Insurance Archives - From Gratitude to Greatness: Brownlee Global's Path to a Purposeful LifeFrom Gratitude to Greatness: Brownlee Global's Path to a Purposeful Life

If something were to happen to you today, is your family protected?

Life insurance is a relatively low cost way to ensure that your family will have financial security if you or the primary earner should die prematurely. Furthermore, life insurance is often necessary financially because it provides peace of mind—not just for you, but for your whole family.

Conventional wisdom dictates that you don’t need life insurance if no one else depends on your income. While mostly true, there are many reasons why you should obtain life insurance if no one depends on your income.

Insurability and low premiums. Buying a policy both locks in lower premiums and guarantees insurability later in life. An existing insurance policy guarantees the ability to purchase additional insurance with no medical underwriting or physical exams.
Cash Value Growth. Whole Life insurance policy provides attractive cash value growth. Access this cash value at any time using a policy loan. Or, if you cancel the policy, you get a return of all or a majority of the premiums paid, or the cash value – whichever is greater.
Funeral and burial expenses. From a practical perspective, in addition to the emotional devastation, parents also face significant expenses in the event of a child’s death. According to the Natural Funeral Directors Association, the median cost of a funeral with burial exceeds $7,000. Purchasing insurance for children alleviates the significant financial burden for a family coping with a tragic loss.

Not only do rising prices make life increasingly expensive, but, as life’s circumstances change – you marry, buy a house, have children, and perhaps need to care for others – you have greater responsibilities and a need for better financial protection.

Key Takeaways

There are several excellent reasons to obtain insurance coverage for you and your family.

You can lock in low premiums while they are young and healthy.
You can lock in eligibility for other services while they have an active policy.
Permanent insurance provides a store of cash value that safely grows at a high crediting rate, which can be used to help fund future expenses like college tuition.
In the event of loss, a policy can cover the ever growing expenses of funerals and burials and protect your savings.

References:

“If you don’t know where you are going, any road will get you there.” Lewis Carroll

Mastering personal finance requires more than a strategy of hope and ‘wishing for the best’—you have to look at your current financial situation holistically and come up with a financial plan for how to manage your money and how to achieve your goals. There are seven personal finance principles that are important for achieving financial success: mindset, budgeting, saving, debt, taxes, insurance, and investing for retirement.

1. Mindset – According to Stanford psychologist Carol Dweck, your mindset plays a pivotal role in what you want and whether you achieve it. Your mindset is a set of beliefs that shape how you make sense of the world and yourself; and, people are capable of changing their mindsets. Mindset influences how you think, feel, and behave in any given situation. And, the first step on the path to financial success is believing you can change your financial circumstances, being accountable, and accepting responsibility for your current reality and financial future. You must embrace that you are in control of your financial future, and every choice you make and action you take can have an impact.

2. Budgeting, Financial Planning and Goal Setting – Budgeting helps you better understand how you spend your money and shows you ways to manage your money, pay off debts and save for future financial goals. Budgeting helps you better understand how you spend your money and shows you ways to manage your money, pay off debts and save for future financial goals. Whether you’re new to budgeting or you’ve tried it before and failed, understanding which steps to follow makes budgeting for beginners simpler.

Begin planning your monthly budget by figuring out how much you have coming in versus how much is going out every month. Ultimately, you want to end up with a blueprint that specifically breaks down your income and expenses, so you know how much you can spend and how much you can save each month.

Figuring out how to budget can be challenging. Avoiding these three common budgeting pitfalls:

Getting overwhelmed,
Having unrealistic expectations, and
Being too strict

Financial planning involves implementing strategies that help you reach your financial goals, be they short-term or long-term. The path to financial success involves planning. It is impossible to effectively manage your finances if you don’t know how much money you have available to spend or have a plan on how you want to spend, invest, and save. You need to create a road map by defining your financial goals.

“The great majority of people are “wandering generalities” rather than “meaningful specifics”. The fact is that you can’t hit a target that you can’t see. If you don’t know where you are going, you will probably end up somewhere else. You have to have goals.” Zig Ziglar

Three essential keys to setting financial goals:

Be specific – define what you want to achieve and when. Goals can be short term (a few days, months, or a year) and long term (five, 10, or 15 years).
Be realistic – make certain your goals are attainable. Setting unattainable goals will only lead to disappointment when they are not achieved.
Write them down – keep records of your goals and mark off key milestones as you achieve them. Refer to this information from time to time. Writing down goals, reviewing them, and recording your progress can motivate you.

3. Credit and Debt – Understanding the way compound interest works is key to building wealth or avoiding crushing debt. Compound interest can work to your advantage as your investments grow over time, but against you if you’re paying off debt, like credit cards. Thus, make that compound interest work for you instead of against you.

“Compound interest is the eighth wonder of the world. He who understands it, earns it … he who doesn’t … pays it.” Albert Einstein

Compounding interest can be a powerful tool to have in your financial arsenal. It can be very beneficial in building wealth and in creating large sums of money over time if invested correctly. But unfortunately, there is a darker side to compounding interest – compounding debt.

Debt is rampant across the United States. According to the New York Federal Reserve, consumer debt was approaching $14-trillion in the third quarter of 2018. This includes mortgages ($9.14-trillion), auto loans ($1.65-trillion), student loans ($1.44-trillion), and credit card loans ($829-billion). The thing about debt is that it eventually has to be paid. There is no such thing, economists like us tend to remind too often, as a free lunch.

Compound interest means reinvesting earned interest back into the principal of an investment Although investment returns aren’t guaranteed, compound interest can potentially help your investments grow exponentially over time.

If you don’t have credit already, start building it now! Many lenders consider not having credit just as bad as having bad credit. Many people in their 30s who have no credit think they have perfect credit because they’ve never had delinquent payments. They can’t have great credit, since they have no credit at all. Many people who are afraid of credit don’t actually understand credit. They may have a credit card, but never use it. Because they never use it, there is no history to report to the credit bureaus. In this case, they might as well not have the card at all, since creditors have no way of determining their credit trustworthiness.

4. Taxes – Being tax efficient with investments allows more money to be reinvested into a portfolio to grow over time. There are ways investments can be taxed and strategies for potentially minimizing tax burdens. Tax planning and financial planning are closely linked, because taxes are such a large expense item as you go through life. If you become financially successful, taxes will become your single biggest expense over the long haul. So planning to reduce taxes is a critically important piece of the overall financial planning process.

5. Saving and Emergency Funds – An emergency fund is 3-6 months of expenses set aside in the event of a job loss, car problems, a medical emergency, or other unexpected financial situations. An emergency fund should be kept in a liquid bank account like a savings account that is easy to access in the event of a financial emergency. An emergency fund is just one type of savings account that is “earmarked” or reserved for financial emergencies. Ensure your emergency fund is only used during financial emergencies so it can help you survive if you lose you source of income or your paycheck stops coming in.

6. Insurance and Risk Management – No one really wants to think about life insurance. But if someone depends on you financially, it’s a topic you can’t avoid. Getting life insurance doesn’t have to be hard (or boring). We have some answers to common questions about life insurance so that you can make informed decisions about protecting your loved ones financially. Have you ever wondered on your family would manage if something happens to you? Life insurance is important for protecting your loved ones if something happens to you.

7. Investing for Retirement – It should not be intimidating to start investing. There are five simple rules for building a long-term portfolio:

Contribute early and often
Minimize fees and taxes
Diversify your portfolio
Consider how much time you have
Focus on long-term goals

https://youtu.be/vl2sasYSY4E

Financial Independence, Retire Early (F.I.R.E.) —is a growing movement of people who want to break free from relying on a job for income. Research has found several money management habits of financially independent people that can help you make the most of your money regardless of your financial goals.

https://youtu.be/7zf7zob1Xdc

References:

From Gratitude to Greatness: Brownlee Global's Path to a Purposeful Life

Guide and Educate Individuals How to Build Long-Term Wealth, Better Manage Their Money, and Achieve Financial Freedom

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