basic finacial concepts presentation
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Frank Codina, NSD, OSJ, CPN
Regional Vice PresidentRegistered Representative
Frank Codina, NSD, OSJ, CPN
Regional Vice PresidentRegistered Representative
THERE IS A STORM BREWING ON THE HORIZONTHERE IS A STORM BREWING ON THE HORIZON
Retirement RolloversRetirement RolloversMortgagesMortgages
Life InsuranceLife Insurance
Long Term CareLong Term Care
Debt CrisisDebt Crisis
There is a Debt & Savings Crisis in our Country
There is a Debt & Savings Crisis in our Country
8%
4%
‘90 ‘95 ‘00 ‘05
Debt Goes UpAverage credit card debt per U.S. household:
Debt Goes UpAverage credit card debt per U.S. household:
Savings Go DownPersonal saving as a percentage of disposable personal income:
Savings Go DownPersonal saving as a percentage of disposable personal income:
7%
-1.1%
$9,312
$2,966
There is Also a Retirement Crisis on the Horizon
There is Also a Retirement Crisis on the Horizon
Almost half of all workers
think they’ll still be working
at age 65 or older!1
2. USA Today, March 30, 2005 2. USA Today, March 30, 2005
Almost one-third of workers said they determined how much they would need for retirement by guessing.2
Almost one-third of workers said they determined how much they would need for retirement by guessing.2
Now more than ever, people are worried about their retirement as Social Security
issues are on TV and radio on a daily basis.
Now more than ever, people are worried about their retirement as Social Security
issues are on TV and radio on a daily basis.
1. Money, February 20051. Money, February 2005
59% of households have no individual life insurance at all.
There is Currently a Protection Crisis in America
There is Currently a Protection Crisis in America
Experts recommend coverage of 8 - 12 times your annual income.1Experts recommend coverage of 8 - 12 times your annual income.1
44% of households believe they need more life insurance.
3
59% of households have no individual life insurance at all.
2
2. National Underwriter, September 20, 2004 3. National Underwriter, April 25, 20052. National Underwriter, September 20, 2004 3. National Underwriter, April 25, 2005
Without adequate life insurance, many families will experience financial
devastation upon the death of a loved one.
Without adequate life insurance, many families will experience financial
devastation upon the death of a loved one.
1. Kiplinger’s, January 20051. Kiplinger’s, January 2005
The Wall Street Journal, February 17, 2005The Wall Street Journal, February 17, 2005
Why is this happening? Why is this happening?
“…more and more agents prefer to focus on the affluent market than on the middle market…”
“The ‘need’ in the middle-income markets, however, greatly exceeds the industry’s capacity to adequately serve these markets.”
The Middle Income Market Is Being Ignored!The Middle Income Market Is Being Ignored!
Married 1 Child Homeowners Both 35 years old
Married 1 Child Homeowners Both 35 years old
Example: The Martin familyExample: The Martin family
Example: The Martin family - $10,000 401K to IRA Rollover
Example: The Martin family - $10,000 401K to IRA Rollover
$300,000
$150,000
$50,000
12%
3%
Age: 45 Age: 55 Age: 65
$10,000$10,000
Rate of Return
$359,496$359,496
$108,925
$108,925
$33,003$33,003
$24,568$24,568
$18,207$13,493
Age: 35
Before:Before: After:After:
3 times the coverage for
$99 LESS per month!
HusbandHusband
$150,000$150,000
PremiumPremium
$200/month$200/month
WifeWife
$150,000$150,000
HusbandHusband
$500,000$500,000
PremiumPremium
$101/month$101/month
WifeWife
$400,000$400,000
Example: The Martin family – Life insurance protection
Example: The Martin family – Life insurance protection
Example: The Martin family – Investing the $99 in a ROTH-IRA
Example: The Martin family – Investing the $99 in a ROTH-IRA
$300,000
$50,000
12%
Age: 45 Age: 55 Age: 65
Rate of Return
$708,957$708,957
$207,841
$207,841
$56,005
$56,005
Age: 35
$10,000 plus $99 per month!
Promote Education Plans
Example: The Martin family – Debt elimination solution
Example: The Martin family – Debt elimination solution
Like most families, they had gotten in over their heads with debt and didn’t
know when they were going to be DEBT FREE.
With a new loan repackaging, we helped the Martin family:
Pay off all their debt (credit cards & mortgage) in 20 years!
And helped them accumulate over $386,000! . . . HOW?
Example: The Martin family – Debt elimination solution
Example: The Martin family – Debt elimination solution
By enrolling in our Biweekly Equity
Builder Program ($655 every two weeks) this family would pay off the loan in 20 years
instead of 25.
By teaching them how to invest $500
each month (automatically) into
an emergency account that would
grow to over $386,000 over those
same 20 years.With this SOLUTION, by age 55 this family would be totally debt-free and have accumulated over
$386,000!!!
Example: The Martin family – Building their Financial House Example: The Martin family –
Building their Financial House
Life Insurance Coverage:$150,000 cash value policy on him$150,000 cash value policy on herTotal coverage: $300,000Cost per month: $200
Life Insurance Coverage:$500,000 term policy on him$400,000 term policy on herTotal coverage: $900,000Cost per month: $101
Debt Situation:Monthly debt payments : $2,199On debt of: $32,157 (credit cards) and a $145,000 mortgageTerm remaining to pay off: 25 years Emergency account: CREDIT CARDS
Debt Solution:Loan payment : $1,309On debt of: $180,000Monthly debt savings: $890!Completely debt-free: 20 yearsEmergency account: $500/month
Savings Style:Total savings: $10,000Monthly savings: $0(no financial direction)
Savings Strategy: Roll-over $10,000 + add $99 to a ROTH-IRA account + $75 a month for an Education Savings Account
$708,000 in retirement savings &
$386,000 in emergency fund
Total liquid net worth: $1,094,000 by age 65
Before After
We help people where they need help most
We help people where they need help most
Become debt free (helping them pay off their homes years sooner and getting rid of credit card debt)
Invest for the future (by setting them up with IRA accounts and Education Savings Accounts)
Protect their income (with enough life insurance protection)
We help families:We help families:
Products and services that people need and want
Products and services that people need and want
Legal InsuranceMortgage Refinance
and 2nd Mortgages
Long-Term Care Insurance
Personal Loans
401K Programs
New Home Loans
Life Insurance
Variable Annuities
Mutual Funds, IRAs & Education Savings Accounts