An Exercise in Cash Flow

Marco Russo, BBAAssociate Consultant

Geoff LeeMortgage Broker

IntroductionMarco Russo, BBAAssociate Consultant

Marco graduated from The University of the Fraser Valley (UFV) in 2009 with a major in Marketing and Sales. He is presently working toward obtaining his CFP. While working with his own clients, Marco also works with John’s clients when John is out of the office: he ensures client deposits are invested punctually, redemptions are completed with minimal tax implications and concerns are addressed promptly. Marco is also responsible for the overall administration of the practice. Marco played volleyball for 4 years while attending UFV and also played soccer for Zone 2 at the BC Summer Games. He continues to play volleyball and soccer and also enjoys skiing, cycling and being a husband and a dad.

IntroductionGeoff LeeMortgage Broker

I have had the honor of servicing hundreds of peoplelike you over the past 22 years and I know what matters! With a terrific wife and two great kids, you can count on me to take extreme care of you and your family’s mortgage needs. I’m an active participant in the local professional community, a regular presenter of the Wealthy Investors Network and a member of the MBABC. I am on the Board of Directors for the IMANI Orphan Care Foundation. I believe with business success comes social responsibility; true success means helping those in need.

A Traditional Approach

RRSP’s

Home Equity

Non-Registered Assets

Cash

Cash ????

Home Valued at $500,000

$400,000 Mortgage*

30 year amortization

3.19% Fixed Rate – 60 month term

Background Information

*Mortgage must be max 80% LTV and re-advanceable( A maximum of 65% re-advanceable)

$400,000

$0

30 Yrs

After 30 Years:

Mortgage $0Assets $0Own your home

A Traditional Approach

Alternative Approach

$400,000

$0

30 Yrs

Between years 18 - 25Mortgage = Investments

After 30 years:

Debt $400,000Assets $1,083,000Own your home

Alternative Approach

$300,000 Deductible Liability $1,269,000 Non-Registered Asset

Alternative Approach

Traditional Approach

After 30 Years

Home Diversification Plan

Mortgage $ 0

Investments $ 0

Home $500,000

Net Worth

$500,000

Mortgage $ 0

LOC $300,000

Investments $1,269,000

Home $500,000

Net Worth $1,280,000

Good Debt is fully tax deductible

Starting Point Desired Outcome

Good Debt Bad Debt

$0 $400,000

Good Debt Bad Debt

$300,000 $0

▶ Staying disciplined

▶ Employing tax returns

▶ Keep “Big Picture” in mind

Keys to Success…

Thank YouQuestions?