Transcript FIA
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One-Stop Financial Center
FIA helps bring Equity Indexed Products to middle America by helping clients make money when the stock market is up, never losing money when the market is down and accessing their money tax free at retirement. FIA offers a variety of insurance products such as indexed life, indexed annuities, term insurance and more.
FIA is a One Stop Financial Center, helping people take charge of their family’s future.
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The Great Consumer Dilemma The Facts Of Life
Tracking 100 Americans from age 25 to 65 … 36 will be dead
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54 will be DEAD BROKE
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5 will still be working
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4 will be financially secure and
1 will be Financially Independent Where does your money go?
Insurance Taxes 28% Savings/ Investments Living Expenses Consumer Debt 21% Mortgage 21%
What did the 5 financially successful Americans do differently?
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The 4 Cornerstones of Finance
• Proper Protection • Emergency Fund
Life Insurance 6 Month Cash Reserve Loan Modification & Refinance Retirement & Investment Accounts
• Debt & equity Management • Long Term Savings
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Albert Einstein's 9 th Wonder: Compound Interest The Rule of 72 Divide 72 by the interest rate to estimate the number of years it takes for your money to double.
Age 2% Money Doubles Every 36 Years 29 $100,000 Age 8% Money Doubles Every 9 Years 29 $100,000 Age 29 10% Money Doubles Every 7.2 Years $100,000 65 $200,000 38 $200,000 36.2 $200,000 47 $400,000 43.4 $400,000 56 $800,000 50.6 $800,000 65 $1,600,000 57.8 $1,600,000
Average 401k Indexed Products
65 $3,200,000
Active Money Management
The person with the most “doubles” wins.
* Average 401k taken from the book “The Great 401(k) Hoax” by William Wolman * These hypothetical examples are for illustrative purposes only and do not represent any particular investment vehicle. The Rule of 72 is a mathematical concept that approximates the number of years it would take to double the principal at a constant rate of return. The performance of investments fluctuates over time, and as a result, the actual time it will take an investment to double in value cannot be predicted with any certainty.
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The Cost of Waiting to Invest
Procrastination – The high cost of waiting
Time can be your greatest ally or your greatest enemy. The key is to get started now. Below are monthly savings amounts needed to achieve $1,000,000 at retirement, assuming a tax-deferred 8% interest rate.
40 35 30 25 Years until Retirement 20 15 10 5 $298 $448 $682 $1,056 Monthly Savings $1,687 $2,843 $5,330 $13,160
Make time your greatest ally. Get started today.
How Taxes Affect Investments
Maximize Your Tax Advantages Tax Deductible Contribution Tax Deferred Accumulation Tax Free Distribution You can only get two of the three!
Which would you choose?
Farmer who didn’t think.
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What is the Perfect Account?
-Good Returns -Compound interest – Rule 72 -Safety - Tax free growth -Tax free income -Access/Liquidity
The Great Consumer Dilemma
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Commodities Business Ventures Limited Partnerships Raw Land Speculative Common Stocks Lower Quality Bonds Investment Real Estate Blue Chip Stocks High Yield Bonds Mutual Funds CD’s Investment Grade Insurance Money Market Funds U.S. Treasury Bills Annuities Equity in House 14 11 8 1 2 3 4 5 6 7 9 12 15 Which investments Do not pass the: 10 Liquidity Test?
Safety Test?
Rate of Return Test?
Tax Test?
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Types of Investments: TIC-TAC-TOE
1% to 4% Upside Potential Fixed Products
Indexed Products
Variable Products Safety of Principal Risk of Principal
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What are Equity Indexed Products
They are fixed interest rate products that earn interest based on the potential of an index
Protect your principle and earned interest from loss
Long term savings vehicles designed to accumulate cash on a tax deferred basis
Guarantee a lifetime of income.
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Indexed Products VS. Large Company Stock
Protection & Potential Many people sacrifice return for safety, and other people sacrifice safety for return. Indexing brings together the best of both.
$100,000 Invested in 1997 $170,000 $166,359 $166,359 $160,000 $155,476 $150,073 $150,000 $149,937 $152,488 $140,255 $140,000 $139,237 $130,000 $131,080 $133,977 $126,925 $122,504 $129,330 $120,000 $110,000 $117,435 $122,504 $122,504 $114,490 $107,000 $115,449 $103,775 $100,000 $96,845 $95,529 $90,000 8/1997 8/1998 8/1999 8/2000 8/2001
Large Company Stocks
8/2002 8/2003 8/2004
Indexed Account
8/2005 8/2006 8/2007 11/2008
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When are Indexed Products Appropriate?
People who are dissatisfied with interest from CDs or other fixed rate savings accounts
People who don’t have the time or temperament for the stock market
People who are tired of losing money in the stock market and want investments with guarantees to never lose money
Still would like to participate in the returns of the market without having any money actually in the market
People who want to grow & access their money tax free at retirement
People who want liquidity
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The Next Step
• Proper Protection • Emergency Fund
Life Insurance 6 Month Cash Reserve
• Debt & equity Management
Loan Modification & Refinance Retirement & Investment Accounts
• Long Term Savings