Do You Really Need to Take Out Life Insurance in Your 20s?

When you’re in your 20’s you have your whole life ahead of you. Most people in this age bracket are care free and don’t worry about more serious issues in life. Taking out life insurance is the last thing on most people’s minds when they’re at this age. However, many older people will tell you that not taking out life insurance at a younger age is a big mistake. The earlier you take out this type of insurance, the better. These are some of the most important reasons you should seriously consider taking out life insurance in your 20’s.

Saves You Money

Most insurance companies offer better life insurance policy terms to younger people. As you get older the premium rates increase. The earlier you take out a life insurance policy, the cheaper it will be and you will be locked in at a cheaper rate. These policies can be taken out for many decades to come. You could receive cheaper insurance for the rest of your life, compared to those who take out insurance when they’re older. Over time this will save you a substantial amount of money.

Pay Off Outstanding Debts

Many people take out various loans at different stages in their lives. Student debts, car loans and other debts are a major concern for the person taking out the loan. However, they can also be a huge problem for other people close to you too. These debts build up and some may have been co-signed by other members of your family such as your parents. If something happens to you and you don’t have the appropriate insurance, these family members may have to pay off these debts for you. This is definitely not something you want to burden those closest to you with. Taking out your own life insurance policy as soon as possible prevents this unnecessary stress from happening to your loved ones.

Some loans such as mortgages are much larger and leave behind even bigger problems if you die and you’re not insured. Mortgage insurance products are designed to pay off the balance of your mortgage if this happens. Anyone in their 20’s who is a homeowner or intends to buy a house is always advised to take out this type of insurance to avoid serious complications later.

Protects You from Unforeseen Events

Different life insurance products are available to individuals under 30. When life insurance is mentioned, most people think of death benefit and leaving money for those close to them after they’ve died. However, there are certain policies that also help you while you’re alive.

As you get older, the risk of health problems also increases and this can be extremely costly. Various policies are designed to aid anyone who suffers from certain medical problems or injuries later in life. Taking out a life insurance policy in your 20’s provides you with a safety net in case you become ill and cannot work to provide for yourself and family members.

Provides a Safety Net for Others

Some people in their 20’s are married and have a family. Others plan to marry in the future. This means you have more responsibilities and more people to take care of. An accident or illness can have devastating effects on those around you. It’s often left to those closest to a person who gets sick or injured to pick up the pieces. However, the burden on those around you is eased if you have taken out the appropriate life insurance. It protects your loved ones and can help you recover without having to worry about any financial problems that may arise if the worst happens.

Peace of Mind

Life today can be hectic. You may have financial pressures, family pressures and other concerns. For many, the unknown can be frightening. However, sitting down with a trusted financial advisor and finding out all the facts about life insurance will put your mind at ease. It’s not as expensive as many people think it is and it’s definitely something everyone in their 20’s should consider.

When you’re young you feel invincible and life insurance is something that doesn’t even cross the minds of most twenty-somethings. However, it’s never too early to plan for your future, especially when it comes to this type of financial product. Taking out life insurance in your 20’s can have a huge effect on your life and the life of those around you in later years, making it one of the most important financial decisions you’ll ever make.



source: 20smoney.com

Are you ready to be a global investor?

MANILA, Philippines - After reading about equities and mutual funds in our recent reports, it’s time for you to explore the world.

That’s right - given the various opportunities that exist for investors in the global capital markets, you may want to take part in the action. After all, the global markets offer a great deal more options for any investor – but don’t forget they also have attendant risks.

Investing directly in global markets is a more difficult process for a retail investor than investing in domestic markets. This is because there are different government restrictions (such as those governing the outflow of money from the Philippines), as well as the difficulty in getting foreign currencies for purposes other than business and travel.

Moreover, not all investment funds are open to all nationalities; there may be administrative requirements that a Filipino national may not be able to meet. Also, the required investment amount may be large. Add to this the challenges that may come with transacting with someone in a different continent and a different time zone.

These, however, should not keep you from looking at investing in global markets. In fact, there are ways that you can do so using local channels and brokerages, by tapping into those funds that are invested in global markets. Of late, larger banks and financial institutions have been offering unit investment trust funds (UITFs) and other funds invested in these vehicles, providing the Philippine-based investor with a convenient way to tap into the much larger global capital markets.


Here’s a guide to help you get started on investing in global markets:
 
Assess your diversification needs. 

Before you choose to invest in the global markets, it is important to have a thorough understanding of your financial goals, investment needs, and financial status. Also know how much risk you want to take on. Investing using a different currency, which is usually required when investing in global funds, may or may not be appropriate for your needs. Therefore, you would have to assess if investing in global funds is the right step to take at this stage in your life, in view of your financial objectives and related considerations. If you don’t know how to proceed, this may be a good time to consult a professional financial advisor.

Do your research. 

Know what is being offered out there for retail investors. If you are thinking of global funds, there are plenty of options to choose from to suit various preferences—bonds, equities, and many others. These may be denominated in dollars or in euros. You will also have to think of what your investment strategy is, and what type of investments is best for your needs. In the Philippines, financial institutions can give you access to exchange traded funds (ETF) and UITF, invested in different vehicles to meet various investor profiles. You can also open an individual brokerage account. Check out what the brokers have to offer and if these products dovetail with your financial goals.

Obtain the needed currency for your fund. 

Most global investment funds require that the invested funds be in a foreign currency, most often the US dollar. If you have a dollar account, then withdraw this now. If you do not have the needed currency and plan to purchase these, be mindful of rules pertaining to this. Note that banks have restrictions on dollar purchases, especially for those related to investments.

Open your investment account with the financial institution of your choice. 

You will be asked to sign documents to signify your understanding of and compliance with government rules (especially pertaining to anti-money laundering) and fill up an investor profile assessment. The latter will help the brokers know your needs and will enable them to recommend appropriate funds. Make sure you check out the required holding period and transaction fees.

Monitor the performance of your fund. 

Most funds report their performance daily on their company websites. Also monitor the currency exchange rate from time to time. When you invest in global funds, you should be looking at both the performance of the fund and the currency it is invested in. By monitoring your funds, you will know if you should top up or diversify into another investment vehicle. If you have questions or concerns regarding how to move forward, seek professional advice.

Investing in global funds requires doing your homework and research, to ensure that you meet your financial objectives and that your investment decisions support these. By investing in global funds, you can diversify your investments and spread your risks beyond one country, hopefully to get the best returns for your money and help you meet your financial objectives.

Diversification is one of the most important pillars of effective investing and should be well thought of. Next week, we will discuss why it is never a good thing to put all your eggs in one basket.

source: www.abs-cbnnews.com

How to choose a financial advisor

MANILA, Philippines – When selecting a professional to handle your finances, credentials and character are the top factors that should be considered, Sun Life Financial’s Al Quitangon said.

Quitangon said you should first be comfortable before entrusting your hard-earned money with an insurance advisor or a financial advisor.

To check the credibility of an advisor, Quitangon said you have to carefully select the company that you want to work with.

Do a quick research on the insurance company’s background online or ask a friend or relative who has an advisor.

“Normally, if they are happy with their advisor, they are going to refer them to you,” Quitangon told ANC’s “On The Money.”

Quitangon said there is also information about insurance companies on social media.

He said that these days, there are not much difference between insurance advisors and financial advisors.

“Most insurance advisors today are trained as financial advisors and they can guide you on retirement, tax and health planning,” he said.

Independent advisors charge a fee while insurance advisors earn commission from the insurance products they sell.

Quitangon said getting an insurance advisor from a life insurance firm is recommended because access to insurance products is easier.

However, he noted that insurance products will cost the same whether you get them from an independent advisor or an insurance advisor.

When choosing an insurance advisor, Quitangon said you should ask yourself these questions:

Do you like the insurance company they represent?
Are you comfortable with the person you are dealing with?
Do you trust them?
What are their credentials?

“Many advisors go out of their way to educate themselves and take advanced schooling such as the Registered Financial Planner program. However, all insurance companies train their advisors before they start going out and give advice to people,” he said.

He added that before selecting an advisor, you must discuss specific details about your needs and make them explain everything to you, including expectations.

He said a financial advisor can provide help with your annual financial review, help you with changes in terms of name of the contract, and give you market updates for investment-laced products, among others.

“Their always updated with what is happening in the market and they’re the ones who can really crunch the numbers for you,” Quitangon said.

He also said that it is best to take time when choosing an advisor and ask questions because, after all, consultations are free.

“They should not be ashamed to ask for a visit because all consultations are free of service because that’s part of the service that we provide for our clients,” he said.

source: www.abs-cbnnews.com

5 Counterintuitive Financial Tips That Work

Russell Holcombe, a certified financial planner based in Atlanta, says he's tired of constantly warning clients against making bad money choices. Part of the problem, he says, is that popular financial advice is often wrong. That's why he finds himself urging people to rethink purchasing houses that would max out their budgets, or putting so much money into retirement accounts that they're unprepared for emergencies.

"I had a certain level of exhaustion from having to protect people from a bad decision-making process," he says. Through his work with clients, he says he realized that their ability to recover from negative financial events depended more on how they had structured their lifestyle than on any investment strategy. That's why in his book, "You Should Only Have to Get Rich Once," he offers counterintuitive advice that's centered more on life decisions than stock market ones.

Holcombe offers these five under-the-radar strategies to help you avoid what he calls "financial suicide":

Buy a smaller house. "During the housing boom of '04 and '05, you would hear people go out with real estate agents who said, 'Your income lets you buy an $800,000 house,' " Holcombe recalls. Most people would go ahead and buy a house at the highest end of what they could afford, while just a fraction would hold back and say, "We're only going to buy a house based on one income," Holcombe says. The people who made that choice ended up coming out ahead during the turbulent economy, when many people lost jobs, he adds.

Don't save for retirement. Okay, save for retirement, but don't tie up so much of your savings in post-tax retirement accounts like 401(k)s that you can't weather financial storms when they hit, Holcombe advises. "The ability to survive is based on the ability to adapt," Holcombe says, and tying up money in certain types of restrictive savings accounts, such as retirement and college savings accounts, means you have less flexibility to invest in other things or pay bills.

Many people end up paying fees and penalties when they have to withdraw from retirement accounts early, Holcombe points out. So yes, save for retirement, but don't forget to prioritize shorter-term savings accounts, too. If you're an entrepreneur, you might want to consider investing in your business instead of your retirement account, he adds.

Forget about stocks. "For financial advisers, all roads lead to stocks," Holcombe says, adding that such a one-track mindset is a problem. "For the people that I know who are successful and endure financial traumas, the market is irrelevant to them. It's not the reason for their success, it's a tool," he adds. So while investing in stocks might be part of a larger financial strategy, Holcombe recommends against getting too preoccupied with investment strategy.

Instead, focus on a "perpetual income stream." Holcombe says everyone should consider how they can build their own "perpetual income stream," which consistently pays out cash over time. A doctor might buy a medical building that generates rent, a writer might generate royalties off of a book, a retiree might invest in a dividend-paying portfolio. "Perpetual income streams are the holy grail in business, from Comcast to Netflix. Everybody is trying to move to that model because they get paid whether you tune in or not. Some people have the talent to create them and some don't," he says. "There's no one size fits all," he adds.

Holcombe urges people to avoid traditional investments that generate income, like annuities, because he says "they are super expensive and you can't change your mind."

Calculate your "lifestyle cash flow." When people try to get on top of their money, Holcombe says they often start tracking all of their expenditures, from gas to food, or their net worth. He calls such calculations "totally meaningless." Instead, he says, people should focus on the expenses that can't be changed quickly, including a mortgage or debt payments. "It shows how quickly you can adapt to a traumatic event [like a job loss]," he says. He uses the term "lifestyle cash flow" to describe the cash flow required each year to pay the bills.

As long as you're earning enough money to cover those expenses, then you can feel relatively financially secure, Holcombe says, adding, "If you're spending money on something that's not making you happy, then kill it quickly."

source: dailyfinance.com

5 Golden Rules For Investing In Annuity

Regardless of your age, your retirement is something that should never be too far away from your thoughts. But as you begin to reach a ‘certain age’, the importance that your pension holds and the role it will play in your future becomes a much more real prospect.

The earlier you start a pension fund, the greater the rewards. But, the tick-tocking of retirement draws closer, people begin to look at making investments to help bolster their pension pot. One concept many people consider is finding an annuity payment. This pays a guaranteed income for life, but is subject to varying interest rates.

To Risk Or Not To Risk?

Knowing what options are available to you will help put you in great stead when it comes to making the most of your hard earned cash. With this in mind, it is always worth seeking the expert of advice of a specialist financial advisor. Using their experience and expertise, they will be able to guide you in finding the right financial retirement plan.

The recent low level of annuity interest rates has seen many people lose out on their investments. This means the amount of guaranteed income paid that can be purchased from a pension fund is at its lowest ever level. This only emphasises the need for investors to consider their options in even more detail.

So if you’re considering investing through annuity, what things must you consider?

Golden Rule #1

Ensure that you have other sources of income or capital to fall back on. Do not put all your eggs in one basket. In today’s climate, there is no guarantee that annuity rates will improve should your decision be deferred so it’s important be stable should your future income fall in value.

Golden Rule #2

Make sure you understand the risks that are involved with your chosen annuity investment. Investments can come with a number of possible outcomes and inconsistent variables so be sure that you fully understand your investment and its consequences

Golden Rule #3

Make sure you have considered all options available to you. The beauty of retirement is that it can be what you make it and, depending on your income, there are a number of options you can opt for.

Golden Rule #4

A risk is a risk for a reason. Many people facing retirement face what is called a ’risk paradox’ between option of guaranteed annuity no longer proving a just investment due to rising inflation. Not only that, your personal circumstances may change, opening up a number of possibilities for you to consider.

Golden Rule #5

Acquire the services of a retirement specialist financial advisor. With their experience and expertise in retirement planning and the options available to you, they will be able to offer guidance on how to invest your money. They will take the time to understand you, your financial situation and your retirement plans before suggesting the most beneficial and secure route.

Make The Most Of Your Retirement

By following these golden rules, you will be able to make the most of your pension pot, giving you the options to plan the retirement you deserve.

source: everythingfinanceblog.com

10 Real People Who Are Winning Their Fight With Debt

As human beings, there are some traits that we all have in common: two hands, one heart, red blood, and, unfortunately for most of us, a ton of debt. The average American carries a $47,000 debt load, and as a nation, nearly $2 trillion of our collective debt is either delinquent or 90 days past due.

Part of the problem in figuring out how to begin getting out of the red is knowing who to turn to for help. Maybe you're too embarrassed to fess up to your issues or you can't afford a financial advisor. So you might pick up a $20 self-help book or enroll in a $200 debt makeover course online.

Save your money. Some of the greatest advice out there can come from the person standing next to you in line at the grocery store. To prove our point, we've rounded up 10 truly inspiring stories of real consumers who faced their debt head-on and managed to come out on the other side.

source: dailyfinance.com