Instead of financing a $30,000 car at 4.99% over 84 months and ending with nothing, put that money in a diversified cash-flow account and use it to make your $424 monthly payments. After 84 months you still have $35,616 plus a $10,000 car. The trick: your money keeps earning interest while you spend from it.
Wait, if you haven't watched part 1, stop this video, go watch part 1, then come back and watch this video. Oh, you're back. Okay, this method requires 2 things. 1, diversified cash flow account, and 2, it's patience. All right, here we go. By the way, if you're not really a numbers person, put on your earmuffs because we're about to get geeky. First, we'll start with the traditional way. Let's say you financed a $30,000 car at 4.99% interest for 84 months, which would make the payments $424 a month for those 84 months, or call it 7 years. So every month you take money out, pay it to the bank. After 84 months, you've paid a total of $35,616. Now, you originally borrowed $30,000, but you had to pay $5,616 for interest. Now the car's paid off, you put 100-plus thousand miles on it, and you're ready for another one. Let's say the value of the car is still $10,000. That would mean over that time frame you lost $25,616. Now let's take a look at the diversified cash flow account example. You've been patiently funding your diversified cash flow account, and now you're going to be able to use the money, go buy that car, and still have interest growing on the money that's not even there. What? That's right, you're going to be able to have interest growing on the money that's not even there. So Ike, you're telling me I put money in my DCA, diversified cash flow account, I take the money out, and I still have interest growing on the money that's not there? Yep. Let's take a look. We're going to take the same $30,000, same 84 months, same payment, $424, and we still paying interest, so 4.99% interest. The only difference is— we're still— now we're gonna gain interest on that $30,000 while we use it to make our payments. So after 84 months, we've paid the same thing, a total of $35,616. However, who's in control of the money now? We are. See, we're in possession of the money. All we basically did is take money from our left pocket and put it in our right pocket. Now, the car's paid off, you put 100,000+ miles on the car, You, you, you continue to, to, to, uh, patiently fund your diversified cash flow account. And guess what? You're ready for a new car. The only difference is now you have the $35,616 and you still have a car that's worth $10,000. So if we sell it, we have a total of $45,616. See, the traditional way we were losing $25,616. And with the diversified cash flow account, we have positive $45,616. That's the power of the diversified cash flow account.
