THE THREE PHASES OF YOUR FINANCIAL LIFE

T H I N G S A B O U T M O N E Y Y O U M U S T K N O W T O A V O I D F A I L U R E P A R T 2 D I S T R I B U T IO N
Pedro M. Adao, Financial Counselor

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Intro to Distribution
Overwhelming response yesterday over 100 people requested to be part of a group of 25 very moved by the response and many of the passionate whys that some of you shared both via text and phone. I have been moved to get involved with your why in a deeper way. See this stuff works People will allow themselves to be inconvenienced when they get involved with your why. Evidence of this is me texting people at 11 PM last night, 100+ one on one meetings, talked to Ralph Rechnitz yesterday, he was in San Jose about to go into a meeting at 7:30 he lives in Discovery Bay, I believe Jennifer Dowd spoke at that meeting she lives in Modesto, Whats the point. People that have the ability to radically bless your life will allow themselves to be inconvenienced when you give them a compelling reason to. Communicate with your family. Spouse and kids needs to be on your team and understand why you are out of the house some evenings. Make up for it every opportunity you can. No pain no gain, I get it but All pain and no gain is a losing proposition for everyone. Will honor all the requests and will have information out to everyone in the next few days about the program and what to do to get started Quick Recap For those that may be just joining us today shame on you Just kidding we are in part 2 of a 3 part series called the Three phases of financial life. The three phases are accumulation, distribution, and lastly legacy Describe each of the three phases Yesterday we covered accumulation and some of the main points we discussed were: 95% of Americans have either failed or certain to fail in not having enough money saved for their retirement. They are not just coming up short they are coming up massively short having retirement underfunded by 80 95% with average retiree having only 50,000 saved. We learned the 4% rule which says thats how much can be safely withdrawn from an account without the risk of the account going to zero during retirement So for every $40,000 of gross income think of needing $1,000,000 in a diversified portfolio of stock, mutual funds, and bonds. Why so many are failing, insincere, self-serving advice from financial industry compounding money makes the institutions a lot more money than you can ever make, lack of discipline on our part mainly because we are not connected to our PURPOSE AND ASSIGNMENT NOT CLEAR ABOUT OUR WHY, so we get sucked why that is being marketed to us, debt, income/ earning gap, life events.

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Distribution Phase Distribution: That phase of life where you are turning to your investments to provide for your everyday expenses and material wants. Earned income from labor is now zero. What are the problems: 1. As we have seen statistically 95% of Americans are showing up with no underfunding gaps of 80 95%. What does that mean and what does that practically look like. Lifestyle of fear and worry Either forced to leave what little money they have saved in the market because they are desperate for any growth that may occur. If so that means they are also subject to the roller coaster ride of the market especially lately. I have included a 1 yr and 5 yr chart of the DOW. Imagine if your life savings was in a account with that volatility. Or either forced to be in all cash because have no tolerance for loss but now inflation is eroding your wealth and without any return Constantly facing compromise and undesirable prioritization decisions. Attached a sign that was posted by someone on the wearethe99percent website that reads that reads I am aged old and frail, I worked and paid taxes all my adult life, now I have to chose between medicine and food, it feels like a very slow death. I am the 99% 2. Not everyone has no money saved and yet many retirees or people near retirement are still gripped by fear.

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This was posted by an elderly person on www.wearethe99percent.com. We dont know anything about this person other than that they are apparently hopeless and have resolved to blaming the government for not having their needs met. This person assumed that working all their adult life and paying taxes was all that they needed to do to have a comfortable retirement. They were wrong and the problem is that for them it might now be too late to do anything about it. Our financial future is up to us. We are responsible and accountable for creating the life that we want.

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Distribution Phase What are the problems: 2. Many individuals that have saved and planned for retirement during an accumulation phase because they lack education and a plan for how to distribute end up bound with the worry and fear about outliving their assets. 3. Even very wealthy high net worth people have underlying fear of loss and dying broke especially f they were alive and have memories of the depression or heard horror stories from parents and grandparents, media scares the pants of people. Common Mistakes Made in Pre-Distribution and distribution 1. Trying to live on the interest only, Following the common thinking and relegating oneself to just the 4 percent. Must cant do it so as they see accounts shrink they are completely bound by fear. 2. Looking at all the assets as individual buckets, lack of a integrated coordinated distribution strategy. Success leaves clues: Peloton, or bids flying in a V 3. Time can still be on your side in retirement if you know what you are doing 4. Starting to draw on funds too soon. 5. Exposing oneself to either way too much risk or being overly conservative. Two extremes. 6. Not planning for a long term care event. This can wipe out even healthy retirement accounts. 2010 survey of monthly cost was $3131, That is approximately 36,000 a year. Average retiree has 50,000 saved.

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The above chart represents a 5 yr chart of the Dow Jones industrial average and the chart below represents the 1 yr chart. Consider being in or near retirement with your entire nest egg of $50,000 in the market subject to these ups and downs. Imagine the anxiety, fear, and worry produced from the uncertainty of what was going to happen next.

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Distribution Phase How much better will my life be if I have a passive income source like an ACN residual business when I reach retirement age? 1. Can continue to work the business even up and through retirement. Use bonuses to create immediate cash flow while continuing to build residual. Compared to other types of work that seniors find themselves doing continuing to build your business with ACN allows you maintain integrity and self confidence. 2. Delay having to touch what you do have saved. This is so significant only a picture can describe it well. Waiting a matter of 2 5 years can have a significant effect. It doesnt just add that same time to back end it has a significant multiplication effect when stacked with our integrated distribution strategies. 3. The more income you need that is being covered from your ACN business during retirement removes massive pressure from the amount of money and assets you have accumulated in retirement accounts, real estate, or any life insurance that might be owned. 1. Dont have to be forced into taking excess risk with what you have peace of mind 2. Dont have to feel guilty about spending all your money in retirement should you need to or chose to and not leaving any inheritance to your loved ones. You can will your ACN business. 3. You have a built in inflation hedge. As inflation moves through the economy do you think energy prices are going to up, what about cell phones and cell service, what about all the other things you guys sell. An ACN business has a built in inflation hedge as prices of services go up so does your check 4. Build it anywhere. Can make Wall St money while living on Main st.

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Distribution Phase
WHY am I covering this with you? Why has Robert brought me on this call? Are we tying to scare you? NO, NO, NO Fear is not Holy, its not righteous, it does not come from the loving God that created us. Fear is often used to manipulate and control people. Sell books, sell crappy investments like Gold, or overpriced systems for how to get rich on the internet or buying houses with no money, no credit, no experience We are not here to create fear or scare you. Our intention is to tell you the truth about the challenges of providing for our entire lifetime, however provide hope. If you apply the financial principles I will teach you and continue to build your income by leveraging the power of the ACN system by working it, you can and will succeed. Regardless of your age, your current financial situation. If you have breath and have the ability work you are still in the game. Some of you guys have been through hell, some of you guys may think you are still here. Right now just tell yourself Im still in the game. If you build your business out of fear then you will still be riddled with fear even when you have more money then you can spend. When you are in fear your prospective customers and partners will sense it and it will repel people. When you exude confidence and peace that you have something that is doing something for you that nothing else you have found both customers and partners will be attracted and want to be involved. What motivates people to make lasting change: one of two things Intolerable pain and/or massive vision for the future Your story, your why must address either or both of these issues. You must connect with the intolerable pain of your current life and or so clearly get a picture of the vision of your future that it pulls you into the right thoughts, actions, and habits. Your first assignment for those that are going to be working with me on our is going to be to provide some facts about yourself and current situation and your going to in writing tell me your why. Why you must succeed in this business, tip. If your why doesnt make you cry, your not there yet. Keep working at it. If your why doesnt move you it wont move me or anyone else.

THIS CONCLUDES THE NOTES FOR PART 2 - DISTRIBUTION

THE THREE PHASES OF YOUR FINANCIAL LIFE

T H I N G S A B O U T M O N E Y Y O U M U S T K N O W T O A V O I D F A I L U R E P A R T 2 D I S T R I B U T IO N

Pedro M. Adao, Financial Counselor 925-778-5626 Office 925-584-1312 Mobile Pma.adao@gmail.com