Enter your client’s income, subtract the amount of money they are currently saving and investing. Ask them the rate of return they are currently getting on their investment. If you can reduce their annual expenses (transferred dollars) by 1 or 2 percent you will have a much greater impact on their Circle of Wealth than finding a better product.
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This calculator will help me illustrate the power of reducing unnecessary transfers and recapturing dollars you are currently losing. Let’s look at the impact. |
SAVINGS EFFICIENCY IN PERCENT The math on this screen is explained in the following example. Assume the following inputs: •Annual Income of $75,000 •Annual Savings of $ 5,000 •Reduce Expenses by 1% The annual expenses are the income minus the savings or: expenses = 75,000 - 5,000 = 70,000. A 1% reduction in expenses is: .01 X 70,000 = 700. This $700 reduction in expenses is divided by the annual savings of $5,000 to find an effective yield: 700 / 5,000 = .14 = 14%
SAVINGS EFFICIENCY IN DOLLARS In the case of a fixed dollar reduction in expenses, as opposed to a percent reduction, the fixed dollar reduction is divided by the annual savings to find an effective yield. For example, •Annual Income of $ 75,000 •Annual Savings of $ 5,000 •Reduce Expenses by $ 1,000 This $1,000 reduction in expenses is divided by the annual savings of $5,000 to find an effective yield: 1000 / 5,000 = .20 = 20% |