The Wall Street Journal is very confident! 

Using the word guaranteed in the financial world is like telling a pitcher he’s got a “no-no” going in the 6th inning. 

But apparently the WSJ doesn’t care.  They have found 10 money moves that will always, always pay off – guaranteed!

Aside from the catchy title luring me in, I had to see what financial advice they were talking about, and of course, I wanted to weigh in on it too.

So, here are their 10 sure-fire money ideas and financial advice with my side commentary.

1. Max that 401(k)

Here’s what WSJ says:

This is a slam dunk for you. Every dollar you invest saves you money on taxes because it comes off your taxable income. So Uncle Sam is effectively chipping in.

I agree with the concept – max your savings and you’ll have more for retirement.  You also get a tax-break now, which is great financial advice.

But, tax rates are going up next year and although we don’t know where tax rates will be in the future, there’s a pretty good chance that they’ll be much higher than they are now.  Tax rates are at a historical low. You may be creating a tax time-bomb that is just waiting to go off!

In my opinion, don’t fall in love with your 401k!!  

Anything beyond the company match is up for debate in terms of contributions and really, you should be looking to diversify yourself from a tax perspective any way.

2. Give up the vacation home

What WSJ says:

Most of the time we use them for a few weeks or months of the year. They cost money to buy. There are annual upkeep, maintenance, condo fees and taxes.

Ok, this makes sense.  Get rid of excess, trim the fat, reduce expenses.  All smart things.  But, what if you could buy a vacation home at or near the bottom of the market and you can use it to build True Wealth?  That is, of course, you can afford it!

3. Put $5,000 into an IRA account or Roth IRA tax shelter

WSJ says:

If you’re over 50, put in $6,000. And make sure your spouse does too. IRAs are a great deal.

There is a big difference between putting into a Roth or a Traditional IRA – and that has to do with IRA withdrawals!

Again, the idea of saving money is great financial advice!  Not everyone is eligible for a Traditional IRA or a Roth for that matter.  So make a careful decision when figuring out which retirement account is right for you.

4. Pay off your credit-card debt

WSJ:

Eat macaroni and cheese for three months if you have to, but pay off those balances. You’re probably paying at least 15% interest. You may be paying a lot more. You’d have to earn maybe 17% before tax on an investment just to keep pace. Boring? Nobody’s making 17% these days. So pay off your credit-card debt and brag to all your friends that you just beat Wall Street.

Amen!!  Paying off credit-card debt is possibly the greatest sure-fire money move you can make.  Of course, you knew that piece of financial advice already, but it’s time to do it!

Here’s a good tool to know your credit-card payoff amount .

5. Fire your banker

Here’s what WSJ says:

If you’re like most people, you’re probably paying hundreds of dollars a year in account service fees, ATM charges for access to your own money and the like.

I’m actually not paying account service fees or ATM charges because I don’t overdraft and I don’t use outside ATMs!

6. Get your tax refund early

WSJ:

How? By not overpaying your taxes in the first place. Every year, millions of people cheer when they get a check back from Uncle Sam. But that just means they paid too much withholding tax during the year. So Uncle Sam got an interest-free loan.

I do like this point, unless of course, you need a tax refund because you simply won’t save that extra money!

7. Buy inflation-protected bonds

According to WSJ:

Treasury inflation-protected securities, or TIPS, aren’t sexy. They won’t make you rich. But they’re guaranteed — twice over.  They’re issued by the U.S. government, so they are guaranteed against default. And they are protected against inflation because coupons and principal will adjust to reflect it.

Really?  Hmm.  It seems like everyone has jumped on the TIPS bandwagon and those things are completely oversold leaving an opportunity for a TIPS bubble to burst. 

So they’re guaranteed by the U.S. government, but it doesn’t mean they won’t drop in value.  I’m not saying you don’t want some exposure here, but to make it sound like it’s a no-lose proposition is a little scary.

8. Buy a bread machine

WSJ says:

If a $50 breadmaker saves you, say, $7 a week on buying bread, that’s $350 year. The easiest dough you’ll make. Modern breadmakers are, well, a piece of cake to operate. The return on investment: 600% in year one and 700% after that.

Wow, they are stretching for financial advice now!!  I’d bet that once the novelty wears off after four or five times using it, you’ll be right back to buying bread once a week at the grocery store….and you’ll be out $50 for the bread machine! 

My wife and I always talk about making bread and then we go buy some at the store.

9. Play hardball with your insurance company

WSJ says:

Call competitors and ask them to quote you prices for your current house and auto policies. 

Amen!!  Here’s how to negotiate your home and auto insurance.

10. Get a freebie from a bank

WSJ says:

Sign up for a credit card with a big bonus — like a free air ticket or weekend hotel stay. Use the card enough to qualify. Then cancel the card.

I know it’s a free airline ticket, but I have never done this – mainly because it sounds like such a hassle.  I hate calling customer service lines.  I’d almost rather pay for the ticket than deal with the headache.

What Are Your Thoughts on These Sure-Fire Money Moves?

Let me know in the comments below!

A new retirement is here.  The retirement landscape has changed!

There.  I said it.  But you already knew that didn’t you?

Things are different than they were three years ago in 2007, when the Dow Jones was above 14,000, your home increased by 15% every year and cats and dogs played nice together!

But now, in 2010, dogs are chasing cats again, your home has dropped by 15% or more and the Dow has woken from the dead of 6,600 but can’t seem to sit above 10k for more than a few weeks.

Things are different.

And that’s okay.

It’s okay because there has been a shift in the definition of retirement for the last several years, one that’s not totally dependent on the market or housing.

What is the new retirement?  It’s not just sitting at home watching Drew Carey destroy the Price is Right or even doing positive things like double checking all your beneficiaries so you know you have the right ones listed.

Here are 10 guiding principles for the New Retirement:

New Retirement Principle #1: Don’t Stop Working

More and more folks these days are working beyond age 65.

They enjoy working and want to continue to be a contributing member of society.

Gone are the days where you worked for 30-40 years, stopped and then veg’d out for the next 15 or so.

In the new retirement work still exists, it just looks a little different than your normal 9-5.

New Retirement Principle #2: Do Something You Love

Work looks different in the new retirement because folks are becoming more interested in doing something they really love.

Instead of dragging your feet to work every day, a lot of baby boomers are fulfilling their life’s dream to do what they love – what they’re passionate about.

That will look differently for everyone, but think about what it is that makes you tick – is there a way to make money at it?

New Retirement Principle #3: Become More Concerned With True Wealth

Speaking of doing things that you’re passionate about – I believe that True Wealth is really defined by the 3 P’s – People, Passion and Purpose.

The new retirement focuses on investing into the lives of people, pursuing what you are passionate about and living life with purpose!

This brings greater fulfillment than any amount of comma’s alone could bring.

Use your material wealth to pursue True Wealth!

New Retirement Principle #4: Become More Charitable

Keeping it all for yourself is a surefire way to become a crotchety old man or woman!

Be generous.  Be charitable.  Look for ways to benefit others, not just yourself.  Here’s is one blogger’s strategy for giving away millions!

The new retirement is concerned about others well-being, not just your own.

New Retirement Principle #5: Become Debt Free

The new retirement is intent on getting out of debt!  Living high on the hog while you mortgage your future isn’t the way to a happy retirement any more.

If you can pay off your mortgage, your cars and get rid of all debt – you’ll be much more free to do what you want, when you want in retirement!

You’ll be able to enjoy yourself much more and will be less worried about a “fixed income” or a lower income for that matter.

New Retirement Principle #6: Become More Frugal

Frugality is the new game in town.  And it’s also the name of the game in the new retirement.

Make frugality fun.  Being frugal doesn’t mean being cheap – there is a difference.

It does mean that you consciously shop for deals, bargains, and use your money wisely – not frivolously.

New Retirement Principle #7: Become More Entrepreneurial

Don’t be afraid to tap the creative juices and become an entrepreneur.

There is sometimes a stigma with entrepreneurship, that you must be filthy rich in order to be an entrepreneur.  I don’t think that’s the case.

You can easily start up an online business, or a consulting gig and start marketing yourself.

Just be sure you weigh the costs and the benefits.  Keep the costs down and go for it.  What have you got to lose?  You may find you love building something from scratch!

New Retirement Principle #8: Become More Diversified With Your Income

Folks in the new retirement don’t rely on Social Security or their pension.  They seek ways to create additional income.

Ranging from turning your hobby into a business, becoming an avid e-Bay seller, blogging to create income, becoming a freelance writer or any other number of things that can diversify your inflows – getting multiple sources of income is a smart thing to do.

Of course, there are some things you’re better off not trying when it comes to diversifying your income.

But again, as I said with principle #7 – be creative – figure out some alternative ways to make a little extra cash.

New Retirement Principle #9: Develop a More Simplified Lifestyle

The New Retirement understands that just because you can “have it all” doesn’t mean you should.

Folks in the New Retirement are quite content with living a minimalist lifestyle.

A simplified lifestyle leads to less clutter, more contentment and can help free up the frantic pace of life we often lead in our pursuit of bigger and better!

If you’re just getting into the simplified or minimalist lifestyle, you may want to check out Minimalist Living 101.

New Retirement Principle #10: Serve the Common Good of Your Community

I’m reminded of Jeremiah 29:7:

But seek the welfare of the city where I have sent you into exile, and pray to the LORD on its behalf, for in its welfare you will find your welfare.

God’s command to Jews exiled into Babylon was to serve the common good of the community.  How much more should we serve the common good of the places we live, work and play?

Folks in the new retirement seek opportunities to build up the community by volunteering, mentoring, teaching and simply investing time and energy to make their communities attractive.

What are Your Thoughts on the New Retirement?

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Mike Sorrentino, from MTV’s controversial (is there any other way for MTV?) reality show, Jersey Shore, has made some smart business deals to put him in a pretty secure money situation.

He’ll rake in approximately $5,000,000 by year’s end!

Known as ”The Situation” on the MTV Jersey Shore show, earns $60,000 per episode and also has inked a few endorsement deals!

I must admit, I have never seen this show.  I hadn’t even heard of Sorrentino (I know, I know, I”m so out of the loop!) until a friend forwarded me this article and said I should write about what “The Situation” should do with his money!

So here are 5 dumb money moves The Situation should avoid - and for you to consider too:

Keep It All For Himself!

$5,000,000 is a lot of money.  It’s not much compared to A-list actors or top professional athletes, but it is a ridiculous amount of money to you and me.

The last thing this MTV Jersey Shore actor should do is keep it all for himself.

Why?

Because contrary to popular belief, greed is not good – sorry Gordon Gekko!

We are most happy when we are self-giving, generous and willing to help those in need.

Don’t Do Estate Planning

“I’ve got plenty of time to get my affairs in order!”

Ever think those things?  I’m sure we all do.

The reality is we never know when it’s time to leave this place.

Sorrentino should avoid probate, avoid the mess that is created without an estate plan and avoid putting it off until tomorrow.

Look at Johnny Carson, the guy did a great job with his estate plan, and is still donating money to charity even though he’s been gone for five years!

Don’t be caught dead without these documents, your beneficiaries will thank you!

Spend Like There’s No Tomorrow

Jersey Shore won’t always be the most popular show on MTV – the next edgy reality show will soon take it over, which means the money won’t always be there.

Sorrentino would be smart to put a big chunk of that away for the future and plan for those rainy days!

Spend less than you make isn’t just for us “regular folks”, it’s for everyone!

Don’t Work With Trusted Professionals

One word.  Madoff.

Many of you are DIYers – and that’s great.  Inevitably though, you’ll probably need to consult with an insurance agent, financial advisor, attorney or CPA at some point in the future.

Do your due diligence on these individuals.  Make sure they have your best interest at heart.

Hopefully Sorrentino has some trusted advisors in his court!

Don’t Diversify Income

Again, the cultic MTV Jersey Shore won’t always be around.  Sorrentino would do well with figuring out additional ways to earn some cash.

It sounds like he’s already doing this, which is great!  He’s got a set of workout videos coming out and is also getting endorsements from liquor companies to clothing lines!

Perhaps we need to take a page out of that book and look for ways to diversify our incomes.

Especially in this economic environment, there aren’t too many “recession proof” jobs.

Maybe we need to our hobby into a business or look for additional ways to make some money!

Avoid Those Mistakes – Do the Right Things!

So there you have it! Five of the dumbest things “The Situation” could do with his money (and you too!) – Be sure to avoid these common mistakes!

True Wealth is a topic that’s been on my mind lately.

I think it’s because I have been challenged  over the last couple years by this and have been trying to sort through my own definition of true wealth and its implications for my life.

In 2007 things were going well.  Business was increasing, I was making more money and I had grand plans for taking it to the next level.

Then the 2008 Economic Tsunami hit!

And just like a lot of others, I had to deal with the aftermath.  I had to evaluate our spending, savings, and ultimately what was truly important.

I firmly believe God used the Great Recession to check my priorities.   In a weird sort of way, the recession was good for me!

And that’s when I realized that something needed to change.

I Can’t See, The Wipers Won’t Move Fast Enough!

Have you ever driven through a torrential down pour? 

You know the kind where the rain is coming down so fast and is beating against the windshield so hard that it’s nearly impossible to see?  

A few months back we were coming home from visiting some friends and we drove through a nasty storm on the highway.  It was freaky.  I wanted the wipers to move faster to keep up with the rain, but they couldn’t – I finally had to pull over because I couldn’t see a thing!

I’ll admit, during the worst part of the 2008 market meltdown, it was very tough for me to see beyond each hour of the day. 

As a financial planner, I was feeling the weight of clients’ dreams, goals and investments on my shoulders – there were some days I felt so horrible that I just wanted to pull off the side of the road and wait for the storm to pass.

Every day, I heard story after story from panicked clients looking for answers to things that were so beyond our control and yet affected each one of us.

It was painful. 

I don’t say that looking for sympathy, I simply want to give you an understanding of the journey I’ve been on to realize a huge life lesson that I hope others will learn too.

I Can See Clearly Now…

The rain is gone.  Thank you Jimmy Cliff for summing it up perfectly for me.

Once the markets began to simmer down a bit, I began to think critically about what I had witnessed. 

We weren’t out of the woods yet in terms of the economic crisis, but I started considering what was most important in life and in business.

I started working through a definition of True Wealth.

I started this blog as an extension of what I was thinking through and as a way to help others with personal finance and more importantly, understand the foundation of building your financial house. 

I also reworked the mission and vision statements, revised the goals and reordered the priorities for my business to incorporate my understanding of True Wealth.

And I’d like to share my learning with you.

True Wealth and the 3 P’s

So here’s what I came up with:

True Wealth is not defined by commas or net worth – it is characterized by the quality of relationships; pursuing your passions and living life with a purpose. 

In other words – it’s the pursuit  of People, Passion and Purpose!

Or the 3 P’s as I’m calling it. 

Understanding True Wealth encourages the pursuit of what’s most important, which improves happiness, enlivens the soul and blossoms contentment.

People

At the end of the day, life is about relationships.  Unfortunately, we seem to forget that truth so often just like Sam Walton, the founder of Wal-Mart did as well. 

Sadly, he didn’t realize it until he was on his death bed.

How are you doing with investing into your important relationships?  I know I need to continue to work on this.

Passion

What are you passionate about?  If you could do anything, what would you do? 

Those are the things that enliven the soul. 

Whether it’s helping the poor; giving time to charity; using your personal finance learning to help others understand how to save money; using your passion of capturing memories on film to start a photography business (like my wife did); or using your creative talents for woodworking, cooking, writing or any number of other things.

Use your natural creative talents to live life with passion.

Purpose

Lastly, True Wealth is taking those passions you’ve identified and figuring out what sort of purpose you have with those.

Why are you here?  What were you created to do.  We all have a purpose.   

True Wealth is figuring out what that purpose is and using your passions to build into people!

So that’s my journey.  A long road, but a good one.  And a lesson that I hope I continue to learn and you do too!

What Are Your Thoughts?

What do you think True Wealth means?

Need cash?  Thinking about taking an IRA withdrawal?

Think long and hard because you may have to pay  a nice little 10% penalty for early IRA withdrawals!

IRA penalty – Oh yeah, Uncle Sam will love you!

If you are age 59 1/2 or older, you can take an IRA withdrawal without any penalties at all.  If you’re younger than age 59 1/2 you’ll have to pony up for an IRA penalty – unless of course you meet one of the exceptions below.

IRS publication 590 lists these exceptions to the 10% penalty for an early IRA withdrawal:

You take an early IRA withdrawal and you have unreimbursed medical expenses that are more than 7.5% of your adjusted gross income.

If you have a lot of medical debt, you may be able to take out IRA money without that 10% penalty.  Remember, medical expenses must be higher than 7.5% of your adjusted gross income.

You can take an early IRA withdrawal for medical insurance

As long as your IRA distribution is not more than you paid for medical insurance you will not have to pay a 10% penalty if the following applies:

• You lost your job
• You received unemployment for 12 consecutive weeks because you lost your job
• You receive the IRA distributions during the year you received unemployment or the following year
• You receive distributions no later than 60 days after you’ve been re-employed

You can take an early IRA withdrawal if you are disabled.

Bad news – you’re disabled.  Good news – no penalty.  Not sure I’d really want to qualify for this one, but it is there.  Be sure to file a special tax form with your 1040 that lets the IRS know that you are disabled!

By the way – it’s a good idea to check out disability insurance before you become disabled too!

If you are the beneficiary of a deceased IRA owner, you can take an IRA withdrawal.

Ok, so Uncle Ritchie leaves you his IRA and you’d like to go buy a new 5 Series – no penalty!

Your IRA withdrawal consists of receiving distributions in the form of an annuity. 

Basically what the IRS means here is that you must take “substantially equal period payments”  – in other words a set amount per year for either a) five years or b) til 59 1/2, whichever is longer. 

Your IRA withdrawal is not more than your qualified higher education expenses.

Alright, so you’d like to use your IRA money for college savings!  Great news – your IRA withdrawal (as long as it is not more than your tuition) can be taken penalty free!!

Your IRA withdrawal is used to buy, build, or rebuild a first home.

First home.  That’s the key here.  Not your second, third or fourth – it’s your first home and you are buying, building or rebuilding – then you can take an IRA withdrawal penalty free.

Guess what though – a first-time homebuyer is actually defined as a homebuyer who has not lived in a main “purchased” home for the preceding two years.

So, if you owned a home, sold it and rented for over 2 years and then decided to buy again – you’d qualify!!

Your IRA withdrawal is a qualified reservist distribution

A qualified reservist distribution is met if:

• You were ordered or called to active duty after September 11, 2001
• You were ordered or called to active duty for a period of more than 179 days or for an indefinite period because you are a member of a  reserve component
• The distribution is from an IRA, 401k or 403b plan
• The IRA withdrawal is made no earlier than the date of the order or call to active duty and no later than the close of the active duty period

These exceptions have some qualifiers on them so it’s important to look at the IRS publication to make sure you fit into one of these categories before you take the money out.

Also, don’t fall into the trap thinking that these exceptions are for taxes!  You still have to pay taxes on any withdrawal you take out.  The exception is for the penalty only!

So there you have it, 8 ways to avoid the penalty for your IRA withdrawal!

If you have not already started planning for your retirement you should start today.

While everyone looks forward to their golden years a lot of people are afraid of retirement or have no idea what kind of retirement savings it will take to make for an enjoyable retirement.

One of the great tools available to help with your retirement planning is a retirement calculator.

As you might expect, a retirement calculator is more useful if you use it early in your working life. If you wait until you are just a few short years away from retirement age the calculator will only be able to tell you how much your income will be after you start working.

However, if you use the retirement calculator when you have thirty or forty years of work ahead of you it can give you a much better picture of what your golden years can look like and how to avoid retirement risks as well as plan to make your dreams come true.

What A Retirement Calculator Can Tell You

Income Target

The retirement calculator can figure out how much money you will need to make in order to have enough to live the life that you want after you stop working.

It not only takes into account the basics like food and housing but also the other things on which you spend money. It can then tell you how much you need just to get by and how much you will need in order to maintain your current lifestyle.

Interest Rates

One of the ways to earn money for your retirement is through wise investments. The calculator helps you figure out just how much interest you need to earn on your investments in order to meet your income goals.

Retirement Timeline 

Your calculator can look at options for retirement dates. It can help you decide to retire early or delay retirement to spend a year or two extra working.

Principal Amounts 

The principal amount of money you hold in your accounts will dictate how much interest you are able to earn. If you withdraw too much money you will stop earning interest, which is a big part of your retirement income.

A good calculator will help you figure out how much you need for retirement.  It will show how much you should put in to that account and how much you can withdraw and still maintain a balance that you are comfortable with and that maintains your interest earnings.

Here’s a great Retirement Calcuator at CNN Money that can walk you through your retirement planning.

Reviewing Your Progress with the Retirement Caluclator

As you go through life, your goals and earnings are likely to change. If you go back to the retirement calculator on a regular basis it will help determine if you are still on the right course or if you need to make changes to meet your goals.

Even if you have already retired the retirement calculator can still help you. By taking the time to plug in your financial numbers from time to time you can evaluate your spending to make certain you do not use up your nest egg too quickly.

Everyone looks forward to the time when they can stop working for good. We all dream of spending more time doing the things we really enjoy without the stress of working day in and day out.

The best way to make sure your retirement exceeds your expectations is to start planning early so that you have the funding you need to relax and enjoy your golden years.

Start as early as possible and use tools like a good retirement calculator and your retirement dreams will be easier and faster to reach then you imagined.

This article was written by William Eve. William writes about saving money, investment loans and real estate for Home Loan Finder. If your a first home buyer or looking to refinance, visit the Home Loan Finder website for great advice and to compare home loans today.

Casper was a friendly ghost.

Slimer was green and gooey, but you couldn’t help but love him.

And of course there’s Patrick Swayze in the movie Ghost – that was just, well, weird.

None of them, however, gave away insane amounts of money.

I’ve never heard of a philanthropic ghost until now – the ghost of Johnny Carson.

Tax filings uncovered by The Smoking Gun reveal the late, great Johnny Carson became Hollywood’s biggest philantrhopist last year as he donated $156 million to various charities.

Carson died in 2005!

Philanthropic from the Grave

How did he give away millions from the grave?

Simple – Carson actually did the proper estate planning before he passed away!

The former Tonight Show host set up a charitable trust and the John W. Carson foundation before he passed, which was able to give grants to various organizations while he lived and obviously still after he died.

No one knows for sure how much is left in the Carson estate or what percentage the $156 million represents since there has never been a public accounting of it. 

Where Do Johnny Carson’s Donations Go?

The tax return lists 67 separate donations to various charities.  Johnny Carson routinely gave to AIDS charities, schools, and environmental groups during his lifetime.

Apparently there are future plans to donate to the Children’s Hospital of Los Angeles as well as the Los Angeles free clinic, Planned Parenthood and other organizations.

Of course, part of the money has to go to the gentlemen who oversee the financial management of the foundation who both receive $90,000 a year each for part-time work. 

That’s not a bad part-time gig!

Donating to Charity

Ok, so it wasn’t really a ghost – this was all planned out during Carson’s life time.  He didn’t make a come back to sign the tax return.

Whether you agree with who he gave his money to or not, there’s a few big financial lessons to be learned here:

1. Start planning before your dead
2. Get the proper estate planning documents in place
3. Start giving money away - you’ll find greater joy and happiness in giving and helping others

It’s interesting how celebrities can teach us quite a bit about money!

The title of this post makes a very big assumption.

It assumes you are actually reviewing your life insurance plans!

Life insurance seems to hit the gag reflex for most folks.  It’s just not something desirable they care to review, make plans for or discuss.

And yet, it’s one of those necessary evils.

Your life insurance plans should be reviewed at least annually, and perhaps more often if you are experiencing life changes throughout the year.

For example, becoming a parent or having another child is a major life event that should cause you to review your life insurance plan well before your annual life insurance review.

So today we want to cover four things that you need to consider when reviewing your life insurance plan:

Type of Life Insurance Plan

Ok, this seems pretty basic, but I sense there is a lot of confusion out in the world regarding the types of life insurance out there.

There are two main types of life insurance:  term and permanent.

Permanent insurance is designed to last as long as you live, no matter how long you live.  These can be whole life, universal life, variable universal life and a newer version of a universal life that is nicknamed permanent term.

All these life insurance plans have one thing in common – they try to make sure your life insurance is their for you when you really need it – at your death.

You will generally pay higher premiums because you are insuring yourself for a longer period of time and because many of these policies build up cash value, a savings portion of the insurance.

Term insurance plans on the other hand insure individuals for a set period of time, or a term.  This could be one year (not recommended) or it could be 10, 15 or 20 years depending on the plan you choose.

If you do not die within that period of time, then your beneficiaries get nothing.  You would have to buy another policy at that time.

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Term is great for those looking to keep premiums inexpensive.  Since you are only insuring yourself for as set period of time, the premiums for these life insurance plans are generally much less.

So, which type of insurance plan is right for you?  It’s a question you’ll need to consider when you review your life insurance!

Amount of Life Insurance Plan

This one makes sense right?  How much life insurance do I have and how much life insurance do I need?  Pretty simple.

The difficulty comes in when really trying to figure out how much life insurance you need. 

I generally like to keep things simple, so here is a good way to think about it:

• Current and future financial obligations
• minus (-)
• Existing resources (includes savings, existing life insurance and survivor’s earnings)
• equals (=)
• Life insurance needed.

Premiums of Your Life Insurance Plan

Many folks confuse the cost of insurance with premiums.

Cost of insurance refers to the cost it takes to insure you as determined by the insurance company. 

Your premiums may be higher than this amount if you have a permanent insurance policy because most of those have the built-in-savings portion called cash value.

In order to build cash value, you have to put in an amount much higher than the cost of insurance.

What I refer to here is the out of pocket cost for your life insurance, or your premiums. 

You’ll want to review your premiums especially with your permanent insurance because if you didn’t put enough in to begin with, your insurance company will want a higher amount to keep this type of policy going strong.

With term insurance, you need to review the premiums because you don’t want to come to the end of your term and automatically renew at a much higher premium.

I’ve heard of people getting a higher bill for their term insurance because it was at the end of its renewal period and just paying it because they didn’t review what it should be.

Beneficiaries of your Life Insurance

Beneficiaries should be reviewed annually as well.

I’ve heard horror stories of folks forgetting to change their beneficiaries after a divorce only to leave their “ex” with a nice little chunk of change upon their death.

This could also apply if you created a trust and were supposed to put life insurance proceeds into the trust! 

There are big ramifications for having wrong beneficiaries selected so be sure to review this regularly, if for nothing else than peace of mind.

What Else Do You Consider When Reviewing Your Life Insurance Plan?

Share your thoughts below!

I came across two stories regarding unique items being sold this week.

The first story was about the Tuttle Family Farm sale.

John Tuttle came to the good ol’ U.S. of A. in 1632 on a land-grant from King Charles I.

He used that grant to purchase land near the Maine/New Hampshire border.

The farm has been passed down from generation to generation making it one of the oldest continuously family-operated farms in America!

But, the 11th Tuttle generation just can’t hack it any longer – and they’ve discouraged their children from taking it over because they’d be “saddled with debt”, according to Lucy Tuttle, 65, who runs the farm with her brother Will.

Looks like this original 20-acre-parcel-turned-134-acre-tract has seen its last days of sweet corn, cucumbers and squash. 

Unless of course, the new buyer would like to keep on farming.  But that doesn’t seem likely.

Farm sales are common in the United States and are gaining in popularity, but this one is unique because of its history.

The other story was about an Alaskan comic book buff who is putting his prized possession on the market. 

Batman No. 1!

This rare comic from 1940 was the first solo spin-off for Batman who originally made his debut in 1939.

Mike Wheat, the owner of this vintage comic said the time was right for someone else to take it over. 

There have been a few Batman No. 1′s that have gone to auction, but this one is unique because it’s in excellent condition. 

I’m no comic book afficionado, but my guess is that a 70-year-old rare comic book can look pretty rough!

I don’t care how well you take care of it, a vintage newsprint comic cannot hold up that well.

Except for this one – apparently the cool temps and low humidity in Alaska make this a perfect area to “raise” comics! 

The condition of this particular Batman No. 1 is “white” and “crisp”. 

I think that’s comic-speak for “Wicked Awesome!”

So, which will fetch more? 

A vintage Batman comic book…..or, a nearly 400 year old family farm?

The comic already has bids pushing it up to $35k and it’s expected to get more than $40,000!

Meanwhile, Lucy and Will have set an asking price on the 134-acre family farm at a cool $3.35 million!

I know one thing is for sure – holding on to farmland for 378 years and a comic book for 70 is definitely not a “Get Rich Quick” Scheme!

What do you think…are either one really worth the money?

Before you set off on a memorable vacation you will probably read up on the cultural differences of your destination, and other local information to avoid falling into traps of offending locals by dressing inappropriately, or being taken advantage of when you don’t know which street vendors are legitimate.

However, there are also plenty of traps when travelling which are harder to spot.  You’ll need some good money advice to help you avoid money traps while away from home, because you can find yourself over budget, out of cash and struggling to get out.

So here is some money advice for you while vacationing – avoid these traps:

Trap 1 – Expensive Tourist Restaurants

When you are traveling it is easy to be caught up in the tourist spots. You are probably staying in a hotel, in the heart of the city or near main attractions, you will find yourself in the heart of the tourist district, where restaurants and cafe are often more expensive than in other areas.

Instead of falling into the tourist trap of expensive essentials such as going out to eat:

• Have breakfast included in your hotel room. Many hotels will offer breakfast specials included with your room charge for much less than you would spend if you went out – that’s one meal you don’t have to fork out for.
• Eat at a fancy local restaurant for lunch. It is great to discover the local cuisine of the region so book a table for lunch in a local restaurant, where meals are often cheaper.
• Ask the locals, or the hotel staff. Find out where the tourist trap isn’t set and ask the locals about good, affordable restaurants, you may have to travel a bit further, but the walk can mean you experience more of your holiday destination.
• Go to the supermarket. Going to the supermarket while on holiday can be an adventure in itself and you’ll be up close and personal with the locals, their food and their customs while you stock up on snacks, drinks and even the makings of dinner.

Trap 2 – Expensive souvenirs

You want some sort of memento from your trip and of course gifts for friends and family back home, but to avoid the trap of spending your holiday budget on expensive souvenirs:

• Know the exchange rate. This will help you calculate whether your purchase is good value for what it is, based on its true cost to you.
• Is it really a souvenir? Before you purchase an item, consider whether it is really indicative of your trip, or whether it is something you could get at home cheaper, or even worse – if it is a cheap and poorly made souvenir which is aimed at targeting tourists making impulse purchases. Instead, make your souvenirs count, and look for something which really represents your trip.
• Limit the number – and the weight – of souvenirs. Remember that you will have to pay to take your purchases home again if they exceed your baggage weight limits so even a souvenir which seemed affordable when you bought it, could cost you later on.
• Shop duty free. Don’t forget about the duty free shop at the airport where you can shop tax free and buy great gifts of pampering skin care, perfume or alcohol, for family and friends.

Trap 3 – Add Ons

When you travel it is always good to have a plan, but you don’t need to plan every day and every minute of your trip. Therefore, be aware of travel agents who will encourage you to add tours and excursions on your travel package because these can add thousands of dollars to your travel budget, and may not be the best value.

Consider whether the add-on excursions are things you want to be doing, and things which are unique to the area you are travelling to, for example look for cooking classes or tours which are not normally open to the public.

Also consider whether you need to join (and pay for) a tour to enjoy the experience, for example you don’t need to be part of a group to do a walking tour of the city, or hire a vesper to see the sights.

Trap 4 – Not Budgeting

When you travel you need to make sure you have budgeted for every part of your trip from the time you leave home to the time you arrive back.

Knowing how much you have to spend before you leave can help you avoid overspending when you arrive at your destination, and can help you avoid a spending hangover when you return home, and back to the real world of bills and responsibilities.

Deduct your necessities such as flights, accommodation and insurance from your travel savings and then stick to spending only what you have left. Also be sure to have an emergency fund so you know you have enough money for a taxi to the airport or for the insurance excess if you need emergency treatments or have your bag stolen.

To make budgeting easier while you are away, use your credit or debit card because you will be able to view your transactions online with Internet banking at an Internet cafe or on your smart phone, and using a card is cheaper than using travellers’ cheques in most cases.

Plus, with your credit card, if you purchase your flights and accommodation on the card, you and your whole family can often be covered by international and domestic travel insurance.

Trap 5 – Being Unprepared

When you travel you want to relax, and enjoy going with the flow away from your everyday life, however you can still be prepared, and this will save you money.

When you are prepared, you can plan your spending more easily because you will know where you are staying, which meals are included, and therefore how many meals you will need to pay for over the course of the trip.

You can then look at where your hotel is in relation to restaurants and supermarkets to research local meal prices and inclusions.

In pinpointing your location on a map you can also plan where you are going and when you need to be there to meet tour times or general admission times to attractions. This is your chance to learn about the public transport system so you can avoid expensive taxi rides.

Trap 6 – Being too spontaneous

It is fun to be spontaneous sometimes, but it is a common travel trap which many people fall into, because if you leave your flights, accommodation and tour books to the last minute, you could be paying a premium.

When you book in advance you also have more flexibility with dates which can save you money too. For example, if you are travelling to Monza in September but are not interested in the Grand Prix, you can avoid those dates and therefore avoid the highly inflated accommodation and travel costs which surround such a big event.

At the same time, be prepared to negotiate prices closer to your departure date to save you more money, because things like hire cars are often cheaper at the last minute, and don’t charge cancellation fees.

Also aim to book online if you can to save even more, and it’s also easier to find inclusive packages, but make sure the inclusions are ones you actually want and need.

Travelling can be dangerous and it can be expensive, but if you know the common traps which ensnare the unwary tourist, you can make your way through any travel destination with money in your pocket for the trip home.

This has been a guest post by Alban, who is a personal finance writer. He helps people to save money and compare the best refinancing loans.