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How much life insurance do you really need? -- 4 times, 8 times, 12 times your yearly salary? The truth is…you really don’t need life insurance…. It’s your surviving spouse (family) that will need your life insurance!So how much life insurance should buy? The most you can afford! If you can’t afford much, consider the following: Whether you’re old or young, you are probably going to die unexpectedly. One day you’re laughing with your family….next day your family is crying for you. Your family is going be faced with making funeral arrangements, notifying friends and family, and taking care of any matters you left pending. On top of that, they have to grieve! To make matters worse, life goes on--your family has to eat, has to dress, will still need a place to live-- The cruelest thing you can do to your family, is leave them wondering, “where will the money come from?” The first year of your death will be the hardest on your family. They will be --for lack of better words--really, really, really messed up! They shouldn’t need to worry about money matters. At the very least, you need to provide them with one year of economic freedom! They will need at least at least ONE FULL YEAR’S SALARY (the whole gross salary)--In fact, your family will probably need more like 1 ½ years salary (some unexpected expenses will definitely come up). Once your family is covered for the first year, consider the next five years. If your spouse is stuck in a dead-end job, low paying job, or no-job situation. Your spouse will need at least five years to: go to college, retrain, or gain work experience. Where will the money come from while he/she is trying to improve your family’s financial situation? Once you planned for the first six years of your death, you can start planning ahead. Factor-in your children’s education, your loss of benefits (basically your earning potential and future retirement moneys)….. Now you may ask what type of life insurance?---Whole, Term, Universal, Variable? Well, that’s a different story. |
Two Popular Types of Life Insurances Term: Insurance for a fix period of time (5,10,15,or…years). Cheaper than Whole life. If you die, your survivors collect the insurance money. If you don't die, you just walk away after your policy expires. Whole Life: You own the policy until you stop making payments on the premium. More expensive then term. Part of the premium is invested for you in an account (it's like a savings account with a low interest rate) If you die, your survivors receive the policy value plus whatever savings you accumaleted. If you don't die, you can walk away with the money that has been saved for you For better information on this subject go to www.smartmoney.com/insurance/life/index. cfm?story=lifeglossary#one |
The Six Rules of Loaning Money to Family and Friends 1) Money does not grow on trees. You worked hard to earn it. You should decide what to do with your money. Don’t let others decide for you. 2) If loaning money places you or your family in financial jeopardy, don’t do it! This means …do not loan out next month’s rent/mortgage money . Do not make that loan regardless of the many reassurances made to you -- “ I get paid next Friday. I absolutely will pay you back then!”--- “Mario owes me money. As soon as he pays me back, I’ll give you the money!” 3.) Any time you loan out money to friends and family, consider it a gift. Do not make a loan unless you can afford to gift the money away. In some cases (sometimes in most cases, depending on the friends/family you keep) you may never see the money again. Considering the loan a gift will eliminate most ill feelings if the loan is never repaid. 4) Don’t give in to emotional manipulation. Some people may play the emotional card on you if you refuse to make them a loan. ---- “ You never want to help me! But if I were Paco, I wouldn’t even have to ask you for the money. You would just give it to me out of the kindness of your heart!”. Sometimes other family members are brought into the game---- “ Shame on you not willing to help your cousin Mario! Why are you so stingy with him?”. The key thing her is--Refer to rule (1). No one should question your motives. 5) When someone is in dire need, don’t loan them the money. Give it to them instead! -- The most important thing here is identifying a true need. There is great difference between needing forty dollars to place food on the table, and needing forty dollars to buy food at Chili’s Bar and Grill. 6) Don’t become someone’s personal bank. It’s okay to ask for a loan once in while (once ever 3 to 5 years), but once a month is something else. If you make frequent loans to the same person , you are creating dependence. They are becoming addicted to your help. Stop the addiction! (I can’t help you here; this one is a tough one ) |
Okay guys, please keep in mind that I am not a professional money manager. The contents of this page are just opinions, and should not be taken as professional advise. Please consult with your financial advisor. |
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