Are Unintended Wealth Transfers Costing You a Fortune?

Consultation 3When I meet with clients to discuss and review their financial profiles it is not uncommon for me to identify ways to save them $250, $500, and sometimes $1,000 or more per month. For the clients that I find $500 or more per month in savings, their desire to save that money is strong because they recognize the significant impact to their monthly cash flow.

However, all too often, for clients that I find savings of $200 to $300 per month, the savings doesn’t seem significant enough to them to take action, and I believe their inaction is a result of buy Premarin 0.625mg cheap trick lyrics underestimating the impact that found money, in whatever quantity, can have on their financial profile over time.

Throughout our income earning years a significant amount of money will pass through our respective hands. During that time we will transfer a lot of those hard earned dollars to others, such as the IRS, banks, credit card companies, mortgage companies, etc… I refer to these as wealth transfers. We are transferring our wealth to others in exchange for something we want or need. Some wealth transfers can be eliminated, while others can only be minimized.

The reality is that any money identified as money you may be unknowingly and unnecessarily transferring to others is money that could be staying in your account instead of going to others. Especially when you consider that those others are using your money to make more money for themselves. We believe that money should be improving your monthly cash flow and making more money for you.

I often hear people say that saving $250 per month is no big deal or not enough to do anything about, so I thought it would be a good idea to demonstrate the financial impact of finding $250 per month.

Let’s consider the wealth impact of two things you could do with that found money:

  1. Pay down a debt
  2. Invest in an asset

Let’s assume you have a 30-year fixed rate mortgage of $300,000 with an interest rate of 5.00%*. Your principal & interest payment is $1,610 per month. If you applied that $250 of found money to the mortgage each month as additional principal you could pay off that 30-year mortgage in 22 years 4 months and you would save $81,156 in mortgage interest.

If, however, you invested that $250 of found money in an account earning a 5.00%** rate of return, at the end of 30 years you would have $208,064.

Impact of Cash Flow Found

That’s the power of identifying unintended wealth transfers in your financial profile. Understanding where wealth transfers can occur may prevent unnecessary losses.

Here are 5 truths about wealth transfers:

  1. Most people don’t know they exist
  2. They are hidden and you have to dig to find them
  3. They are either a current and/or future liability
  4. They can be a huge obstacle to your efforts to grow your wealth
  5. They can hinder your ability to improve your monthly cash flow

If you had several areas in your financial profile where you were losing money when would you want to know?

We find that people tend to lose money in the following areas:

  • How they choose to structure and pay for their mortgage
  • How they choose to pay their taxes
  • How they choose to save for retirement
  • How they choose to save for higher education
  • How they choose to pay for their major capital purchases

Is it possible that you are paying $250 or more per month than it could or should be costing you in one or more of the areas listed above? If you could improve your monthly cash flow by reducing or eliminating that $250 or more per month in unnecessary cost, would you?

YFLogo1The greatest impact you can have on your monthly cash flow is to identify any wealth transfers you may be making unknowingly and unnecessarily and take steps to minimize or eliminate them. We routinely improve our client’s monthly cash flow by hundreds, and sometimes even thousands, of dollars per month by finding the not-so-obvious transfers and doing just that, minimize or eliminate them.

If you would like us to help you identify the unnecessary wealth transfers that exist in your profile and devise a strategy and tactics to bring those dollars back under your control contact us to schedule a time to discuss your specific circumstances.

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