Monday, July 31, 2017
2nd + Main by Create Properties in Mount Pleasant
On the corner of 2nd and Main Street is the new 226 residence building composed of 23 studios, 145 1-bedrooms, and 58 2-bedrooms. Vancouver based, Create Properties brings a unique vibe to their properties where you can live, work and play. This development will feature: a green roof for residents with garden plots and storage for gardening supplies, electric vehicle charging stations, four artist studios, bicycle stalls, 13000 square feet of retail space, and culture space.
This fabulous development is situated within walking distance to the Olympic Village, close to breweries and dining spots.
The post 2nd + Main by Create Properties in Mount Pleasant appeared first on Vancouver New Condos.
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2nd + Main by Create Properties in Mount Pleasant
On the corner of 2nd and Main Street is the new 226 residence building composed of 23 studios, 145 1-bedrooms, and 58 2-bedrooms. Vancouver based, Create Properties brings a unique vibe to their properties where you can live, work and play. This development will feature: a green roof for residents with garden plots and storage for gardening supplies, electric vehicle charging stations, four artist studios, bicycle stalls, 13000 square feet of retail space, and culture space.
This fabulous development is situated within walking distance to the Olympic Village, close to breweries and dining spots.
The post 2nd + Main by Create Properties in Mount Pleasant appeared first on Vancouver New Condos.
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Borrowers who obsess about interest rates are getting it wrong
The post Borrowers who obsess about interest rates are getting it wrong appeared first on Invis Team RRP.
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3 Easy Ways To Put Your Money to Work Right Now
One thing I’ve learned as a parent is that “idle hands are the devil’s workshop.” Keep children busy and you keep them out of trouble.
The same is true with money.
Cash sitting in your checking account is just begging you to spend it mindlessly. The longer it sits there, the more likely you are to fritter it away.
That’s one of the things I love about YNAB (You Need A Budget). This budgeting software encourages you to give every dollar a job. But once you give a dollar a job — whether it’s going to be saving or paying down debt or whatever — put it to work immediately.
Here are three ways you can do just that.
1. Make full use of direct deposit
With direct deposit, you can put your money to work without even touching it. It goes right from your employer to the place you need it to go. I fully utilize direct deposit, and there are a couple of different ways that you can use this tool.
The most obvious option is to take advantage of a 401(k). It’s terrific because your employer simply takes the amount of money you choose out of your check and puts it right into your 401(k).
You never see it, and you don’t touch it. You also never have a chance to miss it. It just goes right from your employer to your retirement account.
The other thing you can do is to set up multiple direct deposits with one or more banks. Did you know that you don’t have to have your whole paycheck deposited into your checking account? If you’re trying to save money, you can direct deposit a certain amount into a savings account, and the rest into checking.
You can even have your paycheck split between two banks. For example, you could have a portion of your check sent to your checking account at your local bank. You can then direct the rest to a savings account at an online bank, where interest rates are higher. If you don’t keep a debit card for the online bank on you, you’re less likely to spend that money on things you don’t really need.
In fact, with some employers, you can have more than two direct deposits. So your money can automatically go into a number of accounts. Try not to over-engineer this, but used properly, it can be a good way to save money.
Related: 5 Unique Alternatives to Savings Accounts to Save Money Now
2. Automate your bill paying and investing
Most of our bills — from the mortgage to utilities to cell phone bills — are paid automatically. It avoids the hassle of having to make the payments and the possibility of paying a bill late.
Automating your bills can also save you some money. Several companies now offer discounts for those who go paperless and automate their payments. Some examples include SoFi (student loan refinancing), many insurance companies, and even bank lenders.
Take advantage of an FNBO Online BillPay Account and earn 0.65% APY
You can do this same thing with investing. For example, you can have an automated transfer into your investment account at Vanguard, Fidelity, Betterment, or wherever you keep your investments each month. It happens every month as soon as you get paid.
That puts the money to work immediately, and it’s out of your checking account. That way, you don’t risk spending it.
Resource: 5 Ways To Automate Your Finances
3. Physically or electronically transfer the money yourself
I invest in real estate with a really good friend of mine. We started investing in our first two homes in 2005. So, it’s been a little more than a decade, and we’ve already earned back the money that we put into the homes.
Recently, we started paying ourselves a monthly dividend from the cash flow.
We have a business checking account that’s got money in it for repairs and vacancies. We’re earning a nice cash flow, to the point where we are automatically sending ourselves $250 a month each from the account. I get the money in the form of a check, but we’re going to work on direct deposit to automate it.
For now, it’s just an old-fashioned check that comes in the mail. I immediately deposit it into my checking account. Then, before I spend it, I transfer it — in this case — to my Vanguard account.
Will that $250 a month make a big difference? You bet! Over decades, that investment of $250 a month will have a huge impact.
My concern is that if I just let it sit in my checking account, I’ll spend it and not even remember where it went. So, I don’t waste any time. As soon as the check clears, I transfer it right over to Vanguard and put that money to work.
Bonus Tip: Spend It
That’s right, you heard me. In fact, spending your money immediately can be a great way to put it to work (depending on how you go about it).
It’s advice I recently gave our daughter. Here’s the story:
She is living on her own for the first time while she finishes college. I’ve noticed that she regularly runs out of money just before payday. That’s not unusual, and it happened to my wife and I regularly when we were younger.
One problem this creates for our daughter is transportation. She finds herself out of money and out of gas. She can’t even get to work.
So, I’ve told her that as soon as she gets paid, she needs to fill the tank. If she’s halfway to payday with half a tank of gas, fill it up.
The point is to spend the money on necessities before spending it on wants. This ensures that your needs are taken care of before the money even has a chance to run out.
Learn More About How Much to Save (and How to Do It!)
So, these are just four simple ways to put your money to work right away, and they’re simple enough that anyone can do them.
It’s certainly better than frittering it away. Plus, you could even get slightly better returns (or pay less interest on debts) if you move that money to the end goal sooner rather than later.
Topics: Money ManagementThe post 3 Easy Ways To Put Your Money to Work Right Now appeared first on The Dough Roller.
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Sunday, July 30, 2017
Friday, July 28, 2017
Second + Main – Plans, Prices, Availability
At a Glance
- located at the gateway to Mount Pleasant
- 12-storey mixed-use concrete building
- 226 residences
- 13,000 sq ft commercial space
- 3,500 sq ft artist production space
- 226 residences
- public plaza & cultural space
- walking distance to Olympic Village
- numerous nearby craft breweries
Where Life Intersects
Create Properties brings you 226 smartly-crafted homes, where vibrant culture and community connect at the centre of the City.
Find Out About New Presales & Get Access to VIP Openings & Special Promotions!
Are you a realtor? Click here
Pricing for Second + Main
This project is currently in its pre-construction phase. Pricing has not yet been made public. For priority access to updates on Second + Main, signing up to our VIP list is strongly recommended.
Floor Plans for Second + Main
Finalized floor plans have not yet been released for this development’s 226 residential units. A mix of 23 studios, 145 1-bedrooms, and 58 2-bedrooms has been proposed. Interested buyers should contact me to discuss plans, prices, and availability.
Amenities at Second + Main
Second + Main has been designed around an outdoor public plaza to give it a maximum amount of sunlight throughout the year. A 3,500 sq ft artist production space fronting East 3rd Avenue is also linked to the courtyard to offer opportunities for cultural programming. A fitness room with an adjoining outdoor patio is located on Level 8. Level 12 features an amenity space with a large outdoor patio that includes two communal tables and a children’s play area. A green roof will also provide residents with garden plots and storage for gardening supplies.
Parking and Storage
Second + Main will provide 297 underground parking spaces, including 48 with electric vehicle charging stations, 19 for visitors, nine handicap, 35 commercial stalls, and four for artist studios. Two Class A loading bays are located underground, while three Class B loading bays are located at grade for residential, artist studio, and retail uses. Secure underground bicycle storage will be available with 329 Class A stalls. Another 12 Class B bicycle stalls are at grade.
Maintenance Fees at Second + Main
Details included with final pricing information.
Developer Team for Second + Main
Create Properties is a Vancouver-based development company dedicated to building exciting places to live, work, and play. By bringing their international finance, development, and construction management expertise together with the finest consultants and partners Vancouver has to offer, they work with the best to Create the best.
Expected Completion for Second + Main
To be announced
Are you interested in learning more about other homes in Mount Pleasant, along Main Street, or near False Creek?
Check out these great Mount Pleasant presales!
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The Truth About Why You Need a Last Will and Testament
Did you know that the majority of Americans do not have a will? This is one of those circumstances where you definitely don’t want to be part of the crowd!
Whether you’re a pop star like Prince, or simply someone’s Pop, having a last will and testament is vitally important. It declares your intent, laying out what you want to happen to your assets in the event of your death. If you have children, a will also specifies their guardianship.
However, simply writing up a will isn’t the only concern you should have. You also need to worry about parallel beneficiary designations. When it comes to the estate of you and your spouse, the order (and timing) of your death(s) can cause bigger problems than you may realize.
Let’s talk about the estate planning documents you need to have in place, as well as the contingencies involved.
Note: different states have different requirements when it comes to Estate Planning Documents. So, if you move to another state, you very well might need to update or redo your documents.
What Is a Last Will and Testament?
A will is the most basic estate planning document. In it, you outline your wishes for your assets, children, and even what you want those left behind to do with your remains. There are caveats to the power of this document, though.
It’s important to realize that your titled assets pass outside of the will. For example, if your checking account has a “payable-on-death” beneficiary specified, the account is transferred to that person upon your death, regardless of what is specified in the will. If your home is jointly owned (rights of survivorship), it passes to the remaining owner(s) outside of the will.
You should also note that life insurance has its own beneficiaries specified. Policy benefits are not governed by your will.
Related: How Much Life Insurance Do You Really Need?
Where possible, you should specify beneficiaries on all your accounts (bank accounts, CDs, 401k, etc) so those assets pass outside of the will. This will allow you to bypass the expense and delay of probate.
Some people delay estate planning because of the perceived expense of hiring an attorney. However, there are less expensive do-it-yourself solutions such as Legal Zoom or US Legal Forms.
Legal Zoom offers one-person Estate Planning for $149, and for two people, it’s $249. If you are going to the effort of doing a will, you really should get the Will, Power of Attorney and Living Will package:
At Legal Zoom’s website, you answer a bunch of questions, and it generates the legal documents. Then you get PDFs ready to print and have notarized. Optionally, they will mail the documents on fancy paper for an additional fee. The process is easy and great for preparing simple documents.
A less expensive and more flexible option is US Legal Forms. For $50 you can instantly download a fully editable set of state specific Microsoft Word documents:
Legal Zoom vs. US Legal Forms
I have personally used both Legal Zoom and US Legal Forms. For me, I much preferred US Legal Forms because I could modify the Microsoft Word document as needed.
For example, I once prepared a power of attorney document for a 90-year-old family friend. We wanted to specify both her grandson and me to be powers of attorney, each able to act independently should the other be unavailable.
The Legal Zoom document didn’t support that arrangement, though. One of us had to be specified as primary POA and the other as the contingent, should the primary withdraw. When we used that document at Wells Fargo, they wouldn’t establish us both as powers of attorney.
When I ultimately re-did the power of attorney document using the US Legal Forms Word document, I simply specified AND/OR. I made it clear in the JOINT POWER section that either agent can act independently (only one signature required, not two).
Having complete control over the Word Document was particularly important when it came time to specifying Contingent Beneficiaries.
Risk of Editing an Old Estate Planning Document
Sometimes, laws change.
For example, in 2014, Pennsylvania made big changes to requirements for Power of Attorney documents.
Let’s say you purchased a valid document from US Legal Forms in 2010. You then edited it in 2017, without buying a fresh document from US Legal forms. In this case, the edited document, based on the 2010 original, would not comply with the new 2014 requirements.
How Sequence of Death can Kill your Estate Plan
Many estates are relatively simple. A married couple might leave 100% to the surviving spouse with the surviving spouse leaving 100% to their children. If both die at the same time, the estate would simply go to the children.
In this case, who dies first doesn’t matter. However, things can get more complicated and can go horribly wrong when it comes to contingent beneficiaries, based on sequence of death.
For example, consider this scenario: a married couple with no children designates the other spouse as 100% primary beneficiary. For contingent beneficiaries, the husband names his side of the family and the wife names hers. The husband dies, and everything goes to the wife.
Then, six months later, the wife dies.
In her grief, she hadn’t yet gotten around to changing her will. Because of this, the combined assets of both husband and wife goes only to her side of the family.
Resource: 11 Life Events That Tell You It’s Time to Get a Will
This problem can easily be remedied if the husband and wife agree on a set of contingent beneficiaries which fairly represent both sides of the family and that contingency-combo is specified for all accounts for both husband and the wife.
Some wills have language which specifies who should be assumed to have died first, if it’s difficult or impossible to determine (e.g. both died in a car accident). Some wills have language which specifies that one spouse must have survived the other by 30 or 60 days.
Sure, such language might be helpful if both die in the same event. However, it does nothing for a more common scenario of the 2nd spouse not changing their will in a timely fashion, after the first spouse dies.
Tech Tip
My spouse and I created a common set of contingent beneficiaries in a Microsoft Excel document.
We included each person’s name, address, Social Security number, phone number, birthday, relationship, and estate percentage. I then took a screen shot of the contingent beneficiaries and pasted it into my US Legal Forms Word Document.
Having complete control of the Word document was a huge plus. It would have been tedious and time consuming to do using a Legal Zoom online wizard.
We used the same Excel document for my workplace 401k and life insurance policies. It was great having all the information in one file that could be re-used in multiple wills and documents, without having to re-invent the wheel.
Advanced Excel Tip
If you used math formulas to divide up the estate, the resulting percentage for each beneficiary might not be whole number. If you used Excel’s rounding function to display whole numbers, make sure the sum of the displayed values adds up to 100%.
In my first draft, due to rounding, it added up to 101% and was rejected by the life insurance company – talk about embarrassing.
Life Insurance Tip
If your plan is to leave some money to charities and some money to individuals, you might want to name only individuals as beneficiaries on life insurance policies. This is because life insurance proceeds pass tax-free, whereas individuals will pay taxes on 401k distributions.
You might want to consider naming the charities as recipients of a 401k or IRA.
Conclusion
Your estate documents will be constantly changing, and it’s important to update them anytime a significant change occurs. However, here are some basic recommendations regarding your planning:
- Everyone should have Will, Living Will, and Power of Attorney document.
- If you don’t want to pay an attorney to prepare the documents, there are some very good do-it-yourself alternatives.
- Consider sequence of death when specifying contingent beneficiaries.
- Don’t procrastinate or let “the perfect be the enemy of the good.”
Do you have any other tips regarding wills and beneficiaries? Share them below!
Topics: financial planningThe post The Truth About Why You Need a Last Will and Testament appeared first on The Dough Roller.
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5 Financial Goals Every Successful 20 Something Should Have
If I think back, I can remember when I first started considering my own financial goals.
I was 20 years old. I wasn’t financially savvy and ended up maxing out a credit card along with incurring other debts.
While I certainly wasn’t alone (many of my peers did the same!), it was a stressful time. Then and there, I knew something had to change.
Several years later, my wife and I paid off over $30,000 in consumer debts (in addition to over $200,000 in student loans). I had realized that I didn’t have to drown in debt, live in frustration, or be doomed to a lifetime of payments. And you know what? Neither do you.
Here are some of the most important financial goals for those of you in your 20s. Start early and focus on them now, before making the same mistake that I and so many of my peers made.
You’ll be so thankful you did in your later years, when you’re financially secure.
1. Make giving a priority
Giving to others changes how we view money. And it’s a very good thing.
It’s easy to get caught up in the idea of building wealth – you know, hoarding it for yourself. However, giving can transform your attitude and help you remember that money isn’t everything.
Giving is also a lot of fun, so be on the lookout for opportunities to bless others. And when you give, give with a cheerful heart.
Rob: My daughter called me from college yesterday to discussing a donation she wanted to make to a charity. I was so proud!
Before she gave, however, we checked out the organization on a website called Charity Navigator. The site rates charities and shows you how much of your contribution actually goes to those the charity seeks to benefit.
Related: How to Make Giving Part of Your Financial Plan With Vanguard Charitable
2. Develop your career skills
Be a lifelong learner. You’re going to need to develop your skills throughout your lifetime, especially in today’s workplace.
Times are changing, and you have to be flexible enough to change with them. Even if you have a secure job, think about some hobbies or trades you can do on the side. Working a side job or two will give you the experience you need to switch to a new full-time position if needed.
3. Eliminate your credit card debt
While there are some enticing credit card rewards programs out there, I always suggest that readers “know themselves.” No matter how great the rewards may be, you should avoid credit cards if you are prone to carrying a balance. You can pay off your credit cards using a number of free tools and methods, such as the debt avalanche or debt snowball.
- Consider a balance transfer credit card to pay down your debt at 0% interest
Paying off our debts has given us a lot of peace, along with the obvious flexibility it provides our finances. If you can be debt-free in your 20s, by all means do so.
Learn More: A Review of Qoins, The App That Pays Off Your Debt
4. Build an emergency fund
If there’s anything you can expect, it’s that emergencies will occur. While you might not have experienced too many of them yet, believe me… they’re coming.
Many financial professionals recommend having 3-6 months’ worth of expenses in an emergency fund. That should be enough to cover you in the event of a job loss, a large medical bill, or another emergency.
By putting your emergency fund into a high-yield savings or money market account, you can have quick access to your funds while earning a higher interest rate than your average checking account. After you use your some of your emergency funds, make it your goal to replace the funds you spent as quickly as possible.
Resource: Big Expense? How to Decide If It’s Emergency Fund-Worthy
5. Start investing for retirement
We’ve all seen the power of compounding at work. Time is a powerful variable in the compounding equation, and because you’re in your 20s, time is on your side.
If your company offers a 401(k), start investing there – you might get a match on your contributions. You should also consider starting a Roth IRA or opening an account with an online discount broker to take advantage of gains in the stock market.
Many experts suggest putting 10-15% of your gross income into retirement savings. If you’re still living with your parents, you might even be able to put more than this into your accounts, but 15% is a good goal.
Get Ready: 10 Valuable 401(k) Tips to Help New Grads Invest Better
All of these goals are more like ongoing practices – ones that you’ll want to adopt and hang onto throughout your life.
By solidifying these habits when you’re young, you’re setting the stage for financial freedom as you grow older. And money lessons are definitely better learned as early as possible.
What financial goals are you working toward in your 20s?
Topics: Personal FinanceThe post 5 Financial Goals Every Successful 20 Something Should Have appeared first on The Dough Roller.
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Thursday, July 27, 2017
The Best Gas Rewards Credit Cards for 2017
Nine short years ago, the average price of a gallon of gas in the United States was $4.24. Today, with the price of oil continuing to fall, that average price has been halved. Factor in the emergence of electric and hybrid cars, and the allure of a great gas credit card isn’t what it used to be.
Still, credit cards offering cash back and other gas rewards can be a great way to trim your gas bill. Many of the cards listed below will give you a straight percentage back on qualified gas purchases.
Others offer tiered percentage amounts, which can be better in some situations. Of course, don’t forget to consider introductory offers, annual fees, bonus rewards, and rewards for other purchases, too.
Here are some of the best gas credit cards on the market today:
1. Costco Anywhere Visa® Card
- Cash Back on Gas: You’ll get 4% cash back on gas purchases, including those made at Costco, for the first $7,000 spent annually. Yes, there’s a limit, but if you’re spending more than $7,000 a year on gasoline at these prices, it’s probably time to trade in the school bus for a more fuel-efficient vehicle.
- 0% Intro Offer: You’ll also get a 0% intro APR on purchases for 7 months. After that, the variable APR becomes 16.24%.
- Annual Fee: None
Bottom Line: The recommended credit score for approval on this one is high (720+), but the gas rewards are undeniable. You’ll get 4% cash back on all gas purchases all year round, with a healthy cash back percentage on everything else. There are no annual fee to eat into the rewards, and earning 2% cash back at Costco makes those 1,000-count paper towel roll buys even cheaper.
2. Chase Freedom® Visa
Like many rewards cards these days, it offers rotating cash back categories. So during at least one quarter of the year, the Chase Freedom® Visa offers a 5% cash back bonus on up to $1,500 in gas purchases (other categories include Amazon.com and warehouse store purchases). Plus, the card offers an unlimited 1% cash back elsewhere, all year-round.
- Bonus: A great cash back bonus is available with the Chase Freedom® Visa. New cardholders will receive a $150 cashback bonus after spending just $500 in the first three months.
- Annual Fee: The Chase Freedom® has no annual fee.
Bottom Line: This is a good option if you’ll use the bonus rewards the other three quarters, and want to take advantage of a solid 1% cash back on all purchases throughout the year.
3. PenFed Platinum Cash Rewards Visa®
- Qualify for Plus: To qualify for the 5% cash back for gas on this card, you’ll need to have another qualifying product with PenFed Credit Union. Checking accounts, loans, lines of credit, and mortgages all count. But as long as this other product is active, you can take advantage of the great rewards of this card.
- Annual Fee: Standard users will pay $0 the first year, and $25 per year after that. Plus users will pay $0 per year in annual fees.
Bottom Line: If you have excellent credit and you’re already searching for a loan or another financial product, check out FedPen. If their other products meet your needs, this credit card could be the icing on the cake.
4. Blue Cash Preferred® Card from American Express
- Bonus Offer: This card offers $150 in bonus cash back after you spend $1,000 in purchases within the first three months of use.
- Annual Fee: Because of its excellent rewards, this card does come with an annual fee of $75. If you max out the grocery bonuses and spend enough on gas, you’ll well out-earn the fee. However, if you don’t use this card regularly enough, the annual fee could easily eat into your earnings.
- Easy Rewards: With the Blue Cash Preferred® card, you’ll rack up cash back rewards — which you can then use as a statement credit. The rewards aren’t quite as flexible as with some other programs, but they’re great if your main goal is to offset spending.
Bottom Line: If you’ll use this as your primary gas card and max out the grocery rewards, too, you’ll be sitting on $400+ per year in savings — well over enough to offset the $75 annual fee. Plus, the $150 cash back bonus for new signers offsets two years’ worth of annual fees.
5. Barclaycard Arrival Plus™ World Elite MasterCard®
Your miles don’t expire as long as your account is active and in good standing. Plus, you’ll get a 50,000 mile bonus when you spend $3,000 on the Barclaycard Arrival Plus™ World Elite MasterCard® in the first 90 days of ownership. That’s enough for a $500 travel statement credit!
- Miles for Everything: The 2X miles offer counts for any purchase made with this card, including buying gas and even paying bills.
- Extra Miles: Besides the 50,000 bonus miles deal, this card also offers 5% miles back to use towards your next redemption. The credit is applied when you redeem miles for travel statement credits.
- Chip Card: These new cards are the wave of the future. The chip gives the card extra security, and makes it easier to pay both abroad and at home.
- No Foreign Transaction Fees: The true travelers’ credit card, this one offers no transaction fees. So while you’re enjoying your vacation travel (paid for in rewards, we hope), you can rack up rewards for the next trip, too.
- FICO® Score: Like the above-listed Barclaycard®, this one offers a free FICO® credit score with each bill or unlimited access to your updated FICO® through your online account.
Bottom Line: If you want to combine great rewards for gas purchases, as well as travel rewards, this is an excellent option — as long as you’ve got excellent credit.
6. Discover it® CashBack Match™
As with the Chase Freedom® above, you’ll get this handsome reward during one or more quarters of the year, and you’ll need to sign up for the category beforehand. The Discover it® CashBack Match™ also offers a 1% cash back reward on all other purchases, and the categories shift every three months.
- Bonus: There is no sign-up bonus being offered on the card currently, but with Cashback Match™, Discover will equally match all rewards earned in your first year with the card. So, $300 in rewards becomes $600. Also, the 18 Month Balance Transfer Offer version comes with the perk of 18 months no interest on transfers for 18 months.
- No Annual Fee: Discover it® has no annual fee.
Bottom Line: This is a good card for everyday spending, especially if the quarterly categories interest you. As far as a stand-alone gas card, it’s not the best. However, the 5% cash back during the one or more quarters that gas is featured will earn you more than any typical card.
Related: Cash Back Rewards: How to Spend the Same but Get More
Picking the right gas rewards credit card depends on a lot of factors, including how much you actually spend on gas and how you plan to utilize the rewards. By asking yourself a few simple questions, though, and doing a little math, you’re sure to find the perfect new piece of plastic for your wallet.
Happy Earning!
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Wednesday, July 26, 2017
3 Bathroom Mistakes to Avoid
Content originally published and Shared from http://perfectbath.com
Despite using the bathroom every day since you were born, you probably still make mistakes that you weren’t aware of. Check out these examples:
Image Source: Flickr
Using toxic chemicals to clean
Let’s take a moment to think about the reason you’re actually cleaning anyway…to kill infection- and illness-causing bacteria, right? Then, you’ll be surprised to know many of the cleaning products you’re using could be harmful to your health. The Environmental Working Group has published a “Hall Of Shame” list of worst-offending cleaning products, many of which are banned in other countries and have ingredients known to cause cancer, blindness and more.
Instead, make your own green cleaner using fruit! A grapefruit cut in half with salt is an effective tub scrubber and a halved lemon will make the water stains on your faucets a distant memory. Not to mention, your bathroom will smell amazing. Source: HuffingtonPost
Flushing the toilet with the lid up
You pee, wipe, stand up, and just flush the toilet, right? It sounds basic enough. But flushing the toilet with the lid still up is a mistake, because there’s this thing called “toilet plume” you may not know about. “Toilet plume” is the mixture of small waste particles and water in your toilet that can shoot aerosolized feces as high as 15 feet into the air when you flush. Yuck, and no thank you.
A study conducted at the University of Oklahoma found that “toilet plume could play a contributory role in the transmission of infectious diseases.” Another study in 2012 at Leeds University discovered that a germ called C. difficile can be catapulted up to 10 inches above the toilet seat every time you flush with the lid open. By the way, C. difficile gives you nausea and makes you vomit. So, yeah, close the lid before you flush. Source: HelloGiggles
Ignoring the floor
Your bathroom floor is dirtier than your toilet seat, according to ABC News. If you walk around in your bare feet, you’re going to pick up all kinds of bacteria (as many as 2 million per square inch). In fact, most people worry about the toilet seat, but never pay attention to the even more dangerous floor. So make sure your feet are covered instead of the toilet seat if you’re a germaphobe. Source: Bustle
We can keep you updated with current bathroom trends. Feel free to contact us for more information!
Contact:
Perfect Bath
Phone: Toll Free 1-866-843-1641
Calgary, Alberta
Email: info@perfectbath.com
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What Are ETFs (and Are They a Strong Investment Option)?
In a mutual fund, investors pool their investment dollars, and fund managers decide how to invest that money. Investors are typically involved with certain aspects of the fund: strategy, what sorts of stocks or bonds it will invest in, size of firms it will invest in, etc.
Fund managers take this strategy into account and make buying and selling decisions based on their investors’ goals and all available information regarding market conditions. Shares in a mutual fund, unlike typical stocks and bonds, can only be purchased at the end of a trading day.
An exchange-traded fund is different, though, in that its shares can be traded at any time throughout the trading day. Another key characteristic is that most exchange-traded funds are index funds.
Index funds are those that are passively managed. They aim to track the performance of a stock, bond, currency, or commodity index.
Index funds generally provide investors with lower cost ratios, because of drastically lower costs with regards to management, accounting, marketing and distribution. Exchange-traded funds typically provide these same benefits to investors.
Related: WARNING: Converting an Index Fund to an ETF May Increase Your Wealth
In addition to the benefits ETFs provide by virtue of their nature as index funds, the ability to trade ETFs throughout the trading day provide investors with freedoms typically only enjoyed by traders of individual stocks. Traders are able to purchase ETFs on margin, short sell them, and trade using stop orders and limit orders.
Discount Broker ETF Resources
Here’s an example: using ETFs, a trader who expects the entire market to drop in price can short sell the entire S&P 500 index. Similarly, a trader who wishes to invest in the S&P, but believes its current price to be too high, can place a limit order for when the price drops. This way, they don’t have to bother continuously monitoring the market, at the risk of missing their ideal price.
ETFs also make day trades against indexes possible. Prior to the development of ETFs, an investor could only purchase or sell shares in index funds at the end of a trading day.
Notes About ETFs
The risks of owning an ETF as a long-term investment are pretty similar to those of owning a typical index fund.
ETFs share the diversification provided by index funds. However, you are still exposed to the general level of risk inherent to whatever market your ETF trades in. The risks of using ETFs in a short-term strategy are similar to short-term strategies in similar markets.
Because most ETFs are index funds, they tend to come with low costs. However, trading an ETF will require spending whatever fee your broker charges for a trade.
In other words, if your online discount broker charges $4.95 per trade, it will cost you that much to purchase a quantity of stock in an ETF. If your broker uses a flat fee, this amount matters less and less as the amount of your investment climbs.
For example, let’s say that your broker charges $5 per buy-and-sell order. If you invested $1,000, your investment would have to appreciate by 1% just to recoup the cost of the purchase and sale. If you were to invest $10,000, your investment would have to appreciate by only .1% to recoup those same costs.
Resource: The Four Hidden Fees of Mutual Funds (This Could Save You 33%!)
Because ETFs are publicly traded, they’re easy for anyone with a traditional or discount broker to own.
Investing in ETFs
If you’re interested in trading a particular index, compare the expense ratios of various ETFs that track the same index. After you know which you want to purchase, placing a sale is as easy as double-checking the trading symbol and placing an order with your broker.
Of course, you should never let this convenience shortchange your decision-making process. Consider ETFs as critically as you would any other part of your long- or short- term investment strategy.
Exchange-traded funds have the ability to give your portfolio a little extra security and added convenience. Treat them as you would any other investment, and they can be a wonderful part of your portfolio, no matter your current allocation.
Topics: InvestingThe post What Are ETFs (and Are They a Strong Investment Option)? appeared first on The Dough Roller.
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4 Steps to Take When You and Your Spouse Don’t Agree On Spending Habits
Marriage is about compromise, teamwork, and communication. Unfortunately, it’s very easy for all of these things to go out the window when couples start talking about finances.
Sitting down to make a budget and create a spending plan can be a frustrating experience for many couples, though. Things can become even more frustrating when spouses simply can’t get on the same page when it comes to what they can spend and how much they should save.
It can feel like you’ll never reach your retirement goals or save up enough money for a down payment on a home if your spouse is a casual spender. It can also feel like you don’t get to enjoy anything in life if your spouse is tight with every penny.
The end result is that emotions get into the mix to create a toxic environment that isn’t ideal for reaching any of your goals or enjoying any of the money that you’re working so hard to earn. Being smart about working together to budget your finances early and often is important. This is especially true since money is the leading cause of stress in most marriages.
Related: The 31-Day Money Challenge
So, what can you do if you and your spouse can’t agree on a budget? Well, here are four tips to get you both on the same page when it comes to spending.
Bring in a Third Party
It may be time to consult with a financial planner or budgeting expert if you and your spouse have been going around in circles when it comes to settling on a budget.
Getting the help of a professional who specializes in creating budgets can bring in a new perspective. In addition, it can prevent the issue of one spouse feeling attacked or judged by their partner. A professional will be able to bring a neutral, balanced approach to the table that simply offers the best options for your financial standing.
Use Visual Tools
One of the biggest roadblocks to creating a good budget is that people don’t really know where their money goes.
It can be hard to convince your spouse to change spending habits if they can’t visualize how much money is really going toward certain purchases. This is why using a program that breaks down your spending each month and provides a visual graph of the areas where money goes can be a big help. A visual guide can serve as a great starting point for a real conversation. You can work as a team to adjust your habits to balance out any unnecessary purchases that are eating away at your monthly budget.
Tools like Mint and YNAB offer easy ways for couples to collaborate on viewing their spending habits and sticking to budgets.
Related: How Can Couples Budget When One Person Is Self-Employed?
Make Your Budget Temporary
Your spouse may not want to commit to being locked into a long-term budget. They may feel stifled by being forced to restrict spending or do the same things every month.
However, there’s a good chance that your spouse might have a change of heart once a successful budget starts putting more money in your bank account. Seeing that money pay off small debts quickly and help you reach financial goals as a family will be encouraging. The problem is just getting the ball rolling.
You can reach a compromise by asking your spouse to stick to a new budget for a trial period. Ask them to live by a specific budget for anywhere between three months and six months to see how it works for your family.
Let them know that they can go back to their old spending habits after the trial period is over — if they must — without any complaints from you. However, the strides you’ve made financially during the trial period may just inspire everyone in your family to stick to practicing better spending habits.
Learn More About A Bare Bones Budget
Keep Collaborating
It can be tempting to stop collaborating on financial matters when communication breaks down between you and your spouse. Some couples may be tempted to simply allow one person to handle all of the finances or run their bank accounts independently.
Neither of those options will help you get where you want to be if your goal is to create a solid family budget.
Both spouses should have equal control over financial decisions. Joint responsibility over decision-making should be your strategy, even if one spouse makes a significantly higher income than the other. Allowing one person to control all of the financial decisions for your household simply because they make more money can lead to resentment that could result in bad spending habits.
Related: How to Live on a Budget with 4 Valuable Lessons
Even when it’s tough, try to agree on a few of the basics on your spending plan. For instance, agree what you’ll spend on a certain problem area. Then, go from there. And stay in communication. Consider setting up a weekly or monthly budget meeting at a non-stressful time. Then, you can have the conversations you need to have on a regular, ongoing basis.
Topics: BudgetThe post 4 Steps to Take When You and Your Spouse Don’t Agree On Spending Habits appeared first on The Dough Roller.
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Tuesday, July 25, 2017
August Swimming Events Open to All!
We have two awesome swimming events coming to the Canyonview in August, come participate or check them out!
UCSD Masters Midnite Madness!
Coming to the Canyonview Aquatics Center once again is one of most interesting and fun events for all swimmers….yes, it’s Midnite Madness. This year, it’s on Saturday, August 19th from 10:30pm to midnite (yawn…). This is a two-person team event, where the teams compete in ‘interesting’ & ‘different’ water challenges in the pool. The top 5 teams are chosen to face off in the final event, with awards going to the top three teams.
Through it all, Sickie will be serving smoothies, to help soothe the savage beast inside of each contestant. Fun for all. If you’re awake…what else are ya doin?
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SWIM 24 Challenge
On the weekend of August 26th & 27th, more than 20, 12 person relay teams will once again be swimming for 24 hours to raise awareness and funds for swimming lessons for low income kids and the San Diego Junior Lifeguard Association. This event has the air of a circus, and in the middle of the night, the atmosphere of a silent movie. Participate on a team (swim24.org), or come in to watch and donate to the cause. Everything is happening at the UCSD Canyonview Aquatics Center…swim for life!
Questions? Email Sickie at sickie@ucsd.edu
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The Andrew Experiment, Part 2: How to Become a Millionaire By Age 40
A few months ago, we published the first installment of “The Andrew Experiment.” This was a case study of Andrew, a Dough Roller reader and listener who was feeling overwhelmed by the process of investing and starting to build wealth.
The purpose of the experiment was to test my hypothesis: With the right coaching, any randomly selected person with enough interest to regularly read/listen to Dough Roller could be taught to overcome the overwhelm associated with managing their own finances. They could be coached to develop an effective wealth building process and become a competent DIY investor. And they could do it all in a short period of time.
Now that it’s been a little while, let’s check in with Andrew. How do you think he’s done?
Starting With Better Questions
In our first installment, we discussed establishing Andrew’s true financial goals (in conjunction with his fiancée). I challenged Andrew to answer two questions related to his original goal of becoming a millionaire by age 40:
- Why did he want to be a millionaire by age 40?
- What does being a millionaire by age 40 mean to him?
Andrew pondered these questions and had some long discussions with his fiancée. He admitted they really didn’t know what they wanted for their future. He and his future wife both enjoy their jobs and are in rewarding careers. Neither currently has a desire to retire early.
However, they acknowledge that work and life situations can change quickly. At some point, they want to start a family. This is why they want a plan that allows for many future options.
Related: How I Reached Financial Independence By Age 40
The couple felt that building wealth would provide them with the flexibility to make choices in the future. Being a millionaire by age 40, while not a magical dollar amount or time frame, would provide a lot of future financial flexibility. It was also a measurable benchmark to start working towards.
I agreed that while the goal had not changed at all, the reasoning behind it was stronger. It was no longer a couple of random and arbitrary numbers. The goal now had meaning, while being specific, measurable, and time-sensitive.
More Questions To Answer
Now that we had a meaningful goal, Andrew was eager to start building a portfolio focused on index investing. His primary questions were what assets to invest in and where to hold them.
I recommended we slow down again and ask a few more questions before going too far down this road.
- Does this investment strategy actually match his goals, temperament, and interests?
- Is it plausible and likely to work?
These questions may seem obvious and overly simplistic. However, many people think of investing options as limited to stocks and bonds. They sometimes assume that investing success is simply choosing the right stocks, asset classes, or specific funds.
This is because most people get their investing “education” from financial advisors and the investment industry — others who sell investment products or are paid a percentage of the assets that they manage. They therefore ignore the myriad other investment options that may be more appropriate to an individual’s goals.
It is one of the many conflicts of interest in traditional financial advice.
Investing in stocks and bonds is a great way to passively grow wealth which has already been accumulated. Over long periods of time, the power of compounding money at a return of 8-10% — as typically assumed with paper assets — can have massive effects.
However, becoming a millionaire in only 13 years, as is Andrew’s goal, is really not an investment problem. Building wealth quickly is primarily about developing a high savings rate.
Establishing Plausibility
As discussed in part 1, Andrew is starting in a relatively rare and enviable financial position for a 27 year-old. He has a high household income and minimal debt (aside from a reasonable mortgage). He also has substantial assets, due to good early saving and receiving inheritances from two different relatives.
While avoiding specific asset and income numbers to respect Andrew’s privacy, I will share how we started due diligence with his investment process.
Given Andrew’s starting investment balance, he would roughly need to double his money twice in the next 13 years to achieve his goal of becoming a millionaire by age 40. This would require earning an annualized rate of return of approximately 12%.
Looking at historical stock returns, it is plausible that this could happen. However, it is highly unlikely given current high stock valuations and low interest rates. Vanguard founder, John Bogle, who is not known as an alarmist, predicts returns in the next decade of only 4-5% for stocks and closer to 3% for a balanced portfolio.
Andrew had started saving money prior to our meetings. At our first meeting, I challenged him to develop a system to budget and/or track spending. This allowed him to know how much he was saving and where he was spending.
Resource: How to Live on a Budget with 4 Valuable Lessons
Since then, he has brought his fiancée on board with his plans, and together they have begun tracking their spending. In doing so, they identified several areas of waste which have since been eliminated from their budget.
They also started to max out their tax-deferred savings into retirement funds to minimize their current year IRS bill, saving them thousands more in taxes. These simple changes substantially increased their savings rate, without sacrificing lifestyle.
If they simply maintain their current high savings rate for three years, combined with the assets with which they are already starting, they would be approaching a half million dollars by age 30. This means they would still have to double their money once in the next 10 years to achieve their goal.
Using the rule of 72 tells us that they would then have to earn an annualized rate of return of about 7.2% over the ensuing decade, if they never contributed another penny to their investments beyond the first three years. Given this information, achieving their goals through index investing seems like a more plausible — though still not certain — solution.
The Power of Saving
To further drive home the point of the impact of saving, we played with the numbers.
We calculated what would happen if Andrew’s and his fiancée’s current work situation and savings rate were sustained for the full 13 years, between ages 27 and 40.
This is conceivable, as they are both early in their careers and would expect pay increases over time. They are currently saving for their upcoming wedding and honeymoon within the year. They also recently made some expensive upgrades to improve a newly purchased home, including buying new windows. This money will all be freed up for other things, including increased saving in the future.
They could, through the brute force of saving, exceed the goal of being millionaires by age 40 without making any drastic changes to lifestyle or even having to earn a penny of investment income!
Learn More: Here’s How Much to Save (and How to Do It!)
Resetting Expectations For High Earners
Andrew — and many others like him, who are high earners — underestimate what is possible because they don’t pay attention to spending and fail to do simple math. When starting, Andrew thought that being a millionaire by age 40 was a bit of a stretch goal and wasn’t sure it was achievable. His primary reason for wanting these coaching sessions was to learn to invest, as he assumed that was the key to building wealth.
He had no idea what he was spending or where his money was going. Simply developing a plan to track spending, and then making a few minor adjustments that did not decrease quality of life, substantially increased his savings rate. This process also enabled him to determine how much he was saving, allowing for these elementary calculations.
Learning to invest is a very wise choice for Andrew or others like him. Due to his earning power and willingness to save, this decision is made a bit easier. It can also be worth millions of dollars in increased returns and decreased fees and taxes over a lifetime.
However, it puts the horse before the cart. Investing prowess only matters because he has the ability to earn and willingness to save first.
Resetting Expectations for Lower Earners or Smaller Savers
Many of you may be reading this and thinking, “This is all well and good for Andrew, but I am not starting with any nest egg. I have a much smaller income, or I am drowning in debt. What good is this information to me?”
This all comes back to our earlier points about asking better questions to get to better answers.
If you are only able to save small amounts of money right now, you too can build wealth quickly. However, you will need different or additional strategies, beyond those used by Andrew.
Like Andrew has done, you need to focus first on creating a wealth-building engine. This will give you the capital to invest. Without Andrew’s high income and head start in assets, you also may need a higher rate of return on investments than can be expected from stocks and bonds.
This can come in one or more of a variety of different strategies outside of, or before considering, traditional paper investments. These can include:
- Getting aggressive with paying off debt to free up money to save, which can then be further leveraged with tax savings.
- Making big changes to lower fixed expenses like housing, transportation, and food to drastically increase savings rate.
- Investing in education to get a better job, or investing in skills and/or equipment to start a business to dramatically increase income.
- Using creative strategies like “house hacking” or “side hustles,” which can address both sides of the savings rate equation by decreasing spending while simultaneously providing increased income.
- Using leveraged investments combined with sweat equity, as possible with mortgaged real estate, to provide dramatically higher returns than possible with paper investing.
Related: How to Earn Extra Income and Have More Fun With a Side Hustle
Is Investing Irrelevant?
I do not want to give the impression that learning to invest in paper assets is not useful and important.
As stated above, for someone with the same earning power and will to save that Andrew has, learning to invest wisely at a young age is likely the most lucrative financial decision he will ever make. It will literally be worth millions of dollars over a lifetime.
The take-home message of this installment of “The Andrew Experiment” is that before investing matters, we must find a way to create the capital to invest. Becoming a millionaire in 10-15 years is not fundamentally an investment problem. Therefore, it does not primarily require an investment solution.
Now that we have clearly established this point, we will begin to dive into developing an investing strategy. We will choose one that will allow Andrew to grow his wealth. In the end, it will enable his family the future lifestyle flexibility they desire.
In our next installment, we will discuss the processes we used to build Andrew’s investment portfolio and plan. I hope you’ll continue to follow along!
Topics: Personal FinanceThe post The Andrew Experiment, Part 2: How to Become a Millionaire By Age 40 appeared first on The Dough Roller.
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5 Decorating Tips for an Attic Bedroom Sanctuary
Attics are places that seem to be frozen in time, collecting dust and hiding forgotten family heirlooms. However, with some effort, it is possible to transform the underused space into a stylish, tranquil haven.
Image Source: Flickr
Below are 5 decorating tips for an attic bedroom sanctuary:
Using Sloped Ceilings Properly
Use sloped ceilings wisely. “Dormers are great for window seats, desks or reading nooks,” says Heron. “These types of activities don’t require ceiling height, so where things are constricted, they provide extra function to that space.”
If you’re short on storage, built-in shelving is another wise use of the space where a sloped ceiling meets the floor. Source: Houzz
Avoiding Overcrowding & Using Furniture
Speaking of furniture, since attics tend to be more cramped than other rooms you’ll want to avoid overstuffing your attic with bulky furniture. The fewer items you have, the better the flow will be. Choose furniture with a low profile since ceiling height could impede movement. Keep beds away from the lowest parts of the room so that nobody bumps their heads when getting in and out. Another issue with a converted attic is that you often lose storage space. This is a problem since you also want to limit the amount of furniture in the attic. The answer is to incorporate storage into the furniture you have. Beds that have drawers beneath them, ottomans that have interior storage, and other multi-purpose pieces of furniture will help you achieve this goal without swamping the space. Source: Blog.ClubFurniture
Picking Colors
The room paint is quite a challenge for the attic room. The reason behind this is simple, these kind of rooms have less walls and wide ceiling. It is important to do the paint work carefully so that you can make the room attractive. The trick is to use two different colours on the wall and the ceiling. Select white or neutral colour for the walls to make it bright. Source: HomeDecorXP
Making Use of a Ceiling Skylight
The attic is the perfect location for a skylight. Although it doesn’t strictly fall under the category of decorations, it’s a very practical project that will add to the appeal of your home. It will allow you to enjoy the great-looking night sky and cloud-gazing during the day right from the comfort of your new room. This will also save on electricity during the day as light will stream into your room and you won’t have to light up the place. There are many innovative options out there you can make use of during your projects. Source: ImproveNet
Choosing Window Treatments
The attic was now ready for the gangly youth, but there was an important detail that needed to be incorporated with Window treatments ideas! Neighbors who’d had their home redone recently told us, the best option to find large varieties of the most effortless and effective window dressings is online shopping. This would also save us professional consultation and installation fees. Going through the online options had our eyes popping! The variety was amazing, but we soon educated ourselves enough to narrow the options down to two – Window Shutters or Cellular Shades. Though the cellular shades were cheaper and provided exemplary insulation, we decided to get the Woodlore Plus Norman Shutters as we felt it would be a more resilient option for clumsy teenage hands. Source: ZebraBlinds
Contact:
Universal Blinds
601 – 1550 W. 10th Ave
Vancouver, V6J 1Z9
Canada
Phone: (604) 559-1988
The post 5 Decorating Tips for an Attic Bedroom Sanctuary appeared first on Universal Blinds, Shades & Shutters.
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Monday, July 24, 2017
Buying A Business? Better Ask the Right Questions Before Closing!
As one grows older, it is likely that they will eventually make some large purchases including, buying a house, purchasing an automobile, or taking out a loan for personal or professional reasons. Of all the purchases that one makes in … Continue reading
The post Buying A Business? Better Ask the Right Questions Before Closing! appeared first on Chicago CPA, Accountant, Tax, Audit, Small Business Accounting Services.
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Term vs Whole Life Insurance: What’s the Best Option for You?
Life insurance is one of the most important types of insurance you can buy. But right now, about 37 percent of American adults don’t have any life insurance coverage.
Why do so many skip out on this important insurance coverage? Many say they can’t afford it. And some may just be confused. These policies have more ins and outs than your typical property insurance policy. And the benefits may seem fuzzier and further off.
But life insurance is an essential way to protect your loved ones in the event of your death. And once you understand the types of coverage that are available, it’s really not that confusing.
Let’s break down the two basic types of life insurance: term and whole life. We’ll explain the differences between them, and the different variations within those two categories. Then, we’ll talk about which type of coverage might be best for your needs.
Term Life Insurance: A Set Amount for a Set Number of Years
A basic term life insurance comes with a set amount of coverage for a fixed number of years. Basic term life insurance policies come with fixed monthly or annual payments.
For instance, I could purchase a 20-year, $100,000 term life insurance policy from Haven Life for about $15 per month. As long as I pay that $15 per month for the next 20 years, my family would receive a check for $100,000 if I died any time in the next 20 years.
After 20 years, the policy expires. If I’m still alive, the insurance company keeps my premiums, and the death benefit goes away. But I could choose to renew the policy for another set term if I choose.
Related: How Long Should Your Life Insurance Term Be?
This is how a basic level term policy works, but there are some variations on this theme. Here’s a breakdown of different types of term life insurance you might see:
Types of Term Life Insurance
| Type of Insurance | Features |
|---|---|
| Level Term |
|
| Return of Premium Term |
|
| Annual Renewable Term |
|
| Decreasing Term |
|
| Increasing Term |
|
| Modified Term |
|
| Convertible Term |
|
| Type of Insurance | Features |
| Level Term |
|
| Return of Premium Term |
|
| Annual Renewable Term |
|
| Decreasing Term Insurance |
|
| Increasing Term Insurance |
|
| Modified Term |
|
| Convertible Term |
|
Whole Life Insurance: Death Benefits Plus Investments
Whole life insurance is actually a type of permanent life insurance.
This insurance doesn’t just have a death benefit. It also includes a savings component. This means you can maintain insurance for the rest of your life.
But it also means that premiums are more expensive, and these policies are more complicated.
Learn More: Should You Consider Permanent Life Insurance?
Each month when you pay your premium, part of the premium goes towards your straight-up guaranteed death benefit. The rest goes into an investment account, which the life insurance company invests on your behalf.
We’ll talk more in a minute about the pros and cons of this insurance approach. First, though, here are the different types of permanent life insurance you can buy:
Types of Permanent Life Insurance
| Type of Insurance | Features |
|---|---|
| Whole Life |
|
| Universal Life |
|
| Variable Life |
|
| Survivorship Life Insurance |
|
| Type of Insurance | Features |
| Whole Life |
|
| Universal Life |
|
| Variable Life |
|
| Survivorship Life Insurance |
|
Term vs. Whole Life Insurance: Which is Best for You?
Things get complicated when you add in all the types of each category of life insurance. But the main difference is this: term insurance is pure insurance, while permanent insurance is both insurance and an investment vehicle.
So, how does this play out in real life, and which option is best for your needs? Here’s what you need to know:
Term is Usually the Best Bet
Most people do need some form of life insurance coverage. Unless you are debt-free and have enough in savings to cover your end-of-life and funeral expenses, you need life insurance, even if you’re single with no children.
This type of insurance can keep your parents, other family members, or friends from bearing these costs should something happen to you unexpectedly. You can use a term life insurance search engine like Quotacy to find the best term life insurance rates online.
Resource: How Much Life Insurance Do You Really Need?
Term is typically best for people who are married and/or have children, too.
Let’s say you’re just starting your family. You want life insurance coverage that will ease your family’s burden should something happen to you before your children are grown and on their own.
So, why is term best for these situations? Why not opt for a whole life policy that sticks with you permanently? There are two reasons:
- Most people can self-insure in later years. Once you’re mostly debt-free and no longer financially responsible for children, you may not need life insurance any longer. A 20- to 30-year term will typically get you to this point. After this, you might carry just a small insurance policy to cover end-of-life and funeral expenses.
- Whole life is significantly more expensive. The lifetime coverage makes the insurance piece of the puzzle riskier for insurers. So they up the premiums. Plus, this type of insurance has the additional burden of the investment portion of your premiums.
This isn’t to say there’s never a place for whole life or other types of permanent life insurance. While it’s not the best option for most people, in some situations it is beneficial.
Let’s say you have a child who will never be financially self-sufficient due to disability. You want to be sure your child is provided for when you die, whether that’s in ten years or 40. You could pick up a 30-year term policy.
But what if you get cancer and become uninsurable during that term? You may not be able to get either a whole life or a term life policy then. Or your new policy could become extremely expensive.
This is where whole life insurance comes in. Once it’s clear your child will need a death benefit, regardless of when you pass away, a whole life policy might be in order. It will ensure that you’re covered for life, even if you become ineligible for a new life insurance policy.
Related: The Complete Guide to Life Insurance
Some financial planners also recommend permanent life insurance to offset estate taxes for your beneficiaries. But this should be one part of a comprehensive estate plan.
Term vs. Whole Life Insurance: An Example
To flesh this out, let’s look at the possibilities with term vs. permanent life insurance policies.
We’ll look at situations for Sam, a 35-year-old man in Colorado. Sam has two kids and a wife, and wants to be able to cover their debts and replace some of his income if he passes away. So, he gets life insurance quotes for $500,000 policies from State Farm.
Sam’s kids will be grown by the time he’s 55, so he decides to get a quote for a 20-year term policy. It costs $35/month. For comparison’s sake, he also looks at a whole life policy, which will cost $589/month.
Here’s how things might look for Sam, financially, in three separate situations:
Situation 1: Death in 10 Years
If Sam were to pass away exactly 10 years after he takes out one of these policies, here’s how the term vs. whole life policy will play out:
Term: Under this policy Sam will have paid $4,200 in premiums for his term life insurance policy. His family will receive a $500,000 benefit. So the net benefit of this policy is $495,800.
Whole Life: Under this policy, Sam will have paid $70,680. According to the graphic below, which is a snapshot of the sample policy paperwork, Sam’s total death benefit will be between $522,456 and $545,107. Why the variability?
Remember, the value of the cash value portion of the policy depends on how well State Farm’s investments perform.
So, the net benefit of this policy after ten years should be between $451,776 and $474,427. That’s significantly less than the benefit provided by the term policy.
Resource: How Much Life Insurance Does a Stay-at-Home Parent Need?
Situation 2: Death in 19 Years
What if Sam almost outlives his term policy? Let’s see what it looks like then:
Term: Under this policy, Sam will have paid $7,980 in premiums. His death benefit will still be $500,000. So, the net benefit is $492,020.
Whole Life: By now, Sam will have paid $134,292 in premiums. The total death benefit plus cash value should be between $561,332 and $624,396, again depending on performance. The net benefit is between $427,040 and $490,104.
Once again, the term policy wins out.
Situation 3: Outliving the Term Policy
So, what happens if Sam actually outlives his term policy? It’s simple: after 20 years, his policy is up.
He can get a new one, possibly. But his rates will likely be higher. At this point, Sam will have paid a total of $8,400 without getting a penny in return.
With the whole life policy, though, Sam’s death benefit and cash value will continue to grow as long as he pays the premiums.
Learn More: 6 Big Expenses You Will No Longer Have In Retirement
If he’s ready to self-insure after 20 years, he could cash in his whole life policy for a guaranteed cash value of $120,485.
If the policy has performed well, maybe he can get $150,000 or $175,000 for the policy. So, he might actually break even — or possibly get some money beyond what he paid in premiums over the 20-year period.
Sounds pretty good, right?
But here’s a catch: if Sam invests the premium difference each month for twenty years, he’ll likely outperform the high-fee cash value portion of his whole life insurance policy.
Investing the Difference
Let’s see what it might look like if Sam outlives his 20-year term policy, but invests the $554 per month he’s saved in premiums.
Using this simple calculator’s “End Amount” function, we’ll have Sam start with $0 but invest $554 per month for 20 years. We’ll say his average rate of return is 6%, which is fairly conservative.
At the end of 20 years, his investments will be worth $251,205. That’s significantly more than the potential cash value of his whole life insurance policy!
This is why most people should purchase term life insurance instead of the wildly more expensive whole life insurance. Even if you don’t invest the full premium difference, you can likely out-earn a whole life policy’s cash value fairly easily.
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What About Other Situations?
What if Sam has a 20-year term life insurance policy, but then an accident leaves one of his children wheelchair-bound?
He wants to be sure he can provide for this child for the rest of her life, no matter how long he lives. In this case, Sam could convert his term policy to a whole life policy, pay the higher premiums, and gain some peace of mind.
Again, there are other situations that might also call for a whole life insurance policy. If you’re concerned about taxes on a large estate, it’s worth discussing this type of policy with your financial planner.
Topics: Life InsuranceThe post Term vs Whole Life Insurance: What’s the Best Option for You? appeared first on The Dough Roller.
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