achieve that amount a person would spend: $300 in Fuel - $520 in Lunch –
Stress at work, pay the taxes etc. In the end - JUST SURVIVING!
Then there is the Worry that Not all jobs are permanent
A person who is 35 years old will make $750,000 until they are 65 years old.
($25,000 x 30 years is approximately $750,000) SAD PART: They do not Save.
The total MONTHLY Income for a Household should be $2000.00 X the
number of people in the Household in order to survive.
IF WE DON’T DO SOMETHING NOW – LIFE WILL CONTINUE TO BE THE SAME
IN THE FUTURE.
Would you rather Live Long and have Money to enjoy or Continue to Work
after Retirement?
8. 3 ENEMIES OF FINANCIAL INDEPENDENCE
Lack of Financial Knowledge
Inadequate Savings
Wrong Priorities
10. WHY ARE PEOPLE NOT CONCERNED ABOUT LOOKING TO THE
FUTURE?
1. Most people do not make enough to think about savings.
- Answer: They do but it is not important.
- most important is a place to live and a car.
- Whatever they make is “For Now”.
2. They believe they can rely on the government.
- Wrong Assumption – What if you get sick seriously?
3. They think that their job is secured and it is always there.
- Wrong Assumption - What if you lose your Job today?
4. Lack of Financial Education
5. Pepsi Generation - “I want it now” Tomorrow is not here
yet.
11.
12. • False Security
• Laziness
• Excuses
• Denial
• Crisis
• REPEAT…
LACK OF KNOWLEDGE AND PROCRASTINATION
WHY AREN’T PEOPLE SAVING?
13. SAVINGS – HOW TO DO IT
• YOU HAVE TO WANT IT OR YOU WON’T DO IT.
• YOU HAVE TO BELIEVE THAT SAVING WILL YIELD GOOD
THINGS IN LIFE.
• FIRST TITHES AND SECOND SAVINGS IN YOUR BUDGET
• FINANCIAL EDUCATION - principles of money – compound interest -
rule of 72 – Time - Opportunity
• BUY NEEDS – DEFER WANTS
• MONEY LIKE WATER IN A GLASS
Income fills it up – Expense drains it!
MONEY
IT IS HARDER TO EARN IT – EASY TO SPEND IT.
14. On average, most people can save $300 - $500/mo.
BANK INSURANCE
PROFESSIONAL
MONEY
MANAGEMENT
Checking / Savings
CD / Money Market
Benefits:
•Liquid
•Guaranteed By FDIC
Term / Whole Life
UL / VUL / IUL
Benefits:
•Protection
•Tax Advantages*
*IRC 7702: No Taxation
on Cash Values in Life
Insurance
401(k) / IRA
Mutual Funds / Annuities
Benefits:
•Money Earns
•Diversified
•Professionally Managed
15.
16.
17. Avg. 3.24 % per year since 1913
Inflation is a general increase in the overall
price level of the goods and services in the
economy
Answer: To Beat The Rate of Inflation WORK MORE,
INVEST MORE OR MAKE YOUR MONEY EARN MORE
INFLATION
18. TAXES
• TAXES WILL NEVER GO DOWN - ALWAYS UP
• PEOPLE COMPLAIN THAT THEY HAVE TO PAY TAX BUT PAYING TAX
BUT IF YOU HAVE TO PAY MORE TAX – IT IS A SIGN YOU ARE
MAKING MORE MONEY.
• THE BEST WAY TO BEAT THIS MONEY ENEMY IS EDUCATION
ABOUT TAXES AND HOW IT RELATES TO MONEY.
• THE GOVERNMENT WILL ALWAYS HAVE THEIR SHARE OF YOUR
MONEY WHETHER YOU WANT IT NOT.
• THE ONLY SCAPE IS DEATH – EVEN THEN THEY WILL TAX YOU TO
DIE.
WE CAN’T AVOID IT - SO WE FIND OUT HOW NOT TO
PAY MORE OR HOW NOT TO PAY IT LEGALLY!
20. TAX STRATEGIES
STOCKS MUTUAL FUNDS SAVINGS ACCOUNTS CERTIFICATES OF
DEPOSIT
I. TAXABLE: (Pay Tax NOW)
Get 1099 Form
(Taxed On Your Gains)
21. Interest income is earned on deposits at banks
and credit unions, on money market funds, on
bonds, and on loans, such as seller-financed
mortgages.
Interest is taxed as ordinary income, subject
to the ordinary income tax rates.
INTEREST INCOME
TAXES
Are you being TAXED on
your Interest, Dividend &
Tax Exempt Income?
Look at the numbers from your
last 1040 tax return. If you are
showing income in box 8a, 8b, or
box 9, you may be paying more
taxes than the law requires….
22. TAX STRATEGIES
II. TAX DEFERRED: (Pay LATER)
401(k) TRADITIONAL IRA ANNUITIES
Qualified Plans (pre-tax $$$):
•Distributions Prior To age 59 ½ Will Incur an IRS Early Withdrawal Penalty of 10%
•At Age 70 ½ (Mandatory Distribution) Can Be Taxed at 50% If No Distributions Are
Taken
EXEMPTIONS
•1st Time Homebuyer: Up to 10% Without Penalty
•Funding For College Education
•Become Disabled
23. TAX STRATEGIES
III.TAX-FREE (PAY NEVER)
(Tax Advantage: Cash Value Life Insurance)
•Premiums Paid With After-tax $$$ (Cash Value
Grows Tax-Deferred)
•Guaranteed Rate of Return on Cash Value
(Whole Life)
•Market-like Potential Return Without Risk of Loss
(Indexed UL: 2% Guarantee / 12 - 16% Cap )
•Cash Value Distributions Are TAX-FREE via the
Loan Provision (IRC 7702)
•Death Benefits Are Income Tax Free
•Cash Value is Private $$$
Provides Protection From:
Dying Too Soon / Living Too Long / Sick or
Disabled
Keeps Uncle Sam Completely out of your Pocket
24. EVERY BODY WANTS A HOUSE
The American Dream or the American Night Mare ??????
Advantages Disadvanages
- Ownership - Cost to Maintain
- Life Events to Lose it
-- Divorce, Illness
-- Loss of Job, Job
Transfer, Law Suit
Taxes
- Permanent Place - Not Really
- Investment - Could Lose Value
THINK 30 YEARS ( MORTGAGE)
LOTS OF THINGS HAPPENS IN 30 YEARS
25. CAPITAL GAINS TAXES
Real Estate Stocks
•A type of tax levied on capital gains incurred by individuals and
corporations.
•Capital gains are the profits that an investor realizes when he or
she sells the capital asset for a price that is higher than the
purchase price.
26. THERE IS A SMART WAY TO BUY YOUR DREAM HOUSE
• BEING YOUR OWN BANK
• WILL NEVER LOSE THE HOUSE
• WILL BE PAID OFF - LESS TIME
• WILL BECOME INVESTMENT
• WORRY FREE TO OWN
CONSIDER
TIME - COMPOUNDING INTEREST - TAXES
27.
28. JOE SMART SCENARIO OF BUYING A HOUSE
• Joe starts a FLEX LIFE account at Age 25
• Instead of buying a house that might cost him $1500 a
month he opts to just get an apartment for a while and
puts away $500.00 a month
• His Flex Life has a Life Time Income provision
• He is also initially covered for $ 305,595.00 just in case
something happens to him. If he gets sick he is covered.
• 10 Years later he has enough large down to pay for a
house or even buy himself a nice car CASH
• At age 40 he can practically pays off his house
• At age 50 he has a nice large house fully paid at almost
half a million dollar home (Debt Free)
• At any time after the 10th year he can withdraw money
“tax free” with out losing a single cent from his account.
• At Retirement Age 65 - Joe Smart not only paid for his
house CASH, he is covered if he becomes ill - He now
starts to receive $105,149.18 a year LIFE TIME INCOME.
33. CRITICAL QUESTIONS
• DID JOE ACHIEVE HIS GOAL TO BUY A HOUSE WITHOUT
GETTING INDEBTED? YES
• DID HE PROTECT HIMSELF IN ANY MEDICAL EVENTS OF HIS
LIFE? YES
• DID HE CREATE A TRUE FINANCIAL SECURITY FOR HIM
WITHOUT GETTING INTO THE MARKET? YES
• HOW MUCH DID JOE PAID IN TAXES? Zero
• DID HE BECAME HIS OWN BANK ? Yes
• CAN THE GOVERNMENT OR CREDITORS OR EX-WIVES COME
AFTER HIM FOR MONEY? Nobody can touch his money.
• CAN OLDER PEOPLE USE THIS AS STRAEGY - YES
34. RECAP…
Retirement / Savings: Taxable | Tax-Deferred | Tax-Free
Insurance: Tax-Deferred Growth | Tax-Free Distribution
Investment: Diversify | Tax Advantages
College Education: Life Insurance Tax-Free Cash Value | Not
Counted Towards Financial Aid
Private: Life Insurance Cash Value Protected From
Creditors
TAKE THE NEXT STEPS…
35. Even if we assume a lower crediting of 7% to 8%
NO BANK PLEASE!!
36.
37. WHAT’S STOPPING YOU FROM MAKING A
GOOD DECISION TO A SECURED FINANCIAL
FOUNDATION?
• $500.00 TO MUCH FOR ME
- START WITH SMALL AMOUNT (INCREASE EVERY YEAR)
• TOO LONG OF A COMMITMENT TO SAVE
- TIME WILL OVER TAKE YOU UNTIL IT IS TOO LATE
• I DO NOT MAKE ENOUGH TO AFFORD A PLAN
- OTHER WAYS TO INCREASE YOUR INCOME
- JOIN US! BECOME AN INSURANCE AGENT WITH ERS
PEOPLE FAIL BECAUSE THEY FAIL TO PLAN
START YOUR FINANCIAL PLAN NOW
