Lifetime Income Planning Workshop

All right, so we are officially live on YouTube. Welcome to everyone that's tuning in live and/or catching the replay, and those of you that are hanging out with me on Zoom. Anyone that is a client, anyone that's done business with me in the past, and anyone that is on my email newsletter, you are being informed of these workshops that I've been putting together As of late, and you get to either hang out with me in the Zoom room where I can bring you on, we do some Q&As back and forth, or you hang out on the YouTube channel in the comments section and engage with me and we have some fun together. With that being said, today's focus is lifetime income planning. We're doing a little workshop. This is going to be a case study review. In real time, looking at all of the frameworks that I teach on YouTube and how it all eventually comes together in alignment to ultimately help you achieve your goals, your financial goals. That's financial freedom, financial independence, being debt-free, having great credit, access to capital, building up your savings, building up your retirement, building up your passive income vehicles. building up your business, you name it. These frameworks that I've been teaching and financial strategies is a reflection of what this case study— what you're going to be looking at here on the board. So to preface that, we're going to direct our attention to the whiteboard here. I'm going to give you the breakdown of what's going on and the overall theme on how we view money on this YouTube channel and many other content creators that I'm in collaboration with or in partnership with that I learned this from so many years back. And that overall theme is cash flow over net worth. That is the theme of really everything that I teach. As it pertains to finances on the YouTube channel and when I'm coaching clients one-on-one. Most Americans are taught to think net worth accumulation, which is why we often focus on where can I get the highest rate of return, ROI, return on investment. Or ROR, rate of return. And so we're typically told by financial gurus, advisors, and professionals all around the United States, all over the internet, that you need to what? Save and invest your money, get an XYZ rate of return, and one day someday you'll have This big nest egg of money built up that you'll be able to live off of. That model has proven to fail at a very, very large scale because of how we're going about doing it and the vehicles that we're using to go about doing it has proven to be failing for the Gen X generation. I believe. Baby boomers, not so much. And the only reason why most— I would say not most, but a large amount of baby boomers who have successfully retired at a reasonable age, let's say between 59 and a half to say 65-ish, The number one reason why those people were able to successfully retire, save enough money for retirement, invest enough money for retirement, is because they had what are called defined benefit plans. This model is proven To work for the vast majority of Americans. Why? Well, A, defined and benefit in finance terms, you're going to have some level of guarantees. It's predictable. It's sustainable and for the most part easy to implement for the average American that is not a self-proclaimed financial expert, that is not the individual that's going to study the stock market day in and day out. That is for the individual that is not going to start an online business, or any business for that matter. They don't have a desire. They worked 30, 40 years in a particular industry, and they perfected a skill, and they got to an age where their body began to slow down in comparison to their ability to produce. in that skill, and then the next generation is coming in, the younger generation that's able to do those skills a lot more efficiently or faster, whatever the case. And so companies would provide these defined benefit plans for people to eventually exit the workforce and retire peacefully with enough money— or I should argue, more than enough money to live off of. Peacefully financially independent. This worked, but after a couple of things. 1971, we removed ourselves from the gold standard. Since then, we've been borrowing— the country and ourselves— we've been borrowing a massive amount of debt over the last 30, 40 years. Inflation has gone crazy. Taxes Is taxes is what it is. It continues to rise. And companies dropped for the most part. Some still do it. Very, very large corporations still have some level of defined benefit plans. If you work for the government, if you work for the military, if you work for the fire department, police department, maybe first responders, there's still certain industries that Still provide this. And those people, for the most part, have a successful departure in terms of achieving financial independence without having to become an expert, without having to know all the different things about stock market and ROIs and tax strategy and tax planning. Like, super simple stuff. Average American volunteers themselves into a defined benefit plan and sees it through. And if they just did the simplest things in life for a long period of time, like spend less money than— spend less than what you make on a monthly basis, on an annual basis, save some money, contribute to that defined benefit plan over a long period of time, and eventually live a debt-free life, eventually have your house paid off, eventually have all your debts paid off before you retire. And literally, that works. It still works to today. The problem is there isn't a whole lot of defined benefit plans out there because most corporations, most institutions have opted out of that. So it switched from defined benefit plan to contribution. It went from defined to just now contribution. Contribution plans where, where the individual has to volunteer into something. And that's the introduction of the 401 and all that. And the responsibility of retirement planning is now on the shoulders of everyone in this room. It's on Denzel's shoulders. It's on Tamika's. It's on my friend Daniel. It's on— even if you're a financial expert, it is now on you. It falls on your spouses. It falls on the head of the household. It falls on our kids moving forward for the most part. It is now our responsibility to retire ourselves, to create enough income to live off of, to create financial independence and freedom. And that comes with a, a lot of time, money, and effort to understand and educate ourselves about these things to make it happen. And literally, we've been seeing the effects of that. Now, it wouldn't have been an issue if education was provided during that time, but it hasn't been. And so now we're seeing anyone who is between the ages of 50 to 65 years old is going through this right now. They're like, I don't know if I have enough money. I don't know what this retirement plan is doing. I don't know what my fees are. I don't know what my costs are. I don't know what the rate of return is I need to make in order to distribute to myself to live off of that for the rest of my life. You just don't know these things. So The answer, the solution, this new model, this new way of thinking is no longer accumulation. The one number the average American needs to focus on over the next 30, 40+ years until this becomes mainstream, because mainstream financial knowledge and education is not this cash flow over net worth, it's still contribute to these benefit plans and hope and pray it works out. But the problem is it isn't. It's not working out for a lot of folks. It just isn't. So here's an example of an individual, 59 years old, female, married, whom when they became a client many years back, they began to adopt this model of cash flow or net worth. And it began With the 4 major numbers: what's coming in, what's going out, what's your debt, what's your cash flow. It began with creating efficiency with our expenses, creating a velocity, a flow of money. So we incorporated the velocity banking strategy for many years using an unsecured revolving personal line of credit. For $20,000 at 7.99%. And we've used this line of credit to accelerate a ton of debt over the last 4+ years that this client has been working with me. And they have successfully put themselves in a position. Here's what they've created. They have active income via a W-2 position, and they have a business. This business is based off of a skill that they've developed and crafted and mastered over so many years in their W-2 position, and that has to do with therapy. A the the name is. I'm forgetting what— a psychologist, I believe. And she does a specific type of therapy for a specific type of people in her practice. And so she's been doing that for many years. She's crafted that skill, gets paid for it, W-2, and then also built this business off to the side. And this is a super conservative number, $680 a month. She actually can make upwards of double or triple that, so we're like being super conservative. There's 3 types of incomes in our framework of cash flow over net worth: active income, passive income, and guaranteed. These are your types of incomes that one can create. Your active is always going to be your W-2 or biz income, and then passive can be real estate, can be A private money lending deal that you did could be something where you're not putting in as much activity, right? So passive income still has some activity in it, but for the most part, it's mostly passive over time, and it becomes less and less work for what you have to do. And then guaranteed income is no work. And it comes from 2 places. Some sort of a welfare program that the government provides. Social Security, right, is a form of welfare. A, uh, VA benefits or disability income. Right, these are welfare programs that can potentially pay income for the rest of someone's life, and then a defined benefit plan. Those are made up of pensions, and a pension is— another word is an annuity. That's it. That's all that exists. In terms of guaranteed— the word guaranteed income only exists within welfare programs and/or defined benefit plans that contain the word pension. And pension is basically an annuity. An annuity is a financial product provided by insurance carriers that Provide a guaranteed amount of income for an individual's entire life and potentially a second person like a spouse for their entire life. That, that amount doesn't change, it stays exactly the same for that person's entire life regardless of the initial amount of money that was dedicated or funded in the plan. Once the plan gets activated, once it gets turned on, let's say you had $500,000 in there, and it's producing whatever amount of income it's producing, even if that money went to zero, the insurance carrier guarantees, as long as that person is still alive, it's going to keep paying that same amount of income no matter what, okay? So this is what this person has created so far between husband and wife. They have Social Security. These are the numbers when they hit 67 years old. We're currently 59. We are planning to retire. Our desire is to replace active income with passive and guaranteed. Income vehicles so that they don't have to work the rest of their lives. They get to work the rest of their lives. They want to work for the rest of their lives at whatever commitment levels they choose. It could be higher, could be lower. They could decide to work for 6 months and then take 6 months off. They can decide to just go from working 40-hour work weeks to 20-hour work weeks. This is the type of person that does not have a desire to just stop working, but they do have a desire to replace this W-2 income. And when they decide to work, it'll be for themselves, for their own business, for their own practice. And commit time and energy to that, as well as building their real estate portfolio. They have one property and it's producing $1,500 a month in income, and they want to be able to expand that. When I'm working with you guys, I typically, you know, ask, hey, you know, give me a number. What is a Amount of money that you would like to have in passive income that would make you feel like, as long as I'm bringing in this amount, I'm happy. I'm able to live the life I truly desire. This person threw a number out, said ten k. If I can just bring in ten k a month, Enzo, we're good. That I, I'm happy. Anything above that, great. Well, what we're going to do is we're going to solve for that number, and we're going to do it with this model, the defined benefit plan model. We're going to use guaranteed products that will create enough income that their expenses would be fully covered. And we want to go above those expenses to have some cash flow. And then what I like is whatever our passive income is, is going to be abundance money. It's going to be in abundance. And whatever active income I'm producing in retirement is fun money. Fun money. So we're gonna have paychecks that are guaranteed in retirement, and then we will have playchecks. Playchecks allow us to live life in abundance, allow us to give and tithe in abundance, and allow us to create memories and experiences with families, and also allow us to build a strong legacy, invest in the next generation, be able to basically take money out of your ecosystem and put it into somebody else's simply because you love them, simply because You are following a particular mission, a vision of a nonprofit or a church, and you want to see that grow. So there's your number that you're trying to solve for. And if you're tuning in live, let me know what your number is. Let me know how much income you want to create for the rest of your life. In retirement? How much income do you want to have where if you know you're bringing in this amount of money, this amount of money per month net after taxes, that you won't have to worry about money? You can then say with full confidence I've got this amount coming in, and I'm able to cover all my expenses and obligations, and I'm able to freely move around. I don't have to go anywhere to clock in or work anywhere, although if I choose to, wonderful. If if not, that's cool too. Let me know what that number is. I want to see what see what some numbers are are. Popping up in your mind. I'll give you a few seconds to figure that out. So again, Zoom, or if you're live on YouTube, comment what that is for me. What's that number? What do you think it is? A lot of us have no idea. We don't really know. Now, sometimes I come across people that are a little too humble in their number. So Tamika says 8,000. Okay, now most of the time when I talk to my humble clients— love you guys, especially my Christians out there— you guys are a little too humble in figuring out or understanding how much money you need in retirement. So oftentimes, whatever number they tell me, I usually just double it. Or triple it, or even upwards of 10x it. Because the reality of the situation is that what you think you need in retirement in the future, whether it's 10 years down the road, 5 years down the road, whatever it is, most of us are not factoring in taxes increasing over the next couple years. We're not factoring in inflation. We're not factoring in, hey, what are you going to be doing with all that free time in retirement? Most of us just don't— aren't able to comprehend what we would do with ourselves if we don't have to report to a job 40 to 50+ hours a week. Can you imagine having all this free time on your hand? Do you really think you're going to be spending The same amount of money you spend now having to go work somewhere. What can happen as humans is you will ball. You will ball out. You're gonna start splurging. You now have all this free time. Working in a way keeps us steady from overspending. In a way, it really does. I noticed that for myself when, when I'm working, when I'm engaged with you all and having phone calls and doing Recording sessions like this and going live and speaking at events, well, I'm not spending money. But if I wasn't working, and let's say I achieved the amount of money I wanted to create, but I'm not working or I haven't transitioned into something else, then what will most likely happen, which is happening to a lot of Americans today that are in retirement, And they're just, they're just spending a lot more than they thought. For those that hit their number or got close to it, they're spending more than they, than what they thought. So retirement is not just about what, getting to a number or accumulating a net worth amount of money and then spending it in retirement. There's also the element of rediscovering your purpose, rediscovering this, or Discovering this new chapter of life. This is the 4th quarter of your life if you're retiring after 60 years old. And let's just assume that average life expectancy in America, somewhere around 80, 85-ish, depends on genetics and different things like that, male, female. But let's just say That if we're going off life expectancy and you retire somewhere around 60 years old, you've got about 20 more years to live or so. 20, 25 more years to live, give or take. So that's the last quarter of a century in your life. And if the first quarter of your life was all play because you were a child growing up, didn't have those responsibilities. And then the middle 2 quarters of your life was pretty much dedicated to working most of your life. And then to what? Go back to being a kid in play mode with responsibilities? Kind of tough. So being able to figure out, okay, what's something that's going to light me up every morning? That's going to make me feel like I'm contributing back to society? What's something that is going to make me feel like I'm still worth value, like I'm valuable even though I'm older, even though I can't move as fast, whatever the case may be, that I'm still giving, I'm still thriving? You need to think about these things. That's what this session is really about. It's less about the numbers. It's more about this. Understanding, hey, when you're working with me, these are the conversations I'm slowly going to be planting as we're working your numbers and holding you accountable, that I really want to figure out what do you want to do in retirement. And this is an example of this right here, that this person right here has perfected their skills. They know their craft. We're 59 years old. We know we Don't want to keep working. She knows that, so she developed this business of hers, and it still requires her time. It's consulting. It's pretty much consulting. That's how she makes money per hour, and that still brings joy to her, but she doesn't want to do it 40, 50 hours a week. So we know that working Say 20 hours or less, she'll be able to probably bring in a third, a quarter of what her W-2 position is, about $1,500, maybe $2,000 in the business. She's got the real estate that'll continue to rise. That's $1,500. By the time I turn 67, if we don't activate Social Security earlier, let's say we waited till 67 to activate it between her and her husband, we'll have $2,935 and $1,807. So just looking at that window so far, $2,935 plus $1,807 Right, that's, that's guaranteed money so far. $4,742. Add the passive income, $1,500. I'm gonna— let's just assume that number stayed the same, which is highly unlikely. Rent will continue to increase. We're being conservative, so we're gonna keep that number of $1,500. And I'll use the lower number, $1,500 of active income. So we're at $7,742. That alone does exceed cost of living, but not her number, $10K. All right, so her number was initially $10K. I flirted with, with $20K because at the end of the day, whatever number you think you need, I'm I'm just gonna double it up because the reality is I just, I just know that stuff's just gonna get more expensive. It's gonna be crazy as life goes on, and we're seeing it in real time. Stuff is just expensive. Just, it's like, dang, this is what it is until, until the governments, administrations finally figure out The healthcare crisis and the real estate and the this and the that and the that. Like, I'm not gonna—I'm not betting my retirement plan that a administration or a government body is going to figure this out. That's just not the bet I'm willing to take, regardless of who's in the White House. Right. Just not willing to take that bet. It is such a massive problem to solve. And the way our governments and different bodies are set up, it's like multiple fires going on at the same time. And each administration is trying to put out a fire, but then creates 4 more fires. And then by the time They put that fire out, they're already out of the White House, and then it's like elections again, and then we're voting again. And it's like, you know, it's tough to have consistent fires being put out and not creating new fires when we're going back and forth with the type of administration that we have. So again, I'm just not going to bet that those things are going to work itself out. But what I can do is take control of my life, my economy, and learn the right financial frameworks and themes. The theme cash flow over net worth. You're going to start hearing this more and more. You're going to start seeing creators say this more and more. You know what? Even though I'm getting this rate of return, a rate of return over a period of time does not properly equate to the amount of cash flow needed to live. It doesn't, because of risk that's involved in those accumulation buckets, which is what a lot of people are putting their money in. A lot of us, a lot of Americans are channeling a lot of your income into retirement accounts that come with a lot of risk. And so if you listen to a Dave Ramsey that says, hey, you know, making 12% rate of return, you could withdraw 8% and, and be fine for the rest of your life— literally every— just for that one thing Dave Ramsey said can literally destroy all of the good things that he says about getting out of debt and spending less than what you make and etc., etc. Let's say you do all that and you follow that advice. Put your money in the stock market, earn 12%, withdraw 8% in retirement, and you do that for the rest of your life. You can look at all of the Monte Carlo simulations, all of the credible financial experts and economists out there that would run the math on that, like truly run the math on that. Whether they're not saying it because they don't want to burn any bridges or be controversial in any way. And it shouldn't be. This should just be a math conversation to say, hey, Dave Ramsey, that's wrong. Love you, respect you, but when we say things like that with that kind of influence and authority, And most Americans aren't running the proper math. They think, oh yeah, if I'm earning 12% and I withdraw 8%, there's a 4% spread. That's easy math. And normally, yeah, I wouldn't argue against that if you're what? Actually earning 12% every year. And the reality is you will not earn 12% in the stock market every single year like clockwork. You won't. And if you're in retirement and you're no longer contributing to those retirement accounts and you're just withdrawing, there is a high percentage you will run out of cash. You will run out of money. And it's only because of one word, and it's the one word that exists in defined benefit plans: guarantees. You have no guarantees in your 401. In your IRAs. There is no guarantee that exists in that, which creates a lot of pressure when you get to retirement. That is what's going on. And so hopefully this case study will show you that, okay, when we think with a cash flow over net worth model, guess what happens? When you focus on solving cash flow, getting to the number that's above and beyond what you make, that allows you to have cash flow in abundance, you know what happens? You get net worth as a benefit. Net worth becomes a benefit of you solving for cash flow. Period. Simple. All right, so recap: active, passive, guaranteed income. We're actively going to choose to continue to work but at a lesser pace in retirement. We're guesstimating about $1,500 a month through their business, which also puts them in a lower tax bracket, by the way, so they net more of what they make. Passive income, real estate. From a tax strategy, you also save even more on taxes of what you actively make over here. And we have a guaranteed defined benefit. We turn 67, this is the number I'm going to get, this is the number that my husband's going to get. Boom. So add all that up, we were at $7,700 so far between active, passive, and guaranteed. Here are some of the things we're doing as of now in 2026 and have been doing for a number of years. We're contributing 10% to their TSP account, their savings plan. It's currently at $39,000. By the time they decide to retire, I'm estimating that this may grow to $100K plus. Okay, cool. They started late, not too much in there, but they are contributing. Great, cool. Then we're saving $1,250 a month, which equals $15,000 per year. We're contributing to a properly designed high cash value life insurance policy with MassMutual. We started it last year in 2025. So we created a savings vehicle that's going to outperform CDs, bonds, treasuries, high-yield savings accounts, money markets, and checking accounts from a rate of return perspective. But more importantly, we're going to get this word right here, a guaranteed Death benefit, guaranteed growth, guaranteed protections that, that product's going to be there no matter what happens to the real estate, stock market, economy. Doesn't matter. This product has a 185-year track record of producing dividends in literally every environment you can think of, and guarantees in every environment you can think of. We have guaranteed liquidity and use of the money that we're contributing into that whole life policy, and that will be a tool that we can use in retirement to either supplement income tax-free Or we can use as a financing vehicle for large-ticket item purchases in retirement, large home repairs in retirement, car purchases, financing vacations. It can be used for a number of things, so we're not limited And every time we go to use it, we're just going to look at what's my cost to borrow and what is the return that I'm, I'm getting. In this case, before we retire in the, in the years between 59 and 67, before that we declare that we're retired, right now we're saving money and I factored it into our expenses. So it's already factored into this $6,927.05, and we have this cash flow of $1,789.50 per month on top of what we saved, $1,250. All right, so we're saving into this whole life policy. We've already contributed $15,000. We're about to contribute again for this year, so we're about to enter year 2. The projections are when they hit 67, the death benefit will be around $351,000 and will have cash value of about $150,000. So that's nice. So $150,000, $100,000. From a net worth standpoint, from a net worth standpoint, this person does not have a whole lot of net worth. Yet from a cash flow standpoint, at 59 years old with a limited time frame, this is what's going to be very attractive as this becomes more and more popular. This is going to be very attractive for that generation above millennials. I think it's Gen X and millennials too. So I'm, I'm the last Millennial, born in '96. So I'm the youngest of the millennial groups, but there's millennials today, I think, that are in their mid-40s. So they're starting to think about this as well. And then we have a lot of Gen Xers and baby boomers obviously retiring every single day. There's a, there's a large group. So for the older millennial watching, For the Gen X watching, again, late 40s, 50s, mid-50s, and 60s, and you feel like you're behind from a net worth perspective, you're like, shoot, I only have 100 grand in my 401, I only have this amount in my 401. If you're still thinking I need to what, contribute and fund more money into those investments to build the nest egg, you're going about it completely wrong. Completely wrong. A, number one, because you don't have the time anymore to your advantage. If you were my age, if you were younger than me, then time often heals all financial mistakes. Usually time, just, just let that thing ride and you'll have millions of dollars. I was helping my little niece out with a financial project, and we were running the math on if she just saved money and earned 4%, and we put a portion of her check away, it was like she had $3, $4 million at 60, 62, 65 years old. $3, $4 million earning 3, 4%. All right, we were like conservative. I'm like, literally, you don't need to become an investor, but the fact that you started at this age, and let's say you kept that consistent number, you'll have millions of dollars in retirement. You don't have to— we don't ever worry about money. And on top of that, if you get married and you have a man that takes care of you, then your money is icing on the cake of whatever you earn. So time is not on your side For those that are in their late 50s, mid-50s, mid-60s, early 60s, late 60s, are you kidding me? Any financial professional that's talking net worth in your ears doesn't apply to you. But cash flow, different ballgame. If we solve for cash flow, that can be done within such a short time frame. 3 to 5 years, 5 to 7 years, 7 to 10 years. We just solve for the number that you're trying to achieve rather than how to make a rate of return of XYZ. I often tell people, hey, if you have a dollar and we can double it over here, take $1 and make $2, or would you rather earn a steady 8% rate of return with your dollar? Would you rather have 8 cents on the dollar, or would you rather have a whole dollar? Would you rather have your dollar create a whole nother dollar, $2? That's 100% rate of return. That's way faster and way more efficient than 8 cents on the dollar, 10 cents on the dollar, 12 cents on the dollar, 15 cents on the dollar. It's going to take forever for you to get to where you want to get to. And on top of that, even if you created the amount Of money, of net worth. The next question is, how much income can you take? Because that's what matters, because now we're talking cash flow again. So net worth is trying to solve for cash flow, and I don't think that's a good model anymore. I don't think it's an effective model at all. It's just not. So for my client here is saying, yep, you know what, Denzel, 59 years old, been working with you the first couple years we've been working together. We've been knocking down debt like crazy. Knocking down debt like crazy, saving money for their kid to go to college, all these different things. And we successfully did that. Great. Now, with time not necessarily on our side, she understands, yep, I'm gonna solve for cash flow because that's what matters. As long as I have cash flow, I could care less what my net worth is. It doesn't matter. Are you with me? If you're listening, let me know in the comments. Does that make sense? As long as you're making the amount of income passively or guaranteed or active or a mix of all 3, right, Tamika? If $8,000 a month was the, was the number and you got there, do you care what your net worth is? No. You don't care what your net worth is. Why would you? It's irrelevant. Matter of fact, again, net worth is going to be a benefit of the work you put in from a cash flow perspective. Okay, let me take a quick break. My wife just came to the house, so let me just open the door for her real quick. Quick. Okay, I am back. Hopefully my livestream didn't drop. No, it did not. Great. And I just saw in the comments Glenn says 20,000. Great, Glenn. And I— if I know who that Glenn is, and I got like 3 clients named Glenn, so this is Glenn Williams. So Glenn says $20,000 a month in income. That's a great number, honestly. That's a solid number. Does anyone have a bigger number than that? How much income you need in retirement, uh, to live off of above and beyond your expenses and the ability for you to live in abundance and give in abundance? What is that number? For you. Mine is $85,000 a month. I've already clocked it in, did the math on it years in advance. The number is still relevant. It's $85,000 a month to be able to create the amount of impact, give in the amounts that I want to be able to give and spend and live the way I want to live consistently on a daily basis. It's about $85,000 a month. Does anyone have a number that seems big and you're too humble to say it, I want to let you know that this is a safe place on this YouTube channel. You're allowed to think big, okay? You're allowed to say a number that's on your heart that makes you smile. For me, when I say $85,000 a month, that makes me smile. You know why? Because the reality is only about A quarter of that is actually for my personal living operations, and the majority is for the business operations to serve at the highest level, to be able to serve tens of thousands, hundreds of thousands of people. That's how much I need to be spending in the business just to serve. And then a solid portion is like all giving. Giving inside the business, through the business, through nonprofits, giving to churches, giving to family and friends, people that I know, just being abundant. So I want to let you know, this is a safe place where you get to say a big number, and whether you're Christian or not, no judgment. Someone just said $50,000 a month. I think this is one of my clients as well, but it says iPhone, so I don't know. So $50,000 a month in income. Isn't that beautiful? Because when you start saying these— what most would say, oh my God, it's a big number, it's too much money, you don't need all that money. It's like, whoa, whoa, depends. How's that money being used? You see, my client here that wants to bring in $50,000, or Glenn wants to do $20,000, or myself $85,000, I'm willing to bet a big majority of that money is not really going to be being spent on themselves. It's going to be being spent on mission work and volunteer work, visions and nonprofits and other things that lights them up. For their kids, for the next generation, you name it. All right, so let's, let's, let's keep this going because I want to get into what we're doing. Okay, I showed you the framework and the numbers. We have some debts remaining. We have a mortgage and we have a car note. Another way of solving for retirement from a, from a guaranteed standpoint From a no-risk standpoint is being debt-free. I mean, let's not— I don't think this is up for debate. I really don't. He who is debt-free is free. She who is debt-free is free. He who is not debt-free is not free. I think it's pretty black and white. Now, as someone who practices leveraging debt, leverages being a lender, leverages 0% debt and low-cost debt to create more income, is a different ball game because when that debt is on my balance sheet. On the opposite side is the asset that the debt acquired. And now that I've used debt to acquire an asset, I've created value in the marketplace, and that asset is now producing income— more than enough income to cover the debt load, the debt service, the monthly payment. So to me, when we talk about the, the average American family I come across that owns debt, typically most of the debts that they have are consumer debts, personal debts, personal expenses that they've financed. And by not having consumer debts That don't produce cash flow, you're guaranteeing yourself in a lesser cost of living on the personal side and/or business side from an operations standpoint, which increases your chances of continuing to be free in retirement and live in abundance. So When we look on the board here, there's two big remaining debts. Have a car note, $476 a month; mortgage payment, $1,740. So if we add those two, this is addressing the expense part. When you're solving for retirement, you're doing two things: your Increasing income and/or reducing obligations of expenses. The less money you need to live in retirement, the more what? Cash flow. Cash flow you're going to have. So this person has $2,217.33 of obligations. Between now And retirement, let's say 67 or sooner. If they eliminated $2,217.33 of, of debt obligation, well, now they need even less money. The expense number goes down even more and really truly sets them up— set themselves up for a healthy retirement where none of their active and passive income is being used for expenses. If we focus on the guaranteed column of assets that we can create that give us income, I want that number— I want guaranteed income to cover above and beyond their expenses first. That's how I like to solve. And then obviously the overall number $10,000 to $20,000, whatever it is, will come from the abundance of good investments that they made that became passive and/or active that keeps them engaged, alive, social impact, you name it. So we talked about how they're contributing 10% to the TSP. This is what— this is a net worth strategy. I'm not against it, But what we're not going to do is contribute the max. So I explained and showed them the differences between max contributing to net worth versus putting a smaller percentage towards net worth and putting more of a capital and cash flow towards Proper savings, which builds capital to create more cash flow. That's what's going down. So here's how we're going about doing it. With the money that they're saving in the whole life, and when you factor in the velocity banking strategy, we're going to use both concepts coming together, velocity banking, infinite banking, to pay down Their debt. We can do that a couple different ways. We can borrow direct from the line of credit, shift the car note into the line of credit, pay this off, do velocity banking. 6.99 to 7.99, not a huge difference there, not the most efficient. So I said, hey, Now that we have this whole life, we've already funded it once, we're about to fund it again. There's going to be more than $20,000+ in cash value that we could borrow against at a lesser interest rate than 6.99%, and we could accelerate the car note. That's one way. Another way of thinking Is we could keep the car note and not see that as a problem. Let that be, make sure it's fully insured and covered, and we will actually direct this capital towards the passive income column to invest. For cash flow, not net worth. So when we look at this cash flow and savings, what do we have? We got $1,000, and I'll round down just to make it easy, $1,700 and $1,250. We have $2,950. Times that by 12, that's roughly $35,000 a year in capital cash flow that could be invested to create more cash flow. The main thing being real estate for this person. That's going to be their vehicle. If they take years 59 to 67, and all they did was continue to do what they're doing now, spend less than what they make, save a nice portion, and the other cash flow, keep it liquid in a high-yield savings, and then group that money together, And go acquire more real estate that creates more cash flow. The question is, could they create more than $2,217 of passive income in, in real estate within that window between 59 and 67? My first number was 10K minus the guarantees we're already gonna have, 4,742, minus the 1,500 they already have, and minus the 1,500 of active income. We're about 2,258 short. 2,000 $258,000 left to create. Now here's where I believe I set myself apart from a lot of financial professionals in the way that they teach and the way that they educate their clients. This is where I let the client decide what's gonna be best for For them to do, not necessarily what's the best thing on the spreadsheet or, or what the best thing that the calculators say, because life doesn't exist on a spreadsheet. Shout out to Chris Kirkpatrick, who says that often over at Life 180, now known as Revan. So he often says Life doesn't live on a spreadsheet. Life doesn't happen on a spreadsheet. We can use spreadsheets and calculators and Monte Carlo simulations as a guide, but it ultimately doesn't have to be the final decision-making process. I like to put it back on the client. So look what happens here. This is where it boils down to personal preference. And I want to see where you guys are as well. So please comment what you feel personally. If these were your numbers, this is your situation, right? Went through everything and you have a choice. You know about the net worth route. Hopefully I convinced you that doesn't make sense because of how long it takes to create that amount of income. So we throw that out, and hopefully you're with me on the on the cash flow over net worth philosophy. Let's let's transport you all in the room. You're 59 years old, married. This is your numbers. And you're deciding, okay, Denzel, if I take the cash flow and the money I'm saving and I put it towards becoming debt-free, then I give myself a guaranteed $2,217.33. That's Write about what we're short of this person's goal. And let's say that was your goal too. Let's say everyone's goal in this room is to make $10,000 a month. And based off of our projections, we have the $1,500 in passive income real estate, we have $1,500 a month projected of active income only working 20 hours a week. And between husband and wife at age 67, You'll have $4,742 of Social Security income. So at 67, it was that $7,700 number. You're short $2,258. The question is, between 59 and 67, would you rather just pay off debt, go the guaranteed route, get that recovery, Or would you rather take your cash flow today, $1,700, $1,250 that you're saving, and invest it in the passive income column in real estate? That would create what? More than $2,258 a month to get to the final number of $10,000. What would you rather do? I'm gonna wait a couple minutes. Let me know your thoughts. Those of you that are on Zoom, you're obviously hearing me in real time. So the people that are on the YouTube Live, there's a little like 15-second delay. So please comment. Based on that, you have to create more than $2,258 of income between 59 and 67 years old. Question is, how do you want to get there? Do you want to get there by creating more income through taking risk and investing, or do you get there by reducing your obligations by paying off debt Becoming fully debt-free and then investing. All right, because with the amount of debt that they have left over, it's not going to take 7 years for them to pay off all their debt. That's, that's pretty obvious. And I can, I can run the math while you guys are thinking as well, so we'll do that. Let me know your thoughts. What are you thinking? You pay off debt or do you invest? What do you do? What's the play? Let me show— this is rough estimate how long it would take us to become debt-free. So $1,740.60, and then we've got $1,700 In cash flow, and we're saving $1,250 a month. So I'm gonna round down and say $4,500. Okay? And we have— I'll use this number right here. I'll do 2— I'll do 217 divided by 4,500. That's 48 months. 4 years. It's safe to say that in 4 years, this person— 4 years or less, super conservative— if all they did was just make extra payments, or if we do a whole life strategy where we're borrowing from the whole life and maybe a little velocity banking and whatever the case may be, say 4 years or less, paid off. So they'll be 63 years old. They'll be 63 years old. We got 4 more years before they retire, and in those 4 years, they would pretty much invest the rest of their capital and just create more income. What would you Rather do? Pay off debt first, then invest, or invest and just have the debt be paid off over time? What are you thinking? We got 10, 15 people on the live stream. We got 8 people on the Zoom. Let me get your thoughts. What are you thinking? Says I would go debt-free. Thank you. Jim, I've been debt-free for 2 years. Okay, Jim's been debt-free for 2 years now. How does it feel, man? Must feel great, right? What would you do, Jim? What would you do, Joel? What would you do, Gemma? What would you do, Miranda? What would you do, Sophia? What would you do? Debt-free first or invest, and then when you invest, that extra income will pay off your debt over time? Debt-free. Okay, I'm noticing cash flow over net worth theory, which is no longer a theory. This is mathematically being proven in real time for this person right here. That has literally been setting themselves up to be focused on cash flow. They've already been paying off a lot of debt. Remember I said that earlier? This is, this is a person that's been doing velocity banking for a number of years. We paid off a ton of debt in that time. That's why their cash flow is really high, $1,700. Their cash flow is actually more, right? Because they're saving $1,250 a month. They're also saving money for one of their children's college education. And so when they stop doing that, that's gonna be even more cash flow back into their economy. And they're like, you know what, Denzel, I, I think I'm leaning towards just, you know, pay the house off, pay the car off. Okay, great. Here's what I then tell them. If you want to pay off your house, you want to pay off this, this car, let's do it in the most efficient manner. So after a number of years educating them on how whole life insurance works, I show them how we can park money in an asset It's gonna grow over time, and then you're gonna be able to borrow against it to pay off this debt in a similar time frame to just making extra payments. Then you're going to pay yourself back all of that money you dished out, and you don't lose your capital, you don't lose your liquidity. So that's the only caveat. The only difference is we're not just going to be sending extra money to the debt directly. We're going to do a combination of creating an asset. So we did that. We successfully created the whole life policy. They got approved. They got a great health rating. They're doing $15,000 per year. And that's just one policy. And that's just some of their cash flow, not all of it. Some. They're still contributing because they're like, you know, they still come from that thinking of net worth. So this is almost like a compromise. I'm like, go ahead, I'm not against net worth. I just don't want you to put all your money towards net worth. So they're still contributing, and of this $1,700, they're going to be making extra payments towards The debt while saving money, building up wealth. As this builds up, we'll eventually take a lump sum, pay off the debts, pay ourselves back, get that guarantee. By the time they're 63, 64, we're projecting that all this debt will be done and taken care of. And then they'll have 3 to 4 years or more of literally investing in the most conservative way if they wanted to. They literally could borrow against the equity in their primary residence using a first lien HELOC, and they can just buy another property outright if they wanted to. Uh, they could, you know, take out Acquire another investment property, do a 30-year mortgage, and just make extra payments towards it. They can just do something super simple, all right? And that's just— it's icing on the cake at that point for them, all right? So that's just showing you in real time how you all might be thinking. And what I'm doing is giving you the theme and the model to keep in mind that when I go to make a decision on an investment, you want to be thinking how much cash flow will that investment create rather than how much the rate of return will be or the net worth of that investment. Because the person that is in their late 50s that decides to invest in real estate versus the same person in their 50s that decides to pour everything into their TSP, the account, they have to grow so much money just to be able to produce $2,000 a month in income. And that's, that's safely, right? That's just being safely doing it safely. Not, not gonna be efficient. All right, let's, let's just play with numbers here. A million dollars in a TSP. Going off of the safe withdrawal rate, 4%, million bucks is only going to produce $40,000 a year distribution. That's it. A million dollars. Taking out 4% of $1 million is only going to give you $40,000 a year. Mind you, that $40K is taxable, right? So that equals this number, $3,333 a month, and then, you know, minus a nice chunk in taxes. Maybe that's only $2,500 or something like that, $2,700. How long is it going to take this woman to accumulate $1 million to safely live off of 4% of that to have only $2,700? Like, that's going to take a really, really long time. Versus I simply hold on to my capital, keep it liquid, save it, park it in liquid cash, let it build. So now she's got this $35K. With $35K, could I acquire $300,000 worth of real estate? Could I acquire $400,000, $500,000 of debt Real estate. Pretty confident she would be able to do that. And then could that $300,000, $400,000, $500,000, $600,000 worth of real estate produce that amount of income, or the net after-tax amount of income, $2,500 or more? The answer is yes. And how quickly can we do that? Within 2 years, arguably. That's that. Is that not a game changer? Does that like help everyone here understand differences between net worth investing versus cash flow investing? All right, the same example could be done in her business. You know, what if she applies this cash flow in her business, expands her business, brings on more practitioners in her space, and makes money off of 4 or 5 practitioners and builds a whole office. She could do that too. It would take work, right? More work, but there is a passive element to it. So like, there's so many unique ways when you start thinking cash flow over net worth, okay? Cash flow over net worth. Due to the age, we like to be debt-free of everything. I agree, Tamika. After working with thousands of families, personally working with about 1,500 families in the last 8 years, and majority of those families I'm typically talking to the, to the mom, they just want to be debt-free. And if that meant an extra year of 6 months that I stay in the workforce, I'm okay with that because I know that once that's gone, I know I'm going to be able to make better financial decisions or investments, and I'll arguably make up. And then I even encourage them. I'm like, when we do the thing that we know we're going to commit to, you're not going to have a delay, so you'll be able to go right to the next thing. Versus people that try to chase something that they saw on the internet or chase an investment strategy they saw on the internet, and because it really wasn't in alignment with them and didn't understand it, there's a delay. There's the education curve. There's the financial commitment curve. There's the perceived loss of time curve. There's life happening and delays and things getting in in the way, and. It like slows you down, slows you down, slows you down, slows you down. It's not fun. At 59, I'm less worried about paying down depreciating debt, uh, car, more interested in increasing income, real estate for sustainability during retirement. Again, so if this was Jay on the board, right, let's say this was his numbers and He's thinking more, more passive route where he's like, hey, you know, I'm happy with this amount of guaranteed income that I've created. I'm pretty confident I'm gonna, you know, keep working. Um, this mortgage is at 2.88%, Denzel. The car is at 6.99%. These aren't an issue for me. I'm not losing any sleep whatsoever. I'm more than willing to continue to service that debt in my retirement years. And I'm gonna take this cash flow that we just talked about, the $35,400, which is $1,250 plus $1,700, and I'm gonna take that cash flow, maybe my line of credit, and I'm going to acquire more real estate. And I'm willing to take that risk because I know what I'm doing. I'm gonna do the same thing I've I've been doing with, with the one rental property I have. I'm just going to get another one in the same state, and I'm going to create an extra $2,000, $3,000, $4,000 a month. And Denzel, I will do that until I get to my number, and I project that I'm going to get to my number in the next 3 to 4 years. So I would— when I, when I meet a J, That's thinking like that rather than just paying off debt, then I tell Jay, okay, let's still run the math of what it would look like if we became debt-free first, and let's see what that timeline is. Earlier, we said that it would be about 4 years. So then I would tell Jay, okay, in 4 years or less, if you don't successfully create that amount of passive income that you were intending to do, with the investment, then let's make an agreement to make wife happy and now pay off the debt because that didn't work out. And I've had that happen with some clients because it's important. This more so happens with men that I work with. We take a risk and it fails. If and when that happens, it's important for us to pivot and course correct. It's not a punishment. It's life. Let's fail forward, not backwards. You learned from that error, from that move. Your wife, let's just say, was not 100% in alignment with it. But But because she's your spouse, and she is supportive of you, she said, go ahead, honey, make that investment. Let's make it happen. Here's our target. Here's our timeline. We need to create this amount of income in this window, because Denzel showed us that if we would have went the guaranteed route, here's what our results are. And wife was happy with those results. But husband was not. Or vice versa, doesn't matter. So what we need to do for the person that wants to take more of a risk, for the J's of the world that I'm talking to right now, is you want to set real targets and have real consequences for that. That if you fail at hitting the target, which means doing better than the guaranteed— going the guaranteed route should always perform less than the risk route. Why? Because again, when you have a guarantee, there's no risk. It's safer, it's more secure. That's normal. If you take a risk and you get the same results as the guarantees, then your wife's gonna knock you on the head like, dude, what are you doing? We could have just did this. And Not have all the stress and sleepless nights and time away from the family. We could have just did this and then did the risk later with no pressure and full clarity. Okay, so that's the pros and cons in doing a proper analysis and comparison. Makes sense, Jay? Where it's like, all right, this is what I'm gonna do. We need to make more than $2,217.33 net after tax in this investment within 4 years or less. You need to beat me. You need to beat debt-free route. Absolutely, you can't do less. You got to do better. And then let's say that happens. Jay successfully does that. You're now off to the races. And then you can say, you could turn around And then say, okay, wife, I created an extra $3,000, $4,000 of passive income within 3, 4 years. Let's just pay off the house. We'll take this cash flow that we have each month. We'll begin to accelerate the home. By age 67, the home, the car, all of it's going to be paid off, and we still will have $3,000, $4,000 a month in cash flow, plus— The rental income. $2,200 less of obligation expenses, which we can put towards fun. We can put towards giving, tithing, offerings, you name it, right? And have a blast. Okay, let me see if I see any other questions. Let's see. Can a life insurance policy be legally referred to as a defined benefit plan? Good question. Privately, no. So this is a privately owned whole life, privately. Depending on the corporation that someone works for, Within a defined benefit plan, life insurance can exist. So, so yes to your question. If you work for a company and they have a defined benefit plan that states all of these different things, if you were to actually look behind the curtain, more often than not, that corporation is using life insurance to fund A defined benefit plan. So life insurance, annuities. There's something called a cash balance plan that entrepreneurs use. Someone like myself would absolutely use this when I grow my company, is I can acquire what's called a cash balance plan, and in that cash balance plan will will live whole life insurance and annuities. And then based on those 2 products would produce a retirement benefit to me for the rest of my life using those 2 products. So again, this person personally acquired a whole life insurance policy in their name outside of their company using their own After-tax money. So it's not a defined benefit plan. What I did was just draw the correlation to how we as individuals, if we work for a corporation that does not have a defined benefit plan, if we are solo entrepreneurs, Then you can create your own— call it your own pension plan, your own defined benefit plan— with the thinking of cash flow over net worth, not net worth accumulation. And you will get to your goal way faster when you solve for cash flow rather than net worth. And that concludes our session here today. All right, this will be available for replay. All right, Jay says, do you also take into account as to when they should take Social Security, maxing out, uh, of taking income ASAP? Yes. So my, my team over at Nations First Financial— shout out to Daniel Romberg and his team— they, for free, you go through You book a call. Matter of fact, let me, let me drop the link. Anyone can book a call with his team. Most likely you'll get Daniel directly, and he'll take you through their retirement process where they run calculations to determine how you get to— how you can maximize your welfare benefits. Whatever it may be, some some of you in here have pensions and Social Security. Some of you just have Social Security. Some of you have Social Security and VA benefits. Whatever it may be, it is a great conversation to to have to know mathematically when does it make the most sense to activate those benefits? Do I wait, Denzel? Do does does wife wait longer and does husband take it sooner? We can base it off of. Politics, right? How many of us think Social Security is going to be around the next decade? So with that thinking zone, might say, you know what, I'm taking this thing as early as possible because I don't believe it's going to be here for very long. That's one way of thinking. The second way is math, where you could say, okay, from, from a life expectancy perspective Denzel, my wife, and her line of the family all live to age 100. All of them. So it might be wise to let wife wait for, for her versus you for mine, right? And then go from there. So those are— those— there's a great question. We'll We'll wrap up. We'll close out here. Thank you for your time. As always, God bless you, and we'll be talking soon. Every Friday, pretty much doing workshops like these. So get on my email list and we'll have some fun together. All right, God bless you all. Talk soon.