The Walker Team takes a different approach to mortgage lending. We see the mortgage as the financial base of wealth success. Why? Because a mortgage is no longer just a monthly payment, it is a valuable financial tool meant to be integrated into an overall financial plan.

When banks compete you lose! Their interest isn't in advising you on the best financial strategy for your particular situation. Their interest is in getting your business by confusing you with points, rates, fees and programs. Most lenders succeed by isolating you and your financial interests without making any professional recommendations. They don’t need to think about your best interests. They just want to start earning interest on your loan!

The Walker Team educates and empowers clients how to best plan and manage debt and cash flow to create wealth. We believe saving money is not the same as making money. Typically, in an effort to save money on a mortgage most people will shop around for the best rate and fees, instead of focusing on how the mortgage should be used to enhance their wealth. Our intellectual wealth transformation strategies are accomplished through our strong partnerships with Financial Consultants, Certified Public Accountants, Real Estate Agents, Insurance Consultants and Estate Attorneys to create a well-rounded financial plan for our clients.

Our comprehensive planning approach incorporates both liquidity and safety, rate of return and tax deductions, assets and debts, and economic and demographic principles. The way we choose to handle our clients’ unique financial situations results in difference between a retirement of Top Sirloin versus Top Ramen.

With nearly $100 million in loans under management, Dirk has found most consumers go about structuring and managing their mortgage, debt and cash flow ineffectively. Traditional thinking about a mortgage is a mindset resulting in a fiscal trap. The rules of money have change and so should mortgage strategy!

The Walker Team would be happy to provide you with a complimentary Mortgage, Debt and Cash Flow review to see how the principles of [PM]2 sm and of the Bank of You Paradigmsm can help optimize your wealth accumulation goals.

Please call us or sign up for one of our educational seminars today!

 
We are Living Longer.
  • A 65-year old American husband and wife couple has a 50% chance that one of them will live at least 27 years to age 92 (source: On Wall Street, SOA).
  • In 1950, the average 65-year old American male had a life expectancy of 12.8 years and the average 65-year old American female had a life expectancy of 15.0 years. In the government's latest studies, those life expectancy numbers have been stretched to 16.6 years for a 65-year old male and 19.5 years for a 65-year old female (source: National Center for Health Statistics).
  • 62% of workers believe their retirement will last 20 years or less. An average 60-year old male has a life expectancy of 20.4 years while his female counterpart has a life expectancy of 23.8 years (source: Principal Financial Group, National Vital Statistics Reports).
  • The life expectancy of a new-born American is 77.9 years today, nearly 10 years longer than the life expectancy of 68.2 years that new-born Americans had in 1950 (source: Center for Disease Control).
We are poor Savers.
  • The personal savings rate fell to a negative 0.6% in 2005, the lowest level ever recorded. The rate is defined as "savings" (i.e., after-tax income less consumption spending) divided by after-tax income. (source: Department of Commerce).
  • A negative savings rate means that Americans dipped into their savings accounts, spent profits from investments, or used credit and home equity lines to buy more than they could have if they had only spent what they earned. (source: Amy Noel Inc.)
  • 46% of workers surveyed anticipate that even though they will work until age 65, they will not accumulate enough assets in order to retire comfortably at that time (source: Transamerica Retirement Services).
  • Less than 1 in 3 Americans surveyed (30%) have determined what lump sum amount will be needed in the future to fund their desired retirement lifestyle after their working years end (source: Wachovia, Richard Day Research, Money Magazine).
If we are saving, it is likely not enough.
  • One rule of thumb that needs to be updated is the idea that you will live comfortably on 70% to 80% of your pre-retirement income after you retire. More than one half of retirees reported they spent 95% to more than 105% of their pre-retirement income during 2005, according to a recent survey by the Employee Benefits Research Institute (EBRI). One of the reasons is growing health care costs. A 2006 EBRI survey found that 55-year-olds who live to age 90 will need to have at least $210,000 saved by age 65 in order to pay for out of pocket medical expenses and insurance to supplement Medicare during retirement. EBRI suggests adding 20% or more to your pre-retirement income that you plan to replace at retirement.
  • MAKING THE FUNDS LAST - $1 million in retirement savings (i.e., in a pre-tax account) will last 28.6 years while producing a static monthly withdrawal of $6,000 (gross withdrawal before taxes) assuming the savings continue to earn +6%. If the funds earn 1% less or +5%, the withdrawals would last 23.3 years (source: BTN Research).
  • A lump-sum of $995,000 will sustain a 20-year pre-tax payout of $100,000 per year ($70,000 after-tax) assuming the funds continue to earn 9% annually. If the rate of return achieved is only 6%, a lump-sum of $1.22 million, or 22% more money, is needed to fund the $100,000 annual payment (source: BTN Research).
  • To accumulate $1 million in a tax-deferred account earning a static +7% over a 30-year period requires monthly contributions of $850. To accumulate $1 million in a tax-deferred account earning a static +7% over a 20-year period requires monthly contributions of $1,959 (source: BTN Research).
Corporate sponsored defined Benefit and Contribution Plans are either being eliminated or cut back.
  • 36% of the US workforce is contributing to either a 403(b) plan or a 401(k) plan. There are approximately 6 million public service employees (mostly teachers and hospital workers) contributing to 403(b) plans today. There are approximately 42 million employees participating in employer-sponsored 401(k) plans today (source: DOL, Kiplinger's Personal Finance).
  • Only 30% of small business owners (i.e., those employing less than 250 workers) have an employer-sponsored pre-tax retirement plan (source: NFIB).
Federal Entitlement Programs (Social Security, Medicare, and Medicaid) will need major revisions.
  • Social Security Trustees announced in 2004 that the trust fund backing the payment of Social Security benefits will be zero in 2042. A year later in 2005, their estimate moved to 2041 when the funds will be depleted. Last week (5/01/06), the 2006 report concluded the trust fund, worth $1.66 trillion as of 12/31/05, will be gone in 2040. A zero trust fund does not mean the payment of Social Security benefits would also go to zero, but rather would drop to 74% of their originally promised level (source: SSA).
  • The projected Social Security shortfall today (i.e., a present value number) between taxes anticipated to be collected and benefits to be paid out over the next 75 years is $4.6 trillion. The entire deficit could be wiped out by either an immediate +16% increase in Social Security tax revenues or an immediate 13% reduction in Social Security benefits (source: SSA).
  • The problems facing Medicare are even worse than those of Social Security as benefits being paid out of the Medicare program are expected to exceed tax revenues from 2006 forward. The Medicare trust fund is projected to be depleted by 2018 or just 12 years from now. The long-term (75-years) present value shortfall in the trust fund could be corrected by an immediate 51% reduction in program benefits (source: SSA).
  • An individual retiring in 2006 who is eligible for the maximum social security benefit will receive $2,053 per month or $24,636 per year (source: Social Security Administration).
Marginal Tax Rates are very low while Federal and Trade deficits are very high.
  • The highest federal marginal tax bracket in 2005 is 35%, effective at $326,450 of taxable income for a joint return. Twenty years ago (1985), the highest federal marginal tax bracket was 50% effective at $169,020 of taxable income for a joint return (source: Tax Facts).
  • For the first 9 months of fiscal year (FY) 2006, the US government has taken in $794 billion of individual income taxes, up $100 billion over the same 9 months in FY 2005 (source: Treasury Department) The 2006 Federal deficit will be in excess of $300 billion.
Consumer debt is out of control and a major drain on our ability to save.
  • About 60% of credit cardholders carry credit card debt from month to month (source: Cardweb.com)
  • The average credit card balance for household that carry a balance is more than $10,000 (source: Consumer Federation of America)
  • Revolving debt, which is almost entirely credit card debt, increased from $554 billion to $730 billion between 1997 and 2002 (source: Federal Reserve Bulletin, 2002).
Most households have a severe lack of liquidity.
  • One in three households is only three missed paychecks away from not being able to make their mortgage payment (source: BTN Research)
  • Do you have a cash cushion of at least six months?
Home equity is a poor investment.
  • 85% of American homeowners within 10 years of retirement view the equity in their homes as a reliable source of income during their post-employment years (source: Prudential REA).
  • Houses are meant to house families not store cash. No matter how you look at it, investing in home equity has a zero rate of return, is illiquid, is not safe from loss of principal, and can increase your tax liability (Doug Andrew, Missed Fortune, 2002)
  • "Why People Hate Mortgages-and Why You Shouldn't: Carrying a mortgage doesn't cause you to lose any money at all. In fact, just the opposite is true: carrying a mortgage is actually quite profitable. It's eliminating the mortgage that forces you to give up profitable opportunities." (source: Ric Edelman, Ordinary People Extraordinary Wealth, 2000)
Conventional Wisdom is counterproductive.
  • The American Dream is to own your home outright and save to create the biggest retirement plan you possibly can. If we are successful at this endeavor, or even moderately successful at accomplishing this feat, then we will have set ourselves up to have forgone the opportunity to create an additional $1-3 million in wealth and will pay back to the IRS more than 20 times the amount we should have. (source: Dirk Walker, 2006)