WHAT IS FINANCIAL

INDEPENDENCE?
This workbook is a supplement to the CFG Consulting LLC seminar and
James Cunninghams book Six Steps to Permanent Personal and Professional
Financial Independence.

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Workbook

Step #1: Define what Financial Independence

is.
What is Financial Independence?

The definition of Financial Independence is having a pool of

money large enough to produce an income stream that supports me
in everything that I want to be, do and have without depleting my
pool of money.
James Cunningham
What will this allow you to be?
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What will this allow you to do?

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What will this allow you to have?

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What will this allow you to feel?

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We need to determine some very specific figures to help you

establish a base of what financial Independence means to you.
(a) = _______________ Monthly Income
(b) = _______________ Yearly Income
(c) = _______________ Rate of return you will earn in retirement
(d) = _______________ Your pool of money
(e) = _______________ How much money you currently have for
Retirement?
(f) = _______________ Rate of return you will earn while
accumulating money.
(g) = _______________ Number of years until you want financial
independence (retire; if that is your goal)
(h) =________________ Amount of money that you need to save
on a monthly basis to achieve your Financial Independence goal (d)

Step #1: Determine exactly how much money you want to have per
month in todays dollars to meet the definition of financial
independence.

The definition of Financial Independence is having a pool of

money large enough to produce an income stream that supports
me in everything that I want to be, do and have without
depleting my pool of money.
Lets calculate this in after tax dollars.
I would like to have (a) __________________ / per month in after
tax dollars.

(Example: $20,000/per month)

This translates into (a) __________________ x 12 =

(b)________________ a yearly after tax dollar amount.

(Example: $20,000 x 12 = $240,000 per year)

Step #2 - Determine how big your pool of money need to be to

meet your definition.
What rate of return, will you earn in retirement?
(c)___________________
(We feel an 8% is a conservative and reasonable rate of return)
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Now, determine how big your pool of money needs to be.

Take your yearly income and divide it by the estimated rate of
return you willearn in retirement.
(b)________________ divided by (c)___________________ =
(d)______________________. Your pool of money!

(Example: (b) $240,000 divided by (c) 8% or .08 = (d) $3,000,000.)

(d) _________________ is the pool of money that you need to

have to pay for all your things that you want to be, do and have.
Now that you have determined what your pool of money needs to be,
take the next 10 minutes and decide what your life will be like once
you have achieved your goal.
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Step #3 now we need to calculate how much money you need to save
on a monthly and/or yearly basis to achieve your goals.
Answer the following questions:
1. How much money do you currently have in savings for your
retirement?
(e) _________________________

(This is the amount of money that you have earmarked for your
retirement and/or financial Independence. Do not include in this

amount any money that you have earmarked as emergency savings,

taxes etc. Only include your money specifically designed for
retirement.)
2. Determine a reasonable rate of return you can earn while you are
in retirement or in a phase of financial independence.
f) = _______________ Rate of return you will earn while
accumulating money.
3. Determine how many years you have from now until your desired
time frame to become financially independent.
(g) = _______________ Number of years until you want financial
Independence (retire; if that is your goal)
(h) =________________ Amount of money that you need to save
on a monthly basis to achieve your Financial Independence goal (d)

Formula (You need a financial calculator, please ask one of the

financial advisors to help you calculate
this number)
N = (g) __________ # of years
PV = (e) ___________ how much money you currently have.
I/YR = (f) __________ rate of return while your money grows
FV = (d)_____________ This is your pool of money.
PMT = (h) ______________ this is the monthly amount of money
that you need to saving on a monthly basis.

Did you get the result that you desired?

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How can you change your results?

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Another scenario
PV = (f) ___________ how much money you currently have.
I/YR = (g) __________ rate of return while your money grows
FV = (d)_____________ This is your pool of money.
PMT = (h) ______________ this is the monthly amount of money
that you need to saving on a monthly basis.
Another scenario
PV = (f) ___________ how much money you currently have.
I/YR = (g) __________ rate of return while your money grows
FV = (d)_____________ This is your pool of money.
PMT = (h) ______________ this is the monthly amount of money
that you need to saving on a monthly basis.
Another scenario
PV = (f) ___________ how much money you currently have.
I/YR = (g) __________ rate of return while your money grows
FV = (d)_____________ This is your pool of money.

PMT = (h) ______________ this is the monthly amount of money

that you need to saving on a monthly basis.

Introduction to the 7 areas of life.

Each person has a hierarchy of values that determine who we
are, how we life and what we do. As it relates to money and
Financial Independence, our value will determine whether we
live a live in poverty or in riches. A life of abundance or a life
of scarcity! A life of options or a life of limitations!
1. Physical
2. Mental
3. Spiritual
4. Social
5. Familial
6. Vocational
7. Financial
We think it is important to identify your values because we always
find time to accomplish our values. (For example: If one of my
highest values is my vocation, then do I always find a way of showing
up to work on time?)
We are going to take the next few minutes and answer the following
questions. This exercise will help us clarify our values because if we
are going to achieve financial independence, we have to see how we

need to link our highest values to saving money and achieving the
goals and dreams of financial independence.

1. How you fill your space?

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2. How do you spend your time?

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3. How do you spend your energy?

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4. How do you spend your money?

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5. What do you think about most?

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6. What do you envision or visualize the most?

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7. What is your internal dialogue about the most?

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8. What do you react to the most?

9. What do you set your goals to the most?

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(Person 1)
1. How you fill your space?
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2. How do you spend your time?
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3. How do you spend your energy?

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4. How do you spend your money?
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5. What do you think about most?
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6. What do you envision or visualize the most?
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7. What is your internal dialogue about?
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8. What do you set your goals to the most?
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(SPOUSE/PARTNER)
1. How you fill your space?
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2. How do you spend your time?
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3. How do you spend your energy?
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4. How do you spend your money?
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6. What do you envision or visualize the most?
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7. What is your internal dialogue about?
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8. What do you set your goals to the most?
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Exercise: Link your top values to saving money.
(Example: If one of my top values is spending time with
family, then I need to write down how saving money (link)
allows me to have more time to spend time with the family.)
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If your goal is to become financially independent, you have to
be able to have saving money as one of your top values.

Do you pay yourself first? (Savings)

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Do you pay yourself weekly? (Savings)
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Do you pay your taxes second?
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Do you pay your personal lifestyle and your overhead last?
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