Your Wealth Puzzle » Disability Insurance

5 Steps To Building Your Financial Foundation

yourwealthpuzzle — Tue, 28 Dec 2010 10:11:46 +0000

When a building is constructed it needs a strong foundation to withstand the test of time and the environment around it. The same holds true for your finances.

If you are to financially withstand the test of time, you need a strong financial foundation. If your financial foundation is weak, it will crumble.

Everyone’s financial circumstances are different; so some of the steps outlined below may apply to your personal situation and some may not. To evaluate your personal financial foundation you should review your life insurance, retirement investments, disability and health insurance and annuities.

Another factor that will help to stabilize your financial foundation are your credit scores. Take the steps to improve credit score. The financial world evaluates you based on your credit rating; so do your very best to keep your credit score above 750 and as close to 800 as you possibly can. Understand that improving your credit score goes a long way towards building your financial foundation.

Building Your Financial Foundation

Step #1 – Buy Life Insurance

The first layer of your financial foundation is life insurance.
Life insurance is your first layer because it works if you live or die.
If you die, the life insurance will help your loved ones.
If you live, any cash value built up within the policy can be used to supplement your retirement.
When you get your life insurance quotes, the premiums will vary depending upon your age, your health and the face value of the policy.

Step #2 – Build Up Your Retirement Investments

For your financial foundation to survive long-term, you must build up your retirement investments.
Social security is weak and will most likely not be enough for you to live on once you reach retirement age; so without a strong retirement investment account, your foundation will also be weak.

Step #3 – Consider Annuities

Annuities can be a layer within your financial foundation.
Annuities are not the proper investment for everyone’s foundation; talk with your financial planner about your personal situation.
Annuities can be a variable or a fixed product.
The returns in a variable annuity will vary depending upon the market swings.
A fixed annuity will pay a fixed rate of return.
Again, work closely with your financial planner on what is best for you.

Step #4 – Look Into Disability Insurance

You can buy disability insurance on your own or get it through your employer.
It can be short-term or long-term disability insurance.
Long term starts when your short-term stops. Long term disability insurance pays a percentage of your salary for 2 – 5 years or until you reach age 65.

Step #5 – Review Your Health Insurance

A discount health insurance company could offer you lower premiums if you do not get health insurance through work.
Discount health insurance is offered through a network of insurance providers; which is what helps keep your premiums down.

We get so wrapped up our day-to-day activities that we sometimes forget to step back and review the basics. Your financial foundation needs to be strong for you to financially withstand the test of time, so take some time today to review your foundation.

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Steps To Develop Your Retirement Investment Strategy

yourwealthpuzzle — Wed, 15 Dec 2010 09:43:30 +0000

Everyone who wants to retire some day should have a retirement investment strategy. It sounds very important, what is it?

Your retirement investment strategy is your financial foundation. It is your plan and your method for achieving your retirement goals.

Like any strategy, through a series of moves its purpose is to get you to an ending.

If you develop a retirement investment strategy, implement it and stick to it; you will be prepared for retirement. Retirement is too important to not be prepared for it; you could spend 20 years of your life in retirement.

Your retirement investment strategy is not a one time exercise but instead it is a process. You do not create this strategy and then put it on the shelf. It is a work in progress. You will adjust it, change it and massage is as things in your life change.

Your Retirement Investment Strategy:

Step #1 – Establish Your Retirement Priorities.

Before you start, you need to know where you want to end up.

Establish your financial priorities as early in your career as possible.
The earlier you start your retirement investment strategy the longer you will have to perfect it.
What are your priorities?
Do you have retirement priorities?
What are your personal financial goals?
Is your goal to retire early, retire but work part-time, retire before your brother-n-law, retire and start a business, retire and golf every day, retire and travel? The list is endless.
Have you established your retirement priorities?

Step #2 – Establish Your Financial Plan.

After you have determined your retirement priorities, you need to develop a financial plan.
You may want to seek the help of a financial planner to develop your financial plan.
A financial plan is your road map.
You wouldn’t plan a trip without a road map; so don’t plan your retirement without a road map.
The purpose of a financial plan is to get you to your destiny.
You will need to know how much money you will need to save today to retire tomorrow.
Through retirement calculators and other financial tools, a financial planner can help you determine the amount of money you will need to achieve the type of retirement you have in mind.
The financial plan may include a budget.
A budget helps you stay on target and will keep you focused.
A budget gives you parameters to work within.
Go outside the parameters of your budget and you have to adjust or cut back.
It’s not what you make but what you keep that matters when planning for your retirement.
All of your financial information gets input into a retirement calculator to help you build your financial road map.

Step # 3 – Your Investment Profile.

Your investment profile reflects your investment preferences.
Do you like high risk or conservative investments?
Do you like stocks or bonds?
Large cap or small cap funds?
Mutual funds or individual stocks?
Those questions make up your investment profile.

Get to know your profile and live within your profile.
Your profile incorporates the risk level you are willing to tolerate with your investments.
Make sure your level of risk matches the investments you are in.
If you are more comfortable with conservative investments, that’s okay.
Stick with your investment profile otherwise you make investment decisions that you are uncomfortable with.
If your risk does not match your investment selection, reallocate your assets so it does match.
You cannot have a wrong investment profile. Your profile is who you are as an investor.

Your Financial Profile.

This profile looks at your insurance needs.
Are you properly insured?
Do you have enough life insurance, disability insurance and long-term care coverage?
Work with your financial planner to fill in any gaps that may exist.

Your Review Process.

Part of an investment strategy is a review process.
Review your investment strategy, investment and financial profiles at least once a year.
Your needs change as your life changes.
When you are single your risk tolerance levels are different than when you get married.
When you are younger your risk levels may be more on the risky side and as you age, you may become more conservative.
Your annual review will adjust for these changes.
If the economy damages your investments, you may have to change when you can retire.
You need to review your investment strategy to stay on track.

Your retirement investment strategy will help you get to retirement. Find a financial planner you trust. Use a retirement calculator to get started. The earlier you start planning for retirement in your career, the better.

8 Steps Used By Successful Investors

yourwealthpuzzle — Fri, 03 Dec 2010 10:42:07 +0000

Why do you invest? You invest because you want money, a better future, a bigger home, you want to go on nicer vacations, you want more.

To be able to afford everything you invest for, you need to become a successful investor.

Becoming a successful investor is not for everyone. To become successful you have to make a commitment, be disciplined and follow some steps. Here are the steps others have followed:

8 Steps To Becoming A Successful Investor:

Step # 1 – Determine what kind of investor you are:

Are you a buy and hold investor?
Do you like buying and selling?
Do you like conservative or aggressive investments?
Do you like being in the market or prefer CD’s sold at banks?

Step #2 – Determine your Financial Priorities:

Do you want more money or more things?
Why are you saving?
Are you saving for today or tomorrow?
What’s important to you?

Step #3 – Determine your Financial Goals?

Do you want to buy a larger home?
Do you want to pay for your child’s college education?
Do you want to retire early?

Step #4 – Develop a Financial Plan:

To be a successful investor, you need a long-term financial plan.
Work with a financial planner to develop a financial plan.
A financial plan is the road map that steers you towards reaching your financial priorities.
A financial plan puts your financial priorities and goals in writing.

Step #5 – Determine your Investment Strategy:

Your investment strategy gets you to your financial goals.
Your strategy is determined by your goals.
Is your strategy to save more or invest more?
You can invest more by maxing out your 401k retirement plan at work.
You will invest more if your employer matches your 401k retirement contributions.
You can invest more by not spending as much.
You can save more by following a budget.
You can save more by not buying something unless you need it – not want it – but need it.
Only buy something when it’s on sale.

Step #6 - Follow a Budget:

A budget helps you stay on target and will keep you focused.
A budget gives you parameters to work within.
A budget helps you meet your financial priorities.
You must be disciplined to stay within your budget.

Step #7 – Determine your Investment Profile:

Your investment profile reflects your investment style.
Your investment profile shows your investment likes and dislikes.
Maybe you like stocks but not bonds.
Maybe you like mutual funds but not stocks.
What risk level are you willing to tolerate with your investments?
Make sure your level of risk matches your investments.
If your investments are not within your risk tolerance level, reallocate so that they are.
Your risk levels change, as your life changes.
When you are single, your tolerance for risk may be higher than when you start a family.
When you get closer to retirement age, your tolerance for risk may be lower, you want to preserve your money vs risk losing it.
Working with a financial planner may help you determine your investment profile.

Step # 8 – Determine your Financial Profile:

What are your insurance needs?
Are you properly insured?
Do you have enough life insurance?
Is it the type of life insurance that you meets your financial needs?
There are term life insurance policies & cash value life insurance policies.
Each type of life insurance policy satisfies different financial needs.
A term life insurance policy has no cash value.
A cash value life policy builds up a savings account for you.
Do you have disability insurance?
Do you need disability insurance?
Do you need long-term care coverage?
If any gaps exist in your insurance coverages, work with your financial planner to fill in those gaps

Implementation is critical. Review is essential. Remember it’s not what you make but what you keep that really matters.

Becoming a successful investor takes time; be patient with yourself. It also takes mistakes. Mistakes are okay, as long as you learn from your mistakes and move on. Work with a financial planner to get you started.

3 Secrets To Building Wealth

yourwealthpuzzle — Wed, 28 Apr 2010 10:44:14 +0000

When you think of building wealth, think of a jig saw puzzle. With a puzzle, each piece is separate but when put together, creates a complete picture. Building your wealth is the same way.

Your income, your insurances and your retirement accounts should all be reviewed and worked on separately. When those financial pieces are put together, they create a complete financial picture for you.

The Secret to Building Wealth: Build a Puzzle

Step #1 – Your Income:

The first step towards building your wealth is getting to the point where you can survive on your income.
Your income should meet all of your expenses without borrowing.
The use of a credit card to meet expenses is borrowing.
A mortgage is borrowing, a car loan is borrowing, an outstanding student loan, borrowing.
If you are making payments on any type of outstanding loans you are not to the point where you can survive on your income.
When you are at the point where you have no outstanding loans and can meet all of your expenses with money left over, you are ready to build wealth.
Remember, it’s not what you make but what you keep that really counts.

Step #2 – Your Insurances:

Life insurance is the first piece of your wealth puzzle; every other insurance builds on top of life insurance.
Think of life insurance as the base of a pyramid, everything builds up from the base.
If used properly, life insurance can be used as a source of income through the growth of the cash value.
This would require that the life policy be a cash value life policy, not a term policy.
Term life insurance policies do not provide a cash value build up only a death benefit.
Each type of life insurance policy provides a death benefit; but whole, universal and variable life insurance also have built-in cash value features in addition to the death benefits.
Your insurances serve one purpose, to keep the flow of money constant in the event of some tragic event in your life.
Life insurance will protect your loved ones from financial ruin if you die unexpectedly.
Disability insurance will keep your income coming in so that you avoid financial ruin.

Long-term care insurance will cover you in the event of a tragic illness or accident.
Keeping current on your insurances will help you build your wealth.
If your insurance policies are current you will not have to divert money to pay for an unexpected death, disability or illness, your insurances will do that for you.
Pay your insurances and they will pay for you if the need arises.

Step #3 – Your Retirement Accounts:

Build up your 401k pension accounts and your IRA retirement accounts during your working years.
With reserves in your retirement accounts, you can pursue your passions without money worries during your retirement years.
Retirement accounts are not to be used by you during your working years as a savings account to be drawn upon whenever you have a financial need.
This would defeat the entire purpose of building up your retirement accounts.
Your 401k and IRA retirement accounts were established by the government so that you could be self-sufficient after your working years.

You can start your wealth puzzle at any age.

Keep it simple by breaking down the pieces. Build it slowly, invest wisely and learn along the way. Lessons are learned through mistakes; it’s okay to make mistakes. Just make sure you correct your mistakes and move on and you will learn the secrets to building wealth.

Disability Insurance Policies

yourwealthpuzzle — Fri, 03 Jul 2009 22:37:57 +0000

Anyone who has bills to pay needs a disability insurance policy. Where do you start when shopping for a policy. Well shopping for disability insurance can be overwhelming due to the terms, conditions and types of disability policies available on the market today. But it is really not that confusing if you understand the basics.

There are three types of disability insurance policies available in the market place.

1. A workers compensation disability insurance policy

2. A group disability insurance policy or

3. An individual disability insurance policy.

Workers compenasation policies are used when there is an injury on the job. This is usually easily recognizable. A worker slips and falls or a machine malfunctions and causes physical damage to an employee. Non-work related illnesses or injuries can fall under your Group Disability Insurance policy at work or your Individual Disability Insurance policy may be used.

Do I Need Disability Insurance

yourwealthpuzzle — Fri, 03 Jul 2009 22:35:40 +0000

Who needs disability insurance?

Disability Insurance is a very important insurance policy to have in today’s tough economic environment. Disabiltiy insurance is commonly known as income replacement insurance – - that is because a disability insurance policy replaces your “paycheck” or income with a “disability check”. So who needs disability insurance?

A disability insurance policy pays you or replaces your income during your recuperation after an injury or illness occurs and you cannot work for 6 months or longer. So who needs disability insurance?

Everyone who has bills to pay needs disability insurance!!!! If you have major surgery or break a bone and that illness or injury keeps you from working your bills still need to be paid. So a check from your disability insurance policy would protect you from financial ruin. Your protection comes in the form of bill payment. Your disability policy would make your payments….landlord, mortgage company, credit card bills, etc.

Disability Insurance

yourwealthpuzzle — Fri, 03 Jul 2009 22:22:43 +0000

Individual disability insurance polices are purchased and owned by the individual themselves. Where as a group disability policy from work is generally purchased and owned by the corporation. At some company’s the employers may ask the employees to contribute to some of the premiums of a Group policy, but the policy is still owned by the corporation.

Many states have specific requirements for worker’s comp disability insurance policies to be used. Therefore a workers comp policy is not a solid guaranteed method of income replacement. The rules of your state may or may not qualify you to use the worker’s comp insurance after an injury.

There are many advantages and very few disadvantages to owning an individual disability insurance policy. Your work place may not offer disability insurance and your state rules may disqualified you for worker’s comp insurance. If you are put out of work due to an illness or injury, you will want and need disability insurance if you have bills to pay. Therefore you need an individual disabiltiy insurance policy to cover you when no other policy will.

Disability Insurance

yourwealthpuzzle — Fri, 03 Jul 2009 22:19:17 +0000

What protection does a disability insurance policy give you? Your protection comes in the form of bill payment. Your disability insurance policy would pay your landlord or your mortgage company when you are disabled. Your disability insurance policy would make your car payment; pay your credit card bills; pay all of the other household bills that come up every month. These bills come up every month whether you are working or not.

Your mortgage company or your landlord does not care whether you are working or bed ridden due to surgery – they just want your mortgage payment or your rent payment…..they have bills to pay too. And it does not matter to your utility company whether your monthly payment comes from your “paycheck” or your “disability check” – a payment is a payment.

If you have credit card bills, utility bills, a car payment, or even your child’s tuition to pay – - – - you need a disability insurance policy. There are many advantages to owning a disability insurance policy and very few disadvantages, if any. Peace of mind is the biggest advantage. Knowing that if you are ill or injured you will not lose your home is worth the price of a disability insurance policy.