After you’ve worked with enough clients, you know that many are under the misconception that their financial future would be brighter if they could just find someone who can sell them a better product; a magic product that could potentially earn a higher interest rate than the one they have today. As you know, the truth is that there is no perfect financial product that can solve their problem.
To help them understand this point, use the Wealth and Income Potential calculator in the Circle of Wealth® system. The purpose of the calculator is to illustrate the amount of money that will go through one’s hands over the course of their lifetime as well as the total wealth potential those dollars represent had those dollars been invested.
To prove this point, use this conversation that has worked well for other advisors:
“Over the course of your lifetime a great deal of money will pass through your hands. Your income potential represents the actual money you will earn. Your wealth potential is what you would be worth if you were able to invest everything you made. Obviously, you cannot do that. If I can help you recapture, say, 10 percent of your total wealth potential, it can have a dramatic impact on your wealth.
Let’s take a look at your wealth potential and how it is impacted over time with your expenses. The biggest factors of wealth include: taxes, debt service lifestyle (which represents our standard of living) and finally what’s left over to save.”
You can then use the calculator to go over their finances. For example, let’s assume that your client is age 42, wants to retire at 65 and their current income is $102,000, income growth is 3 percent, current savings equals $188,000, and they are expecting a 6 percent return.
If you and your client focus on the areas they can change without affecting their current lifestyle, there can be a dramatic impact on their financial potential. Suppose they could reduce their taxes to 25 percent and reduce their debt service to 10 percent; the result would give them about $2,048,827. The calculator goes over this and much more to help determine a bright financial future for your client.
The Wealth and Income Potential calculator is just one of the Circle of Wealth®’s presentation tools. The Circle of Wealth® system helps financial advisors communicate with their clients so they can better understand their financial future.