A Cash Flow Control Structure for Automating Savings

Access to the Currence app is what you get when you upgrade your PEA membership to a new “Plus” account. So what is Currence, and how can it help both you and your client?

What is Currence for the Client?

For the client, Currence is a cash flow management app that allows them to save first. They do so by opening a “reservoir” account and redirecting all income into the account. Then, with your guidance, they choose how much income to take each month and have that deposited into their normal checking account. All of their expenses will continue as normal. The client simply adds their Currence reservoir in the middle to capture savings.

What this does is allow the client to save FIRST, unconsciously. That way there’s nothing to miss because it’s not going into their normal checking account. And if at any time their financials change, they have complete control to raise or lower their numbers.

Currence also allows the client to set a “target” for their reservoir. This is an amount of money that they wish to work up to. After hitting that target, they can use any excess to invest or save, including something like funding a new whole life insurance policy. This way the client has both an emergency/opportunity fund that can eventually be converted to whole life insurance or otherwise invested for additional passive income.

What is Currence for the Advisor?

As the advisor, you have the ability to enroll an unlimited amount of clients into Currence. While financial decisions remain the client’s on an individual level, you can see and access a dashboard that gives you insight into how your clients are doing. You can see who has reached their target, who is saving more money, who is struggling, etc. This gives you the capability to help tailor your work with your clients, and empower them to take control.

In other words, Currence is also a relationship tool that helps you stay connected with clients on a deep level and use the data you have to assist them. All the while, the client remains in complete control of their finances, so they can build the confidence and excitement to save more.

Proving that Currence Works in Maximum Potential

If you have clients who are skeptical of how savings can play a significant role in wealth-building, you can use the Maximum Potential calculator from Truth Concepts to prove it out.

Below, let’s put in information for a 35-year-old client with an income of $125,000 and no assets. Over a 35-year timeframe, you see that there’s a cumulative $4.375 million moving through this client’s hands. 


However, this assumes that the client never gets a raise or otherwise increases his income. If you input a modest 4% cost of living increase (no raise), the cumulative sum surpasses $9.2 million. That’s more than double the original sum.

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Assuming that the client could save all of that money at 4%, their income is now at $17.2 million. In other words, if they saved everything, they’d have $17.2 million cross their hands over a lifetime.

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By virtue of this chart alone, you can see that saving money is the single most important thing your client can do. However, life gets in the way, and no one can come out on the other side without some expenses.

Wealth Eroding Factors

So what happens when you add in all those expenses? At a 35% tax rate, your client is looking at a significant loss. While the cumulative tax cost is only about $3.2 million, it isn’t removed at the end. It’s taken out along the way. This means that there’s a compounding effect on the loss, thanks to the tax. So while your client has technically only paid $3.2 million, it’s cost them $6 million that they would have otherwise accumulated. 

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If you add debt and lifestyle expenses, you’ve still got an above-average saver (10% of income). And yet, the money leftover by retirement has still been significantly reduced. The costs your client has to pay all along the way just erode their overall wealth. And not just the money that comes through their hands. It also erodes future potential, and this proves how real opportunity cost is. If that doesn’t convince you (or your clients) of the power of opportunity cost, I don’t know what will. 

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Adding Currence to Improve the Picture

So, does this mean your client is doomed by this information? No! Let’s look at some practical steps that you could help your client move through to improve these numbers. 

For starters, what if we helped the client stop increasing their debt at the same rate as inflation? If you slash that rate from 4% to 2%, that action alone takes the client’s income longevity from just over 6 years to 14 years of income. 

(Note: An easy way to tell how many years of distribution the client has at their current expenses is to hover over the green compound number on the righthand with your mouse.)

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Next, let’s look at lifestyle. First, we can consider that not all lifestyle expenses are created equal. Some, for example, are going to increase with inflation over time that we have no control over. That’s expenses like groceries, the water bill, etc. Then, there are expenses we can control, like eating at restaurants, going on vacation, etc. 

To illustrate this, let’s split them. Let’s say that half (15%) of the client’s expenses are fixed with inflation, and the other half are discretionary. We’ll put the latter in the “Other Costs” column. The fixed expenses will be impacted by inflation, while the discretionary expenses are just that–discretionary. Let’s say the client does increase those expenses each year, but not quite at the same 4% rate that their income is increasing. By cutting that rate to 2%, the client has now increased their distribution income to about 23 years worth of income. 

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Finally, let’s consider what the client could do if they worked with some good CPAs who could reduce their tax bill to 31.5% from 35% Now the client is at 27 years of distribution income. 

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To top it all off, what if the client was able to get a 5% return instead of a 4% return? If so, they would now have essentially 40 years of distribution income. 

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Why Does Currence Make a Difference?

Realistically, the changes made to the client’s habits in this scenario are minuscule. They’ve only improved their savings rate to 13.5% from 10%> And yet, that small change has made a decades-long difference in their income.

The Currence app has helped people save an average of 38% of their income by helping them to adjust their habits. And they can do this all relatively painlessly (in fact, it even becomes something of a dopamine hit) using the app. It takes some time, but it truly helps clients to require their thinking about savings.

So if going from a 10% savings rate to a 13.5% savings rate can add over 20 years to a client’s distribution income, imagine what’s possible if they could save 38 percent? And even if they land somewhere between, they’re going to notice substantial changes in their lives. The Currence app will support your clients as they create this discipline, leaving them better off than if they tried to do it alone. 

Upgrade and Get Currence

The PEA community has the privilege of being some of the first people to use the Currence app before it launches nationwide. And, as a member of PEA, you get access to Currence at only an additional $100 to your membership (a significant discount). You’ll also have access to comprehensive training, and plenty of people ready to support you. In fact, you’ll have a whole community behind you, learning to implement Currence too. We look forward to seeing you flourish with Currence. If you have any questions or would like more information, please contact Janet at ja***@pe*.email.

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