Holistic Planning Approach - Gathering your information to solve the financial problems
Consider this wealth transfer: over a 50 year period take a $15/mth bank fee would cost a family $9,000. If that money could have stayed with the family instead of giving it to the bank, at a 5% cost of money, could have grown to almost $39,000! That’s right one little bank account over your lifetime could lead to almost a $39,000 wealth transfer from your life.
This is just one example of a wealth transfer but this typically happens in many areas of families financial lives that can add up to a million dollars or more of lost wealth in a lifetime.
Holistically everyone has 5 components in their life and the only way to make holistic decisions is to see all your components in one place, otherwise decisions are based on opinions. The 5 components are:
Protection, Savings, Growth, Debt, and Cash flow
The main reason to gather your information holistically is that over many client’s lifetime they unknowingly and unnecessarily lose over a million dollars of wealth. Where is this money transferred? It can only go one of 3 places: financial institutions, corporations, or government. Our objective is to identify in working together where we can find these wealth transfers leaving your financial world and minimize that impact.
Step1: Identify your current debt and cash flow system
How you spend and pay down debt will be the foundation of your planning. Often this step is missed in the planning process but is the most important! We have a simple process to start with inviting our clients a link to MyVelocityBanking.com website that we set you up with that allows you to enter all income, expenses, and debt in one place.
What is different about the system then anything on the market today? This system is a smart simulator uses what is called “target rate percentage” to show you how to reduce and eliminate debt at an accelerated rate. No opinions, biases, or sales hype, your figures will be based on facts. This way neither the advisor or client can be influenced by any existing biases.
We then take your information and review together your most efficient cash flow and debt strategy using the financial simulator to help you stay on track once a strategy has been identified. Keep in mind a good strategy will almost always beat a good rate. This is why some people can use the same financial tool and get different results.
Step 2 : We gather your additional financial information
One we have a good idea of how your cash flow and debt spending is working today and any strategies around making improvements, the next step is to gather any insurance, savings, and investments you have in place today.
Once we have added the protection, savings, and growth, we now have your complete financial picture. Now that we have all your information in one place we can discuss any additional strategic planning. At the same time we want to make sure that beneficiaries and wills have been reviewed on all personal and group plans.
We can now determine if any investments or savings should also be used to pay down debt and free up more monthly cash flow. Each situation will be unique on its own and there is no way to know the correct answer unless all client’s financial information is in one place to review. By one place we don’t mean one company but one system showing all your financial products together.
Step 3 : Building your own banking system
Building your own banking system will be different with each situation and depending on the amount of debt outside a mortgage can determine your timeline and approach.
If someone has no debt outside the mortgage, then starting up their own banking system can be addressed sooner than later. Keep in mind you finance everything you buy regardless if you pay cash or pay interest to the institution. By saying this it means that everyone banks, you are either building wealth for the bank, or building wealth for you and your family.
The ultimate objective in this approach is that you will always live in a world where you have access to cash free of every any credit card or high interest debt and ideally recovering or reducing the transfer of hundreds of thousands of dollars in money over your lifetime.