stock to cash ® emerging money corporation stock to cash is a proprietary program and registered...

Stock To Cash®

Emerging Money Corporation

Stock To Cash is a proprietary program and registered service mark of Emerging Money Corporation. Copyright 2003 by Emerging Money Corporation. All rights reserved. This presentation is intended for professional advisors only.

Tapping Into Your Portfolio

Behavioral Finance• Financial liberation• Error of anchoring• Attaching recency• Subjective decision

making• Belief perseverance• Wishful thinking bias

Dysfunctional Investing• Anger• Grief• Denial• Loss/risk aversion• Blind optimism• Going for broke• Detachment from reality

Market Vulnerability

Definition of Stock to Cash1stock·to·cashPronunciation: 'stok-too-kash also 'S2C"Function: nounDate: 2003

1 a : the business of insuring your stock portfolio b : coverage by contract whereby leading banks undertake to indemnify or guarantee another against loss by the volatility of the stock market c : the sum for which a stock portfolio is insured

2 : a means of guaranteeing protection or investment safety <the stock to cash non-recourse loan is your insurance against downside market risk>

What do you Currently Insure?

• Home• Automobiles• Life• Health• Travel• Freight packages• STOCK PORTFOLIO?

Stock to Cash Benefits

• Market Protection• Liquidity • Growth• Tax Savings

Stock to Cash® Features • 90% LTV• Non-callable• Non-recourse• All interest accrues• Dividend credits• Renewal options• Tax advantages

Stock To Cash is a proprietary program and registered service mark of Emerging Money Corporation. Copyright 2003 by Emerging Money Corporation. All rights reserved.

If Market Goes Up …• Pay back loan• Recover stocks• Recover dividends• Keep all appreciation• Pay NO upfront taxes• Have money working in

two places at the same time

If Market Tanks …

• Walk away from loan• Pay no principal• Pay no interest• 90% protected• Keep reinvested assets

and any upside growth

Gambling Insurance• Start with 10 chips• Give one to the dealer• Put the rest in your pocket• Dealer gives you 10 new

chips to play with• If you lose, walk away

with the 9 chips• If you win, give some to

the dealer

Gambling Means You Gamble

• Playing cards• Slot machines• Dice• Horses• Sporting events• Stock portfolio

Alternative Protection Strategies

• Get out of the market• Buy puts• Sell calls• Collar Loans• Variable Prepaid

Forwards

S2C Beats the Competition

Collar

Loans

Variable

Pre-Paid Forwards

Stock to Cash

90% cash immediately? Sometimes No Yes

Full downside protection? Principal Only Principal OnlyPrincipal and

Interest

Full upside potential (no cap)? No No Yes

Considered taxable by IRS? No Maybe No

When is interest paid? Ongoing Ongoing Accrues

Must interest be collateralized? Yes Yes No

Stock to Cash® Simplicity• Lender pays 90% and

contractually guarantees return of shares

• Lender purchases option contracts to avoid all risk to lender

• Investment-grade counter-parties protect lender and guarantee return of shares

Lender

Borrower

Counter-Party

Examples in this presentation are based on actual facts, but have been modified to protect the identity of the investor.

“Charles Schwab” Case Study

• 850,000 shares of Charles Schwab (SCH) – Hedged 3 years ago @ $35 a share

($30,000,000)– Cost basis: $1,000,000

• Client received $27,000,000 • 52 week low: $6.25 a share ($5,312,500)• Currently at $13 a share ($11,050,000)

Examples in this presentation are based on actual facts, but have been modified to protect the identity of the investor.

.

“Charles Schwab” Case Study

• 850,000 shares of Charles Schwab (SCH) – Hedged 3 years ago @ $35 a share

($30,000,000)– Cost basis: $1,000,000

• Client received $27,000,000 • 52 week low: $6.25 a share ($5,312,500)• Currently at $13 a share ($11,050,000)

Examples in this presentation are based on actual facts, but have been modified to protect the identity of the investor.

.

Flexibility

• Most stocks qualify • All major exchanges qualify• Preferred pricing available

for low volatility stocks• 2 to 25 year terms• Easy repayment options

SPDA’sSPIA’s

Life Insurance(Real estate, bonds,

CD’s, business)

SPDA’sSPIA’s

Life Insurance(Real estate, bonds,

CD’s, business)

$90,000Stock to

Cash Loan(90% non-callable and non-recourse)

$90,000Stock to

Cash Loan(90% non-callable and non-recourse)

S2C Flow Chart

$100,000Stock

Portfolio(Minimum portfolio

value)

$100,000Stock

Portfolio(Minimum portfolio

value)

Client Receives

SPDA’sSPIA’s

Life Insurance(Real estate, bonds,

CD’s, business)

SPDA’sSPIA’s

Life Insurance(Real estate, bonds,

CD’s, business)

$90,000Stock to

Cash Loan(90% non-callable and non-recourse)

$90,000Stock to

Cash Loan(90% non-callable and non-recourse)

S2C Flow Chart

$100,000Stock

Portfolio(Minimum portfolio

value)

$100,000Stock

Portfolio(Minimum portfolio

value)

Client Receives

$150,000Stock to

Cash Loan(5 years includingaccrued interest)

$150,000Stock to

Cash Loan(5 years includingaccrued interest)

$400,000Stock

Portfolio(No caps. Unlimited

growth potential)

$400,000Stock

Portfolio(No caps. Unlimited

growth potential)

SPDA’sSPIA’s

Life Insurance(Real estate, bonds,

CD’s, business)

SPDA’sSPIA’s

Life Insurance(Real estate, bonds,

CD’s, business)

$90,000Stock to

Cash Loan(90% non-callable and non-recourse)

$90,000Stock to

Cash Loan(90% non-callable and non-recourse)

S2C Flow Chart

$100,000Stock

Portfolio(Minimum portfolio

value)

$100,000Stock

Portfolio(Minimum portfolio

value)

Client Receives

$250,000Equity inCollateral

(Loan repaid andcollateral recovered)

$250,000Equity inCollateral

(Loan repaid andcollateral recovered)

$150,000Stock to

Cash Loan(5 years includingaccrued interest)

$150,000Stock to

Cash Loan(5 years includingaccrued interest)

$400,000Stock

Portfolio(No caps. Unlimited

growth potential)

$400,000Stock

Portfolio(No caps. Unlimited

growth potential)

Client Receives

- =

+

SPDA’sSPIA’s

Life Insurance(Real estate, bonds,

CD’s, business)

SPDA’sSPIA’s

Life Insurance(Real estate, bonds,

CD’s, business)

$90,000Stock to

Cash Loan(90% non-callable and non-recourse)

$90,000Stock to

Cash Loan(90% non-callable and non-recourse)

S2C Flow Chart

$100,000Stock

Portfolio(Minimum portfolio

value)

$100,000Stock

Portfolio(Minimum portfolio

value)

Client Receives

SPDA’sSPIA’s

Life Insurance(Real estate, bonds,

CD’s, business)

SPDA’sSPIA’s

Life Insurance(Real estate, bonds,

CD’s, business)

$90,000Stock to

Cash Loan(90% non-callable and non-recourse)

$90,000Stock to

Cash Loan(90% non-callable and non-recourse)

S2C Flow Chart

$100,000Stock

Portfolio(Minimum portfolio

value)

$100,000Stock

Portfolio(Minimum portfolio

value)

Client Receives

$150,000Stock to

Cash Loan(5 years includingaccrued interest)

$150,000Stock to

Cash Loan(5 years includingaccrued interest)

$50,000Stock

Portfolio(No caps. Unlimited

growth potential)

$50,000Stock

Portfolio(No caps. Unlimited

growth potential)

SPDA’sSPIA’s

Life Insurance(Real estate, bonds,

CD’s, business)

SPDA’sSPIA’s

Life Insurance(Real estate, bonds,

CD’s, business)

$90,000Stock to

Cash Loan(90% non-callable and non-recourse)

$90,000Stock to

Cash Loan(90% non-callable and non-recourse)

S2C Flow Chart

$100,000Stock

Portfolio(Minimum portfolio

value)

$100,000Stock

Portfolio(Minimum portfolio

value)

Client Receives

$0Equity inCollateral

(Loan defaulted andcollateral forfeited)

$0Equity inCollateral

(Loan defaulted andcollateral forfeited)

$150,000Stock to

Cash Loan(5 years includingaccrued interest)

$150,000Stock to

Cash Loan(5 years includingaccrued interest)

$50,000Stock

Portfolio(No caps. Unlimited

growth potential)

$50,000Stock

Portfolio(No caps. Unlimited

growth potential)

Client Receives

- =

+

SPDA’sSPIA’s

Life Insurance(Real estate, bonds,

CD’s, business)

SPDA’sSPIA’s

Life Insurance(Real estate, bonds,

CD’s, business)

$90,000Stock to

Cash Loan(90% non-callable and non-recourse)

$90,000Stock to

Cash Loan(90% non-callable and non-recourse)

S2C Flow Chart

$100,000Stock

Portfolio(Minimum portfolio

value)

$100,000Stock

Portfolio(Minimum portfolio

value)

Client Receives

$250,000Equity inCollateral

(Loan repaid andcollateral recovered)

$250,000Equity inCollateral

(Loan repaid andcollateral recovered)

$150,000Stock to

Cash Loan(5 years includingaccrued interest)

$150,000Stock to

Cash Loan(5 years includingaccrued interest)

$400,000Stock

Portfolio(No caps. Unlimited

growth potential)

$400,000Stock

Portfolio(No caps. Unlimited

growth potential)

Client Receives

- =

+

Examples in this presentation are based on actual facts, but have been modified to protect the identity of the investor.

“amazon.com” Case Study• 125,000 Shares of amazon.com

(AMZN)– Hedged 23 months ago @ $8 a

share ($1,000,000)• Client Received $900,000• Reinvestment @ 7% is $1,030,410• Currently at $59.63 a share

($7,453,750)• Loan balance @ 12.13% is

$1,131,582• Current stock value – loan +

reinvestment is $7,352,578

Examples in this presentation are based on actual facts, but have been modified to protect the identity of the investor.

“amazon.com” Case Study• 125,000 Shares of amazon.com

(AMZN)– Hedged 23 months ago @ $8 a

share ($1,000,000)• Client Received $900,000• Reinvestment @ 7% is $1,030,410• Currently at $59.63 a share

($7,453,750)• Loan balance @ 12.13% is

$1,131,582• Current stock value – loan +

reinvestment is $7,352,578

Examples in this presentation are based on actual facts, but have been modified to protect the identity of the investor.

.

“amazon.com” Case Study• 125,000 Shares of amazon.com

(AMZN)– Hedged 23 months ago @ $8 a

share ($1,000,000)• Client Received $900,000• Reinvestment @ 7% is $1,030,410• Currently at $59.63 a share

($7,453,750)• Loan balance @ 12.13% is

$1,131,582• Current stock value – loan +

reinvestment is $7,352,578

Examples in this presentation are based on actual facts, but have been modified to protect the identity of the investor.

S2C Applications Unlimited

• Stocks• Bonds• Cash• Mutual Funds• Home Equity• Retained Earnings / C-Corp• Large Purchase• Fund / Buy Business• Investment Property

• Need Income Stream / SPIA• Asset Accumulation / SPDA• Life Insurance Planning• IRA & Qualified Plans• Estate Planning Needs• Uninsurable• Charitable• ESOPs• Retirees With Employer Stock

S2C Applications Unlimited

• Stocks• Bonds• Cash• Mutual Funds• Home Equity• Retained Earnings / C-Corp• Large Purchase• Fund / Buy Business• Investment Property

• Need Income Stream / SPIA• Asset Accumulation / SPDA• Life Insurance Planning• IRA & Qualified Plans• Estate Planning Needs• Uninsurable• Charitable• ESOPs• Retirees With Employer Stock

S2C Applications Unlimited

• Stocks• Bonds• Cash• Mutual Funds• Home Equity• Retained Earnings / C-Corp• Large Purchase• Fund / Buy Business• Investment Property

• Need Income Stream / SPIA• Asset Accumulation / SPDA• Life Insurance Planning• IRA & Qualified Plans• Estate Planning Needs• Uninsurable• Charitable• ESOPs• Retirees With Employer Stock

S2C Applications Unlimited

• Stocks• Bonds• Cash• Mutual Funds• Home Equity• Retained Earnings / C-Corp• Large Purchase• Fund / Buy Business• Investment Property

• Need Income Stream / SPIA• Asset Accumulation / SPDA• Life Insurance Planning• IRA & Qualified Plans• Estate Planning Needs• Uninsurable• Charitable• ESOPs• Retirees With Employer Stock

S2C Applications Unlimited

• Stocks• Bonds• Cash• Mutual Funds• Home Equity• Retained Earnings / C-Corp• Large Purchase• Fund / Buy Business• Investment Property

• Need Income Stream / SPIA• Asset Accumulation / SPDA• Life Insurance Planning• IRA & Qualified Plans• Estate Planning Needs• Uninsurable• Charitable• ESOPs• Retirees With Employer Stock

S2C Applications Unlimited

• Stocks• Bonds• Cash• Mutual Funds• Home Equity• Retained Earnings / C-Corp• Large Purchase• Fund / Buy Business• Investment Property

• Need Income Stream / SPIA• Asset Accumulation / SPDA• Life Insurance Planning• IRA & Qualified Plans• Estate Planning Needs• Uninsurable• Charitable• ESOPs• Retirees With Employer Stock

Qualified Plan Asset Flow

• Stocks grow out of market• $90,000 to $100,000 downside

protected in new IRA• 10% shortfall covered by other

assets or taxable• Retirement distributions continue• Stock gains at cap gains rate• Bonuses available

401(k)Plan

(Assets)

401(k)Plan

(Assets)

TraditionalIRA(Cash)

TraditionalIRA(Cash)

Trustee to Trustee

Transfer Assets

60 Day Distribution

Purchase Stocks

Blue ChipStocks($100,000)

Blue ChipStocks($100,000)

In the Market

RolloverTraditional

IRA($90,000)

RolloverTraditional

IRA($90,000)

Out of Market

90% Stock LoanNon-callableNon-recourse

Stock to Cash® Guidelines• Share price of $5 a share• Market Cap of $1 billion• Average daily trading volume

of 100K shares per day• Minimum portfolio value of

$100K• Minimum per stock of $25K

Getting Started• Sign and submit Registration Form• Schedule an appointment to

discuss cases• Client completes borrower

application• Client completes Disclosure Form

& Agreement