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Archive for the ‘Financial Planning’ Category

Want to Save More? Get Out of Your Own Way

Watching a friend run a marathon recently I was struck by the lack of outward competition. The runners seemed more determined to accomplish personal goals than on overtaking one another. There are of course those at the head of the pack competing for the win, yet the majority aimed only to cross the finish line. I couldn’t help but make the comparison between achieving financial goals and completing a marathon.

Setting long-term financial goals is a long race. Those trying to sprint wind up exhausted. There is one significant difference that stands out: people choose to run a marathon yet we are all in the financial race together. The race is long and will push many to the limit. The prize for completing the race is, instead of a medal, personal financial success.

Like running a long race, obstacles will arise and there will times when digging deep will be the only way to overcome. For runners, these moments are called breaking points. My friend says in marathons, it is mile 22 where the tank feels empty. The key to getting beyond that is to visualize the goal. Seeing the shorter distance to the goal rather than the longer distance completed makes finishing the final miles a little easier.

What is mile 22 in our financial lives? Anecdotally it seems that hits around the age of 50 for both men and women. At that age, most are settled into life. Children may be part of the picture with mounting education expenses. They’ve been a part of the workforce for some time and retirement can feel closer than ever. The reality is there are still a couple of miles left to go in the race.

A 2015 Transamerica retirement survey recommends that a 50-year-old maintain a steady account balance of $117,000. For many, that may be the eye-popping moment. In a marathon, there is always the option to throw in the towel and catch a ride to the finish line. In life, the financial race is lifelong and mandatory. Symbolically, age 50 represents the point where the remaining distance is shorter yet also the hardest. The good news is you’re still in the race.

The first thing to get a hold of are any pre-existing notions about organic financial health. Financial success is something earned; the chances finances will correct and improve on their own is, well, impossible. Often the opposite it the case requiring an effective defense as well. For all those important decisions put off until later, it’s time to finally take control of personal finances. Next, make active decisions to improve stability and security for the future. Several examples include increasing retirement account payments, paying mortgage balances on-time or early, and seeking alternative funding for children’s education. A positive financial mindset will make the rest of the race possible. See the finish line and visualize to materialize.

For any questions about insurance topics that may impact personal and financial health, call today.

Simple Steps to Get Out of Debt

Debt can be stressful for anyone. Things happen each day which can change employment, financial, and living status. In other cases, spending habits, medical care, and family create additional stressors. Loans and other financial obligations will have to be met regardless. Rather than throwing in the towel, overcome debt and get back on track. Reduce and overcome debt with these 5 steps to a debt-free life:

1. Stop Borrowing

To get ahead quickly, eliminate credit spending. This goes for credit furniture, credit cards, payday loans, new vehicles and more. The first step to eliminating debt is to stop feeding the monster. Once the debt has a set total, it will be easier to figure out how to eliminate it completely.

2. Start Saving

Create an emergency fund of $1000. This fund prevents the unexpected from adding to the debt. This buffer may be a challenge to create initially but may help avoid multiple loans later on.

3. Create a Budget

Creating a budget and sticking to it tracks income and expenses. Learning where the money is coming and going will help plan a strategy for overcoming debt. Money left over after essential expenses are covered should go toward reducing overall debt. Creating an excess is possible by either increasing income or reducing expenses.

  • Increasing income. Those with the means can increase income a number of ways. Extra jobs, overtime, commission, and other avenues for increasing exist depending on career options. Get creative. Many home-based businesses allow for extra income while maintaining a regular routine.
  • Spending less. Reducing spending helps create a budget excess at the end of the month. Look at monthly expenses to find opportunities for saving. Gym memberships, entertainment subscriptions, and eating out add up. Shop smarter by comparing prices.

4. Get Organized

Organizing debt is the next step in developing a strategy. Using one of two methods, organize all debts according to size and interest rate to begin reducing them to zero. Watching loans reduce down is satisfying and motivating for reducing more.

Organize based on size. Line up debts from smallest to largest regardless of interest rate. Begin by paying the smallest off first, then roll payments into the next debt until paying the final loan.

Organize based on interest rate. Otherwise known as credit laddering, this solution has debts arranged based on interest rate, with the highest at the top. This method reduces total amount spent on interest.

Once a method is arranged, stick to it. Begin with paying one loan, and roll payments into following loans after accounts are brought to zero. Take care in closing accounts, as closing accounts completely may cause damage to credit score. These methods work for debts large and small.

5. Get Ahead

Spend any additional income on debt. At the end of the month, excess money should be placed toward debts before entertainment. Smart spending with tax returns, inheritance money, and unexpected income will help reduce debts for good. The more placed towards paying off debt, the faster it will disappear. Create a strategy for overcoming debt today.

Always a source for great information about insurance topics for health and finance. Call today with any insurance-related questions.

Straightforward Steps to Living Well

Retiring with sufficient money for living well is possible. Planning early and making the right decisions can create wealth. There is more to retirement planning than investing in the stock market. Deliberate decisions made early boost savings potential. Daily decisions matter. Plan early and the money will follow.

College or a Trade?

College graduates entering the workforce often come with college debt. College debt can exceed the tens of thousands and beyond. Loans of this magnitude affect all life decisions from buying a home to having a family and finding a career. The right job for the degree matters. Many graduates have low-paying jobs in fields other than their major. Education is expensive; a college education may cost $100,000 or more. The good news is: people drawn to other fields have alternatives.

Many professions have starting salaries under $30,000 a year. College loan payments can consume a good portion of that. Planning ahead can help manage college loan payments. A good rule of thumb is keeping total college debt below total annual income. Researching careers and salaries before committing to loans helps plan for the making payments on them later. High-paying jobs are available without 4 years of college. People interested in arts, trades, and other careers can make more than graduates with bachelor’s degrees. According to a study by Georgetown University, 28% people with associates degrees or trade equivalents earn more than university grads.

Saving Smart

A smaller amount of people have savings accounts than those who do. For many people, saving is possible with smart financial planning. Cars, homes, and other accessories consume portions of the monthly budget. Before long, entire paychecks are spent the moment received creating a cycle of loan payments.
Navigate pitfalls applying these basic rules:

  • Saving. Save 10% of earnings for retirement. For people starting after age 30: 12-15%. For parents making a choice between saving for retirement and saving for children’s college, choose retirement.
  • Living. All general living expenses receive 50% of the budget.
  • Saving. Place 20% of income into savings. Additionally, 6 month’s savings for emergencies helps overcome the unexpected.
  • Driving. Limit vehicle payments to 10% of monthly income; loans payable within 4 years.
  • Spending. The remaining 20% is available for spending,

Other savings vehicles include 401k work-programs, IRAs, and life insurance.

Budgeting Loans and Credit Cards

Many lessons came from the last economic crisis. People are much better about debt-management and loan commitments than before. Still, excessive credit-card limits savings potential for many. Credit cards carry high rates of interest, often 18% or higher. This means credit card charges totaling $5,000, paid at the minimum monthly-rate, may reach over $9,000 in payments over 3 decades. Making purchases within means helps limit credit card and loan payments. Credit and loan payments are part of a monthly budget.

Watch the Market

Stock market growth is up 12% this year, yet the tides are in constant ebb and flow. Market downturns happen, causing many to leave the market in a panic. Recovery may be hard to picture, yet time and time again the stock market recovers and improves. A 260% increase since the most-recent downturn continues this pattern. Long-term strategies for investing create solid foundations for savings. Focusing on a combination of smart stocks and bonds, rather than market trends, creates reliability. Young investors may wish to invest up to 70-80% of annual income for comfortable retirement.

Retire Smart

At retirement, making money last is important. Many people spend 30-40 years or more in retirement. Before retiring, plan on enough savings to last a lifetime. Before retiring, determine annual living expenses. This helps plan for enough for living comfortably. Each year, limit withdrawals to only 4% of available savings. Life may continue for decades, plan early and plan smart.

Speak to a Pro

Retirement planning is different for everyone. Each person has a different vision and timeline for retirement. A financial planner can help determine the best way for achieving retirement goals. It is always a good time to start planning for retirement, start today.

There are many wellness and finance topics affecting daily life. Want to see any topics featured? Send over any suggestions, and please contact an agent for any questions.

Teach Your Kids Financial Literacy!

For better or worse, kids copy their parents. In fact, they are more likely to “do as you do”, rather than “do as you say”. This can be good, or it can be eye-opening to bad personal behavior. Kids imitate more than mannerisms. What kids learn today will affect their success tomorrow. According to asset management firm T. Rowe Rate, parents with poor financial management are more likely to pass bad money-management habits on to their kids.

T.Rowe conducted a study which found parents with large credit-card balances influenced similar behavior in their millennial children. In some cases, these kids already carried over $5,000 in debt, a lot for a young person. Making matters worse, the same children had less interest in saving and none in clearing their debt. They expected parents to pay their expenses as they got older, with no plans for securing their own financial future.

Parents who exercised sound financial decision-making fared better. Often, those children grew up performing financially better than the parents. These children were also more likely to have college savings in place. The study confirmed what many already suspected: parents are a child’s largest financial influence.

According to T. Rowe, kids develop financial discipline at a very young age – well before high school. Teaching smart money matters to children at an early age creates advantages. The principles of saving and smart-decision making should be part of home life.

An allowance is a good way to introduce money management to children. An allowance can teach the principles of saving and spending. Family budgeting is another way to involve children in money matters. Vacations and other large purchases have opportunity costs. Teaching children the importance of balanced decision-making helps them later on. Without using money children can learn budgeting using allowances of time for entertainment.

Start teaching smart financial skills today. Teach kids to be financially independent right at home. Classes exist online or contact an expert. Give kids the tools to succeed later in life. Good financial skills are for everyone. Save today and enjoy tomorrow!

This and other insurance-related topics have a direct bearing on well-being. Have any insurance topics to talk about? Send them over! Call for answers to all personal insurance and business insurance questions.

When You Should Work With a Financial Planner

Americans are stressed about debt. According to the American Psychological Organization, 72% of Americans worry about debt. Only about 18% think that they have enough money saved to last through retirement. Still, when it comes to their financial future, many people don’t ask for help. Only around 40% of those surveyed reported using a Financial Planner.

Financial Advisors Vs. Financial Planners

A Financial Planner is different from a Financial Advisor. While often casually interchanged, these titles apply to specific roles:

Financial Advisors have a wide range of financial expertise. Financial Advisors aid with investments, estate planning, and tax preparation.

Financial Planners have a specific set of financial skills. They can specialize in areas of finance such as retirement, investing, or estate planning. When you need help managing money or a financial plan, this is who to call.

Many people think that building a long-term financial plan simply means establishing goals. In reality, it is much more complex. These are a just a few instances where you may want to hire an expert:

1: You don’t like thinking about money.

If you’re the kind of person who hates talking about finances, you probably aren’t paying as much attention to yours as you should. You’re also not alone. Let’s be honest – some people don’t like discussing money because it isn’t all that fascinating. Instead of hoping things work without supervision, hire a specialist to help out.

2: Money management is overwhelming.

Money management is complex. It involves more than saving – you need to plan, budget, and prepare. College savings, retirement, investments… When the realization of how involved the process it hits, the shock can freeze you in your tracks. If you’re already behind on your savings goals, obstacles will feel larger and more difficult to surmount.

Financial Planners do the hard work for you. Financial Planners can help set goals, then break them down into specific steps. This makes the process feel much easier and far less overwhelming.

3: You want a second opinion

Here’s a secret – even the financially savvy ask for advice. Financial Planners are a great resource for professional advice and second opinions. Spending too much energy focusing on your 401(k) and neglecting something else? Even if you have a business degree it can help to have outside help. Having someone dedicated to your finances can help you discover more ways to save and invest.

The Costs for Financial Planning

Financial Planners may employ different rates for their services. In most cases, your Financial Planner will use one of the following frameworks:

  • Fee only. Fee-only financial planning refers to flat-fee pricing. Financial Planners will charge either hourly, a flat percentage, or a set monthly retainer cost.
  • Commission based. Some Financial Planners will charge a commission as payment, from earnings and investments they work on.
  • Fee-based. Fee-based Financial Planners charge both flat fees and a commission.

To best determine what financial planning services are best for you, begin by determining your needs. For simple concerns, flat fee work may be most appropriate. Ongoing investment or savings advice may require long-term help.

Talk to a few financial planners about their cost structures and fees. Before you agree to anything know exactly what services you need, and what services they offer. There’s nothing wrong with asking for help managing your money! Talk to a Financial Planner today to see how you can achieve your own financial goals.

We’re always on the lookout for great information about insurance topics that may impact your health and wallet. If you think of any insurance-related topics, be sure to reach out to us.

Young Boomers Not Saving For Rainy Days

The good news is: Americans are getting better about setting money aside for emergencies.

The bad news is: Americans still aren’t very good about saving money for emergencies.

The worst news is: Older Americans are the worst, and they should know better!

Boomers Aren’t Preparing

Recent research indicates Baby Boomers aren’t doing a great job at saving for a rainy day. A survey by Bankrate found 32% of Baby Boomers between the 53-62 did not have ANY savings set aside for an emergency. No savings at all. This is more surprising when you consider how close they are to retirement. Their age group needs to save more than any other, yet they ranked the highest of all surveyed.

Financial experts recommend a solid emergency fund. Most experts recommend an emergency fund capable of covering 3-6 months of expenses. Bankrate financial expert Greg McBride says the high percentage of young Boomers have the economic crisis to blame. According to McBride, the recent recession affected Boomers disproportionately due to investment losses and extended unemployment. The market crash affected the emergency savings funds of this group most. The survey found those aged 63 and older fared better. This group had the lowest percentage of respondents without any emergency savings. 50% of adults 63 and older replied they had at least 6 months of expenses covered in savings.

Save Now, Save for Life

The survey found 25% of all Americans don’t have any savings. On the positive side, that’s the lowest number since the survey began in 2011. Additionally, 31% of the survey respondents now have six months worth of expenditures covered in savings. This, too, is the best result since 2011.

A surprising finding of the survey was how well millennials were at financial planning. While infant boomers are more likely to have enough to cover six months of expenses or more, Millennials are more likely to have three to five months and were better at keeping emergency funds overall.

Life stages are a definite factor when it comes to saving. Fewer millennials are starting families, and more are still living with their parents – the Baby Boomers. Experts state increasing savings is an important step to safeguarding your financial future and decreasing your stress levels. This is true no matter your current age or your financial situation.

McBride says the first step to this process is easy: setting up an automated savings deposit from your current job. You have to make a choice to start saving. No one else is going to take this step for you.

We’re always on the prowl for great information on insurance topics that may impact your health and your wallet. If you have any insurance-related questions, reach out to us.

Getting a Better Car Loan

Recently, Congress passed on a major chance for increasing customer securities. Last summer, the car industry obtained an exemption from the new interest rate reform law. Although brokers for home loans are subject to these new policies, auto dealerships are not. The same auto giants that brokered roughly 80% of customers’ $850 billion in car loans may continue charging high-interest rates unchecked. If you have to take out a vehicle loan, don’t assume your auto dealer will offer you the best interest rate. There are many ways the auto dealer may up your rate, pad your loan with charges, or use longer-payback loans to attract you with a lower payment.

When it comes to an auto loan, you’re much better off obtaining pre-approved loans from a bank or a local credit union before visiting a car dealership. The loan pre-approval process can help you set a reasonable budget for your auto purchase. There are several things to keep in mind when selecting a car to buy. You should be able to pay at least 20% of the sticker price up-front for your car. You should also be able to pay your loan back in four years or less. Finally, make sure the monthly loan-payback rate won’t exceed 10% of your gross earnings. A large deposit will guarantee you never owe a greater amount on the vehicle than it’s worth.

If the auto dealer offers you a much lower interest rate, you can choose not to take the bank loan. Regardless, a pre-approved rate can give you extra confidence, knowing what rate you can expect to pay.

Dealers Hide Costs: Avoiding Extra Fees

The Center for Accountable Loaning found auto buyers pay an extra $20 billion each year. This is due to auto dealers raising interest rates on loans they provide. Car dealers inflate their own profits with extra fees such as:

  • Charges for cleaning your car
  • Marketing Fees
  • Life Insurance for settling your loan if you die, and more

Ask about any fees before you buy – and balk if you see any.

If a car dealer offers you better terms for your auto loan, you can always skip the bank loan. Know what to expect for a car payment. Getting pre-approved means you’ll walk into a car dealership knowing how to manage your auto loan. We are always looking for great information about any insurance topics that may impact your health or your wallet. If you have any insurance-related questions, reach out to us for help.

Who Pays For the Wedding?

Nearly all weddings can be quite expensive, the average wedding cost hovering around $28,000. Luxury weddings can easily cost $100,000 or more. (Your location has a huge influence on cost.)

* Rural weddings can cost an average $18,000…
* East Coast cities see an average cost of around $85,000…

These high costs have led to a dramatic increase in financing weddings.

Tradition has long held that the bride’s parents will cover the bulk of the costs but this is a heavy responsibility to bear that is calling more and more for cost-sharing.

Here’s a common cost sharing plan:

* 45% – Bride’s parents
* 43% – The couple
* 12% – The Groom’s parents

Costs can invariably run out of control. This is particularly true for an event as emotionally charged as a wedding.

Wedding Planners and Financial Planners can offer some great help for controlling costs…

1. The Wedding Planner

An effective wedding planner will provide solid and time-tested help on how to best make the wedding a success. The advice
offered by the wedding planner usually includes the following:

a. Budget

The wedding couple needs to understand their financial constraints. They need to prioritize what they need to make their wedding successful. Both partners of the couple should be involved in determining priorities.

b. The Date and Venue

Wedding costs will go up for weddings held on Saturdays, especially during the months of April through October. Good deals can be found by having week day weddings. The venue of
the wedding is equally important with 5-star locations in the heart of the city being the most expensive.

c. Be Realistic

It’s best if both partners have clear and realistic expectations of what their budget will allow them to accomplish. A bit of clever work can often stretch a budget.

2. The Financial Adviser

Given the high costs of weddings, involving a financial adviser can be helpful.

a. Avoid Large Loans

Big loans can take a long time to repay. Some advisers suggest a home equity loan with low repayment rates may be a good way to go.

b. Give Lump-sum Gifts

A lump-sum gift can be given to the couple and spaced out in a way that is strategically valuable to the couple.

c. Be Conservative on Guest-lists

The guest-list count should be as low as realistically possible. The rule of thumb is to cut the list until it is no longer realistically possible to cut it further.

Final thoughts…

If you are thinking about getting married or if you have a child that is tying the knot, be sure to reach out to us for money saving tips. We’ll also help you understand how life changes may impact things like your insurance as well.

Steps to Take if You Think You’re Handling Asbestos

Asbestos is a mineral fiber compound that naturally appears in rock or soil. It may also be found in building and construction materials or while doing maintenance or repair work.

In fact, many roof and installation materials, plaster, caulk, and pipe-insulation materials can contain asbestos. This is because it had been an effective insulating material.

Being exposed to asbestos is dangerous as it can lead to lung problems including a variety of cancers. Asbestos exposure has been linked to lung cancer, mesothelioma cancer, and asbestosis. However, the time from exposure to development of these conditions may take years.

Precautionary Steps

There are a few key steps to take in order to protect your team from asbestos exposure. Use these three steps before starting a work project.

* Always ask if the job that you’re about to complete involves working in an environment that could contain asbestos. If the answer to this question is “yes,” then you’ll need to supply workers with the training and safety equipment to minimize exposure. (And bill your client accordingly.)
* You’ll also need to provide warning signs in the area that note the danger of being exposed to asbestos.

In construction, you hold the responsibility to ensure that employees in the area and any members of the general public are kept safe from asbestos exposure.

Protect Team Members

Minimize employee exposure to asbestos by requiring workers to:

* Wear a head covering, coveralls, gloves, and respirators.
* Avoid smoking in areas that may have asbestos present.
* Eat and drink in safe zones away from these areas.
* Shower before leaving the job site.
* Remove any traces of the material from their clothing. Clothing and footwear exposed to asbestos should be left at the job site.
* Never bring clothes home to clean them… the company is required by law to leverage professional garment cleaning instead.

Require Education

If workers are to be exposed to asbestos, they need to be given training on how to work safely in such an environment.

Training should be mandatory and understood by all levels of the crew including workers, job site managers, etc.

And if your company regularly handles materials such as asbestos, be sure your insurance addresses this risk. Have questions? Give us a call today!

Owning International Stocks

Many investors are thrilled to see how well US based equities have performed in the last few years.

However, international stocks have been making strong upward movements of their own. With increases as high as 14% within the first five months if this year, investors are asking if they should consider these stocks.

Looking back, international stocks performed quite well preceding 2007. That changed after 2007. Since then, international stock performance has been hit & miss. As of 2016, it appears this trend may have shifted.

Generally, most advisors agree that having some exposure to international stocks is always a good thing… and most agree they should never comprise more than 1/3rd of one’s equity exposure.

Choosing to invest in international stocks has one major advantage – diversification. Yes, certain populist political trends lean toward isolationism. However, the dynamics of a global economy are such that smart investors have at least some exposure to international equities.

Individuals that lack the time or expertise to actively trade securities can still participate via two key methods:

* Dollar cost averaging
* Regular rebalancing

With dollar cost averaging, an investor buys stocks consistently over time. Sometimes they’ll buy when the market is low and sometimes when it is high… and over time they’ll achieve a purchase price that is “averaged” so that it is often better than if they were trying to time the market. If one had been investing consistently since 2007, they would have seen some fantastic growth over time.

With regular rebalancing, you are forced to “sell high” and “buy low”. This means that if one part of your portfolio is performing really well, let’s say U.S. Equities, you would sell some of those stocks. You would use those proceeds to invest in underperforming equities. This follows Warren Buffett’s great advice which is: “Buy the fear and sell the greed”.

You should also ensure your exposure to risk is diversified. For international stocks, this means buying equities from different countries and sectors.

So are international stocks right for your portfolio? We recommend reaching out to your financial advisor to get the best answer to that question. They understand your goals and your situation. They can also help you understand the risks, portfolio allocations, and the best investment vehicles to help you participate in international stocks while limiting risk.