"Nick, to be honest, being from the UK, I never made the connection. I hadn’t realised the author was the Ken Fisher until I read the comments on my post. The man behind Fisher Investments, the US firm that American index investors love to dislike 😂"
"It amuses me when I’m with friends and they split up to grab to-go coffees from different vendors, then debate which is best while sipping through a lid. I could understand it if they took the lids off so they could actually taste the damn coffee! It’s like debating the merits of fine food with a blocked nose. Pointless."
"I practice geriatrics in CT for three decades and watched several “ assisted living” facilities come and go.
The biggest issues are financial, or long term viability of the organization. Many of the for profit ones go bankrupt as they start with low fees, care needs increase and so do the fees. Non Profit or church affiliated places are usually a better bet. I would look at staff longevity ( a good employer retains employees and usually runs things well), physical plant ( avoid places that put a lot of money into walnut paneling etc), resident retention ( ask people you meet at the place how long they have lived there). None of them are reliably excellent"
I'LL CONCEDE IT'S HARD to justify—but I don’t believe it’s 100% unjustifiable. At issue: my strategy of overweighting stocks during big market declines. I…
"I don't think the credit will have any effect on your state taxes. If you live in a state that participates, that will have to be dealt with on your state tax return. In Ohio, you can direct the tax credit to the school of your choice."
"Here is another Jonathan quote he gave me for my chapter in My Money Journey I think it captures the essence of everything we talk about on HD. “We can’t control what others do and we can’t stop misfortune from striking. But we can control our own actions. Those who are financially prudent will most likely enjoy success, even if events don’t always go their way.” "
EARLIER THIS YEAR, Pacific Life Insurance Company agreed to settle a class action lawsuit brought by policyholders. At issue were marketing materials that its customers argued were misleading. While Pacific Life admitted no wrongdoing, it agreed to a settlement of $58 million.This wasn’t an isolated case. Insurers that sell permanent life insurance policies, including whole life and universal life, are often on the receiving end of lawsuits because of the way that they promote their products. In another recent case, the late race car driver Kyle Busch sued his insurance agent, arguing that he’d sold him coverage costing millions that was billed as a “tax-free retirement plan.”These cases highlight the fundamental issue with permanent life insurance: Unlike term life policies, whole life and universal life policies combine two somewhat separate features in a way that often leads to confusion. On the one hand, they provide life insurance. That part is straightforward. But they also include an investment account—referred to as “cash value”—that sits alongside the insurance.These lawsuits and other criticism of permanent life insurance products stem mostly from the way the investment component is advertised. Because no one can predict how any investment will perform in the future, life insurance salespeople provide prospective customers with illustrations of how the investments might perform over time. The problem, though, is that these are merely projections, and disappointment can result if the reality of the cash value’s growth falls short of those illustrations.It’s for that reason that I don’t recommend permanent life insurance. Instead, my recommendation is to opt for simple term coverage, which provides insurance without the complication of an investment component.If you’re shopping for term coverage, though, there are still some questions to consider, including the following:Should everyone have life insurance? If you aren’t married and have no dependents, then I’d argue you do not need life insurance. Some salespeople will make the case that you should purchase coverage when you’re young, before you have a family, because you’ll receive a better rate, but I’d be wary of that argument. If the insurer is offering you a better price on a product you don’t need, that doesn’t somehow make it a better deal.Another group that typically has no need for life insurance: folks who are financially independent. If you’re retired and living off of your savings, or have assets sufficient that you could retire, then in that case, you likely don’t need life insurance.One exception to the above might be for business owners, where life insurance can help facilitate buy-sell agreements between partners, but that is a narrow use case.How much coverage should you purchase? I suggest the following formula.If you own a home and have a mortgage, I would start with the mortgage balance. While it isn’t necessary to pay off the mortgage when a spouse or parent dies, I’ve found that it can make life much easier for survivors if they aren’t burdened by a mortgage.If you have children, I would total up the estimated cost of all of their future tuition. Depending on their ages, this can be a difficult exercise because college costs vary so widely and because tuition has historically increased faster than inflation. In addition, some children might earn scholarships, while others might attend pricey schools and go on to graduate school. Recognizing these unknowns, I suggest making your best guess, perhaps going with the midpoint of the highest and lowest potential numbers.The next step would be to build an endowment of sorts to fund annual living expenses for your family. For this element, you could approach it the same way you’d think about building a portfolio for retirement. Suppose, for example, you’d like your family to have $100,000 per year. Assuming a 4% or 5% portfolio withdrawal rate, that would translate to a portfolio of $2 to $2.5 million.For the endowment portion, keep in mind that you can subtract your existing savings. If you already have $1 million saved, that would reduce the coverage you’d need by $1 million.The final element in deciding how much coverage to purchase: Be sure to round up. As we’ve seen in recent years, inflation can stretch budgets. And your family’s needs might simply change over time.How long a term should you choose? In working through this formula, you’ll likely notice a wrinkle, which is that some needs are temporary while others will be longer term. Tuition, for example, will have a defined timeframe. The endowment for living expenses, on the other hand, would need to provide for your spouse’s needs indefinitely.Fortunately, term life insurance is flexible, and there are two ways you can cover differing time periods. The first strategy would be to purchase two policies. The first would provide funds for tuition and would be timed to expire when your youngest child is age 22 and likely out of school. The second policy, to meet ongoing expenses, would be timed to expire around the time you expect to reach financial independence—around age 60, for example.An alternative approach would be to purchase a single larger policy. Because it can be difficult to predict both your family’s needs and the growth of your savings over time, the single policy approach can, counterintuitively, provide greater flexibility than committing to two separate policies. That’s because many term policies allow the coverage level to be dialed down at the owner’s request.If you’re married, should each spouse carry their own coverage? In this case, the approach I suggest is to insure each spouse in relation to the income he or she brings in. Even if your family could survive on one income, a reality is that when one spouse dies, the other may not be able to work as much. That’s frequently the case when there are children at home. So I recommend that both spouses carry life insurance until it’s clear you’ve reached financial independence.What if you have group coverage through your employer? On the one hand, this is a nice benefit, but since you might change jobs in the future, I wouldn’t factor in the benefits of any employer-provided coverage.A final point: While life insurance is important, don’t overlook disability coverage, which can be just as important.Adam M. Grossman is the founder of Mayport, a fixed-fee wealth management firm. Sign up for Adam's Daily Ideas email, follow him on X @AdamMGrossmanand check out his earlier articles.
FOR MORE THAN 20 years, I worked as a personal trainer. Now I’m a financial advisor. On the surface, the two professions look nothing alike. Human behavior makes them far more similar than most people realize.Years ago, one of my fitness clients joined Weight Watchers. At her intake meeting, she asked whether she should cut back on carrots because she’d heard they're high in sugar. The specialist didn't miss a beat. She smiled and said “No one ever comes to us because they eat too many carrots."The money version is just as true. People often fixate on a detail that barely moves the needle. I’ve watched people agonize over choosing this fund or that fund while saving just 3% of their pay. People follow the financial media frenzy for fear of missing out on the next big winner. This is akin to revamping your entire routine every time the latest weight loss trend hits the market. On and Off the WagonOver my years as a trainer, I watched the same pattern again and again. People went on an aggressive diet, then off it. They started a workout program, then quit. They joined a gym, then rarely set foot in the door.Plenty of others showed up consistently, but they simply went through the motions. They strolled on the treadmill while reading a magazine or watching TV. They lifted weights that never challenged them. Going through the motions beats going through no motions, but it rarely gets you the result you want.Trainers have a metric for this. It’s called RPE, short for rate of perceived exertion. RPE is a scale used to measure how hard your body works during physical activity based on how you feel. I often asked my clients, “On a scale of one to 10, how hard did that feel?” A one is sitting on the couch, and a 10 is the absolute maximum effort you can handle.Muscles, fitness and health only improve when they’re pushed past comfortable. It’s called overload. Someone who wants to lose 30 pounds needs both better eating habits and workouts hard enough to count. Cutting back on carrots is not the problem to solve.Your Financial RPEIt didn’t take long to realize my financial planning clients were displaying similar behaviors. Some experienced a burst of energy to tackle important tasks. Then life got in the way, and the work landed on the back burner, half finished.Others enthusiastically told me all about their early retirement dreams. The minimal effort they were putting in today wasn’t going to get them there.Still others were on track but working at a perceived exertion of a 9 or 10 in their 40s and 50s. They saved so aggressively, or worked so much, that they were missing out on life. I applaud the effort, but it isn’t sustainable. I worry these clients will have regrets later in life. Are they missing out on valuable family time while the children are young? Are they working so much they’re neglecting taking care of themselves?In both fitness and finance, you need to identify what you hope to achieve and make a plan to get there. You also need to reevaluate as the decades pass. What worked in your 30s is likely not the right strategy in your 50s. Every human body gets more complex and delicate with age, and your financial life does, too.The Hard LiftsIn the gym, the exercises people avoid are usually the most important and effective ones. Sometimes that’s cardio. Sometimes it’s lunges. These exercises are uncomfortable, so people find reasons to skip them.Money has its own hard lifts. The task you’re avoiding is likely the most important one on your list. You avoid it because it makes you uncomfortable and it’s hard to get started. It’s a 9 or 10 on the financial RPE scale.I see high income earners in their 30s and 40s continue to increase their spending with each raise yet not increase the savings rate along with it. I see completing an estate plan as one of the most delayed, yet extremely important financial lifts we each need to address. First time parents are eager to open their first 529 plan and begin saving for college but life insurance? That can wait. Opening a college fund for an infant feels productive and gratifying. Facing mortality or making tough family decisions is stressful and overwhelming. My training clients told me they didn’t have enough time. My financial planning clients tell me they don’t have enough time.When will you have time to address your health? When will you have time to address your wealth? Every year you put off your health is a decision you may pay for dearly later in life. Every year you put off saving is a year compounding can’t work in your favor. It raises the risk you can’t support yourself financially or can’t live your later years the way you hope.Check Your RPEHere’s my challenge. Pick a financial goal you’re chasing, or a task that’s been sitting on your list for a while. Rate your effort honestly, from one to 10. Then ask whether that number matches the goal you set for yourself.Health and wealth fuel each other. The money you accumulate is only enjoyable if you’re healthy and happy enough to use it. Ideally, it pays for more adventures than doctor bills.What’s a reasonable financial RPE to strive for? Well, that depends on how financially fit you are. And that’s a topic for a future article. In the meantime, eat your carrots. Lift the heavy thing. And check your financial RPE.Annie Garland, CFP®, is a wealth advisor at WealthClarity in Lakewood, Colorado. She spent more than 20 years as a personal trainer before becoming a CFP® professional. She’s a proud mom of two daughters, a wife, and an avid mountain biker.
"Nick, to be honest, being from the UK, I never made the connection. I hadn’t realised the author was the Ken Fisher until I read the comments on my post. The man behind Fisher Investments, the US firm that American index investors love to dislike 😂"
"It amuses me when I’m with friends and they split up to grab to-go coffees from different vendors, then debate which is best while sipping through a lid. I could understand it if they took the lids off so they could actually taste the damn coffee! It’s like debating the merits of fine food with a blocked nose. Pointless."
"I practice geriatrics in CT for three decades and watched several “ assisted living” facilities come and go.
The biggest issues are financial, or long term viability of the organization. Many of the for profit ones go bankrupt as they start with low fees, care needs increase and so do the fees. Non Profit or church affiliated places are usually a better bet. I would look at staff longevity ( a good employer retains employees and usually runs things well), physical plant ( avoid places that put a lot of money into walnut paneling etc), resident retention ( ask people you meet at the place how long they have lived there). None of them are reliably excellent"
I'LL CONCEDE IT'S HARD to justify—but I don’t believe it’s 100% unjustifiable. At issue: my strategy of overweighting stocks during big market declines. I…
"I don't think the credit will have any effect on your state taxes. If you live in a state that participates, that will have to be dealt with on your state tax return. In Ohio, you can direct the tax credit to the school of your choice."
"Here is another Jonathan quote he gave me for my chapter in My Money Journey I think it captures the essence of everything we talk about on HD. “We can’t control what others do and we can’t stop misfortune from striking. But we can control our own actions. Those who are financially prudent will most likely enjoy success, even if events don’t always go their way.” "
EARLIER THIS YEAR, Pacific Life Insurance Company agreed to settle a class action lawsuit brought by policyholders. At issue were marketing materials that its customers argued were misleading. While Pacific Life admitted no wrongdoing, it agreed to a settlement of $58 million.This wasn’t an isolated case. Insurers that sell permanent life insurance policies, including whole life and universal life, are often on the receiving end of lawsuits because of the way that they promote their products. In another recent case, the late race car driver Kyle Busch sued his insurance agent, arguing that he’d sold him coverage costing millions that was billed as a “tax-free retirement plan.”These cases highlight the fundamental issue with permanent life insurance: Unlike term life policies, whole life and universal life policies combine two somewhat separate features in a way that often leads to confusion. On the one hand, they provide life insurance. That part is straightforward. But they also include an investment account—referred to as “cash value”—that sits alongside the insurance.These lawsuits and other criticism of permanent life insurance products stem mostly from the way the investment component is advertised. Because no one can predict how any investment will perform in the future, life insurance salespeople provide prospective customers with illustrations of how the investments might perform over time. The problem, though, is that these are merely projections, and disappointment can result if the reality of the cash value’s growth falls short of those illustrations.It’s for that reason that I don’t recommend permanent life insurance. Instead, my recommendation is to opt for simple term coverage, which provides insurance without the complication of an investment component.If you’re shopping for term coverage, though, there are still some questions to consider, including the following:Should everyone have life insurance? If you aren’t married and have no dependents, then I’d argue you do not need life insurance. Some salespeople will make the case that you should purchase coverage when you’re young, before you have a family, because you’ll receive a better rate, but I’d be wary of that argument. If the insurer is offering you a better price on a product you don’t need, that doesn’t somehow make it a better deal.Another group that typically has no need for life insurance: folks who are financially independent. If you’re retired and living off of your savings, or have assets sufficient that you could retire, then in that case, you likely don’t need life insurance.One exception to the above might be for business owners, where life insurance can help facilitate buy-sell agreements between partners, but that is a narrow use case.How much coverage should you purchase? I suggest the following formula.
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