How A 71 Year Old Built Cash Flow

Okay, so the next case study, I love this because it also shows that age is not a factor. Age is a non issue in this ecosystem. So I don't care how old you are, if you've got the will, God can make a way. The universe will abide. God will make a way. God will show. It will reveal those who are committed, fully committed, fully engaged. So this is another client I've been working with for years now. Such an honor to work with this person. We've got another mom that I'm working with. I want to say I've been working with her since 2019. So just to save time, be a little more efficient, we're just going to Fast forward to 2025 as of right now. And I've done a case study before, I think on her numbers. But we are about to be in a phenomenal place. Here's what we're working with. We 4,789 of income per month. This person is retired, 70 or 71 years old. I forget. I think she just had a birthday. So forgive me, my current client, we have a mom, she's been retired. She's been retired since we first met to show. So she retired successfully. This income of 4,789 is made up of Social Security income and a pension. Okay. In terms of debt, we have just a mortgage left. 326,259 86. We're in Florida, single mom, retired. And one of the things that we have been working on for years, paying off debt. And we've been doing a phenomenal job. She's paid off everything except for her primary residence. That current mortgage payment is 3164 per month with an interest rate of 8.13%. All right, 8.13%. Technically. Technically speaking, as of right now, she is operating out of a negative cash flow and has been for quite some time. So I'm going to give you the real technical number. But we're about to be in a positive cash flow position of this roughly that amount. That 1100 number is what we're estimating. But let me look at what we're actually currently at. So it's 2295 is her living expenses. And then we add that mortgage payment, 3164. So technically, as of right now we're here is 5459 38. So 4789 minus 5459 38. Technically we're operating out of a negative $670.38 cash flow. It could be a little bit more, but that's where we're at today. When I first met her, we were in multiple negative thousands of dollars of cash flow and we did a lot of work. It's been amazing journey so far. It's been amazing. Let me tell you, I've had the pleasure to meet this person in person. It was awesome. And for those of you that are lifetime clients, I make myself exclusively available to you, especially if you live in Florida. Anywhere in Florida, for that matter. And whenever I travel, I was just in Nashville. I'm going to Arizona for another speaking engagement from August 21st to the 23rd, anytime I travel. As long as you are a client, you're on my email newsletter. You're subscribed, you want to meet me in person. I will make that time if I'm going to be in your area. Okay. I usually only travel for business. Whenever I speak, go to an event, or if I'm traveling with my wife. And there's been a few scenarios where travel, my wife, we're on vacation, but I make a little time to have a coffee with somebody that is a client. And it's an awesome experience because one of the things that I've. I can attest to every single client I meet in person after that meeting, for some reason, their numbers just get better. And what I mean by that is like, they, they're more committed. They're dialed in. They're like, oh, shoot, he's met me. He knows. Like he's seeing it now. And so when we talk together, it's like there's not that they were lying before, but it's like, it's even more accurate. The data that I'm getting, it's more dialed in. It's. It's more focus, there's more clarity, there's more vision. So there is something special about that, that human connection, which you can't measure it on a. On a spreadsheet. It's just these added features and benefits that help people really take their finances to the next level. So I just wanted to share that with you. So technically, we're here. We're about to be here. The goal is to pay off debt. We're also going to be simultaneously building wealth, and wealth building shifts season to season. When you're younger, it's all typically about, you know, cash flow, accumulation, and building that business, getting it to the next level. When you're like 10 years or less out from retirement, you're thinking, I got to build more passive income to retire. And then when you're in retirement, it's a different ballgame as well. Now you're thinking, well, I have created the wealth, how do I spend the wealth efficiently? So this is a conversation now of paying off debt in retirement while simultaneously building wealth for preservation for the next generation and also spending the wealth. How do you spend your wealth throughout your lifetime? If this woman lives to 100 years old, she's got another 30 years on earth. How do we spend our money in wealth? Right. In retirement? I mean, how do we spend that? So one of the moves that we've been working on is converting the first lien mortgage at 8.13% with a payment of 3164 and converting it into a all in one loan or otherwise known as a first position home equity line of credit. And we're going to implement the velocity strategy. We're going to accelerate her debt, putting her in an automatic cash flow positive position. Okay. And then remaining liquid in the process in retirement. Let me share with you some other assets we already have at play. We have an IRA, I want to say, that has 65k plus in there. We have a Roth IRA, I want to say $10,000 or more is in there. We're not contributing to those at all. We have an annuity where we contributed about 150,000 into that so far. And with the annuity, I want to say the payout when she turns it on is going to be over $1,000. I think it's like $1,100. I'm going to verify real quick, see if I can pull it up for you guys. Okay, so what's cool? We initially started with 150 grand in January of 24. So this was January 2024. Just a year later, the account value is now at 175,930 and 11 cents as of January 2025. So she bought an annuity at a time where interest rates were, you know, really, really pumping. They still are still really good time. And if she were to turn the annuity on this year, which she doesn't have to, the guaranteed payout is 10,115 98 divided by 12, so about 8, 42, 99. That's the, that's the guaranteed payout. If she were to turn it on as a lifetime income, that adds to her overall income. So she would get the Social Security, the pension and the annuity. That's if she turned it on this year, by next year, if I'm not mistaken, I Think it would be about 1000 bucks, if I'm not mistaken. So quite powerful in that sense, providing her with that secured income. And what's nice is whether she turns the income on this year, next year. She is securing this money. It's insurance money that's paid for her whole life. And then when it comes to the Roth IRA and the traditional ira, she doesn't have to touch that. So she can allow her investments to just keep compounding year over year over year in retirement, have low fees and just let that money keep on growing and not have to really ever touch that. Because on the debt payoff side, if we can eliminate that mortgage payment, that's a massive amount of cash flow back into her economy that she gets to say, I want to spend it, or she can invest it and keep growing her wealth here and then turn on the income over here. So pretty, pretty powerful stuff. So let's do this. Let's say the all in one loan. Let me pull up the details about that one. We're like very close to the closing of the all in one. So. So what we got approved for was a $331,650 line of credit. So this is our credit limit. I believe the interest rate is going to be like 7.8% or 7.7 if I'm not mistaken. I'm waiting on that final number, but we can go off that. So 8.13 to 7.8. That's an immediate savings. Then on top of these other assets, we also have about 161,000 in savings, and that's sitting in a high yield savings. I want to say she's earning about three and a half percent on that money as of now. We also have some life insurance. So she's got life insurance, about 150k on the death benefit and about 5k in cash value, if I'm not mistaken. These are policies she's had before we even met. So she's just been paying those. So we got 150,000. That's for wealth preservation she has to pass on. We have two accounts here, the Roth IRA and the ira, which we really don't need to touch. That money is wealth preservation that's going to keep growing. We have this insurance money, this 150,000. Initially it's grew to 175. It can pay out a distribution of 842.99 on a guaranteed level just a year later. And that number could easily go up, could easily be higher if she waits. So I'm Just going to use that, that super low number as of right now, then we've got the 160,000 in savings. So at 326, 259.86 owed plus closing cost, I'm going to guesstimate 5k ish, maybe more in closing costs. So what happens when you get a first lien HELOC is you have to have money for the closing cost and then space. You need to create space in the line of credit. They don't want you to owe too much on the line initially because when you're doing a refi and it's that tight of a credit limit. So they approved it for 331,650 because of her low income, even though she has great credit, doesn't have any crazy debt. So we used, we were able to leverage her assets to be able to approve that high of a, of a credit limit even though the house is worth more than that. But she only got approved for 331. That's really based off the, the fixed income that, that she's on and the fact that technically she was operating out of a negative cash flow. But she's been spending her assets down to, you know, finance until we can get to that positive place. So with all in one, they gave us this number so far, 15,000. Not all of that is cost. It's 15,000. There's cost in there and then it's also space for the line of credit. So if I have a credit limit of 331 and I'm already going to owe 326 out the gate, you need to have, they like you to put almost like a month's worth or more of your income into the line because moving forward you're going to have a checking account and the all in One altogether. So it's a checking account, it's a loan, it's a line of credit all in one. So literally your checking account number, your routing number is the same to your loan on the property. So she's going to be, you need time to switch banks over and get set up. That usually takes about a month. So they want to make sure you got money in there. So what I'm going to do, to be super conservative is take off 15,000 from the 161 but still start us at owing 326. So this is what I'm going to assume. 326 and I'll make it easy is what we owe. Let's say we're at a 7.8 interest rate now we go from a principal, interest, taxes and insurance payment to now just interest only payment. This frees up a lot of cash flow for her. So now we're at interest only payment. So let's see, 326 times 7.8%. Her interest only payment, owing 326. It's going to be 20011 9. So we go from a 3,164 payment down to a 2,119. So we got about 1,045 in saving. But we don't stop there, do we? We're going to keep going because what's next? Well, she's got this cash that's sitting in a high Yield savings earning 3.5% when we could be recovering 8.13. 8.13 went down to 7.8, 7.8. We can reduce that further to like 5% or less. So let's see, what would it look like if she took the bulk of that money and just parked it into the house? How much more are we saving there so we can look at the bulk of it and just say let's do 161. I'm going to minus 15,000. Right? To be conservative, say a 146 and we're going to dump. Let's just say 140. So 326 minus 140 is 186, 186,000. So now I went from 326 owed on the property down to 186 with a credit limit of 331. That money's still available. If I, if I get scared. She could pull that money back out if she wanted to. All right, there's no limitation there. So now 186times 7.8%. Now my interest only payment is 1209 per month. My income, let's say she turns the annuity on, starts collecting 842,99. So you got 842 plus the rest of her other fixed income. Let's say we're here 56, 31, 99. And now our expenses are, I'll use that 1209 number plus living expenses was 22, 95, 38. So I'll round up, I'll keep this number. I'll use that, I'll round it up, call it 36. Now when you switch from a 30 year fixed mortgage to an all in one loan, you're now responsible for property taxes and insurance. Before, with her 30 year mortgage, she's paying her property taxes and insurance in escrow on a Monthly basis. So her property taxes and insurance are $1,516.84 per month. Let's times that by 12. So we're paying 18,202. So if we did 3,600 plus 1,016,84, technically her expenses per month would be 5,116,84. But since that's not the case with an all in one on a month to month, she's actually on the low end, cash flowing about $2,031 per month. That cash flow property insurance money now becomes cash flow to the all in one to start knocking the balance down much faster. And the faster you knock the balance down, guess what? Her interest cost is driving down much faster now because we're using more than just extra payments or extra cash flow. We're now using every single dollar that comes into our economy is 100% principal pay down on the property yet staying liquid or unexpected stuff. Now here's where it can get even better. This 18,202,08 number is what she was paying in property taxes and insurance. But when you go from paying monthly to annual one shot, you actually can save money both from the government paying property taxes and the homeowner's insurance company that she's with. They can provide an incentive for paying your bill in full. And from a Florida resident, what I've seen personally with my property taxes is if I pay mine in November when it's first due, I'm going to save about 5, $400 for the whole year versus if I waited to pay it all the way out to January or February. So let's say I'm going to cut that savings in half. Let's say she could save $200 by paying her property taxes in full. And with homeowners insurance, I saved for paying in full another five plus $100 or so. So we're just going to guesstimate. Let's say she could save about 500 bucks, which I think is very reasonable. Now we're at 17,702.08. That'll actually come out to pay those bills. Meanwhile, we're going to start velocity on the all in one. All her income is being parked into the all in one. Expenses are coming out this $3,600, which includes the interest costs. And again, that number is not going to be 1209 each month. In fact, even in the first month, it's not going to be 1,209. Let's prove it. $186,000 times 7.8% divided by 365. So we're paying $39 a day in interest. She then gets her income $186,000 minus $5,600. Let's say times that my 7.8% divided by 365, that's $38 a day. 55 cents. 186. Boom. And then add expenses 184. Excuse me, had to help my sneeze there. So 39, 32. Add those numbers up gets you like a nice healthy estimate, 39.74 and then divide by three and then times 30 days, 1,176, 10, 1209. A $32 difference. Now watch this. I said she had about 2,200 or so in living expenses. 2,295, 38 in living expenses, let's say of that 22. But I didn't have let's say 1,500. She could run on her credit card and get 2% cash back. That's 30 bucks. So 1500 times 2% cash back rewards is $30 per month. Times 12 is three hundred and sixty. So if I can, in a year over a 12 month period, let's say her interest cost reduces by about $25 every month, which is underestimating it. $25 is $300 a year in interest reduction using the strategy. So we have 300 plus we have 360 in cash back rewards. And that's not even counting the fact that your interest reduction on the all in one increases when you're floating expenses on a credit card 20 to 25 days out of the month. That means you have an extra $1,500 that stayed in the all in one that did not get charged interest. If you looked at how much is 1,500 times 7.8% and divide that by 365. So that's 32 cents a day. So 32 cents times 25 days is another $8. So on top of my $30 in cash back rewards, you can argue that also created about $8 a month in interest savings times 12 is $96. So here you got 96 plus 360 plus 300 for the year, an average reduction plus say $500 in property tax and insurance savings from switching from monthly to annual payments. So We've got this $1,256.16 of essentially new money that became cash flow that sits in the line of credit. It doesn't sound like a whole lot, but do that every Year now it starts to make a difference. Do that every year. And I'm not even done. I'm not even done. There's more because when it comes to her, this person's credit, they still have great credit. So in about six months from now, I could have her go to a credit Union, get a 0% credit card for say 12 months and 0 balance transfer fee. And let's say she gets approved for 15k, I could have her take a transfer of 15,000 out of the all in one, just park it in the credit card, zero balance transfer fee. So no fee, no cost to turn credit into cash. Now you got 15 grand that's sitting out of the HELOC times 7.8% for a year. So that's another 1170, let's just say in interest savings for the year. And then she could just, you know, come month 11, month 12, she just makes a payment to the credit card, that money goes back into the all in one. You would have just paid the monthly required payment. And there's no essential new cost to that like you're making a payment, but it's 0%, it didn't cost anything. So maybe it reduces that 1170 by a few bucks, but nothing great. So when you combine all of this and this is the person that's retired, this is the person I've been working with for years. So they comprehend all of this and they're able to execute and they have my support, they're not going to implement this. This mom is not going to implement all this at once. But it is happening simultaneously in a very organic, healthy kind of a way. And mind you, we haven't touched these other assets that she has. So it puts her in a very, very healthy position to pay off wealth, pay off debt fast, increase her wealth, even though she's dedicating a lot of it to debt elimination, puts her in a positive cash flow position, keeps her fully liquid, right? You got a $331,000 credit limit that you just got with a bank that specializes in first lien heloc. So we don't have to worry about the bank, quote, unquote, having all this fear that they're just going to close my line. And guess what? Even if they did, this client knows exactly what to do if that were to happen and the first lien heloc, for some random reason, they decide to close her heloc. We could just refinance back into a traditional market, or I could go to a different bank and get a first lien heloc so if All In One decides to play games closer HELOC up, okay, I can just go to another bank. There's another bank called University Bank. They'll be happy to take my business. I could go to PNC Bank. They'll be happy to take my business. I could go to Space Coast. So the list goes on. I could go to any other bank that wants my business, sees that I'm a tier one borrower with great credit, never late, ton of equity in the home. I've paid down the house dramatically. I got all this equity in there, and then it could just. I can restart the process again, and then by then, maybe I get an even better rate. Okay, now here's where it gets even better. Because this is a variable interest rate that'll fluctuate. It can go up, it can go down. Now, what's most likely going to happen under this current administration that we're in in 2025? She may start at 7.8%. The feds have their meeting coming up in September, and Jerome Powell did already signal, if I'm not mistaken, that they will most likely decrease interest rates by September, if not December, for sure by the end of the year. So the current administration has been pushing on decreasing interest rates. So if rates go down a half a percent, 0.25. She benefits in that instead of being locked in at a fixed rate. And the reverse would be true as well. If rates went up, well, her rate would go up. But we're in a time right now where that is just so unlikely to happen. So I'm very confident that we start off at this 7.8 rate, let's say. And then by the end of the year, we're probably sitting around 7.5%, potentially maybe even less. What does that look like? 184,000. Just. Just 7.5. Just 0.3% difference is 1150 compared to 1209. So 1209 minus 1150. So there's a $60 difference there in interest costs per month. And then when you implement the strategy, how much did it go down by? Another $32. So that 1150, same thing, minus 32. We're at 1118. And then you do all the math, this thing starts to come down real fast. So we can see how, okay, over the next six months, we're in August. So let's say she starts the HELOC now. September, October, November, say four months. Very reasonable that this HELOC will be around 180. And then it'll shoot up to pay whatever the remaining property tax and insurance is because she has that escrow account that's going to get either refunded to her or be used for the property taxes and insurance. If it gets refunded to her, well then that money just gets parked into the all in one as well, reduces the interest costs, and then it'll come right back out to pay her property taxes and insurance. So her focus at this point over the next few years just becomes knocking down the heloc. She'll be operating out of a positive cash flow position, about $2,000 on a month to month. And then for one month, it technically goes negative 17,000 and then. And then back to normal. Right? Or November, property taxes and insurance, if it's due in December, So two months out of the year, she operates technically a negative cash flow because you're paying this bill all up front. And then from January all the way to November on a cycle, all that money just flows back into the line of credit. Okay, so a lot just happened there, right? A lot. But she is in a very, very healthy position right now. And again, her Roth and her IRA can continue to compound, that can continue to grow. She could even contribute money to that while simultaneously getting out of debt. And if she's earning more than 7.5%, 7.8% over here on these two accounts in about two, three years. So when she's like 74, 75, depending on where the balance is on this HELOC, if it goes all the way down to like under 100 and these two accounts grew to 100 or more, she's in a position now where she could either fully liquidate, pay the house off in full and don't touch it, just have an open line of credit, or keeps going, leaves this money alone, lets it keep growing, keeps compounding, and she can keep just paying off her house over, you know, through her 70s. But then what happens is it's not just about paying off the house and doing nothing. She gets to be in a position where if rates come down over the next two, three years, comes down to like 4 or 5%, and she's riding that interest wave down. What will most likely happen is all in one, they'll release new product where they. Because back in 20, 20, 20 21, they were doing these. What is it? These interest only, I'm sorry, fixed rates. That's what it is. So it's interest only P lock, but it was a fixed rate, 3, 3.5% rate. And then you could lock it in for three to five years. Then 2023, 2024, they started getting rid of it and they haven't offered it since. So if rates come back down, they may reintroduce their fixed rate 3 year, 5 year rate, lock on an all in one. If they bring that back, this person on the board here and other clients I have, I'm absolutely going to encourage them say hey, go ahead and lock in that three year, five year fixed 3 to 5% rate again if we get to those low rate. And then you could leverage some of the equity in your home to go earn 10, 12, 15% in another area of focus. And that's on the wealth side. So whatever interest this mom has, we can again start a business. Opens up the door to tax deductions to reduce her tax liability on W2 side with all this fixed income that she's getting. And that's just more money that just parks in the heloc. Eventually when the home is paid off, she's got this open ended line of credit for $331,000 that she could use whatever she want or she doesn't use it at all. And then just cash flows to 3000 plus dollars per month. Keeps using her credit cards, keeps getting points, can contribute to her Roth, can contribute to her ira and just let that just keep growing and growing and growing. If I'm not mistaken, I think the IRA, I think you have to take distributions after like 72 or something like that, if I'm not mistaken. But the Roth IRA you never have to take distributions from. So she can keep contributing to that 8,000 per year and have that keep growing. And with that, that is two case studies today, nearly three hours of work that we put in together. So take one more look at the board here. Doing phenomenal work together. Carlos, 57 and retired, doing the first lien HELOC plus the life insurance strategy. You're doing 2% cash back cards for the year. You love those. Awesome. We got Janine out of Missouri as well. Orlando Denzel. Unfortunate. An unfortunate illness. Wait, there's another message. I think. Thank God, I'm good. Okay, you had an unfortunate illness. Good. Now wife works, you're unemployed with a self directed ira. When I sign up, what option do I pick? Payment options. Well, take a look at the options. Whichever you know works for you. What is based on affordability. Before you sign up, talk to wife. I want you all on the same page. So let's go through that first. Before you just sign up, make sure you talk to wife about it. I want you both on the same page. And we again, you pick the one that you can afford. If you don't see anything in there that you can afford, you email me. I have other options. I go as low as 50 bucks a month. As you saw earlier on my other case study, I have a lady. I have plenty of moms paying me right now. 50 bucks a month. 100 bucks a month. 150amonth. Some even zero. But that's just based off of they initially started at a certain amount and had to go down because of circumstance. But I said, hey, we're not quitting this relationship, so we're going to keep going. Because I'm the guy people come to when you get in the thick of it, where you're in the mess. That's where I thrive. And then people do well. Okay? And hopefully I helped you build a strong foundation. But still, life happens. And then what happens is people do really well and they stop talking to me. That's what that. That messes people up. They don't realize it. They all, you know, I'm good now. Denzel, thank you so much. Da, da, da. Boom. Life hits them, punches them in the mouth, then they come straight down and they're hitting me up again. I say, hey, let's maintain communication this time around. And then when life hits them, they get hit. But they don't have a crash and burn moment. They just have like a stalling event. They're still growing, but maybe a little slower. With that accountability and support, they're rocking and rolling. So with that being said, I'm going to close it out. This has been wonderful. God bless you all. Enjoy the rest of your day. I have links in the description below. You can get ahold of me. You can book an initial consultation on my calendar. I have now, with Jerry just signing up, I now have 44 spots remaining in my lifetime program. So I only take on so many clients per year. I had opened up my lifetime program a couple months back. I'm only taking on 50 more families. So with Jerry, he now brought it down to 44. And it looks like Orlando wants to sign up again. Sign up and figuring out what the payment option will be for him. So that'll bring it to 43. Once I serve, once I acquire those 50 more families before the year is over or before that program will close. So I want you to keep that in mind. I only take on so many families per year because I'm only one person. I run a very, very tight financial practice where this is all I do. All day long is talking to people Monday through Friday and even sometimes on the weekends to really serve people at the highest level. And once I reach that number, I close it. I'll reopen it again one time a year. Every year, I open it up and I just take on another 30 to 50 more families, and then we're locked in for life. Okay, so this is the last year that I'm doing lifetime going into 2026. It's going to go off an annual basis. I just charge, like, one price for the year. And then you just renew year over year until a certain point, and then we just have an ongoing relationship. So I'm going to figure out what that will look like. But I'm getting to that point where I have hundreds of families that I'm working with one to one. So I want to make sure I continue to provide the best service. And I'm working on partnering up with other financial coaches and helping, you know, build this community a little bit stronger.