The two biggest areas people are in constant search of gratification are in regards to money and looks.  For the purpose of this post we’re going to focus on weight and physically fitness in regards to looks.  Then for money we are going to looking financial situation or your financial health.

Development

an early age our perceptions of money and health take shape mostly for us.  We learn our thoughts and feelings regarding these areas from the major influences in our lives.  It might be your parents, teachers, friends, other family members.  It could be things you learn or things you can experience.  There are numerous ways in which your relationships with money and health grow over the years.  The key is to realize that your thoughts and feelings are a learned behavior because of this they can just as easily be unlearned or changed.

Our Society

Today we are a society that is struggling, to say the least, in these two areas.  There are people everywhere saddled with debt.  They don’t have the savings they need.  They become reliant on jobs and the income they provide.  To make matters worse, the economy is bad and unemployment is up.  Just as we struggle with money we struggle with weight.  Obesity in America is out of control.  We love what’s not good for us, maybe because it’s easier or maybe because it tastes better.  We don’t have time to exercise.  We also spend more time sitting than ever.  We sit at our job, in our car and in front of our televisions.

Caught in the Middle

Everywhere you look you are bombarded with extremes.  You are shown rich or poor, fat or skinny.  The in between has essential been buried in our society.  What fun are they?  They are boring right?  Who wants to be boring?  So you constantly deal with cognitive dissonance.  This creates a sense and feeling of being uncomfortable.  These extremes make it very difficult to change.  It’s almost as though you have to be one or the other.  So then if your are not rich, you must be poor and if you are not skinny you must be fat.

This creates a constant battle, a mountain to climb.  How do we respond to this?  We don’t have the patience or the time.  Some may argue that we are lazy.  We struggle with the lack of understanding of exactly what to do or where to start.  We seek out the quick fix.  We want to be rich and skinny now.  Isn’t that what we are suppose to be?  Isn’t that what is in the news and the magazines and on tv?

Quick Fixes

There are the diet pills and the lottery.  They advertise everywhere.  This one pill will make you skinny.  You don’t have to be fat, just as the lottery makes you rich.  We throw money at these get rich and get skinny schemes.  These two sections are in every grocery store across American.  The place to buy your lottery tickets and the section that has the diet pills.

Next we are faced with an overwhelming number of ways to get rich and skinny.  There is too much information, too many ways to make it work.  So we look around in our own worlds.  We scratch and claw to find someone who has had a bit of success so we know who to copy or follow.  Oh this diet plan or pill or book worked for so-and-so it will work for me.  I read about this on the internet or saw it on tv.  Maybe there is truth there I will try it.  We offset our constant struggles with constant little efforts.  It’s as if we just try a bit maybe something will happen to fix everything.  Or maybe we’ve come to accept that we are failing in these areas.  That would be scary, acceptance?

Last Resort

We are left with our final option, Bankruptcy or Gastric Bypass.  They are one in the same aren’t they?  Start over with a clean slate.  Wipe the fat and debt away.  Does it work?  It definitely can.  What it doesn’t address is the root of the problem.  The money issues you were dealing with first and the eating issues are still there.  They need to be fixed.  What it does is shrink the mountain.  Things become less overwhelming when you don’t have to go it alone and figure things out by yourself.

It Doesn’t Have to be This Way

That’s what I’m hear to tell you.  There is help.  You are the norm.  The majority of people our there are struggling with the same money and health issues you are.  Just because they don’t put them for you to see doesn’t mean they are not there.  There is help for you.  There are financial planners and personal trainers.  There are bloggers and information everywhere.  This can continue to be overwhelming so focus on three.   Three great services or people that can help and teach you.  You need to take the leap of faith and now that things will get better.

Your Chance to Fix It

Focus on the next 30 days.  Go out and follow your 3 things that are going to change your life in the next 30 days.  It might be a book, a blog and a personal trainer..  Maybe it’s a friend, a financial planner and/or Financial Samurai.  Whatever works for you.  Don’t worry about if it’s the best, find something you trust and stick with it for 30 days.  Maybe it’s an exercise video from BeachBody or a great book from Amazon or someone you were introduced to.  I promise it will make a difference.

Change

We’ve come to talk about how we as a society got here.  It’s okay to be here.  It is normal to be here.  But you don’t have to.  You do, however, have to want to change.  There is a reason for this.  There is a purpose to change.  It’s different for everyone.  Now is your opportunity.  30 days is all I ask for.  So ask yourself two questions…

1. Why do I want to change?
2. What will be my 3 things for the next 30 days?

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Make sure you read the title.  Read it again.

I turned on the Biggest Loser tonight just in time to see Jillian Michaels at the top of her game.  The green contestant was not opening up and not exercising.  The funniest thing about the show is that if you really watch the trainers on the show they aren’t worried about the exercise.  Yes, they get people to work out a lot.  Yes, they teach them how to eat right.

They give the contestants to tools to succeed.  They teach the contestants how to work out by teaching them how to do each exercise.  They teach them about proper form and what muscle groups the exercise targets.  Then they teach them about calorie burning.  They teach what to eat and how to eat.  These are the tools necessary to being physically fit, to being healthy.  But those tools are NOT enough.

With your money, you can learn to budget.  You can learn how to spend your money.  You can learn when to spend your money and what to spend your money on.  That won’t make you rich.  You can take it a step further.  You can learn where to put your money, what the best investments are and the best financial tools for you.  That will still NOT make you rich.

There is a whole other level.  There is the mentality.  The people on the biggest loser have the mentality to be fat.  They have the mindset to be fat.  It’s a coping mechanism for most of them.  The truth is it’s a learned behavior most of the time.  Fat parents have fat kids.  Broke parents have broke kids.  The best part about is that it can be unlearned.  Fat parents don’t have to have fat kids or you could go one step further and teach fat parents to lead healthy lives and they will teach their kids to lead healthy lives.

Just as you can develop, learn or pick up the habits of being fat, you can develop, learn or pick up the habits of being broke.  This means that no matter what you do, you will continue to be broke unless you change your mentality.  Why do you think professional athletes and actors go broke?  Why do lottery winners still end up penniless?  They don’t change their mentality, they don’t change their thought process.

So called, ‘professionals’ that focus on dollars or weight are useless.  It is NOT about numbers.  Yes, your obesity can be measured by a scale.  You can argue that your wealth can be measured by your net worth.  However, this doesn’t tell you how you got there.  It doesn’t tell you why.

Are you happy?  Do you want to change? Then it starts with your mind.  It starts with your thinking.  If you can’t change the way you think about food or money, then you can’t change.  You might make progress.  Just enough to tease you.  Fake ‘professionals’ will help you make a little progress.  If you don’t change the way you think, in the end you will be fatter and more broke.

Jillian said on the show tonight, “emotions are a compass“.  If you are upset about being fat or spending money, you have to deal with it you can’t just hide it.  It’s your body and minds way of telling you something is wrong.  The emotions are there to guide you and point you in a direction.  They tell you something needs to change.  There is no better time than now.

Here are the two best books I know of for changing your mindset about money.  It’s a great place to start.

Anyone else have some recommendations?

Related posts:

1. Is it time to be happy yet?
2. Throwing Money Stones
3. Search for Instant Gratification

Has your financial advisor every asked you…

What are the three things you want your money to provide for you in the future?

If yes, how did you answer that?  If no, get a new adviser.  How simple is this question?  Let’s start here.  What do you want your money to provide for you in the future?  What is the purpose of your money?  Money is not a goal or an outcome.

If I told you I will give you $1 million the day you retire would that make all your hopes and dreams come true?  Would that money provide you purpose in life?  It might or might not.  More likely, we have no idea.  We don’t know the value of $1 million at some arbitrary point in the future.  So why do we as individuals target a number?  Or maybe a better question is why do financial people push you to a number?  So many financial people I meet equate everything to numbers.  Numbers are guesses.  They are simple things that financial people can do to try to make the abstract concrete.  Don’t fall for it.

Instead ask yourself why you want that million dollars.  What would you do with it?

• Travel - Where is the first place you would go?  Why?  What do you like about Italy (or Hawaii or Massachusetts, etc)?
• Vacation home – Where would it be?  Would it be just for you or for the family to come visit?
• Grandchildren - What would you like to give them?  Time, money, both?  How? Trips, entertainment, college funding?
• Hobbies - What do you love to do that you never have enough time for?  What does it take to get it done?  Do it!

These are just a few things to get you started.  Start to brainstorm and write things down.  The best part is you are allowed to change these things.  By writing it down it allows you to review your list once a year.  Writing it down helps you visualize it.  You might just make something happen long before you thought possible.

Take these 5 Steps to your outcome:

1. Ask yourself, “What are the three things you want your money to provide for you in the future?”
2. Brainstorm on a pad of paper.  Jot down what comes to mind.  If you are married first brainstorm individually and then together.  You might just share more than you thought.
3. Focus on why.  When you have your ideas jotted down look at them individually and focus on why they are important to you.
4. Write it down.  Make your list and put it to paper.  Better yet, get pictures that go along with your 3 things.
5. Make it visible.  Put your list somewhere where you can see it.  Let those whom you care about know.  Tell them and talk about what your wrote and why.

Once you have done this you begin to give your money purpose.  Money itself, or some arbitrary dollar amount, is not an outcome.  It probably is going to help you reach the outcome you desire but not necessary.  It most likely will play a large roll so it is important.  Why the money is important can vary greatly from person to person.  Why is money important for you?

Related posts:

1. Throwing Money Stones

I was going through my e-mails the other day when I received another e-mail from an insurance company (I say that because I receive a lot of e-mails from various insurance companies) advertising some change in their current offerings.  I breezed over it when something jumped out at me.  The thing that really caught my eye on this e-mail was that it was advertising a rate increase.  The current economic environment isn’t leading to very many rate increases.  It seems like nowadays all I’m seeing is rate decreases, so it was refreshing to see an increase.

This got my attention so I read on. The e-mail was promoting an immediate annuity.  The big hook that the e-mail had was that a 65 year old male could get 7.2% income from this particular immediate annuity.  In a world of the 4% rule this caught my attention.    What this company is saying is that $100,000 could be turned into approximately $7,200 per year for as long as you live.

I’m not someone that says everyone needs an annuity but it does give you some advantages:

• Guaranteed stream of income – The company that sent me the e-mail has a Comdex of 98 which means that they are financially rated in the top 2% of all insurance companies.  That’s a pretty strong guarantee.
• No down years - One of the biggest killers of retirement withdrawals is years like 2008.  When you withdraw money during a down year, your accounts will never be able to recover.  You are not depending on the market.
• Diversification – Everyone talks about it.  People talk about diversifying your streams of income.  Here is a great way to do that.
• Leave something behind – This is probably the second biggest argument against annuitization.  I looked into it closer and a 65 year-old male in average health can guarantee an insurance policy for the $100,000 he just annuitized for about $2,000 per year.  This means that he would still be receiving 5% income guaranteed for the rest of his life.
• Control – The number one reason against annuitization is that you are giving up control of your money.  This is true.  So don’t annuitize all your money.  You only want to annuitize a portion of your money.  Usually this will be a portion that will cover fixed expenses that you know are going to be there.  Bills such as property taxes, insurance, utilities; these are bills that are always going to be there regards less.  If you’re not sure where your money goes I recommend using personal finance software to help track your spending.

What about inflation?

I have not mentioned inflation.  I know what you are thinking the 4% rule is indexed for inflation.  Well the advertisement they sent me never even mentions inflation.  I would be willing to bet money that some stupid people that call themselves financial advisers are going to go out and try to sell 7.2% income and never even thought about inflation.  It’s the first thing I thought about so I went into my software and started to dig around quickly.  When indexed for a 2% inflation the payout was about 6%.  But this is where your other assets come into  play.  Here is where your investments would be used to hedge against inflation.  Diversification is key.  There’s no perfect fix.  Your investments would be part of your income rather than all of it.

Related posts:

1. RMA: Income Planning Program

Chances are you never thought to put a number nonetheless a dollar value on your own life.  Is it even possible to put a value on human life?  That is exactly what underwriters and insurance companies attempt to do.  One of the things that the insurance company needs to determine is whether people are worth the amount of insurance they are applying for.  They have to convert the intangible to the tangible.  They need to put concrete numbers on a human life.  They call it human life value.  Ever wonder how they do that?

Human life value is used by life insurance companies to determine the maximum amount of insurance that they can offer you.  How do they go about doing this?  They base it on the higher of 1. assets or 2. earning potential.  Assets is pretty straight forward, they will insure you for 1x your total assets.  As for earning potential it gets a little trickier.  This will vary slightly from company to company but here is an outline for you:

There is also one more qualifier to see the maximum amount of life insurance a company can offer you, income.  Depending on your income levels companies will only allow you to pay a certain amount of your income towards insurance.  This may vary from company to company.  An idea of what this might look like is that if you make less than $80,000 you are only allowed to contribute up to 5% of your income to life insurance.  If you make between $80,000 and $120,000 it goes up to 8%, between $120,000 and $250,000 it’s 10% and over $250,000 is decided on an individual basis.

If you want to maximize your human life value then you would get the most insurance you could.  Unfortunately, with income restrictions you might not be able to fund to policy properly so what good is that.  If you are looking to maximize the efficiency of your life insurance why not use the maximum funding allowed by the insurance company to properly fund as much life insurance as possible?  You can always add more insurance over time or use whole life insurance from a mutual insurance company and you can watch your face value grow.

If you had a BMW would you insure it for the value of a Hyundai?  If you had a mansion would you insure it for the value of a motor home?  If you were a doctor would insure for the salary of a store clerk?  These questions are a lot easier to answer.  The reason for that is because no one ever thought to put a value on their own life.  Well no one except for the insurance companies.  Why not maximize their scale?  Don’t sell yourself short.

Related posts:

1. Life Insurance Secret
2. Life Insurance Audit

Yesterday, I had a message on my voicemail from someone we’ll call Paul.  It said something along the lines of ‘Hi, it’s Paul.  We met last night at the networking event.  I made a note to call you because you had mentioned having to deal with acid reflux.”  Now I go to my fair share of networking events.  I meet a good number of people and they always ask for my card.  I’ve been giving it to them.  The funny thing is they never call me.  Paul did, so I called Paul back.

Now when Paul called me he was focused on the call and was probably all ready to talk.  When I called Paul back, I could tell he was searching or going through his stuff to figure out what he wanted to talk to me about.  Now I told Paul that I was calling him because I was impressed he actually called after a networking event and I was showing my respect for him and his business by returning his call.  But he wasn’t ready because I called him and when he couldn’t find his notes on me, he did what every cold caller does, he talked.  He was off and running.

When I mean off and running, I mean talk, talk, talk.  I couldn’t get a word in.  I don’t even know if he took a breathe.  Everybody has had a call like this right?  The kind of call that you barely have enough time to squeeze in the uh-huh.  So I waited and waited for my chance to speak.  Then I think he took a breathe.  I looked at the phone and said something along these lines “Paul, I’ve been on the phone with you for 7:38 and I don’t want you to take this the wrong way but I haven’t been able to say a word.  It sounded like in the beginning you were looking for your notes on me, I’m guessing you didn’t find them?”  Paul said “no I can’t seem to”.  “Well in your message you mentioned acid reflux.  I know that, why didn’t you ask?”  Paul stuttered.  So I said “You’ve told me how great this product of yours is but unfortunately, most of it doesn’t apply to me.  However, if you had got me talking about my acid reflux, you might have just gotten somewhere.”

Now me and Paul continued talking for about a half hour.  The conversation ended with him thanking me for my honesty and constructive criticism.  I also ended up learning that not only was Paul trying to sell me a product but he is also sort of in between jobs and this is a part-time thing for him.  I’m going to introduce him to a couple of people I know that might be able to help him find a job.  Why?  Because I like Paul and I like the fact that he called.  He can learn to talk better on the phone but you can’t teach people to actually call.  (Well, technically you can it’s just a lot harder to do)

Why am I tell you this?  I was reading Knowing vs doing: Let’s compare these 2 friends who try to earn more from @ramit.  The difference between your financial success and your financial failure begins with your income.  If you don’t have any or enough then how can you succeed and it is a lot easier to succeed with a big income.  So can you call?  Erica Douglass teaches us that if you can make 5 call you can make 500.  And if you can make 500 you can make 5,000.  Whatever it takes.  Paul can call.  He’s ahead of about 95% or maybe even 99% of all the people I meet networking.  These people call themselves entrepreneurs or worse yet they are working for someone else.  Paul is one step closer to succeeding than they are, he called.

If you can call then go see The Rainmaker Maker so you can learn about what to do next.

If you can’t call then you just might want to devote some time to that or find a new job.  Something is  broken, are you going to, or better yet willing to, fix it?

Follow my feed, follow me on twitter and e-mail me.

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In case you didn’t know, I’m from Massachusetts.  That makes me a Red Sox and Patriots fan.  Now yesterday might have been one of the worst days to be a Boston sports fan in recent memory, if not ever.  So I don’t want to talk about it.  Since the Red Sox season is now over, let’s talk football.

In football there are three main areas of the game: offense, defense and special teams.  Now any true football fan knows that you need to be solid in all three areas in order to have a good season.  If you had to rank in order of importance, how would you?  Most people would probably put special teams as the least important.  Special teams doesn’t usually win you games, though it can.  For you local guys, Holliston’s Kevin Curry scored on a 75-yard punt return and a 70-yard kickoff return and set up another touchdown with a 42-yard punt return (compliments of the MetroWest Daily News).  Now I would just not kick the ball to him but that’s just me.  The game ended up being decided by a field goal.  You could definitely say special teams won that game.

The big debate is usually over offense and defense.  The age old saying in football is that “offense wins games, defense wins championships”.  Or there is some variation of this.  But what do the fans want?  What are the fun things about the game?  There are usually a few great hits, a couple of sacks and an interception or two to cheer about but there is always more noise for touchdowns.  People pay to see touchdowns.  Everyone that’s ever heard of football pretty much knows what a touchdown is and they know when to cheer.

In your financial world we have growth, protection and savings.  Savings is the special teams.  It’s the stuff that can make or break a game for you if you let it.  But as long as you play solid special teams everyone just sort of forgets about it except the special teams coach.  Remember what sells tickets?  It’s growth.  Everyone loves it.  They cheer for it.  They get pumped about growing their money.  How much did that stock go up today?  That’s what people want to see.  That’s what people pay for.  The defense or protection is just there in case.  No one really pays too much attention unless something big happens.  Hopefully nothing does and you can just root for that growth.

Just as in football you need a full team approach to your financial world.  Make sure all three areas are well coached and well prepared.  Remember though, in football there is a separate coach for each area.  Do you have that?  Could it help you?  Everyone loves to chase the growth.  Maybe you’ve learned from the down market?  It’s kind of the equivalent to Tom Brady blowing out his knee in the first game.  Luckily they are a well coached and well rounded team so they still had a pretty decent season even without the best offense in the history of the NFL.  In Superbowl XLII it was the defense that won the championship for the Giants beating the best offense ever.  In your financial world, are you focused on your offense (growth)?  Is your defense (protection) just enough to get by?  Or do you have a championship defense?  Remember, “Growth gives you a great year; defense gives you a legacy.”  What do you think?  I just came up with that one on my own.  Don’t get caught up in all the offense the companies are selling you in their ads, take sometime to make sure you defense is going to help you get there.

For you football fans A Giant reminder: Best offense is a good defense

If you have any questions or comments e-mail me, follow me on twitter and grab my feed.

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Well if you hadn’t heard about Baker and Man Vs Debt then you probably aren’t involved in social media.  He is probably one of the most popular topics right now in regards to personal finance in social media.  He is doing a great job with his blog, that I believe he said is just over six months old.  The reason I’m telling you this is not only because, from the comments I’ve been reading, he’s been affecting a lot of people’s lives but also because he is the inspiration behind this post.  Before I continue, go read Would You Rather Be Fat or In Debt? It is a great post and there is a lot to learn from all the comments he’s collected.

Financial Independence

So as I read his post I couldn’t help but think about financial independence.  For me financial independence means maximizing choices and minimizing risk and loss.  What most people might consider the biggest factor (I don’t) in your financial independence is how much money you have for retirement.  The three main factors for this are the amount you invest, time and rate of return.

What about your health independence?

Is there such a think?  There is now.  So your health independence would be maximizing choices and minimizing risk and loss.  You want to be able to choose to do what you want to do.  Unfortunately, there seems to be a lot of people out there that don’t get around well.  I don’t just mean old people but younger ones as well that have difficulty with mobility.  Their choices are limited by their health.  You also need to minimize risk and loss.  This is a little more self explanatory and is about controlling the bad things that being unhealthy can lead to such as health issues and costs, illness, disease and death, to name a few.  I’m sure you can think of or might have experienced more.

The main way people determine how healthy they are seems to be based on three factors: diet, exercise and weight.  Now something might jump out at you right away as it did me.  You only really control two of these factors, diet and exercise.  The third, weight,  is determined by an outside force.  This relates to the factors for money.  Two of which you can control (amount invested and time) and then a third that is determined by an outside force (rate of return).

Why do people seem to fixate on the two things they can’t control the most?

Weight and rate of return are just numbers.  By themselves they mean nothing but are most commonly used as a frame of reference.  Think about it.  Just because two people weigh 200 lbs doesn’t determine how healthy they are.  One could be grossly obese while the other could be extremely thin and malnutritioned.  The number by itself means absolutely nothing, just as rate of return does.  Just because someone is getting a 10% rate of return doesn’t determine their wealth.  You might work hard to try and figure out how to have some control over these numbers but in the end it’s probably more of an illusion.

At any time it seems as though the stock market can go up down or any which way.  I think we’ve all experienced that.  How many people have experienced this with their weight?  I actually have experienced that recently as well.  Over the last few months I’ve lost 20 lbs or so and I wasn’t even trying.  I have exercised about the same and didn’t consciously change my eating habits.  I think I just decided that I wanted to weigh closer to 200 lbs.  At first I was started to worry a bit but since my weight has leveled out.  I’ll just keep an eye on it.

To give you some background, my highest weight was around 245 lbs give or take.  This was when I played football in college and was during the winter.  I didn’t once consider myself fat.  I was putting on muscle at the time, that was my goal.  The opposite might have been my senior year of college when I was trying to keep my weight down during the football season in an attempt to be faster.  Since college, I’ve consistently weighed around 220 lbs give or take, until now.

Do these numbers mean anything to you?

What if I told you I got a 10% rate or return?  In 2008 you would have thought I was God but in 2009 you would feel bad for me.  I just gave you a bunch of numbers about my weight but you get no real context without knowing me and my situation.  You can’t determine how healthy I am from my weight alone.  Just like you can’t determine someone’s wealth from the rate of return they get.  Stop chasing a number.

The numbers will come.

It’s Field of Dreams all over, “if you build it they will come”.  Think of the movie.  He went against what people said, the popular way of doing things and even went against his family’s wishes a bit but I think it was worth it for him in the end.  It’s hard to change but once you do things get easier.  Make it a habit to just eat a bit healthier.  Start by cutting out excess eating or spending and fatty foods or luxury items.  Then start exercising.  Maybe you go for a walk or open a savings account.  When the time is right talk with a personal trainer or a financial planner.  The best part is if you start exercising NOW and your start saving NOW you really don’t have to be quite as picky with your eating or save quite as much.  It will definitely help if you do but it’s not as detrimental.  What are you going to change today?

Don’t forget to follow my feed and me on twitter.

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Have you ever heard of a Life Insurance Audit?  It’s something you should be aware of.  Life insurance is one of those things that everyone wants to set it and forget it.  Unfortunately, as the economy changes so doesn’t your life insurance.  Also life happens.  You get married, buy a new house, have kids, change jobs, etc.  These things can have a drastic effect on your need for life insurance.

Let’s face it, no one wants to deal with their own demise.  You don’t want to think about it,  you definitely don’t want to worry about it and you probably don’t want to talk about it.  At some point in your life you are going to need life insurance.  Actually, you might not but those that depend on you definitely will, your children, you spouse and your employees.  So what did you do when you reached that point?  Maybe you searched the internet, filed out a form online?  Maybe you knew a guy, neighbor, college buddy?  Or had a friend or family member that knew someone?

You got your insurance right?  You needed to for your family.  Now you can sleep well at night and not have to worry about it.  You’re all set.  Or are you?  Times have changed.  Your sick of paying the bill wondering if you’ll ever need or even use it.  You don’t like seeing money go out the door with no return.  Sound about right?

Then there are the people with permanent coverage.  You wonder want return you’re getting if any.  Is your cash value going to be there when you need it?  Will this policy really do what the guy told you it would do?  Unfortunately, permanent policies are blowing up left and right because they were sold by brainwashed agents that were looking for their commissions.  This leaves you in a really bad spot.  It sounds like a problem.  Here’s your chance to fix it.

Today life insurance rates are at some of the lowest levels in history because people are living longer than they ever have before.  What you do is get a Life Insurance Audit.  This is a no cost, no obligation analysis done on your current insurance policy.  It shows you how it is performing, where it is now and where it is projected to be in the future.  Is it doing what it is suppose to be doing?  More importantly is whether or not your old life insurance policy is still competitive.  Can I get more coverage at the same or less cost?  Here’s your comparison.  Can I get the same coverage and put more money back in my pocket?  Here’s your comparison.  Can I extend my coverage to last longer without it costing a fortune?  Here’s your comparison.

Now here’s the catch.  Most insurance agents can’t do this.  They aren’t independent and they truthfully, just don’t know enough about life insurance and different types of policies.  They are brainwashed by the company they represent to believe that what that company offers is the best for just about everyone.  Make sure you read my rant about life insurance.  Here’s your chance to level the playing field.  Get a Life Insurance Audit and know you have the best policy for what you are trying to accomplish.

If you want to know more and/or have questions e-mail me.  Don’t forget to subscribe to my feed and follow me on twitter.

Related posts:

1. Life Insurance Secret
2. Life Insurance Breakpoints
3. What Every Life Insurance Policy Shouldn’t Be Without

I was talking with a teacher about this the other day so I thought I would share.  The teacher told me that him and his wife are no longer eligible to contribution to a Roth IRA so he figured he should start a 403b.  So then I mentioned a Roth 403b to him.  He then asked me what that was.  So I proceeded to tell him it works like a Roth IRA except that there are no income limits, higher deposit amounts and the school had an approved vendor list from which you had to choose.

This is a normal conversation I have with teachers.  I usually hear one of two things.  I was told to do a 403b and so I started funding one or that they contribute to a Roth IRA.  The Roth IRA can work great if you are eligible and you don’t want to exceed the contribution limits ($5,000 under age 50 in 2009).  So then let’s look at alternatives that especially come into play when a Roth IRA isn’t available.

Before we get there let’s look at what most people seem to do.  They hear from other teachers that they should contribute to a 403b and they do.  What they don’t realize is this decision might be hurting their pension.  Let’s look at it.  I’m going to use Massachusetts numbers because that’s what I am most familiar with.  The concept should work with most pensions.  So in Massachusetts teachers are contributing 11% of their salary into the pension program.  These contributions are made pre-tax so the teacher doesn’t pay taxes on the money that goes into the pension.  What this means is that when a teacher receives their pension the money is taxed as ordinary income.  A Traditional 403b works the same way, pre-tax contributions, fully taxable withdrawals.

Before January 1^st, 2006 the only other payroll deduct plan available to teachers besides their pension was a Traditional 403b.  So when people wanted to save for retirement that was the only option they knew about so they thought it was best.  Now times have changed.  There are more options available.  The biggest of these is a Roth 403b.  The biggest benefit of this is that the withdrawals are tax-free.

The great thing about the Massachusetts teacher’s pension is that they are probably going to receive 80% of their income in retirement.  You take that number and take away their extra tax deductions they might have today; they probably end up in the same tax bracket in retirement.  If on top of this you add a Traditional 403b then you are adding more taxable withdrawals.  This could cause you to be in a higher tax bracket if you are not careful.  This could hurt your pension income.  So learn about your Roth 403b options.  Ask your employer for their approved vendor list and which ones offer a Roth 403b.   Learn your options and more importantly ask questions.

Related posts:

1. Who Controls Your Retirement Money?
2. Max Out Your 401k Math