60k Salary Sacrifice

Employee saves $16,900 – Income Tax @ 24% ($12,400) PLUS FICA $4,500)

Employer buys $40k of CC services – saves $4,590 FICA on $60k

CC pays Income Tax $8,400 *(21%)

 

Employer .provides temporary finance to worker $4,000

CC lends $16k to Worker for Personal 401k Contribution

Worker gets rebate $4,000 for $20k (max) 401k Investment

Repays Employer $4,000

Employer makes matching contribution $20k using retained salary _No tax to worker who saves income tax and FICA on $30k of Salary Sacrifice *($7,200 + $2.750)

Employer get tax saving of $4,200 for 401k contribution.

Worker borrows $20k from 401k to REPAY CC $20k

CC has $51,600 – from worker $20k Loan Repayment (no tax) Plus $31,600k ($40k less tax of $8,400)

CC Lends Worker $36,000 to meet personal expenditures (reduced cash after Salary Sacrifice)

cc RETAINS $ 51 ,600 – $36,000 = $15,600business Cash Flow Recycling & Repositioning

$10,000 Reinvested in to Employer Business with 30% equity – body guarding in JV under CC Control

 

Has to make $20k a year to ensure funds are there year 5 and on to ensure repayment of 401k loans.

 

CC expenses $1,600

$4,000 Invested for future distributions;

Agents $2,000 –

  • First Line Capital Loan zero interest (5 years)
  • Second Line – $500 – Expense Allowance
  • Third Line – $500 Over-ride (10 year loan)\
  • Agents pay no tax on loan amounts – only on allowances and maybe on investments if they are not too smart.

Cash flow recycleAn alternative to spending the $10k on marketing is to amalgmate capital for acquisitions and accelerate scaling