Cash-Flow Your Dreams

Millionaire Makers Wealth Building System.

The Basics of Creating Financial Independence

Presented by Peter Pfann

 Disclaimer
• All the examples and exercises are entirely
hypothetical, and are not intended to determine how
much or how quickly one can make money with the
outlined Wealth Building Programs. Peter therefore
cautions you to not assume and or rely on any of the
provided information in deciding your best and most
profitable wealth building system without research,
consultation and personal risk assessment of any and
all investment strategy.
• If you are uncertain about the above note, please
contact Peter Pfann for clarification.
 House Keeping
• Today’s workshop will be approx 3 hours long.
• We will have TWO 10 minute breaks.
• Questions and Interaction is Encouraged, we do
however need to stay on topic and time.
• Please Turn off phones and pagers, please return calls
or pages during breaks.
• You are encouraged to complete and return the course
evaluation at the end of today’s course.
• Peter will gladly answer any Confidential questions for
an hour after today’s course, or by phone/email at your
convenience.
What Do You Hope To Learn
 Course Objectives
• Building a BIG “Why”
• Learn Wealth Building Using Passive Income.
• Compare Good Debt Vs Bad Debt
• Discuss How Cash Flows for all income levels
• Outline Essential Wealth Building Blocks
• Outline Common Money Mistakes
• Good Money Management Concepts
• Team Building For Wealth Building
• Outline a Road Map to Financial Independence
• Cash-Flow Increasing Actions (CIA)
The Basics Of Financial Independence
Being Financial Independent Means;
“ Passive Cash-Flow
Funding Your Dreams”

Or worded slightly different:

– Financial Independence is achieved when You
are receiving Enough PASSIVE income to
finance your Lifestyle and Mission.
 Being Rich Vs Passive Income
• Financial Wealth (being Rich) and Passive
Income are not at all the same thing.
– Many people have achieved instant or quick
Riches to be broke in less than 5 years after,
why?

Hint :
Getting Rich is Easy, Staying Rich Requires a Plan
 How Many ATM(s) Do You Have?
• Creating and building passive income streams
is the ultimate objective of the truly financial
independent.

Quote;
It’s like having your own personal ATM’s,
giving you passive income every month.
 Wealth Is A State Of Mind
• The answers to our most important questions
are often within us, however we continue to
seek outside solutions.

• The Source of Success, as with Happiness, Lies

within us.
 Wealth Is A State of Mind.

• It is the result of ones attitude.

• The Attitude of the Financial Wealthy is

manifested by applying focussed thought(s)
towards a Financial Target.
 Financially Wealthy Mindset
• In order to achieve true financial wealth in
life, one must first become wealthy in the
mind.
• By answering the big questions first, one
can achieve the financial wealthy mind set.
– They are WHO, WHAT, WHERE, WHEN & HOW.
 #1 Hard Truth About Money

• The Key to Happiness is not having more

money.
• MONEY IS MONEY
• HAPPINESS IS HAPPINESS
– They are not related, if you seek happiness,
don’t focus on money, focus on Happiness.

• Money does not Buy Happiness.

 # 2 Hard Truth About Money
• Whatever drives you and what your life is
about, having more money will amplify it.

• Money won't change you —it will magnify

your true self to you and the world.

• It will reveal your core values.

 # 3 Hard Truth About Money
• Lifestyle is Style over Money.
• Style is an art; Your personal art of
living.
• You can't buy style with money.
• You can't buy good taste or good decisions
with money.
• You can only buy more with more money.
 # 4 Hard Truth About Money
• The Purpose of Life is to have the Highest
Quality of Life in the time available to us.
• It's not the Money; it's the Quality.
• Money doesn't buy Quality of Life as it
pertains to the best life possible.
 # 5 Hard Truth About Money
• Money will come to you when you are
doing the right thing(s) to make money.
• Even more money will come to you when
you are doing more of these right things.
• Deciding what are the right things and how
to implement them is a learned skill, not
luck.
 # 6 Hard Truth About Money
• Money has its own language, rules and
disciplines.

– If you don't master the rules you are basically

financially illiterate.

• If you don’t master the rules you are deciding

not to follow your dream.
 Travel Plan To Financial Freedom
The 3 Key Pieces of Luggage on your trip

Balance
Resume
Sheet Team

•Knowledge What You Own •Your Mentors

•Skills - What You Owe •Field Experts
•Experience = Net Worth •Those You Built
Wealth For
•Those Building
Wealth For You
Road
Map
 Your Resume
• Take stock of Knowledge, Skills, and or
Experience needed to achieve your
Financial Dreams.
• Do You know what and or who you need?
• We have a simple yet effective tool for you.
 What Do you Need to;
Know, Have & Do?
Know Your Objective Have

DO
 Before We Break

WHAT WAS YOUR AH......!!!

MOMENT, SO FAR.
 Net Worth Vs Cash-Flow
• Net Worth = Assets – Liabilities on a Balance
Sheet. (= financial worth)
• Net Cash-Flow = Income (Passive and Active) –
All Expenses on a Income statement.
• Build a budget to Learn what cash-flow is
needed to finance Your life without working.
The New Attitude About Money
Passive Income

YOU MONEY

GOAL
WORKING WORKING
FOR FOR

MONEY YOU
Earned Income
 5 Financial Freedom Steps
1. Live within your means.
2. Grow your earned Income.
3. Lower Bad Debt and Bad Expenses.
4. Use Money to Invest in Cash-Flow Producing
Assets.
5. Use extra Cash-Flow To buy more Cash-Flow.
 Bad Debt Vs Good Debt

Bad Debt Good Debt

Puts Money
Takes Money Out
IN
of Your Pocket
Your Pocket
 Are You Born To Race?
• SAFE • HOUSE
• CREDIT • CAR
You are Born • LIFESTYLE • HOLIDAYS
• RETIREMENT • CREDIT CARDS

GET
Go To School INCREASE
BETTER
and get Good SPENDING
Grades so you JOB
can

Go To College,
to get a GET
Degree to INCREASE
BETTER
SPENDING
JOB
Get a Good • BIGGER HOUSE • GET UP
JOB • NICER CARS • GO TO WORK
• BOAT • GET PAID
• PENSION FUND • PAY BILLS
 How to Break the Cycle

• Choose the work that you are

Passionate about, and or gets
you closer to your Passion.

• Work, live, learn, study what

your plan tells you too.
 Breaking the Cycle
1.Put Money Away Every Month.
2.Study The Techniques and
Strategies of Making Money.
3.Invest Consistent to Your
Strategy.
 So What’s Next?
1. Plan Your Own Investment Strategy
2. Implementing the Strategy is Your 1st Win.
– Example: built a team, Restructure Debt etc.
– Remember it is “YOUR” Strategy.
3. Keep Score.....Work of a Balance Sheet Daily.
 Remember
Assets
___ Liabilities
=== Net Worth

Financial
Wealth
 Good Flow, Bad Flow
Cash Flow From an Asset Cash Flow From a Liability
Income Expense
Income Expense Job Taxes
Job Taxes investments Food
investments Food Car
Car Rent/ mortgage
Rent/ mortgage

Assets Liability
Assets Liability Stocks Credit cards
Bonds Consumer loans
Stocks Credit cards
Real Estate Mortgage
Bonds Consumer loans
Business
Real Estate Mortgages
Residual income
Business
Residual income
 Cash-Flow of Many
Income Expenses
Job Creates Pay Check Taxes
Food
Car
Rent
Clothes
Fun

Assets Liabilities
Credit cards
Consumer loans

Large Money Pit

 Middle Class Cash-Flow
Income Expenses
Job Creates Pay Check Taxes
Food
Car
Clothes
Fixed Expenses

Assets Liabilities
House Credit cards
RRSP’s Consumer loans
Mortgage

Large Money Pit

 (H)Wealthy Cash-Flow
Income Expenses
Job Creates Pay Check Fixed Expenses
Investment Cash flow

Assets Liabilities
House Mortgage (s)
RRSP’s Taxes
Cash-Flow Producers
Investment Property Smaller Money Pit
Mortgages/notes
Businesses
Residual income
 The Wealthy Get Wealthier
Income Expenses
Investment Cash flow Fixed Expenses

Small Money Pit

Assets Liabilities
House
RRSP’s
Cash-Flow Producers
Investment Property
Mortgages/notes
Businesses
Residual income
 What Side Of Cash Flow Are You On?
You Working For Money Money Working For You
• Job • True Business Owners
• Sales • Network Marketing
• Consultant • Business System Creators
• Self-Employed • Franchisees
• One person/family business • Lenders
• Savers & Some Retirees
• Smart Investors
• Sophisticated Investors
 How Does Your Cash Flow?
•Most people will never
represent just one type of
Cash-Flow.

•Taxes have a big influence on

what type of cash-flow is best
for your situation.

•There is no good or bad side,

as long are you creating cash
flow consistent with your goals.
 11 Common Money Mistakes
• Having a consumptive lifestyle with little
emphasis on investing.
• Buying cars & houses too soon. Spending before
having money.
• No personal budget. No future budget.
• No financial goals.
• No tithing. (Share and you shall Reap)
• Focus on taxes vs returns in investment
decisions.
 11 Common Money Mistakes
• Perceive saving as the same thing as investing.
• Asking, "Should I invest" Vs. "Where should I
invest?"
• Investing without understanding if you are in an
"accumulating financial wealth" or "preserving
financial wealth" mode.
• Failure to follow the proper sequential
investment strategy:
1. Get out of debt.
2. Put emergency savings aside. (1-6 month's worth)
3. Save for major purchases.
4. Invest for financial independence.
 11 Common Money Mistakes
• Making mistakes involving debt.
– Debt is;
• over-extending yourself in order to
satisfy some short-term desire.
– When you commit to stay out of debt —
you are committing to having less than
what the world says you are entitled to.
10 Laws Of Money Management
• As A Rule, Pay CASH (or cash equivalent) —
NO PLASTIC CREDIT THAT ISN'T PAID OFF AT
MONTH'S END!
• Purchase Protection:
– Maximum disability protection
– Adequate life insurance
– Best health insurance
– Adequate home and personal property insurance
– Adequate car insurance

• Follow a budget — avoid impulse.

10 Laws Of Money Management
• Save up then purchase —
• don't let a credit card or loan do your saving for you. Live
beneath your means — not above it.
• Buy based on "need" first —
• avoid a "wants" purchasing lifestyle.
• Think "repair" first — "replace" second — and
"new" last. Be frugal.
• Pay yourself first — not last.
• Tithe regularly with a grateful heart.
• Invest regularly following a proven strategy.
• Save and Invest no less than 20% of your income.
 Rules Of Thumb
• Any Investment that Consistently puts Net money
in your pocket, is a Great Cash-Flow Option.

• Never Sell a Positive Cash Flow Investment!

 Let Do Some Math
Q: IF YOU SAVE/INVEST $1,000 A MONTH
How long will it take to have enough money to then
earn $100,000 a year from the money?

$1,000/month@ 6% after 37.25 years = $1,666,660

$1,666,660 @ 6% = $100,000/year

$1,000/month @ 8% after 28 years = $1,250,000

$1,250,000 @ 8% = $100,000/year

$1,000/month @ 10% after 22.42 years = $1,250,000

$1,000,000 @ 10% = $100,000/year

$1,000/month @ 12% after 18.70 years = $835,000

$835,000 @ 12% = $100,000/year

$1,000/month @ 15% after 14.90 years = $666,667

$666,667 @ 15% = $100,000/year

$1,000/month @ 20% after 11.25 years = $500,000

$500,000 @ 20% = $100,000/year

So how much money do you need to

invest to fund your life’s mission?
The Value of Compounding
WHAT WAS YOUR AH......!!!
MOMENT, SO FAR.
 Only 2 Investment Options
You can lend it to someone. You can buy something with it.
 The Flow Of Cash
2 Types
Cash-Flow

Active Passive
Cash-Flow Cash-Flow

Total
Cash-Flow

See The Next Slide

Choices

Results
 Cash-Flow Choices
Choices 4 Spending Choices % Results
1. Consuming Lifestyle %
2. Sit On It %
3. Give It Away %
4. INVEST IT % 2 Choices
1. LEND IT Savings Account
CD
Bonds ETC.
2. Buy Ownership Stock
Real Estate
Private Business ETC. 2 Choices
1. Passive Mutual Funds
R.E.I.T.S.
2. Active Invest in what YOU know 4 Choices

Results in
 Real Estate Investment Options
Short / Medium Term Long Term
• Options • Buy & Hold
• Flipping • Residential Tenancy
• Skipping • Commercial Tenancy
• Speculating • Land Banking
• Land Assembly • Trusts
• Sub-division • Syndication
• Building • Management
Objective:
Short Term Profit by Adding Objective:
Value Long Term Cash-Flow and Capital
appreciation
 Why Make Real Estate Part of Your Investment
Strategy?
• Regardless of your Strategy, Real Estate can be
a perfect fit towards your Investment
Objectives and goals.
• Real Estate Is one of the rare investments that
combines, great tax options, easy financing
options, as well as
• Locally we have record low Vacancy rates!
• Locally we have consistent Appreciation!
• Locally we have All Levels of Support and Assistance (if
you don’t want to be active).
 Why Real Estate Investing?
• Let’s discuss some Viable • Capital Appreciation
Real Estate options that • Giving Back to Society
you may have been • Development options
thinking about?
• Other.......?
• Retirement
• Cash-flow
• Helping Family
• College Funding
• Tax benefits
• Creative financing
 estimate avr. yr 10
Redfern property
pp $ 250,000
appreciation 7% 9.50%
holding years 10 10
value at end of holding $491,788
current CMA of Value $ 620,000
Loan to Value ratio 75%
original mortgage $ 187,500
Down payment $ 62,500
rate 7%
amortization in years 25
payment monthly $ 1,091
annual payments $ 13,086 $ 13,086
annaul rev incr 4%
Revenue monthly $ 1,300 1924
annual Revenue $ 15,600 $ 23,088
vacancy 1% 1.00%
vacancy Cost $ 156 $ 231
Net Revenue $ 15,444 $ 22,857
operating expenses % 20% 20%
operating expenses $ $ 3,088.80 $ 4,571.42
Net Revenue after o.e. $ 12,355.20 $ 18,285.70
tax deductions 20% 20%
tax deductions $ $ 3,234.98 $ 3,531.51
Net Revenue after tax $ 15,590.18 $ 21,817.20
cash flow $ 2,504.06 $ 8,731.08

Mort balance after 10yrs $ 138,368

Equity position $353,420 $ 481,632
Annaul return on down 18.92% 25.79%
or total return on down 465.47% 892%
total net rev $ 25,040.64
 Make it Automatic
• Once You Develop Your
Investment Strategy;
– Implement it,
– Improve it, (if needed)
– Repeat it
– Automate it !!!
– Enjoy It.
Financial Wealth is Dependent on
Relationships
 Team Sport

• Nobody Succeeds Alone!

• How Many People Are on Your Team, NOW?
• What Type Of Services Do You Need On Your
Team?
• Each Team Is As Strong As It’s Weakest Link!
• Establishing Your Support Team Is Your Short
Cut to Financial Independence
 Building The Team Steps
• What is The Plan (what, when, how, where & who)
• What do we Know, Have and Do (shows what missing)
• Create Job Descriptions and Systems
• Recruit and Select the Best Talent Available to your Job
Descriptions & Systems
• Implement “the Plan”
• Hold all People and all Actions Accountable to “the
Plan” and Job Descriptions.
• Hire Slow & Fire Fast
• Offer “Profit Sharing” as an incentive for commitment.
 Summary
• Plan, document and implement your strategy
• Live within your means.
• Study money and its cash-flow options
• Surround yourself with people that
compliment your weaknesses
• Avoid Bad Debt (the kind that takes money out of your pocket)
• Buy investments that pay for themselves, +
pay you, + have capital appreciation (Real Estate for
example).

• Repeat the process, and have fun doing it.

 Some Questions To Ponder
• How Big Is Your Dream?
• Do You know How to Get there from here?
• Do You Have a Written Strategy, and are you
Monitoring its Progress Frequently?
• Have You Built Your “Cash-Flow Team”?
• What is Your Independence Day?
• What Constitutes Your Independence?
• How Can We Help You Get There Faster?
 Books To Read
Investing Concepts Real Estate Investing
• Rich Dad Poor Dad
• The Millionaire R.E. Investor
• Cashflow quadrant
• Flip
• Guide To Investing
• Hot Tips For R.E. Investors
• The Millionaire Next Door
• The Smith Manoeuvre
• The Automatic Investor
• R.E. Investing In Canada
• Creating Wealth
• 97 Tips for Cdn. R.E. Investors
• Wealthy Barber
• The Automatic Millionaire
• Make Sure It Is Deductable
homeowner
• Real Estate Riches
 Some Additional Services
We Offer

Real Estate Consulting

• Residential & Commercial
Buying and Selling Services
• Millionaire Maker System
• Retirement and Downsizing
Options
• Cash-Flow From Your Own
Home.
• Development and Building
• Real Estate Investing
workshops
• Coaching and Consulting
• Realtor Training &
mentoring
• Investment Analysis
Services
• Property Improvement
Analysis
 You Action Plan
Action Do Know Have Due
 Bonuses and Extra’s
• In Your workbook you will find Free Extra’s
– Your Personal Budget Worksheet
– Personal Financial Statement
– Investment Portfolio Schedule
– Evaluation sheet (please Complete & Return
Today).