Repost of Historian from The Get Team CASH-IN PLAN
(Part 1 of 4)
OVERVIEW: This Cash-In Plan walks you through some tasks and decisions you may need to address to prepare for cash-in. It is organized in steps from now to the time you set up Advisors (attorney, accountant, etc.). After that, your Advisors will help you plan cash-in and secure your new wealth, so you only need to make the first part of the journey on your own.
Historian Note: This Cash-In Plan assumes that the IQD rate at RV will stay the same for some time or increase, and that it will not decrease within the first 12 months (the latter would require a different plan.)----------
3 BIG STEPS TO CASH-IN (that you must take on your own)
Step 1: Your Transition - Organize funds to cover 6 months of expenses and
Step 2: Your Wealth - Estimate your profit and wealth BEFORE you select your
Step 3: Your Advisors - Select Advisors who specialize in your wealth level and “click” with you....
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WHY IS THE PLAN FOR 6 MONTHS? There are practical considerations: You may need to set up or revise your legal and financial structure, and it may take time to find the right Advisors – you should interview several attorneys, accountants, etc. before settling on the right team. Scheduling and meeting with these people – especially if they are in demand – could take 2 weeks or could easily take 1 to 2 months. You need to plan for the longer possibility . . . so, 2
Your Advisors will need to set up the right legal and financial structure for you,
and define a plan for you to cash-in. Attorneys and accountants – especially
very good ones – are busy, so they will need to fit your work into their regular
schedule. They will need to develop the plan, do paperwork and filing. This
could take just 1 week or as long as 1 month.
After that, you will need to set up bank accounts for the entities in your legal
structure. The bank will need specific documents, and they may take more than 1
day to process these. Allow for 1 week. Only after you have set up your legal
and financial structure, are you ready to cash-in the bulk of your IQD (or VND).
You may need to schedule cash-in appointments. Allow for 1 week. So the time
from RV to cash-in could be as little as 1 month or as much as 4 months.
To make sure you are not worrying about living expenses and other financial issues, you need a plan that is comfortably longer than 4 months. That is why this
Cash-In Plan is for 6 months. (End of Part 1 of 4
CASH-IN PLAN (Part 2 of 4)
STEP 1: YOUR TRANSITION -Organize funds to cover 6 months of expenses and activities.
In Step 1, you set up a TRANSITION BUDGET. This will cover
(a) Expenses for 6 Months including the cost of your Advisors,
(b) Debt Repayment, and
WHY DO THIS: A TRANSITION BUDGET buys time for you to calm down, adjust and THINK CLEARLY again. It also: - buys time to get past any bait rates - buys time to let professionals help you pay off debts, cash-in and secure your new wealth - helps you avoid spending wildly and wasting your wealth (due to sheer
excitement!) - trains you to start thinking like the wealthy person you now are
– the wealthy all have a plan that outlines what % they will spend on different
living expenses, luxuries and types of investments
WHAT TO DO: Exchange the minimum amount of IQD needed to cover all the costs in Step 1. This may be one 10K or one 25K IQD note, or more. Make sure you have enough to pay for all of the following:
Note: You may also be able to arrange a line of credit using your IQD as collateral. If so, you may not have to cash-in any IQD to cover your transition, but the rest of your Cash-In Plan will still be the same.
a) Expenses for 6 months: Basic monthly living costs: -home costs: monthly
rent/mortgage, utilities, phone, security, other - loan payments: monthly auto
or other loans - personal care costs: food, meds, clothing, health care, dental,
other - annual: property tax; insurance on property, vehicle, health, other -
R&R: basic entertainment, recreation, travel/vacations, gifts - Other: any
regular costs not already noted
Contingency: add 15% of the above - this is for emergencies One-time costs: - 6
months insurance for your IQD (and VND) if you do not already have it - repairs,
maintenance or minor upgrades to home, auto, security, other - special personal
costs – e.g. health care you have been waiting for - $10K to $25K to set up your
entire legal and financial structure
b) Debt Repayment: Debts you can pay right away: - small current debts with NO
PENALTY if paid off – (e.g. credit cards) - overdue bills and mortgage payments
Debts you DO NOT INCLUDE: (see your Advisors first) -large current debts that
HAVE A PENALTY if paid off – e.g. mortgage - large overdue debts - e.g.
foreclosure, outstanding taxes
**Note: see your Advisors about this first; there are specialists who can help you
minimize your costs, as well as settle any other associated legal or financial
c) Rewards: Set aside a SMALL budget for “treats” and“toys” that are a HIGH
priority – this will help you avoid wasting your wealth on impulse items that
you later do not use – examples of treats and toys include: - Vacations – take
your time planning each vacation and make sure you get maximum value; it is easy to travel because you can afford it, but you also want to make sure you enjoy
the trip and get top value. (It is also prudent to secure your wealth first.) –
Clothes – buy better quality or fill in gaps in your wardrobe, and know what you need. Avoid shopping sprees. It is easy to get carried away here – you cannot return it or sell it for much value. Once it is spent, it is gone . . . and part of
your new wealth is gone forever. –
Toys – pick up a few of those dream electronics, home, hobby or other items you have always wanted, especially if they are not large ticket items – these toys will
help you stay disciplined about your budget while you set up your Advisors and
prepare for cash-in –
Vehicles – if you can, get by with the present vehicle until cash-in. Your Advisors may recommend that your trust or corporation/LLC own the vehicle. If necessary,
repair the present vehicle, rent a vehicle, or buy a low end vehicle that you
can later upgrade –
Real Estate – it is best to select your Advisors BEFORE you buy a new property. This is the kind of item that they may suggest your trust or corporation/LLC own.
Take 6 months to compare properties while you wait. Travel and experience new
d) Calculate your TRANSITION BUDGET: Expenses (a) + Debt Repayment (b) + Rewards (c) = TRANSITION BUDGETe) Simple Tips to help you stay“On Budget” for 6 months:
If you are disciplined about managing your money, you may not need to do this.
If you tend to lose track of your funds, then this may help you stay within your
budget: - open several bank accounts - put the funds for (a) and (b) into one
account - put the funds for (c) into another - set up a third account for
putting aside tax money and tithing money as you cash-in(End of Part 2 of 4)
CASH-IN PLAN (Part 3 of 4)
STEP 2: YOUR WEALTH - Estimate your wealth BEFORE you select
your Advisors To keep it simple, Step 2 only considers the wealth you gain from
cash-in of your IQD (and VND). It does not include any current wealth you may
have, such as a home or savings, since this is likely to be a minor percentage
of your new wealth. In Step 2, you calculate approximately what YOUR WEALTH will be after you cash-in your entire IQD investment and subtract all payouts. You
will base this on the RV rate, and update the amount if the rate goes up. You
need this information to help you select the right Advisors.
WHY DO THIS: Knowing YOUR WEALTH is essential to securing and growing YOUR WEALTH. It will help you: - select Advisors that have clients similar to yourself in wealth and lifestyle - reset your priorities, now that wealth has given you new options - remind you that luxuries REDUCE YOUR WEALTH, so think before you spend - spend only on priorities and maximize YOUR WEALTH WHAT TO DO:YOUR PROFIT is the money you will make from cash-in of your total investment, less ALL payouts. To calculate YOUR PROFIT, do the following:
a) Calculate your Proceeds from cash-in: Calculate the money you will receive from cash-in. Use the cash-in rate at RV (you can update this if it goes up).
b) Calculate your Payouts: These include: - taxes on the proceeds (use the highest % for now) - tithing or causes (% of net proceeds after taxes)
c) Calculate YOUR PROFIT: Proceeds (a) – Payouts (b) = YOUR PROFIT (c)YOUR WEALTH is what you will have left after you spend part of YOUR PROFIT on expenses, large debts and big purchases (excluding a new property). To calculate YOUR WEALTH, include the following:
d) Your Transition Budget: Use the amount from Step 1
e)Large Debts NOT included in the Transition Budget: These include large items you excluded in Step 1 (b): - current debts that HAVE A PENALTY if paid off – e.g. mortgage - overdue amounts –
e.g. foreclosure,outstanding taxes
f) Luxuries and Big-Ticket Items NOT included in the Transition Budget:These
include: - high end vehicle or boat - luxury goods -big vacations –
Calculate YOUR WEALTH: YOUR PROFIT (c) - Transition Budget (d) - Large Debts (e) - Luxuries (f) = YOUR WEALTH(End of Part 3 of 4)
CASH-IN PLAN (Part 4 of 4)
STEP 3: YOUR ADVISORS - Select Advisors who specialize in your level of wealth and “click” with you In Step 3, you select YOUR ADVISORS and work with them to develop your Cash-In Plan. Following this, you will proceed with the bulk of your cash-in. You need to know all of the information in Steps 1 and 2 in order
to select the right Advisors.
WHY DO THIS: Not all Advisors are equally qualified to help you. You need Advisors who are well versed in assisting clients with needs and considerations that are similar to your own. This is because: - they are deeply familiar with the laws and rules that will most affect you - they have perfected their theories on many clients (you will not be a guinea pig) - they know how to work with laws and
rules to maximize the PROFIT from your cash-in -they know how to help you
minimize taxes and manage your wealth year after year, so that you can achieve
and maintain the life that you want
WHAT TO DO:
a) Interview your Advisors: You have set aside $10K to $25K to set up your entire
legal and financial structure - DO NOT tell the Advisors you interview that this
is your budget - Always come across as a well-heeled penny pincher - DO NOT tell the Advisors you interview all your details - Give them a high-level overview
with ball park figures –
Make sure youinterview at least 3 candidates for each Advisory role - Look for Advisors who understand what YOU want (and do not push their views) - DO NOT sign any documents that charge you for a FREE consultation - DO NOT sign or pay for any documents or analyses you did not ask for - DO NOT accept any offers that appear to be generous "free" analyses –
If you retain this Advisor, you may be charged later for the service - Once you
have agreed on the specific services, you will likely need to sign a contract or
form agreeing to these services. Read all the fine print, and make sure you
understand absolutely everything that is described. Do not hesitate to ask for
clarification. Your Advisors will respect you and give you better service.
b) Select your Advisors Make sure your team can work with each other; they should not be “flying solo”. At the very least, your attorney and accountant MUST work as a team. - Ask the attorney if he/she can recommend a good tax accountant – the attorney will often already have accountants they prefer to work with; make sure it is because the accountant understands the legal work (what the attorney needs) - Do the same with the tax accountant –ask him/her about a good attorney - This will help you create a team that will work together to help you
c) Give all the information in Steps 1 and 2 to your selected Advisors. Have them
set up your legal and financial structure, and your Cash-In Plan (e.g. the
accountant may want you to delay cash-in if it changes your tax %). The Cash-In
Plan should include: - where to cash in - how much to cash-in at a time - when
to do it - where to deposit it - into which part of your structure (trust,
corporation/LLC) - other advice. Make sure both your attorney and accountant
agree with your Cash-In Plan.
d) YOU ARE NOW READY TO CASH-IN e) Other Tips. Read and refer to other new and future postings from The GET Team – on how to select and interview attorneys, accountants, financial strategists, wealth managers and other Advisors (End of Part 4 of 4)