From $293K Debt to Guaranteed Lifetime Income | Real Case Study 2026

Today is a case study review in action, what it looks like to put all of these different things together and simplify it in such a way that's not overwhelming. Because I think that is what discourages a lot of people who are not financial experts, who are not putting in the time to understand the financial economic environments and all the, the global economic uncertainties and all the conversations and all the different things when we all have our lives to worry about or other things that are— that take priority. And so what I've been doing in this series is really simplifying it where if you can just understand these critical key philosophies, everything becomes so simplified in terms of how you solve for what you and I are wanting to achieve, which we, we often use the same words: financial independence, financial freedom, passive income. We're all pretty much going in the same direction in terms of what we're trying to solve for. We want to have enough money at the end of the month. We want to have freedom. We want to be predominantly debt-free. For the most part, and we want to be able to just live in abundance, give in abundance, operate out of abundance. How do you do that with such a complex financial system we now live in today with a lot of different, call it, booby traps? Taxes, inflation, this, that, government change, law changes, tax laws. This state does this and that state does that, and this is this and this is that. We're gonna simplify that. 3 key philosophies here based off of the previous sessions we've covered so far that if you can, if you can fully comprehend this, um, it's going to be a game changer for you, which is cash flow over net worth. That's the foundation. When you solve for cash flow, it helps you make decisions whether I will put my money into something or not when you solve for cash flow. Second key philosophy: define— defined benefits versus contributions. Remember, prior to 1970, most Americans were on defined benefits. You work for a certain amount of time, you're given a certain amount of benefits at retirement which are guaranteed. That does not exist today. We are now in a contribution system where your employer contributes to your retirement and you contribute to your retirement. That money accumulates a net worth but does not guarantee any defined benefits. There's no guarantee whether your million dollars that you accumulated, or your $2 million, or your $5 million— the number actually doesn't matter. The net worth you accumulate actually doesn't matter. What matters is income. What does your net worth actually produce in income? Because you and I are not spending our net worth, we spend the income that the net worth produces. In our last session, I asked the group a question: would you rather have $1 million at a 10% distribution with a 4% increase on the million dollars, or would you rather have a 10% growth on your million dollars and only a 4% distribution? Which would you rather have? One will give you $100,000 a year in income, for the rest of your life. The other at 4%, million bucks will give you $40,000 a year in income for the rest of your life. But you're going to earn a rate of return of 10% in that million. Does it matter in retirement? Your rate of return matters so much less when you reach retirement, when you start to solve for cash flow, net worth is, is almost irrelevant. It's all about cash flow. What does the cash flow produce from those assets you've accumulated in your working years? And so net worth is not a bad thing. We want to have both, but, but understanding the context and what we're truly solving for when when I work with you one-on-one. So here's an example case study, and that, that third philosophy kind of feeds into the, the second, which is defined benefit versus contribution. Defined benefits are predictable, guaranteed, focuses on income. So return on income versus return on investment. For me personally, I would rather have a higher income distribution than a higher rate of return any day of the week, because that's what I'm spending. It's really what matters. It's like if you had $10 million but you can't spend it versus $1 million but you can spend it, which would you rather have? $10 million that you can look at or $1 million that you can spend, right? That's what it's about. What you can spend, what you can use with what you're accumulating. Watch these 3 key philosophies play out in a, in a scenario here. Here we go. 4 major numbers dealing with a husband and wife. Husband 58, wife 54, both W-2 earners. Combined income $9,480 per month. Take home— they make more. This is take home, net. Total expenses overestimated, $8,946.79. Total debt, $293,000. Cash flow, $533. We're not rocking with a lot of cash flow, and we're close to retirement. What we're gonna solve for here today is retiring in 4 years, meaning husband and wife are in a position where they do not have to work. If husband decides he wants to continue to work, That's cool. If wife decides she wants to go from full-time to working 20 hours a week, 30 hours a week at a church ministry and receiving a, a $30,000 a year salary or $40,000 a year salary, whatever it may be, that is completely up to them. What I'm solving for is replacing our active income with defined benefits, cash flow, return on income from the various assets that they've accumulated over their working years. We're approaching the tail end, so we're looking at the next 4 years. We have a home equity line of credit in the second position, $100,000, 8.5%. We're working on increasing that to $160,000, and it's going to come with an intro rate at 4.74%. We owe $70K at the moment. We have a mortgage that we owe $141 grand. Here's the mortgage payment, interest rate. We have a timeshare, $28 grand monthly payment, interest rate. Student loan, $19K payment rate. Home value about $490K. We have cash value life insurance at, um, a $30,000 loan. There's like $50,000+ or so in cash value, and we're funding that at $20,000 per year. So we're saving $20,000 per year into that asset. 4 major numbers: debts, cash flow, $58,054, goal to retire in 4 years. We're going to solve for cash flow. The number we have is $12,000 a month. In income that we want to produce. Now, what I went ahead and did, just to like give estimated numbers here, if we're gonna, if we're gonna replace active income with passive income, and let's just say it's taxed in the same category, in the same way, then your number would have to be higher. Right? Because what you, what you gross— let's say we gross $12K per month, but after tax that number will be less what you, what you net. So I Googled estimated in the state that they live in, if I'm, if I'm making $12,000 a month gross before tax, what would my net amount of money be, and the number was slightly above this number. So it's about perfect in that, in that sense. So you're going to need about $12K in order to net somewhere around, you know, $95-ish, $100 or so. And that's not including any tax strategy that could be involved, which in retirement, that's something That will be a part of the conversation. So, so far we're solving for $12,000 in guaranteed income for life, and that's just one stream of income that we can produce in retirement. There's active income, there's passive income via your assets or business. Active income, something you continue to do in, in life. That brings fulfillment, brings joy. And then there's guaranteed income. There's only 3 vehicles that produce guaranteed income: your Social Security, or any welfare, any, any kind of entitlement program provided by the government, pensions provided through employer, or annuities. Annuities are self-funded or could be funded with an employer if you're like a part owner in a company to, to an extent. So annuities, pensions, and Social Security income, or any government entitlement program. In this case, let me show you what they've accumulated so far based on their ages if they were to turn on these guaranteed income vehicles. So wife and husband will have Social Security benefits. And I broke down the numbers between 62, 65, 62, and 67. So the low number, $779,272.28, if we turned it on at 62. So that'd be 4 years from now. 4 years from now, he'll be 62, she'll be 58 turning 59. So we wouldn't be able to turn on hers right away, so that wouldn't, wouldn't count that. But what I went ahead and did was take the lowest estimated numbers on this side, so the $779,000, $2,728, uh, the pension that husband has. So husband does have a pension, and wife has a TRS plan, so that's the Teachers Retirement System. That's above and beyond Social Security. And we add everything up, we're looking at about, on the low end, $7,692 of guaranteed income for life if they were to turn on these different income vehicles as early as 59 or as early as 62, on the, on the low end. So there's a gap, right? We have Let's say the goal was $12,000. So far we got $7,692. So there's a $4,308 gap that we want to solve for. So what most Americans do to solve for that gap is, let me invest, let me accumulate money, get a high rate of return, and then I'll pull from that gap. I'll live off of that gap versus what I've accumulated. Here's what they've accumulated so far. Total asset values. $1 million, not including their home, because the home's not liquid in that sense. So we have $1 million made up of various different retirement accounts. We have death benefit, total death benefit $2.1 million. We're still contributing to 401s and HSA and whole life insurance. These are the 3 main vehicles that they're still contributing to, which is building that net worth. On the front end, we have an opportunity to use the velocity strategy with our home equity line of credit to accelerate the balance of the home equity line of credit, pay everything off except the mortgage. Why? The mortgage is at a super low rate, 4.25%. So it doesn't make sense to move 4.25% to 8.5%. Doesn't make sense at, at this point in time. So if on the front end, over the next 4 years or less, if we accelerate majority of the debt, let's say we pay off the HELOC, pay off the timeshare, pay off the student loans, that's $990 of cash flow recovered. There's only 2 ways you solve for retirement. To, to hit a certain number goal, which is increase your income or decrease obligation, decrease your expenses. Removing debt is a way of decreasing your expenses, which would mean I need less money to live off of. So we're looking at $990,000. What I did, I did a cost of living increase about 3% over the next 4 years based on this number and guesstimated that 4 years from now, let's say they maintain their lifestyle, everything stays the same, it'll cost them about $10,000 to live that same lifestyle 4 years from now, estimated. Minus removing debt, we're at $9,098.95. So what does that, what does that do? That allows for that $12,000. So I don't necessarily need to replace all of that if I can continue to reduce obligation and expenses. For some people, it may be the case where becoming debt-free literally gets you to retirement that much faster on a, on a, on a guarantee basis. In this case, not quite. You can, but it's a little bit tight. Remember what I said, if I can solve for 12 That's definitely going to replace that $94, but there still is only, you know, still only a couple hundred dollars of cash flow if we make no other money ever again. All right, and again, not including active income. On the front end, paying off debt. What's that solving for? Cash flow. Cool. No one disagrees with that. Majority of the people in this community here were constantly in that rhythm for many, many, many years now. That's been my specialty. On the front end, helping people remove debt, because it sets you up for retirement that much easier because you have less obligation to worry about. You need less income to live the same life that you live today. We already have $7,000+ secured, guaranteed through these 4 vehicles, which is nice, but we're not quite there yet. What I also did was looking at their retirement accounts, HSA, in 4 years. I guesstimated what it would accumulate to based off of a rate of return of 7%. Let me share my screen with you. Let's do that real quick. So I have here $961,000 is the total amount of money they have in various different retirement accounts. And I underestimated what they're contributing. I don't have the exact number working on that, but I know it's more than $1,000 that they're contributing from their paychecks to the retirement account. So I just did $1,000 building on a monthly basis, compounding at 7% over the next 4 years. They— their total Account value should be about $1.3 million, maybe more. Then they have an HSA with about $30,000 in there. 4 years, 7%. There I have the exact number. They're contributing $650 a month to their HSA. It should grow at about $76,000. And then I did the cost of living increase. Then I went to Google. I asked at age 62 for a male How much money would be required to create the gap? $4,300 a month monthly income with an annuity for life. So it gave me the answer. It said you're gonna need between $680,000 to $800,000 to secure a guaranteed $4,300 monthly income for life. Could be more, could be less. I like to be conservative, just lowball it, so you go with the higher number. To create $4,300. Now, good news is that if person on the board here continues to grow their money, they hit age 62, they got $1.3 million, they could roll over a chunk of that $1.3 million into an immediate annuity, and it would pay them out the gap You solved for cash flow guaranteed. The remainder of that money can stay in the investment. So $1.325 million, let's just minus $800 grand. Say you roll that into an annuity. You still have a half a million left, which you're not going to distribute from. Okay. Because this is what most Americans do. They have the $1.3 million that they accumulated at retirement. They see what their gap is, what Social Security didn't cover, what their pension didn't cover, what their retirement system didn't cover, teacher retirement system, whatever else. And the financial advisor says, yeah, you know, you could take 4% out per year. What's that? 4% safe withdrawal rate on $1.3 million is only $53,000 per year. So that's $4,400. Does that solve for your gap? Yeah, but is that efficient? Does that make sense? So look, $1.3 million with a 4% distribution will give this couple $4,400 a month. That closes the gap. They won. They can retire. Peacefully, or so they think, because this $1.3 million has to stay where? In the stock market, which is extremely volatile. Now, if they reduce that volatility and just stick it in CDs, bonds, treasuries, etc., etc., that's fine, but you're greatly reducing your what? Rate of return. If your rate of return is less than the the 4%, you now put the entire $1.3 million at risk because now you're not spending the income that $1.3 million can produce based off 4%. You're now spending the principal in retirement. Now that money is going to run out, right? And that's not efficient. Now where it gets even tougher is you have some stipulations with your retirement accounts when you reach 72. When you reach 72, you have to take required minimum distributions, where in a sense those RMDs might be at a higher distribution than a rate of return you might be earning in your overall account in any given year. That's putting you at risk because what if you live to 105? What if you live to 100? What if you live past 93? What if you live past your parents' age? That is what's taking out a lot of Americans in retirement is they don't know how to distribute this $1.3 million. And so this series is showing you, teaching you how we can do that safely with guarantees and protection through defined benefits. Basically going to a pre-1970 wealth building strategy. This is in today, since we no longer live under a defined benefit strategy with our employers, we are contributing to different various accounts, and maybe your employer contributes as well. But with no defined benefits. So we have to create those defined benefits. How do you do that? With annuities, with whole life insurance. Those are your two primary vehicles. Everything else, throw that in the risk category of investments, rate of return, whatever you decide to do. Denzel, I want to do private money lending. Denzel, I want to start a restaurant. Denzel, I want to do real estate. Fix and flip. Denzel, I want to start a YouTube channel. Do those things. Those are amazing. We want to do those things. That's awesome. Where it gets scary is if all you do are those things, you're always going to be chasing a rate of return to feed a lifestyle that you want to live. Instead of just allocating dollars towards guarantees to replace your active income, which provides no harm to those assets that you're continuing continuously creating. It allows you to take more risk in retirement without the worry of running out of funds. Okay. So that's extremely powerful, extremely powerful. Now watch this happen in real, in real time. So $1.3 million safely with no guarantee, the financial advisor tells us 4%, but we just went to Google. Google told us an annuity today for $800,000, so over $500,000 less of capital can produce the same amount of income. That's very interesting, right? The $4,300 number more or less will produce the same rate of return. And here's the thing, that's guaranteed. This is not. That's, that's important to understand that, that one is guaranteed and one is not. Then it allows the remainder, that $525K or so, to keep compounding without taking a distribution. Understand that at $1.3 million, I have— I'm taking distribution off of all of the $1.3 million. So if my account goes down in value one, one year, doesn't produce a positive rate of return, I still need to distribute 4%. For this family to live off $12,000 per year versus $800,000 produce the same amount of income. Keep the $500,000. Let that keep compounding starting at 62. Let's run the numbers on that. Let's see what does that look like, Denzel? Like if I just had $525,000 So let's drop this. Let's assume we're 62 years old, no more contributions, earning 7%. Let's go 10 years out. Whoa, just 10 years from 62 to 72, I went from $525,000 and yeah, basically my money doubled in just 10 years. So now I'm 72 years old. Let's use— let's see what our cost of living looks like. So let's do— let's put us at— I'll just do $10,100. So $10,100, okay, let's go 10 years. So when I'm 72 years old, now my cost of living is $13,600. So that by then, that would have what, exceeded my guaranteed amount of income that I created. Now let's just assume, you know, with the Social Security increasing, you know, cost of living adjustment, and yeah, they, they have extra active income in those, in those 10 years. So they were able to— let's just say for 10 years they were able to stay ahead of inflation comfortably. And we'll just create a scenario and let's just say they're, you know, at 72 now. Moving forward, they want to have a little bit of a surplus. Let's just say their cash flow has been shrinking, right? What can they do? Well, they have the million. They have the million. They can just get another annuity. So let's Google at age 72 for a male, how much money would be required? Let's just say we're short $1,000. Let's just say we need to create another $1,000 of, of income for life. Notice how the numbers starts to shrink the older you get. One of the things we talked about in the previous session was mortality credits. So let's Google, what are mortality credits and how do they work? Mortality credits are the extra income generated in lifetime annuities when funds from policyholders who die early are redistributed to those who live longer. They function as a form of risk pooling, consistent returns than standard investments. So what that's saying, what's that— what that basically is saying is the life insurance company, let's just say, insures everybody in this room, okay? We got 10 people in the house and all of us are different ages, but the insurance company, we— let's say all 11 of us, 10 of us, we all buy annuities at whatever age we're currently at. But since, let's just say, Denzel passes away earlier than Ruth and Carlos— let's just say Carlos and Ruth live the longest in this room— when they acquire more annuities at an older age, they're given more income on a guaranteed basis with less money required because they're now closer to mortality. So they're being given a credit. Insurance company is able to pay more to Carlos and Ruth because they didn't have to pay Denzel as long as they projected, initially projected, because people either die too soon, and that's a benefit technically to the insurance company. And if people live longer than the insurance company assumed, they can— it's technically a loss, let's just say, for the insurance company, a win for the individual who lived a long, healthy life. They're happy because they receive income for a much longer period of time. The insurance company is fine. They're not hurting even though I said they lost. It doesn't hurt them. They're insulated from the risk pooling that they took on. The more— the law of large numbers allows them to say, we'll insure everybody in this room. We'll guarantee everybody in this room that you'll have enough money. The stock market can't do that for you. What the stock market can do is accumulate a net worth, but that does not translate well to what you can spend. All right, so this is happening in real time, just looking at solving for cash flow via guaranteed income replacing their cost of living completely, assuming it'll be around $9,098. We, we very much— we very well get there, and we only had to use say a max of $800K, that number could be far less because it depends on when did we get the annuity. You see, we have $1 million right now. If they converted some of that money today and rolled it into annuity and let it defer for 4 years, it could potentially do what $800 grand could do immediately at 62 versus maybe $600,000 today, or $400,000 today, defer for 4 years, could do a similar amount of damage, right? So very, very interesting. How this all works is your money needs to be in alignment with your values and beliefs. That's why I teach the philosophies. If we're coming into the community, into the picture with a level of certain beliefs about money that are either simply not true or not efficient, that's an opportunity for you to think differently, to, to repent in a way, which just simply means to change your way of thinking so you can truly benefit yourself. And then for some of us who have no financial philosophy just yet, and we're learning, and you can be molded into these philosophies that apply to this era that we live in today. The era of debt, the era of leverage, the era of cash flow over net worth, return on income instead of return on investment. If you're able to insert these philosophies into your way of living, then we combine kingdom living with this, and you have an amazing recipe to live the life that God has called you to. And you don't have to be an expert on the economy. You can be the expert in the area that God called you to be in. And then build a financial team that matches your values and beliefs. So that's me. Denzel's expertise is this: the numbers, the philosophies, the strategies. I help you implement them. You stay in your lane of what you do best, which is how do you produce income. If you're stressing too much on net worth and rate of return, it will cause you to take a higher level of risk, which can have an impact on your production, your ability to produce income. When you're stressed, when you're worried, your performance goes down naturally. We go into fear. Well, if you're operating from a place of fear, you're gonna make less money in your life no matter what you do. If you operate from a place of fear, you know, you're gonna make less money. If I can remove that fear with simple financial philosophies— cash over net worth, defined benefits, return on income— now you're worried so much less about this big fat number we gotta accumulate in your, in your nest egg. And you're going to be more focused on, well, how do I just replace this income? You're not going to be thinking rate of return, net worth, what I got to contribute. Really just what's the gap that we need to replace? What's the gap? Okay, Social Security will have this, Social Security replace this. Do you have a pension or not? Okay, no. Okay, yes. Boom, boom, boom. Here's our gap. That's what we have to replace. How much money will it cost? Will it, will it take to replace that gap? Boom. I'm going to take another quick pause here. If you have questions, go ahead and start typing that in the chat, and then I'll start doing some Q&A. Okay, I'm back. Let me know if you're getting value from this. The last piece that protects your accumulation, your whole financial portfolio is a buffer asset. So a buffer asset is another thing that we covered. It's part of the philosophy thinking, which is having something liquid and available and accessible when life happens, so you don't have to sell an asset to, to take care of a life event. Whole life insurance and home equity are one of the best vehicles to have as a buffer asset. Whole life insurance, via the cash value, allows for liquidity, tax-free growth, tax-free use, death benefit protection. A whole life insurance policy, when set up properly, can provide 10+ benefits. One product can provide multiple benefits over the life of an individual. Obviously the main one being the death benefit. If anything happens to the husband or wife before retirement, at retirement, after retirement, we have a $2+ million death benefit pays out, wipes out the debt, able to pass on tax-free income to the heir, to the heirs of this family, and allows for the heirs to not sell anything of asset value because they have all this income, multiple 6 figures worth of income that they can supplement. So that's huge. That's the power of whole life from the death perspective. While I'm living, if I get a chronic or terminal illness, that means health, anything severely happens to me health-wise, but I don't die right away, or I don't die immediately, or I'm not— or let's say I don't have a timeline, I just have a serious chronic illness. Whole life insurance, I'm able to tap into the death benefit while living tax-free to take care of those things. Then in addition to whole life, this person has home equity. So they have a home, $100K, increasing to $160K over time. They can use what's called a home equity conversion mortgage, which they can use to provide tax-free income via the equity in their home so that they don't have to spend down other assets. So that's just in their back pocket. I don't think they're really going to need to use it in this, in this case, but it's something that could be extremely valuable. It's in their back pocket. So that's the buffer asset. You can have multiple buffer assets. Whole life insurance is the best in my opinion, and based off of just historical evidence and track record. And when it comes to active income and business income for this couple, we haven't solved for that yet. What's beautiful is they could stop working and never work again. And be okay if we focus on these philosophies, if we don't get sucked into what the world tells us to do— society, financial advisors and planners that aren't thinking cash flow, just thinking net worth, rate of return, you know, build, build, build— not really thinking in cash flow terms. When we're able to look at it from this way, I think it really allows a couple, husband and wife, to just be creative, to say, hey, if we have guaranteed lifetime income no matter what, I spend all that money and the next month it gets replenished, then they're sitting at retirement with 50, 40+ hours a week free that they don't know what the heck to do with because they just left their their full-time careers. So now they have to think, how do I— what do I do with all this free time? This allows you to be fully creative now to say, you know what, I would like to go on 3 mission trips this year. I would like to volunteer full-time at the church, at this nonprofit organization. I'd like to start a YouTube channel. I'd like to start a podcast. I would like to start a men's group, a women's group. A singles couples group, a this group, an addicts in recovery group, a ba ba ba. Now whatever that activity is, whatever that passion purpose— here's where the kingdom living— God calls us to a particular place. Whatever God calls us to, our work, which is us becoming who we are, more of who we are every day, and his glory is revealed through the works that we, that we do for his glory. Why on earth would you ever stop glorifying God just because you reached retirement? No, that's not how this works. Because you're going to be in joy, in peace, in happiness. You literally wake up every day and that's what you're thinking about doing. I'm going to glorify God today. I'm gonna go to this nonprofit, I'm gonna do this, I'm gonna do that. Now, somewhere along the way, it may not be everything you do, but somewhere along the way, some of that activity is going to produce income somehow, some way. Someone's either going to be funding you or someone's going to be paying you because you're providing continuous value into, into the world. You're creating value. Anytime you create value, you are setting yourself up to be paid. That's the exchange of value. That's how this world works. When you create value, other creators value what you created, and they either want to pay you for it, fund you to do more of it, or help you, or you help them. It is— that's what it is, right? There's not— I don't think there's any dispute there. So what's really cool is it just frees up this, this place here where that active income is your abundance money. So you'll have maybe 3 accounts or more in retirement, but to simplify it, you'll have your active account, your passive account, and your guaranteed account. Your guaranteed account pays all your bills, right? That's the money that is consistent Your bills for the most part are consistent, pays that. You have your passive money for your random big-time expenses. Maybe you gotta liquidate something, maybe you need a little more money. That's where passive income comes into play, 'cause we can pull from an asset somewhere else, take care of something. Then you have active income, which is just abundance, where it's like, okay, I'm bringing in an extra like $2,000, $3,000 a month, and I'm gonna use that to just travel the world. With my spouse, or I'm going to use this extra $2,000-$3,000 to keep building the kingdom. I'm just gonna just walk around the streets of my neighborhood, go into the city in the downtown and help the homeless every day. I'm just gonna go there, help the homeless, feed them, do this XYZ, help people get a job, pay someone's bill, pay someone's rent. It's, it's abundance. Really cool. Where business comes into play is whatever activity we do in retirement from a tax perspective, that activity should be identified as a business, because when you have a business, you open up all of these tax deductions at play. So whatever your guaranteed income is that we saw for retirement, if you have a business attached to that income you're able to reduce the tax liability on that ordinary income number, which means you net more of what you make, which means you need less now. So if you're looking at two people, they have the same amount of income, $12,000 a month, $12,000 a month. Person A making $12,000 a month is taxed at 7% gross. Person B making $12,000 a month but is taxed at 37%, ordinary income, they need more money. They need more income to have the same as the person who's being only taxed 7%. Or hey, there's cases where enough tax strategy, you don't pay taxes. You completely offset tax liability through tax planning and tax strategy. That's where the team comes back into play.