Friday Poll: How would your life insurance policy help you most?
When you stop to think about it, life insurance can help you in so many different ways. It can offer security, wealth accumulation, protection, and other wonderful benefits to both the policy owner and his or her loved ones and dependents.
Each person looking for life insurance, though, is motivated by different goals. Perhaps they are getting on in their years and want to make sure their family is taken care of after they are gone. Or they may be just starting a family, but want to make sure their child is protected, while also having a way to save tax-deferred money for the child’s college education. Whatever the motivation, life insurance as a financial planning tool that is gaining notoriety as a necessary part of one’s overall fiscal picture.
So we ask you – what is your main interest in having a life insurance policy? How do you think having life insurance would benefit you most?
The Tao of the Planner: Finance
If there were one word we could use to sum up our approach to smart living, it would be “planning.” Taking the time to think ahead about your short-term and long-term goals is a key element to their success. There are two areas in which planning and careful thought and consideration are especially crucial – finance and health. Today, we’ll talk about how the concept of planning will help your financial picture now, and in the future.
As as life insurance brokerage firm, financial planning for the future is the crux of what we do. There are many different kinds of life insurance policies (such as term life insurance and whole life insurance) that a potential client could purchase. An insurance agent or broker could use his or her expertise to guide someone to the best policy for their needs and circumstances. The point, though, is to insure your life, for the sake of protecting your family.
Beyond life insurance, there are other savings vehicles that can be used to save money for a variety of different possibilities and instances. You could use bonds, scholarships and loans as part of your college savings planning, pensions, 401ks and Social Security for retirement planning, or you could opt to buy disability insurance and long term care insurance, to protect both you and your family from the financial side effects of being rendered unable to work.
The concept of planning your finances doesn’t have to be complicated, though, and your portfolio should not include anything you don’t understand inside and out. The most basic element of a financial plan is a savings account – a place where you can deposit a certain amount of every paycheck, which can be used either toward a specific financial goal, or just to have as an emergency fund.
A Post for the Men
Whenever financial conversations are split along gender lines, a majority of the discussion tends toward fiscal issues that face women. There are, in fairness, a great many issues that can be discussed in regards to gender inequalities that negatively affect the fairer sex. This time, however, we would like to focus on the men.
It is often assumed that men, due to their continued ability to earn more than women employed in the same capacity, should have an easier time saving money, an easier time supporting a family and an easier time making large purchases. Stereotypically cast as the breadwinners, the dominant gender, the hunters and gatherers of society, men are held to incredibly high financial standards, and are sometimes made to feel like failures if they happen of all short (even if they do so because of circumstances beyond their control).
The truth of the matter is, the economic downturn has been rough on everybody, no matter what gender, race or religion they happen to be. But according to the results of an extensive survey coordinated and conducted by Men’s Health Magazine, men are finding ways to survive all the same. Even those who put the survey together admit to being pleasantly surprised with the results.
Some of the more interesting findings revolve around the participants’ perspective on their personal finances. The men asked seemed optimistic about their finances, and about the fiscal picture they saw painted for their future. Many wished to make more money, but that is a symptom suffered by most people, no matter who or what they are.
There were, of course, some less surprising elements, especially in regards to the sort of happiness and satisfaction men would find in having more money – as well as some rather unsavory ones (consider this a warning for those easily offended). But overall, it seems the recession from which we are still presently recovering (and will be for a considerable length of time) has not dampened the spirits of men overall.
For us, the biggest cause of concern is the lack of saving the participants had admitted to doing, both in regards to emergency funding and retirement planning. No matter who you are, there are two things that you need to do – save, and save more. Having adequate money put aside for the times in your life when you don’t have a steady or adequate income (namely, when you least expect it, and when it comes time for you to retire) is incredibly important.
We hope the optimism displayed continues to prevail through stormy economic seas, but we also hope this isn’t a foolish optimism, that leaves people unprepared at the most inopportune times.
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An Update on Last Friday’s Poll
Last Friday, we asked our readers about the varying difficulty levels of several different financial planning challenges. These were the choices:
“1- Living off of $30 of groceries and nothing else for two whole weeks (including weekends), with only $10 allowed for dining out within the two week time period
2- Not buying any new clothing of any sort, for any occasion, for an entire month, no matter what events may arise
3- Finding any (legal) way possible to make an additional $20 per week, no matter what”
Our readers have voted, and the results are in – Challenge #1 would be the most difficult. And so Candice will take on this task, taking her $30 shopping trip on Sunday, June 5th and documenting her success or failure on this blog.
Thank you all for your input!
Understanding the “Terms” of Investing
Let’s be honest – when financial professionals begin discussing investment options, most of the technical terms they use don’t translate. It’s almost as if they’re speaking another language altogether. But don’t let yourself be intimidated by the fancy terms insiders use. We’ll explain to you the different terms you might here while speaking with an investment banker, not only to impress them, but so that you can be a part of a conversation which ultimately results in the best use of your hard-earned money.
These are only a few basic terms – investing is clearly a very nuanced, detailed field. But at least with these key phrases understood, you’ll be able to take part in a more productive conversation.
STOCKS
Stocks essentially allow you to purchase partial ownership in a business. When you buy a share of stock, you are taking a bet on the success of a certain, publicly owned and traded business. If the business thrives, your stock will increase in value. If your business does not fare well, however, your stock in the company will follow suit, and you could wind up losing significant sums of money (depending on how much you invested in the company in the first place).
BONDS
When someone purchases a bond, they essentially loan money to an entity (either the government or a corporation). The entity borrows this money for a predetermined amount of time, with a fixed interest rate. When the bond matures, the entity pays back the person that initially loaned the money, yielding a profit for that person.
IRAs
An IRA, which is short for individual retirement arrangement, is simply a retirement savings plan of any sort that comes with tax advantages. The term IRA encompasses many different types of plans, including a trust or account for an individual, or an annuity (a product created when a life insurance policy owner pays a premium that will later be returned to them over time).
INVESTING FOR GROWTH vs. INVESTING FOR INCOME
If you are looking to simply make money in timed intervals, you are considered to be investing for income, Your goal is to simply make a steady amount of money from an investment, for example a U.S. Treasury notes, without attempting to compound the worth of the investment. If, however, you seek to invest your money in something that will multiply your input, you are investing for growth. Though you may not immediately get money from this type of investment, such as stock in a company, the overall payoff will be far larger than your initial input.
RISK AND RETURN
To put it plainly, risk is the possibility of losing money in an investment, and return is the amount of money you could potentially make from an investment.
Keep in mind that you don’t have to choose just one option or direction. You can do multiple things with your portfolio once you understand the different ways you could go. And of course, if you’re in the moment and you forget what you’ve read here, don’t be afraid to ask questions. Ultimately, these professionals are here to help you understand your options, so that you can make the best decision for you, your needs, your comfort and your finances.
And if you have other questions and curiosities now about investing and other ways to put together the best financial plan for you, look through the other articles on our site, or reach out to us today for specific advice that will work for you.
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How can one switch careers later in life without ruining their finances?
An economic climate that has fostered lay-offs, coupled with a growing societal embracing of bucking tradition, has led many to reconsider and even permanently alter their career paths. Some even as late as their 40’s and 50’s are switching proverbial gears, moving from a career in which they worked diligently from many years into an endeavor that speaks more to their passions and deeper goals (if they were not already employed in a vocation which fostered such things).
It’s an interesting phenomenon, and it’s not altogether a negative trend, to see people taking the plunge toward doing something they’ve always wanted to do. But as with any major decision in one’s life, there are financial considerations to keep in mind.
No matter when you make this shift, you’ll want to consider what you have set aside for your retirement years. Hopefully, if you are approaching senior citizen age, you have already begun to plan for your retirement plans, setting aside money in a savings account, as well as in a pension plan such as a 401k or an IRA. If you have one of these plans, find out whether or not it can be transferred over to a new job, once you find one.
In addition to that consideration, you’ll want to make sure you have enough money saved in general to pay for all of your necessary expenses, in case your new venture does not immediately turn out to be profitable. And you’ll need to consider your health insurance options without an employer-sponsored plan to cover you.
Pursuing your dreams is an admirable thing, and it takes guts. But it also requires careful consideration and planning, lest you be left in a financial lurch (and worse, lest you drag your family down with you).
Happy Presidents Day!
Regardless of your political leanings, everyone enjoys a day off, especially in the name of paying tribute to leaders past and present. It can be the perfect opportunity to catch up on other tasks that may take a backseat to your everyday life.
We at BeamaLife will still be in the office though, working hard to offer you advice on term and whole life insurance, college and retirement savings plans, disability and long term care insurance, and other potential financial concerns you may wish to address.
So give us a call today, toll-free, at (866) 972-3262 or visit our Web site (beamalife.com) for more information and assistance!
Is there a way for me to calculate my net worth on my own?
Absolutely. In order to figure out your true net worth, first add up the current value of all of your assets, and all of your liabilties. Subtract the total of your liabilities from your total assets. The resulting figure is your net worth.
The assets you factor in could be cash, checking accounts, stocks, mutual funds, certificates of deposit (CDs), IRAs, 401(k) plans, real estate, or automobiles. Liabilities to consider include credit card debt, student loans, mortgages, car loans, 401(k) loans, home equity loans, or car loans.
If you’re trying to figure out the net worth of you, your spouse, and you as a couple, list your assets and liabilities together by owner, then add and subtract assets and liabilities accordingly to figure out net worth for all three of those entities.
These calculations should be the first step in your financial planning process. Once you have your net worth figured out, you will know exactly where yous tand, in terms of what you have, as well as what you owe. And that information will be crucial in planning your finances properly.
Net worth is a constantly changing thing, and as such, you should calculate net worth annually, making adjustments as they become necessary, to ensure that your financial goals are met.
BeamaLife can help you save thousands of dollars in your income and estate tax through pension plan and life insurance strategies now.
If one lives a lifestyle outside the parameters of working full-time or keeping a home – for example, existing as a nomad – how can he or she still have the health insurance one would need?
As it turns out, Assange has lived his entire life as a nomad. Even as a child, he attended almost 40 schools, moving about with his traveling actor parents. And as an adult, the online nature of his work left him unfettered– which proved useful as government agencies sought Assange out for questioning in regards to his large-scale releases of sensitive military documents.
Learning of such a person conjures questions regarding how one who lives such a life would have the kind of health insurance needed in order to survive any potential emergency circumstances. Some – like his parents – must travel frequently for their jobs. Others work toward one day quitting their jobs and setting out to travel the world. Assange found himself on the run after going public with the information he received.
No matter the reason one adopts a nomadic lifestyle, planning is essential – as much planning as possible – to making sure they have the financial resources they need in an emergency. Well-funded savings accounts (to which you contribute diligently), high-deductible health insurance policies (if you don’t frequently need medical care), and detailed research of group plans, or more likely the most affordable individual plan, are essential to ensuring the coverage you need and security you desire.
Depending on where you’re wandering (and whether it’s within your country of residence), you will find vary degrees of difficulty in the availability of health care no matter where you are. In America, for example, health insurance is built upon local and state-level deals between companies and government, making it difficult to go to any doctor, anywhere, for aid without paying more.
Odds are, you will have the opportunity to speak with an insurance expert about your options as you venture into this way of life – generally, a nomadic lifestyle is a lifestyle of choice. Take the time to do so, if you can, to make sure you have everything you need in terms of security. Companies such as BeamaLife make it easier to consult with informed, educated persons who can help you toward your financial goals.
BeamaLife can help you save thousands of dollars in your income and estate tax through pension plan and life insurance strategies now.
The Success Secret of the “Over 100” Crowd
One of the fastest growing segments of the population today is people who are more than 100 years old. A recent article states that back in 1990 there were about 37,000 of them here in the U.S. By 2008, the number had swelled to 84,000. And estimates state that by 2040, there will be more than 500,000 “centenarians” living in the United States.
Living beyond 100 years – that’s an amazing accomplishment! Because, as the article points out, people who live to 100 are not just people who made it to 80 and then tacked on an additional 20 years of physical and mental decline. People who live to be 100 often avoid the chronic illnesses associated with age altogether. No diabetes, no heart disease, no Alzheimer’s or Parkinson’s diseases.
Another interesting thing that the article pointed out was that centenarians were, as a group, much happier about their financial situations that any other age group. When asked, 95% of them responded that they had enough money to meet their needs, while 76% said that they even had enough to by the extras that make life even more enjoyable.
The article then went on to highlight a surprising fact. Of the centenarians surveyed, nearly 40% had no financial reserves whatsoever. And another 37% had enough money for life’s necessities, but no “extra” money for more pleasurable purchases. Yet, 95% felt they had all the money they needed to meet their needs.
As someone whose career is built around ensuring the financial futures of everyday people, I find that fact amazing. And inspiring. Because it points out something that I think is so important, but so simple, that it’s often overlooked.
We choose how to feel about our circumstances. Whether we have a lot or a little, we can always choose to be happy. It may be easier to feel happy when you have a lot of money, but at the end of the day, we’re the ones who choose to put a smile on our faces when we get up in the morning.
Let’s take a lesson from the valuable and inspirational members of our society. Let’s do the things that we know we need to do to secure our own financial futures, and let’s choose to be happy. And maybe we can be the inspiration for a future generation!
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