Should You Buy Term Insurance and Invest the Difference?

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Jim Lorenzen, CFP®, AIF®

 

I first heard this mantra in the 1970s.  It resurfaced again in the ’80s and again in the 90s.  Funny thing is it’s only the guru’s selling CDs and DVDs – people who are neither registered, regulated, or even have a single client – who keep promoting it.

Nevertheless, it does sound good!  Would it work.   I thought you might like to see an independent analysis that even gives term insurance a head start!  What if you could buy $500,000 of term insurance for only $1 a year!   Silly, I know, but, the analytics are interesting – and worth understanding.

I think you’ll find it interesting.  You can access it here.

Enjoy!

Jim


Jim Lorenzen is a CERTIFIED FINANCIAL PLANNER® professional and An Accredited Investment Fiduciary® serving private clients since 1991.   Jim is Founding Principal of The Independent Financial Group, a  registered investment advisor with clients located across the U.S.. He is also licensed for insurance as an independent agent under California license 0C00742. The Independent Financial Group does not provide legal or tax advice and nothing contained herein should be construed as securities or investment advice, nor an opinion regarding the appropriateness of any investment to the individual reader. The general information provided should not be acted upon without obtaining specific legal, tax, and investment advice from an appropriate licensed professional.

What’s Your Focus?

Jim Lorenzen, CFP®, AIF®

Most people buy life insurance based on the same outdated advice they’ve been given for years.   It’s predictable:  buy term – and, for many people term insurance makes the most sense!   Others have been told they should buy “whole life” because it’s permanent and comes with the most guarantees; and, for many people that probably is the best choice – and it does come with the most guarantees.

All generally agree they should buy the most amount of death benefit for the least amount of money – and in some cases, that’s true as well – but, not in all cases.

Different strategies and case designs are possible to achieve a wide variety of objectives and all can make sense for some people and not for others.    This should be no surprise.  There are people who are allergic to foods other people love – my dad, for example, couldn’t eat peanuts, but I could munch on them all afternoon.

If you’re wondering what kind of life insurance strategy makes the most sense for you, the first thing to do is to identify your focus – your priorities.  Life insurance can be simple death protection or it can function as a highly versatile financial tool accomplishing a number of objectives.

What’s your focus?  What do you want life insurance to accomplish for you?  Here’s a little tool you can use to help identify your focus; so, when you talk to an advisor (naturally I hope it’s me, but it can be anyone you trust), you’ll be able to more clearly communicate just what your needs really are.

Hope you find this helpful.
What’s Your Focus Life Insurance Priorities Tool

By the way, when you request this tool, you’ll also receive future issues of my ezine.  I hope you find that helpful, as well; but, you can unsubscribe at any time and be removed from the list immediately.

Enjoy!

Jim


Jim Lorenzen is a CERTIFIED FINANCIAL PLANNER® professional and An Accredited Investment Fiduciary® serving private clients since 1991.   Jim is Founding Principal of The Independent Financial Group, a  registered investment advisor with clients located across the U.S.. He is also licensed for insurance as an independent agent under California license 0C00742. The Independent Financial Group does not provide legal or tax advice and nothing contained herein should be construed as securities or investment advice, nor an opinion regarding the appropriateness of any investment to the individual reader. The general information provided should not be acted upon without obtaining specific legal, tax, and investment advice from an appropriate licensed professional.

Do You Have A Greedy Business Partner – Even if you don’t own a business.

Jim Lorenzen, CFP®, AIF®

If you work, you have a business partner, even if you don’t own a business.  And, this partner isn’t like most others.

The problem is your partner in the business of life gets to decide how much of your revenue he wants to take… and you have no vote.  In fact, he can – and will – change his mind at any time at any time, including during your retirement years.

What can you do?  You might find this special report helpful.

You can access it here.

Enjoy!

Jim


Jim Lorenzen is a CERTIFIED FINANCIAL PLANNER® professional and An Accredited Investment Fiduciary® serving private clients since 1991.   Jim is Founding Principal of The Independent Financial Group, a  registered investment advisor with clients located across the U.S.. He is also licensed for insurance as an independent agent under California license 0C00742. The Independent Financial Group does not provide legal or tax advice and nothing contained herein should be construed as securities or investment advice, nor an opinion regarding the appropriateness of any investment to the individual reader. The general information provided should not be acted upon without obtaining specific legal, tax, and investment advice from an appropriate licensed professional.

Is Your Business A Ticking Grenade?

Jim Lorenzen, CFP®, AIF®

Did you know that as much as 80% to 90% of many business owner’s net worth is tied-up in their businesses?

According to the Exit Planning Institute’s State of Owner Readiness survey, 83% of business owners do not have a plan for how they will leave their business.

It’s interesting when you consider the number one reason a business owner sells is to fund retirement.  The stats above are even more alarming when you consider that 70% of those doing over $1 million in revenue are 54 years old or older; and many businesses distribute all their cash flow to their owners with little in the way of cash reserves set aside.

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Businesses like these are called “lifestyle’ businesses; and many experts  agree that up to 90% of all closely-held businesses operate just this way:  They are simply operated until they shut the doors.   This being the case, it’s no wonder that 50% of all businesses end-up closing their doors unexpectedly.

When this happens, the only thing the business owner can fall back on is retirement savings, if there are any, including the business’ 401(k), which often proves insufficient simply because it’s funding limitations often can fall short of what an owner will need in retirement to preserve his/her pre-retirement lifestyle.

Many business owners intuitively understand that there business either does or should have resale value allowing them to cash-out their equity.  The problem arises, if they’ve waited too long to address this issue, is not only the ability to find a viable buyer with money, but even one that’s ‘bankable’ – one able to arrange financing outside of the selling owner; after all, no seller wants to have to come back in and retake control of a now failing business.

There are a number of solutions available to an owner who begins planning early – the earlier the better.  Just to provide one example, one solution is called the “One-Way Buy-Sell“.

It’s just one possible option among many, but you may find it interesting.  I caution, however, not to assume it’s the right solution for you.  The best solution is one that’s tailored to the business owner’s unique circumstances; but, FYI, you may enjoy learning about this one.  You can get a copy of our One-Way Buy Sell Report by using the link below:

One-Way Buy-Sell Report
Enjoy,

Jim


Jim Lorenzen is a CERTIFIED FINANCIAL PLANNER® professional and An Accredited Investment Fiduciary® serving private clients since 1991.   Jim is Founding Principal of The Independent Financial Group, a  registered investment advisor with clients located across the U.S.. He is also licensed for insurance as an independent agent under California license 0C00742. The Independent Financial Group does not provide legal or tax advice and nothing contained herein should be construed as securities or investment advice, nor an opinion regarding the appropriateness of any investment to the individual reader. The general information provided should not be acted upon without obtaining specific legal, tax, and investment advice from an appropriate licensed professional.

Jim’s background includes founding, building, and selling five successful businesses and international consulting.  He has been the headline speaker at more than 500 national and international association and corporate conventions for clients such as Foster Grant, Hobie Cat, CapCities/ABC, H.R. Textron, Hearst Corporation, The National Management Association, the National Newspaper Association, and Cox Communications, as well as scores of state, regional, and national conventions.  Jim has also been featured on American Airlines’ Sky Radio heard on more than 19,000 flights, as well as in The Wall Street Journal’s SmartMoney magazine, The Profit Sharing Council of America’s Insights, and has been published in the Journal of Compensation and Benefits, NASDAQ, and in scores of national and international association trade publications.

Trying to Keep Top Talent? This could be your roadmap

 

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Jim Lorenzen, CFP®, AIF®

No, that’s no my picture – I wish I were that young and good looking; but he does look like a happy executive who’s worth keeping…. a key employee!

Key employees don’t have to be executives.  It can be anyone who is valuable to a business, particularly a small business that has to compete to attract top talent – and keep them from jumping ship to join a larger competitor or to start their own business in competition with you (trying to enforce non-compete agreements is no fun and costs far too much time and money, not to mention lost opportunities).

Small business owners often aren’t established enough to offer expensive benefit packages, but they want to find a way they can offer the right incentives to benefit their top people.

You might be interested in learning about the REBA, or GEBA, as some call it.  It’s a Restrictive Executive Bonus Arrangment, or Golden Executive Bonus Arrangement.

They’re pretty simple to set-up and can be designed to provide flexibility for the owner.

You can get a copy of the REBA Report by using the button below.  Hope you find it helpful.
Get My REBA Report!
Enjoy,

Jim


Jim Lorenzen is a CERTIFIED FINANCIAL PLANNER® professional and An Accredited Investment Fiduciary® serving private clients since 1991.   Jim is Founding Principal of The Independent Financial Group, a  registered investment advisor with clients located across the U.S.. He is also licensed for insurance as an independent agent under California license 0C00742. The Independent Financial Group does not provide legal or tax advice and nothing contained herein should be construed as securities or investment advice, nor an opinion regarding the appropriateness of any investment to the individual reader. The general information provided should not be acted upon without obtaining specific legal, tax, and investment advice from an appropriate licensed professional.

Do Advisors Really Add Value?

 

Jim Lorenzen, CFP®, AIF®

For years the media and others have debated the ultimate value of an advisor to the individual investor.   Some believe they either under or outperform; others believe the value is more about providing a disciplined investment process; and, there are still others who believe the value lies in the planning and tax optimization process.

Vanguard – long a champion of the individual investor and low-cost investing – conducted their own study and actually came up with more than a conclusion; they came up with a number.  You may find it interesting.

You can access it here.

Enjoy!

Jim


Jim Lorenzen is a CERTIFIED FINANCIAL PLANNER® professional and An Accredited Investment Fiduciary® serving private clients since 1991.   Jim is Founding Principal of The Independent Financial Group, a  registered investment advisor with clients located across the U.S.. He is also licensed for insurance as an independent agent under California license 0C00742. The Independent Financial Group does not provide legal or tax advice and nothing contained herein should be construed as securities or investment advice, nor an opinion regarding the appropriateness of any investment to the individual reader. The general information provided should not be acted upon without obtaining specific legal, tax, and investment advice from an appropriate licensed professional.

Can You Reduce Risk By Adding To It?

 

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Jim Lorenzen, CFP®, AIF®

Ever wonder why so many “off-the-shelf” allocation engines available today tend to look so much alike?   The reason is pretty straightforward:   The investor’s menu of choices is limited by the engine provider based on similar sets of data inputs and a short risk questionnaire.   When you couple that sameness with a fear of placing “risky” investments in the hands of the general public in a litigious culture, you get what you’d expect:  Off-the-shelf tends to look a lot alike with limited ‘plain vanilla’ investment options and sometimes, if not often, a proprietary product line.

“Plain vanilla” isn’t bad!  However, there are ways a little pinch of something can actually enhance the flavor without causing stomach upset.

You might find this risk report interesting, if not helpful.
Risk Report
Enjoy!

Jim


Jim Lorenzen is a CERTIFIED FINANCIAL PLANNER® professional and An Accredited Investment Fiduciary® serving private clients since 1991.   Jim is Founding Principal of The Independent Financial Group, a  registered investment advisor with clients located across the U.S.. He is also licensed for insurance as an independent agent under California license 0C00742. The Independent Financial Group does not provide legal or tax advice and nothing contained herein should be construed as securities or investment advice, nor an opinion regarding the appropriateness of any investment to the individual reader. The general information provided should not be acted upon without obtaining specific legal, tax, and investment advice from an appropriate licensed professional.

Will My Money Last?

piecing-retirement-puzzle-pathJim Lorenzen, CFP®, AIF®

Scott and Linda (not their real names) are in their 50s and have done a lot of things right:  They’ve worked hard, saved and invested, and they’ve been practical in their spending.

They feel like they’re well on-track to a secure retirement; but, a few “wild cards” do have them concerned:

  • Inflation and longevity:  They know what’s happened to their purchasing power over the last 30 years.  They’re concerned about the next 30+ (maybe 40) when they’re living off their investments.
  • Taxes:  While there may be a temporary reduction coming now, they also know the U.S. is facing a $20 trillion debt and there will be 7 or more presidential elections – not to mention 15 congressional elections – that will take place in the next 30 years.  That spells a lot of potential changes and changes in tax laws.   They want old-age income that will be protected from the politicians.
  • Health costs:  A huge wild-card.  They know the odds are about 50% one of them will need it, but they don’t want to see long-term-care insurance money going down the drain if they don’t need it.  They also want money available if they do have a chronic illness.
  • Liquidity:  They want money available for emergencies during retirement without having to jump through a ton of hoops.

I thought you might like seeing a sample case study about how one couple addressed this issue.

Enjoy!

Jim


Jim Lorenzen is a CERTIFIED FINANCIAL PLANNER® professional and An Accredited Investment Fiduciary® serving private clients since 1991.   Jim is Founding Principal of The Independent Financial Group, a  registered investment advisor with clients located across the U.S.. He is also licensed for insurance as an independent agent under California license 0C00742. The Independent Financial Group does not provide legal or tax advice and nothing contained herein should be construed as securities or investment advice, nor an opinion regarding the appropriateness of any investment to the individual reader. The general information provided should not be acted upon without obtaining specific legal, tax, and investment advice from an appropriate licensed professional.

SELLING YOUR BUSINESS? This may be the best kept secret you’ll need.

Jim Lorenzen, CFP®, AIF®

Ever heard of a “One-Way Buy-Sell” arrangement?  Don’t feel bad.  Few people have.  I know when I was in publishing I hadn’t heard of it, either.  I wish I had.

Here’s the tease:  How to sell your business – in advance, at a price you want, and secure the funding, too!

Most businesses are sold on some form of the installment plan; for closely-held businesses, the ‘all cash’ buyer is virtually a misnomer.  The problem with the installment plan is obvious:  What if the business should suffer reversals during the buyout period?  Do you really want to come out of retirement to save the business and go through another sale all over again?

i806a_One-Way Buy-Sell Agreements_001The One-Way Buy-Out arrangement not only addresses all the issues cited above, it also protects against reversals and can secure your retirement, as well as the security of employees and family if something should happen to you before you get your ducks lined up.

Want to learn more?  You can get my report here!

Enjoy,

Jim


Jim Lorenzen is a CERTIFIED FINANCIAL PLANNER® professional and An Accredited Investment Fiduciary® serving private clients since 1991.   Jim is Founding Principal of The Independent Financial Group, a  registered investment advisor with clients located across the U.S.. He is also licensed for insurance as an independent agent under California license 0C00742. The Independent Financial Group does not provide legal or tax advice and nothing contained herein should be construed as securities or investment advice, nor an opinion regarding the appropriateness of any investment to the individual reader. The general information provided should not be acted upon without obtaining specific legal, tax, and investment advice from an appropriate licensed professional.

Department of Labor Wants Consumers To Know Their Advisor’s Fiduciary Status

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Jim Lorenzen, CFP®, AIF®

The DOL wants investors to know who their “advisors” are and just how they operate when giving advice to consumers regarding their retirement accounts, i.e., 401(k)s, IRAs, etc.

Under the new rules, which are scheduled to be phased-in over time beginning in April, any financial advisor providing advice on retirement accounts must act as a fiduciary – clients’ best interest must be the sole consideration – as opposed to operating under the old “suitability” standard – as long as the investments recommended are suitable, they pass the test, i.e., the recommendation doesn’t have to be in the client’s best interest.

RIAs (Registered Investment Advisors) have been operating under that standard for all client accounts for years; but “dually-registered” financial advisors – those selling securities as registered representatives of broker-dealers who are also registered as RIAs – have been utilizing two different standards, thus providing a confusing landscape for many investors who may find it difficult to determine just when their advisor is wearing which hat.

Commissions aren’t really the issue; however, because of the conflicts commissions can create, any advisor who provides advice or recommendations on retirement account investments for commission compensation will be required to provide the client with a Best Interest Contract Exemption (BICE) agreement.

The DOL has posted a consumer protection piece on their website, containing a more complete explanation, as well as a list of questions consumers should ask their advisor.  See DOL Consumer Protection Rights.

Hope you find this helpful.

Jim

 


6a017c332c5ecb970b01a5116fb332970c-320wiOpinions expressed are solely those of the author.  The Independent Financial Group does not provide legal or tax advice and nothing contained herein should be construed as securities or investment advice, nor an opinion regarding the appropriateness of any investment to the individual reader. The general information provided should not be acted upon without obtaining specific legal, tax, and investment advice from an appropriate licensed professional.  6a017c332c5ecb970b01a51174caed970c-120wiJames Lorenzen is a Certified Financial Planner® professional and an Accredited Investment Fiduciary® in independent practice since 1991.   The Independent Financial Group is a fee-based registered investment advisor with clients located across the U.S.  Jim is also licensed for insurance as an independent agent under California license 0C00742. Jim can be reached at 805.265.5416 or (from outside California) at 800.257.6659.6a017c332c5ecb970b01a51174cbb0970c-120wi