Truth Tip on Distribution Calculator

When running a 41 year analysis, say from 65 to 105, yet you want a paydown for only 20 years, se the illustration period to 20, click the paydown button, then click it again (turns it off) then change your illustration period to 40 so you can see the 20 year paydown.  Then, in the Other Net Income section you could add Reverse Mortgage Income or Dividend Income from age 86 to 105.  Definition of “Additional Income” is “net after taxes but before qualified plan deduction”.  For example, if someone

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How do I tell if my Real Estate deal is a “good one”?

You’ve got to learn how to analyze the ROI of a real estate deal! Inside www.truthconcepts.com software is a one page Real Estate Analysis Calculator that enables you to put in simple information and get a ROR on your invested dollars. It does require you to set a time frame and you’ll want to know some detail. So let’s look at a $200,000 deal that we actually bought for $200,000. Remember the price and the value are not always the same.  We’ll identify $5000 for closing costs, a land value (since only

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How can I get an amortization schedule?

How can I get an amortization schedule?  We’ll use the Loan Analysis calculator in the www.truthconcepts.com software to print a 48 month amortization schedule for a $35,000 loan to be paid back at 6.5%.  The picture below only shows until month 24, but the rest is there below in the actual software when you click the scroll bar. Next, we’ll select the from the Alternate Payback section a button to the right of Annual Loan Rate to see what happens if we paid the loan back at 10% instead of

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Truth Tip Definition of Additional Income

Definition of “Additional Income” is “net after taxes but before qualified plan deduction”. For example, if someone is earning $150,000 they have $30,000 of mortgage interest deductions and $10,000 of charitable deductions, then Additional Income is $110,000 for the Qualified Plan Calculator and if they are putting $15,000 into their QP, then Additional Income is $95,000 for Accumulation and Distribution Calculator.

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Truth Concepts Tutorial Automobile Purchase

To open the automobile purchase calculator double click on the TC icon.  This gives you a menu bar which you can move to another screen if using multiple screens or place it where is most convenient.   You can also resize calculators as you open them to view them comfortably.  To do so, click on the calculator and move cursor to bottom pull down and drag to make the box a larger size.   Select Automobile Calculator.  There are a couple ways to use this calculator:   put in value of a person’s current assets or

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Financial Calculators Tutorial

Financial Calculators Tutorial by Norman Baker: Here is a short tutorial on the financial calculators in Truth Concepts.  Future Value, Present Value, Payment, Interest Rate and Time Period Calculator.  I can size the calculator by moving my cursor to the edge bottom or side and stretching.  I can make it as big as I want to or reduce to an icon.  I can memorize the short cut keys.    Rate Calculator:  We’re looking for a future value of $1,000,000 as hypothetical suppose we have a $100,000 of cash to start

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The Whole Truth About Qualified Plans

Welcome to this tutorial on the Qualified Plan Calculator inside the Truth Concepts Software.  What Todd will be going over below is how to use the calculator to show the whole truth around this arena.  Could be a 401k plan, an IRA, a SEP IRA, simple, the 403b, Profit Sharing Pension Plan, anything that falls under the government’s domain in the Qualified Plans.  This calculator will tell the whole truth about the money inside this plan.  You can view the visual tutorial by clicking on the Tutorials tab on title menu

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Steps for the First Truth Concepts Meeting with a Client

Bold italics are the client’s answers I’m glad we get some time together today.  We are going to be using software to numerically prove the truth about how money works as it grows and to discover the most efficient way to get your money to work as hard as it can.  Before we begin I have a few questions. If we were meeting here 3 years from today, what has to have happened for you to feel pleased with your progress? I’d like to have my money working harder for

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Truth Tip Qualified Plan

The Truth Concepts Qualified Plan calculator gives a graphic overview of the whole truth about qualified plans.  It shows clients why not maxing out their qualified plan may be the best strategy. In this calculator the Rate of Return box on top right toggles On and Off.  

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Truth Tip Accumulation

The Accumulation Calculator shows the effectiveness of money growing (taxable, tax deferred, tax deductible and/or tax free) and it has multiple variable payment and withdrawal columns, the ability to vary the earnings rate, and to add term insurance and  other costs.  In this calculator you can create an exact copy of existing information currently in the calculator by pushing the “Duplicate” button on the top left.  PINK box means column showing but no #’s.  YELLOW box means #’s but no column showing.  BLUE box means #’s in the column and its

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Truth Tip Loan Analysis

Truth Concepts Loan Analysis calculates amortization schedules and the benefit of paying back loans under various scenarios and different rates and compare two loans for deductible and non-deductible loans.  Here is a tip for the Loan Analysis Calculator: Always put the lower interest rate payback first in the “Annual Loan Rate” box as that reflects the actual loan information, then put in the alternate rate, time period or payment amount in the “Alternate Payback” panel on the right of each “loan box”. Click “Period Number” Box to change from sequential

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Truth Tip Borrowing Strategy

The Truth Concepts Borrowing Strategy Calculator illustrates the principles of banking with varying interest rates strategies and money sources.  Here’s a tip for that calculator: Toggle off or on the “Future Account Value with NO Loans” by clicking on it.  Top middle also has an ROR feature that is OFF but can be turned on by clicking in the grey space to the right of the clear button. Right Click on the 5 “Loan/WD” buttons at the top to re-title them for example: 1. Cars 2. Wedding 3. Child’s Credit

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Truth Tip Funding

The funding illustration allows you to compare life insurance illustrations (with or without loans) to an alternate investment.  For this calculator, you can:   Toggle off or on the “Interest Rate on Savings Account to Match PLI” at bottom left corner.

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Truth Tip All Calculators

All calculators: to switch from positive to negative numbers or vice-versa, highlight the numbers to change in one column and right click, select change sign.  To put the same # or formula in multiple cells, enter the # or formula in the top cell, highlight the cells you want filled starting w/ that top one, select ALT  + DOWN ARROW    or right click and select “fill down”.   Anywhere there are cells underlined in blue inside the spreadsheets you can enter numbers or formulas in place of what is there,

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How do I figure out if I can get ahead by earning 6% if I have an 8% cost?

How do I figure out if I can get ahead by earning 6% if I have an 8% loan? At first glance, the answer is obvious, you don’t get ahead.  However, sometimes we get confused and think that since an account (say at 6%) has an increasing balance while a loan (say at 8%) has a decreasing balance, we might be able to get ahead.  Let’s look at it to see the whole truth of the matter. Take a $100,000 account earning 6% over 20 years.  Future Value: $320,714.  

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Truth Tip All Calculators

Financial calculators: switch from annual to monthly mode or any other mode and it will ask you if you want to adjust the existing amounts to match.    Pushing the “TOP” button: causes the calculator to stay on top of anything you are doing.  Double clicking on any of the labels for the inputs in the calculator brings up that (other) financial calculator.

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How Can We Prove a 15% Flat Tax is the Most Efficient?

Let’s use a Cash Flow Calculator from www.truthconcepts.com to tell the whole truth about what happens to an account when it gets taxed. We’ll put in $20 in 1913, the year the tax system started. We’ll show the account earning 20% per year. We can see below that the account has $798,784,476 (that’s $798 million) in it.   This assumes no taxes or management fees were taken out during this time.  If we adjusted the account for inflation, assuming a 4% annual rate, it would have $18,502,442  ($18 million) in

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How to Calculate the Lost Opportunity Cost of the Typical way to Educate Kids.

How to Calculate the Lost Opportunity Cost of the Typical way to Educate Kids. A college education that cost $30,000 per year in today’s dollars with a  6% inflation for a 4 and a 6 year old will remove $2,187,493 from the parents wealth by the time they are 68 years old. How? The actual cost of the school plus the opportunity cost of the money removed from the parents’ estate assuming it was earning 5%.  We’ll use a Cash Flow Calculator from www.truthconcepts.com to tell you the whole truth

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How To Get One Dollar To Do Many Jobs

First let’s define what a job is.  Any time a dollar buys an asset, pays an insurance premium, reduces tax, increases cash flow, leverages itself, improves protection, recaptures opportunity cost, improves liquidity, recovers control, enables tax benefits, builds confidence, gains movement or lowers restrictions, that dollar is doing one job.  And in many products it can do 2 or 3 (products are things you buy).   In many strategies it can do 5 or 6 additional (strategies are things you do.)   So many people limit their prosperity potential by having

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Calculating Internal Rate of Return

How do you calculate the internal rate of return on an investment when the cash flows vary and you can’t use a typical financial calculator that only functions with the same stream of payments, not a varying stream?  For example, you invest in an oil well where you contribute $100,000 the first year and the second year there is a $20,000 capital call (meaning you contribute $20,000 more). Then in the third year, there wasn’t any income but starting in the fourth year, you received the following stream, $30,000, $25,000,

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How To Figure Out If 12% Annually Is The Same As 1% Monthly?

How do you figure out if 12% annually is the same as 1% monthly? First take a Future Value Calculator on “annual” and put in $100,000 at 12% for 1 year, and it shows the FV to be $112,000.        Then take another Future Value Calculator set on “monthly” and put in $100,000 at 12% for 12 months, and it shows the FV to be $112,683.        Most banks compound monthly, a few savings and loans compound quarterly, yet it is common to express interest rates

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How Much Interest Do I Save By Paying My Life Insurance Premium Annually?

How do you calculate the cost of paying a life insurance premium monthly instead of annually?  Get a Rate Calculator from www.truthconcepts.com.  Put the annual premium in the Present Value as a negative number (which changes it to Loan Balance) since the insurance company is loaning you the annual premium and you pay them back monthly.  Then make the mode “monthly” and “beg” for beginning of year since the insurance company loans you money at the beginning of the period.  Put the monthly premium payment in Monthly Payment box and

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How Do You Know Which Is More Important In Building Wealth, Money Saved Or The Rate Of Return?

How do you know which is more important in building wealth, money saved or the rate of return?  From www.truthconcepts.com  in the calculator called Maximum Potential we can see that it is the money you save and the reduction of costs that matter, not the rate of return. We’ll look at a Period of 35 years with a personal example where you said your income was $100,000.  It should increase at least 4% a year if not more and for starters we’ll set an after tax Earnings rate of 5%. 

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Financial Planning vs. Prosperity Economics

Financial Planning vs. Prosperity Economics   Meets needs and goals only   Maximizes every dollar Retirement oriented   Abundant/Freedom oriented Product oriented (only what you buy)   Strategy oriented (what you do) Accumulate money   Accelerate money Rate of return focuses   Opportunity cost recovery focused Institutions control your money   You control your money Uncoordinated   Integrated Micro (vacuum) based   Macro (big picture) based Net worth is measurement   Cash flow is measurement Money stays still   Money moves Dollars do only one job   Dollars do many

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How 0% Financing On A Car Isn’t Always 0%!

Since we are writing this in 2009, there are some true 0% car loans in the market place due to the economy in general and the condition of the automobile industry in particular.  However, knowing the whole truth about your money is critical in knowing how best to finance a car and there is much misinformation around this area.  Don’t be sucked into making higher payments because it’s only 0%! What happens to car buyers is they get focused on the payment.  A car dealership has a different price for

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