In this episode, Val guides listeners into the world of financial wellness and provides actionable insights to help people break free from the shackles of debt. We stress the importance of budgeting, and what it means to have a healthy relationship with money. Val also explains how you can tackle debt head-on with the right mindset.
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11.10.23: Audio automatically transcribed by Sonix
11.10.23: this mp3 audio file was automatically transcribed by Sonix with the best speech-to-text algorithms. This transcript may contain errors.
Val Majewski:
Well, welcome back to the Federal Retirement Show. I'm your host, Val Majeski with American Benefits Exchange. And as I typically say, I really do appreciate you taking the time out of your schedule to see the information that we're providing. And as a reminder, we provide this information to you, the federal employees that are out there, because we feel there's a lack of information and this information is going to be extremely valuable to you, your family, your situation, your planning for retirement. Today, I want to go into a presentation that I've recently gave to a group of government employees, and it's revisiting a topic that we've covered before on several episodes. But since I just gave this presentation to a group of federal employees, I'd like to share with you a condensed version of what I went over. Now, this original presentation was about an hour long. They invited me in to come talk to them about a couple of different topics, but one of which, which was very attractive and very well attended, was about debt elimination. Eliminating debt. And as I've said, we've talked about it before, but it doesn't hurt to get more information on this subject, especially with the nature of the economy, the nature of interest rates, the nature of debts, not only when it comes to personal debt, but also businesses that have debt out there.
Val Majewski:
And if there's a way that you can eliminate your debt in a fraction of the time, I'm sure you'd be very interested in it. I know folks that are within the general public are very interested in this, not just federal employees, but speaking specifically to you, a federal government employee, and making sure if you want to retire the way you want and when you want, getting rid of your debt is a part of the story. And we'll go into that here as we review the presentation that I've recently gave. So let's dive in to the information. And we're going to talk today about debt elimination. So. So as I said, this was a presentation that I gave to a group of federal employees and they were interested in how do we eliminate debt? This was a topic of concern. This was a topic they specifically asked me to come and speak about. Right? It wasn't like, hey, what can you talk about? They wanted me to come in and talk specifically about how to help their employees, their group, eliminate debt. So I would highly recommend after watching this one, you go back and watch some of our other episodes that revolved around eliminating debt.
Val Majewski:
It is a popular topic now and it's not always been as popular. It's it's a question that I know everybody would answer in the same fashion, and I'll ask it here in a second. But eliminating debt, getting rid of the money that you owe somebody plus the interest, that is the bigger part that we're going to talk about and making sure you're on your way to financial freedom. Now, first, I've not done this before, and I want to make sure that you understand what this QR code does. And you can certainly go to our website to request more information. You can go to FederalRetirementShow.com fill out the form. We will be in touch. You can also use this QR code as a way to schedule your personal benefits review and personal debt elimination review as well. So this this will help you get directly to me. You can put your comments in there, what kind of information you're looking for, what questions you have, and we'll make sure we get in touch. Reach out to you, schedule some time. I'm going to put this up at the end as well. So don't feel like whoops, you got rid of it. But the big question I'm asking today is what does financial wellness mean to you? What is your financial wellness mean to you? And that can mean a lot of things to a lot of different people.
Val Majewski:
You know, it could talk about retirement, say, hey, I just want to retire. Well, I want to retire comfortably. I want to retire, like I said earlier, when I want and how I want. And what do I mean by the how? And maybe you want to travel the world. Maybe you want to go buy a boat. Maybe you want to go play golf every day. Maybe you just want to sit and do nothing. Everybody's retirement would look different. But we're not just talking about retirement, we're talking about overall financial wellness. And that has to do with the day to day, your day to day finances, your balance sheet, so to speak. Your budget, your spending, your assets. Maybe you're thinking of, but what does financial wellness mean to you? And it can mean something different to everybody. Nearly 1 in 5 employees wait until they experience a crisis related to debt, cash flow, unexpected expenses, or income loss before they seek financial guidance. Now go back to the previous slide. What is financial wellness look like to you if you realize you're not in a financially well place?
Producer:
What should you do?
Val Majewski:
My advice? Talk to a professional. Talk to somebody who's done this before. Who's helped others get out of their financial situation. Same way if you were sick. If you felt like someone's just not right now. I know some stubborn people. I used to be one of them who would never go to the doctor. Right? I'm going to fight this. I'm going to take some over-the-counter stuff or my body will kick this soon. I don't need to go to the doctor. But next thing you know, maybe you don't kick it as quickly as you thought you would. Maybe you get worse. You should have immediately gone and seen a professional, a doctor. Same here. If your financial wellness is similar to your physical wellness, you don't let it get to the point where you're too far gone or your situation has gotten worse before you seek help. But there are some people out there, just like I was saying, stubbornness with going to the doctor, their stubbornness when it comes to talking to a financial professional. 1 in 5 employees wait until they have some kind of crisis before seeking financial guidance. I can figure this out on my own. I can do this. I'm going to take care of it. That's not financial wellness in my opinion. Okay. That's not that's not creating financial security. That's creating a financial ticking time bomb until everything just ends up blowing up. We want to make sure that your financial wellness is high, like your health, your health status.
Val Majewski:
You are stable. You've been given a clean bill of health. Well, what about your financial wellness state? Has it been given a clean bill of health or are there some issues and some problems? Statistically. Now this is done. I didn't mention this is by Price Waterhouse. And they came out with this survey. They they surveyed people in the workplace. And these were the numbers that they came out with regarding to their survey and the questions they asked, 49% of employees are embarrassed to ask with help with their finances. That's probably why 1 in 5 wait till it gets so far gone before they seek help. Now, in actuality, 87% reported that they truly want help. So there's a lot of folks out there that want help. One out of every two are scared to ask for help or embarrassed to ask for help, and one out of five wait until it gets so far gone before they actually go and seek guidance. What if the second you saw your symptoms right, the second there was an issue, you went to see the doctor? What if they as soon as you saw your symptoms arise, you went, I'm going to go get to the doctor. I'm going to nip this before it gets worse, before it gets to be a tough situation, it probably stay healthier, right? Same with your finances.
Val Majewski:
If you nip some of those things before they became problems, better chance that you're going to be pretty financially stable and your plan is going to excel going forward. That starts with seeking some guidance. Okay, 49% of employees who are stressed about their finances admit being distracted at work. Now, what does this mean? This means that those who have a financial problem. About half have said that it distracts them in their workplace. It it bothers them, right? It weighs on them. Why does it distract them? Because it's constantly on their mind. It feels like the weight of the world is on their shoulders. They've got their head spinning, thinking, how am I going to get out of my financial situation? How am I going to improve this? How am I going to get out of this hole I'm in? And then you have that pit in your stomach, that nervous, anxious energy that distracts you from what you're currently doing, and it just doesn't have you thinking clearly either. I've been there. I've been there a lot. So I've just known through my experience now and now the the work that I'm doing, helping and guiding people. I practice exactly what I preach. I have no problem sharing with you my my plan of what I've done to get out of certain holes or certain situations, but everybody's a little different. So why do I say all of this? Because financial wellness means a little bit.
Val Majewski:
Or something different for everybody. Now, it could mean not being stressed about finances. We just said one out of every two that were surveyed said that financial stresses weigh on them and distracting the work. Maybe it has to revolve around debt. You know, being financially well means I'm going to be completely debt free. Maybe that's you. Maybe it means having enough savings, having enough to not have to worry about things coming up. I know a lot of folks that are scared about another medical emergency or medical bill, or an accident waiting to happen, or just something going wrong with their house, that's going to be a big, you know, financial burden on them. What if you had enough savings where it's like, hey, we're covered. We're taking care of. Maybe that's what financially well means to you. What about having the freedom to make choices and enjoy life? What if you can go do what you want, when you want, how you want, and not to worry about how much it costs? That'd be awesome. But I know there's a lot of us out there that are still worried about the cost and having enough money to do those things. Being able to meet your monthly expenses. We call that what living paycheck to paycheck. What if I don't have enough coming in? What if I've got so much going out that there's not enough to pay other things? We talked about debt.
Val Majewski:
Let's go to debt. And the topic of today is debt elimination. What if you have so much debt and you're using so much of your money to service debt that you didn't have enough to pay your bills and expenses? What do we mean by service debt? Okay. If I if I paid an interest, only say I had this big loan, I had this big credit card bill, this big something, and I was paying only the interest on that by principal balance. What I actually owed never went down. But let's say I was paying money on just the interest. And there's a lot of folks that do that. I'm essentially paying the bank, paying that lender for the privilege of owing them money. How awesome does that sound? I'm sitting there, I'm paying this interest, and I'm owing this. I'm paying this bank for the privilege to owe them more money. That doesn't sound right, does it? But so what if you were in a position to now be tackling that balance, dwindling it down to eventually it goes away. So that's no longer a burden. And then being able to retire either early or on time, there's a lot of federal employees that talk to that say, I want to retire at a certain date, but when we run the numbers and look at the situation, the numbers don't add up or there's still too much debt that's on the payroll, so to speak, that I can't retire on that because I'm not going to have enough money to service that debt in retirement.
Val Majewski:
I need to make my current income now. What if you got debt completely eliminated? It's off the table. And now you can retire how you want, when you want, and maybe even retire early. So said a lot of this. If we if we applied debt to all of this, not being stressed about finances. I know a lot of people are stressed about the amount of money they owe. They would love to be debt free. Having enough savings will. Why don't they have savings? Because all that money is going towards debt. Financial freedom to make choices in life again. Money going to pay debt. Not enough. Money coming in to their checking and savings account for emergencies or for the fun money being able to meet monthly expenses I just mentioned. You know, you're if you're paying to service debt, it's not doing you any good. Those dollars going out the door, but it may not help you meet your monthly expenses and then finally wanting to retire on time or retire early. Everybody does. I would love to retire early. I know each one of you would as well. Maybe you love what you do, and you just love to have the freedom to retire when you want and not.
Val Majewski:
Maybe not early, but you love what you do. You don't care how long you do it, because you just love it and you just say, hey, I can retire whenever because I have the freedom to do so. Not because you're forced to retire. It's because you still love what you do have that freedom. That's financial wellness to me, having the freedom to do all of these things. Now, what we want to talk about is living interest free. Break the chains of interest. I just mentioned about the service payment. Let's say you're paying interest only on a debt. And there's a lot of things that are attractive. Oh, you only have to pay interest, only have to pay interest. Again, that is paying somebody for the privilege of continuing to owe them money. That is interest. That is money that is just going out the door. It's money you can throw in the trash. It's money you can light on fire. Why? Because it does not do you any good interest. Interest makes money for the lender, for the bank. We'll talk about how banks work here in a little bit, but we want to get you to the point where you're living interest free every day, breaking the chains of debt, interest free every day. Now, why is that? Because if you're interest free, get all that money that's going out the door that you could have lit on fire, thrown in the trash, stays in your pocket.
Val Majewski:
It doesn't go to a bank or a lender. It stays with you. So two questions and I've asked these before. By going back to financial wellness, going back to your financial security, going back to your financial health, are you 100% sure you're going to have a great retirement, or do you have some doubt? A lot of federal employees I talked to have no idea, not to any fault of their own. They just weren't given the proper education and training when it comes to how their retirement works. But they're they're hopeful that the government's going to take care of them after they put in their 30 plus years. But are you 100% sure you're going to have a great retirement, or do you have some doubt? Most I talked to have some doubt. Number two and this revolves around debt and into your financial wellness. What if I can show you how to get completely out of debt in an average of ten years or less, including your mortgage, completely debt free, without spending any additional money than you're spending right now? Is that something you'd be interested in? I know my answer is yes. I don't know about yours, but my answer is yes. And I can share with you on a one on one basis of what my situation looked like and how I've gotten and am continuing to get my family out of the debts that we do owe.
Val Majewski:
So where does my money go? Right, if I can, if we're going to talk about debt and eliminating debt, first of all, you got to know where your money is currently going. And we could talk about budgeting. We could talk about creating a spreadsheet to see where all your money's going. Now, when people hear the word budget, they're thinking of the word diet, right? What does a diet tell you? A diet tells you typically what you cannot eat. You want to. You want to do something, but you can't because you're on a diet. You're following a certain diet. Same with a budget. You think, well, I want to spend my money on something, but I can't because I'm on a budget, right? I can't spend the money on this, or I don't have the ability to do this because I'm on a budget. That's not necessarily true. It just means you want to track and understand where your spending is going, so you can better understand where every dollar goes. But before you even think about spending. Let's look at the typical typical American person American family and what they are doing. When it comes to their dollar. So for every dollar that comes in. Americans. Average Americans only save about 3.8% per year. Now this is average. You might be spending more or saving more. You might say, well, I put 10% towards my TSP.
Val Majewski:
Great. You put more money towards your future than the average person does. But we're going to talk about the pluses and minuses to that here in a second to taxes. Average of 24% of someone's income goes to taxes over a household's income, goes to taxes per year, 24%. That's a quarter out of every dollar. Out of every dollar. One quarter goes back to Uncle Sam or maybe even the state that you live in. We're talking also about sales tax. Property tax taxes average 24%. Now you might be higher than that if you live in a higher state tax or you have higher property taxes. But the average is about a quarter of every dollar goes to taxes. Interest. On average, 14% of somebody's interest of somebody's income goes to interest. So we just said a quarter and now 14%. So right right away, right away we're looking at almost 40%, 40%, 4/10. Of your dollar is going to go towards the government and interest. Those are dollars that I shouldn't say don't do you any good, but they don't do you any immediate good. And the interest you can like is said light on fire, throwing the trash. When it comes to debt. Now this is the average type of deal, right? We're talking averages or we're talking groups. But up to about 50%. Now. This is 50% of those that are surveyed. So 50% of Americans are spending 50% of their income on debt service, on debt payments.
Val Majewski:
So think about that. 50% of Americans, about half of Americans are spending 50% of every dollar on debt service. That's a lot. Now there's another 50% that's not doing that, but they're still spending some money. But up to 50% are spending 50% of every dollar on debt. Hopefully that's not you. But if you are, wouldn't you want to get rid of that and put 50% back in your pocket, 50% of your money back in your pocket? I don't like owing people money. I certainly don't like owing people money when they're charging me interest on the money. So we want to get rid of that as quickly as we possibly can. Now, we talked about taxes. I was saying you might be putting away 10% towards your TSB. You might be putting it towards an IRA or some other retirement account. But if if a quarter at this point in time, as of today and we're in the late stages of 2023, as of today, the average American is paying about 24% of every dollar is going to taxes. Which way do we think taxes are going to go? You've got three choices here. Go higher, lower or stay the same. Now if you answered it out loud or to yourself. Most that I've talked to, it's not 100%, but most will say the taxes are going up. Some have said stay the same.
Val Majewski:
Nobody that I've talked to, at least within the past couple of years, has said that taxes are going to go down. So if we believe if the majority of us and the overwhelming majority of us think the taxes are going to go up, then why in the world would I want to put more towards an account or towards a plan that's going to charge me 100% tax on all of my money in the future? Now I'm not ripping on the TSB. That's not it. I'm just talking about qualified tax deferred accounts that are traditional IRAs or traditional in nature. If I'm going to get a tax break on that today, right, I get a tax deduction on the money that I put into that account today. But that money goes in, grows with interest. And then when I pull it out, I'm going to pay tax on every dollar, my money, plus the growth I've had in there. That may not seem like the best deal, especially if we think taxes are going up. You may have a differing opinion than I do, but again, this is my opinion when it comes to taxes in the future. Okay, so if I'm creating a tax bomb for myself by putting money into a qualified account, I'm just using TSP as an example, the traditional portion of TSP. And I'm getting a tax break today, which could be good.
Val Majewski:
But in the future I'm going to not only pay tax on those dollars, I'm going to pay tax on all the earnings that I had. And if we think taxes are going up, well, I'm going to pay a higher tax rate on my money and all the earnings in the future. Doesn't sound like the best deal, does it? So it's important to note when it comes to taxes. When do you want to pay taxes? Now or later. Would you rather get Uncle Sam out of your pocket today by prepaying all the taxes and then letting your money grow and having no taxes due on that, like in a Roth type of account, or a Roth type alternative where all the money is going to come out tax free, that can be something to look at, right? If you're concerned about taxes. I have a business proposal for you. Right? I'm a business guy. I'm not the smartest business guy. But let's say here's the business proposal. You front all the money. You and I are going into the deal together. All right. Together. This is a mutual mutual deal. Mutual. Let's see how mutual it really is. You front all the money you put up, all the money you take, all the risk over time, okay? You do all the heavy lifting, you do all the work. You manage the business on a day to day basis, okay? Just just keep it going.
Val Majewski:
Keep it afloat. Keep putting money into it. 30 years from now, I'm going to come back and I'm going to tell you how much you owe me. Now, would that sound like a business deal that you want to get into with me? You front the money, you take the risk, you manage the money, and then I'm going to come to you and tell you, wow, you did a great job. This is how much you owe me. Well, that's how it works within those traditional tax deferred accounts that we have for retirement. You front the money, you put in money into your traditional account. Now you do get a tax deduction today. Not a problem. Great. Tax deduction today. You take all the risk. You manage the money. You put it into different investments. Let's use TSP again. You have all those different funds and you can put it into they can go up. They can go down. You can earn money. You can lose money. That's all up to you. You take all the risk. You manage it on a day to day basis. You make sure that you're continuing to put money in on a per pay period basis. You continue to manage it, change up your investments. I'm not giving any guidance. I'm just sitting back. And then after you retire in 30 years and start withdrawing money from that, I come in, my name is Uncle Sam and I'm going to tell you how much you owe me.
Val Majewski:
Wow, you did a great job. You accumulated all this money in your TSB. Congratulations. Now it's time for my cut. Preciate it. Thank you. And you made a heck of a business. This is a great business model for me. I'm going to keep doing this over and over. And it is done over and over and over again. Now on the flip side, what if I said, okay, you're going to put some money in, but before you do, you're going to pay tax on that money. You're going to pay tax on that dollar and then you're going to put it into your business. Then it's going to grow tax deferred, right. You're not going to owe taxes on it along the way just like you do now. It's going to grow and grow and grow. And you can take some risk if you want. But you can let it grow and grow and grow. And in the end, when you've got this nice nest egg, this stockpile of money, I can't touch a thing because you've already prepaid me. You've paid me off. You've gotten me out of your pocket, you paid tax on the starting point, and you get to reap all the harvest tax free. Pretty awesome. That's how the Roth type plans work. Or Roth alternatives out there work. You pay tax up front. Money grows tax free.
Val Majewski:
So no matter how taxing, how high taxes go, they could go up to 90 plus percent like they did in the 1940s. That money comes to you tax free. Cannot be touched. Pretty awesome. So just looking at just a closer look, I'm just. I'm harping on a point, right? I'm beating a dead horse here. But these are three different accounts. All started with $10,000. The red is taxed, meaning this is like a securities account. An investment account. Average growth rate of 7%. But in an investment account that's not tax deferred. You get taxed on your growth every single year. So your 10,000 over the next 28 years gets taxed tax taxed every year on the growth. Uncle Sam says hey thank you so much. You've done a great job. You made some money this year. We need our cut now. The second one is tax deferred meaning it's like a traditional IRA, right? Like your traditional portion of your TSP. You put money in, you don't get taxed every single year. Taxes are deferred until you start withdrawing money. But if you withdrew it all at a 25% tax rate, which we said is kind of average 25%, you're losing a good chunk of your money, right? $10,000 went in. You didn't pay tax on it. It grew, grew, grew, grew, grew. And then you pay tax on it. Well, what if you take the same investment, pay the taxes up front and then let it grow for 28 years at 7%, you're going to get the green, which is tax free money.
Val Majewski:
You're going to get all of it. You're going to get the the whole kit and caboodle, as they say. So which account would you rather have? I think it sounds pretty simple. So it's a pretty simple question. Pretty easy answer, but it really just depends on your outlook now. On the flip side, if you think taxes are going to be drastically less in the future, by all means pay your taxes in the future. But that is not the consensus. That is not what most people I'm talking to are seeing or guessing. Now, when it comes to debt, now we're talking about debt elimination, right? Let's look at the game of life. I've mentioned about taxes and was really harping that hammering that point home. But how's the game of life work? And this is an illustration that I got from a group we partner with and I love it. I've played this game of life, I loved it, I loved the little car and they had the pink and blue little dots there. And you had the the spinning wheel and you went through the game of life. Well, how does the actual game of life work? You get you get going through life. Maybe as a young adult you get a credit card. You start learning how debt works, right? You you put stuff on the card, you got to pay it back.
Val Majewski:
You put stuff on the card, you pay it back. If you don't pay it back right away, you get charged interest. Your balance goes up a little bit, then you pay it off. Maybe you buy a car, you learn about some other debt, right? A car loan, how does that work? How many months? What's the payment? How much do you pay over time? They don't really tell you that, you know, $50,000 car. You might pay $70,000 for it over time. Then you go to college and they tell you and the world tells you to. You might have to get a loan. And having student debt is is normal. Just because if you're going to get a job and that job is going to be more valuable because you got a college degree, and then you can pay off those loans and things like that. So credit cards are taught as normal. It's a necessary evil. Same with car loans. That's how you buy a car. College. That's how you go to college. You got to you got to take on some debt. Well what happens? Well, maybe you get married in there, okay, you get married and you meet the love of your life. You want to start having a family? Well, guess what? You're going to need a bigger car. You need a bigger house.
Val Majewski:
You're done renting. Now you got to buy a house. So we've got a different car loan. We've got a mortgage, and then maybe we added more people to our family. We got to get a bigger car. We got to rinse and repeat and do it again and get a bigger house. And when it's all said and done, you hope that you're getting to the finish line where it shows this, you know, beachy tropical field. But are you going to get there? Are you going to get there? Because every time it feels like we're gaining, we might have to take a couple steps back. We take one step forward, two steps back, because we're piling on some new debt, some new things that we are taught are normal. And what do people look at when they accumulate new debt? They look at the payment, oh, I'm okay with that payment. I'm okay with that payment for for this month. But how many months down the road are you going to have that? How many more months down the road is it going to take to pay that off? And how much would you completely pay when it comes to paying off your car? I just mentioned you might buy a $50,000 car, and it might cost you 70,000 to pay it off over time. If I told you the car was was worth 20,000 more, you're going to pay 20,000 more.
Val Majewski:
Maybe you think twice about paying for that or getting that car. So this is the normal game of life that we're taught. Let's talk about the three phases of money. Right. And let's just say we want to help, help you get get out of debt. But we want to learn how to use our money more effectively. Okay. In the process we want to learn to use our money more effectively. Go back to that said, if I can help you get out of debt in ten years or less, completely out of debt. So including your mortgage, you're probably very interested. But how are we going to do that? Well, we have to more efficiently use your money. Okay. We can't just vanish it. We can't say abracadabra. Boom! It's gone. We need to use your money more effectively. So we have to maximize every dollar. Now, normally you use every dollar. One time you have a dollar, you spend it. That dollar serve one purpose. You have a dollar and it's gone because you spent it. Now you get whatever you've got, whatever you bought, but you spent. That money cannot be used again. You have to earn a new dollar to then spend it again. What if we can maximize every dollar and use it more than once? I'm going to show you an example of how that works here. In just a second accumulation. Most people then want to not just maximize every dollar, but they want to accumulate more dollars so that they can maximize those dollars.
Val Majewski:
So we're not only looking at maximizing every dollar. We want to accumulate more of those dollars that we can then maximize. And then in the end, you certainly want to distribute those dollars to utilize them, okay. Utilize them for whatever the purposes are. Buying stuff, retirement income, gifts, whatever it might be. So you want to make sure that you're setting yourself up, right. But it all starts with maximization. You want to maximize every dollar so you can accumulate more dollars. And ultimately when you distribute those dollars, you've got more money to distribute. So I'm going to show you here in just a second how this works. And the illustration of a bank. So you're thinking, well, every dollar. How do I use it? Twice. How can I use every dollar twice? Well, let's talk about how a bank works. Now banks, they don't just spring up out of nowhere because they've got all this capital to start. Right. It's not like you're starting a restaurant or a franchise, and you need to front all this money. A bank, a bank is getting started because people are going to be doing what they're going to be making deposits. So we put money in the bank, right? I put in this example, let's say I put $10,000 in the bank. The bank says, thank you for your money.
Val Majewski:
We're going to keep it safe, but we're going to also we're going to give you some interest. If it's in a certain account, it could get credited interest. Now how much money could you get credited in a savings account. I know before all these interest rate hikes was getting about a quarter of a percent in my savings account. It was kind of embarrassing at the end of the year, when I look at how much interest I actually earned on that money, not even close to keeping up with inflation or normal interest. Even if it was 1%, even if it was 3%. We're not keeping up with today's inflation, which is about 4%. Now. What if what if now I didn't want to withdraw the money. I was like, I still want my money to sit there and grow. I want my money. As little interest as it's going to earn, I want to try to use my dollar twice. How does a bank work if I'm going to keep the money in the bank in order to get credited interest? And I say I want to loan some of that money out, I need to utilize some of it. I've got money in the bank. I want to keep it there, earning interest, but I want to loan some of it out. What interest rate is the bank to charge me? They're going to charge me the same 1% they're paying me.
Val Majewski:
Heck no. They're going to charge you five, six, seven, nine, ten, 11, 12%. Depending on the type of loan, they're going to charge you interest. And as I said earlier, what is that interest do for you? Nothing. It does you. Not a thing. It gives you the privilege of owing them money back. But it's money you can light on fire. Throw in the trash. So how does that benefit you, really? You put money in the bank. It grows with interest. You don't want to withdraw it because you don't want to only use it once. You want to try to use it twice. But in this method, using it twice does not benefit you. It benefits the bank. Then money goes in. Money's loaned out. They're making money. They're making money because of the interest. Question for you. How would you like to be the bank? How would you like to be that person that takes money in? Has money grow with interest? Have to pay a little bit of interest. Then they're going to come to me for a loan. I'm going to charge them more interest. So that's how I'm going to make you money. I'm going to make my money as the bank by charging interest. How would I like that? That business. We talked about a business proposal. This is what I'd like to take. I'd love to be the bank. Well, when it comes to our debt, this is how it works, right? If we loan money from the bank, we end up owing more money.
Val Majewski:
So how can we take control of this and become the bank? Well, that's where our program comes in to help people get out of debt. So when would you like to be out of debt? When would you like to get completely out of debt? So including your mortgage in ten years or less? They have even less, right? Everybody's situation is different. There are some folks we look, we can get them at a completely out of debt in seven eight years. They're normally in debt for 25, 30 years, depending on how many years are left on their mortgage, because that's typically the longest or the longest debt repayment that you still have. So when I ask this question, when do you want to be out of debt? Most people tell me yesterday. Let's get me out of debt tomorrow. Well, I wish I could say it was that easy and I could just abracadabra, make it vanish. But we have to develop a plan. You have to have a roadmap. You have to know a way in which you're going to get there. And we can show you how to do that by maximizing go back a couple slides, maximizing every dollar. Try to use every dollar more than once, just like the bank does. On the previous slide I said, wouldn't you like to be the bank? What if you can be? What if I showed you a that you can be, that you can create your own bank, and you can utilize that bank to help you get out of debt, and in the meantime, build an asset that can be used for future expenses, future retirement, what have you, and do it on a tax free basis.
Val Majewski:
We're covering all of these bases here. So we talked about taxes. Taxes are going up. We can eliminate that fear because we can save money on a tax free basis. Eliminate interest that you're paying towards debt because you're paying off debt quicker. Okay interest to get money. You can throw in the trash light on fire. It doesn't do you any good. What if we got rid of the bulk of your interest? Help you build your retirement savings again on a tax free basis? Free up all that cash flow that was going to debt. Eliminate all the worry, the stress, the doubt, all the things that come with your financial wellness that could affect your actual health. All that stress, worry and doubt is not good for your health. So if you have that peace of mind knowing that you're doing everything you need to do to get out of debt, put yourself in the best situation possible. It will help improve your health. So what do we do next?
Producer:
What's the plan? What's the next step?
Val Majewski:
Well, I'm going to put that QR code up here again in a second. I'd want to look at your situation now. Not only do we do a full benefits and retirement workup, go over all of your federal employee benefits, project out your retirement, let you know how you're trending. Let you know how you're looking when it comes to your federal employee financial wellness. But we'll also look at your debt situation. We'll outline all the debts, all of the numbers, and we'll come up with a plan and show you how, ideally without spending any additional money. That's a big thing we just said, rearranging and making your dollars that you're spending a lot more effective and a lot more efficient. So if we can do this all without spending any additional money, your bottom line remains the same. We will outline that plan and then it's up to you if you want to take action. But this is your decision. But once we lay it all out, I see no reason why you wouldn't want to get out of debt in a fraction of the time, but that's completely up to you. We'll schedule time to go over your numbers. Right, so we will schedule time or request a review. We'll book the time, look over all the numbers, and then we'll go over the roadmap. We'll go over the plan going forward.
Val Majewski:
Here's the QR code. I'm gonna leave that up here for a second, but I want to make sure that you understand that it is absolutely necessary for you to first understand about your federal benefits and retirement situation, too. If you do have debts, even if you just have a mortgage, it's important for you to figure out a way to get rid of that quicker. Now why? Maybe not everybody wants to. But why? Because I said the quicker you pay that off, the less interest you're paying. And interest was just money that you that went away right? As money that could have been lit on fire. Now, if you have a lot of debts, we can help there as well. If you've got ten, 15, 20 different debts, some do. And it said earlier, you know, about about half of us are ashamed to ask for help or help when it comes to our finances. And 1 in 5 want to wait till it gets way out of control before asking for help. So this is your chance to ask for help. This is your chance to speak with an expert, somebody who's not only knowledgeable in federal benefits and retirement information, but also in how to get you out of debt in a fraction of the time. So click on that QR code or utilize it on your phone.
Val Majewski:
Take a snapshot, schedule a review. We'll go over all the numbers, see where you currently stand, and make sure you have a solid plan going forward. And you know 100% that your financial wellness is in good order, right in good standing. Just like when you get out of that physical with the doctor, they give you a clean bill of health. Everything's in the green. You're doing the right things. We want to make sure you're on the right track when it comes to your financial situation and your retirement. Well, I really appreciate you taking the time to learn today about eliminating debt. And I want to share with you this presentation that I recently gave to some government employees had a great attendance, great response. So why not share with you all as well on the Federal Retirement Show. We'll be sure to check out our previous episodes. Go back. There's a lot of great information in there for you. We've done all of this for you. The federal employees reach out to us either through the QR code or via FederalRetirementShow.com. You can fill out the form on there as well. Again, thank you for taking the time out of your schedule and look forward to seeing you on a future episode.
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