A quick review of the focus of the blog and the Miles Weekly Personal Finance Podcast, a vehicle by which to inform, educate, entertain, and cover the basics of personal finance, small business, investing, savings. The primary objective if there is one at all, to close the gap of “information asymmetry” and raise the minimum threshold of financial literacy to anyone that subscribes to the podcast or keeps up with the blog. In communications lingo The “A” End is the originating end or point of origination, for us that would be Episode #1 and Blog Post #1. Conversely the “Z” end is the terminating end, whereas the communications sent have been received. But don’t be fooled, the end also becomes the beginning and Z becomes A to start the cycle all over again. This is “Episode Number “Z”, we have reached the terminating end of these communications …successfully I might add. end.
Anyone that has been looking to just be seen by a doctor for some acute issue, maybe a slight sudden illness like the flu, they now have more options than just the emergency room. At one time regardless of your health insurance coverage, many folks were destined to sit in ER’s around the country for hours and maybe even watch hospital staff change shifts while they wait, and wait some more to be seen. With a lack of primary care physician availability and increasing wait times in the ER, first response of many people was to take an ambulance to get in right away, so they can hurry up to wait. Although there are folks that still believe the ER is the place to go when they have the flu, the landscape has changed quite a bit since then. Firstly, there are flu shots at the local pharmacy, and you can even see a doctor without going to the emergency room and waiting for your doctor to graduate from med school. What happened? One major change that is here to stay, Urgent Care Centers.
Plan for Both Life and Death, Because Both Have Expenses.
On this week’s episode, an interview with Funeral Services Director Alysia M. Hicks. We discuss the business of managing final arrangements, burials, becoming a mortician/ funeral director, rumors about the business and of course …how much does it cost to bury someone??? In this very straight forward conversation Alysia M. Hicks is able to give some true insight on a range of topics from what it takes to become a funeral director and the level of casket side manner required to be a “Doctor of Dead People”.
This is the holiday season and you probably deserve to give yourself the gift of of financial fitness. At the end of the year during holiday season there’s still time to wrap up 2016 and put a big bow on it. The Personal Finance Holiday List focuses on maximizing deferred savings, reducing taxes, giving gifts that keep on giving and optimizing your credit profile so you’re not paying the interest that allows other customers to get teaser rates. Keeping yourself financially fit ultimately allows you to go out and buy gifts for whoever you may desire, you included. Just remember, charity starts and home, then travels abroad.
Annual “Open Enrollment” selections, elections and options are typically around October and November of every year. Most employees carryover the same options year after year, sometimes this is a big mistake, they’re leaving money on the table and that is not how the game is played. Much like you would review every line of tax deductions for expenses and credits at tax time, the same should be done to ensure annual elections are “optimized”. Everyone wants to get the most for their money, with that in mind making a decision for the entire year can be tricky. It’s necessary to consider everything from frequency doctor visits, dental visits, eye care, prescriptions, relocating or even if you don’t go to the doctor much more than preventative care and checkups here and there.
Consider everything from possible savings by reducing coverage, adding life insurance amounts, and of course the possible tax advantages of an FSA or HSA to help offset those wonderful co-pays and deductibles. I always wondered who came up with the “co-pay”, like really, a $10. co-pay?!?! Why? It’s always been a pain to make sure you have $10. or $15. in my pocket just for the co-pay!
Life Insurance Essential Interview with Kissy Ariza, Life Insurance Rep.
I met with Kissy Ariza, a very personable and knowledgeable, high energy local NY area life insurance representative to ask some popular questions about getting life insurance. Many folks already understand the importance of having life insurance of some kind, somewhere with some company. Most of us even remember the “insurance man” who used to come around from time to time, and our parents bought whatever policies they could afford. Not so much in our busy lives today. Hence, there are a lot of misgivings and out right un-truths out there about insurance. One thing however is for sure, a good ironclad policy is a key part of any good personal financial planning.
Kissy Ariza was able to dispel some common misconceptions, verify some known truths and even offer some serious take away information. In this interview she gave some invaluable points that make it easy to understand why life insurance is such a big deal and necessary part of your finance arsenal.
As a foundation to build your wealth be it in monetary riches or a longevity in life, it is our health that we will rely on time and time again. Good health is our number one asset, and well being of both mental and physical is what will allow the hustling go-getter in us all to build our own Empires. Health and Wellness is the underlying engine that keeps us all running. More than any accidental deaths, homicides, suicides or any other tragedy, it is illness and deteriorating health that slowly robs most people of the greatest potential. As is well known, some of the worst killers among the US population as it relates to health are also some of the most most preventable are Diabetes and Cardiovascular Disease.
Diabetes is the 7th Leading cause of death in the US according to the American Diabetes Association. Cardiovascular Disease is the absolute leading cause of death globally according to the American Heart Association.
At the very minimum, there are at least 5 finance accounts every couple should share, or are working toward getting together:
Joint Checking: Day to day and monthly household management, utilities and food, etc.
Savings/ (MMA) Money Market Account: For the Emergency Fund, home down payment, vacations, large purchases like cars and appliances.
Checking/ MMA Investment: For making investments and speculative activity into anything ranging from real estate investing to small business ventures.
Brokerage Account: For investing in mutual funds, stock and other long term investments.
Credit Card Account: For shared benefit expenses like vacation rentals, car rentals, travel, bookings and on the spot issues.
How does finances play a role in relationships when you’re trying to build yourself up? Can it be expected that your spouse, boyfriend or girlfriend will take on your bills with your now that you’re together? Are old debts now shared debts? Do you share bank accounts and saving accounts?
When it come to relationships, another major qualifier other than how great a personality someone has, how good they look and make you feel should be what is their philosophy about finances. Do you have a spender, a compulsive saver or someone that just doesn’t have or want a clue about money on your hands? The time to figure this out may not be after you’ve kind of fallen head over heels, you know when you’re not thinking so clearly.
What if you’re already in a relationship and the finances are jacked up, one sided or no one is taking responsibility for your financial future? Who should be in charge of the finances? Probably you if you’re the one who noticed. Who should be guiding and ensuring you’re reaching financial goals of home buying, savings, retirement and education? Again, probably you. Credit scores, retirement savings and financial does matter. Unless of course you don’t mind making up the difference where your partner lacks in these areas. Now is always a good time to take a look at your finances and how they work in your relationship, because as you may already know, ain’t no romance without finance.
As we approach the end of the year, yes October should be signalling the end of the year, it is th perfrect time to make annual adjustments regarding financial goals, wealth and well being acccordingly. And these things may range from how much you intended to save, bills you meant to pay down, points on your credit score to improve upon or most important of all, your health and physical well being.
Typically, as far as finances go you should be balancing and rebalancing semi-annually just to make sure you are on
track with any goals from the beginning of the year. Usually some time around June or so, reviewing your 401k if you’ve got one, 529 plans, IRA’s, annual Christmas Club Saving Plan, (does anybody still do these?) and anything else you can think of that you need to stay on top of during the year. Make adjustments accordingly, increases, sell-offs, account closing and opening, etc. Are you headed where you want to be for based on half way through? If not, the middle of the year is a good time to check and correct. And, it is also a good time to start some of those things that fell off the table during the New Year’s resolution stage, which for me is typically the entire first three months. It sometimes takes that long to narrow down real reachable goals that I can measure and guide as the year goes on.
During the last quarter of the year, beginning Oct. 1, the same thing should occur with a bit more focus. Besides
getting caught up on all of the things and statuses of accounts, there’s the reality check for what can really be
accomplished in these last three months. Let’s say you’ve intended to save $100.00 per month with the intent of getting a stated interest, if you’re not at least half way there can you get there with what’s left of the year?
Readjusting goals is a normal practice and beats letting them go altogether. If you see you can at best end up with $900.00 for the year, readjust and make that happen. The satisfaction and benefits of accomplishment far outweighs giving up on your goals, even if only you know about it. If there are any investments or college savings plans you may have intended but never got around to, now is a great time to get ahead of the coming year and open new accounts with even the smallest amount. Many accounts for IRA’s, College Savings IRA’s and Mutual Funds will waive the initial investment of over a $1000.00 and let you get started for $25.00 to $50.00 if you pledge to make monthly automatic deposits. Speaking of automatic deposits, it’s been proven people save more with an automatic setup, (direct deposit, pretax, and auto-debit) than making manual deposits and investments. Having these plans and accounts in place already will allow you to follow through easier in the coming year.
For the hustler and entrepreneur in you, the last quarter marks the beginning of the next year as it relates to becoming prepared early. A true businessperson will need to familiarize themselves with and learn their industry, customer or client. Forward looking entrepreneurs can begin setting up their legal business structure, (C-Corp, S-Corp, LLC and Partnerships) gathering information on regulatory requirements for their particular business, focus on financing (often overlooked, personal credit is key as an entrepreneur as you may need to rely on this to back up the business as the business will have no history!) relevant credentials, marketing and start building out the foundation of the enterprise whatever that may be. Also, keep in mind that all of the costs and expenses that go into setting up the legal structure, market research, travel, courses, equipment, goods and stock, expenses related to building out or using office space in your home, and any other expenses related to getting the business up an running are tax deductible for the current year.
So being on your grind, you’re set to reduce your taxable income for this year and tax season is in 2 months. Get these started now and keep good records! Health Regimen. There will be no need to worry about financial prosperity except to pay the medical bills if there isn’t proper focus on health. Most important semi-annual and End of Year review if that of your health. Beginning with regular physical to dental and eye check up for the basics. Then there are the specifics based on your gender, age, race and habits -those dang habits, some good and some not so good. Whether it’s prostate checks or mammograms, get in focus early. Now’s a good time to start a routine and maybe review or tweak your health practices ranging from what you eat to how often you eat. I personally don’t believe in crash diets whatsoever, but tweak things as I go. A regular workout schedule and a decent diet will do for most people. just find what you like out of the stuff that’s good for you and have it often. Fighting off any preventable conditions such as diabetes, heart disease and high blood pressure that will steal your time, ability to focus on your prosperity and happiness or cost you the same money your working so hard to get is the way to go. I’d even consider changing my doctor if we can’t work out a plan to avoid a medication for an avoidable condition, he’s not helping me reach my goals. Also, gym time is a great investment, just don’t get lost paying for a gym you don’t go to although that’s how they make their money.
Finally, there’s plenty more to discuss but to summarize… Review what’s attainable and what’s not, be realistic of
course. Cut the losers and keep winners, whether it’s ideas or stocks and in some cases people activities and even jobs sometimes. Losers such as unnecessary medications, banks fees, high interest credit cards, finance fees, depreciating investments expensive cars or appliances with costly repairs, high media costs for cable and movie channels can all be losers, just sucking money away from you that can be better utilized. Winners like free checking accounts, low interest credit cards, (call them and ask, you may be surprised) increasing IRA contributions instead of poor 401k options, increasing retirement contributions with every raise, using money market accounts instead of savings accounts, reducing taxable liability by using FSA options and for eligible expenses are all winning moves. Quitting Early has an upside and may save lots of losses later on, that’s what reviewing is all about. Equally, Starting Early can give you the leg up and put you in position to prosper instead of trying to figure things out when the time comes.
Here are some money saving tools and routes to take to get set up for the coming year.
There once was a time when acquiring insurance was a relatively uncomplicated event. There were companies making all sorts of offers to cover everything from health, life, well-being –long term well-being that is. In order to get signed on to these policies, it was fairly simple and straightforward, you could respond to a mailer solicitation form, answer the knock at your door from the local salesman or just call up one of the most well-known companies and get the process going. Typically you would identify a few key things relative to your general well-being, how much coverage you needed, the duration and what affordable premiums would be to you. During these times, people were even insuring other high risk activity family members just in case. There was no need to set up auto payments, check your credit, look up anything or wait for anything.
Well, things have changed drastically over the years and if you want to be insured for anything, you had better do your homework. Whether it’s homeowner’s insurance, car insurance, health, life, or anything that’s insurable you had better take the time to understand what will be required from you in order to be eligible, the costs and the fine print… the exclusions and disqualifiers. The insurance industry has taken a turn for becoming a behemoth sized profit machine. Through their lobbying arm, they use their collective might to persuade lawmakers to legislate in their favor, according to Opensecrets.org , they did this to the tune of over $40,000,000 so far in 2015. They are constantly refining policies to cover things that they are pretty darn sure will not cost them money, and if something does come along and have to be covered then you should expect higher rates somewhere down the line because you’ve just moved into the high risk category. Even calling your homeowner’s policy insurance representative to inquire about making a claim can be held against you! I’m going to stop here before going on some sort of rant, this post isn’t about how terrible insurance companies are, even though they are at times.
This post is however about understanding that it’s necessary to evaluate your current and future status, and planning accordingly in all financial matters relative to insurance. Insurance is a useful tool in the planning of your financial well-being and overall prosperity. That being said, knowing how to evaluate your needs properly is key alongside knowing the options available and how to effectively use them
Evidence of Insurability.
This is the term that will be thrown in conversation after you’ve sat with an agent representative and have gone over the details of a policy. After you have reviewed the costs, benefits, premiums, setup auto debit from your checking account, and finally decided that you’re making a good financial move. It also may come up after you’ve made elections during the “Open Enrollment” period at your job, when your make elections for the upcoming year for employer benefits and decide to “up” your life insurance. That’s when this pops up… “Evidence of Insurability”. Typically this means that the insurer is going to want you to do something that offers proof of your current state of health and well being at the time of the coverage. At the very least that your health and well-being is what you state it is on the application. Not that they don’t “Trust” you, but um… let’s say they are Reaganites who believe in the idea of “Trust but Verify”. So what this means for you is they may require one or more of a few things to prove your insurability such as:
Having you sign an affidavit stating your insurability according to your application, or they may
Sending a nurse to your home to take your vital signs, blood and even an EKG to be sure you are worthy of insuring
Having you sign a release document authorizing you medical records to be released to them from you doctor or any other medical institution for the purpose of underwriting insurance for you.
So, keeping healthy will literally cost you less money in the long run in medical bills, health insurance and life insurance too. And now more than ever, what the Doctor puts in your file regarding your blood pressure and medications (prescribed, whether you take them or not) make a big difference. Don’t worry though, they’ll still insure you if you’re voluntarily not in good health, you’ll just need a mortgage for the insurance that’s all.
This seems like the no brainer regardless where you fall on the economic ladder if you are concerned about any costs that will remain after you die, be it an untimely or expected death. The younger and healthier you are the more time you have to move through various life insurance options to fit your needs. First you want to consider what liabilities would remain that you would want to make sure are taken care after you die including any final plans for yourself. And that’s it. There is no need to use life insurance as a windfall option in case you die for anyone else to benefit from. This means focus on what’s important and unless you have million dollar liabilities you won’t need a million dollar policy, seriously. Here’s 5 top things what people need to consider covering with life insurance.
Income replacement for primary or secondary head of household
Education costs for growing children
Cost to cover outstanding debt such as car loan, mortgages, etc.
For example: If you have $150,000 left on the house, 2 school age children, 2 car notes totaling $35,000 left owed on the vehicles, “Your Own” final expenses, and a second mortgage for $10,000 . Assuming $50,00 per child for education (this is a wild card, because they can also go to community college, or get scholarships- you have to figure out what you’re working with). You’re definitely not looking at a million dollar policy to cover this scenario… If you currently earn a modest $60k to $90k a policy with a payout of $300,000 to $400,000 should cover those expenses plus by replacing 4 to 5 years of disposable income. Sure a $500,000 policy would be super sufficient, but that would be near the top end of the needs. I’m definitely no insurance broker or representative, however, this is good conversation to consider when calculating your needs at the time of buying a new policy. If your representative isn’t taking this approach with you, then get someone else.
Notice, there isn’t anything there about a new Lexus or a new house or super vacations. And, as you become older some of these things may even drop off. If the house is already paid off, you won’t be worried about leaving a spouse to pay for it. Same goes for children’s education and so on. So be wary of over purchasing life insurance that you may not be able to keep up with. You may end up losing the benefit that all of those premiums go to if you drop a policy that was too expensive in the first place.
One interesting option is “Return of Premium” (ROP), this policy offers a return of your accumulated premiums if you so happen to not die during the term of the policy, less whatever they work out to keep for themselves of course. The premiums are a bit higher, however it is definitely very worthwhile looking into. www.aig.com and www.statefarm.com both offer ROP policies and have extensive info on these type of policies including understanding the costs, future benefit calculations and comparisons to regular term policies. It all comes down to future value which is easily explained by Investopedia.com at http://milesweekly.com/futurevalue
What if you just become ill or need care?
LTC Insurance seems to be a well-kept secret, this sort of insurance plan offers to help pay the costs of any long term care should you become ill or injured and need long term care. This is something many people overlook for various reasons including believing that their health insurance is going to cover everything. However, health insurance doesn’t cover much related to “care” as it relates to someone helping you in your home if you’ve been released from the hospital and are in need of home health care. Many people end up leaning on their family members if they have a support system in place, others are weighed down with the guilt of burdening family members and can sometimes trigger depression as a result. LTC policies come in many types and sizes to fit different budgets and target various scenarios, however, in general the focus is on primary areas that health plans typically do not cover or cover very little of. 5 Key areas that Long Term Care policies cover:
Nursing Home Care
Home Health Care
Personal Care in your home for thing like cooking meals, toileting and other personal issues.
When you consider how a lifetime of earnings, smart financial decisions and the resulting accumulated assets can be wiped out in your later years by the costs and needs for “care” due to illness or injury, it’s a smart move to add this to any plan for prosperity. www.Genworth.com , www.statefarm.com , and www.mutualofomaha.com offer LTC policies. I don’t recommend these companies in particular, however, they offer great info, standard policies, are leaders in the market and a great place to start.
The Earning Years.
Typically for most of us the “Earnings Season” will be between 25 and 60, really hitting peaks at 35 to 50 give or take some years for some folks that are faster or slower. It’s actually a nice long time when you think about it, enough time to do extremely well even if you trip, have a slow start or need to restart. These are the years to build the nest egg, acquire whatever cultural standards and even enjoy the fruits of yous labor a bit too. This is also the time to plan, review, assess, execute… I could have made up some corny acronym, but simply put, these are the years to keep healthy place good odds on your health and life and then collect on them too. That 35 to 50 interval is critical, critical… There is still time to redirect, change course, update, step up, get things in order like your health and even buy insurance if you haven’t or recently lost it with your last job. You may even get a new job and start there if you have to, you’re in the zone, old enough to have some serious experience and young enough to execute with vigor.
Of course there’s more and more, plus some more to go over with insurance, everything from home to auto to pet care and even insurance to cover the other than angelic teens. But that’s all for another time, right now, being mindful of the term “Evidence of Insurability”, buying the appropriate amount of life insurance and considering the often overlooked Long Term Care insurance is where we are. These are pillars of your personal prosperity as it relates to being insured to protect yourself and your assets long after the home is sold or paid off, the car has been replaced, the kids grow up, and the pet is heartfelt memory.