Download The Cash Flow Quadrant

Referrals/Earn Your Business/Expansion
Not to be used in New York.
The Financial Services Company For the 21st Century
•
Founded in 1977 with 85 people
•
Approximately 100,000 licensed
representatives
•
•
•
6 million clients in the United States,
The research has been done!
Canada and Puerto Rico
1. Warburg Pincus, Baron Fund & 200 other
Largest Financial Services marketing
companies invested in Primerica.
organization in North America
2. Better Business Bureau A+
(PRI) Listed on NYSE
3. Rated A+ (Superior) by A.M. Best
All of this without any national TV
or radio advertising!
Primerica Life’s, National Benefit Life’s and Primerica Life Insurance Company of Canada’s
financial strength is rated A+ (Superior) by A.M. Best, the oldest and most prominent
rating agency in the industry.
1.**A.M. Best ratings range in order from the highest ratings as follows: A++, A+, A, A-,
B++, B+, B, B-, C++, C+, C, C-, D, E, F. Primerica’s term life insurance is underwritten by
National Benefit Life Insurance Company, Home Office: Long Island City, NY, in New York
State, Primerica Life Insurance Company, Home Office: Duluth, GA, in all other U. S.
jurisdictions; and Primerica Life Insurance Company of Canada, Home Office: Mississauga,
Ontario, in Canada.
We Are a One-Stop Financial Supermarket
With Home Delivery!
Life Insurance
Managed Accounts1,4
Annuities1,3
Debt Solutions1,2
Primerica
DebtWatchers™
Offered by Primerica Client
Services, Inc. through
contractual agreement with
®
401(k) Plans1,3
Auto & Home Insurance
Referral Program
Mutual Funds3,5
Quotes from such companies as:
Travelers
Safeco
Long Term Care
Progressive
Legal Protection
Our Mission: Help Families Become Properly Protected, Debt
Free and Financially Independent
“The average household now owes $15,788 in credit card debt.”
AARP Bulletin, July- August 2010
“ More than half of all Americans have no emergency savings.”
Time.com, August 2011
“Study shows that 1.5 million Americans filed for bankruptcy in 2010.”
CNNMoney.com, January 3, 2011
“68 million adult Americans have no life insurance.”
National Underwriter Life & Health, October 8, 2007
“Nearly half of all workers have less than $25,000 set aside for retirement.”
2008 Retirement Confidence Survey.
How real and serious are these problems?
The Problem: No Financial Education,
Coach, or Plan.
The Solution: Working with a financial
coach that educates and provides a plan for
you to become financially independent.
People Don’t Plan to Fail, They Fail to Plan!
Financial Independence Number
Your financial independence number is the
amount of money you need to accumulate so
that when you retire you won’t run out of
money and have to go back to work!
You want $2,500 per month
to retire today… 30 years from
now, after
3% inflation… you will need $6,083
per month to buy what $2,500 buys
today. Which is $73,000 per year!
Your FIN is $1,080,000
To get there, invest $585 per month for 30 years at 9% = $1,080,000
How important is it to know your Financial Independence Number?
This hypothetical example assumes 20 years of retirement income needed, at a 6% post-retirement rate of return and 3% inflation. Hypothetical investment
rates assume a nominal 10% rate of return, compounded monthly, and is not indicative of any specific investment. Any actual investment may be subject to
taxes and fees, which would lower performance. This example shows a constant rate of return, unlike actual investments, which may fluctuate in value. It is
unlikely an investment would grow 10% on a consistent basis, given current market conditions.
The Rule of 72…
Sometimes called the Bankers Rule
Divide your interest rate into 72 to find the
approximate number of years it takes for money to double!
Years
1%
12%
0
$2,000
$2,000
6
$2,123
$4,000
12
$2,254
$8,000
18
$2,394
$16,000
24
$2,542
$32,000
30
$2,699
$64,000
36
$2,866
$128,000
42
$3,043
$256,000
48
$3,231
$512,000
54
$3,500
$1,024,000
• How do you win a
game if you don’t
know the rules?
• Do banks or
insurance
companies have any
incentive to teach
us this rule?
• Who would benefit
from learning this
rule?
• Shouldn’t we have
learned this rule in
school?
Without introducing us to family and friends, how would they learn the “Rule of 72?”
The table serves as a demonstration of how the Rule of 72 works and is only an approximation of accumulations. It is not intended to represent any specific investment.
The chart uses constant rates of return, unlike actual investments, which will fluctuate in value. It does not include fees or taxes, which would lower performance.
The Theory of Decreasing Responsibility
How Life
Works
Today
1. Young children
2. High debt
3. House mortgage
Loss of income would
be devastating
At Retirement
1. Grown children
2. Lower debt
3. Mortgage paid
Retirement income
needed
What Life Insurance company do you know of that teaches
people how to eliminate the need for Life Insurance?
Cash Value Life Insurance vs.
Buy Term and Invest the Difference
Whole Life, Universal Life, Variable Life
SAME
$298
$298
?
?
?
Monthly
Cash
$150,000 $150,000
John
age 35
Mary
age 33
Premium
Value
$518,673
Buy Term and Invest
the Difference
Cash Value Life Insurance
$300,000 $300,000
$175
@9%
$123
John
Mary
Monthly
Premium
age 35
age 33
(35-year Level Term, $25,000 on two children)
Investment
at 70
Which program would you want?
Monthly premium for cash value policies is an average of whole life policies from three major North American life insurance companies for male, age 35, standard
risk and female, age 33, standard risk. Cash value life insurance can be universal life, whole life or variable life, and may contain benefits in addition to a death
benefit, such as dividends, interest, or cash value available for a loan or upon surrender of the policy. Whole life usually has a level premium for the life of the
policy. Primerica monthly premium for age 35, non-tobacco use for 35-year Custom Advantage policy (C535) and spouse age 33, non-tobacco use for 35-year
Custom Advantage rider (C5SR), both with rates guaranteed for 20 years, plus a child rider of $25,000 each on two children, underwritten by Primerica Life
Insurance Company, Executive Offices: Duluth, GA. Term insurance provides a death benefit only and its premiums increase at certain ages. The accumulation
figure reflects continued investment at the same rate over 35 years at a 10% nominal rate of return compounded monthly and does not take into consideration
taxes or other factors, which would lower results. This example uses a constant rate of return, unlike actual investments, which will fluctuate in value. This is
hypothetical and does not represent an actual investment. It is unlikely an investment would grow 10% on a consistent basis, given current market conditions.
Solution: Build Your Financial House
Other Goals and Dreams
College Savings
Retirement
Debt Elimination
Emergency & Short term Savings
Term Life Insurance & Will*
“A good rule of thumb is that you need between
eight to ten times your annual salary in life
insurance coverage.”
— The Wall Street Journal, April 12, 2006
* Primerica Legal Protection program. Exclusions and limitations may apply. See plan for details.
Primerica representatives do not provide legal, tax or estate planning advice.
On a scale of 1-10,
10 being the highest,
how would you rate your
desire to have a strong
financial house and a crack
free foundation?
Four Ways to Earn Income
The Cash Flow Quadrant*
Employee
Business
Has a job.
Owns a system.
Income based on position,
not the person.
Has others working for him/her.
Unlimited income potential via
manufacturing, marketing, etc.
Self-Employed
Investor
Owns a job.
Has money working
for him/her.
Dentist, doctor, lawyer, hair stylist,
real estate agent, salesperson.
Enjoys complete freedom
and lives the dream.
Which two ways to earn income appeal to you most?
*The Cash Flow Quadrant, CASH FLOW Technologies, Inc.; used with permission.
and ESBI are trademarks of CASH FLOW Technologies, Inc. For informational purposes only.
PP/SR/37938/8.08/V8.0/02PFS344-29
The Cash Flow Quadrant
The Real Estate Model
Broker
Agent
Limited Income Potential
No Security
No Time Freedom
6% Broker Fee
$100,000 House =
$6,000 Fee
Agent
50%
$3,000
Agent
50%
$3,000
Unlimited Income Potential
More Security
Time Freedom
Broker
A Broker with 5 agents
Earning $3,000/month
Earns $15,000/month
50% Override:
$3,000
Agent
50%
$3,000
Agent
50%
$3,000
Agent
50%
Commission
$3,000
Which would you rather be — an agent or a broker?
PP/SR/37938/8.08/V8.0/02PFS344-29
Primerica representatives market term life insurance underwritten by the following companies in these respective jurisdictions: National Benefit Life
Insurance Company, Home Office: Long Island City, NY, In New York State: Primerica Life Insurance Company, Home Office: Duluth,
GA, in all other US Jurisdiction. Primerica Life Insurance Company of Canada, Home Office: Mississauga, Ontario, in Canada.
Primerica Secure: A personal lines insurance referral program in which representatives may refer individuals to Answer Financial Inc. which offers
insurance products and services through its licensed affiliates. Primerica, its representatives and the Secure Program™ do not represent any of the
insurers in the program.
Primerica Legal Protection Program: a legal services contract from PrePaid Legal Services, Inc.
Securities: In the United States, securities are offered by PFS Investments Inc., 3120 Breckinridge Blvd., Duluth, Georgia 30099-0001.
Using Primerica’s Custom Advantage 35 (form CS35); Primary: male, age 30, preferred plus, Spouse: female, age 30, preferred plus.
This example is for illustrative purposes and does not represent an actual investment. This example shows a constant rate of return, unlike actual
investments which will fluctuate in value. It does not include fees and taxes, which would lower results. Distributions before 59 ½ may be subject
to a 10% tax penalty. Consult your tax advisor with any questions.
Rates of return used in the above illustration are hypothetical and do not represent the returns of an actual investment, which will fluctuate in value.
The figures show a 10% nominal rate of return compounded monthly and do not take into consideration taxes or other factors.$25.00 per month.
Compensation examples are based on 2-year advances in full-benefit states for the PLPP product. Representatives of Primerica are independent
contractors and are paid commissions on sale of products. Life commissions are based on a 75% advance. Life Bonus is based on 67% QBI.
Primerica Life Insurance:
1. Monthly premium is an average of whole life policies from three major North American life insurance companies for male, age 35, standard risk and
female, age 33, standard risk. Cash value life insurance can be universal life, etc., and may contain benefits in addition to a death benefit, such as
dividends, interest, whole life, or cash value available for a loan or upon surrender of the policy. Whole life usually has a level premium for the life
of the policy.
2. Primerica monthly premium for age 35, non-tobacco use for 35 year Custom Advantage policy (C535) and spouse age 33, non-tobacco use for
35 year Custom Advantage rider (C5SR), both with rates guaranteed for 20 years, plus a child rider of $25,000 each on two children, underwritten
by Primerica Life Insurance Company, Home Office, Duluth, GA. Term insurance provides a death benefit only and its premiums increase at certain
ages. The accumulation figure reflects continued investment at the same rate over 35 years at a 10% nominal rate of return compounded monthly
and does not take into consideration taxes or other factors, which would lower results.
This example uses a constant rate of return, unlike actual investments, which will fluctuate in value.
This is hypothetical and does not represent an actual investment.
11. Term insurance provides a death benefit and its premiums can increase at certain ages. Cash value life insurance can be universal life, whole life,
etc., and may contain certain features in addition to death protection, such as dividends, interest, or cash value available for a loan or upon surrender
of the policy. Cash value insurance usually has level premiums for the life of the policy; term insurance premiums increase after initial premium
periods. This example is for illustrative purposes and does not represent an actual investment. This example shows a constant rate of return, unlike
actual investments which will fluctuate in value. It does not include fees and taxes, which would lower results. Distributions before 59 ½ may be
subject to a 10% tax penalty. Consult your tax advisor with any questions. Rates of return used in the above illustration are hypothetical and do not
represent the returns of an actual investment, which will fluctuate in value. The figures show a 10% nominal rate of return compounded monthly and
do not take into consideration taxes or other factors. Primerica Legal Protection Program. Exclusions and limitations may apply. See plan for details.
PP/SR/37938/8.08/V8.0/02PFS344-29