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A Tale of 3 Brothers

A Tale of 3 Brothers. This is a story of three brothers, each earning $75,000.00 per year. Each brother has $60,000.00 in savings and is buying a $300,000.00 house. Who made the right decision?. Results after just 5 years!. What if all three brothers suddenly lose their jobs?.

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A Tale of 3 Brothers

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  1. A Tale of 3 Brothers This is a story of three brothers, each earning $75,000.00 per year. Each brother has $60,000.00 in savings and is buying a $300,000.00 house.

  2. Who made the right decision? Results after just 5 years!

  3. What if all three brothers suddenly lose their jobs?

  4. Results After 30 years

  5. Remember: • Cash is King – Brother C now has more than $2.5 million in savings and investments. Your best investment is not always in your house – people who understand how to make their money work for them hold 1 of the keys to financial freedom.

  6. This example is based on a payment driven loan. The minimum payment is based on a rate of 1.95%, whereas the note rate of the mortgage is assumed to be 6%. For illustration above, the index is considered constant throughout the term of the loan. Actual results may vary. • Assumes a combined feral/state income tax rate of 28%. • Assumes a 10% rate of return. Rate of return may vary based on type of investment. • The monthly cash flow is determined by comparing the minimum payments against Brother A – minus the $100 he sends in as an additional payment on his mortgage. • The monthly cash flow is determined by comparing the minimum payments against Brother A. The monthly payment changes annually at 7.5% of the previous year’s payment – we have used the average minimum payment over that 5 year period. • Brother C refinances every 5 years, dropping his minimum payment back down to the low 1.95 payment level and starting all over. He continues to invest his cash flow each month. Because Brother C refinanced, every 5 years, Brother C has built little equity in the property. The equity he builds is used to cover his refinance costs every 5 years, therefore, he essentially owes what he originally borrowed - $270,00.

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