Cash-Flow Your Dreams

Millionaire Makers Wealth Building System. The Basics of Creating Financial Independence Presented by Peter Pfann

Disclaimer
• All the examples and exercises are entirely hypothetical, and are not intended to determine how much or how quickly one can make money with the outlined Wealth Building Programs. Peter therefore cautions you to not assume and or rely on any of the provided information in deciding your best and most profitable wealth building system without research, consultation and personal risk assessment of any and all investment strategy. • If you are uncertain about the above note, please contact Peter Pfann for clarification.

House Keeping
• Today’s workshop will be approx 3 hours long. • We will have TWO 10 minute breaks. • Questions and Interaction is Encouraged, we do however need to stay on topic and time. • Please Turn off phones and pagers, please return calls or pages during breaks. • You are encouraged to complete and return the course evaluation at the end of today’s course. • Peter will gladly answer any Confidential questions for an hour after today’s course, or by phone/email at your convenience.

What Do You Hope To Learn

Course Objectives
• • • • • • • • • • Building a BIG “Why” Learn Wealth Building Using Passive Income. Compare Good Debt Vs Bad Debt Discuss How Cash Flows for all income levels Outline Essential Wealth Building Blocks Outline Common Money Mistakes Good Money Management Concepts Team Building For Wealth Building Outline a Road Map to Financial Independence Cash-Flow Increasing Actions (CIA)

The Basics Of Financial Independence
Being Financial Independent Means;

“ Passive Cash-Flow Funding Your Dreams”
Or worded slightly different:
– Financial Independence is achieved when You are receiving Enough PASSIVE income to finance your Lifestyle and Mission.

Being Rich Vs Passive Income
• Financial Wealth (being Rich) and Passive Income are not at all the same thing.
– Many people have achieved instant or quick Riches to be broke in less than 5 years after, why?

Hint : Getting Rich is Easy, Staying Rich Requires a Plan

How Many ATM(s) Do You Have?
• Creating and building passive income streams is the ultimate objective of the truly financial independent.

Quote; It’s like having your own personal ATM’s, giving you passive income every month.

Wealth Is A State Of Mind
• The answers to our most important questions are often within us, however we continue to seek outside solutions. • The Source of Success, as with Happiness, Lies within us.

Wealth Is A State of Mind.
• It is the result of ones attitude.
• The Attitude of the Financial Wealthy is manifested by applying focussed thought(s) towards a Financial Target.

• In order to achieve true financial wealth in life, one must first become wealthy in the mind.

Financially Wealthy Mindset

• By answering the big questions first, one can achieve the financial wealthy mind set.
– They are WHO, WHAT, WHERE, WHEN & HOW.

#1 Hard Truth About Money
• The Key to Happiness is not having more money.
• MONEY IS MONEY • HAPPINESS IS HAPPINESS

– They are not related, if you seek happiness, don’t focus on money, focus on Happiness.

• Money does not Buy Happiness.

# 2 Hard Truth About Money
• Whatever drives you and what your life is about, having more money will amplify it.
• Money won't change you —it will magnify your true self to you and the world.

• It will reveal your core values.

# 3 Hard Truth About Money
• Lifestyle is Style over Money. • Style is an art; living. Your personal art of

• You can't buy style with money. • You can't buy good taste or good decisions with money. • You can only buy more with more money.

# 4 Hard Truth About Money
• The Purpose of Life is to have the Highest Quality of Life in the time available to us.
• It's not the Money; it's the Quality.

• Money doesn't buy Quality of Life as it pertains to the best life possible.

# 5 Hard Truth About Money
• Money will come to you when you are doing the right thing(s) to make money.
• Even more money will come to you when you are doing more of these right things.

• Deciding what are the right things and how to implement them is a learned skill, not luck.

# 6 Hard Truth About Money
• Money has its own language, rules and disciplines.
– If you don't master the rules you are basically financially illiterate.

• If you don’t master the rules you are deciding not to follow your dream.

Travel Plan To Financial Freedom
The 3 Key Pieces of Luggage on your trip
Resume Balance Sheet

Team
•Your Mentors •Field Experts •Those You Built Wealth For •Those Building Wealth For You

•Knowledge •Skills •Experience

What You Own - What You Owe = Net Worth

Road Map

Your Resume
• Take stock of Knowledge, Skills, and or Experience needed to achieve your Financial Dreams.

• Do You know what and or who you need? • We have a simple yet effective tool for you.

What Do you Need to; Know, Have & Do?
Know

Your Objective

Have

DO

Before We Break

WHAT WAS YOUR AH......!!! MOMENT, SO FAR.

Net Worth Vs Cash-Flow
• Net Worth = Assets – Liabilities on a Balance Sheet. (= financial worth)

• Net Cash-Flow = Income (Passive and Active) – All Expenses on a Income statement.
• Build a budget to Learn what cash-flow is needed to finance Your life without working.

The New Attitude About Money
Passive Income

YOU

MONEY

GOAL
WORKING FOR MONEY
Earned Income

WORKING FOR

YOU

5 Financial Freedom Steps
1. 2. 3. 4. Live within your means. Grow your earned Income. Lower Bad Debt and Bad Expenses. Use Money to Invest in Cash-Flow Producing Assets. 5. Use extra Cash-Flow To buy more Cash-Flow.

Bad Debt Vs Good Debt
Bad Debt
Takes Money Out of Your Pocket

Good Debt
Puts Money IN Your Pocket

Are You Born To Race?
You are Born

• SAFE • CREDIT • LIFESTYLE • RETIREMENT

• HOUSE • CAR • HOLIDAYS • CREDIT CARDS

Go To School and get Good Grades so you can

GET BETTER JOB

INCREASE SPENDING

Go To College, to get a Degree to

INCREASE SPENDING
• BIGGER HOUSE • NICER CARS • BOAT • PENSION FUND

GET BETTER JOB
• GET UP • GO TO WORK • GET PAID • PAY BILLS

Get a Good JOB

How to Break the Cycle

• Choose the work that you are Passionate about, and or gets you closer to your Passion. • Work, live, learn, study what your plan tells you too.

Breaking the Cycle 1.Put Money Away Every Month. 2.Study The Techniques and Strategies of Making Money. 3.Invest Consistent to Your Strategy.

So What’s Next?
1. Plan Your Own Investment Strategy 2. Implementing the Strategy is Your 1st Win.
– Example: built a team, Restructure Debt etc. – Remember it is “YOUR” Strategy.

3. Keep Score.....Work of a Balance Sheet Daily.

Remember
Assets ___ Liabilities === Net Worth
Financial Wealth

Good Flow, Bad Flow
Cash Flow From an Asset
Income
Job investments

Cash Flow From a Liability
Income Expense
Taxes Food Car Rent/ mortgage Job investments

Expense
Taxes Food Car Rent/ mortgage

Assets Assets
Stocks Bonds Real Estate Business Residual income

Liability
Credit cards Consumer loans Mortgage

Liability
Credit cards Consumer loans Mortgages

Stocks Bonds Real Estate Business Residual income

Cash-Flow of Many
Income
Job Creates Pay Check

Expenses
Taxes Food Car Rent Clothes Fun

Assets

Liabilities Credit cards Consumer loans

Large Money Pit

Middle Class Cash-Flow
Income
Job Creates Pay Check

Expenses
Taxes Food Car Clothes Fixed Expenses

Assets
House RRSP’s

Liabilities Credit cards Consumer loans Mortgage
Large Money Pit

(H)Wealthy Cash-Flow
Income
Job Creates Pay Check Investment Cash flow

Expenses
Fixed Expenses

Assets
House RRSP’s Cash-Flow Producers Investment Property Mortgages/notes Businesses Residual income

Liabilities Mortgage (s) Taxes
Smaller Money Pit

The Wealthy Get Wealthier
Income
Investment Cash flow

Expenses
Fixed Expenses

Small Money Pit

Assets
House RRSP’s Cash-Flow Producers Investment Property Mortgages/notes Businesses Residual income

Liabilities

What Side Of Cash Flow Are You On?
You Working For Money • • • • • Job Sales Consultant Self-Employed One person/family business Money Working For You • • • • • • • • True Business Owners Network Marketing Business System Creators Franchisees Lenders Savers & Some Retirees Smart Investors Sophisticated Investors

How Does Your Cash Flow?
•Most people will never represent just one type of Cash-Flow. •Taxes have a big influence on what type of cash-flow is best for your situation.

•There is no good or bad side, as long are you creating cash flow consistent with your goals.

11 Common Money Mistakes
• Having a consumptive lifestyle with little emphasis on investing.
• Buying cars & houses too soon. Spending before having money.

• • • •

No personal budget. No future budget. No financial goals. No tithing. (Share and you shall Reap) Focus on taxes vs returns in investment decisions.

11 Common Money Mistakes
• Perceive saving as the same thing as investing. • Asking, "Should I invest" Vs. "Where should I invest?" • Investing without understanding if you are in an "accumulating financial wealth" or "preserving financial wealth" mode. • Failure to follow the proper sequential investment strategy:
1. 2. 3. 4. Get out of debt. Put emergency savings aside. (1-6 month's worth) Save for major purchases. Invest for financial independence.

11 Common Money Mistakes
• Making mistakes involving debt.
– Debt is;
• over-extending yourself in order to satisfy some short-term desire.

– When you commit to stay out of debt — you are committing to having less than what the world says you are entitled to.

10 Laws Of Money Management
• As A Rule, Pay CASH (or cash equivalent) — NO PLASTIC CREDIT THAT ISN'T PAID OFF AT MONTH'S END! • Purchase Protection:
– – – – – Maximum disability protection Adequate life insurance Best health insurance Adequate home and personal property insurance Adequate car insurance

• Follow a budget — avoid impulse.

10 Laws Of Money Management
• Save up then purchase —
• don't let a credit card or loan do your saving for you. Live beneath your means — not above it.

• Buy based on "need" first —
• avoid a "wants" purchasing lifestyle.

• Think "repair" first — "replace" second — and "new" last. Be frugal. • Pay yourself first — not last. • Tithe regularly with a grateful heart. • Invest regularly following a proven strategy. • Save and Invest no less than 20% of your income.

Rules Of Thumb
• Any Investment that Consistently puts Net money in your pocket, is a Great Cash-Flow Option.

• Never Sell a Positive Cash Flow Investment!

Let Do Some Math
Q: IF YOU SAVE/INVEST $1,000 A MONTH

How long will it take to have enough money to then earn $100,000 a year from the money?
$1,000/month

@ 6% after 37.25 years = $1,666,660 $1,666,660 @ 6% = $100,000/year $1,000/month @ 8% after 28 years = $1,250,000 $1,250,000 @ 8% = $100,000/year

$1,000/month @ 10% after 22.42 years = $1,250,000 $1,000,000 @ 10% = $100,000/year $1,000/month @ 12% after 18.70 years = $835,000 $835,000 @ 12% = $100,000/year $1,000/month @ 15% after 14.90 years = $666,667 $666,667 @ 15% = $100,000/year $1,000/month @ 20% after 11.25 years = $500,000 $500,000 @ 20% = $100,000/year

So how much money do you need to invest to fund your life’s mission?

The Value of Compounding

WHAT WAS YOUR AH......!!! MOMENT, SO FAR.

Only 2 Investment Options
You can lend it to someone.
You can buy something with it.

The Flow Of Cash
2 Types Cash-Flow

Active Cash-Flow Total
Cash-Flow

Passive
Cash-Flow

See The Next Slide

Choices

Results

Cash-Flow Choices
Choices 1. Consuming Lifestyle 4 Spending Choices % % Results

2. Sit On It
3. Give It Away

%
%

4. INVEST IT
1. LEND IT Savings Account CD Bonds ETC. Stock Real Estate Private Business ETC.

%

2 Choices

2. Buy Ownership

2 Choices

1. Passive 2. Active

Mutual Funds R.E.I.T.S. Invest in what YOU know
Results in

4 Choices

Real Estate Investment Options
Short / Medium Term • Options • Flipping • Skipping • Speculating • Land Assembly • Sub-division • Building
Objective: Short Term Profit by Adding Value

Long Term • Buy & Hold • Residential Tenancy • Commercial Tenancy • Land Banking • Trusts • Syndication • Management
Objective: Long Term Cash-Flow and Capital appreciation

Why Make Real Estate Part of Your Investment Strategy?

• Regardless of your Strategy, Real Estate can be a perfect fit towards your Investment Objectives and goals. • Real Estate Is one of the rare investments that combines, great tax options, easy financing options, as well as
• Locally we have record low Vacancy rates! • Locally we have consistent Appreciation! • Locally we have All Levels of Support and Assistance (if you don’t want to be active).

Why Real Estate Investing?
• Let’s discuss some Viable Real Estate options that you may have been thinking about? • Retirement • Cash-flow • Helping Family • College Funding • Tax benefits • Creative financing • • • • Capital Appreciation Giving Back to Society Development options Other.......?

estimate avr. yr 10 Redfern property pp appreciation holding years value at end of holding current CMA of Value Loan to Value ratio original mortgage Down payment rate amortization in years payment monthly annual payments Revenue monthly annual Revenue vacancy vacancy Cost Net Revenue operating expenses % operating expenses $ Net Revenue after o.e. tax deductions tax deductions $ Net Revenue after tax cash flow $ 250,000 7% 10 $491,788 $ $ $

9.50% 10 620,000

$ $ $ $ $ $ $ $ $ $ $

75% 187,500 62,500 7% 25 1,091 13,086 $ 13,086 annaul rev incr 4% 1,300 1924 15,600 $ 23,088 1% 1.00% 156 $ 231 15,444 $ 22,857 20% 20% 3,088.80 $ 4,571.42 12,355.20 $ 18,285.70 20% 20% 3,234.98 $ 3,531.51 15,590.18 $ 21,817.20 2,504.06 $ 8,731.08

Mort balance after 10yrs Equity position Annaul return on down or total return on down total net rev

$

138,368 $353,420 $ 18.92% 465.47% $ 25,040.64

481,632 25.79% 892%

Make it Automatic
• Once You Develop Your Investment Strategy;
– – – – – Implement it, Improve it, (if needed) Repeat it Automate it !!! Enjoy It.

Financial Wealth is Dependent on Relationships

Team Sport
• Nobody Succeeds Alone! • How Many People Are on Your Team, NOW? • What Type Of Services Do You Need On Your Team? • Each Team Is As Strong As It’s Weakest Link! • Establishing Your Support Team Is Your Short Cut to Financial Independence

Building The Team Steps
• • • • • • • • What is The Plan (what, when, how, where & who) What do we Know, Have and Do (shows what missing) Create Job Descriptions and Systems Recruit and Select the Best Talent Available to your Job Descriptions & Systems Implement “the Plan” Hold all People and all Actions Accountable to “the Plan” and Job Descriptions. Hire Slow & Fire Fast Offer “Profit Sharing” as an incentive for commitment.

Summary
• • • • Plan, document and implement your strategy Live within your means. Study money and its cash-flow options Surround yourself with people that compliment your weaknesses • Avoid Bad Debt (the kind that takes money out of your pocket) • Buy investments that pay for themselves, + pay you, + have capital appreciation (Real Estate for
example).

• Repeat the process, and have fun doing it.

Some Questions To Ponder
• How Big Is Your Dream? • Do You know How to Get there from here? • Do You Have a Written Strategy, and are you Monitoring its Progress Frequently? • Have You Built Your “Cash-Flow Team”? • What is Your Independence Day? • What Constitutes Your Independence? • How Can We Help You Get There Faster?

Books To Read
Investing Concepts • • • • • • • • Rich Dad Poor Dad Cashflow quadrant Guide To Investing The Millionaire Next Door The Automatic Investor Creating Wealth Wealthy Barber Make Sure It Is Deductable Real Estate Investing

• • • • • • •

The Millionaire R.E. Investor Flip Hot Tips For R.E. Investors The Smith Manoeuvre R.E. Investing In Canada 97 Tips for Cdn. R.E. Investors The Automatic Millionaire homeowner • Real Estate Riches

Some Additional Services We Offer
Real Estate • Residential & Commercial Buying and Selling Services • Millionaire Maker System • Retirement and Downsizing Options • Cash-Flow From Your Own Home. • Development and Building Consulting • Real Estate Investing workshops • Coaching and Consulting • Realtor Training & mentoring • Investment Analysis Services • Property Improvement Analysis

You Action Plan
Action Do Know Have Due

Bonuses and Extra’s
• In Your workbook you will find Free Extra’s
– Your Personal Budget Worksheet – Personal Financial Statement – Investment Portfolio Schedule – Evaluation sheet (please Complete & Return Today).

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