1. Debt Reduction
7 STEPS

2. without spending any additional money than you are spending right now?
Are you 100% sure you’re going to have a great retirement, or do you have some doubt?
What if I could show you how to get out of debt in 9 years or less, including your mortgage,
without spending any additional
money than you are spending right now?
Are you 100% sure you’re going to have a great retirement, or do you have some doubt?
Most people want to have a productive life where they retire… financially comfortable and with enough free time to do the things important to them. The problem is, very few accomplish it and even worse, unless more people learn how to manage their money better very few ever will accomplish it. Would you agree with that?
What if I could show You how to be debt-free including your mortgage, in 9 years or less, including your mortgage, without spending any additional money than you are spending right now?

3. Average household debt: $250,000
Savings 3%
Savings 15%
Lifestyle 23%
Interest 22%
Interest 34%
Lifestyle 33%
Taxes 30%
The average person pays 34% of the money they earn in a lifetime out to interest. That interest goes to cars, credit cards, college, mortgages, all those types of things we finance is interest going out …and we pay taxes! About $.40 of every dollar the average American earns goes out to taxes. I’m talking about everything from income tax, to gas tax, water tax, sales tax etc. So that leaves about 23% of our money left to live on. This is what we call our lifestyle money. That’s what we have to pay everything else with. Like our gas, car, insurance, clothes, etc.
Now what most financial advisors do is concentrate on that 3% savings. You know what they’ve told all of us, “You’ve got to save more money, save more money”. Guess what, I couldn’t save more money, and most people can’t. Lots of us are doing the best we can. So looking at this chart, what we try to focus on, is the 34% going to interest and 40% to taxes.
Here is the YFB approach.
What if we could reduce that 34% going to interest and also reduce taxes? That would give us more lifestyle money and would also give us more to contribute towards savings.
Using the Your Family Bank 7 steps of Money Management, we can do just that
Average American
Household
Our Approach

4. Knowledge STEP 1: Knowledge becomes power only when you put it to use.
We have knowledge about all sorts of other things… sports, web design, cooking, cars, etc... But to retire well, we really need to know the rules of money and how money works.

5. What if we could teach you how to…
Reduce the volume of interest you are paying to lenders.
Get out of debt in 9 years or less.
Improve your cash flow.
Decrease taxes.
Save for college.
Retire with tax-favored income.

6. Our financial lives can sometimes feel like a game, where one step forward is often followed by two steps back.
With Your Family Bank, we can help you break this cycle by planning for both the expected and unexpected.

7. This isn’t the American Dream
Average American Household
Total Assets at age 65
This isn’t the American Dream
$2,000,000 - Lifetime income
$60,000 - Funds at Retirement
Here’s the situation most people on America find themselves in… The average person is going to earn$2 million during their lifetime. At age 65 they will wind up with about $60,000 in assets including the equity in their house. That is certainly not the American dream after having $2 million pass through their hands.
The average person saves only about 3% of their $2 million, that’s just $60,000!

8. STEP 2:
Cash Flow
When you track your money,
You Control it.

9. Quick Start Budget Look for ways to save money and be more efficient.
Experience has taught us that by utilizing a spending planer and tracking money, clients are able to find inefficient dollars that can make a powerful impact on their future.

10. Plan for the Unexpected & the Expected
Emergency & Emotional
20%
Long-Term
80%
The 80/20 Rule
Your Family Bank plans are strategically designed for real life.
Emergencies and emotional spending will happen along the way.
Have you ever heard of the guy who went down to the car dealership to pick up a couple brochures and came home driving a new car? How did that happen!? It happened because most spending is emotional.
Have you ever heard of the woman who came home with new clothes because, they were “on sale”. Spending is emotional! When I buy myself an Oreo cookie shake on the way home because I’ve had a hard day… that’s emotional spending.
The significance is, that if we don’t realize spending is emotional we won’t allow for it and that creates problems. Let’s plan for it!

11. How Banks Leverage Cash Flow
You
18%
24%
12% 8%
23% 2%
19% 5%
10% $ 7x
$1=$7
You put a dollar in the bank, they give you 1% interest. The bank can loan that same dollar out 7 times! It’s called the 1 to 7 rule. So you make 1% and the bank makes 136%.
How would you like to be the bank?
-Use your dollar like a bank
-Give every dollar two jobs
-Create compounding interest for yourself 1%
You

12. STEP 3:
Debt
Minimize debt to create additional wealth.

13. Let’s Look at a Typical American Family .…John and Mary
Before we get into principle number three, let me introduce you to John and Mary. A real couple who are Your Family Bank clients. We’ll use them to illustrate the other steps.

14. Financial Worksheet Main Areas of Interest: Name: John and Mary
Age: 37
Spouse Age: 35
Desired Retirement Age: 65
Address:
Phone:
Number of Children: 3
Ages: 3, 4, 8
College Savings: None
Monthly Income: $3,960
Monthly Income: $3,125
Desired Monthly Retirement Income: $5,000
A plan for this? Not yet
IRA/401k: Less than $100, $100k-$250k
$250k-$500k $500k+
Net Worth: Less than $750k $750k-$1.5
Main Areas of Interest:
Increased retirement income
Reduce debt
Get spending under control
Reduce taxes
Increase savings
College planning
Conversion alternative
Organize finances
Better understand tax law
Wills and Trust
When to start social security
Here we have John and Mary financial worksheet.
You can see they’re 37 and 35 years old, they make about $7000 a month and would like to retire at age 65 with a $5000 monthly income. A question we asked John and Mary is, what are two things financially that you don’t have right now that you would like to have? What they said was that they wanted to be debt free, and have a good retirement. We asked them if they had any specific plans currently to accomplish that, and they said not yet.
They knew they needed to learn more about the world of finance. So they checked several things on this list. They’d like to know about eliminating debt, maximizing savings, they need to get a will or trust in place, they want to get done with their mortgage soon as possible, they know they need some life insurance and would like to have some asset protection.

15. Financial Institution Monthly Contributions
Financial Worksheet
Financial Institution
Account Type
Account Value
Monthly Contributions
Int%
Available YFB®
BOA
Emergency
$6,000
$25
.25%
Fidelity
401k
$36,000
$300 5% Y N Y N Y N Y N
They do have some savings.
$6000 cash in an emergency savings account and they’ve been making contributions of $3600 a year into their 401(k). Y N

16. Outstanding Debts: Debt Interest Rate Balance Payment Visa 12% $460
$55
Medical/Dental 0%
$2,420
$200
Credit Card
16%
$4,236
$296
Furniture
18%
$5,988
$237
Auto 8%
$13,313
$417
Mortgage
6.5%
$153,781
$972
Total Debt
Average int.= 10%
$180,198
$2,177
Here they’ve listed their debts. They had a $460 balance on their Visa card, a $2,420 medical bill, a Discover card, some furniture debts, one car and a mortgage.
Average interest rate was 10%
Adding up all their debts they were paying $2,177 a month and a total of $180,198…

17. John & Mary Debt $180,198 Interest Paid: $199,959
Years of Debt Payments: 30
$180,198
Their real debt was $380,157! The difference between the current balance and their real debt is $199,959.
$199,959 more than they thought they were paying in debt!
The reason that they are paying so much more is because of the interest going out to all those institutions. The visa, the medical, the Discover card, furniture, auto and home.
Remember the 34% in interest we looked at earlier on the pie chart? Well that’s how much it adds up to in their life.
We prepared a report to show Mark and Joyce and they were shocked that they saw. Frankly we find that most of the people we show this to are shocked when they see just how much their own interest adds up.

18. Current Retirement Plan
$36,500 Current Retirement Savings
$300 Monthly Contributions
5% Annual Interest Rate
25% Income Tax Bracket
Retirement Account at the End of Saving period: (30 years)
$408,890 Before Taxes
$306,668 After Taxes
Current Retirement Plan

19. Let’s take a look at what John and Mary were able to accomplish with our strategies

20. What did we Accomplish? 1 2 3 4 Savings in 30 years $1,004,387
Saved Interest $122,739
Freed up $2,177/mo. for retirement
Free from lenders in 7.8 years 3 1 2 4
By using Our Strategy, John and Mary were able to get out of debt in 7.8 years. Instead of 199,959 of interest paid, they would only pay $77,220 in interest… A savings of $122,739! Now let me ask you, is $122,739 a lot to you? It sure is to me, especially if it’s just money I’d been throwing away.
Let’s also look at the $2,177 monthly payment to debt.
If they are able to continue saving that money after they got out of debt for the remaining 22.2 years, at 4% interest, they would accumulate to $1,004,387 in a savings account.
Of course we understand that we do have stuff to buy. For instance, they might buy another car, boat, or house during the next 30 years. What we’re really trying to do with the idea of Your Family Bank, is to show a better way of buying those things.

21. Our Plan: Current Plan: $306,668 After Taxes for Retirement
$1,004,387 Tax-Favored for Retirement!
Now let’s make sure we get the picture here. Here’s John and Mary, living their life and doing okay. They’ve got good income, but their debt service meant that they were going to be in debt for 30 years. Using Your Family Bank, we were able to help them get out of debt in 7.8 years without spending one more penny, and saving them $122,739 of interest! …and if they kept with the program for the remaining 22 years, John and Mary will have $1 million in savings! Now most people when they see this immediately make a decision that they want to be like John and Mary would that include you? It sure included me

22. What is the Cost Not to do Our Debt Reduction Plan?
$1,004,387 in Retirement
$122,739 in Interest Saved
Total: $820,458
What is the Cost Not to do Our Debt Reduction Plan?

23. Taxes STEP 4: The less you pay, the more you keep.
Every year it seems there’s a new tax law. Of course we hope that when you sit down with your tax advisor or your financial planner every year they probably go over those rule changes with you to keep you informed of what’s happening and how you need to adapt. They probably have you on a path already to get out of debt is that correct?
One of the things we do, is to keep track of the changes that are going on and make sure that we are up on those so we can advise the people that are working with us on Their Family Bank.

24. Future Tax Rates Lower Higher Stay the Same What do you think?
Most people agree that taxes will be higher in the future.

25. If we think taxes are going to be Higher….
Is postponing taxes really a good idea?
When should we start tax planning?
NOW!

26. I have a business proposal for you…
You front all the money.
You take all the risk.
You manage the business on a day to day basis.
30 years from now, I’ll tell you how much you owe me.
This sounds like a horrible business partnership! Yet this is what people do every day when they start a qualified retirement plan with the government.
Would you want to go into business with me?

27. $5,000 IRA Contribution 25% Tax Bracket
Age
IRA Growth at 10%
Tax Saving Growth at 10% 45
$500
$1,250 52
$10,000
$2,500 59
$20,000
$5,000 66
$40,000
$1,000
Rule of 72
$40,000 X 25%
Tax = $10,000
Do you know how an IRA works at the end?
Let me show you something I found out…
Let’s say we put $5,000 per year in an IRA earning 10%. With the rule of 72 we know that those funds will double every 7 years.
What advantage do you get by utilizing an IRA? If you said “a tax deduction” your right!
So at age 45 you will be able to deduct $1,250, age 52 that deduction is $2,500 and so on… By age 66, you’ve saved $10k in taxes correct?
Now, when you pull that money from your IRA at age 66 at a 25% tax bracket what do you owe the government? If you said $10k, your right.
So my question is “Where is the tax savings?”
My point by showing this is that by reducing the tax liability, you can put more money in your pocket.
Do you agree?
Where is the Tax Savings?

28. Take a Closer Look Comparison of Taxed / Tax-deferred / Tax-Free
$10,000 Investment
28 Years
7% Interest
25% Tax Rate
Let’s look at a $10,000 investment for 28 years, at 7% working with an average tax rate of 25%.
This is what you’re account would be worth.
-$41,900 in a taxable investment,
-$49,866 in a tax-deferred investment,
-$66,488 in a tax-free investment.
Its clear that knowing the different ways assets can be taxed and getting started taking advantage of them early on in life is a really good way to make sure that your retirement is going to be what you want it to be when you get there.

29. STEP 5:
Risk
Don’t lose a lifetime of work.

30. What are your potential risks?
Taxes
Market
Inflation
Emergencies
Disability
Lawsuit
Fraud
Outliving your money
Death
What are your potential risks?

31. STEP 6:
The Big Picture
Know where you are going, and how to get there.
If I am going to Florida, or I’m going to Maine, or I’m going to California, I’ll a take different routes to get there right? I have to know where I’m going in order to know what route to take. Well it’s important to look at the big picture when you’re trying to get out of debt, or when you’re trying to save for retirement. You need to have a blueprint, a plan, a roadmap, to know how you are going to do it.
What’s your definition of retirement?
And what age do you think you’d like to retire at?
Do you have a specific plan in place to accomplish that? You might remember that Mark and Joyce didn’t have a plan in place and they couldn’t tell when they were going to be out of debt, so of course they also couldn’t tell what their retirement was going to look like. It sure would be good to know all those things though wouldn’t it?
One of the ways we help is, by addressing the 3 phases of retirement…

32. Three Phases of Retirement
Maximization
Accumulation
Distribution
Three Phases of Retirement
Putting a plan in place.
Much emphasis is put on the accumulation phase, while ignoring the maximization and distribution.
Our plans are designed to address all three phases!

33. The Big Picture Plan Benefits
Argue less about money.
Find wasted money.
Improve Cash flow.
Dramatically increase your savings.
Get out of debt faster than you ever thought possible.
Learn how to prioritize your accounts.
Retire with tax-favored income.
The Big Picture Plan Benefits

34. John and Mary Debt Interest Paid: $199,959 Years of Debt Payments: 30
Their real debt was $380,157! The difference between the current balance and their real debt is $199,959.
$199,959 more than they thought they were paying in debt!
The reason that they are paying so much more is because of the interest going out to all those institutions. The visa, the medical, the Discover card, furniture, auto and home.
Remember the 34% in interest we looked at earlier on the pie chart? Well that’s how much it adds up to in their life.
We prepared a report to show Mark and Joyce and they were shocked that they saw. Frankly we find that most of the people we show this to are shocked when they see just how much their own interest adds up.

35. What did we Accomplish? 1 2 3 4 Savings in 30 years $1,004,387
Saved Interest $122,739
Freed up $2,177/mo. for retirement
Free from lenders in 7.8 years 3 1 2 4
By using Our plan, John and Mary were able to get out of debt in 7.8 years. Instead of 199,959 of interest paid, they would only pay $77,220 in interest… A savings of $122,739! Now let me ask you, is $122,739 a lot to you? It sure is to me, especially if it’s just money I’d been throwing away.
Let’s also look at the $2,177 monthly payment to debt.
If they are able to continue saving that money after they got out of debt for the remaining 22.2 years, at 4% interest, they would accumulate to $1,004,387 in a savings account.
Of course we understand that we do have stuff to buy. For instance, they might buy another car, boat, or house during the next 30 years. What we’re really trying to do with the idea of Your Family Bank, is to show a better way of buying those things.

36. Now most people see this & immediately make a decision to be like John and Mary?
Would that include you?

37. Let’s Review Gather info for your data sheet
Analyze your data and run reports with your numbers.
Schedule your Big Picture report meeting
Let’s Review

38. Your Decision STEP 7: A Goal without a plan is just a wish.
This is the step where most people fail. The goal is being debt free, owning your home, car, taking vacations, being prepared financially for retirement but without making a decision, many of those goals are just wishful thinking.

39. Next Step Argue less about money. Find wasted money.
Improve Cash flow.
Dramatically increase your savings.
Get out of debt faster than you ever thought possible.
Learn how to prioritize your accounts.
Retire with tax-favored income.
Next Step
If I can show you a plan that makes since to you. It fits in all the right boxes, not too long, not to short, it’s not too hot, it’s not too cold. You understand it and you understand the cost, and you are ok with it. And it makes your life not just a little bit better, but a lot better. Would you be willing to make some financial changes?
This was all built on Mark and Joyce’s numbers. Let’s get your numbers and see what our concept could do for you. I’ll need your help though, this is the part I can’t do by myself. I don’t need your personal information; I just need to know about debts and assets, and any contributions you’re currently making. Basically I need you to help me fill out this form (the Data Collection sheet)

40. THANK YOU!!!!
7 STEPS