Step 1: Once they exceed $42,000 in the cash buffer, additional amounts are invested into long-term investments.
Step 2: The Lifestyle Paychecks are sent from the cash buffer, and new deposits replenish the cash each time. (We do this to avoid selling long-term investments every month. If an emergency comes up, we have the cash available to send to their bank within two business days.)
Step 3: If a short-term goal comes up, like a vacation in a year’s timeframe, we can send additional money to their bank savings account so that when their trip occurs, they have the cash in the bank to pay for their whole vacation. (If they spend a little more, we have them covered with the cash buffer.)
Step 4: In this hypothetical scenario, our married couple went from saving $500 per month to now saving $3,000 per month! (Remember, they are in their early 40s and are set to retire at 65 years old.) By leveraging Portfolio Payday, assuming they continue to save $3,000 per month for 25 years and earn 6% on average on their investments, they could have an additional $2.09 million saved toward retirement!
Step 5: What if, due to inflation or a new car, our couple needs to increase their monthly Lifestyle Paycheck to $14,500, thus retaining and saving only $2,500 instead of $3,000 per month? With all other factors staying the same, they would still have an additional $1.74 million saved—additional meaning in addition to their other accounts, like their 401(k)s, 403(b)s, IRAs or other type of retirement plans or investments.
The goal of Portfolio Payday™ is to get you to a more robust retirement sooner, giving you the chance to achieve your retirement goals at the earliest age possible. With Portfolio Payday, you are your own boss, paying yourself today and in the future.
To schedule a meeting to discuss your cash flow and see how Portfolio Payday can help you, set up a consultation now!