buy term

Buy Term and Invest the difference

Many people struggle over which type of life insurance makes the most sense for their situation, term insurance or permanent insurance. The difference between the two comes down to cost. Some experts will question why you should pay for an expensive permanent policy when you could buy term (which is way more affordable). With the savings, you could invest in a mutual fund, annuity, stocks, bonds, or other investment vehicles. The idea is that investing that “difference” (premium savings) would replace or exceed the cash value accumulation of permanent insurance.

If you decide if this strategy is right for you, you need to consider what best suits YOUR objectives and circumstances seriously. Think about this:

  • You may not have the discipline to invest the difference.
  • Suppose you need to renew or reapply for your term policy. In that case, the cost may become prohibitive as you get older or develop health problems.
  • If health problems occur, you could become uninsurable and not even purchase term insurance when renewing your policy.
  • The difference between your term insurance premium and the amount of the premium for your permanent insurance is substantial. It would be best if you had the discipline to invest the difference and invest early. You will need to make up for the dramatic increase in term insurance costs at later ages.
  • The investment you choose may not perform as you hoped.

Please make sure to weigh your knowledge about your habits carefully. Also, be sure to review the benefits, risks, product features, and any current or future charges associated with any insurance and investment product before deciding how to address your particular needs. When in doubt, schedule time with a professional because they can help you sort through all your options and ultimately make the decision that will be in your best interest.


The #BuildWealth Movementworks tirelessly to Disrupt Generational Poverty™ for everyone so their kids, kids, kids can live a life of privilege.

IRA's

All IRA’s Are Not Created Equally

The individual retirement account (known as the IRA) was created to allow people to stash away money for retirement on a tax-favorable basis. There is a variety of IRA’s; some are specifically for individuals and others serve business owners. From banks to mutual fund companies to brokerage firms, numerous financial institutions will allow you to open such an account. Most people might not be aware of this but there is a huge difference between a bank IRA and a brokerage IRA.

Bank IRA’s are a great place to put your retirement dollars if you are looking for safety and security. Such accounts will utilize certificates of deposits (CD’s) or other safe options like money market funds to invest your dollars. You can be assured that by having your money here, you will not lose a cent. Plus, having your funds placed there allows them to be protected by the Federal Deposit Insurance Corporation (FDIC). Some banks may offer riskier options, like mutual funds (which are not covered by the FDIC), but the safe options are primarily what you will typically see. This doesn’t seem like a big deal on the surface; however, playing it too safe with your retirement dollars could hurt you in the long run. By their very nature, banking solutions are low-yielding; thus, this will subject you to purchasing power (your dollar today won’t be worth much in the future) risk over time due to inflation. IRA’s were designed to be utilized as a long-term financial instrument, which means it isn’t wise to use CDs or money markets (which are more geared towards short-term goals) to fund your retirement. A bank IRA makes perfect sense if you are within a couple of years of retirement because you can’t afford to be too risky only since you don’t have enough time to make up any losses. Or, if you don’t have the appetite to take any substantial risk with your money, this option is also appropriate.

The brokerage IRA enables you to purchase securities… stocks, bonds, mutual funds, exchange-traded funds (ETF’s), etc. However, by purchasing securities, you are adding more risk to the equation. Unlike the bank IRA, you could lose some of your initial investment and you will see your account balance fluctuate over time. This usually scares people but have you ever thought about your retirement account in this manner. What if retirement is 10/20/30 years away, and the market is down and as a result, so is your account balance. If you’re not at retirement age, meaning you do not need these funds, then you have only “lost” on paper. Why exactly are you worried? Most people don’t have an excellent response to that; thus, we need to change the way we think about short-term news concerning our long-term accounts.

No one individual has control over the stock market, but over the long-haul, having money in the stock market can be extremely rewarding for your brokerage IRA. The neat thing about the brokerage IRA is that you can invest in a money market type of fund, along with the other riskier solutions. The one thing you want to avoid is having a brokerage IRA open and ONLY having money market funds within it. This happens quite often because people will rollover funds from an old 401k or 403b and the money will sit in a money market fund (which is the default), not being invested. Or, they will open a brokerage IRA, fund it, and never make a decision on what to invest in. Take full advantage of all your options within the brokerage IRA.


The #BuildWealth Movementworks tirelessly to Disrupt Generational Poverty™ for everyone so their kids, kids, kids can live a life of privilege.

50.20

50/20/30 Plan

The budget is the quintessential piece of any financial game plan; however, it tends to be a considerable challenge for most people. Some people have even done away with using the b-word because of its negative connotation. Why is it so negative? Well, anytime you hear the word budget in the news, it’s because the government can’t balance it, and some item needs to be eliminated.

You rarely hear the word “budget,” and something positive comes out of it. This is the exact reason why the average person has such a hard time doing a budget. They are continually witnessing a group of people (the government) struggle to spend money appropriately. Then they look at themselves in the mirror and figure they pretty much don’t stand a chance against the abominable budget.

What’s the solution? For starters, people need to begin to use a spending plan instead of a budget. A spending plan sounds so much friendlier. Plus, we all love to spend money, so why not focus more on our spending habits instead of cutting things out of our lives. A simple paradigm shift is the answer.

All spending plans are not created equally and you must find one that fits your personality. The 50/20/30 plan is a simple spending plan that most people might like regularly doing. Here’s how it works: Once you get your paycheck, no more than 50% of it should be spent on essentials; your rent or mortgage/food/transportation/utilities. 20% should apply to financial obligations; savings, retirement, insurances, investments, paying off debt. 30% applies to your lifestyle; whatever else you want to spend your money on, it’s up to you!

The 50/20/30 plan is a basic framework and its simplicity is the reason you might stick to it. Plus, the fact that you’re free to spend 30% of your money on whatever you want should make you a bit happier about doing a spending plan each month.


The #BuildWealth Movementworks tirelessly to Disrupt Generational Poverty™ for everyone so their kids, kids, kids can live a life of privilege.

timeless tips

5 Timeless Financial Tips

Most people would agree that discussing your finances can be extremely challenging. The biggest hurdle that plagues us – – getting started. Like anything else, when it comes to beginning your journey to financial glory, you must set a goal. Once the goal is set, now it’s time to take action.

Of course, there are no “one-size fits all” type of approach, and no matter where you are in your life, you may need to address one or all of the following as it applies to your financial game plan:

(1) Create a spending plan (also known as the budget).

How much do you earn? How much do you spend? How much are your bills each month? How much do you save/invest? Try your best to stick to a spending plan each month and have someone hold you accountable when you do not stick to it. Please do not beat yourself up if you don’t stick to it each month because it’s hard to change your spending habits overnight. Grade yourself on a 3-month basis because if you can manage this over an extended period, then guess what, you’ve created a brand new habit! And if the conventional way of “budgeting” doesn’t work for you, consider an alternate strategy, like the 50/20/30 plan.

(2) Pay off credit card debt.

We all know that credit card companies make money off the interest they charge on your account. Here are a couple of tips: 1) Stop spending money that you don’t have; 2) Pay off the card with the highest interest rate; 3) Consider paying off the smaller balance (this will give you the emotional jolt to continue to fight against the larger balance) 4) If possible, pay more than the minimum payment each month. 5) Try the debt-snowball technique

(3) Build an emergency fund.

Make sure to have between 3-6 months worth of living expenses saved at all times. Or for those over-achievers, considering having 9 months to 1 year’s worth. This may be a challenge, but you will never be upset with yourself for saving money when an actual emergency pops up.

(4) Determine personal insurance needs.

Many people may be uninsured or under-insured, which could prove detrimental to your overall financial game plan if the unexpected happens. Consider your situation and see if life insurance and disability income insurance provided by your employer will sufficiently cover your needs. If need be, consider owning personal insurance outside of what is offered through your job. Please note, if you change jobs or lose your job, you will typically lose those employer-provided benefits because the employer is paying the premiums; thus, you don’t “own” the policy. Personal policies can help ensure that you’re protected, no matter where you work or what happens with your job situation. Also, your age and health play a HUGE role in how an insurance company will set the price of their policy, so please keep that in mind.

(5) Begin/review your retirement plan.

We all work extremely hard, but what do we have to show for all our years of service? Many companies are doing away with pension plans; thus, the responsibility of putting money away for retirement falls on our shoulders. Take advantage of your employer-sponsored retirement plans like a 401(k) or 403(b) because these plans allow you to invest monies tax-deferred. An excellent benefit of these plans is that they take money out of your check before getting paid. There are also ways to save for retirement outside of an employer-sponsored plan. Consider opening an IRA (traditional or Roth) or a brokerage account. An annuity or life insurance contract could also be an option. If you decide to save for retirement outside of your employer-sponsored plan, consult with a financial professional. You’ll need to be aware of contribution limits, tax treatment, and how the accounts work.


The #BuildWealth Movementworks tirelessly to Disrupt Generational Poverty™ for everyone so their kids, kids, kids can live a life of privilege.

5 reasons

5 Reasons to Buy Life Insurance

Did you know that life insurance is not for those who die? It’s for those who live. Suppose you die and have life insurance in place. In that case, the people you love and care about (your beneficiaries) will receive a sum of money. They can use this money for anything; however, its primary purpose is to help make up for the loss of your income. The money that they receive is generally free of federal income tax and is usually used to address the following:

  1. Daily Living Expenses: help maintain your family’s lifestyle by replacing your current income. The proceeds can help make sure there is food in the refrigerator, utility bills covered, the car loan payment is on time, etc.
  2. Home: help protect your family’s home by enabling them to pay off the mortgage. It’s crucial because it can help them stay where they are comfortable and in a place that’s filled with memories.
  3. Education: help safeguard your child’s future by keeping the college fund intact. This will ensure that there will be money for their education no matter what
  4. Final expenses: help provide funds to pay estate taxes and other expenses, such as funeral costs, outstanding medical bills, etc. This will prevent leaving a financial burden while your family grieves.
  5. Retirement: help ensure a solid retirement for your spouse or partner since you’re no longer there.

While individual needs can be covered by life insurance, it also comes in handy for a business owner. Having life insurance can aid with business continuation. Life insurance can help keep the business in the family according to your intentions. There are many layers to the fantastic product called life insurance, and now, you know the “why” behind it.


The #BuildWealth Movementworks tirelessly to Disrupt Generational Poverty™ for everyone so their kids, kids, kids can live a life of privilege.

soon to be parent

5 Planning Tips for the soon-to-be parent

The best time to get money-wise about parenthood should be before a child is born. Most soon-to-be parents are probably thinking about all the glorious elements of being a parent; the snuggling, baby baths, feeding, or changing diapers. The last thing newly minted parents are thinking about is making sure their family is set up for financial success. If you are a parent-to-be, preparing ahead of time will enable you to think through all your options and create a solid financial plan.

1.      Create a (parent) budget

When a child arrives, your family budget will change dramatically. Make sure to factor in the cost of diapers, baby formula, child-care, clothes, toys, and the list goes on.

2.      Start an emergency fund

Start saving three to six months of household expenses in an account that you can readily access. For those who wish to be a bit more aggressive, aim for six to twelve months.

3.      Review your insurance coverage

The primary goal is to make sure your family can continue to keep the household going financially if something unexpected were to happen. This involves you conducting a thorough analysis of your life insurance, along with short- and long- term disability insurance.

4.      Think retirement before college

Students have options for funding their education – – grants, scholarships, loans, and any savings or investments you’ve put aside. You don’t have such a variety of options to fund your retirement, nor can you make up for that time lost. Understandably, you want to provide proper funding for your child’s education. Still, your financial independence should be the top priority.

5.      Make an estate plan

Make sure your family’s wishes are carried out in the event something happens to you. Your family’s details will end up in court with a judge deciding what he or she thinks is best if you don’t have documents such as a will, trust, or power of attorney.

Please make sure to speak with a financial professional as it relates to these tips. Doing so will ensure that you and your family will have peace of mind related to your financial decision making.


The #BuildWealth Movementworks tirelessly to Disrupt Generational Poverty™ for everyone so their kids, kids, kids can live a life of privilege.

5 estate planning

5 Important Estate Planning Documents

One of the most valuable gifts you can leave your loved ones is a properly prepared estate plan. During your lifetime, you will have worked hard to acquire various assets (hopefully). When you leave this earth, the choice is yours about who/what gets those assets. However, this won’t happen without proper planning. Please don’t leave it to the state to decide what happens to your assets upon your death. The first thing you should do is touch base with an estate planning attorney. They are well versed in the legal requirements for the state in which you reside.

Here are 5 estate planning documents that you should familiarize yourself with:

1.      Last Will and Testament – a will is a legal document which allows you to:

  • Designate who will receive your assets after your death; this avoids having your assets divided according to the state’s formula
  • Nominate an executor; they will manage your estate, pay your expenses, debts, taxes, and distribute your estate according to the instructions in your will
  • Nominate a guardian for your minor children

2.      Durable Power of Attorney for Health Care

  • With this document, you name a person of your choice and agreed to make a medical decision for you. This person will act on your behalf in health care matters if you cannot make those decisions. This authority expires upon your death.

3.      Revocable Living Trust

  • In a revocable living trust, your assets are transferred into a trust, generally administered by you for your benefit during your lifetime and transferred to your beneficiaries upon your death, without the need for court involvement. Your Last Will and Testament, which is supplemental to your trust, cover any assets that have not been transferred into the living trust. A revocable trust allows you to retain control of your assets during your lifetime, quickly transfer them to your beneficiary upon your death and avoid the expense and delay of Probate Court. This trust also helps to reduce or eliminate any federal estate taxes.

4.      Durable Power of Attorney for Property Management

  • This document designates and authorizes a person of your choosing to make financial decisions and manage your assets on your behalf to the same extent and effect as if you were present in person. Durable means that they may also act for you in the event you become incompetent or incapacitated.

5.      Living Will

  • A living will allows you to state your desires regarding the use of life-support devices to prolong your life if you are stricken with a terminal illness or when there is no reasonable hope for recovery from an injury or illness.

The #BuildWealth Movementworks tirelessly to Disrupt Generational Poverty™ for everyone so their kids, kids, kids can live a life of privilege.

 

pexels-picha-stock-3894375

10 Money Tips For Women

There has been a ton of research around women and finances. One study, conducted by the National Center for Women and Retirement Research, showed a direct correlation between a woman’s personality characteristics and her financial habits. The study also revealed that some unique qualities tend to lead to smarter money choices: assertiveness, openness to change, and an optimistic outlook.

Money, in general, is an emotionally charged subject. Some experts say the beliefs that women have about money and their emotional attachments strongly influence how they spend and handle money. If you’re not where you want to be financially, do a quick assessment of what drives you emotionally when it comes to money. Try to figure out the roadblocks that keep you from becoming financially independent.

With that, here are 10 tips (not in order of importance) that can aid you on your journey to becoming a financial rock star:

  1. Be involved in the day-to-day of your family’s finances. Talk about money with your spouse or significant other.
  2. Don’t rely on someone else (spouse or significant other) for your future financial security.
  3. Set financial goals and track your progress along the way; They can break down as such: (a) Quick Win – a goal you can accomplish today, tomorrow, or within the next 1 or 2 weeks (b) Big Win – goals you can achieve within 1-month, 3-months, 6-months or 1 year.
  4. Don’t let the fear of (1) losing money, (2) of failure, or (3) of the unknown stop you from investing. The stock market (in the long run) is your friend.
  5. Consider taking on some DIY (do-it-yourself) projects around your home. Try fixing minor issues yourself. YouTube has a TON of DIY videos that can assist you and if you’re still not comfortable, ask a friend or family member to help out.
  6. Build a substantial emergency fund; 3-months is good, but 6-months is even better.
  7. Focus some attention on your retirement savings; a rule of thumb – put away 10% of your earnings each year.
  8. Pay yourself first! Since you pay your bills every month, you should be one of those “bills” that gets paid.
  9. Having a day job is great but think of other creative ways to earn additional income.
  10. Get your debt in check. Don’t spend money you don’t have (that one was for the credit card abusers). And, if you have student loans, know that you may have them for a while unless you’re working in a position that receives bonuses or commissions OR you receive a windfall of money.
  11. BONUS tip: Marry well! (Believe it or not, this is a strategy for some women)

The #BuildWealth Movementworks tirelessly to Disrupt Generational Poverty™ for everyone so their kids, kids, kids can live a life of privilege.

you need a planner

You Need A Financial Planner

Financial planners were put on this earth for one reason, to help people get and keep their financial houses in order. But so many people avoid financial planners. Why, exactly is that? Are you one of those people who think you’re better off on your own? Perhaps. Are you the person who says you don’t make enough money; therefore, there’s no need for you to meet with one? Or maybe you’re the person who says, “I don’t want someone all up in my business.” Whatever your reason, you should seriously consider having a conversation with a financial planner because the data doesn’t lie! As a society, we are seriously failing at financial planning.

If you have some time, research this piece that the National Association of Personal Financial Advisors published in 2012. The findings are quite disturbing. In that piece, they reference an organization, the National Foundation for Credit Counseling, which conducts an annual consumer financial literacy survey. Take a look at their survey in 2013 and 2014. It should come as no surprise, but the numbers continue to be extremely disappointing year after year. And, if you’re wondering how things are going today, not much has changed. On the flip side, this should encourage any financial planner to continue to reach out to and follow up with their clients, ask those tough questions, and challenge their clients to be better financial stewards.

Financial planning shouldn’t be something that we fear, but something we should embrace. If you are someone who doesn’t have a plan, you need one. If you’re someone who already has a plan, maybe you’re overdue for a review. No matter your situation, having a financial game plan will most certainly guarantee you financial independence (however you define it) at some point in your life. And just like that adage says, if you fail to plan, you plan to fail.


The #BuildWealth Movementworks tirelessly to Disrupt Generational Poverty™ for everyone so their kids, kids, kids can live a life of privilege.

understand bene's

Understanding Your Benefits is Important

When you get a job, your employer may have informed you that you will be receiving some additional benefits aside from a paycheck. Some of the most important benefits a company may offer come by way of insurance. For this article, I want to focus on life and disability insurance. Determining what insurance benefits you select will depend on your unique situation. Keep in mind; employers may give you numerous insurance options to choose from, while others may offer the bare minimum. Nevertheless, read through the entire benefits packet that they give you!

Most people are well aware of the importance of health insurance, but not so much when it comes to life and disability insurance. Here’s a recommendation; take some time to determine how much life and disability insurance you need. The life insurance offered through your employer is the cheapest that you will find, typically because your employer is fronting most, if not all, of the premium payments for you. You will generally find that they may offer flat rates of coverage at varying cost to you, or they may have it where you’re entitled to an amount equal to one or two times your salary. If what they are offering isn’t enough, consult an insurance agent to determine how much additional coverage you need to fill your gap. Having adequate life insurance is of the utmost importance. Suppose your household has two wage earners and one passes away, or the breadwinner of your family was no longer here. In that case, the remaining family members would most certainly appreciate having money for the final expenses and maintaining their current lifestyle. The grieving phase will be challenging enough, but adding financial troubles into the mix makes things that much tougher on your family.

When it comes to disability insurance, the same rules apply. Your employer is fronting most, if not all, of the premium payments for you. Many of us don’t see the value of having disability coverage, but here’s some food for thought. If you were seriously sick or injured and unable to work, how would you pay your bills? If you answered that question by saying you have an adequate amount of emergency funds (3-6 months worth of expenses) saved, then you may be okay. If you don’t have such an amount, then disability coverage becomes your savior. Essentially, it enables you to maintain your current lifestyle. What happens for most people is that they fail to have the all-important emergency fund, which results in them having to tap other resources like their investment or retirement accounts or credit cards. None of those sources should be utilized if at all possible. Your employer may only offer short-term disability or a combination of short and long-term disability coverage. 

Remember, read your benefits packet because this is something you need to know. Again, just like with life insurance, if what your company offers isn’t enough, consult an insurance agent to determine how much additional coverage you need to fill your gap. [Just so you know, you will never be able to get 100% disability coverage, primarily because if you could get 100% of your earnings without working, you would never go back to work.]

Having a firm grasp of your insurance offerings through work is critical. There may be gaps within your overall insurance plan, and you need to make sure they are filled. Insurance is THE foundation of a financial plan. If you are not adequately protected, you are putting your investment and retirement accounts in serious jeopardy. Think of it this way, if you were going to build a house, would you start on the second floor? Of course not!! You set the foundation, which allows you to build the remainder of the house. There have been numerous studies conducted about the staggering number of under-insured people in this country. Please don’t let this be you. If you don’t care about insurance studies, ask a family member or close friend if they or someone they know has been negatively impacted by having an inadequate amount of insurance, then you will understand.


The #BuildWealth Movementworks tirelessly to Disrupt Generational Poverty™ for everyone so their kids, kids, kids can live a life of privilege.