Introducing the Easy Way to Economic 

Independence 
Congratulations! Here is Your First Weekly BUILD: Issue 

​ he Builders at Wealth Factory

Written By: T

Congratulations! You are now reading Wealth Factory’s premier publication

on building wealth.

In your first weekly issue you will discover ​the easy way to economic independence​ —
an important concept at Wealth Factory plus a major focus of BUILD: over the next 52
weeks. We’ll also introduce you to 3 members we’ve helped achieve it (one business
owner went from worrying about payroll to saving $100,000 in 9 months).

Then we’ll give you ​9 ways to start recovering cash flow​ — in many cases as soon as
next month — that we bet you’ve never seen before.

Finally, have you ever wondered the best way to pay down loans? Like which loan to
pay down first? Or whether to pay down more than one loan at a time? ​The Cash Flow
Index​ will show you the smart way to pay down loans to maximize your cash flow at the
same time.

Without further ado, enjoy your first BUILD: issue!

   
WF Lever: Strategically Engineer Wealth 
 

Introducing the Easy Way to Economic 

Independence 

Written By: ​Garrett Gunderson

Dr. Jordan Cooper, once said something to me that was pretty amazing.

He said that he went from worrying about being able to afford payroll, to filling his
Wealth Creation Account with $100,000 just 9 months later. (We will cover Wealth
Creation Accounts in the next issue.)

“I don’t worry about payroll anymore,” he said, “and I’m looking at doing this larger
multi-specialty project that I wouldn’t have had the cash to do a year ago.”

How’d he do it?

Somewhere in those 9 months, Dr. Jordan Cooper, a dentist from Arkansas, found
economic independence.

Economic independence is an important concept in BUILD: — so we want to make sure

you understand it in issue #1.

Economic Independence is when your investment income, or even your hands-off

business income, is greater than your expenses. (Hands-off business income is
business income that you don’t have to lift a finger to earn, because it doesn’t require
your direct involvement.)

Note that economic independence is not about accumulating wealth, like many believe
when they’re stuffing money into 401(k)s and IRAs. Instead it’s about cash flow — it’s
about income and expenses.
Once your investment income and hands-off business income outweigh your expenses,
then you’ve reached the inflection point where every extra dollar you make can go to
expand your vision, to reach the next level in your business, or to expand your
human-life value.

And you can spend these extra dollars without fear or guilt, because you’re not putting
your family or your home or your cars at risk. A lot of business owners do that, get
burned and then live the rest of their lives with a scarcity mentality.

Achieving economic independence will protect your abundance mindset — and that will
allow you to be more productive in your business.

So how do we reach economic independence?

The Hard Way to Reach Economic Independence 

Notice the word I just used is “hard,” not “wrong.”

The hard way is to increase your investment income. There’s nothing wrong with
working to increase your investment income, but it is a difficult way to reach economic
independence.

I’ve watched so many entrepreneurs take their mind off their business in pursuit of some
magical investment that will provide a “passive income.”

Real estate is the most common example. People get sucked into the hype of rental
properties and “mailbox money” even though real estate isn’t their area of expertise.
Soon they’re leaving their business during the day to sign papers, check out a “hot”
property or worst of all — to fix a leaky faucet.

Investment income is fantastic, but it will be easier to generate and you’ll have more
time to focus if you reach economic independence first.

Another hard way to reach economic independence is to grow your hands-off business
income.
Again, this isn’t the wrong way. Being in business is all about growing your hands-off
business income.

It’s just harder than the third way to reach economic independence, which is the easy
way.

The Easy Way to Economic Independence 

The easy way to reach economic independence — where your investment income and
hands-off business income are greater than your expenses — is to lower your
expenses.

It’s so obvious, but many people miss it.

By taking a close look at your cash flow stressors — like loans, taxes, investment
contributions that don’t provide cash flow etc. — you can make a plan to lower these
expenses so that you don’t require as much income to live wealthy.

It could be eliminating or restructuring inefficient loans, or asking for a second opinion

on your past 3 years of tax returns, or finally making the decision to let go of an
underperforming or mediocre employee.

Sometimes lowering your monthly expenses means doing the exact opposite of what
others advise you to do.

For example, a financial advisor may tell you to get a 15-year mortgage to save on
interest. But this will also make it harder to achieve economic independence because
your monthly bills will go up.

The minimum monthly payment is much higher with a 15-year mortgage than a 30-year
mortgage. It becomes a cash flow stressor.

Plus, nothing is stopping you from paying your 30-year mortgage off in 15 years if you
choose — there’s no penalty for paying extra each month. But having the option to
make a lower monthly payment will make it easier to achieve economic independence.
With a little knowledge and the right financial team helping you, it’s easy to lower your
monthly expenses and achieve economic independence.

For inspiration, let me introduce you to a few people who have done just that.

3 Stories on the Way to Economic Independence 

Dr. Gary Latimer and Samantha Sordoni

Dr. Gary Latimer and wife Samantha Sordoni found themselves in a classic situation for
successful private practices.

They were making a lot of money, and couldn’t pay their bills.

They had $20,000 on one credit card, and $15,000 on the other.

They worried about making payroll.

Yet just 4 months after deciding to find economic independence by recovering cash
flow, their lives completely changed.

They accessed money from their 401(k) to pay off their credit cards, which made perfect
financial sense. The interest they paid on their credit card balances year after year more
than squashed the one-time penalty and taxes for withdrawing the money.

They freed up $7,000 per month in cash flow just by restructuring their loans.

Suddenly they had extra money coming in each month which they could save for
emergencies and reinvest in their business.

Dr. Latimer says business is booming, and he’s invested in a speaking coach to help
him take it to the next level.

Kari and Jeremiah Jorgensen

For physical therapists Kari and Jeremiah Jorgensen, business was doing fantastic —
to the point where they needed to hire more help.
But the busier they were, the more they had to work on patients and the less time they
had to plan how to grow their business or hire new employees.

Finally, Brandon Allen, Wealth Factory’s business strategist, convinced Kari and
Jeremiah to stop taking new patients for a month. And during that time, they came up
with a plan to lower their expenses so they could hire new help.

They decided to pay off an equipment loan, which freed up $697/month.

They refinanced a business loan, which freed up $797/month.

They decided to temporarily stop making extra payments to their credit cards in order to
build an emergency fund first, which freed up $1,361/month.

They were also able to coordinate everyone on their financial team, which would give
them more time to run the business.

The results? They’ve doubled the number of physical therapists working for them and
they are busier than ever.

Dr. Jordan Cooper

We started this article by quoting something amazing Dr. Jordan Cooper said to me, but
let me tell you a little more about him.

Dr. Jordan Cooper built 6 dental practices in his first 6 years in business.

Clearly his business was successful, but the massive growth didn’t come without its
share of problems — including cash flow problems.

In Jordan’s first month working with Dale Clarke, our cash flow specialist, he was able to
recapture $15k per month just by restructuring and prioritizing his business loans.
Fifteen thousand per month recovered. With numbers like that, it’s not hard to see how
Dr. Jordan Cooper was able to add $100,000 to his Wealth Creation Account in just 9
months.

And the telling part is, Jordan’s financial advisor would have had him investing that
money outside of his business in mutual funds. Jordan even admitted he would have
done so had he not worked with Wealth Factory.

But Dr. Jordan Cooper feels much better knowing he has invested in his business — a
proven wealth-generator — and reached economic independence the easy way.
WF Lever: Recover Cash Flow 
 

9 Ways to Recover Lost Cash Flow and 

Grow Your Wealth 

​ arrett Gunderson
Written By: G

Want to improve your cash flow and grow your wealth? It’s easier than you think. Most
people think you have to make more money, but the easiest way is just to keep more of
the money you already make. And I don’t mean by cutting back or sacrificing; instead,
it’s about optimizing your cash flow and getting efficient with your finances.

Yet you’ll rarely hear a financial advisor tell you this. Why? Because there’s no
commission attached — but at Wealth Factory, it’s always the first place we start.

Here are 9 ways to recover cash flow and keep more of what you make starting as soon
as today:

 
#1: Do You Own A Car, But Are Buried Under High-Interest 
Loans Balances? 

High-interest loans are typically unsecured loans, like credit cards, which means there’s
no collateral to repossess if the borrower stops making payments. As such, the interest
rate for credit cards is much higher than for collateralized auto loans or mortgages, and
can range from 12-36%. In contrast, the interest rate for an auto loan usually ranges
from 2-5%.

That presents a possible opportunity for car owners with high-interest loans. Consult
your bank or credit union and ask about refinancing your car. This can be done even if
you have an auto loan for the car as long as you have equity in it — i.e. you owe less
than the car is worth. At the end of the process, the bank will write you a check based
on the value of your car, and you can use it to pay down the high-interest loans.

You can also refinance your home mortgage to accomplish the same thing — only
better because now the interest you’re paying is tax-deductible. If you go this route,
though, just be sure that it makes financial sense at the current mortgage interest rates.

  
#2: Are You Accidentally Hurting Your Credit Score? 

There may be no other number that affects your life as much as your credit score. A
poor credit score means a higher interest rate on credit cards, car loans, home
mortgages and more — and that can amount to paying hundreds of thousands of
dollars more in interest over your lifetime.

So a good or excellent credit score is vital, but did you know that you can pay all of your
bills on time and still have a poor credit score?

If your credit card balances are high, it doesn’t matter if you pay the monthly minimum
each month, your credit score will still take a major hit. It’s called your “utilization rate,”
and it measures how close your credit card balance is to your credit card limit. The
higher your utilization rate, the lower your credit score. And if you’re using more than
30% of your credit card’s limit, it could devastate your score.

But that’s not all. Even if you pay off your balance in full every month, your score can
still take a major hit. It happens if you use more than 30% of your limit during the month
— and your credit card company reports to the bureaus before you pay it off. Your credit
report will only know that your balance was higher than 30%, and not that you paid it off
a week later. So your credit score plunges.

So make an effort to pay off your credit cards or reduce your balance to under 30% of
your limit and stay there. This might mean making a partial payment in the middle of a
billing cycle.
Another smart move is to contact your credit card companies and request to increase
your credit limit. This way your balance will remain the same, but it will be a smaller
percentage of your total credit.

Do this and your credit score will likely improve within the next month. The next step is
to contact any remaining lenders and ask if they’ll refinance or reduce your interest rate.

 
#3: Stop Paying Extra On More Than One Credit Line 
 
Many times when people make an honest effort to pay down their loans, they try to
make progress on all of their balances at once. This is the shotgun approach, and it’ll
end up costing you in the long run. As an entrepreneur, it’s far better to pay off a loan to
get rid of its monthly minimum payment. That way you have more cash flow at your
disposal to invest in your business or pay off other loans.

So choose one loan and pay it off first. Once it’s paid off, you can apply the minimum
payment from that loan to other loans to pay them off faster and save on interest.

Note: We show you how to choose which loan to pay off in the next article, and it’s NOT
just the loan with the highest interest rate, ​Rocket Scientist Invents New Way to Pay
Down Debt​.

 
4. Choose to be an S Corp, C Corp or Partnership 

If you’re not incorporated, you can set up an S Corporation to differentiate your income.
You take a reasonable salary, which isn’t what you’re worth but what you’d hire
someone else to do that job. And then you can take the rest in distributions which is not
subject to the self employment tax. That’s a tax savings of 15.3% on your first $250,000
of income (if you’re married and filing jointly). And then 3.2% of tax savings on every
dollar after that.

In some cases, it’s worth taking a part of your business and forming it into a C corp. A
good example could be a medical practitioner who also sells supplements to patients.
You can form a C Corp for the supplement division of your business and you’ll pay less
on the first $50,000 of income for the C Corp than you would as an LLC or S Corp.

Are you a 1-member LLC? Then you’re not being as tax efficient as you could be. If you
add a partner, like a spouse, and give them just 1% ownership then you’ll be taxed as a
partnership — which uses IRS form Schedule K instead of Schedule C — which
reduces your tax liability.

 
5. Own a Building for Your Business? Charge Yourself Higher 
Rent 

If you own the building that your business resides in, a smart move is to make sure your
business is a tenant that pays rent — then charge yourself the highest possible rent that
is reasonable. Why? Because that money is going to be taxed at a lower rate than if it
came to you as salary.

 
6. You Can Also Charge Yourself Rent to Use Your Own Home 

It’s true — and it’s called the Augusta Rule. If you use your home less than 15 days for
a business purpose — for employees, vendors, or clients — you can rent your home out
to your business and get a check that is not subject to tax, yet is tax deductible for the
business.

How much rent can you charge? For a ballpark figure, look up how much it would cost
to rent a hotel banquet room at the same time. If you’re in Austin, that could be
anywhere from $2,500 for a regular night or $7,500 during South By Southwest. It’s
wise to check with your accountant when implementing this strategy.

 
7. Host a Company Meeting… in an Exotic Location 
It’s natural for your business to hold an annual meeting. I happen to think better in
exotic locations, so we’ve held our annual meetings in Whistler, Hawaii, Italy and other
inspiring locations — and you get to write off travel, lodging and 50% of meal expenses
along the way.

This is another strategy where it’s best to talk to your accountant ahead of time and
form a plan.

 
8. Give Your Business to Charity and Reduce Your Tax Liability 

If you have an established business, some day you may consider selling it — which
usually comes with a huge tax bill. Another option is to create a Charitable Remainder
Trust.

We once had a client selling his business, and he was going to have hundreds of
thousands of dollars of tax liability on his $1.7 million sale. But by using a Charitable
Remainder Trust, he got a tax deduction instead of a tax bill, and the full $1.7 million is
providing him income from the Charitable Remainder Trust.

When he dies, the charity will keep what’s left over. But in the meantime, he’s avoided
hundreds of thousands of dollars in tax, and he’s increased his cash flow by thousands
each month because there’s more money at work for him.

 
9. Start Your Own Insurance Company — Yes, Really 

Starting what’s called a Captive Insurance Agency can not only help to protect you from
risk — it can cut your tax rate in half. I personally own a Captive Insurance Agency, and
it works like this:

I can put money into the Captive Insurance Agency with pre-tax money. Then if I don’t
have an insurance claim, I can take that money out as a capital gain. So I took ordinary
income and turned it into a capital gain, which currently drops my tax rate from 37% to
20%.
This is, of course, an advanced strategy that we’ll be covering in more detail in a later
issue of BUILD:

 
Time to Take Action 

If you implement even just one of these techniques, you’ll be keeping more of what you
make, optimizing your cash flow and growing wealth without cutting back or sacrificing.
WF Lever: Recover Cash Flow 
 
Rocket Scientist Invents New Way to Pay 
Down Debt 

​ ale Clarke, former rocket scientist

Written By: D

“Which loan should I pay down first?” That’s one of the first questions we get when a
member decides to work with us in our Wealth Architecture program or 1-on-1.

It’s a great question and your financial health depends on choosing wisely.

Choose the right loan to pay down first and you’ll improve your cash flow, pay down all
your loans faster, and have the freedom to start saving and investing in your business
sooner.

Choose wrong — and it will murder your cash flow and be a heavy weight on your
finances and mind.

There’s a lot of bad information out there about paying down loans. And much of it
completely ignores cash flow.

So that’s why we created the Cash Flow Index to rank your loans in order of priority for
paying off.

 
The Cash Flow Index 

First, note that we favor focus over diversification when paying down loans. So instead
of paying more than the minimum payment to several loans, we pay the minimum to all
but one loan. The Cash Flow Index determines which loan that will be.
If you’re familiar with the Cash Flow Index, here’s a reminder of how it works:

Write down the balance and minimum payment for all of your loans, including your
mortgage.

Then put the relevant numbers for each loan into this formula:

Your Balance
Cash Flow Index = -----------------------------------
Your Minimum Payment

Next, write down the Cash Flow Index for each loan and compare them to this chart:

If your Cash Flow Index number is low, the loan is inefficient. Conversely, the higher the
number, the more efficient the loan.

Any loan with a Cash Flow Index number less than 50 should be paid off right away —
this is the danger zone. If the number lies between 50-100 the loan should be
restructured and or refinanced. And finally if the number is greater than 100, it’s best to
make a minimum payment on the loan.
 
Which Loan to Pay Off First? 

Here’s an example to show how this works:

Say you owe the same amount on a car loan as you do a student loan: $10,000. But on
the car loan, the minimum payment is $500 while the student loan’s minimum payment
is just $50.

Which is best to pay off first? Some would tell you to look at the interest rate, and
occasionally that can be a factor. But the Cash Flow Index reveals which would truly
help your financial situation the most.

Take a look.

Here’s the Cash Flow Index of the car loan:

$10,000 (loan balance)

----------------------------------- = CFI of ​20
$500 (minimum payment)

And here’s the Cash Flow Index of the student loan:

$10,000 (loan balance)

----------------------------------- = CFI of ​200
$50 (minimum payment)

The Cash Flow Index says you shouldn’t worry about the student loan, which is in the
freedom zone with a score of 200.

But it says that your car payment is in the danger zone with a score of 20, and you
should pay it off right away.

Why is the car loan more urgent than the student loan, regardless of the interest rate?
Well think about how you’ll feel when you pay off the car loan and suddenly have $500
more cash flow — every month — at your disposal.

Would you feel better paying off the student loan and having $50 in extra cash flow
each month, while still having a minimum $500 monthly car payment due? Probably not.

The other benefit is, now you can put that $500 per month that you freed up by paying
off your car loan to work in paying off your student loan even faster.

You could also use that money to build up savings, create liquidity, add to your peace of
mind, or reduce your debt-to-income ratio, which improves your credit — which can
then improve your interest rates.

 
The Caution Zone 

Now, that was a clear cut example where one loan was in the danger zone and the
other was in the freedom zone. But what if it lands in between? What if the Cash Flow
Index is in the cautious zone?

Then the answer is to restructure the loan. Talk to your lender about lowering the
interest rate, lengthening the payback period of the loan, or both.

This is something I do with Wealth Factory members on a regular basis.

In the time we have been using the Cash Flow Optimization process, hundreds of our
members have saved millions of dollars in cash flow. On average, we have showed our
members how to free up more than $2,800 per month. This has allowed them to pay off
debt faster, save more money, and create peace of mind.
 
Frequently Asked Questions 
Does the interest rate matter?

Yes, a higher interest rate is the tie breaker. If two loans you are comparing are four
points apart or less, then pay off the loan with the higher interest rate first.

How much savings should I have before considering paying off debt?

One to two months of monthly expenses. In dire cash flow situations, a temporarily cash
reserve is not necessary.

Does it ever make sense to go out of order of the cash flow priority?

Yes, in the case of low balance loans, use your discretion.

Build the Life You Love,

Dale Clarke

Dale Clarke is a former rocket scientist who listened to Garrett’s unique approach to
finance and was immediately hooked. He left his job engineering jet engines to create
the Cash Flow Optimization processes used by Wealth Factory today.
In Closing... 

​ arrett Gunderson
Written By: G

By now I hope you realize that Wealth Factory can be a game changer for your financial
life — AND your personal life — as you learn how to start living wealthy today.

We’ve put together a congruent, logical, consistent framework to help you manufacture
wealth and economic independence in a way that resonates with you as an
entrepreneur.

And you know, there are tax and legal advisers that do some of what we do...

There are business consultants that do some of what we do...

There are life insurance consultants and even some progressive retirement planners
that do some of what we do...

...but there is no one entity with a financial blueprint, complete set of tools and a robust
team working under the same philosophy that can bring you the comprehensive results
that we can at Wealth Factory.

Right now, if you have an accountant and a retirement planner and a lawyer — but
they’re all playing a different sheet of music — then what you have is an orchestra
without a conductor.

At Wealth Factory, we’re one team with one philosophy designed to help you start living
wealthy today.
And we look forward to sharing that philosophy with you over the next 52 weeks.

Until next time...

Build the Life You Love,

Garrett Gunderson