Why Retirees Are Going Bankrupt

May 16, 2022

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Denise and Chris Arand

Denise and Chris Arand

Executive Vice Presidents/Financial Strategists

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March 16, 2022

What You May Not Know About Life Insurance

What You May Not Know About Life Insurance

Life insurance has one main job—helping to protect your family’s financial security in the event of your death.

And it does that by providing your loved ones with a one-time payout that replaces your income.

Your family depends on you to provide. It’s how they afford necessities like food and shelter. It’s also how you support them with their lifestyle.

But if you pass away, your income dries up. Your family would have to face their financial responsibilities with fewer resources.

That’s where life insurance helps. If you pass away, your family receives a benefit that can help ease the financial pressure.

Instead of a yearly salary, your loved ones now receive a once-in-a-lifetime salary.

That’s why it’s common to base the size of your life insurance policy on your income. Rule of thumb, you want a policy that’s 10X your annual income.

So if you currently earn $60,000, you probably would need a $600,000 policy.

There are factors besides income to consider. For instance, your family may need more protection if you’re paying off a mortgage.

In conclusion, if anyone you love depends on your income, you need life insurance. It’s a way to provide for your family, even if you’ve passed away.

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This article is for informational purposes only and is not intended to promote any certain products, plans, or policies that may be available to you. Any examples used in this article are hypothetical. Before enacting a savings or retirement strategy, or purchasing a life insurance policy, seek the advice of a licensed and qualified financial professional, accountant, and/or tax expert to discuss your options.

March 14, 2022

Financial Essentials for Retiring Baby Boomers

Financial Essentials for Retiring Baby Boomers

Are Baby Boomers out of time for retirement planning?

At first glance, it might seem like they are. They’re currently aged 57-75, meaning a good portion have already retired!¹

And those who are still working have only a few precious years to create their retirement nest eggs and get their finances in order.

Perhaps you’re in that boat—or at least know someone who is. If so, this article is for you. It’s about some essential strategies retiring Baby Boomers can leverage to help create the futures they desire.

Eliminate your debt. The first step is getting rid of your debt. After all, it’s not optional in retirement—you’ll need every penny to fund the lifestyle you want.

That means two things…

  1. Don’t take on any new debt. No new houses, boats, cars, or credit card funded toys.
  2. Use a debt snowball (or avalanche) to eliminate existing debts.

That means focusing all of your financial resources on a single debt at a time, knocking out either the smallest balance or highest interest debt.

Eliminating, or at least reducing, your debt can help create financial headroom for you in retirement. It frees up more cash flow for you to spend on your lifestyle and on preparing for potential emergencies.

Maximize social security benefits. Delay Social Security as long as possible (or until age 70). Delaying Social Security increases your monthly payments, so it’s a simple way to maximize your benefit.

For example, if you started collecting Social Security at age 66, you would be entitled to 100% of your social security benefit. At 67, it increases to 108%, and by 70 it increases 132%. That can make a huge difference towards living your dream retirement lifestyle.

Check out the Social Security Administration’s website to learn more.

Protect your wealth and health with long-term care (LTC) coverage. The next step is to protect your assets from the burden of LTC. It’s a challenge 7 out of 10 retirees will have to overcome, and it can be costly—without insurance, it can cost anywhere between $20,000 and $100,000. That’s a significant chunk of your retirement wealth!²

The standard strategy for covering the cost of LTC is LTC insurance. It pays for expenses like nursing homes, caretakers, and adult daycares.

But it can be pricey, especially as you grow older—a couple, age 55, can expect to pay $2,080 annually combined, while a 65 year old couple will pay closer to $3,750.³

The takeaway? If you don’t have LTC coverage, get it ASAP. The longer you wait, the more cost—and risk—you potentially expose yourself to.

Pro-tip: If you have a permanent life insurance policy, you may be able to add a LTC rider to your coverage. Meet with a licensed and qualified financial professional to see if this option is available for you!

Review your income potential with a financial professional. The final step on your path to retirement is reviewing your income options. You want to strike a balance between maximizing your sources of cash flow and keeping control over your retirement plan.

Many retirees lean heavily on two primary income opportunities: Social security and withdrawals from their retirement savings accounts.

And that’s where a financial professional can help.

They can help you review your current retirement lifestyle goals, savings, and potential income. If there’s a gap, they can help come up with strategies to close it.

You’ve worked hard and made sacrifices—now it’s time to reap the rewards of all that elbow grease. Which of the essentials in this article do you need to tackle first?

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¹ “Boomers, Gen X, Gen Y, Gen Z, and Gen A Explained,” Kasasa, Jul 6, 2021, https://www.kasasa.com/articles/generations/gen-x-gen-y-gen-z

²”Long-term care insurance cost: Everything you need to know,” MarketWatch, Feb 19, 2021, https://www.marketwatch.com/story/long-term-care-insurance-cost-everything-you-need-to-know-01613767329

³ “Long-Term Care Insurance Facts - Data - Statistics - 2021 Reports,” American Association for Long-Term Care Insurance, https://www.aaltci.org/long-term-care-insurance/learning-center/ltcfacts-2021.php

March 2, 2022

Playing With F.I.R.E.

Playing With F.I.R.E.

Financial Independence. Retire Early. Sounds too good to be true, right?

But for many, it’s the dream. And for some, it’s even become a reality.

What is the Financial Independence Retire Early, or “F.I.R.E.” movement? It might be obvious, but it’s a movement of people who are striving to achieve financial independence so that they can retire early. How early? That’s up to each individual, but typically people in the F.I.R.E. movement are looking to retire between their 30s and 50s.

How are they doing it? By saving as much money as possible and living a frugal lifestyle. That might mean driving a used car, living in a modest house, and cooking at home instead of eating out. They scrimp and save wherever they can to save.

So why is the F.I.R.E. movement gaining in popularity? There are a few reasons…

Some people want freedom. They want the freedom to travel, to spend time with their family, and to do whatever they want without having to worry about money.

Others are tired of the rat race. They’re tired of working jobs they don’t love just so they can make money to pay for things they don’t really want. They’d rather be doing something they enjoy and have more control over their own lives.

And finally, people want security. They want the wealth they need to live comfortably and fear-free, and they want it now. They don’t want to wait until they’re 65 or 70 to start enjoying their retirement.

It’s a challenging path. Achieving financial independence and retiring early takes hard work, sacrifice, and planning. You’ll have to face financial challenges like covering health insurance, for one.

So if you’re thinking about joining the F.I.R.E. movement, what are some of the first steps?

1. Assess your finances. Figure out how much money you need to live on each month and how much you need to save to achieve financial independence.

2. Set financial goals. Determine where you want to be financially and create a plan to get there.

3. Make a budget and stick to it. Track your spending and make adjustments as needed so you can save more money.

4. Invest in yourself. Education is key, so invest in books, courses, and other resources that will help you build your wealth.

5. Stay motivated. Follow other F.I.R.E. enthusiasts online, read blogs and articles, and attend meetups to keep yourself inspired on your journey to financial independence.

So are you ready to play with F.I.R.E.?

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February 7, 2022

Why Debt Is A Big Deal

Why Debt Is A Big Deal

Debt is a word that strikes fear in the hearts of many. It ruins fortunes, causes untold stress, and topples governments.

Just ask a millennial about their financial struggles—student loan debt will certainly top their list.

But why? Why is debt so bad, anyway? After all, isn’t credit just money you can use now then pay back later? What’s the big deal?

Well, actually debt is a very big deal. In fact, it can make or break your personal finances.

This article isn’t for hardened debt fighters. You already know the damage debt can do.

But if you’re just starting your financial journey, take note before it’s too late. At best, debt is a tool. It certainly isn’t your friend. Here’s why…

It begins by lowering your cash flow. All those monthly payments bite into your paycheck, effectively lowering your income.

And that has consequences.

It can make it a struggle to afford a home. You simply lack the cash flow to afford mortgage payments.

It makes it a struggle to build wealth. Every spare penny goes towards making ends meet.

It makes it a struggle to maintain your lifestyle. You may find yourself choosing between the pleasures—and even the basics—of life and appeasing your creditors.

And that brings the risk of bankruptcy. It’s a last-ditch effort to erase an unpayable debt. It comes with a heavy price—creditors can take your home and possessions to make up for what you owe. And even if bankruptcy erases the debt, it will have a lasting impact on your credit score and financial future.¹

It can change your life forever, throwing your life into chaos.

Think about it—when was the last time someone smiled and fondly recalled that time they went bankrupt? Never. It’s a traumatic experience. This is something you want to avoid at all costs.

This isn’t to scare you into a debt free life or guilt you for using a credit card. Rather, it’s to educate you on the stakes. Debt isn’t something to be taken on lightly. It can have lasting consequences on your life, family, finances, and even mental health. Act accordingly.

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¹ “Bankruptcy: How it Works, Types & Consequences,” Experian, accessed Jan 7, 2022, https://www.experian.com/blogs/ask-experian/credit-education/bankruptcy-how-it-works-types-and-consequences/

January 10, 2022

Why Poverty Can Be Outrageously Expensive

Why Poverty Can Be Outrageously Expensive

Picture the most expensive lifestyle you can imagine. What do you see?

Palm trees and beach views? Italian shoes and Swiss watches? Flying yourself into space just because you can?

How about having to live in government housing, or working a minimum wage job, or not even being able to find a job?

It’s counterintuitive, but poverty can be outrageously expensive.

There are two main reasons…

  1. Poverty makes essential spending relatively pricey
  2. Poverty has hidden—and costly—side effects

Let’s break these down…

Poverty makes essential spending relatively pricey. Consider an example. Let’s say you’re single and earn $10,000 per year, $2,000 beneath the federal poverty line.¹

Let’s also say that you and some buddies snag a mediocre apartment in the city. Great location, right? But at $500 each per month, it’s $6,000 each per year. That’s over half your income on housing alone.

Your car? Between insurance, gas, and repairs, you’re looking at costs that could be north of $5,000.

That leaves you in the hole for $1,000. Then add groceries, your cell phone, and emergencies. Normal living expenses have not only consumed 100% of your budget, but they’ve left you in the red for other essentials.

For the wealthy, those items aren’t even a consideration. The essentials take up just a fraction of their income. What’s relatively cheap for them becomes crushingly expensive for you.

But the cost of poverty can get steeper…

Poverty has hidden—and costly—side effects. Suppose that, to save money, you downgrade your housing. You find a true hovel in a bad part of town that charges $150 each per month, or $1,800 each annually.

And it doesn’t take long for reality to set in.

You might find yourself in a so-called food desert since there aren’t proper grocery stores around you that sell healthy, affordable food. The quality of your diet plummets, but still increases in cost.

There’s consistent crime in your neighborhood. Possessions get stolen. Cars get broken into. Friends get hurt. You’re under constant stress.

To deal with the stress, you pick up some foolish habits that further hurt your finances and health.

You turn to payday lenders to make ends meet. It’s a critical mistake—they charge you aggressive interest rates that become a black hole of debt.

Finally, the consequences of a low-quality diet, stress, and unhealthy coping mechanisms emerge. You face one expensive health crisis after another. You have to quit your job as your condition worsens.

This isn’t to excuse bad or foolish or unhealthy behavior. Rather, it shows how situations make people vulnerable to otherwise avoidable pitfalls.

Relative expenses and hidden expenses creating a vicious cycle help explain why it’s so hard to escape poverty. It also helps explain why poverty tends to be intergenerational. Poverty actually consumes the resources needed to build wealth.

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¹ “Poverty Guidelines,” Office of the Assistant Secretary for Planning and Evalutation, Jan 13, 2021, https://aspe.hhs.gov/topics/poverty-economic-mobility/poverty-guidelines

² “Average monthly apartment rent in the United States from January 2017 to February 2021, by apartment size,” Statistia, Mar 25, 2021, https://www.statista.com/statistics/1063502/average-monthly-apartment-rent-usa/

³ “Average Car Insurance Costs in 2021,” Kayda Norman, Nerdwallet, Aug 20, 2021, https://www.nerdwallet.com/article/insurance/how-much-is-car-insurance

December 28, 2021

The Right Way to Spend

The Right Way to Spend

There’s endless advice about how not to spend money. And it’s often delivered with an undertone of shame.

“You’re spending WHAT on your one bedroom apartment? Why don’t you find roommates?”

“I’ll bet those lattes add up! That money could be going towards your retirement.”

“You still buy food? Dumpster diving is so much more thrifty!”

You get the picture.

But make no mistake—pruning back your budget is great IF overspending is stopping you from reaching your goals.

But what if you’re financially on target? What if your debt is gone, your family’s protected, your retirement accounts are compounding, your emergency fund is stocked, and you still have money to spare?

Good news—you don’t have to live like a broke college student. That’s not you anymore. Instead, you can spend money on the things you really care about, like…

• People you love

• Causes that inspire you

• Local businesses

• House cleaning services

• Travelling

• Building your dream house

• New skills and hobbies

This isn’t a call to wildly spend on everything that catches your momentary fancy. That might be symptomatic of underlying wounds that you’re trying to heal with money. It won’t work.

Instead, it’s a call to identify a few things that you’re truly passionate about. Ramit Sethi of I Will Teach You to Be Rich fame calls these Money Dials.¹ They’re things like convenience, travel, and self-improvement that excite you.

Just imagine you have limitless money. What would be the first thing you spend it on? That’s your money dial.

And, so long as you’re financially stable, there’s no shame in spending money on those things. This is why you’ve worked so hard and saved so much—to provide yourself and your loved ones with a better quality of life. Give yourself permission to enjoy that!

So what are you waiting for? Start planning that backpacking adventure through Scandinavia, or drafting blueprints for your dream house, or decking out the spare room as a recording studio. You’ve earned it!

Not positioned to spend on your passions yet? That’s okay! For now, let your goals inspire you to take the first steps towards creating financial independence and the lifestyle that can follow.

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¹ “Money Dials: The Reason You Spend the Way You Do According to Ramit Sethi,” Ramit Sethi, I Will Teach You To Be Rich, Oct 22, 2021 https://www.iwillteachyoutoberich.com/blog/money-dials/

December 13, 2021

Digital Nomadism: What You Need to Know

Digital Nomadism: What You Need to Know

Ever wish you could travel the world AND earn a living at the same darn time?

Of course! Building a digital income source under the shadow of the Eiffel Tower, in a cozy cabin in the Alps, or among majestic Sequoia trees sounds like a dream.

But it’s becoming a reality for many. Think about the travel influencers you follow, or your college friends sitting on a beach with their laptops enjoying a beer. They’re all digital nomads.

You’re not imagining things—digital nomadism has exploded since the COVID-19 pandemic first began, growing 49% from 2019 to 2020.¹

If you’re considering ditching the cubicle for the open road, here are a few key facts and figures you should know!

83% of digital nomads are self-employed.² The majority of self-employed nomads are entrepreneurs (66%), while the remainder are freelancers (34%). It’s not impossible to work and travel while keeping your day job. But there’s a clear connection between the independence of the road and owning your own business.

49% of digital nomads earn the same income or more as their office job.³ In addition, digital nomads often enjoy a lower cost of living. With the wonders of Wifi, they can host meetings with clients in the US and Europe while enjoying lower cost locations like South America or South East Asia.

80% of digital nomads prefer to stay in one place for 3 to 9 months.⁴ It’s no wonder—setting up shop in one location can help nomads establish routines and boost their productivity. Plus, it’s the best way to truly soak in a new culture and experience.

The #1 reason digital nomads return home is loneliness.⁵ Distance from family and old friends can become hard to cope with. And finding community among an ever-shifting sea of locations and new acquaintances can be even harder. It’s the reason why nomads have established co-working spaces around the world. They serve as hubs for nomads to socialize and build friendships.

Time will tell if digital nomadism is a pandemic fad or a seismic shift in how we work. But if you’ve longed for a work/travel lifestyle, there’s never been a better time to make it happen.

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¹ “15 Digital Nomad Statistics and Exciting Trends 2021 Update,” Project Untethered, 2021, https://www.projectuntethered.com/digital-nomad-statistics/

² “63 Surprising Digital Nomad Statistics in 2021,” A Brother Abroad, Nov 23, 2021, https://abrotherabroad.com/digital-nomad-statistics/

³ “15 Digital Nomad Statistics and Exciting Trends 2021 Update,” Project Untethered, 2021, https://www.projectuntethered.com/digital-nomad-statistics/

⁴ “63 Surprising Digital Nomad Statistics in 2021,” A Brother Abroad, Nov 23, 2021, https://abrotherabroad.com/digital-nomad-statistics/

⁵ “63 Surprising Digital Nomad Statistics in 2021,” A Brother Abroad, Nov 23, 2021, https://abrotherabroad.com/digital-nomad-statistics/

November 15, 2021

Now Is The Time to Consider Life Insurance

Now Is The Time to Consider Life Insurance

If you’re young, you may not be thinking you need life insurance yet. But life insurance isn’t something only for your parents or grandparents.

Even if you have a free life insurance policy through your employer, you may not have as much coverage as you need.

There are many great reasons to buy life insurance – and a lot of those great reasons are even better reasons for young people.

So, read on for a little illumination about why you are not too young for life insurance. If you have dependents, life insurance is a must.

Take a moment and think about who depends on you and your income for their well-being. You may be surprised.

Most of us think immediately of children, but dependents can include your parents, siblings, a relative with a disability, or even a significant other. A solid life insurance policy can protect the people that count on you.

What would they do without your financial help? A life insurance policy can ensure they are protected if something were to happen to you.

The older you get, the more life insurance costs. From a simple, cost/benefit perspective, the best time to buy life insurance is when you are young. That’s when it’s the most affordable. As you age (i.e., become more likely to suffer from accident or illness), the cost of the policy will most likely go up. So buying a life insurance policy while you’re young may save you money over the long term.

Your employer-provided life insurance may be problematic. Getting life insurance through your employer is a great benefit (you should take advantage of it if it’s free).

But it may present some problems. One of the drawbacks is that this type of life insurance policy doesn’t go with you when you leave the company. That may be a challenge for young people who are moving from company to company as they climb the career ladder.

Second, employer-sponsored life insurance may simply not be enough. Even dual-income couples with no dependents should consider purchasing individual policies. Keep in mind that if one of you passed away, would the other afford to maintain your current lifestyle on a single income? Those “what if?” scenarios may be uncomfortable, but they are the best way to determine how much life insurance you need.

You’re never too young to think about your legacy. It’s not too soon to think about this. Did you know a life insurance policy can provide a lump sum to an organization you select, not just to a family member or other beneficiary? A life insurance policy can allow you to leave a meaningful legacy for the people or causes you care about. When it comes to buying life insurance, generally the younger you are when you start your policy, the better off you’re going to be.

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August 16, 2021

Financial Moves to Improve Your Mental Health

Financial Moves to Improve Your Mental Health

Can wise money moves help improve your mental health, decrease your stress, and boost your peace of mind? Absolutely.

It’s easy to see why. A lot of stress comes from worrying about the future, as well as problems that might seem small but are stressful in practice (such as getting stuck with a $400 car repair bill because your brakes went out).

How much better would it feel if you could stop stressing about money? How much less anxiety would you experience if your retirement savings were on track? And how much more secure would you feel, knowing that should an emergency arise, you have the resources to handle it?

With that end in mind, here are simple financial moves you can make to help improve your mental health!

Create a financial vision statement. Whether you use a financial professional or do it on your own, creating a financial vision statement is the first step to improving your quality of life with personal finance.

What’s a “vision statement?” It’s a one or two sentence description of where you want your money to take you in the future.

Why does it help your mental health? For starters, it gives you a goal to strive towards, and goals tend to increase mental resilience.¹

It also may help reduce uncertainty and ambiguity about the future. When your financial vision statement is clear and complete, your next actions may become clear and obvious.

But while it may seem simple on paper, it can feel overwhelming in practice. Try this process to help take the stress out of creating your vision statement…

Create a list of things you value. That could be family, adventure, stability, comfort, and more.

Write out what a future full of your values would look like. This gives you a more concrete—and inspiring—vision of your goals.

Describe how money can make your vision a reality. This final piece is your financial vision statement. It’s how much money you’ll need to enjoy the lifestyle you want in the future.

Save up an emergency fund. Juggling a paycheck, credit card bills, student loans and other debt repayment, rent, and groceries is stressful.

Unexpected—and expensive—emergencies can make things even harder.

But being prepared helps! Having an emergency fund means that when something goes wrong, you’ll have cash on hand to help cover it.

In general, aim to save 3-6 months’ worth of income and keep it easily accessible. Then, when an emergency strikes, simply reach into your emergency fund to help cover the costs.

Will it totally eliminate the stress of emergencies? Probably not. But it can mitigate the financial anxiety that can loom over you if you’re not prepared.

Meet with a financial professional. Nothing reduces your stress levels quite like knowing your finances are in good hands. That’s where a licensed and qualified financial professional can help.

They can help you develop strategies for reaching your goals, identify obstacles early on, and refine your financial vision statement.

Plus, having someone you can talk to about money can make your finances far less intimidating and stressful. Find a professional who you’re comfortable with and who’s knowledgeable, and start cultivating your relationship. It may be one of the best investments you make!

If you’re feeling stressed about money, know that you’re not alone. And the good news is that you can do something about it. Try these simple steps, and see how you feel!

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¹ “Goal setting,” healthdirect, https://www.healthdirect.gov.au/goal-setting

August 11, 2021

Saving Money With Credit Cards: The Ultimate Guide

Saving Money With Credit Cards: The Ultimate Guide

Credit cards are one of the most useful tools for saving money.

That may seem counter-intuitive. In fact, if you’re struggling with credit card debt, it might seem like an all out fantasy!

But if you have your credit cards under control, they can offer significant opportunities to save money.

Here’s your strategy guide for saving money with credit cards.

Eliminate your credit card debt. The simple truth is that credit card debt can derail your financial strategy. No matter how advantageous credit card rewards seem, they won’t offset the high interest rates that most cards feature.

So before you start leveraging the benefits a card can offer, take steps to eliminate your credit card debt completely.

The two most common strategies are the “debt snowball” and the “debt avalanche.”

Debt Snowball: Make only minimum payments on your other cards, and focus all of your financial firepower on your smallest balance. Once that’s gone, move on to the next smallest. Repeat until your debt is gone.

Debt Avalanche: Make only minimum payments on your other cards, and focus all of your financial firepower on the balance with the highest interest rate. Once that’s gone, move on to the next highest. Repeat until your debt is gone.

Another strategy is opening a new card with a 0% introductory APR. Then, use your new card to pay off your old card with no interest. This is called a balance transfer, and there are specialized cards with benefits tailored for this strategy. Check out this Nerdwallet article for a few options! (Note: Make sure you understand any fees that may be charged for a transfer.)

Build your credit score. It’s no joke—the higher your credit score, the greater the rewards you may earn. To help maximize your savings with a card, start building your credit score ASAP.

A simple step towards increasing your score is automating all of your loan payments. You can do this with your credit card, mortgages, and car loans. Once your credit crosses a certain threshold, look for cards with greater benefits. You might be surprised by the difference your score makes!

Choose benefits that align with your lifestyle. DO NOT get a travel card and then plan four international vacations to “maximize your benefits.”

Instead, choose a card that rewards you for your current habits, behaviors, and the way you live your life. It’s a chance to get something back for going about your daily routine!

Travel frequently for work or lifestyle? Consider a card that rewards you for flying or that waives foreign transaction fees.

Loyal to certain brands and stores? Look for cards that offer points for shopping with your favorites.

Above all, remember that credit cards ARE NOT FREE MONEY. The more disciplined you are with your credit card usage, the more you stand to benefit from the rewards.

Ask a financial professional about how you can leverage credit cards for your advantage. They can help you understand your financial position and develop a strategy to maximize your benefits.

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August 4, 2021

Should You Pay Off Your Mortgage Early?

Should You Pay Off Your Mortgage Early?

On the surface, paying off your mortgage seems like a no-brainer.

It’s become a staple of personal finance advice that everyone should eliminate their mortgage ASAP.

But here’s the truth—there are some drawbacks to eliminating your mortgage quickly. Read on for the pros and cons of paying off your mortgage early.

The pros of paying off your mortgage early. Your mortgage can be a serious drain on your financial resources. Those monthly payments can hamper your ability to save, build wealth, and enjoy the lifestyle you desire. It makes sense that the sooner you eliminate those payments, the sooner you’ll have the cash flow to make your dreams a reality.

You might also save a significant amount of money in interest by paying off your mortgage early. The less time your mortgage accrues interest, the less you’ll pay overall.

Perhaps most importantly, eliminating your mortgage creates peace of mind. So long as you’re paying off a mortgage, you’ll always run the risk of defaulting and losing your home. Owning your house outright can greatly reduce this danger and the stress that comes with it.

The cons of paying off your mortgage early. But eliminating your mortgage is not necessarily an unalloyed good. There are a few downsides to consider, too.

What if, instead of devoting your financial resources towards your mortgage, you saved them at a high interest rate?

There’s a chance you would actually walk away with more wealth. That’s because the sooner your money starts compounding interest, the greater potential it has to grow.

When you should and shouldn’t pay off your mortgage early. Paying off your mortgage early might be viable if your mortgage makes up a small fraction of your monthly expenses. So long as it doesn’t interfere with your other savings goals.

However, always consult with a financial advisor before you make this decision. They can determine if eliminating your mortgage quickly will derail your wealth building strategy!

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June 28, 2021

Habits of Successful People

Habits of Successful People

Successful people come from all types of backgrounds.

But did you know there are certain habits they tend to have in common? What’s better yet, they’re mostly practices that don’t require a huge budget to start doing. Here are three concrete ways that you can imitate the wealthy—starting today!

Wake up early (but also get enough sleep) <br> Let’s establish right away that most people shouldn’t wake up at four in the morning if you’re going to bed at midnight. Lack of sleep can exacerbate or cause dozens of health and mental issues ranging from obesity to depression (1). That’s the exact opposite of what rising with the sun is supposed to do!

The primary perk of going to bed early and waking up early is that it helps give you control of your day. You’re not simply rolling out of bed forty-five minutes before work and coming home too tired to do anything useful. Instead, you get to devote your most productive hours to something that you care about, whether that’s meditating, working on a passion project, or exercising. Speaking of which…

Exercise <br> Exercise is something that the successful tend to prioritize. One survey found that 76 percent of the wealthy devoted 30 minutes or more a day to some kind of aerobic exercise (2). It seems obvious, but working out doesn’t just improve physical health; it can help ward off depression and increase mental sharpness (3). It’s no wonder so many successful people make time to exercise.

Read <br> Almost 9 out of 10 wealthy people surveyed said they devote thirty minutes a day to reading. Why? It turns out that it can improve mental awareness and helps keep your brain fine-tuned (4). But reading can also be a valuable way of expanding your perspective, learning new ideas, and drawing inspiration from unexpected places.

Some of these habits might seem intimidating. Switching your bedtime back three hours so you can wake up before sunrise is a big commitment, as is working out consistently or reading books if you’re just used to scanning social media. Try starting off small. Get out of bed thirty minutes earlier than usual for a week and see if that makes a difference. One day a week at the gym is much better than zero, and reading a worthwhile article (like this one!) might pique your appetite for more. Whatever your baby step is, keep expanding on it until you’re an early rising, iron-pumping, and well-read machine!

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June 2, 2021

Don't Panic: What You Need To Know For Your Life Insurance Medical Exam

Don't Panic: What You Need To Know For Your Life Insurance Medical Exam

I don’t know about you, but most people don’t like exams – either taking one or having one done to them.

But there’s no need to panic over your life insurance medical exam (yes, you’re probably going to have one). I’ve got some steps you can take before the “big day” to help prevent readings which may skew your test results or create unnecessary confusion.

One important thing to keep in mind is that the exam’s purpose isn’t to pass or fail you based on your health. Your insurer just needs to understand the big picture so they can assign an accurate rating. Oftentimes, the news can be better than expected, and generally good health is rewarded with a lower rate. Alternatively, the exam might uncover something that needs attention, like high cholesterol. That might be something good to know so you can make necessary lifestyle changes.

Think of your exam as a big-picture view. Your insurer will measure several key aspects of your health. These areas help determine your life insurance class, which is simply a group of people with similar overall health characteristics.

Your insurer will most likely look at:

  • Height and weight
  • Pulse/blood pressure tests
  • Blood test
  • Urine test

Tests can indicate glucose levels, blood pressure levels, and the presence of nicotine or other substances. Body Mass Index (BMI) – a measurement of overall fitness in regard to weight – may also be measured as part of your life insurance exam.

So let’s find out what you can do to prepare for your exam!

The most obvious cause that could affect your results is medications you’ve taken recently. These will probably show up in your blood tests. Bring a list of any prescription medications you’re taking so your insurer can match those to the blood analysis.

Over the counter meds can interfere with test results and create inaccurate readings too, so it might be best to avoid them for 24 hours prior to your medical exam if possible. Caffeine can cause spikes in blood pressure.¹ Limit your caffeine intake or avoid it altogether, if possible, for 48 hours prior to your exam. Smoking can elevate blood pressure as well.²

Alcohol has a similar effect on blood pressure. Try to avoid alcohol for 48 hours prior to taking your life insurance medical exam.³ Some types of exercise can also spike blood pressure readings temporarily.⁴ If you can, avoid strenuous exercise for 24 hours before your medical exam.

Some types of foods can create false readings or temporarily raise cholesterol levels.⁵ It’s best to avoid eating for 12 hours prior to your exam, giving your body time to clear temporary effects. Scheduling your exam for the morning makes this easier.

Stress can affect blood pressure readings.⁶ (Surprise, surprise.) Try to schedule your life insurance medical exam for a time when you’ll be less stressed. After work might not be the best time, but maybe after a good night’s rest would be better.

Have any further questions on how you can prepare for your exam? I’m here to help!

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¹ “Caffeine: How does it affect blood pressure?,” Sheldon G. Sheps, M.D., Mayo Clinic, Jan, 26, 2019, https://www.mayoclinic.org/diseases-conditions/high-blood-pressure/expert-answers/blood-pressure/faq-20058543

² “Smoking, High Blood Pressure and Your Health,” American Heart Association, Oct 31, 2016, https://www.heart.org/en/health-topics/high-blood-pressure/changes-you-can-make-to-manage-high-blood-pressure/smoking-high-blood-pressure-and-your-health#.Wrz8uNPwZTZ

³ “Short-term Negative Effects Of Alcohol Consumption,” BACtrack, https://www.bactrack.com/blogs/expert-center/35042501-short-term-negative-effects-of-alcohol-consumption

⁴ “Does Exercise Raise Blood Pressure?,” Barrett Barlowe, SportsRec, Nov 28, 2018, https://www.sportsrec.com/6277164/does-exercise-raise-blood-pressure

⁵ “How to Prep for a Cholesterol Test,” Vanessa Caceres, Livestrong.com, Apr 29, 2020 https://www.livestrong.com/article/326114-what-not-to-eat-before-cholesterol-check/

⁶ “Managing Stress to Control High Blood Pressure,” American Heart Association, Oct 31, 2016, https://www.heart.org/en/health-topics/high-blood-pressure/changes-you-can-make-to-manage-high-blood-pressure/managing-stress-to-control-high-blood-pressure#.Wr0OsdPwZTY

March 24, 2021

Tips For Saving Money At The Grocery Store

Tips For Saving Money At The Grocery Store

Every penny counts, especially when you’re trying to balance your monthly budget.

But unless you plan ahead and only buy things you need, it’s easy to overspend at the grocery store. If you keep these tips in mind when you’re shopping, you can save money without sacrificing quality.

Bring a list of what you need to buy. Why? Because a list keeps you on task. You’ll be far less likely to wander the store, spying things you don’t need and snapping them up, if you go with a clear plan of what you need to buy. Make a list, check it twice, and shop with a purpose!

Buy in bulk when it makes sense for your family size and lifestyle. If you have a big family, buying in bulk can save you big money, especially if items are on sale! But don’t just buy anything that seems like a good deal—only buy what your family will consume, and be sure to store it properly. That means non-perishable food items, hygiene and cleaning products, and home supplies.

Compare the unit price. A low sticker price doesn’t always indicate it’s the best buy. Always check the unit price to maximize your savings. The cheaper it is per ounce, pound, or unit, the better bargain it probably will be!

Use coupons and sales flyers when available. It’s simple—just download your favorite store’s app and look for the savings or coupon page. All you have to do is tap the items that you want to save on. Then, just scan your phone when you check out and watch the savings!

Rack up loyalty points when possible. Afterall, why shouldn’t you be rewarded for your usual shopping? Just scan your card every time you shop, and eventually you can earn free or discounted items. However, be careful that you don’t increase your spending to maximize your rewards!

Why not try one of these tips for just a month and see how much you save? It’s a worthwhile experiment that may result in a substantial boost in your cash flow. Let me know how it goes!

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March 22, 2021

How to Manage High Costs of Living

How to Manage High Costs of Living

It’s no secret that living in a larger city can be more expensive than in other areas.

Depending on where you live, the cost of buying groceries, public transportation, and even rent can vary drastically! If you want to learn how to manage your finances when living in an area with a higher cost of living, read on…

Lower your housing costs. Keeping a roof over your head is probably your number one expense, especially if you live in a major city. The most straightforward way to free up cash flow, then, is to downsize your apartment or home size.

While that sounds simple, it’s not always easy, particularly if you own a house! But if your budget is too tight and it’s at all possible, moving to a cheaper home or apartment can be the single most effective way to cut your spending and increase your cash flow.

Consider moving to a cheaper area. To find less costly housing, you may choose to relocate to a new neighborhood. But be sure to keep tabs on the price of daily expenses like groceries or increased transportation costs in your new stomping grounds—just because housing is cheaper doesn’t mean everything else will be!

Take on a second job, like freelancing, dog walking, or babysitting. Fortunately, living in a high cost of living area might mean you have access to plenty of part-time or side work. Check out sites like Upwork, and leverage your social networks to find viable gigs.

If you live in an area that’s high cost and has poor employment opportunities, you may need to consider relocating entirely.

Trim your budget. Try using a free budgeting app like Mint or PocketGuard for this one! They’re easy-to-use tools that can help you identify problematic spending patterns. Once you know where you’re wasting money, you can develop a strategy for cutting costs.

Coping with a high cost of living can be challenging, especially if you love the lifestyle of a big city or your work requires you to live in a certain area. Using these strategies can help reduce the burden of living in an expensive neighborhood. Which one would be easiest for you to apply to your financial life?

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February 17, 2021

Spend Less or Earn More?

Spend Less or Earn More?

What’s the most effective way to meet your financial goals—increasing your income or cutting your spending?

The answer? It depends on your situation. While both strategies can be useful, they’re not interchangeable. Read on to discover the advantages and limitations of each approach… and which one may be right for you.

Spending less: An immediate solution with a fixed floor. There’s no doubt that cutting expenses is the fastest way to move closer to your financial goals. Canceling a streaming service, clipping digital coupons on your phone, and carpooling are simple lifestyle adjustments that take only seconds or minutes to accomplish.

But stricter budgeting can only go so far. Moving back in with your parents, walking to work, and never having fun again may still not be enough. There’s only so much you can cut before you seriously decrease your quality of life!

Earning more: High effort, massive potential. On the surface, increasing your income can seem like a daunting task. Developing your skills, working an extra job and starting a side hustle or business can be labor and time intensive. Furthermore, some of those investments may not pay off immediately—a business or side gig may not generate significant income for weeks, months, or even years!

But those investments also have massive payoff potential. Once you’ve mastered a skill, your earning power is only limited by the market demand for your abilities and your time. And as you grow more and more competent, your potential to earn only increases.

The takeaway? Spending less is a quick and simple move towards your financial goals. But, over the long-term, earning more has far more potential to create the wealth you desire. If you need to quickly increase your cash flow, create a budget and reduce your excess spending. But when your financial situation stabilizes, take inventory of your skills. You might be surprised by how many money earning talents you have, if you take the time to cultivate them!

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January 20, 2021

What All Early Retirees Have in Common

What All Early Retirees Have in Common

Early retirees track both their net worth and annual spending… and you should too!

Why? Because those two pieces of information are critical to evaluating your current financial situation and understanding what separates you from your financial goals.

Retiring early takes meticulous preparation, a willingness to sacrifice temporary comfort, and consistency. Every financial decision must effectively move you closer to your goal or you run the risk of failure.

Ignorance about your net worth hampers your ability to make certain financial decisions wisely. It may cause you to save less, if you assume your net worth is closer to your retirement goal than it actually is. When the time comes to retire, you’ll be in for a shock!

Failing to monitor your expenses can lead to a similar outcome. What if you never identify the expenses that eat up the majority of your cash flow? You might swear off lattes or designer clothes, but you might miss bigger saving opportunities. There’s a reason that so many early retirees cut back on housing, transportation, and food–they’re the biggest drains on cash flow!¹

Here’s the takeaway—imitate early retirees and regularly evaluate your net worth and spending, regardless of when you plan to retire.

Knowing what you’re worth and what’s eating up your cash flow empowers you to make effective decisions that bring you closer to your lifestyle goals.

What’s your financial status? How close are you to achieving your goals? And what’s standing in your way?

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January 13, 2021

Is the RV Life Right For You?

Is the RV Life Right For You?

2020 was the year of the RV.

You might have noticed as you scrolled through social media that more of your friends, family, and maybe even your in-laws are moving out of their homes and living on the open road. Don’t believe it? Search #vanlife on Instagram and see what comes up!

It’s not hard to see why. The RV lifestyle pairs material minimalism with adventure. The possessions and mortgage payments that can weigh you down are replaced by bare essentials and the open road.

People crave freedom. A bigger house and lots of toys can’t promise happiness. If you’re a born adventurer, exploring the country in an RV might be the opportunity for escape that you’ve been waiting for.

But it’s not a decision to be made lightly. RVs cost anywhere between $60,000 and $600,000.¹ Beyond that, you’ll have to buy gas, food, and pay for vehicle maintenance. Unless you have a job that allows you to work remotely, you’ll need to save diligently in order to afford life on the road.

That fact has made the RV lifestyle an attractive retirement choice. It’s increasingly common for retirees to sell their homes and use the proceeds to buy a van or RV.

So if you are an adventurer, love freedom, and have the career or savings to afford it, life on the road might be the choice for you!

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¹ “Is an RV the Perfect Retirement Lifestyle for You?,” Margo Armstrong, The Balance, July 21, 2020, https://www.thebalance.com/retire-in-an-rv-2388787

November 30, 2020

4 Insights Into Paying Off Debt

4 Insights Into Paying Off Debt

On paper, paying off debt seems simple. But that doesn’t mean it’s always easy.

In fact, it can get downright discouraging if you don’t see any progress on your balances, especially if you feel like your finances are already stretched.

Fortunately, there are ways to take your debt escape plan to the next level. Here are a few insightful tips for anyone who feels like their wheels are spinning.

You must create a plan <br> Planning is one of the most important steps towards eliminating debt. Studies show that creating detailed plans increases our follow-through.¹ It also frees up our mental resources to focus on other pressing issues.²

Those are essential components of overcoming debt. A plan helps you stick to your guns when you’re tempted to make an impulse buy on your credit card or consider taking that last-minute weekend trip. And tackling problems that have nothing to do with debt can be a breath of fresh air for your mental health.

You have to stop borrowing <br> Seems obvious, right? But it might be easier said than done. Credit cards can seem like a convenient way to cover emergency expenses if you’re strapped for cash. Plus, spending money can feel therapeutic. Kicking the habit of borrowing to buy can be hard!

That’s why it’s so important to fortify your financial house with an emergency fund before you start eliminating debt. Save up enough money to cover 3 months of expenses. Then quit borrowing cold turkey. You should always have enough cash in reserve to cover car repairs and doctor visits without using your credit card.

Your lifestyle has to change <br> But, as mentioned before, debt can embed itself into lifestyles. You can’t get rid of debt without cutting back on spending, and you can’t cut back on spending without transforming your lifestyle.

When you’re making your escape plan, identify your highest spending categories. How important are they to your quality of life? Some of them might be essential. But you may realize that others exist just out of habit. Be willing to sacrifice some of your favorite activities, at least until you’re debt free.

You can still do the things you want <br> This does NOT mean that you have to be miserable. You can still enjoy a vacation, buy an awesome gadget, or treat your partner to a romantic dinner. You just have to prepare for those events differently.

Create a “fun fund” that you contribute money to every month. Budget a specific amount to put in it and dedicate it to a specific item. This allows you to have some fun every now and then without derailing your journey to financial freedom.

Debt doesn’t have to be overwhelming. These insights can help you stay the course as you eliminate debt from your financial house and start pursuing your dreams. Let me know if you’re interested in learning more about debt-destroying strategies!

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¹ “Making the Best Laid Plans Better: How Plan-Making Prompts Increase Follow-Through,” Todd Rogers, Katherine L. Milkman, Leslie K. John and Michael I. Norton, Behavioral Science and Policy, 2016, https://scholar.harvard.edu/files/todd_rogers/files/making_0.pdf

² “The Power of a Plan,” Timothy A Pychyl Ph.D., Psychology Today, Nov 17, 2011, https://www.psychologytoday.com/us/blog/dont-delay/201111/the-power-plan

November 25, 2020

Money Black Holes You Should Avoid

Money Black Holes You Should Avoid

It’s true that sometimes you’ve got to spend money to make money.

But there are plenty of things that people spend money on that give them absolutely no return. Some of these are obvious (lottery tickets and ponzi schemes), but others are subtle parts of our lifestyle. Here are three money black holes that you should avoid at all costs!

New Cars <br> Nothing feels better than driving off the lot with a new set of wheels. Until, that is, you realize that your car’s value has already started plummeting.

The most important rule to remember is that cars are practical tools, not long-term investments. Blowing a huge stack of cash might feel cool, but it’s a huge misallocation of money if you don’t have any to spend. Try to find a used model of the same car that’s five years old or more. Chances are you’ll get many of the same features for a fraction of the cost.

Pricey Phones <br> It seems like phones are improving every day and in every way. But is your high-end, name brand personal assistant really worth the steep price tag? Phones always decline in value after you buy them; The highest value-retaining phone dropped almost 50% a year after its release.¹ Unless your mobile device is a tool of your trade (i.e., you’re a TikTok influencer), dodge the hype and choose a cheaper or refurbished alternative.

Designer Clothes <br> New threads are awesome. You’ll never feel more like a hero than when you first hit the town in a freshly fitted suit or a designer t-shirt.

They’re also insanely expensive. Sure, they might not all cost $1,690 like a Tom Ford long sleeve solid T-Shirt. But regularly buying top-of-the-line clothes can burn huge holes in your wallet.

Fortunately, you have some fun alternatives at your fingertips. Off-price retailers might sometimes carry your favorite brands at a fraction of the cost. And thrift stores can be goldmines of high quality finds if you’re adventurous enough to explore them with a friend!

Remember, it’s okay to spend money on cool gadgets and gear if you’ve saved up for them or you’re already financially independent. But if you’re just setting out on your journey, it’s best to practice some discipline and seek out cheaper alternatives to these potentially dangerous money black holes.

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“Depreciation among top smartphone brands compared: Apple’s iPhone tops the list as the least depreciating brand,” Abhin Mahipal, SellCell, Oct 14, 2019, https://www.sellcell.com/blog/depreciation-among-top-smartphone-brands-compared-apples-iphone-tops-the-list-as-the-least-depreciating-brand/#:~:text=Apple%20once%20again%20blows%20the,release%2C%20making%20it%20worth%20%24580.

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