Sunday, December 30, 2012

What are your Goals?


What are your Goals?

By Keith Bunn Jr.
December 30, 2012


Now that we all survived the Apocalypse of 2012, have you figured out you goals for 2013 yet? Now I have to be fair and honest with this topic, I am horrible about setting goals, and because of that, it seems that most, to all the things I wanted to do this past year didn't get done. So one of my goals this year is to set some goals and here's how I'm going to do it with these 5 steps.

1) Be specific. 
For example: If one of your goals is to get out of debt, don't just write down that you're going to pay off debt. Instead, write down that you're going to pay off X, Y, Z debts

2) Make your goals measurable. 
How do you know if you've achieved the goals, if they're not measurable. Taking the example from above, how many debts do you want to pay off this year? 3, 5, 10, how many? Or you could give it a dollar amount. Write down that you want to pay off $2000, $5000, or whatever you decide. 

3) Are they your goals? 
These goals have to be yours! Or if its a joint goal with your spouse, you both have to agree with it. You have to take ownership of it or it won't work. This has to be something you want to do or again, it won't work.

4) Set a time limit. 
You have to set yourself a deadline for when you have to have your goals accomplished by. Using our same example, don't just write down that you're going to pay X debt or $2000, but write down that you're going to pay X debt or $2000 by Feb 28th or whatever you decide the deadline should be.

5) Put them in writing. 
It astounds me that when you put your goals down on paper, they will get done compared to if you type them up on a computer or keep them in your head. So give your goals a fighting chance, write them down. 

Now don't just write down your goals and stash them some place and never look at them again. Look at and go over them often and don't be discouraged if a new goal pops up and you have to put a current goal on hold or postpone it for another time. Just keep going!

Questions

I only have 2 questions for you this week.

1) What are your goals for 2013?

2) If you set goals differently than what I've outlined here, what do you do that's different?

I hope my posts inspire you to look at what you’re doing financially and if needed, make some changes that will cause you to win financially. I also look forward to reading your views on any articles or postings that I may post. For more money news, facts and ideas, follow me on Facebook, or Twitter. Thank you!



Sunday, December 23, 2012

Merry Christmas


Merry Christmas

December 23, 2012
By Keith Bunn Jr.

Just a short blog this week to thank every one of you out there who have been reading my blog, liked and followed me on Facebook & Twitter, and who have made comments and asked questions in this past year! Believe me when I tell you, that I'd rather be helping all of you than doing my day job! One day I'll be able to make the transition from one to the other. 

I hope you all have a very Merry Christmas & a Happy New Year!

I hope my posts inspire you to look at what you’re doing financially and if needed, make some changes that will cause you to win financially. I also look forward to reading your views on any articles or postings that I may post. For more money news, facts and ideas, follow me on Facebook, or Twitter. Thank you!


Sunday, December 16, 2012

Doomsday!


Doomsday!

December 16, 2012
By Keith Bunn Jr.

Well if any one of the things I've heard that's going to happen on 12/21/12, aka, Doomsday  this will be my last blog posting. Mayan calender ending, earthquakes, alien invasions, earth colliding with planet X, dog storms, polar shifts, and last, but not least, zombies.  Cripe, I don't even know why we even bought Christmas gifts this year. I'm not even going to be able to open them. 
Really?! This is what I believe...

"Then if anyone says to you, 'Behold, here is the Christ,' or 'There He is,' do not believe him. For false Christs and false prophets will arise and will show great signs and wonders, so as to mislead, if possible, even the elect. Behold, I have told you in advance. So if they say to you, 'Behold, He is in the wilderness,' do not go out, or, 'Behold, He is in the inner rooms,' do not believe them. For just as the lightning comes from the east and flashes even to the west, so will the coming of the Son of Man be. Wherever the corpse is, there the vultures will gather. But immediately after the tribulation of those days THE SUN WILL BE DARKENED, AND THE MOON WILL NOT GIVE ITS LIGHT, AND THE STARS WILL FALL from the sky, and the powers of the heavens will be shaken. And then the sign of the Son of Man will appear in the sky, and then all the tribes of the earth will mourn, and they will see the SON OF MAN COMING ON THE CLOUDS OF THE SKY with power and great glory. And He will send forth His angels with A GREAT TRUMPET and THEY WILL GATHER TOGETHER His elect from the four winds, from one end of the sky to the other. Now learn the parable from the fig tree: when its branch has already become tender and puts forth its leaves, you know that summer is near; so, you too, when you see all these things, recognize that He is near, right at the door. Truly I say to you, this generation will not pass away until all these things take place. Heaven and earth will pass away, but My words will not pass away. But of that day and hour no one knows, not even the angels of heaven, nor the Son, but the Father alone."  - Jesus Christ, Book of Matthew 24:23 - 24:36 -

There have been so many times the end of the world has been predicted and every one of them have been false, so why would this be any different? With that being said, what does all this have to do with our finances? Simple, we should not let fear be a factor in our decision making process, especial when it comes to our finances. When we make decisions based on fear, we make mistakes and sometimes those mistakes are more costly than the things we're afraid of. So don't stop paying down your debts, don't stop saving money for retirement, and don't stop teaching your children how to handle money. In other words, keep living your life as if nothing was going to happen. Because as the scripture states above, "...that day and hour no one knows" when the end of the world will happen and when it does, you can't take your money with you anyways.

If all the talk about the end of the world coming has made you afraid, then you need to talk to someone about it. A pastor or counselor are perfect places to start. Because the bible also states "For by wise counsel thou shalt make thy war: and in multitude of counsel there is safety." - Proverbs 24:6 KJV -. I personally don't believe that the end of the world is this week. We're still making plans for Christmas, for January, etc... so talk to someone if you're afraid. This time of year is suppose to be a happy time filled with family and friends.

Questions

1) Have you ever made a financial decision based on fear?

2) If you have, do you regret that decision?

3) Has all this talk about the end of the world made you afraid? 

4) Have you talked to someone about it, a pastor or counselor?

5) What are your plans for 2013? 

I hope my posts inspire you to look at what you’re doing financially and if needed, make some changes that will cause you to win financially. I also look forward to reading your views on any articles or postings that I may post. For more money news, facts and ideas, follow me on Facebook, or Twitter. Thank you!



Tuesday, December 11, 2012

What to do with your Inheritance


What to do with your Inheritance

By Keith Bunn Jr.
December 11, 2012

It is always a sad time in our live when we lose a loved one, but depending on the circumstances, it could also be an incredible blessing if they have left you an inheritance with a dollar amount attached to it. But what should you do with it? Most people I know would take a trip, buy a bunch of stuff, or maybe do some repairs to their home. None of those are a bad thing, but is there something better that that inheritance can go towards? 

In my opinion, there is one question that I will ask myself when this happens, "What can I do with this inheritance that best honors the loved one that gave it to me?" I see no better way of doing that than bettering our lives in the long run. In our case, we would have to go right down our 7 Baby Steps. 1) Establish a baby emergency fund of $1000. 2) Pay off our debts smallest to largest with the Debt Snowball. 3) Go back to the baby emergency fund and boost it up to 3 to 6 months worth of your household expenses  4) Put 15% of our take home pay into retirement funds. IRA's, 401K's, 403B's, and Roth's. 5) Fund kids college using Educational Savings Accounts (ESA's) and 529 plans. 6) Pay off our home early. 7) Build wealth and give a bunch away.

Now I'd like to make myself clear so I don't sound like I'm just waiting for someone to just kick the bucket and leave me with a bunch of cash. I've had many relatives pass away in my lifetime and I have never asked, "What am I getting?" To me, that is selfish, uncaring  and rude! If I inherited some cash after someone passed, great! I'll go as far as I can in the Baby Steps. If I don't get anything, that's fine too. The memories I have of them are all I need. Those are priceless!!

Now if I received a rather large amount of cash in an inheritance and I was able to get through the Baby Steps with cash left over to play a bit by going on a trip for a week or so, then you can bet on that I'm going to do just that. Because I know my loved one would want me to enjoy that money also. 

Of course, this is what I would do. You'd have to decide what you would do. I don't want to improve our financial situation with the loss of a loved one, but if by some chance they bless me with an inheritance, I will not only honor their memory with it, but use it to improve my family's life as well.

Questions

1) What would you do if you received an inheritance? 
2) What would the best way for you to honor your loved one's memory?

I hope my posts inspire you to look at what you’re doing financially and if needed, make some changes that will cause you to win financially. I also look forward to reading your views on any articles or postings that I may post. For more money news, facts and ideas, follow me on Facebook, or Twitter. Thank you!


Sunday, November 25, 2012

Don't Build a House of Cards


Don't Build a House of Cards

By Keith Bunn Jr.
November 25, 2012


The only reason I'm posting this is to give you an example of what NOT to do!!! The guy who wrote this posting, Kevin McKee did this and thought that it was a good plan, but his plan only works if nothing goes wrong. In a sense, he is not factoring in risk. From everything I've read, he has taken on a whole bunch of risk!!  As he put it in his posting,"There are No Absolutes in Personal Finance". We don't know what will happen! So let's go over what he did a bit at a time.

He said that he... "had to sell essentially all of my stocks, drain my Roth IRA, and even take a loan against my 401k to get the money for the down payment, but after doing all of that, I now have enough money for closing." But he even admits, "I actually don’t even know exactly how much I’ll need at closing because all the paperwork and stuff isn't done." So how does he have enough money for his closing & what if after all that he's still short for the closing?

Putting all that off to the side for now, I have no problem with him selling off his stocks to put towards the down payment to the house he wants to buy, but cashing in his Roth IRA & taking a loan out of his 401K is a whole other matter. Just those two things tells me that he is trying to buy a house that he can't afford. Not because he is taking out a mortgage to get it but because he has liquidated and taken out loans from his retirement accounts just for the down payment. The Roth IRA for example, because a Roth grows tax free, he didn't have to pay taxes when he cashed it out, but he did have to pay a penalty for withdrawing it out early. But what makes me dislike this part of the plan the most is that most of the money in his investment was growth. For example: if you take $2000 and invest it at 10% rate of return for 20 years, that would be $14,656.19. $12,656.19 of that was interest and that was all tax free. Now I don't know and he didn't say how much he had in that account, but he missed out on a bunch of money.

The 401K loan is a horse of a different color. When you take out a 401K loan, you are taking a loan out of a tax-deferred retirement plan and you pay yourself back, sometimes with interest. But if you take out a loan from this account and you leave your job, that loan comes due right then and there and if you don't pay it back within 60 days, not only will you have to pay back the money you borrowed but you'll have to pay taxes and penalties of anywhere between 34-47%. So my question to you is, how many stories have you heard lately of people losing their jobs? No job is secure, please remember that before you take out these kinds of loans. Here is a link to backup what I've told you.

On top of all this risk, he add a possible balance of $2000 on his credit card for the purchase of his fiancee’s engagement ring. All it takes for this young man's brilliant plan to go from  good to nightmare is the loss of his job. When that happens his 401K loan becomes due, and even though him and his new bride could last for a little while on his savings, it probably won't last long now that he has a huge tax bill on his hands. On top of that, he probably won't be able to pay on his new mortgage. As for his credit card, he probably won't be able to pay it off every month like he says he does, in fact, they will probably live off them to make up the loss income. This is the type of stuff we hear about all the time. It's not too far fetched to think this could happen. All it will take to knock over his perfect house of cards is one bad event. With this amount of risk he set himself up with, all he has to do is trip and he'll be in a world of hurt.

I hope my posts inspire you to look at what you’re doing financially and if needed, make some changes that will cause you to win financially. I also look forward to reading your views on any articles or postings that I may post. For more money news, facts and ideas, follow me on Facebook, or Twitter. Thank you!


Money lessons from Smallville



Money lessons from Smallville

By Keith Bunn Jr.
November 25, 2012

Smallville

Have you ever watched the TV series Smallville? If you haven't, Smallville is the story about the young Clark Kent (a.k.a. Superman) living on his adopted parent's Kansas farm. In the series you follow Clark as he discovers and develops his super abilities as well as his existing and future relationships. One of those relationships is with his longtime high school sweetheart, Lana Lang.
To make a long story short, in one of the episodes, Clark and Lana are visited by a trio of superhero time traveler. After everything is said and done and the day is saved once more, a couple of the time travelers vaguely tell Clark and Lana what is to become of them in the future  Shortly after the trio go back to their time, Clark and Lana discuss what they were told, and towards the end of their conversation, Lana wisely tells Clark, "Our destinies are not written in some book in the future  we write it ourselves everyday." Which Clark follows up with, "Then the question is, what do we write next?"

Where Does the Money Part Come In?

Now I know that what they said had nothing to do with money, but those two comments could very easily be used when discussing it. Let me explain by rewriting it a bit...  
"Whether our destinies are for us to be broke or wealthy, it is not written in some book in the future, we write it ourselves everyday."
"Then the question is, what do we write next, are we going to be broke or wealthy?"
You see, it is what we do with our money that will determine whether we will be wealthy or broke. Just because you maybe broke now, doesn't mean that you'll always be broke, and just because you maybe wealthy now, doesn't mean you'll always be wealthy, it all depends on what you do.

Questions

1) Do you want to be wealthy or poor?
2) What are you going to do about it? 
3) Do you feel like your financial situation is going to stay the same no matter what you do? 
4) What are some of the things you can do now to start changing it?
5) Do you need help making those changes?  Let me help. 

I hope my posts inspire you to look at what you’re doing financially and if needed, make some changes that will cause you to win financially. I also look forward to reading your views on any articles or postings that I may post. For more money news, facts and ideas, follow me on Facebook, or Twitter. Thank you!



Sunday, November 18, 2012

You want to win with your money, change your behavior


You want to win with your money, change your behavior

By Keith Bunn Jr.
November 18, 2012

For most people, a second part time job or some overtime is necessary to either get out of debt or to pick up the financial slack due to someone in your household not working anymore. No matter what you're doing, for whatever reason, you will not win with your money if you don't change the behaviors that got you into your mess in the first place. Personal finance is 20% knowledge, 80% behavior. To put it another way, we all know that we are supposed to eat good and exercise regularly, but a good portion of us don't do it, myself included. It is just so much easier to do whatever we've always been doing. But it makes no sense to work all those extra hours, earning all that extra money if you are still spending more than you make. Its not an easy task and it does take more self discipline for some people, but if you can make the changes necessary to win with your money, you will find no greater reward than being debt free and have money in the bank.

Questions

I really only have one question for you this week.

1) What changes can you and your family make in order to win with money? 

I hope my posts inspire you to look at what you’re doing financially and if needed, make some changes that will cause you to win financially. I also look forward to reading your views on any articles or postings that I may post. For more money news, facts and ideas, follow me on Facebook, or Twitter. Thank you!


Sunday, November 11, 2012



Have You Helped a Veteran Today?

By Keith Bunn Jr.
November 11, 2012


In light of it being Veteran's Day today, I'd first like to wish all my brothers and sisters in arms a blessed Veteran's Day and thank you all for your service both presently and in the past!!!

Because it is Veteran's Day, I'd like to talk about some of the things I did, that I shouldn't have done financially, while I was in the military. 

Now that I have been out of the military going on 15 years now, I've had some time to look back and see some of the things I shouldn't have done and think about what I learned from them.
When I joined the Army back in August, of 1986, I was 19 years old and fresh out of high school. It was the first time really away from home and on my own. So in a sense, it was like I was going away to college but instead learning math, science, and English  I was learning how to blow things up, camouflaging myself to my surroundings, and how to drive armored vehicles. 
As a private in the Army, single and living in the barracks, I didn't make a lot of money, especially for the amount of work we did, and when I think about it, I really didn't need a lot of money. I had 3 square meals made for me each day 24/7, a warm dry bed to sleep in (a good portion of the time), and electricity and water was provided (again, a good portion of the time). I had everything I needed to live on, so that made the money I was earning, I could do with it what I pleased. So I had the PERFECT opportunity to save all, if not most of my pay and leave the military with a boat load of cash in my pocket, but that's not what I did. I blew it all!! 

Back in those days, it was a time of buying A LOT of crap I didn't need. I bought an old style (new then) 35 mm camera and lens for $400, a HIFI stereo VCR for $500, a movie on video tape for $80, a big box of comic books for $65, two completely different stereo systems for over a $1000, and the list goes on and on. And on top of all of that, I partied my tail off!!! Any night I could go to the bars, I did! I laughed and kind of made fun of one of my room mates because he just stayed in the barracks and nothing, but when we were getting ready to clear the Army and the post, he was the one who had the last laugh. When we closed out our bank accounts there on post, I walked out with $90 to my name. He walked out with $10,000.  No one pulled me off to the side to tell me that I needed to think about the future. What a waste!

The thing is, everyone in the financial world talks about the college students and debt, but I rarely hear anything about our service men and women and debt or how to save. In my opinion, the two are one in the same and they are both being marketed to just as hard to go into debt and stay into debt. Today's single soldiers that live in the barracks are bombarded from all kinds of debt companies like payday lenders as soon as they walk off the base, looking for every opportunity to take their HARD earned cash away from them.

In fact, 56% of our service members have some sort of money issues going on in their lives and it is the #1 reason they lose their security clearances, which causes even more financial hardships. Our service men and women, as well as our older veterans deserve better then that.

So if you know a young service member or an older veteran that needs some help dealing with their finances and you think you can help them, then help them! They either have risked or are currently risking their lives on almost a daily bases so we can enjoy the freedoms we have today.

I hope my posts inspire you to look at what you’re doing financially and if needed, make some changes that will cause you to win financially. I also look forward to reading your views on any articles or postings that I may post. For more money news, facts and ideas, follow me on Facebook, or Twitter. Thank you!


Sunday, November 4, 2012

Change



Change

By Keith Bunn Jr.
November 4, 2012

Let's face it, changing something in our lives when we've done it a certain way for a long time is hard to do. But sometimes the changes are necessary to better our lives and grow. My wife struggled with change about nine months ago after she quit her job of about 15 years and moved out of a home and away from a town she had lived in for over 20 years. But now she thinks it was a good move on our part. She loves her new job and has gotten use to her new surroundings. I too struggle with change from time to time. Years ago when I moved from Georgia back to Michigan and leaving a failed marriage and my kids with their mother behind was extremely hard for me back then. But there is one thing I've learned from all the changes in my life and that is sometimes change comes along when we decide to do it. Other times life decides for us. And even though we can't predict all the changes that will take place in our lifetime, we can either try to prepare for it or be a victim of it, it's our choice.

“The only thing constant in life is change” -  Fran├žois de la Rochefoucauld -

I hope my posts inspire you to look at what you’re doing financially and if needed, make some changes that will cause you to win financially. I also look forward to reading your views on any articles or postings that I may post. For more money news, facts and ideas, follow me on Facebook, or Twitter. Thank you!


Sunday, October 28, 2012

Shacking Up and Doing a Budget





Shacking Up and Doing a Budget

By Keith Bunn Jr.
October 28, 2012

It seems to be the norm these days for men and women to live with each other instead of, or before, getting married. I can't tell you not to do that because I have. But I have been seeing a trend, especially after this past recession, that people are trying to get on a budget and live within their means, but when it comes to some of the men and women who are just living together, it is almost impossible to do that. And the reason for that is because they're not married. A lot of times I see the men and women in these relationships, acting like their married but when it comes to their money, they are still living like they're not, saying, "Its my money and I'll do what I want with it." and in a sense, that's true. It is their money, you're not married. Only after you get married does the money get pooled together and become "ours".

Now, if you're planning on getting married and this is a big issue for you, I suggest that you get premarital counseling with your pastor or marriage counselor. If your soon to be significant other won't do that, then that just might be a deal breaker for your relationship. 

I hope my posts inspire you to look at what you’re doing financially and if needed, make some changes that will cause you to win financially. I also look forward to reading your views on any articles or postings that I may post. For more money news, facts and ideas, follow me on Facebook, or Twitter. Thank you!

Sunday, October 21, 2012

Loaning or Borrowing Money from Family and Friends



Loaning or Borrowing Money from Family and Friends

by Keith Bunn Jr.
October 21, 2012

Have you ever loaned money to a family member or a friend? What about borrowing money from them? We have done both and it didn't really do anything to help us, but boy did it add more stress to our lives. It added stress by having to ask for the loan and paying it back or for us asking for repayment after loaning others money, and it does strain the relationships we have in our lives by loaning and borrowing money. The bible says that the borrower is slave to the lender, and after being on both sides of that coin, we know that to be a true statement!
So if you truly cherish the relationships you have, don't jeopardize them by loaning or borrowing money. It's not worth it!!

Follow me!

If you like my postings, I'd be honored if you follow me, so please sign up. You can also find more money news, facts and ideas, on my Facebook and/or Twitter pages. I'd be grateful if you followed me there too. Thank you!

Sunday, October 14, 2012

What Affects your Credit Score, Good and Bad



What Affects your Credit Score, Good and Bad

By Keith Bunn Jr.
October 14, 2012

It would seem that even with what happened with the Great Recession of 2008, people are still worried about their FICO scores. But if you have read anything I wrote, you know that I believe, and a lot of other financial gurus believe, that the FICO score is a false representation of your financial wellness. With so many new, and not so new, products, systems, and businesses sprouting up, there really isn't any need for FICO anymore. For those of you who are new to my blog, let me explain...

FICO

The FICO score, or credit score, is and always has been, a measure of what your debt history is, what your debt levels are, how long you've been in debt, the types of debt you have, and what kind of new debt you got. Did you see a pattern there? It was all bases on debt! Not how much money you had in savings, not how long you've been with your employer, and not even how much you make each year. Don't you think that would be something you'd like to know if you were going to lend someone money? I would!

How to get a Good to Great Credit Score

So with that being said, the only way you can have a good to great FICO score is if you borrow money all the time without borrowing too much or too little and pay the lenders back with interest your whole life. That's it! That's all you have to do to get an 800 credit score. Get yourself some credit cards, use them and pay them back every month without missing a single payment. Get yourself a car loan and pay that back every month without missing a single payment. Borrow as much as you can without borrowing too much, and pay those loans back every month without missing a single payment. I just told you the secret to getting that awesome credit score you always wanted. Can you hear the sarcasm?

What can give you a Bad Credit Score

Well for one, if you get too much debt or not enough debt, your credit score will either be harmed or start to go away. Your debt levels are 30% of your overall credit score. Interesting isn't it? If something goes to a collection agency like your credit cards, car loans, phone bill, utility bills, something over due at the library, traffic tickets, etc... those can all put a ding on your credit score. What I find funny is, is that all of those things that were just mentioned, with the exception of the credit cards and car loans (phone bill, utility bills, something over due at the library, traffic tickets, etc...) won't help you get a good credit score if you pay them on time, but they will hurt it if you don't. Errors on your credit report can also harm your credit score. 79% of the credit reports out there have some kind of errors on them and 25% of those errors are bad enough to deny you credit.

I was just like you all many years ago, thinking that I needed to have a good to great credit score to win with money, but I think it is clear to me now that FICO doesn't work anymore. I think it is more important to not use FICO any more and use cash for the things that I want. Getting out of debt, and building wealth is what our future consists of now. FICO can go jump in a creek!!

I hope my posts inspire you to look at what you’re doing financially and if needed, make some changes that will cause you to win financially. I also look forward to reading your views on any articles or postings that I may post. For more money news, facts and ideas, follow me on Facebook, or Twitter. Thanks you!


Sunday, October 7, 2012

“I Don’t Have the Time”


“I Don’t Have the Time”


By Keith Bunn Jr.
October 7, 2012

Americans, we love our TVs don’t we? And we all have our favorite shows. I mean from sports to drama, to documentaries and sci fi, there is a show for everyone. For me, I like some of everything and I have my share of shows programmed to record on our DVR. 

As a kid growing up, we didn't have all the channels like we do today and no DVRs or VCRs either (VCRs came later in my teens). We had 3 channels at worst, 5 at best, and I have to tell you, TV watching has controlled most of my life. I have come to realize over the past few years that I watch A LOT of TV and it has robbed me of some precious time. Time that I can never get back. Time that I could have used to better myself in a bunch of ways. And it is this is the kind of behavior we are passing on to our kids. This is what I mean.

According to a survey done in the first quarter of 2012, by the Nielsen Company, which uses the Nielsen rating system to measure the audience size and composition of TV programming here in the U.S., Americans watch more than 34 hours a week watching unrecorded shows and another three to six more hours watching recorded shows. That’s a whole other work week just sitting there being absolutely nonproductive.
 
Now I don’t want you to get me wrong. In no way shape or form do I think watching TV is evil and I’m surely not telling you to stop watch it. I’m just saying that there are better things to do with just half of that time that is more productive and could better your lives in the process. What could you do with 20 extra hours a week that was more productive?

• Do a Budget: You knew that one was coming. Doing a budget can not only help you better your finances, but also, if you’re married, it can help with communicating with your spouse. And most people feel like they got a raise when they do one for the first time.

• Work: In the book “Debt Free U” by Zac Bissonnette, Zac’s research shows that if a student works just 20 hours a week while going to college, they will be able to pay for the in state school tuition without going into debt to do it.

• Read: Pick up a book and read it. Studies have shown that the average millionaire reads a non-fiction book a month, but it really doesn't matter what kind you read. Readers are always winners.

• Spend time with your Family: Sitting in front of the TV with your family for 20 hours or more is not really quality time spent with your family. You could go to sporting events, on picnics, play board games, etc… Quality time. 

• Overtime: Work some overtime to help pay down debts or save for something big that you would normally go on your credit cards. One month I worked 100 hours in just overtime. 260 hours total and I’m still here. 20 hours extra a week won’t kill you.

• Get in shape: A good portion of us (myself included) could use a little more activities in our live to improve our health. Even though going to the gym is a good idea, you don’t always have to do that to get in shape. Walking, jogging, and bike riding are all good for you and for most people, it’s free! 

These are just a few ideas I came up with, I’m sure there are a bunch more you can think of. Just be mindful of how you’re spending your time. Time management is like money management. The more you manage, the more you’ll have!

Questions

• How much extra time could you have per week if you cut your TV watching time in half? 

• Out of the examples above, which ones do you think you would be willing to do?

• How many more examples can you come up with to spend your time more wisely?

I hope my posts inspire you to look at what you’re doing financially and if needed, make some changes that will cause you to win financially. I also look forward to reading your views on any articles or postings that I may post. For more money news, facts and ideas, follow me on  Facebook, or Twitter  Thanks you!

Tuesday, October 2, 2012

Insurance Part 7: Identity Theft & Long Term Care


Insurance
Part 7: Identity Theft & Long Term Care


By Keith Bunn Jr.
October 2, 2012


To end this long series about insurance, there are just two more topics we need to talk about; Identity Theft insurance and Long Term Care insurance. Again, these types of insurance are critical in protecting both your good name and your money, both now and when you’re in your golden years.

Identity Theft Protection

The first thing I want you to understand is that if your identity is stolen and the thief racks up a huge bill, you don’t own anyone a dime! The thief does. Unfortunately, most of the time someone’s I.D. is stolen, it is done by someone they know. Sad, but true.

Identity theft is the fastest growing blue collar crime in the U.S. today, so if you don’t have Identity Theft insurance, you are looking at an average of 600 hours to clean up the mess made by the person who stole your I.D. With just a few insurance companies out there that offer Identity Theft insurance, which one should you get? What should you look for?

·         Credit Monitoring: I suggest that you don’t get one with credit monitoring, only for the fact that you can do that yourself for free by watching your bank/credit union accounts and getting your free annual credit reports from all three credit bureaus; Equifax, Experian and TransUnion. And I do suggest that you get a report from one of the bureaus every 4 months.

·         Clean Up: Since there is no way you can protect yourself 100% from being a victim of identity theft, you need to find an insurance company that offers a service that assigns someone to your case to clean up the 600 hour mess for you. Saving you the hassle and headaches of doing it yourself.

Really good banks and credit unions will contact you if unusual charges are made in unusual places, like buying a lot of car parts in Florida when we live here in Michigan (which did happened to us) and they will help you correct the issues, but by some chance that doesn't happen, there are a few things you need to do to work through this issue which I laid out in a blog called “What do you do if you’re robbed” In that blog, I give you a step by step process on what you have to do to start cleaning up your mess.


Long Term Care Insurance

Long Term Care Insurance is to cover the cost if you need to be put into a nursing home or need some kind of in home care. This is extremely important for you if you are 60 years old or older for the simple fact those types of care can easily and quickly drain any kind of retirement savings you worked so hard to build and possible leave a surviving spouse (normally the wife) with nothing when the one who needed the care passes. So what are the do’s and don’ts for this kind of insurance?

·         When should you get it: On your 60th birthday, you should get yourself and your family the awesome gift of Long Term Care insurance. Why 60 years old and not in your 50’s when the policy could possibly be cheaper? Because the chances of you needing some kind of nursing home care or in home care is less than 1% before the age of 60. But as soon as you reach 60 years old the odds of you needing that kind of care go up rapidly the older you get. In fact, studies have shown that the last 10 years of your life will more than likely be the most expensive times too.

·         Gimmicks: Again, beware of gimmicks that could be built into these polices like Return of Premiums. You don’t need crap like that. All you need is to protect yourself and your family of the high cost of that kind of care.
  
 In closing, I want to share with you a website that was just brought to my attention that could help you chose insurance companies or at least let you know if the insurance company your work is going through is good or bad in 4 areas of insurance; Auto, Home, Health, and Life insurances. The website is called Free Advice and what you do once you’re on their home page is go to the “Learn About” section, click “Insurance Topics”. In the orange bar on top on the right hand side, click “Insurance Company Reviews”, pick the type of insurance you’re looking for and click on it. From there, you will be asked what state you live in. Once you select your state, it will give you multiple choices of insurance companies offering coverage for the kind of insurance you are looking for in your state. What I like about this website is that it shows you reviews from people who like and dislike the companies and why. It also shows pie charts for different categories and gives percentages from different questions asked. It is really worth a look.

 I hope my posts inspire you to look at what you’re doing financially and if needed, make some changes that will cause you to win financially. I also look forward to reading your views on any articles or postings that I may post. For more money news, facts and ideas follow me on Facebook, or Twitter. Thanks you!


Sunday, September 23, 2012

Insurance Part 6b: Life



Insurance
Part 6b: Life

By Keith Bunn Jr.
September 23, 2012


Review

Before we start today, let’s review last week’s blog. Last week we learned that there are only two main types of Life Insurance, Term Life Insurance and Cash Value Life Insurance.

1. Term: Term Insurance is for a specified time or term. If you have a 10 year term policy, you only have the policy for 10 years. 20 year term policy, you only have the policy for 20 years, etc… it has no savings accounts built into it and it is much cheaper than the Cash Value policies.

2. Cash Value: Cash Value insurance is a continuing policy meaning, as long as you don’t cancel the policy and keep paying the premiums, you will have the policy as long as you live. It cost much more than Term policies because it has a savings (cash value) account built into the policy.

3. Better Deal: We also learned that even though Cash Values polices look good from the outside, when you look into the polices deeper and compare the math between the two, we found that Term Insurance is really a better deal for four main reasons.

·         Cost Less: Term Insurance is extremely cheaper than Cash Value for the simple fact you are not funding a savings account inside the insurance policy.

·         More for your Buck: You can get 2 to 3 times the coverage in a Term policy that still doesn’t cost as much as a $250,000 dollar Cash Value policy.

·         More when you Retire: If you just take the difference in what the two polices cost and invested it yourself in a decent Growth Stock Mutual Fund, by the time you retire, you’ll have millions of dollars invested instead of hundreds of thousands.

·         When you Die: If you have a Cash Value policy and you die, your family only gets the face value of the policy, NOT the cash value portion. The insurance company keeps that part.

How much to get

Now that we know what to get, the question is, how much do you need to get. And the answer to that is, you need to get a minimum of 10 times your annual income. So if you make $40,000 a year, you need $400,000 coverage in a 20 year level Term policy and this is why…

Let’s make up a couple named Joe and Suzie Smith. Joe and Suzie are a 30 year old couple that have two young kids that are 3 and 4 years old. Now if Joe is making $40,000 per year and the family is dependent on his income and he has a $400,000 20 year term policy in place, if unfortunately Joe dies 5 years later, Suzie will receive the $400,000. If she took that money and invested it in a decent Growth Stock Mutual Fund that gave her an annual rate of return of 10%, she would get $40,000 per year off those investments. Joe’s income is now replaced and the family will survive.

Now what about Suzie? If Suzie works, then she should also get 10 times her annual income in a 20 year Term policy. But if she doesn’t work, if she is a stay at home mom, then there should be anywhere from $250,000 to $450,000 of coverage on her then. The reason is, stay at home moms have an economic value too. From maintaining the household, grocery shopping, cooking, taking the kids to the doctors, to soccer practice, etc… If you had to hire someone to do that, it would cost a lot of money to do it. So don’t forget stay at home moms!


Who doesn’t need Life Insurance?

Let’s use Joe and Suzie again for this example. Let’s say Joe doesn’t die and he lives all the way to the end of the 20 year policy. If Joe and Suzie do what most Financial Coach’s say to do, in 20 years they will have become debt free which will probably include their home, they have an emergency fund established of 3 to 6 months’ worth of their household expenses, their 3 and 4 year old kids are now 23 and 24 and should be out of the home and living on their own, and Joe would have been investing 15% of his annual income for retirement into decent Growth Stock Mutual Funds that, instead of giving them an annual rate of return of 10%, they were making 12%. Now if Joe died 6 months after his 20 year policy expired, would Suzie be OK? Yes. Why? Because Suzie is debt free, has a paid for house, she has about $20,000 to $30,000 saved in case of emergencies, and over a half a million dollars in a retirement fund. Suzie will be OK. The same goes for Joe if Suzie dies. You see, they have become self-insured due to good financial planning.

Now if you’re single and no one is dependent on your income to survive after you die, then all you really need is a simple life insurance policy through your work that pays out enough to bury you. But if you want to get a Term policy, you can. There’s nothing saying you can’t.

You don’t take out big life insurance policies on your children. Most children don’t bring in an income, they normally cost money. So to put Term policies on your children is an over kill. A simple rider policy attached to your life insurance policy through your work should be good enough to bury them, God forbid.


What do you do if you have Cash Value Insurance and what Term?

If you have a Cash Value policy and you decide you want to get out of it and buy some Term instead, Make sure you have the Term insurance in place first. Because if for whatever reason, while you had the Cash Value policy, you became uninsurable because of some health issues, (meaning you can’t buy any new insurance), at least you still have the Cash Value policy to cover you when you die.

If that’s not the case, once you have the Term policy in place, you can then cancel the Cash Value policy. Also, you need some life insurance outside of work. Again, if you only have your work policy and you become uninsurable because of some health issues and then you lose your job, now you no longer have life insurance.


Bad Insurance plans! Don’t Buy Them!

1.    Credit Life and Disability: This is an insurance plan that is bought when you bought something on credit; it pays off that item if you were to die or be disabled. This type of policy is anywhere around 50 – 100 time the cost of what Term insurance will cost you. Not a good plan!

2.    Cancer and Hospital Indemnity: Don’t be pulled into this bad plan because of your fear of cancer. Your health insurance covers cancer. By buying both, you are doubling coverage and that is always a bad idea when it comes to health insurance because the insurance companies will argue who’s going to cover what and nothing will get paid.

3.    Accidental Death: You’re not double dead when you die by accident. I know these types of policies are not that expensive but you’re nickel and dimeing yourself to death with all these gimmick policies. Put that money towards something better like getting out of debt. Besides, if an insurance company only charges you a couple of dollars a year to cover something, that’s because the coverage sucks!

4.    Prepaid Burial Policies: If you are 40 years old, statistically speaking, you have a real good chance of reaching 80. And if you bought a prepaid policy that cost you no more than $3000 all the way to the day you died, that would have been $355,942.39 if you took that same $3000 and invested it into a Mutual Fund giving you a 12% rate of return for 40 years. Don’t prepay anything!

5.    Mortgage Life Insurance: This gimmick policy is kind of like the cancer one. “When I die, at least the house will be paid for!” That’s what people think when they buy this kind of policy. It is all based on fear of the “what if’s”. The only reason you should buy this policy is if you are un-insurable.

6.    Return of Premiums: This policy gimmick pledges that if go so many years without ever using the policy, they’ll give you all the premiums back if you just pay a little extra on the policy. If you take that little extra you’re paying on that policy and invest it yourself, you’ll have the premiums back whether you use the policy or not.

Well folks, this blog ended up to be way longer than I wanted but this information is just so important for everyone to know. Be careful, read the policies, do the math, ask for other peoples’ advice and input, and for goodness sakes, if you don’t understand how the policy works or even if it’s just a touch confusing, DON’T BUY IT!! Only buy it when you understand what you’re going to buy. Because insurance is an area where you normally don’t know you were ripped off until it’s too late. Only from knowledge and understanding can you prevent that from happening.

I hope my posts inspire you to look at what you’re doing financially and if needed, make some changes that will cause you to win financially. I also look forward to reading your views on any articles or postings that I may post. For more money news, facts and ideas follow me on Facebook, or Twitter. Thanks you!