transforming debt into wealth

1

How you can achieveTRUE financial freedom...

using the money you already earn!

TransformingDEBT

into

WEALTH

2© Spencer, Spencer & Associates Consulting Group 2009

Some popular MYTHS about debt and building real wealth…

• That just earning more money will solve your financial challenges• That credit cards and unsecured loans are the only debts you

should be concerned with• That consolidating your debt and lowering your payments alone

will get you out of debt• That paying off debt is not your best investment• That you should not pay off your mortgage

3© Spencer, Spencer & Associates Consulting Group 2009 2009

How we provide some practical SOLUTIONS to help you…

• Get completely out of debt• Rapidly pay off your mortgage, and if you don’t own a home right

now, how to get one, and pay it off• Start building wealth immediately with guaranteed returns that

beat most traditional investments• Permanently avoid the credit traps that ensnare most people and

keep them from succeeding financially• Achieve your financial dreams and goals, using the same money

you’re earning right now


• Travel and visit the kids?• Take up a hobby?• Play golf daily?• Alaskan cruise?• Home in the country?• Pay for the kid’s

education?• Help needy people?What’s YOUR Dream?


25 are dead

20 have incomes under $6,000

51 have incomes of $6,000 to $35,000 ($12,000 median income)

4 have incomes over $35,000

Out of every 100 people born, after 65 years . . .

That’s where YOU want to be!


A USA Today article dated May 8, 1995 stated:

You will need $1 MILLION to

Retire


Annual ApproximateIncome Goal Nest Egg Needed

( in today's ( in today'sdollars ) dollars ) 40 years 35 years 30 years 25 years 20 years 15 years 10 years

$10,000 $167,000 $88 $125 $182 $267 $400 $633 $1,101

$20,000 $334,000 $175 $250 $363 $533 $799 $1,263 $2,197

$30,000 $500,000 $262 $375 $544 $799 $1,198 $1,894 $3,295

$40,000 $667,000 $350 $501 $726 $1,066 $1,599 $2,527 $4,396

$50,000 $834,000 $437 $626 $907 $1,331 $1,997 $3,157 $5,492

$60,000 $1,000,000 $527 $751 $1,088 $1,598 $2,397 $3,788 $6,590

$70,000 $1,167,000 $613 $876 $1,270 $1,865 $2,797 $4,421 $7,691

$80,000 $1,334,000 $700 $1,001 $1,451 $2,130 $3,196 $5,051 $8,787

$90,000 $1,500,000 $787 $1,126 $1,632 $2,397 $3,595 $5,682 $9,886

$100,000 $1,667,000 $875 $1,251 $1,814 $2,663 $3,995 $6,313 $10,984


Most people aren’t….but what if you had…• NO mortgage payments?• NO car payments?• NO credit card payments?• NO debt payments of any kind…

Then would you be able to save enough to reach your financial freedom goals?


• Most people think that if they could just earn a little more money…

• THEN they would be able reach their financial dreams

• But the truth is…


What’s left? October November December

But then… where is it all going?The average American with average debt:

January 1 to May 13 pays taxesMay 13 to September 28 pays credit interest

($25,000 x 40 years = One Million Dollars!)

And don’t forget to save for your future!

• Groceries• Utilities • Medical bills

• Mortgage• Clothes• Kid’s education

• Cars• Entertainment• Other expenses


Average hourly wage = $15.00 per hour

Subtract all taxes $5.45 per hourSubtract credit interest $5.65 per hour

REAL take home pay = $3.80 per hour


Consumer defined:

• One who“consumes.• Webster’s dictionary defines the word, consume, “to take, to do away with completely, to waste, to squander”

Wealth defined:

• “A person’s ability to survive so many days forward without working.” - Buckminster Fuller

• How long could you survive without working?


• Because if you truly want to make the transition from being a “Wealth Consumer” to becoming a “Wealth Producer” …

• Then you will need to see how your spending affects your potential to build wealth…


6 MonthsNO Interest!

* If paid after 6 months, interest is accumulated from first day. Interest is 23.6% annual rate.


Example: A $2,000 furniture purchase on your credit card…

– Will take 31 years and 2 months to pay off!– You will pay $8,202 in interest alone!

How will that sofa look when you finally pay it off?


* Purely hypothetical example: monthly payment of $40 for 31 yrs., 2 mos.; 8% annual rate of return

If you invested the minimum payment in a mutual fund over the same 31 years, 2 months with an 8% annual rate of return…

The total wealth you would have accumulated instead is $66,000*!


EXAMPLE:$200,000, 30-year mortgage

at 6% fixed interest . . . You end up paying $431,676 in total payments for your

home

$231,676 of that is in interest alone!


After paying on this $200,000 mortgage for FIVE years… (30-year, 6% fixed)

• You would still owe 93% of the balance ($186,109)

After paying for 10 years…• You would still owe 84% of the balance ($167,372)

It will take approximately 21 YEARS to pay off 50% of your mortgage And what happens whenever you move and start over on a new

mortgage?


What that means is this…• If you are in a 25% tax bracket…• For every dollar of interest you pay, you will get 25 cents

back in interest tax deductions• You pay a dollar… get 25 cents back…

Does this sound like a good deal to you?


Example: If you were to pay off this $200,000 mortgage 20 years sooner than normal…

• You would save $165,609 in interest• If you invested the same mortgage payment ($1,199) for

the 20 years you saved, and realized an 8% annual rate of return…

The potential Wealth Impact of paying off your mortgage early would be $706,235!*

* A purely hypothetical example; if you invested the same money in an investment earning an 8% annual rate return. For illustration only.


Make a $300 monthly car payment over your working life . . .

You will make $144,000 in payments over 40 years…

Invest the same $300 a month instead in a mutual fund with a 8% return for just HALF the time. . .

You could potentially build over $176,706* in wealth!* A purely hypothetical example; if you invested the same money in an investment earning an 8% annual rate return. For illustration only.


• Eating out for lunch• $10 / workday• $96,000 expense over an average working life• Potential Wealth Building Impact: $698,202*

• The Latte a day that keeps the wealth away!• $4 / workday• $38,400 expense over average working life• Potential Wealth Building Impact: $279,281*

* A purely hypothetical example; if you invested the same money in an investment earning an 8% annual rate return. For illustration only.


We’re not saying you can’t spend any money on the things you want…

• But we DO want you to be aware of the impact that each expenditure has on your ability to build your wealth…

• NOT a non-spending plan• But a managed-spending plan

And what if you just spend half of the amount you normally spend on these things?


• Focuses on lowering monthly payments instead of actual debt elimination. This could mean you stay in debt longer.

• You are INCREASING your debt with longer-term interest charges and closing costs.

• You give up equity in your home without really solving your problem.• Creates temptation to charge up credit cards you paid off the balances

on.• Consolidation loans, by themselves, don’t deal the REAL problem...

WHY you got into debt in the first place.


• By incorporating the new consolidated loan into a disciplined debt-elimination plan.

• By lowering your monthly payments so you can create the extra funds to accelerate your debt payoff.

• BUT BEWARE! • Consolidation loans do not eliminate debt by themselves. • And without a disciplined debt-elimination plan can get you

deeper in debt than before!


OLDPersonal Loan $400.00Credit Card 1 $190.00Credit Card 2 $150.00Credit Card 3 $175.00Credit Card 4 $100.00Credit Card 5 $200.00Car Payment $250.00Mortgage $900.00

Total:$2,365.00

NEW

New Second$300.00

Credit Card 4 $100.00Credit Card 5 $200.00Car Payment $250.00Mortgage $900.00

Total:$1,750.00

$615 of newly created funds


Whose wealth are you going to build?• Yours?• Or everybody else’s?

Remember… You can’t build your wealth and consume it at the same time.


Perform PLASTIC SURGERY!

Cut up thoseCREDIT CARDS!

* Use a Debit Card instead

The First Step To Financial Freedom...


1.) Start building wealth immediately by first eliminating all debt.– Simultaneously operate 100% on cash.

2.) Build your estate.– Protect your loved ones with a quality insurance product while

you’re building your nest egg.

3.) Build REAL retirement wealth using the same money you were wasting on debt!– Most people could be saving 40% to 50% of their income if they

had no debt payments!


• How to get completely out of debt, including your mortgage, usually in less than 7 years

• How to simultaneously live 100% on cash, even when emergencies strike

• How to quickly build retirement wealth using the money you’re wasting on debt payments now


THREE Choices:1. Do-It-Yourself! 2. Get assistance 3. Bankruptcy Alternatives It’s Your Choice.No matter what your financial

situation is, we can help . . .

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We can provide you with all the tools you need to follow the Transforming Debt Into Wealth® system yourself!

The TDIW Seminar Manual & Audio® home-study course.

The DebtFree™ software will help you personalize your own financial freedom strategy.

The TDIW Seminar DVD - John Cummuta LIVE at a Tony Robbins Wealth Mastery event.


• Fill out the Cash Flow Check-up form for a FREE no-obligation Cash-FLOW Analysis.

• We will show you specifically how our debt-elimination program can help you.

2We can help you develop your own personalized plan with our consultation service.We also have longer-term coaching services available to ensure that you are successful with your debt-elimination plan.You decide what level of assistance you may need


• Alternative program to bankruptcy.• Get harassing creditors off your back.• Transform negative cash flow into positive cash flow3

TM

The right debt-relief service can create monthly payments based on what YOU can afford.

You can pay off all your unsecured debt, usually within 36-48 months!


• Will be COMPLETELY OUT OF DEBT in 7 years and 7 months*.

• Will SAVE $107,121* in interest payments.

• Will FREE UP $307,500* in accumulated monthly payments.

* Based on $47,211 annual income; $1,230 in total monthly debt payments over a 28 yrs., 5 mos. period. Debt-free 20 yrs.,10 mos. sooner than normal.

Could you think of a better use for this $307,500 than giving it to the credit institutions?


This program can only help you if you get started… time is money!

• Every DAY this average American family would’ve delayed implementing their plan they would lose $38.67* in potential interest savings…

• Every MONTH they delayed would have cost them $1,177* in potential interest savings…

So with this in mind… when would be the best time to get started?

* Based on the Average American family case study. $107,121 in total interest savings, over a 91 month period.


• Let’s take a few minutes to fill out a FREE, no obligation Cash Flow Check-Up…and see how financial freedom can be a reality for you!

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