Penny Pot: Money Saving and Financial Advice

Life Insurance Coverage Agent: Vicki Gunvalson discusses Whole Life VS Term Insurance

“The difference of term to permanent. I think that term is being sold to a lot of clients under age 40 where I try to talk more permanent coverages when over age 40 with more on the estate planning side where it is something they want to have for their beneficiary’s benefit when they are an age 100.

So with term we could obviously only go 20 to 30 years but when we’re looking at 40-50 year olds I always talk to them about permanent coverage.”

Be careful of a Life Insurance Agent like Vicki Gunvalson!

We believe that no one should purchase anything other than term life insurance . Financial gain is in the life insurance agents’ best interest when they try to approach you with whole life insurance, variable life insurance, universal life insurance or any type of life insurance with an investment portion .

Whole Life VS Term Insurance Details

Permanent Life Insurance which includes Whole Life Insurance, Universal Life Insurance, Variable Life Insurance and Survivorship Life Insurance has a built in “Cash Value” but when you understand that the cash value really means nothing to your bottom line you will never think about purchasing any of the types of permanent life insurance .

Cash Value is the “investment” portion of life insurance that you can access through loans or withdrawals . There will be interest charges when you take a loan out on your Cash Value Investment portion of your life insurance policy. If you do take a loan out then your death benefit will be reduced by that amount as well.

The life insurance agent may recommend whole life insurance or permanent insurance over term insurance so be cautious when they do because they either do not know how bad whole life insurance is or they intend to make a hefty commission from you selling it.

Isn’t an investment in combination with life insurance great?

Yes, there is an investment portion to these permanent life policies but in reality the cash value is never really yours . The life insurance agent will then inform you that you can borrow the cash value portion if you have any. Cash value will be promoted as a way to borrow for the use towards or saving for the children’s college expense, your own retirement, emergencies, etc . Any funds that you take out from the cash value must be paid back with interest even though it is supposedly your money.

But I thought Cash Value Was My Money?

Our apologies. Cash Value isn’t really your money. . You will not have control over your money held within the whole life insurance policy unless you cancel the policy . It’s really the insurance company’s money .

All your investments whether it be mutual funds or money market funds will be held in the policy until the policy is canceled or paid out as a death benefit (hefty penalty fees on your cash value if you cancel your policy too!!). Their investment options are severely limited so you only can choose from what the insurer can offer and most of the time their returns are not that great .

If the life insurance agent, after trying to push whole life / permanent life insurance onto you then switches to term life insurance and tries to sell you that type of life insurance just leave the office . Don’t deal with them any longer .

Term Coverage and Term Life Insurance Premiums

You’re paying for only the life insurance and no money goes towards any savings or investment. By buying term life insurance instead of purchasing a whole life insurance policy you will save a large sum of money. NOW take those savings and put it into any investment (mutual funds, stocks, bonds, money market) of your choice .

It is not held within the life insurance company that holds your life policy. You have full control of what you do with your money and NEVER EVER have to borrow against it . Do not have a life policy with cash value. You are just giving up control of your money to the life insurance company.

Your money is your money and you make your own decision where you will invest it or how you use it .

Having “Cash Value” just allows life insurance companies to take advantage of customers’ hard earned cash. Keep your life insurance and investment vehicles separate. You will have 100% control of the money and be better off .

Differentiating between Whole Life VS Term Coverage there is no other choice than to choose the latter: Term Life Insurance.

Top dividend paying stocks can actually be great investments. They pay you a relatively consistent income each and every month that come out of the company’s earnings. There are a few reasons to consider investing into them.

1. Income

It’s pretty obvious that the main reason people invest into dividend stocks is that they help you to get some extra income. While stocks don’t pay out a lot of dividends if you keep investing your money little by little throughout the years it can turn into something that you will be able to live comfortably off of.

This is really the main reason that people buy dividend stocks.

2. They Offer Security

One other pro is that these stocks offer security. Most investors love the fact that dividend stocks pay them money month after month. As a result off that dividend stocks normally have a good demand for them at all times and are more stable because of it.

In bear markets when everything is going down a lot of investors will look for dividend stocks as a safe haven to park their money and just receive some nice added income without having to do much work at it. This makes stocks that pay out dividends much more stable during times of hardship.

3. Pays for itself

One other benefit of dividend stocks is that if you hold it long enough they will pay for themselves. Of course you do have to hold the stock for a long time period to do it, but if you do you have made your money back just in the dividends.

If you hold the stock for long enough you will get your money back and everything else will be pure profit. While the stock market in general is a great place to grow your money, only dividend stocks will ensure that if you hold onto them long enough you will make money.

There are some nice advantages to dividend stocks that can make them worthwhile. Just remember that it shouldn’t be your only reason for investing into a stock.

As part of a do it yourself financial plan, you need to know your 401K contribution limits for retirement planning . The 401K contribution limits for 2010 are $16,500 for employees. 401K employer contribution limits are  6% of the employee’s pre-tax compensation under the 401k rules. You can contribute an addition $5,500 for a total of $22,000 if you are 50 and older .

For example, if you earned $100,000, you could contribute a maximum of $16,500 in 2010 before taxes and your employer could contribute up to another $6,000 for a total of $22,500 going into your 401K account. Those are the 401K limits for people under 50.

  You could contribute the maximum of $16,500 plus an additional $5,500 bringing the total of $22,000 contributed on a pre-tax basis according to the 401k rules if you are over the age of 50 . If your employer also contributed the maximum of $6,000, you could have a total of $28,000 put into your account in one year. For people over the age of 50, those are the 401K limits .

Due to no inflation, 401K contribution limits did not change from last year . The 401K limits are high enough to make the maximum contributions that will help make up for any losses you had in the prior year. Use the 401K rules above to make the maximum 401K contributions in this year. Rebuild your retirement dreams by putting in the maximum 401K contributions allowed by law and what you are eligible for through your employer.

Many employers will match contributions by employees up to a certain percentage. That is a 100% return on your money contributed yet statistics show most of you don’t take advantage of this. You can’t afford not to. You will not get that kind of return of your money elsewhere, and it is risk free.

Other advantages of your maximum 401K contributions are tax deferral on your  contributions and the tax deferred growth on the earnings within the 401K account . By putting money into your 401K on a pre-tax basis, you have more money working for you right away. By having to pay no tax on the investment income within your 401K plan, you get your money to grow faster than an investment outside of this plan.These two advantages make it the ideal growth vehicle for retirement planning.  There are three investments of which the 401K is one, that you will give you the most income at retirement- social security, savings, and 401K plan income  . -Fern Alix LaRocca CFP® Wealth Coach

Trend is your friend. You must have heard it too often. Swing trading trend is one of the most profitable strategies that traders use. When a trend starts, once you have made the entry, you don’t have to do a lot to manage your trade. If it is an uptrend, the price will continue to rise and in case it is a downtrend, price will steadily fall. As compared to range trading, trend trading is more profitable. Ride the trend as long as it lasts. Get this 1 Minute Forex Trading System FREE. This forex trading system is so simple that even a person who has never traded forex can make money with it. First triple your Forex Demo Account two times in a row, only than trade live. Always first a new system on your forex demo account. Only trade a new forex system once you have mastered it on your demo account. Download these Swing Trading Informants plus the Forex Profit Accelerator End of Day Trading Kit FREE! Forex Profit Accelerator End of Trading Kit is a 100 page PDF that is worth $300!

You need to learn how to minimize your risk of riding a crashing trend. You need to develop a swing trading system that lets you only enter trends at the right time and stops you from riding trends about to end. How do you identify that you are about to ride a beginning trend or an ending trend?

You should use an ADX indicator and only enter if the reading is above 20. However, in all aspects of trading nothing is 100% sure. The best thing you can do is to put the odds in your favor. You can use charts or technical indicators. Charts are much easier. Especially if you know the typical Candlestick patterns that signal a trend reversal like the hanging man and the hammer, you can know for sure that the trend is about to reverse and a new trend is about to start.

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What most traders miss is proper risk and money management principles in their trading. Never, ever risk more than 2% of the capital in your trading account on one single trade. Never try to risk everything on a single big trade that you think might make you a fortune. Even when you are dead sure that you have the right signals, you must not ignore sound risk and money management rules.

Support is like the floor. When you hit a ball on the floor, it bounces up and comes back to you. In the same way, in trading,when price action hits support, it bounces back. Support is the level at which most traders are willing to buy. So when the price action hits support, massive buying takes place and the price action rebounds up.Similarly, you can think of resistance as the ceiling.

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