Case Study Analysis
What method of financial management is right for you?
These are actual client profiles, individual and business, who have exited out of costly conventional methods of financial management and implemented the Self Banking cash flow optimization strategy to defeat debt and build wealth.
The goal of this study is to help determine which method of financial management eliminates debt the quickest, reduces interest accrual the most, increases liquidity, increases cash flow and provides an optimal environment for wealth creation.
Client: Jack and Barbara
Summary:
Went from having 28 years remaining on their mortgage to being able to be completely debt free 3.7 years without having to make major changes to their lifestyle or trap monthly surplus. By restructuring their debt and reallocating cash flow they were able to increase monthly cash flow by $2,116. Limiting interest accrual daily will help them save approximately $88,000 of interest costs and 24 years of mortgage payments. Mr. and Mrs. Jones are now able to retire debt free with enough cash flow to make retirement living much more comfortable.
Before
Mortgage $150,133 @ 4.5%
Years remaining 28
Mortgage interest costs remaining $111,000
Total monthly debt service payment $1327.59
Basic living expenses $2,445
Total monthly expenses $3,772.59
Monthly surplus $1,351.41
After
Mortgage $158,000 @ 3.99%
Years remaining 3.7
Estimated interest costs saved $88,000
Total monthly debt service payment $562.50
Basic living expenses $2,445
Total monthly expenses $3,,007.50
Monthly take home income $5,124
New monthly surplus $2,116.50
Before
Mortgage $2,355,538 @ 6.25%
Years remaining 16+
Mortgage interest costs remaining $1,600,000
Total monthly debt service payment $20,629
After
Mortgage $1,855,538 @ 6.25%
Rate protected LOC $500,000 @ 5.25%
Years remaining 5.6
Estimated mortgage interest costs saved $1M
Total monthly debt service payment $17,499
New surplus increase $3,129.50
