What up, what up!!

Stumbled across my man Rob Wilson’s Insta feed this morning, and now want to share ALL HIS VIDEOS with you here!! They’re so good!!

But I’ll refrain from blowing up your inbox, and instead just share my two favorites with you today ;) But be sure to check out his feed afterwards as it’s legit!!

If he sounds familiar, it’s because we’ve featured him here on the blog before, as well as on my old podcast – The M.O.N.E.Y. Show – remember that one?* Here are the links:

• One-on-One with “Hip Hop’s Financial Advisor” (blog post)
• Hip-Hop’s Financial Advisor Spills Details on Managing Celebrity Money (podcast)

Now take it away, Rob!! Thanks for letting me re-share these here

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5 Things I’d Never Do As a Financial Advisor

[Click to watch]

Here’s the transcript, along with my thoughts:

#1. I would never leave my 401(k) at my old job once I left and got a position at a new company

I don’t want my hard earned money sitting in some account that I’m not going to pay attention to, that’s also limited by the short menu of mutual funds that I can invest in. In that situation, I would always roll that account over into an IRA where I had much more control over the account, and the entire investing universe of individual stocks, bonds, mutual funds, ETFs, and options were all available to me and right at my fingertips.

[J$: Yes yes yes!! Not only does it give more control over everything, but it also helps with *keeping track* of it all too! What’s easier/more fun to do: monitoring 3 accounts with 401(k) funds, or just 1? It might be a bit annoying to do (paperwork and all), but it’s def. worth the one-time hassle. (And if you prefer to stay with 401(k)s over IRAs, you can still roll it over into your current 401(k) if it’s better…)]

#2. I would never invest in penny stocks

Being into penny stocks isn’t even investing, it’s gambling. And if you’re going to do that I’d much rather you buy a plane ticket, go to Vegas, have a nice dinner, and also go see a nice show because you’d have much more fun doing that than by losing all the money that you’re bound to lose by investing in penny socks.

[J$: Hahaha… agreed. Some people are good at it and have managed to come away on top, but for the majority of us I wouldn’t even TRY going down that path… So many other ways to win big, with much less risk!]

#3. I would never give a potential employer my salary history or my salary requirement

Look, what I made in the past has absolutely no bearing on what a potential employer should offer me today. And quite frankly, asking that question is why women and minorities in particular get stuck in this vicious cycle of wage discrimination. Now, the good news is that asking that question has been banned in 21 states, but just in case you live in a state where they can still ask that question, don’t answer it.

[J$: Didn’t know about any of this!! So helpful!!]

#4. I would never go through life and not have an estate plan

Look, I’ve seen families absolutely ripped apart because there was no directive on how they wanted the estate to be divvied up. I’ve also seen some ugly custody battles when something unfortunately happened to both parents, and they didn’t leave proper instructions as to who they wanted to care for their children if something happened to them. And of course, we’ve all seen the many Go Fund Me campaigns that occur when people don’t have adequate life insurance. So look, if you care for your family as much as you say you do, then getting your affairs in order is of utmost importance. And that means you have to have an estate plan.

[J$: I agree of course, having recently gotten our own wills and trust stuff set up, however I wouldn’t give yourself too much grief if it’s still on your list and you haven’t gotten to it yet. Make sure you do eventually, but if you still don’t have your career/savings/investments down (and/or don’t even have any assets or kids to begin with) you’re probably safe to wait until you’re more solid. We don’t live in perfect worlds unfortunately, so we gotta cut ourselves some slack :)]

#5. I would never not have multiple streams of income

You might feel like you have the best job in the world, but anytime someone else is signing your check, they can decide to stop signing it tomorrow. And even if you’re a business owner, you still want to have multiple streams because anytime you only have one source of income, whether that’s a salary from a job or your business income, you never know what can happen to it. During the pandemic, millions of businesses were shut down, and also lots of property owners couldn’t collect rent during the eviction moratorium. But at the same time that all this was happening, the stock market was hitting new all time highs. So for those folks that had an investment portfolio, they were able to use those gains to help them get to the other side.

[J$: Yup yup, again in a perfect world you’d have cash flying in from all over, but if you’re only able to manage just *one* right now, that’s okay too… Just keep working and doing your best and eventually you’ll get there!! And some *have* managed to come out just fine too btw by only focusing on one income – some even say it’s more powerful doing that than not giving it your all and tacking on side hustles on the side! So just keep doing your best and you’ll find that sweet spot. (A way to cheat in this too is to just *invest* your money as Rob points out which requires no consistent effort on your behalf – that’s mainly what I do now :) So if you are “just” a one-jobber you can at least take advantage of that and get the win!)]

So yeah – solid tips overall!

Here’s the next vid I liked, that all you stock pickers might find helpful… I didn’t know about any of these, perhaps because I’m an Index Snob?! ;)

******

[Watch video here]

5 Secret Websites That Will Help You Become a Better Investor

1. Whale Wisdom — allows you to see exactly what famous investors like Warren Buffett or Ray Dalio are putting their money in inside of their real life portfolios.
2. Smart Insider — allows you to see exactly what investments members of congress are buying and selling, so you too can learn how to become a great investor by totally not using tax-payer funded insider information.
3. Guru Focus – allows you to see when corporate insiders like founders, executives, and board members use their own money to buy or sell their company stock. Putting their money where their mouth is, so to speak.
4. Bar Chart – gives you access to tons of free investment tables, charts, and research so that you’ll always know the current pulse of the market.
5. Toggle.ai – leverages the power of algorithms and artificial intelligence to help you identify potentially awesome investment opportunities.

Great great stuff all around… Thanks again Rob!

If you’d like to see more, you can check out his Instagram feed here: @RobWilsonTV, or his recent book here: Secure The Bag.

Hope you learned something new! Do you follow any of those tips or sites above??

*The M.O.N.E.Y. Show is now known as the “Afford Anything” show, with Paula Pant. We co-hosted it back in 2016 and then I dipped out and she took the reigns over and has been KILLING it ever since… If you’d like to check out all the shows we did together – about 30 of them – you can find them here: eliteedgemoney.com/podcasts

[This post, 5 Things I’d Never Do as a Financial Advisor, was first published by J. Money on Elite Edge Money]

Bugger! I just found out my rental property in Texas needs a new roof!

There was a nasty hail storm last month that ripped through the area and smashed a bunch of cars and houses — unfortunately, my rental property was one of them.

The good news is that nobody was hurt, and insurance will cover the replacement roof cost (~$10k). The bad news is I still have to pay the insurance deductible (~$2k) and figure out the claims process and stuff.

Surprisingly, dealing with insurance isn’t as bad as I thought it was going to be. Since it’s my first time filing a claim like this, I thought I’d share some notes, numbers, and things I’m learning along the way. This might give any new and aspiring property investors out there some insight into what it’s like being a landlord.

But before we get to the boring stuff, here are some fun facts I just learned while googling hail storms. Did you know…?

• There were 4,611 hail storm events last year (2020) in the US.
• 601 of them were in Texas! By far the most of any other U.S. state.
• ALL these events had hailstone balls larger than 1 inch in diameter!
• About 24 people each year are injured and go to hospital for hail hitting them Ouch!
• And sadly, 4 people have actually been killed by hail in the last 20 years.
• The world record for the largest hailstorm was in 2010 near Vivian, South Dakota, where 8-inch diameter (~20 cm) hailstones fell from the sky! Daaaaang!

This is the hail that hit my rental. The biggest stones were about the size of golf balls!

When Disaster Strikes Your Rental Roof, What Happens Next?

My property manager emailed me and said there had been a huge storm in town the night prior. Whenever this happens, she gets a million phone calls from every roofing company in town asking if they can go out and assess all of the roofs of the properties she manages.

Because roof assessments are free (or at least that’s how it was offered to me), I was glad to have someone go out to see if there was any damage at my duplex.

It’s pretty cool actually … roofing companies these days use drones that fly over the house with cameras to look for damage. They can zoom in, take photos, and sometimes even provide a repair quote the same day.

For my place, they determined that a whole roof replacement was necessary. There were no massive holes or water leaks into the house (thankfully), but the shingles were bashed so hard by the hail they need to be replaced.

How Insurance Claims Work for Your Rental Property

I’m no expert in this area. (And actually this is a great side note for new real estate investors — It’s OK if you have no clue what you’re doing… Owning rental properties is mostly about figuring stuff out as you go along. As long as you ask good questions and are willing to learn, every problem you come across is figure-out-able.)

Clueless, I called the 1-800 number for my insurance company (Travelers), and asked about the claims process. Here’s a simplified overview:

• They ask basic info about the disaster.
• 24 hours later, a claims person gets assigned.
• The claims person schedules a visit to the property.
• They write up a report and tell you how much $$ they think the damage will cost.
• They send you a check for that amount (minus deductible and stuff I’ll explain in a bit).
• You use that money to fix whatever happened.
• If the repair cost ends up being higher, you call back and ask for more money. If not, you’re all good.

Pretty simple, right?

How Much Insurance Will Pay for My Roof Replacement

My claims dude also used a drone to assess the roof. He emailed me this assessment and summary afterward, and also called me to walk through and explain it:

The depreciation line item can be a little confusing. But really all you need to know is that it is “recoverable.” Meaning it still gets paid to you, but only after you go ahead and complete all the repairs. The adjuster posted me a check for $3,810, and I’ll get an additional $3,673 after the roof is fixed.

All in all, my total out-of-pocket cost should be $2,310 (which is exactly my policy deductible). Kind of a bummer that I’m out 2 grand, but it only puts a small dent in my $15k+ rental property emergency fund!

What to Ask Your Insurance Company If You’re Thinking About Filing a Claim on Your Rental Property

Since this is my first property insurance claim, I took the opportunity to interrogate my claims guy and ask him as many questions as possible. Here are the main things I asked, as well as his responses:

How bad is the roof damage? Do I need to replace it right now?  (I asked this to understand if there was a time limit in which I needed to make the repair). He said there are no holes or leaks into the units, and advised me to hold off on making the repair until *after hail season is ove.r* Great advice! He said there is actually no time limit on my policy to make a repair.

If I file a claim, will my insurance premium go up next year?  Unlike car insurance, property insurance typically doesn’t go up for your individual policy after a single claim. Property insurance rates are more tied to the general area and fluctuate based on how many claims are filed in the whole region. (This is nice to hear, but honestly Texas and my small town have been getting hammered the past 12 months with disasters. My insurance premiums will go up regardless, so I don’t really know why I even asked this!)

What if the new roof costs like $20k, instead of $10k? If my new roofing quotes come in any higher than the estimate I was given, I can submit them to Travelers, and they’ll adjust my claim. The max I will pay out of pocket should be my deductible — $2,310.

What if the new roof cost is *lower* than the estimate? If I can repair the roof for less than the $10k, Travelers will actually lower my second reimbursement. It doesn’t matter how low or high the repair cost is — I will be out of pocket $2,310.

Can I choose the roofing company? Yep, I get to handle the repair and choose the company to work with. (Well, actually my property manager will do this).

Is the new roof cost tax-deductible? And do I pay income tax on the insurance reimbursement? THIS is such an interesting grey area… I asked the claims person, who quickly said I should consult a tax professional. But, from my initial research online it looks like a) I do *not* pay income taxes on the $7k reimbursement checks, and b) I *can* claim my new roof repair as a deduction for property expense. Seems shady — I’ve got a call with my tax guy this weekend anyway and I’ll bring it up.

Whelp, that’s it for now! Happy to answer any questions if you have any, or if any of you experienced real estate peeps have advice for me on how to handle this insurance crap better – I’m all ears!

TLDR Summary:

• Hail storm smashed my rental property roof! Booo.
• But property insurance is covering the repair. Woohoo!
• I’m only out ~$2,300 (my policy deductible)
• Waiting until Aug to do the repair (when hail season is over)
• Reminder to all: Owning a rental property is not really “passive income” because it actually requires work/effort to maintain.

Have a great week!
– Joel

[This post, How to File an Insurance Claim on a Rental Property, was first published by 5am Joel on Elite Edge Money]

[Many FIRE walkers (including myself!) underestimate the cost of healthcare in retirement. It could be because we don’t track our costs accurately, don’t monitor our employer contributions, or forget to account for healthcare completely! Guest authors The Dragons on FIRE explain in today’s post the importance of tracking, budgeting, and planning for healthcare, as well as how to include it in your FIRE strategy. This is advice I wish I had read 5 years ago!]

Open enrollment season is upon us. Time to sign up for 2021 health insurance at work or online at healthcare.gov if you buy it on your own. Most people pick a plan and then don’t think about it until next year, or when they have to use it. 

I retired early last year at the age of 43 and my wife Dragon Gal retired three years ago at the age of 40. 

In 2011, I was diagnosed with leukemia. I have been in remission for the last 5 years and was able to stop my daily medication last year. As a cancer survivor, healthcare costs were the number one issue preventing me from early retirement. I had to really understand all the costs I was paying and make sure I had sufficient savings to cover all of those costs. 

Common FIRE Problem: Not Accounting For Health Insurance Premiums

One cost that I really had to pay attention to was the insurance premiums.

According to the Kaiser Family Foundation (KFF), employer sponsored insurance covers approximately 157 million people. On average, workers pay 17% of the cost of premiums for single health coverage ($1,243 per year) and 27% of the cost of the premiums for family health coverage ($5,588 per year). 

For those of us with workplace insurance, the cost of premiums is usually deducted from our paycheck. Although this is convenient from a net pay standpoint, it makes it easy to ignore the cost in our expense tracking or budgets.  

Over the years of reading finance blogs, I noticed that many people in the FI community do NOT include healthcare premiums in their expenses.

As finance nerds, we are known to track every single penny that goes out the door. For health care, we track our doctor visits and prescription drugs costs. So why wouldn’t we do the same thing for health insurance premiums?

Why Track Health Insurance Premiums?                             

Not including premiums in your expense reports results in a skewed view of what you pay for healthcare. Here are reasons it is important to track your health insurance premiums:

• It is a real expense

By definition, your healthcare premiums are a real expense. But because most of us don’t swipe a credit card, write a check, or pay cash for it, we overlook this cost because it’s mostly deducted from out paychecks of included in our employer health benefits.

• Employment situations can change

You might say that you don’t need to track health insurance premiums because the costs are low or you never want to quit your job so you will always have employer provided health insurance. But the reality is, there is no guarantee your situation will remain constant.

At the beginning of 2017, we knew nothing about the FIRE movement. Dragon Gal was working and we both had insurance provided by our employers. The combined cost of our portion of the premiums was about $150 per month. After Dragon Gal retired that summer, I put her on my workplace insurance. This increased our monthly premiums by over 3 times! Not only were we not receiving her paycheck, my net paycheck was now smaller because of the increased insurance costs (to the tune of almost $3,500 per year). 

• Having non-employer sponsored insurance

If you didn’t get insurance from your job, you would most likely budget and track the costs of the plans you have to pay for on your own (which would probably be much higher than the premiums you pay through your workplace insurance). So why track the costs you pay on your own, but not the costs you pay that are netted from your paycheck? Self-employed, freelancers, or contract workers are all people that would need to pay for insurance on their own, and would most likely be tracking the expense.

• Implications for financial independence and early retirement

People who don’t track costs for premiums are underestimating their FI number or retirement savings.

When I was still working, we paid roughly $500 per month in premiums, via my workplace insurance. Now we are paying $1,100 per month in premiums: Dragon Gal has an insurance plan on the marketplace (Obamacare) and I have COBRA coverage through my former employer.

If I didn’t include any of those costs in my budget, using the 4% rule of Financial Independence, I would be understating my FI number by $330,000!

 $1,100 monthly expense*12 = $13,200 annual expense

$13,200* 25 = $330,000

Likewise, if I ignored the $500 per month we paid last year with my employer insurance, my early retirement budget would show the full increase of $13,200 per year. By including the premiums from my work insurance, I was preparing myself for the costs when I needed to buy insurance on our own. Early Retirement didn’t mean a $13,200 increase per year; it only meant a $7,200 increase per year. That is still a large increase, but seeing a $7,200 increase is much more manageable than a $13,200 annual increase.

Without tracking any of the premiums, I would have underestimated our retirement savings goal by $330k. But by tracking the premiums I paid through my job, I was only understating our FI number by $180k ($7,200*25).

How We Tracked Our Premium Costs

For most of my working career, I did not track our health insurance premiums. But when I found out about Financial Independence in 2017, I changed that. 

I track all of our investments and expenses in Quicken. In the past, I would enter the net amount of the paychecks we received. Once I decided to track health insurance premiums, I started to gross up the income for the premium cost, and then input the premium as an expense.

A $5,000 net paycheck would be adjusted to $5,500 gross pay and an expense of $500 would be deducted for health care premiums. Pre-2017 I would just input a total net salary of $5,000. This was a simple change that added just a few extra seconds to the task of inputting my paycheck. But now I had the additional costs included in my tracking. I could then incorporate this cost into my budget.

Focus on the Total Cost of Healthcare       

It is tempting to just pick the health plan with the lowest premiums, but that may mean you pay more in total costs when you need to use the services (go to the doctor or hospital). 

If you use a lot of services, it might make sense to get a health plan with higher premiums and a lower out of pocket max.  

Let’s take a look at two plans my former employer offered (numbers rounded):

Healthcare Scenario 1: Doctor Visits Only

In Plan A, if I have one visit to the doctor (aside from the annual physical, which is free), my total annual cost would be $1,200 for premiums and $25 for the doctor visit, or $1,225 total. In Plan B, the same costs would only be $750 total ($600 premium plus $150 doctor visit).

Plan B is cheaper in total. But if I wasn’t including the premiums in my expense tracking, I would show that I spent more in costs with Plan B ($150 for the doctor visit versus only $25 for the doctor visit in Plan A).        

As a cancer survivor, I have learned to look at the total cost of health care when building my budget (premiums plus out of pocket spend). I know that I need to see my oncologist for lab work at least two or three times a year. Because I will need more services, I am more likely to choose a plan with a higher premium, but lower out of pocket costs.

Now let’s look at the cost of lab work for the two plans:

Healthcare Scenario 2: Lab Work

Although Plan A has higher premiums, the labs are free and thus the total cost of premiums and labs is significantly lower than Plan B.

Based on my health care needs, although Plan A has higher premiums, I would spend a lot less money in total than with Plan B. On the flip side, Dragon Gal does not use the doctor as much as I do. So Plan B would make more sense for her. 

See how this can be confusing if you don’t track the premium costs? Your total costs can vary depending on what your needs are. So it is important to look at all health care costs in your budgeting.

Estimating Non-Workplace Health Insurance

The premiums you pay for workplace insurance are most likely not the full amount. But it’s still important to think about the full amount in terms of understanding your FI number or if you have a change in job situation.

Here are a couple of ways to estimate the cost of non-workplace health insurance premiums:

• COBRA

In most cases, if you leave your job, you are entitled to 18 months of company-provided health insurance through COBRA continuation coverage. But you must pay 100% of the premiums plus a 2% administrative fee. For Plan A above, the $100 monthly copay is almost $700 per month under COBRA. For the $500 per month plan that Dragon Gal and I had, COBRA is about $1,600 per month.

COBRA is expensive! But it still might offer better health coverage than plans in the open market. Although I might find cheaper premiums in the open marketplace, I would spend significantly more to go to the doctor or have lab work done. So those high COBRA premiums made sense to me. 

If you don’t know the price of COBRA continuation coverage, using estimates from the KFF survey, assume your single health coverage is 15% of the total (so take your premium and divide by 0.15) and assume your family health coverage is 30% of the total premium (take the premium and divide by 0.30).

• Healthcare.gov or ehealthinsurance.com

Healthcare.gov is home to the health insurance marketplace (Obamacare). If your state has its own marketplace, this website will direct you to your state specific site. You can find prices of plans and see which doctors and hospitals are in-network.

Ehealthinsurance.com is an aggregator site that shows prices for Obamacare as well as short-term plans and small business plans.

Regardless of the ways you estimate health care cost, don’t just look at the total health insurance premium costs; you need to also look at the cost of utilizing services. One easy way is to take the annual premium costs and add in the out of pocket maximum. This is the most you would pay for health care in a year. 

Insurance as Part of “The Big 3” Expenses

We all think of housing, transportation, and food as the big 3 expenses. But by including your health care premiums, insurance costs might actually become part of your big 3. 

While I was working, the $500 in monthly insurance premiums ($6,000 yearly) was more than our food expenses for our family of two (groceries and restaurants, including travel). This cost was also more than the cost to own and maintain our two Toyota Prius cars. (We don’t have any more car loan payments.) Only our housing costs and travel expenses (we like to travel) were more than the costs of the workplace health insurance premiums. 

In 2020, under our new early retirement insurance, the $1,100 per month in premiums will be our largest expense for the year. 

Typically, we like to know what our big 3 expenses are so we can find ways to shave our costs. But unlike food, housing, or transportation, you probably feel you have less control over healthcare costs. However, by doing a little research on the plan options, you can have some control over the costs. 

Based on how you’ve used healthcare historically, you can think about how to optimize your costs. For me, it makes sense to pay higher premiums in exchange for lower out of pocket costs. Dragon Gal rarely goes to the doctor outside of her annual checkup, so it makes sense for her to pay lower premiums and higher out of pocket costs. We are essentially using her insurance to cover her in case of emergencies. 

Final Thoughts on Budgeting for Healthcare

As you go through the open enrollment season at work or think about your budget for 2021, include health care premiums as one of your expenses listed in your budget. Just because your health premiums come directly out of your paycheck, it doesn’t mean they’re not a cost you aren’t incurring.

Since I started tracking health insurance premiums and researching our plan options, I have become more aware of our true health care cost. This awareness gave me a realistic view of our FI number and allowed us to be better prepared as early retirees. 

With the pandemic, we are in an increasingly volatile job market. I think it is important for everyone to understand what your health care costs may be without employer sponsored insurance. Hopefully, you don’t have to think about that situation, but by doing a little research, you can be better prepared for any curveballs that may come your way.

Dragon Guy retired in 2019 at the age of 43 after a 20-year career in finance. He is a 9-year cancer survivor, having been diagnosed with leukemia in 2011. He has been married to Dragon Gal for over 18 years. Together, they blog at The Dragons on FIRE, where they write about their early retirement experiences, living with cancer, and traveling around the world.

[This post, Budgeting for Healthcare in Early Retirement, was first published by Guest Author on Elite Edge Money]

Welp friends, we finally checked off the last major part of managing our finances!

We got a will and trust!!

And it only took me 10 years to do DESPITE BEING A MONEY BLOGGER! ;)

(Just keep that in mind the next time you’re feeling bad about procrastinating yourself, lol…)

I’d love to say it was super easy to do and we breezed through it, but it was actually a b*tch – not gonna lie. Not only to first *find* someone we liked and was affordable enough to help us with it, but also just to go through the million and one questions you have to think about – and make decisions on – before even STARTING the trust.

Things like, who will take care of our kids if we both die? Who should *manage* our trust for us that we can count on? When should we disperse the funds to our kids, and at what %’s and ages? What do we want to happen to us if we’re on life support and can’t make any decisions? What about our bodies once we’re gone?

Now some of those questions don’t relate if you’re just going with the will and not doing some of the other paperwork that’s related (power of attorney, advanced medical directive, etc), but since we finally committed to sitting down and doing this thing, we figured why not knock it all out at the same time and be done with it once and for all?

Took us about 4 months from the time we first met with our lawyer to having everything signed and in our hands, but now we’re done and it feels SO GOOD!! Wish we would have done it sooner, of course, but hey, not all of us are perfect… At least we got it now!!

Here’s everything we now have filed away:

(Copies in our safe, copies with our executor, and copies at our lawyer’s place)

• Will – for me
• Will – for Mrs.
• Power of Attorney – me
• Power of Attorney – Mrs.
• Advanced Medical Directive – me
• Advanced Medical Directive – Mrs.
• Family Trust (Revocable Living Trust)

Total costs: Just under $2,500

Which may look expensive, but compared to the other estimates we got when shopping around ($4,000-$10,000!) it was a steal at first sight. Which they are able to offer because they’re a small firm working out of their homes without much overhead! And the fact they were LOCAL and wouldn’t charge me by the minute for all my questions was the fat cherry on top. Because I had a lot of questions :)

But it’s all wrapped up now, and we move onto the 2nd part of the process – which is actually PUTTING THINGS INTO THE TRUST! So they’re safe and avoid probate!

Here’s a good article on what to watch for and *not* put in them (at least revocable trusts like ours), as well as some other articles that explain the ins and outs of wills and trusts more:

• Assets That Don’t Belong in a Revocable Trust
• Will vs. Living Trust: What’s Best for You?
• Should You Set up a Revocable Living Trust?

TL;DR on the trust benefits which sold us:

• Helps you avoid probate on your assets
• Let’s you plan for the possibility of your own incapacity
• Helps you control what happens to your property once you’re gone
• Helps prevent your financial affairs from becoming a matter of public record

All of which, of course, is good to talk over with your accountant if you have one, not only to make sure it aligns up well with your particular situation, but also to cross reference the advice your estate lawyer might have as I found their opinions can vary greatly depending on the angle they’re looking at.

(For example: our lawyer said to get an EIN for our trust once it’s set up to start being reported on, whereas our accountant said NOT to and to use my social security # instead. Then when we die, the *executor* of the trust establishes the tax id and it becomes an official entity at that point – thereby avoiding major tax hits along the way!)

Here’s what’ll be in our trust as soon as I finish creating all the new accounts for it… (they require new ones under the trust’s name/details vs our personal ones):

• Our house (deed needs to be changed)
• Two bank accounts (one checking, one savings – where we’ll hold a bulk of our savings)
• A non-retirement brokerage account (starting up a new one again for legacy $$$!)

The rest of our assets like our IRAs and other retirement accounts – and even our life insurance policies – won’t be tied to it for tax reasons… They’ll all flow into us and then we can move over any of the $$$ into our trust as needed (or when we die). Though it is good to go over all the *beneficiaries* you have set up everywhere to make sure they’re still accurate! I found a number of places I needed to update as I went down each of them one by one… Which was also not a fun process to do, haha…

But we’re all good now, baby!! And I have to say – it feels great! Between that and our minivan this year, I’m really feeling like an adult over here! Lol…

Now to just see if I can out-live our wills ;)

Hope some of this helps y’all if you’ve been wanting to get this process going as well… Again, it’s not the easiest, but if you allow yourself a few months to do it like we did it does make it a tiny bit less painful… See if you can beat me and wrap it up within 10 years of needing this stuff! ;)

Questions/comments/concerns, drop ’em below and will do my best to answer…

XOXO

[This post, I can officially die now… ;), was first published by J. Money on Elite Edge Money]

[Good morning friends!! Here’s an idea to consider if you’re frustrated with all the health insurance options out there! I’d never heard of direct primary care before, but a reader – and doctor – of the blog just emailed this over and thought it was worth re-sharing in case it’s a perfect fit for you. Just make sure to do some due diligence first as I’m sure there are some caveats in there :) You’ll find a map of DPCs you can search through to see if there’s any around you at the bottom of the post… Thanks for shedding light on this, Rachel! And glad you found your dream job!]

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J. Money!

I love your blog and devotedly update my net worth every month.

But you have complained about health insurance one too many times, my friend. You need to discover Direct Primary Care!

So I’m a family doctor, and we docs hate health insurance, too. Doctors end up working for the insurance company instead of for their patient – the insurance company mandates how much they can get paid per visit, and so docs have to see more and more patients per hour to make ends meet. Insurance makes up all these rules about coding the visits and diagnoses and procedures, and you only get paid so much for each of them, and you have to check off rather arbitrary requirements in each note that you write to get paid at different levels.

And then there’s all the paperwork you have to fill out and go back and forth on for prior-authorizations – basically the doctor has decided on a plan of treatment, but if the insurance company thinks it’s too expensive, the doc has to justify it to them. Because that is exactly how we love to spend our time, writing up paperwork to justify our plan of care to folks that have never been to med school!

I served in the Air Force for the past 8 years and didn’t have to deal with any of this (Tricare has different struggles, but at least I could get patients the care they needed without making them broke!). So when it was time for me to leave Active Duty, the last thing I wanted was to become suicidal over my next job (burnout rates for physicians are awful right now! Doctors hate their jobs!).

I love being a doctor and didn’t want to lose that passion, so I looked into my options. I specifically looked up the smartest doc I knew, who had retired from the Air Force, to see what he was doing now – and he was in a direct primary care practice.  Solution!

Direct primary care takes health insurance out of the transaction for your basic day-to-day medical care.  Rather like car insurance – you save your car insurance for expensive things, not for gas or oil changes that you expect. That helps keep car insurance at reasonable rates – we could do the same thing for health insurance.

You pay a monthly fee to have access to your doc, but then you get as much (or as little) care as you want/need. You still should have a high deductible health insurance in case of emergencies or accidents, but for most things, I can take care of you! I manage chronic conditions, treat skin problems, do biopsies, diagnose and treat sports injuries, inject joints, perform pap smears, help with pregnancy and breastfeeding problems, perform sports physicals and well child checks…

I do as much as I have ever been trained to do, and I love it!!!

I spend SO much more time seeing patients and reading up on how to care for them better, I write in my notes what I and my staff will find helpful for future reference (and DON’T have to stress about checking off the stupid little things that I have to in order to get a certain level of payment by health insurance).

We have cut out a TON of overhead because we don’t have so much paperwork to do for insurance. So we save money AND we save our patients money and we are all happier. Instead of having to have 2,000-3,000 patients to make ends meet, my goal is to have 600 (my boss/partner is already there, and has been doing this for the past decade, quite happily and successfully).

Can you imagine knowing 3,000 people and being in charge of their health?? That is just so many. 600 is a great number. And I can spend more time in every appointment (never less than 30 min), and always have open appointments for today or tomorrow if someone needs to get in fast.

Especially with all this covid madness, my patients are reaping the benefits! I’m keeping my patients at home as much as possible, doing a lot of visits over the phone or webcam, and we just called all our older patients individually to make sure they were doing OK. I just delivered some meds to a patient’s apartment yesterday to keep them home and safe. But my patients can call or email or text to reach me, 24/7, and I can talk them down from their worries and discuss how to best care for their families in this crazy time.

When it comes to $$: for young adults, my practice charges $60/month, older adults are $80/month.  Which might sound pricey, but compare that with the cost of being seen for cash by an urgent care (where one of my many side hustles is for now) is $140 at MINIMUM – labs or xrays or medicines or anything extra will just keep jumping that number up and up!

We have a bunch of medications in our office that we buy wholesale and give to our patients at (almost) cost. We have deals with local imaging companies and labs for much less expensive cash prices. And there’s the convenience – instead of going to the doctor’s office (and waiting forever…), then pharmacy (and waiting), and lab (and waiting), we do all that in our office – the doc sees you, we get your meds for you, and draw your blood all in house.

So next time you’re mad at health insurance, just know there’s another way!  I really hope that this is the healthcare of the future – it certainly makes sense to me.  I love my job and my patients and practicing medicine so much, and this is a great way to do it.

If you want more info, a lot of articles have been published about DPC lately, plus there’s our own web site and my little YouTube channel, and a map of DPCs across our nation:

• Our website: PineridgeFamilyMedicine.com
• YouTube channel: Pine Ridge Family Medicine
• Good article: Direct care practices perfectly positioned to help patients during coronavirus outbreak
• Map of DPCs: DPC Frontier Mapper

Sorry for the long email!  Hope it was helpful.  Stay healthy!

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Thanks Rachel! It was helpful!!

Anyone here ever try this option before??! What did you like/didn’t like about it?

Thankfully we have decent insurance coverage now through my wife’s gov’t job, but there were a stretch of years there where we were paying upwards of $1,000/mo and getting CRAP in return for it! I told her something like this seems great for those who are self-employed, and she wrote back saying,

“We’ve definitely got a lot of self-employed folks as patients. AND small businesses that can’t afford full health insurance for their employees, but want to offer SOMEthing to take care of their people. Which I LOVE!”

So take from this what you will!

Here’s a couple more articles on DPCs I found while doing a quick search. It’s def. a “thing!”

• GoodRx: A Patient’s Guide to Direct Primary Care
• Consumer Reports: Pros and Cons of Concierge Medical Care
• American Academy of Family Physicians: Direct Primary Care

[This post, Direct Primary Care (DPC) – A health insurance option worth looking into?, was first published by J. Money on Elite Edge Money]

Happppy Monday everyone!!

You’re in luck as I heard a Financial Fairy was going around granting people wishes today – free of charge! – but you could only pick one of two options…

Would you rather….

Have ALL your student loans completely wiped away?! (If you don’t have student loans, you can choose your mortgages/cars/credit card/etc)

– OR –

Get free healthcare from now until the end of your days?

I think I’d take the No Debt option and wipe out my $265,000’ish mortgage as that would free up $2,300/mo on the spot AND we could start enjoying the effects right away!, but wiping out a major concern like that in FIRE would be a helluva blessing too… Both in terms of the insurance itself, but also our own health – as we saw with my poor friend Agatha last week and what she’s now suffering through out of nowhere!! (NOT covered by health insurance, btw…)

And speaking of which – you guys have now donated over $2,000 (!) since Friday – THANK YOU SO MUCH!!! Cannot wait for her to check her fundraiser page and see the outpouring of love coming in from the community… She’s gonna be so thankful – and it’s all because of YOU!! :)

But back to this magical question – which of them would you pick? Freedom from DEBT or freedom from insurance costs/worries forever?!

Drop your answers below so we can all fantasize with you!

I’m not sure exactly *when* this fairy will be visiting us, but I do know it never hurts to put stuff out there in the world just in case ;)

Just don’t stop making moves while you’re waiting!

As Bruce Lee once put it,

“If you spend too much time thinking about a thing, you’ll never get it done.”

And Bruce Lee knows everything. So keep going!

******
PS: Shout out to LendEdu for inspiring this who recently put out a report that found that 40% of Americans would rather have the U.S. completely forgive all $1.61 trillion in student loan debt instead of implementing free universal health care, which was selected by 60% of respondents. Would your answer change here if it meant wiping out *everyone’s* student loans vs just your own?! (And conversely, giving EVERYONE universal healthcare for free as well as yourself?)

More fun Would You Rathers from over the years:

• Would you rather… Win $15,000 in dollar bills, or win $20,000 in quarters?
• Would you rather… Be rich 100 years ago, or average today?
• Would you rather… Have a salary of $50,000 where everyone around you only has $25,000 – OR – Make $100,000 but everyone around you makes $200,000?
• Would you rather… Be attractive as hell BUT you never make more than $30k a year for the rest of your life –  OR – you’re damn ugly BUT you’re as rich as Oprah Winfrey?

[This post, Would you rather have your student loan debt wiped away or FREE healthcare forever??, was first published by J. Money on Elite Edge Money]

Came across this test by WorkableWealth.com and thought it was a great exercise to do today :)

Are you better off right now than you were when the year started?

Answer these 6 questions:

1. Did you increase your net worth?
2. Did you reduce your debt?
3. Are you tracking your spending and keeping a budget?
4. Did you reach a savings goal?
5. Did you ask for and/or receive a pay increase, or take advantage of your company benefits in a way that allowed you to keep more money in your pocket?
6. Do you have the right insurance policies in place?

I scored positively in two of these, mildly on another two of them, and then negatively in the remaining two areas, haha… Mainly due to “owning” another house again, as well as the fact I prefer now to mainly only track our net worth over a budget :) But since our net worth went up pretty substantially this year, it’s safe to say we came out ahead overall so I’ll give ourselves an A+ here on this test.

How about you? Feeling good about how the year has gone so far? Anything surprising come up when answering these questions?

A good one to assess each and every year actually, as we close them out and get ready for fresh new starts :)

Here are my answers more fully if they help anyone:

1. Did you increase your net worth? Yup! Started the year at $848,665.47 and at last report it was now $1,131,601.03… Almost went and divulged the most CURRENT numbers there, and then realized at the last second I wasn’t allowed to anymore! Haha… Almost got me there! ;)
2. Did you reduce your debt? Nope. In fact, we increased it!! Went from being completely debt free for the first time in my life EVER, all the way up to $260,000+ indebted now due to our recent home buying decision (!!!). Which I know isn’t the worst type of debt to have, but it’s still very much *debt* and not that fun to carry around.
3. Are you tracking your spending and keeping a budget? Nope. We used to when we first started our journey and it helped out immensely!!, but now we mainly focus on our net worth tracking as I find it holds us much more accountable (AND takes up only 1/10th of the time ;)). Of course, we pay a nice convenience fee for that since it also means we’re probably spending more than we’d like as we’re not fully paying attention to it all, but for now it’s a fee we’re comfortable with paying while we wrangle other important things – like all our kids, haha… (and a dog this past weekend too!! Which my wife is now salivating over after watching my mom’s for a bit!!)
4. Did you reach a savings goal? Kinda? My goal is to always max out our retirement accounts every year, but we don’t do it until after the year ends to make sure we’re *allowed* to, so it hasn’t happened yet. Even though we have the money earmarked for it. And honestly that one move alone every year has transformed our savings! Because even if you spend every other dollar that comes in, the amount you’ve amassed over time just keeps compounding like crazy and there’s no way NOT to hit FI eventually doing that year over year!
5. Did you ask for and/or receive a pay increase, or take advantage of your company benefits in a way that allowed you to keep more money in your pocket? Yup! Ironically enough, I actually get paid more than I did when I owned this blog, due to a stable “salary” as well as the extra consulting work I’m now freed up to do. So not too bad in that department! (Though no benefits like health insurance or 401k matching/etc since I’m a contractor and not an employee of anyone’s)
6. Do you have the right insurance policies in place? I think so? I haven’t changed anything this year, but our $350k term life insurance policies for both my wife and I would still do the trick in the event either of us pass sooner than expected (which is to have the house fully paid off, giving the remaining spouse complete peace of mind). We also rock a sizeable umbrella policy to help fill out the other gaps in coverage which also helps us sleep better at night, though admittedly I haven’t paid much attention to it since the day we signed up for it 5 years ago, haha…

Back tomorrow with more financial nuggets!

Thx for the great questions, Mary Beth!

[This post, Pop Quiz: Are you financially better off *today* than you were at the start of the year?, was first published by J. Money on Elite Edge Money]

So a friend of mine recently told me she WORKS AT A CEMETERY full-time now (!!!), and after spitting out my coffee and then asking her a million questions, she was kind enough to write up a little ditty for us today which I’m beyond excited to share ;)

I’m very familiar with hanging out and visiting cemeteries as it’s one of the most serene places in the world!, but I’ve never known anyone to actually *have a job there*, so hopefully you find this as interesting as I did…

And then when you’re done, be sure to check out our post on what it’s like to be a MORTICIAN so you’re all set for Halloween this year! Haha…

Take it away, Fern!

******

I started working with a cemetery and funeral chapel last year in the great state of Minnesota.

My job there is multi-purpose. First, I am a Family Service Counselor who helps with families who are ‘At-need’ suffering a loss at that time. It’s my job to help them out with purchasing a cemetery space if they don’t have one already, picking out a marker (formerly known as a headstone), and arranging the cemetery costs, dates, times, and everything else that goes into planning a funeral.

I also often act as a grief counselor, social worker, and occasionally mind-reader! Some of the emotions that accompany death are as unsettling as they are bizarre at times.

Second, I work as a Preneed Specialist and sell people funeral plans for the future. Sometimes the plan is for Mom or Dad who are in a nursing home and need to spend down their assets so that they can be taken care of by Medical Assistance or some other public program. Sometimes it is for the person themselves because Mom or Dad or Grandma just passed and they got a front row seat to how ridiculously expensive passing can be!

Prices can vary from around $2,000 for a simple cremation, to $20,000 or more for a nice traditional casket burial service.

The first choice to make is whether you want to have a full traditional funeral (with body) or a simple cremation or somewhere in between. As well as the kind of casket or urn you want, and if you prefer to have a memorial service or not.

If you do a traditional service, then you need to be sure that you have a space in a cemetery, the casket, a vault for the casket to go inside (which keeps the ground integrity… We once had a tractor fall into a grave before – not fun!), as well as the marker and funds for opening and closing the grave.

Funeral plans are indeed expensive, but there are many ways to work it out to your benefit. First off, by setting it all up now – while you’re alive – you’re guaranteed to get exactly what you want and save the trouble/emotions of loved ones having to deal with it later.

You will also be locked in at the current prices for almost everything*, and with funeral costs rising on average 200% every 10 years it’s something everyone needs to be paying attention to.

Unlike classic life insurance, a funeral plan is a set amount, similar to a car loan. When you make your decided number of months’ payments, it is yours and complete. You’re given a credit-card sized card to carry in your wallet for whoever finds you, and then all you have to do is show up! :-)

And because this funeral policy gets made out irrevocably, and directly, to “any funeral home with interest”, it can never be taken away from the person who purchased it.

This definitely falls into the “spaving” category, however in the long run it’ll save you a ton of money and worry. I highly encourage you to look into it, and happy to answer any questions you might have.

– Fern

*Labor is usually not locked in since you can’t pay people the same rates today as you did 20 years ago.

******

I threw her a question right away on *how* it is someone gets into this line of work?!, and here was her response that sheds some more light on it… In case anyone’s looking to make a career move ;)

I have done many things to lead up to this job. Started out as a receptionist for a funeral home in 2004. Then worked 13 years as a teller, receptionist and customer service person at different banks. Got a job as an insurance salesperson last year (FROZEN calling and AWFUL!!!) which I got my insurance license for – and turns out the license was necessary for this job too since the funeral plan is insurance!

I have also been a personal care attendant for a few years which has helped prepare me well for the emotional side of things. I’ve always had a heart to help people which is the biggest pre-requisite in my mind for this role.

******

What other questions can we ask her?? Have any of you already booked your final resting place??! :) Or did it for any loved ones?

Any tips/advice you can give us noobs?

While I HAVE already picked the location I want to be buried at, I have yet to actually sit down and run the numbers or even go through the millions of variables there are… Other than knowing I want a traditional burial and hopefully one in a *family* plot too so my loved ones can join me – provided I haven’t embarrassed them too much by then ;)

Fern – in your high-end $20,000 cost up there, does that include family plots or just solo rides? Can you just buy the lots for now and then deal w/ the rest later?

[UPDATE: From Fern: $20,000 is for a solo ride. Cemetery spaces are totally variable based on location.]

I have a friend who’s not only secured his own grave for him and his wife already, but also went ahead and placed TOMBSTONES on it with birth dates and messages and all! Even though they’re both still very much alive and kicking! The only thing missing is their death dates, and every time I pass by it I’m reminded to pick up the phone and call him, haha… (Which may or may not be his freakish plan?! ;))

At any rate, thanks for taking the time to intrigue us Fern, and everyone please have a fun – and safe! – non burial weekend out there!! Remember that none of us are dead yet, so soak it up while you can! :)

Other reading:

• Why I’m Obsessed With Cemeteries
• My Dead Sexy Job: Living Life as a Mortician

[This post, My Name is Fern, and I Work at a Cemetery, was first published by J. Money on Elite Edge Money]

Came across this article from Kiplinger this morning, and can’t say I’ve heard of half these rules of thumb before, haha… Maybe that’s why they’re so breakable?! :)

“Financial Rules of Thumb to Consider Breaking“

They’re bolded below, along with my own two (free) cents, and an attempt at comparing them to our own finances to see if we’re on track or not :)

Anyone following any of these?!

“Spend no more than half of your income on living expenses, keep discretionary items to 30%, and save the rest.”

People sure would be better off if they followed this, but I have yet to run into anyone who actually budgets off percentages, do you? In theory I think it all makes sense, but I tend to just cut back in all the areas I’m able to cut back in (some months it’s good, and others not!), and then at the same time stash as much savings as I can each month as well.

Maybe it breaks down into similar %’s over time, I’ve never really run the numbers, but so far it’s been working out well, at least since I’ve wrapped my head around all this stuff a decade ago :) Ask the old me though and I couldn’t tell you *what* I was spending on, no less the pie percentage!

At any rate, here’s where our current finances would break down if it was pie’d up like that:

• Living expenses: 60%
• Discretionary: 20%
• Savings/Investments: 20%

So not too far off, actually! Although there’s a number of items in there I had to guess on as wasn’t sure what category they’d fall into… (says the guy who blogs about finance for a living!!)

“You can afford a home that’s two to four times your annual gross income.”

Well this one should be an easy one to compare to since we literally just bought a house!! :) Doing the math on this bad boy pushes us out into the $320,000 – $640,000 range, where I’m glad to see we’ve landed wayyy on the lower end of the scale here – woo!!

Although if you recall, we did get approved all the way up to $800,000 from one source, so it seems pretty accurate at least on the lender’s side. And not to be confused with what you can *actually afford* btw, since the banks are happy to loan out as much as they can get away with because it means more $$$ for them!! So don’t fall for that trick like many of us have over the years!

“You need life insurance equal to eight to 10 times your annual pretax income.”

No idea where this figure comes from, but if we stayed in line with it we’d need to have about $640,000-$800,000 each, of which we’d massively fail at since we only have $350,000 of life insurance each ;) Though it was initially set up to mainly cover our *mortgages* in the event one of us passed pre-kids, so it wouldn’t be a bad idea to reassess here again…

Although isn’t the point of financial freedom to be *fully* sufficient without needing outside help unless you wanted it? We’re far from that point at the moment, but it would be yet another perk if you can start clearing away some insurances since you’d be able to fund a lot more during your demise ;) And not talking about *health* insurance btw – ain’t no way I’m giving up that with our jacked up system here!

Curious though – how many early retirees out there are still carrying life insurance? Why or why not?

(In other fun news  – I recently read that they call it “life” insurance vs “death” insurance because it’s more appealing to see and better odds of people signing up for it, haha… Which is probably true, unless you happen to enjoy thinking about death like some we know! ;))

“Save one-third of the cost of college.”

I’ve never thought of the *ratio* when it comes to saving for college (just always gone with the “save as much as you’re able to” route, and we’ll figure it out later when it gets closer! Haha…), but probably better to have a more developed game plan in place ;)

Per that same article by Kiplinger:

“Under this rule of thumb, you pay for a third of the cost of college from savings, pay a third from current income and financial aid, and borrow a third using a combination of parent and student loans.”

Anyone care to share their perspective or strategy with this who’s in the thick of it all?! Obviously it would be great to have ALL of it taken care of by the time they leave your comfy nest, but we all know it’s hard enough to stay on top of our other massive goals in this Game of Life, so I think if you’re at least saving *something* towards it you’re allowed to be semi-proud of yourself… At least that’s the rationalization I’m telling myself ;)

“You’ll need 70% to 80% of your preretirement income to live on when you retire.”

Oh boy!! The magical retirement number question!! EVERYONE RUN FOR THE HILLS!!! Haha…

You already know what I’m going to say on this one so we won’t linger on it too long, but it’s always fun to refresh ourselves for all the new people to the scene :) And to those people we say, *pay attention to the EXPENSES of your future planning – not your INCOME!* As you can very well be poor with a million dollars hitting you in the face, or rich with $10,000 in the bank – all depending on the quality of lifestyle you want or need later on!

And while we do have a common “rule” here in the FIRE community – 25x your yearly (forecasted) expenses – there’s still ALL kinds of variables you can throw into the mix and tweak to your heart’s desire, so it’s really about finding the starting point that seems best *to you*, and then adapting it as life moves on and changes… And it will always be changing, believe me!

And with that, I’m already feeling a bit re-tired, haha…

Finally a place to insert this meme I’ve been dying to use!!! ;)

What do you think?? Any rules here worth implementing or gonna pass?

Looks like we accidentally hit 2 of the 5 here, but don’t think it’ll be something we’ll be incorporating into our strategies anytime soon…

Always good to hear outside perspectives though!

[This post, Interesting Financial Rules to Follow (?), was first published by J. Money on Elite Edge Money]

I don’t know if I mentioned this, but that Best Man’s speech I gave the other weekend included a pretty epic Mad Lib in the middle of it.

One which greatly helped me overcome my nerves and complete the mission :)

I’ll tell you how it applies to today’s topic in a bit, but first – the mad lib (with the help of my kids who provided the important nouns/adjectives/etc!):

A Wedding Day Mad Lib

Hello! My name is Sponge Bob SquarePants, and I’ve known today’s couple for a million years. I doggie paddled all the way from Dinosaur World to get here, and I am beyond stinky that [groom] & [bride] are tying the knot! There has never been a more naked couple than those two, and I hope they have 13 slimy babies together. My Best Advice? Don’t forget to kick the green burritos before going to bed every night! And [groom], always tickle [bride]’s belly button after a long fight. You may be scared, but true soccer balls last forever. Now ladies and hedgehogs, please raise your light sabers for the slippery couple, and may they have a lifetime of health, happiness, and everlasting ninja turtles!

[Entire toast can be found here if you want to steal it.
It included the required sappiness and prodding of the groom too, of course ;)]

It was a fun way to tackle something I really didn’t want to do, and surprisingly went over really well. Which tells me either everyone was already drunk by that point (99% probability), or all these years of writing has finally paid off ;)

In any event, I can’t tell you how great it felt afterwards, and immediately proceeded to the dance floor to celebrate my victory. Not unlike knocking out << get ready for the slick transition! >> personal finance matters that we really don’t want to deal with either! Whether out of fear, lack of knowledge, or just being completely bored by it!

Which leads us to today’s main topic: LIFE INSURANCE!!!

I’m a little late to the party here (we’ll call it fashionably late), but in case you weren’t in the know either, September is officially Life Insurance Awareness Month, so my job today is to tell you all the reasons you should have some, and then hopefully motivate you to go out and make it happen afterwards.

We’ll start with the reasons:

1. When you die, it’s going to cost money! Why not help cover the costs of your own death?
2. The money can also be used to pay off mortgages, debts, or even full rides to college for your kids (or those who claim to be your kids ;))
3. It’s good to give your family and loved ones much better peace of mind
4. It’s good to give YOURSELF much better peace of mind! (While you’re still alive and can enjoy it!)
5. And most importantly, it’s one less thing for your favorite financial blogger or parents to harp on you about ;)

Fact is, when you die your entire family is going to be crushed and the last thing on their mind will be money. But when it all sinks in and they’re thinking clearer,  leaving them with hundreds of thousands of dollars to play with will make your death a teensie bit better. You might even say a blessing? At the very least it’ll be harder for them to forget about you ;)

And picking up life insurance doesn’t have to be super complicated, or even expensive for that matter. Here’s what we’ve got going on for about 10 years now – and I honestly haven’t thought about it much since, except to check in every now and then and see if it still makes sense (which I think it does?).

1. Me: $350,000 of Term Life Insurance (30 years @ $30.99/mo)
2. Mrs. Money: $350,000 of Term Life Insurance (30 years @ $24.57/mo)

It’s all through USAA – my go-to company for all financial products (thanks dad!), and the money should be more than enough padding to secure the future of our finances. Whether that’s fully paying for a house down the road, funding our 3 boys’ tuitions, or just investing it for another 18 years so my wife can retire like a BOSS when the kids are finally out of the house.

Not like I’ll have much say in it after I’m gone ;)

(BTW – you don’t need to have a military connection to get USAA’s life insurance)

Why TERM LIFE over the other more “exotic” types of insurances? Because it was simply the most straightforward policy you can get, with monthly premiums that won’t kill you. (Zing!)

If you die your beneficiary gets the pay out, and if you don’t die your beneficiary gets to keep on loving you! Win-Win! ;)

You’ll want to do your own research of course to see what’s best for *you* and your situation (the others, like Whole Life, have their place, I’m sure), but as a reader of this site once said, “buying whole life is like going to Subway for lunch and giving them extra money to invest for me. Sammiches are good. Investing is good. But they have nothing to do with each other” Haha… “Buy insurance (term) for when you need insurance and invest when you need to invest. Keeping them separate allows you to go to the best provider for each, rather than get sub-par products just for the ease of buying them together.”

So yeah, we like Term here. Particularly for those who are relatively young and healthy.

Now onto the part of me trying to get you to take action if you haven’t already!

And staying on theme here, I’d like to do that by making you channel your own inner-child today and fill out a Mad Lib :) The first one’s for those who don’t already have insurance, and the 2nd one is for those who do – in hopes the insight you share might help the others to finally pull the trigger!

Fill it out, copy and paste it in the comments, then print off and get busy!

******

A Mad Lib For Those Without Life Insurance

Hello! My name is [name] and I haven’t looked into life insurance yet because of [excuse]. I vow to change that today though because I’m [adjective], and I promise all my [net worth number] that I will look into it as soon as I finish filling out this [adjective] Mad Lib. If I don’t, J. Money gets all my money and future naming rights to my [plural noun].

Signed, in blood, [name].

You like that one? ;)

Now a Lib for those already insured… Fill out as much as you can so it helps others get a better idea of this stuff and make the unknown a little less scary.

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A Mad Lib For Those Sexy & Insured

Hello! My name is [name] and I picked up [type of life insurance] over [years] ago when I was [age] years old. I currently pay [amount] a month for it through [name of insurance company], and I am relatively [healthy or not healthy]. I chose them because [reason], and so far I am pretty [adjective] with them. If I had one piece of advice to give to anyone shopping for life insurance today, it would be [advice].

Your friend in finance, [adjective] [name].

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Drop your answers in the comments below, and let’s see if this works as well as my toast!

Bonus points if people stop you in the street and say they love your insurance plan ;)

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This post was in partnership with USAA for Life Insurance Awareness Month, a company I’ve proudly been a member of for almost 20 years now. But we’ll see how proud of *me* they are after reading all these Mad Libs today, haha…

[Photo cred: Craig Story // possibly altered by J. Money]

[This post, A Life Insurance Mad Lib!, was first published by J. Money on Elite Edge Money]