S.A.F.T.N.E.T. (Structural Adjustments to Financial Transactions for the New Economic Terrain)—The finance and banking protocols that monetarily compensate the consumer in this digital-age/fiat economy and enable consumers to pay off debt in 1/3^rd the time while saving 2/3^rds the interest.  Given the right product, the S.A.F.T.N.E.T. is the only tool that can both accurately project for retirement and most efficiently fund that retirement.

DIA (Deferred Income Account)—an insurance-based account wherein the policy is stripped down to the bare bones allowing for maximum funding, wherein there are guaranteed gains, no market loss, and is completely tax free when configured properly and the tax-free tenets are adhered to.

HHIP (Hybrid Health Insurance Program)—A health coverage approach wherein riders are used in conjunction with a major medical policy, wherein the riders not only cover any out-of-pocket deductibles, but also create a positive cash flow scenario in the case of a claim.  In this very low-cost approach, policy holders make money with claims.

AMP (Accelerated Mortgage Program)—An Australian banking-based concept wherein a mortgage can be paid off in one-third the time, saving more than one-half of the mortgage interest without making more money (for the average American household).

HELOC (Home Equity Line of Credit)—The HELOC is often the best vehicle through which to run this program.  If/When securing your own account, do not ask for a Home Equity Loan:  A “loan” will not work for this program, wherein a revolving Line of Credit will.

PLOC—Personal Line of Credit

BLOC—Business Line of Credit

CDSLOC (CD Secured Line of Credit) CD being Certificate of Deposit—For those with a less-than-stellar credit rating, one can deposit money into a CD (which money is locked up) where after the financial institution will offer a line of credit for as much (or 90%) of the funds locked up in the CD.

SSLOC (Savings Secured Line of Credit)—The same as a CDSLOC, wherein the funds in the savings account are locked up, where after the financial institution provides a line of credit for the amount of the savings account (or for a percentage thereof).

LTV (Loan to Value)—The amount that a financial institution will lend compared to the value of the home.  For example, an 80% LTV means that institution will lend up to 80% of the value of the home.  If the home has a $200,000 value, 80% of that amount is $160,000.  Therefore, they would loan up to $160,000 to you.  However, keep in mind that you must deduct your current mortgage (and any second mortgage) from that amount.  Therefore, if you owe $100,000 on your first mortgage, the institution would then lend you $60,000—up to 80% of the value of the home.

[Note:  Before the recession, many institutions lent 110% LTV.  Through the recessive period, most institutions will lend 80% LTV.  On a rental unit or second home, institutions will typically lend 50% LTV.]

Hybrid Mortgage—An interest only mortgage wherein the first 10 to 15 years are interest only, and thereafter any remaining balance is amortized over the next 15 years.  We prefer this mortgage, enabling low payments while the AMP scheduling enables you to accelerate the payments.

ARM (Adjustable Rate Mortgage)—These mortgages have various terms, normally 3, 5, or 7 years.  Before the 2008 recession, these mortgages carried a very attractive “introductory rate”, often 1% for the first year.  They also carried 4 different options of payments allowing the mortgage holder to rack up more debt by not meeting the minimum interest payments on the loan, thereby creating a negative amortization scenario.  It is these types of loans and tactics that, in part, have created the current economic crisis.

Insurance—a vehicle to mitigate or lessen risk.

Term Insurance—a policy that carries a death benefit (face value) paid out at the death of the beneficiary.  These policies are written (and paid for) over a set “term”, normally in increments of 10 years.

Cash Value Insurance—one of three different classes of insurance which include both a death benefit (face value) as well as an investment device within the policy wherein one accumulates cash.  These three classes include Whole Life, Universal Life, and Variable Universal Life.

Whole Life Insurance—a policy that normally requires contributions (via the premium) to be paid until age 100 (or pre-determined date), at which point the policy matures.  The policyholders typically invest “in the company itself”, and thereby earn “dividends” based on the earning of the company.

Universal Life Insurance—There are several variation of ULs, one of the most popular being the Equity Indexed Universal Life (EIUL).  These policies have become very innovative, allowing guaranteed gains, no market losses, and like the other classes of insurance allow the tax-free distributions when configured properly.

Variable Universal Life Insurance (VULs)—These are the policies responsible for much of the lost retirement dollars and lost home equity through the past two decades.  Unscrupulous companies and individuals sold the concept of taking equity from the home and placing it in the stock market through VULs.  It was a losing prospect for consumers, but a big money maker for these companies—and currently a windfall for the legal industry that is now targeting these unscrupulous companies for their business practices.

Loss and Rebound Cycle—This concept proves The Big Lie of investment brokers who claim that because the stock market gains an average of 7% annually, that your money will average 7% annually also.  The Loss & Rebound Cycle stipulates that when consumers lose 50% of their retirement fund, they must make 100% to get back to “par”—where they were before the 50% loss.  Using the Rule of 72s, one can easily figure how long it takes to make 100% (or to double) your money.  One can easily plot the annual percentage gain of the market, plug in any amount of money, and through simple math show that money on the stock market does not reflect the average percentage—but far below that.

Rule of 72s—This is a common mathematical formulation used by financial planners to show how long it takes to double one’s money.  To arrive at this number, one simply divides 72 by the annual interest rate of the investment vehicle.  If you gained 8% on the market, then it would take 9 years to double your money.  Therefore, if you had $100,000 in your 401k, but on 9/11 your account value fell 50% to $50,000, you now need to double your $50,000 to get back to where you were before the fall.  Whereas the S&P 500 has averaged approximately 8% over the past, it will take 9 years to get back to where you were.  Therefore, for 10 years or an entire decade (one year of Loss and nine years of Rebound) you made 0% on this money…certainly not an average of 8% per year.