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.

taking inventory

Taking Inventory

Getting your financial house in order is a goal that most people set for themselves. Of course, not everyone will get things in order at the same stage in life. Like anything else, most people will do things when they are ready, not when some financial professional tells them to do so. Or they will decide to take action as a response to a life event. Here are a few examples.

Let’s say you have a friend (who has young children and a spouse) that passes away unexpectedly. After witnessing that, you decide to get serious about having adequate life insurance to protect your family. Or you have a co-worker who is getting well into their golden years but still HAS to work because they didn’t save/invest appropriately for retirement. Only then do you decide to start taking retirement planning seriously.

No matter your excuse or fear around financial planning, you must take it step by step. You have to crawl before you can walk, and you must walk before you can run.

Completing a personal balance sheet is the “crawl” step that everyone should take. This document, which you can find pretty much anywhere on the Internet, is easy to complete. It’s going to require you to list everything you own (assets) and everything you owe (liabilities). With some basic math (assets – liabilities), you will be able to determine your net worth.

Taking this “inventory” enables you to focus on where you need to start related to your financial plan. Plus, as you continue to move forward with your financial plan, this can serve as your barometer of financial fitness. The goal is to continue to grow your assets while decreasing your liabilities.

Some experts will recommend that you update your balance sheet once a year. However, if you are the type that needs more frequent feedback, perhaps you should consider updating your balance sheet quarterly or twice a year.


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

rtmnt crisis

The Retirement Savings Crisis

The National Institute on Retirement Security produces research studies, and their primary focus is, you guessed it, retirement. They published a study in June 2013 entitled “The Retirement Savings Crisis: Is It Worse Than We Think?” It was startling to read through the key findings of the report. If you get a chance, take a look at the report, and even if you’re not in the financial services business, the data is alarming. They produced another study in December 2013 about Race and Retirement, and that study was even more frightening. Honestly, year after year, the updates on the data they produce doesn’t get much better.

The first key finding from that report stated that 38 million working households have NO retirement account assets at all. The sad thing, that number includes workers who are offered a retirement plan through their employer but who refuse to put any money into the plan. It’s understandable that some companies do not offer a retirement plan. Thus the individual is responsible for setting something up on their own. If your employer offers you a retirement plan and you’re not putting any money into it, you need to have a serious discussion with yourself or someone about why. If you don’t know how to get started or have the slightest idea about what you’re doing, your benefits department will be more than happy to assist you. They’re providing you the 401k or some other retirement plan, and they will gladly walk you each step of the way. If not them, then the plan sponsor (the company hired to offer the retirement plan) can provide you that assistance. Please make that phone call, send an email, find a co-worker who understands the retirement plan, do something.

For those people who are not offered a retirement plan through their employer, then you must seek out someone on your own to help get you squared away. There isn’t a shortage of financial services professionals in this country. And if you don’t want a professional’s help, there are a plethora of do-it-yourself options available. Either way, there is absolutely no good reason as to why you shouldn’t have some of your money in a retirement account. If you are still unsure why this is of the utmost importance, ask yourself one question. After all your working years, wouldn’t you like to have something to show for all those hours you worked??

Retirement planning applies to every working individual in this country. If you’re just starting in your career, then time is on your side. It doesn’t take a ton of time for you to do this, but it does involve committing. So many people say that they don’t have time to do this planning, which is bologna. There is more than enough time within a year (8766 hours) for you to work on your retirement plan. Not taking your retirement plan serious is just not cool. There are similar studies done and year after year, and the data never seems to improve. We can most certainly do better only by asking ourselves one simple question.

How much time did you spend this year or last year planning for your retirement?


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

219

The Rule of 219

Retirement planning applies to every working individual in this country. If you’re just starting in your career, time is on your side. If you’re halfway through, then you should be regularly doing a retirement checkup. If you’re winding down, hopefully, you are adequately prepared to enjoy your golden years.

If you don’t think retirement is important, look at some of the research reports from the National Institute on Retirement Security. If you don’t have time to read each report, peruse the executive summary, and you will get a good flavor of just how horrible this country is doing on the retirement front. That information will blow your mind!

Without proper retirement planning, that virtually means you have only a few options

  1. you need to receive an inheritance
  2. you need to win the lottery
  3. you will or plan on working forever
  4. you pass away the day after you decide to retire

Most people will probably frown at options 3 & 4, and many of us won’t have the luxury of option 1. Option 2, good luck because the odds are not in your favor. People don’t have much saved for retirement because they never set a goal. Plus, we have no clue how much money we are going to need in retirement.

There are so many variables that you simply can’t plan for, but as a starting point, search “retirement calculator” in your internet browser and play around with the numbers. At least that’s a start. But just to put things in perspective, let’s do some simple math concerning the amount of money we’re all going to need in retirement. The rule of 219 is not widely discussed, but here’s how you get the number. The rule assumes:

  • you and a spouse/partner/significant other (2 people)
  • eat 3 meals/day at $5/meal
  • you do this for (20) years
  • there are 365 days in a year

Thus 2 x 3 x 5 x 20 x 365 = $219,000. Obviously, every meal you eat won’t be $5, you may not have a spouse in retirement, and you may live longer than 20 years in retirement. This rule makes a ton of assumptions; however, it is easy to understand—the alternative, trying to determine your retirement number by conducting a time value of money calculation. Simplicity is the goal of this rule.


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

dyk LI

Did You Know This About Life Insurance

Life insurance is a dynamic financial vehicle, but most people only refer to it as death insurance. Yes, if you have a policy and you’ve been paying your premiums and pass away, a sum of money will be paid out. Who or what gets that sum of money is totally up to you.

Many of you reading this might not have known this, but people use life insurance while they’re alive. Did you know that life insurance can be used to fund a child’s education? Did you know that people utilize life insurance to supplement their retirement income? Did you know that if you borrowed against (taking a loan) your life insurance policy, that in some cases, you don’t have to pay the loan back? Life insurance is a phenomenal tool but it gets such a bad reputation; however, there are so many ways that people can use life insurance while they’re alive. It’s one of the most flexible products that exist, but most people don’t take the time to educate themselves properly.

If you didn’t know about those awesome things that life insurance can do (and that was only an appetizer), perhaps you should schedule an appointment with an insurance agent and let them explain it to you.


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

how can a planner help

How Can A Financial Planner Help Me?

Having a conversation about financial matters is a struggle for most people. We all understand that it’s imperative to have your financial house in order; however, most people typically don’t. The fear that you face around this issue will never subside until you decide to take action. You either need to do-it-yourself (which most won’t commit to doing) or enlist the aid of a financial planner.

Financial planners don’t get a ton of fanfare, but they should. The issue stems from the fact that people don’t understand the value that a financial planner can provide. People don’t know that a financial planner may be the solution to all of their money woes. People don’t understand that a financial planner needs to be cherished just like your barber or hairstylist. Wait, like your barber or hairstylist? Yes!! When you need your hair done for an event or before you go on a trip, you will move mountains to get that appointment. Or if your person doesn’t do appointments, you will wait as long as it takes. Why?? Because looking good is non-negotiable!! However, when it comes to financial matters, you’re okay with NOT taking immediate action and continuing a life of financial misery. There isn’t a sense of urgency in interacting with a financial planner, nor is there typically a quick (there are exceptions) outcome received. Thus, people tend to shy away from meeting with a financial planner or constantly reschedule their appointment.

Now that we’ve addressed the psychology behind why people avoid financial planners, let’s move on and look at what you need to consider when you are ready to find your go to person. For starters, whoever you decide on, you need to like them. It doesn’t make much sense to do business with someone that you don’t like. Next, it’s recommended that you should interview 2-3 candidates before making your decision. Before finishing that first meeting (which is typically the free consultation that most will offer), you should know precisely how they get paid and what they can do for you.

Here’s a menu (of sorts) that you should consider when walking into that first meeting. A financial planner usually works in one of 3 ways:

Transactional-based business (Needs Analysis):

Think of this level as the basic package. You need a solution, and this planner can sell it to you. The planner will capture the necessary information as it applies to your need, conduct an analysis, and conclude by recommending a solution(s). It doesn’t require much follow up after the transaction is complete. The planner will be in touch at a minimum annually to review or be in touch periodically for service-related matters. The planner earns a commission on the solution that is sold.

Managed Money (Wealth Management):

This can be considered the “I’m in it with my client” level. You are entrusting the planner to manage a certain amount of money for you. The services at this level may involve the following as it relates to your money: 1) how your portfolio is allocated amongst the different asset classes 2) managing risk within the portfolio 3) enhancing (growing) your portfolio and 4) tax planning. You will probably meet with your planner quarterly to review your account. The planner will charge a quarterly fee based on the solution chosen and the account size. A fee-based relationship requires the planner to act in the client’s best interest because their compensation is tied directly to performance. Good performance, better pay, poor performance, less pay.

Comprehensive Financial Planning:

This level is like the deluxe service at the car wash. The planner will assist you with an in-depth analysis of some or all of the following areas: Net Worth and Cash Flow, Investment Planning & Allocation, Risk Management, Retirement Planning, Income Tax Planning, and Estate Planning. At this level, you will meet as necessary to help ensure that you understand your financial plan. At a minimum, you will conduct an annual review of your plan. Compensation at this level is two-fold. First, there will be an agreed-upon fee for the financial planning service. Second, the planner’s commission or fees will be earned if you decide to purchase any solution(s) to implement your financial plan. Some people choose to have the planner produce their financial plan, pay the fee, and opt to implement a solution(s) with another planner.


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

pexels-andrea-piacquadio-3768905

Wealth Building Strategies Your Advisor Didn’t Share With You

Many people don’t know (and probably don’t care) that September is Life Insurance Awareness Month. It’s the one month out of the year that life insurance gets its time in the sun. I want to share some alternate uses for life insurance that many advisors never share with their clients to pump up this incredible product.

1. The Roth Alternative 

The “Roth” IRA was created back in 1997, and it was set up to provide an individual with tax-free money during their retirement years. Other employer-sponsored retirement plans (401k, 403b, 457b, etc.) also adopted the Roth feature. Currently, if you have an IRA or employer-sponsored retirement plan that has “Roth” in front of it, you’re telling the IRS to tax the money that’s currently being contributed into that account. And, if you follow a few simple rules, you can receive your distributions tax-free during retirement.

There were only two problems with the Roth IRA specifically: 1) if you earn too much money, you are not allowed to open one, and 2) the contribution amounts are limited (2020 limits – $6,000 if you’re under age 50, $7,000 if you’re 50 and over). Income limits don’t apply to employer-sponsored plans, and the contribution limits are higher than an IRA, but they still have a cap.

With these problems known, people began to search for another way to invest their money for retirement. They hope to receive tax-free money during their retirement years, and the solution – a properly structured permanent life insurance policy.

2. Create Your Own “Bank”

You will not have to concern yourself with setting up a physical (or online) financial institution for starters. Also, for the sake of keeping things simple, this strategy involves you utilizing a properly structured permanent life insurance policy. Here are the primary reasons people consider creating their own “bank” or what some call the “family bank”:

  1. The cash value usually earns a much better growth rate than any solution you would find at your financial institution (High-yield savings/checking or CD’s).
  2. The growth, as well as distributions you take, are not taxed as long as a small amount of death benefit stays in force until you pass away
  3. When you borrow money, your full cash value continues to grow inside the policy despite any loans you have against the policy

For each of the alternate uses of life insurance I’ve shared with you, I highly recommend that you speak with a financial advisor or insurance agent. These strategies are not typically shared with the general public. Once you connect with a financial advisor or agent, you will now be equipped with some good material to discuss at your next appointment.


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