The equity well
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Transcript of The equity well
The Equity WellThe Equity Well
Presented by Robert RatimorszkyPresented by Robert Ratimorszky
GSF Mortgage GSF Mortgage
Expanding Your Business
According to Jay Abraham (corporate advisor to Microsoft, Merrill Lynch and Century 21), there are only 3 ways to grow your business
• Increase your number of clients • Increase your average sale per client• Increase the number of times your clients
return and buy again.
Increase Your Average Sale
Presenting your clients with unrealized opportunities is what identifies YOU as the expert, and their trusted advisor.
Client’s Mortgage Mentality
The traditional “Rules” of homeownership
• Take out the smallest mortgage you can afford
• Pay it down whenever you have extra cash
• Pay it off as soon as possible.
• Don’t involve your advisor Why does this “Rule”
exist? Is this sound advice?
Client’s Mortgage Mentality
View their equity as a “savings account”
Perceive it as easily accessible
Understand their mortgage as a
“loan against their house”
Net Result
Today’s Equity Truths
Job CrisisGainfully Employed
Poor HealthGood Health
Unexpected DebtLow Debt Load
Difficult to access when:
Easy to access when:
If your clients have sudden health issues, lose their job, or have some other sudden crisis, accessing this equity can be expensive or impossible.
In other words, when they need it the most!
Dead Equity
The rate of return of home equity, under the best of situations is 0%
If the housing market experiences even a slight pullback, that rate of return turns to the negative.
How hard would you have to work to find your clients a better return on investment than that?
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0
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The Equity Well Vision
The days of mortgage-burning parties are over.
Having an offsetting asset that earns more than their mortgage costs enables your clients to outperform investors with no mortgage debt.
The Equity Well vs. Traditional Thinking
Cash
Reserves
Car Debt
Credit Card
Debt
Liquidity
Home Equity
Traditional
Better
The Equity Well Timeline
Fund PaymentBucket`
Refinanceto access
additional equity
Home appreciates
over time
Liberate a large quantity
of income
Fund saferinvestments
with an actual ROI
Step Two: Payment Bucket
That equity is placed in a “Payment Bucket”–An easily accessible savings account from which their mortgage payment is automatically deducted.–Under ideal situations, this can remove the burden of paying their mortgage payment for 2 years.
If there is some “leftover” equity to be realigned, it would be best distributed based on their individual goals.
–Reduction of “Bad Debt”–Investment property
These options either create additional sources of income, or liberate existing income previously bound to service debts.
Step Three: Liberated Income
The income that was previously locked up in funding the mortgage payment is now liberated, an effective pay raise of tens of thousands of dollars per year for your client.
Let’s look at the numbers:
Average Family with an income of $70,000
Net pay of ~$4100 per month
Liberate $1000 of that income previously servicing the mortgage
Over two years, this family would have an additional $24,000 diversified among multiple higher yielding and safer investments.
Step Four: Liberated Income Reallocation
You are now able to conservatively reallocate this Liberated Income – Retirement / College
Funding– Disability Insurance– Etc..
Action Steps
Calculate the Impact.– If you could free up tens of thousands in additional
investable income for your clients, what would that mean to your bottom line?
– What would that mean for your client? Formulate a plan.
– Together we can identify clients who have dangerously unbalanced assets
– Coordinate our marketing efforts Execute.