Savvy individuals and investors purchased $17 B of one type of product this year. That represents almost 7% increase over last year. The investors did it to control risk, earn a decent rate of return and in many cases to guarantee lifetime income or at least guarantee income for a fixed period of time. How does that sound to you? How about Zero market risk! Is that important to you?
These products are offered by some of the strongest financial companies in the world. The companies I recommend did not lose money in 2001, 2008 or 2009. They did not require any government bailout! They actually made money in 2008-9. They are well positioned to weather the next market downturn which we all know will happen! We just can not say when.
These products work with both qualified and non qualified money. They work in ROTH and Traditional IRA accounts, SIMPLE Plans, SEP Plans or even within ROTH or Traditional 401K Plans that I run for my clients. They can be used in Trusts, can fund charitable contributions or work within estate plans.
Friday, November 15, 2013
Monday, November 11, 2013
Did you know November is Long Term Care Month?
Yes, November is Long Term Care Month!
If you are in a room with only 4 adults how many of them will end up need Long Term Care (LTC)?
The answer is at least 2! I don't know who is going to need it but I know what percentage will need
it! That's over a 50% chance of needing LTC!
Do you own a house? Do you have homeowners insurance? Of course you do! Do you know that you only have about a 1 in 1200 chance of having a house fire? That's less than a 0.1% chance of a fire but you have protection against that risk.
Do you have auto insurance? About 98% of people have auto insurance. The risk of being in an accident is about 1 in 200 or 0.5%. But even with the low risk almost everyone insures the risk.
Why is that? It is because the risk of an event without the coverage is devastating to your financial health!
The risk of an uninsured LTC event is far more devastating than either of the two examples shown above. The average cost of a LTC event far exceeds the cost of replacing the average house! The average cost of a LTC event is 20 times the cost of a typical auto accident.
There are even products that protect those who are convinced it will not happen to them. If you never need it you get your money back!
If you are in a room with only 4 adults how many of them will end up need Long Term Care (LTC)?
The answer is at least 2! I don't know who is going to need it but I know what percentage will need
it! That's over a 50% chance of needing LTC!
Do you own a house? Do you have homeowners insurance? Of course you do! Do you know that you only have about a 1 in 1200 chance of having a house fire? That's less than a 0.1% chance of a fire but you have protection against that risk.
Do you have auto insurance? About 98% of people have auto insurance. The risk of being in an accident is about 1 in 200 or 0.5%. But even with the low risk almost everyone insures the risk.
Why is that? It is because the risk of an event without the coverage is devastating to your financial health!
The risk of an uninsured LTC event is far more devastating than either of the two examples shown above. The average cost of a LTC event far exceeds the cost of replacing the average house! The average cost of a LTC event is 20 times the cost of a typical auto accident.
There are even products that protect those who are convinced it will not happen to them. If you never need it you get your money back!
Saturday, November 9, 2013
Why would anyone ever put up with earning only1.9%?
I was just reviewing Bank Rate.com and it showed a National Average 5 year CD rate of only 1.9%.
Why in the world would anyone want to park funds at a bank with a rate of 1.9%? Just think about it the average inflation rate over the last 5-10 years has been over 2.5-2.9%. That means in December you have lost money every year for parking money with your bank! Ouch! Your bank doesn't loose money they lend it out for anywhere between 3.9 - 19+%. Why should you loose money so the bank can make as much as17% per year on your assets.
Did you know that solid alternatives exist?
How about the following examples. I am going to mention just a few.
The only problem is that these rates might not last for ever. Don't Delay!
1) 5 year fixed rate guaranteed 3.25- 3.5% per year.
2) 8 year monthly income stream paying 6%
3) Insured High yield but variable rate 7 year product. Contractual low rate of 1.25% with an annual upside potential of up to 7 - 7.25%. If you get the maximum only 2 years out of 7 you get almost 2.8%, if you get the max 3 years out of 7 you earn almost 3.7% and if you earner the higher rate 6 years out of 7 you would earn over 44%. Compare that to the Bankrate.com national CD rate of 1.9% with a 5 year return of under10%. Which should you choose?
Call or email to learn more or to determine if these strategies makes sense for some of your assets!
Why in the world would anyone want to park funds at a bank with a rate of 1.9%? Just think about it the average inflation rate over the last 5-10 years has been over 2.5-2.9%. That means in December you have lost money every year for parking money with your bank! Ouch! Your bank doesn't loose money they lend it out for anywhere between 3.9 - 19+%. Why should you loose money so the bank can make as much as17% per year on your assets.
Did you know that solid alternatives exist?
How about the following examples. I am going to mention just a few.
The only problem is that these rates might not last for ever. Don't Delay!
1) 5 year fixed rate guaranteed 3.25- 3.5% per year.
2) 8 year monthly income stream paying 6%
3) Insured High yield but variable rate 7 year product. Contractual low rate of 1.25% with an annual upside potential of up to 7 - 7.25%. If you get the maximum only 2 years out of 7 you get almost 2.8%, if you get the max 3 years out of 7 you earn almost 3.7% and if you earner the higher rate 6 years out of 7 you would earn over 44%. Compare that to the Bankrate.com national CD rate of 1.9% with a 5 year return of under10%. Which should you choose?
Call or email to learn more or to determine if these strategies makes sense for some of your assets!
Monday, November 4, 2013
Congratulation the Award for the Worst Website Launch in Internet History is Awarded To ...
I can think of several world class awards we could give out. I'm trying to decide between an Academy Award and the Time Magazine Internet Man Of The Year. Unfortunately they would both be awarded to the same team. Five days into the OBAMACARE launch the stats looked like this 9.7 M attempted sign-ons to the website, followed by a whopping 36,000 American who managed to buy Obamacare insurance. Since then the government has not even been releasing statistics! Why not? So much for open government and public disclosure. I believe it was CBS that did a story on the fact that 2,000,000 Americans lost health insurance coverage either because their employers cut their hours for employees or just plain stopped offering insurance altogether!
Any half decent manager knows that if the product does not begin to be ready to release you Delay the launch. So why the disconnect?
Look at the numbers.
Admitted government spending on Obamacare website $300 Million
Probable real spending before rollout estimates $600 Million
Estimate for the total cost to write, correct and repair $1 Billion
What did we get for that $1 Billion?
Any half decent manager knows that if the product does not begin to be ready to release you Delay the launch. So why the disconnect?
Look at the numbers.
Admitted government spending on Obamacare website $300 Million
Probable real spending before rollout estimates $600 Million
Estimate for the total cost to write, correct and repair $1 Billion
What did we get for that $1 Billion?
Insurance , Where Does It Fit In?
Did you know that approximately 30% of Americans do not have Life insurance!
Did you also know that 50% of Americans know that they need to buy more life insurance!
Everyone should think about the following questions. I would love to see some replies or comments on line here on the blog or offline! Help for most of you is available!
1) What is your personal situation?
2) Do you have life insurance?
3) Do you have Life Insurance that isn't tied to your Employment?
4) Why does that matter?
5) Do you have enough insurance?
6) If you do not have life insurance what is your excuse?
If you have a spouse or dependents almost everyone needs to have life insurance!
People with a non working spouse or families with young children need the most death benefit. Even people nearing retirement often need insurance and Often buy it even though it is much more expensive at older ages! As we age sometimes we need different types of coverage or even different amounts.
Why does it matter if your insurance is tied to work? See the comments in the Blog post from October 23, 2013 for a discussion of employee life insurance!
Do you have enough life insurance? See the blog post from October 23, 2013 for a discussion about how to determine if you have enough insurance. Use the worksheet or call to discuss.
If you are uninsured because you waited to long to buy protection there is still hope. Call to discuss your specific situation.
Remember Life insurance serves two primary functions it offers protection against the "What If ..." scenario, and it helps anticipate and cover the "When I..." scenario. Can you figure out the What if and When I scenario.
Did you also know that 50% of Americans know that they need to buy more life insurance!
Everyone should think about the following questions. I would love to see some replies or comments on line here on the blog or offline! Help for most of you is available!
1) What is your personal situation?
2) Do you have life insurance?
3) Do you have Life Insurance that isn't tied to your Employment?
4) Why does that matter?
5) Do you have enough insurance?
6) If you do not have life insurance what is your excuse?
If you have a spouse or dependents almost everyone needs to have life insurance!
People with a non working spouse or families with young children need the most death benefit. Even people nearing retirement often need insurance and Often buy it even though it is much more expensive at older ages! As we age sometimes we need different types of coverage or even different amounts.
Why does it matter if your insurance is tied to work? See the comments in the Blog post from October 23, 2013 for a discussion of employee life insurance!
Do you have enough life insurance? See the blog post from October 23, 2013 for a discussion about how to determine if you have enough insurance. Use the worksheet or call to discuss.
If you are uninsured because you waited to long to buy protection there is still hope. Call to discuss your specific situation.
Remember Life insurance serves two primary functions it offers protection against the "What If ..." scenario, and it helps anticipate and cover the "When I..." scenario. Can you figure out the What if and When I scenario.
Thursday, October 24, 2013
Where are our taxes going?
During the Obama presidency the federal deficit has basically doubled. We now have a federal deficit of over $17 Trillion that T not a B. You can not blame it on Iraq or Afganistan since those wars were well underway before he came into office and most of the expense is in the billions of dollars of equipment vehicles, building, arms, trucks, planes etc that were bought, built and transported to the battlefield most of which was already in country before Obama's election. You can not blame it all on the recession because if you believe Obama the recession is over and we are well into a recovery, or so he says. My reply to that claim is what recovery? So if its not the wars and its not the recession why have the federal deficits doubled since Obama took office? Its not the costs of OBAMACARE since the true inflationary costs of that program cannot yet have begun to be seen since the program doesn't really begin until next year! There really is only one answer and that is out of control spending beyond the tax income the government takes in!
So its our overspending without adequate tax revenue to offset the spending. Can we all basically agree on that? That brings us to the next question. If we are spending more than our revenue What impact will that have on future tax rates? Do you believe that the Congress and the president are going to balance the deficit in the next 10 years or so? I don't. So what do you think will happen to our tax rates over the next 10-25 years? The only logical answer is they are going to go up. If that is the case than it is even more important that we begin to plan for how to manage the taxes we will have to pay! Tax free or tax controlled income planning and tax free retirement products are therefore almost essential! We can help you with that!
So its our overspending without adequate tax revenue to offset the spending. Can we all basically agree on that? That brings us to the next question. If we are spending more than our revenue What impact will that have on future tax rates? Do you believe that the Congress and the president are going to balance the deficit in the next 10 years or so? I don't. So what do you think will happen to our tax rates over the next 10-25 years? The only logical answer is they are going to go up. If that is the case than it is even more important that we begin to plan for how to manage the taxes we will have to pay! Tax free or tax controlled income planning and tax free retirement products are therefore almost essential! We can help you with that!
Wednesday, October 23, 2013
How Much Insurance do I need? Other great questions.
A client just asked me a number of questions about insurance.
Question 1) How much insurance do I need?
This is a great question. There are a number of ways to address this question. Some people use a ballpark approach , some use a multiple of 10-20 times incomes but there is a nice one page worksheet that can help you answer this question. Its called The D.I.M.E worksheet If you want to answer this critical question this worksheet will help you out. I can help with that!
D.I.M.E.
D. represents Death Benefit and Final Expenses
I. represents Income Replacement
M. represents Mortgage Payoff Amount
E. represents Education Expenses
The Sum of D.I.M.E. equals a reasonable estimate of your insurance need
Question 2) Since I have insurance at work why do I need more?
Almost 90% of work based insurance is Term Coverage. Workplace Term coverage has limitations.
If you retire, are disabled, quit or are terminated Worksite term is usually not portable. You leave you lose!! Your need for insurance doesn't stop just because you leave! I can provide Worksite Portable Life Insurance that you can keep. Ask me about how that works! So when you leave your ability to buy a replacement policy depends on you health and your age at that future date and time. If you can tell me when that happens or what your health will be then you might be able to say you do not need other insurance. If you cannot answer those questions than worksite insurance is not enough!! The typical 1.5 - 3 times salary is simply not enough! To get more you have to buy it and you should buy it from a professional who understands your real needs. You can't get that from a website! You only get that from a professional who works with you face to face.
Question 3) What is the right type of insurance for me?
Another great question. There are many types of insurance that fill specific needs. Only by sitting down with a professional who works with you to analyze all of your specific, assets, needs, debts, financial commitments is it possible to truly insure that your selected policy or policies truly meet your needs. I will tell you this. Most people have a complicated set of needs and in most cases one policy my not completely cover all of those needs. that's why insurance companies have created 6 or 7 different types of policies. How many do you need?
If you have a question that you would like to see answered please send me a question or get in touch for a one on one discussion!
Question 1) How much insurance do I need?
This is a great question. There are a number of ways to address this question. Some people use a ballpark approach , some use a multiple of 10-20 times incomes but there is a nice one page worksheet that can help you answer this question. Its called The D.I.M.E worksheet If you want to answer this critical question this worksheet will help you out. I can help with that!
D.I.M.E.
D. represents Death Benefit and Final Expenses
I. represents Income Replacement
M. represents Mortgage Payoff Amount
E. represents Education Expenses
The Sum of D.I.M.E. equals a reasonable estimate of your insurance need
Question 2) Since I have insurance at work why do I need more?
Almost 90% of work based insurance is Term Coverage. Workplace Term coverage has limitations.
If you retire, are disabled, quit or are terminated Worksite term is usually not portable. You leave you lose!! Your need for insurance doesn't stop just because you leave! I can provide Worksite Portable Life Insurance that you can keep. Ask me about how that works! So when you leave your ability to buy a replacement policy depends on you health and your age at that future date and time. If you can tell me when that happens or what your health will be then you might be able to say you do not need other insurance. If you cannot answer those questions than worksite insurance is not enough!! The typical 1.5 - 3 times salary is simply not enough! To get more you have to buy it and you should buy it from a professional who understands your real needs. You can't get that from a website! You only get that from a professional who works with you face to face.
Question 3) What is the right type of insurance for me?
Another great question. There are many types of insurance that fill specific needs. Only by sitting down with a professional who works with you to analyze all of your specific, assets, needs, debts, financial commitments is it possible to truly insure that your selected policy or policies truly meet your needs. I will tell you this. Most people have a complicated set of needs and in most cases one policy my not completely cover all of those needs. that's why insurance companies have created 6 or 7 different types of policies. How many do you need?
If you have a question that you would like to see answered please send me a question or get in touch for a one on one discussion!
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