2 Line Cashflow Ratio Model

Everything that we do needs to be represented on cash flow because whether it's our salary or income, future pension, social security, or future investment income, our world is based around cash flow. This whole model, this whole assessment is based around a cash flow ratio between how much money you're consuming and how much money you're saving.

Consumption vs. Savings

The consumption is based on any dollars that you lose, whether you lose it to paying taxes, buying a coffee, incurring a necessary business expense, or any time you lose, spend, or use a dollar. You don't just lose that dollar, but you lose what that dollar could earn you for the rest of your life.

Understanding the Better Wealth Assessment

This is Better Wealth with Caleb Guilliams. Welcome to the first ever Better Wealth Assessment! I'm excited that you are here, and this assessment is ready to go live. I want to break down the philosophy and brilliance of how this model and the assessment were designed.

• It's not based on a strategy or theory; it's based on math.
• We want to give you a mirror to see how you're currently doing.
• Answer tough questions like how much money you need to be saving.
• Make key pivots for better financial management.

Graphical Representation of Cash Flow

I'm drawing a dollar sign, and this represents cash flow. Everything that we do needs to be represented on cash flow because, as stated, our world is based on cash flow.

Inflation and Its Impact

We need to understand inflation, which makes our dollars less valuable. For example, if a family was making $100,000, saving $10,000, and consuming $90,000: they need $90,000 now, but much more in the future to maintain the same lifestyle because of inflation.

Calculating Your Financial Future

We're assuming an inflation rate of 3%, a 7% investment return rate before retirement, and conservatism for post-retirement. Including Social Security, pensions, and other accounts help make this snapshot more accurate.

1. Your initial savings and how much you save annually.
2. Projected income increase by 3% annually.
3. Expected retirement age and lifestyle maintenance costs.

The Red Line and Green Line

The concept is to keep the red line, representing necessary income, balanced with the green line, representing savings growth. Most people find a gap because of unseen factors like inflation, taxes, etc.

Tools and Recommendations

Factors like tax efficiency, money tracking, and growth strategies can help you align your financial future.

• Maximize current savings potential.
• Explore financial strategies for better ROI.

In Conclusion

This Better Wealth Assessment offers a snapshot of where you are and what needs to be changed to stay in balance. If this model seems off, remember: there are solutions, and working with someone skilled can help maximize your financial potential.

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