Hi everyone,
I recently read an excellent marketing book called Made to Stick. There were so many great points in it that I entirely re-vamped my joint venture partner presentation. One of the things I included in the new presentation is a story. It`s been so increadibly effective, that I wanted to share it with you. Feel free to use it in your presentations and materials if you like it. Here`s how it goes...
I was recently reading about something called "The Latte Factor". Now, we all love a good latte. Just a short stroll down the block, Starbucks is the perfect escape from the office. A quick swipe of the stripe and seconds later you`re holding a delicious, enticing latte. It almost doesn`t seem like you`re spending money at all!
But you are spending money. $3.20 to be exact. Say, for example, you`re one of the many who drinks a coffee a day (after all, one a day isn`t bad right?). That`s $96 a month, $1,168 a year, or $5,840 over 5 years. When you add it up like that it seem shocking, and it truly is. Doesn`t it make you wonder, what else you could be doing with that money?
I`m going to use this example to show you how changing a single habit, like drinking a coffee a day, can change your financial future. That`s a bold statement, for sure. But pay careful attention to the numbers and I`ll show you how true it really is. In this example I`m going to use an investment property in Grande Prairie, Alberta. This is a real property that I already own.
The total investment to own this property is $67,000. Instead of using cash to buy it, you get a home equity line of credit on your home and use the bank`s money. The monthly interest payment on your line of credit is $265.21 ($67,000 * 4.75% ÷ 12). Your new property produces positive cash-flow though, and this rises over time as we increase rents. This partially covers your interest payments. Over the 5 years you hold the property, the total interest you pay is $15,912.50 and your total projected cash-flow is $11,609. Subtract one from the other, and the actual interest you pay is only $4,303.50.
But we`re missing one BIG part of the calculation. You`ve stopped drinking lattes! Add back the $5,840 you saved and actually still have $1,536.50 left over. Here`s the kicker. The $1,536.50 you have left is $0.87 a day over 5 years. That`s enough to buy a green tea, so really all you need to do is switch from coffee to green tea and you can own a cash-flow investment property in one of the hottest real estate markets in Canada!
This is just a fun example to put things in perspective. It`s important to realize, though, how powerful it can be to change one small habit and the positive impact it can have on your financial future. It`s my greatest desire for you to have all the health, wealth and happiness in your life that you desire. One of my mentors once told me something that`s really stuck with me over the years, "Success is merely a series of small, incremental steps in the right direction. Each one starts with a choice." I`ll let you ponder that while I enjoy a delicious green tea... Until next time. All the best!
I recently read an excellent marketing book called Made to Stick. There were so many great points in it that I entirely re-vamped my joint venture partner presentation. One of the things I included in the new presentation is a story. It`s been so increadibly effective, that I wanted to share it with you. Feel free to use it in your presentations and materials if you like it. Here`s how it goes...
I was recently reading about something called "The Latte Factor". Now, we all love a good latte. Just a short stroll down the block, Starbucks is the perfect escape from the office. A quick swipe of the stripe and seconds later you`re holding a delicious, enticing latte. It almost doesn`t seem like you`re spending money at all!
But you are spending money. $3.20 to be exact. Say, for example, you`re one of the many who drinks a coffee a day (after all, one a day isn`t bad right?). That`s $96 a month, $1,168 a year, or $5,840 over 5 years. When you add it up like that it seem shocking, and it truly is. Doesn`t it make you wonder, what else you could be doing with that money?
I`m going to use this example to show you how changing a single habit, like drinking a coffee a day, can change your financial future. That`s a bold statement, for sure. But pay careful attention to the numbers and I`ll show you how true it really is. In this example I`m going to use an investment property in Grande Prairie, Alberta. This is a real property that I already own.
The total investment to own this property is $67,000. Instead of using cash to buy it, you get a home equity line of credit on your home and use the bank`s money. The monthly interest payment on your line of credit is $265.21 ($67,000 * 4.75% ÷ 12). Your new property produces positive cash-flow though, and this rises over time as we increase rents. This partially covers your interest payments. Over the 5 years you hold the property, the total interest you pay is $15,912.50 and your total projected cash-flow is $11,609. Subtract one from the other, and the actual interest you pay is only $4,303.50.
But we`re missing one BIG part of the calculation. You`ve stopped drinking lattes! Add back the $5,840 you saved and actually still have $1,536.50 left over. Here`s the kicker. The $1,536.50 you have left is $0.87 a day over 5 years. That`s enough to buy a green tea, so really all you need to do is switch from coffee to green tea and you can own a cash-flow investment property in one of the hottest real estate markets in Canada!
This is just a fun example to put things in perspective. It`s important to realize, though, how powerful it can be to change one small habit and the positive impact it can have on your financial future. It`s my greatest desire for you to have all the health, wealth and happiness in your life that you desire. One of my mentors once told me something that`s really stuck with me over the years, "Success is merely a series of small, incremental steps in the right direction. Each one starts with a choice." I`ll let you ponder that while I enjoy a delicious green tea... Until next time. All the best!
