Personal Economic Model Opening Interview Personal ...Opening+… · Personal Economic Model ®...

Personal Economic Model® Opening Interview

10-Steps to COW Script Rev 10.20.19 of 15

Personal Economic Model® (at a glance)



PEM Opening Interview Script To begin I would like to introduce you to a simple picture, called the Personal Economic Model®, that will provide a visual platform for us to discuss your personal situation. (Show picture of the model)

● As you look at this picture, what do you see? ● (Allow them to comment, they probably will not understand it until you illustrate.) ● The model is a visual representation of the flow of money.



PEM Opening Interview Script (continued)

● Let’s talk about position A. ● So what’s position A? ● You have money coming in, and you are going to have a lot of money coming in that is why that tank on the left is so big. ● Now you don’t have a lot of money sitting there. ● Why? ● Because the money comes in monthly cash flow. ● Most people run their budgets on a monthly cash flow position.




● Then the money has to flow through the tax filter ● The federal government gets involved ● And they control that, they actually put that onto your financial position




● And then the natural flow for our money is through the tax filter ● And then on through your current lifestyle ● And then gone forever ● That’s pretty much the natural flow.




● But we all see that it is pretty obvious that position A is going to be for our retirement. That we are going to have to have money come in, flow through the tax filter but we have to get money up into these two tanks so by the time we retire we have enough money in these two tanks to open up these distribution valves, that we will talk about later, that we will have enough money flow out so we can live in the future just like we live today.

● So we consider position A to be a position so you can afford the same standard of living you enjoy in your working years in your retirement years without the fear of running out of money.

● Now we are going to help you to determine where you are today in relation to where you want to be in the future and we will help you build a plan to help you get there.

● There are two ways to reach position A. o The first is to find better products that potentially yield higher returns – which often require you to take more risk. o The second is to become more efficient by avoiding unnecessary losses.

● Our philosophy: There is more value in avoiding the losses than picking the winners. Let me illustrate what I am talking about.



PEM Opening Interview Script (continued) I am going to click on Lifetime Capital Potential and it is going to bring up a Calculator called Wealth and Income Potential.

● So let’s plug in some numbers. o This person is 42, o They want to retire at 65, o They say they are making 102,000 a year, o They say they are earning 3 percent income growth on their income every year o So let’s give them 188,000 o and they are saving about 6 percent interest on their account.

● Let it calculate.




● Let me point out a few numbers here. ● What this says is that you are going to have about 3.3 million dollars go through your hands though that big tank we looked at earlier. ● If you invest every dollar you ever earn, which you cannot do, the maximum potential you would have is 7.3 million. ● Now the purpose here is to point out that fact that you are going to have a lot of money go through your hands. ● And if you are going to have a solid financial future you are going to have to manage those resources. ● Your wealth and income potentials plays a role in how that is going to happen. ● Let’s go back to the tank picture.




● And let’s focus on the earned income tube right now. ● Yes you have a lot of money coming in and it has to flow through the tax filter. ● But what about the future lifestyle tube? ● The future lifestyle tube is going up to signify that fact that it takes work and effort to pump money up into those two, the savings and

investment tanks. ● Now remember that is not the nature flow of your money. ● The nature flow of your money is out the tax filter and gone forever. ● So it does take energy and effort to get money into these two tanks the savings and investment.




● There is another thing we want to point and it has to do with this piece right here the diverter valve. ● And what this does is it allows you to dictate which tank you want your savings and dollars to go into. ● The tank you choose will give direction as to what accounts may be available to you. ● A solid plan should allow you to monitor the flow into each tank and dial up or down the percentages you desire in each to create the

allocation that works best for you. ● This percentage will change over your lifetime and you want to make sure you have a plan that allows you flexibility. ● So the diverter valve plays a very important role in helping you manage your financial resources.




● Let’s take a look at the two tanks. ● First let’s look at the safe tank. ● Every dollar you put in this tank will be there it can never be lost - notice the cap. There is no way for it to get out. Every dollar you put

in there will be there. ● Accessibility to capital is the key to this tank not rate of return. ● You are looking for safe but competitive returns plus benefits.



PEM Opening Interview Script (continued) Let’s talk about benefits for a minute. (I am going to simply click on the top here and it is going to bring up our benefits list.)

● And this is a sampling of accounts you might find in the safe tank. ● If I click on cash, it will bring up a list of the benefits that you will find from a cash position as well as things you need to consider. ● The benefits are what people are after plus accessibility so in the Safe Tank we want to walk away understanding that is has

accessibility so we have access to our money. Money you put in this tank cannot be lost – unless you move it to the Risk tank and it doesn’t come back.




● Let’s move over to the risk tank. ● Many advisors and clients focus solely on the investment tank for their financial future. ● It has potential for higher returns but remember it also brings risk into the equation. ● It also has a benefits list. ● So here are the accounts you would also expect to see on the investment side. ● When you click on any of those it brings up the benefits and considerations you need to take into account. ● Key point: Notice that there is not cap which signifies that money can evaporate from this tank. ● Have you ever had money evaporate on your? Well yes I think we all have. ● So the Risk Tank, although it does bring the capability for higher returns it also brings in the capability for loss.




● Now there is the tank connectors let’s talk about those for second ● It is these two little positions right there in the center. ● Notice they go both ways. ● At times you may want to move money from the safe tank to the investment tank to take advantage of a business or investment

opportunity at other times you may feel more comfortable having the majority of your money resting in the safe tank and wait for the next opportunity to come along.

● The tank connectors allow you flexibility and they play an important role in your peace of mind as you move closer and closer to your retirement years.




● Let’s review, very quickly. What is position A? o You got money coming in o It flows through monthly cash flow o It’s going to flow the tax filter – you are going to have to pay the government, o You need to put money away in these two tanks o So by the time you retire you have enough resources sitting in those accounts that you can open the distribution valves and have

enough money flow so you can live in the future just like you live today adjusted by inflation. ● It is pretty much that simple. ● A lot of things can get in the way and we are going to talk about how we can help you maximize your efficiency in those areas.

Personal Economic Model Opening Interview Personal ...Opening+… · Personal Economic Model ®...

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