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Some Alternative Uses for Life Insurance

Posted by Larry Jones on Jun 22, 2021 9:30:00 AM

Are your life insurance benefits important to you?

Are you one of those people who has paid into a cash-value life insurance policy for many years? Do you remember why you originally bought the policy? Does that reason still exist?

Ann is a widow whose husband John just passed away. They had no children. Thirty years ago Ann purchased a whole life policy on herself, making John the beneficiary. The payments on the policy are still continuing, and run over $100 a month. Now that John is gone, with nobody to leave the money to, she's considering cancelling the policy. What should Ann do?

There are a number of alternatives available to Ann. She could take tax-free loans against the cash-value in the policy. She could stop making premium payments and accept some sort of reduced payment of the death benefit. She may even be able to use the cash-value as collateral for a bank loan. I'd like to discuss a couple of lesser-known settlement options of a life insurance policy: viatical agreements and life settlements.

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Topics: Life Insurance

You Can Make College Planning Easy

Posted by Larry Jones on Jun 17, 2021 9:30:00 AM

A Brain is a Terrible Thing to Waste

Should your child go to college?

My parents were part of the "greatest generation." Dad was a veteran of WWII (and not happy about it. He was on the verge of being called up from a minor league baseball team to play in the majors when Uncle Sam summoned him instead...) and came home in 1945 to a world finally at peace. In those days, a college education was considered a sure ticket to success. That's not so much the case today. It really depends on your field of study as to what your opportunities will be, and many college graduates come into the workforce only to discover that it's very difficult to find employment using their particular field of study. Many skilled trades pay as much or more as could be earned with a degree. I'm of the opinion that college isn't for everybody, and many are in college who shouldn't be.

Nevertheless, most parents have the hope that their little angel or angel-ette will one day discover the cure for cancer, bring about world peace, or colonize Mars, and to do that, they're going to need to attend college. 

And so the next question is: how are we going to pay for it?

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Topics: Case Studies, College Planning

Long Term Care and Your Way of Life

Posted by Larry Jones on Jun 15, 2021 9:30:00 AM

Risk Tolerance and Common Sense

My experience as a financial planner has brought me into contact with almost every type of personality. When it comes to the subject of risk tolerance, folks have many different ways of evaluating what they think risk exactly is. Some people don't consider putting their entire portfolio into third-world currencies risky, while others wouldn't go near Wall Street with a dime. If you've been around this blog long enough you've heard my rants on investment risk and not taking more than you need to in order to achieve your desired results. That's why I always attempt to quantify for my clients exactly how much risk they are being exposed to.

There seems to be one subject that is greatly ignored in the financial plans of many people. That subject is how a long term care event will affect your portfolio, and indeed, even your very lifestyle, as well as your family's. When that bubble breaks loose in your bloodstream it can very well rock everyone's world that you are close to. How is it that we give so much thought to the risk in our portfolio, which is internal, and so little to what is perhaps a much greater risk, which is external, and much more likely to happen? In my opinion, this subject needs to be discussed by any reputable planner with his client. Anything else, in my opinion, is gross negligence.

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Topics: Long Term Care

In Defense of Used Car Salesmen

Posted by Larry Jones on Jun 10, 2021 9:30:00 AM

Did you see the 1980 film "Used Cars?"

The film starred Kurt Russell as a sleazy used-car salesman. The film drew laughs because it so fit the sterotype that American's have regarding the person who may have sold them their last car.

It just so happens that on the "trustability" scale, car salesman don't seem to rank very high. I'm beginning to wonder if we're not being too hard on them.

The recent TV series about Bernie Madoff detailed how one of the greatest financial criminals in U.S. history systematically stole somewhere between $20-50 BILLION from investors through an elaborate Ponzi scheme, which went undetected by the SEC for decades. Let's see the car salesman top that! ( I won't even go into how a politician can be nearly broke when they enter politics, and be worth hundreds of millions years later, while earning nothing more than a public servant's salary...)

Most people have a very happy relationship with their stockbroker. Many times I have asked folks, "how's your portfolio doing?" only to have them tell me something like, "it's been doing good lately." When I ask them for specifics, many times they can't tell me what "good" actually means. Often, when I analyze their holdings they have in fact been doing good, for the last year or two, but they are very surprised to discover that they are no better off than they were ten years ago! Why did they stay in the holdings they were in? They trusted their stockbroker.

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Investment Risk - How Much Should You Tolerate?

Posted by Larry Jones on Jun 8, 2021 9:30:00 AM

Are You a Risk-Taker?

Mr. Allen is the CEO of a large manufacturing firm, which has done very well over the last ten years. Lately, in considering expansion plans, it was brought to his attention that an attractive opportunity was available in another country for the location of the new plant. Labor costs would be much lower, and access to raw materials was also easier there, and he could count on a much higher return on investment.

On the other hand, this particular country has a history of political instability. In fact, powerful factions in this country were actively working toward political revolution and a commitment to nationalizing all industry inside it's borders, effectively taking over all foreign investments.

Should he locate the new plant in this country? How will Mr. Allen decide?

How about you? What would you do?

The answer you'd give reveals a lot about your personal attitudes toward taking risk.

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Topics: investment risk

Don't Make These Estate Planning Mistakes!

Posted by Larry Jones on Jun 3, 2021 9:30:00 AM

Your Life, Your Death, and Your Legacy

If I were to ask you the name of your great great grandfather could you tell me? Not many folks can. But if your great great grandfather had set up a trust that was today paying you $50,000 a year tax-free I'll bet you could.

Death isn't something we like to think about, and I guess that's a good thing. After all, I believe that most people are optimistic by nature, and the subject of death isn't high on the optimist's list!

Yet, we cannot deny that this life will one day come to an end for us. We will then leave someone behind to pick up the pieces and carry on. Leaving a positive legacy is all about easing the strain on those who will have to do that. 

Have you given any thought to those who will be following in your footsteps?

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Topics: Estate Planning

Thinking about a 401-k rollover? Here's some things to consider

Posted by Larry Jones on Jun 1, 2021 9:30:00 AM

Should you consider rolling over your 401-k to a personal IRA?

If you have recently left your job (or if it has left you), it's likely that you have an orphan retirement account at your old firm. Should you leave it there? If not, what should you do with it? What are the tax implications of your decision? What questions should you be asking that you don't know you should be asking?

Here are some guidelines to help:

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Topics: Retirement Plan Rollovers

Is Your Disability Coverage What You Think It Is?

Posted by Larry Jones on May 27, 2021 9:30:00 AM

When was the last time you took an 8 week vacation?

How about 10 weeks? How about 30?

"Man," you say, "my company wouldn't keep paying me for that long!" And you're right. Most wouldn't. But now suppose an accident forced you to miss work for 10 weeks or longer. Could you count on your firm to take care of you? What would happen to your family when those paychecks stop? If your company provides you with disability coverage as a benefit, then you can rest easier. 

Or can you?

Perhaps your firm offers coverage as part of your benefit package. Many good companies do, either with short-term coverage, long-term, or both. If not, you may have purchased a disability policy of your own.

There are some things you need to know, however. Many group disability policies aren't worth the premiums that are paid, because of very limiting language in the policy. You could find your false sense of security shattered in the event that you can't work.

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Topics: Disability Insurance

Can Life Insurance Be a Sensible Investment?

Posted by Larry Jones on May 25, 2021 9:30:00 AM

The Hare vs. the Tortoise

Let's face it, Wall Street is sexy. Where else can the lure of 150% returns and the calculation of standard deviation, variance, and geometrically weighted returns create such excitement? Wall Street is the red Ferrari, the F-16 fighter, the Rocky Balboa of earning money. Just remember that Rocky took some hard knocks along the way!

But what about "good old, boring life insurance?" Can it be a good investment?

Many advisors today would tell you that the answer to that question is no. Certainly those advisors who also happen to be stockbrokers would say that. But our parents would have had a different idea. To the “greatest generation” the idea of risking money in the market brought back unpleasant memories of losing everything in the great depression.

But it's just not sexy, insurance. Ugh! Why would anyone want the tortoise when they can have the rabbit?

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Topics: Investment Advice

How will your family handle a long term care situation?

Posted by Larry Jones on May 20, 2021 10:51:00 AM

Are you a reasonable person?

What a question, huh? Of course you are!

Why would I even ask such a question of a reader? "After all, isn't the fact that I faithfully read this blog, and am nearly physically ill when I miss one, proof enough that I'm a reasonable person?", you might say. Point taken.

Well then, this blog is for you! The subject is your family....or more specifically, your family and how your need for long term care might affect them, and their lifestyle. Is that important to you?

If so, read on.

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Topics: Long Term Care

What you don't know can hurt you!

As a fiduciary I am required to always act in your best interests, and as a professional planner, it's my job to be familiar with all types of possible solutions and financial vehicles. In short, I have no interest in selling any particular product or any affiliation with a particular company. I work for my clients.

Are you:

  • concerned that your tax bill is too high?
  • tired of watching your nest egg decline by significant amounts every 5-7 years?
  • wishing you could find more free time?
  • looking for ways to help protect yourself against litigation that could destroy all you have worked for?
  • worried that Uncle Sam is going to enjoy your retirement more than you are?

If any of the above describes you and you'd like to get a question answered then just click the button below and we'll be in touch.

Let's Meet!

p.s. we have the ability to meet virtually regardless of your location! Give us a shout!

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