How to Keep More of What You Earn

where can i buy gabapentin in the uk you could look here YFLogo1The greatest impact you can have on your monthly cash flow is to identify any unintended wealth transfers and take steps to minimize or eliminate them. And therein lies the problem. Most people are making unintended wealth transfers unknowingly and unnecessarily.

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

In a blog post entitled “What Impact Can Wealth Transfers Have on Your Finances?” I shared an example using Steve & Mary. I assumed the following:

  • Steve & Mary are a 30-year old married couple
  • They earn a combined household income of $125,000 per year
  • They receive raises of 2.0% per year
  • They own a $350,000 house
  • They have $25,000 spread across various accounts
  • They are able to earn a 5.00% rate of return
  • They plan to retire at age 65

I showed that if Steve & Mary could save their total household income each year, including the 2.0% annual raise, add it to the $25,000 they currently have saved, and earn a 5.00% annual rate of return, their lifetime wealth potential through age 65 would be $15,520,951.

After paying 45% of their lifetime wealth potential in taxes, 40% in lifestyle expenses, and 10% in servicing their debt, they had 5% left to save. Steve & Mary got to keep $907,053 of that $15.5 million dollars.

Cut TaxesIf Steve & Mary were able to reduce or eliminate the unintended wealth transfers in the taxes they would otherwise pay by just 5% (from 45% to 40%), instead of $907,053, they would be able to keep $1,676,205, and increase in their wealth potential by $769,152 ($1,676,205 – $907,053). That’s an increase of 84.7% in spendable assets.

If, in addition to the tax savings, Steve & Mary were able to reduce or eliminate the unintended wealth transfers in their lifestyle expenses by just 5% (from 40% to 35%), instead of $1,676,205, they would be able to keep $2,445,358, and increase in their wealth potential of another $769,153 ($2,445,358 – $1,676,205). That’s a combined increase of 269.5% in spendable assets from $907,053.

If, in addition to the tax and lifestyle savings, Steve & Mary were able to reduce or eliminate the unintended wealth transfers in the cost of servicing their debt by just 2.5% (from 10% to 7.5%), instead of $2,445,358, they would be able to keep $2,829,924, and increase in their wealth potential of another $384,566 ($2,829,924 – $2,445,358). That’s a 312% increase in total spendable assets from the original $907,053.

If you were transferring your most valuable dollars to others unknowingly and unnecessarily would you want to know? I would. Isn’t it time you gave yourself a raise by keeping more of the money you already work so hard to earn? Follow these steps:

Step One: Identify the unintended wealth transfers in your personal finances

Step Two: Figure out how to eliminate those unintended wealth transfers

Step Three: Figure out how to reduce the unintended wealth transfers that cannot be eliminated

Many of these wealth transfers are necessary to our particular ways of life and, thus, unavoidable, but many are unnecessary and can be avoided, eliminated, or at least minimized.

choiceFollowing are 5 truths about unintended wealth transfers:

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

We are experts at identifying unintended wealth transfers. 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 unintended wealth transfers and minimizing or eliminating them.

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

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