My Stories from the Field - Chapter 3

This is the third post in a long sequence where I want to share stories of real people I have met either while working with a life insurance company, or as an independent investment adviser. My goal is to share their stories so I can impart the lessons I learned in the hopes that these lessons will also serve others - this is for you, my readers!
*All my subjects will be either John or Mary, for privacy reasons.

I want to spend the time today talking about the importance of getting life insurance while healthy, so that the family is taken care of, in case something happens. While working with the life insurance company, I met quite a few people who were not able to qualify for life insurance. In industry jargon this type of prospect is known as an autodecline. This means that even without sharing this info with the underwriters I was able to know that these persons were unable to qualify for life insurance.

A couple of the examples that come to mind are for single parents - a mom and a dad - both young, and both with children under 10 years old. In both cases I was unable to set in place life insurance for the parents. It was a bad feeling of inability to help them. Neither one was able to protect themselves with life insurance, and unfortunately both of them have passed away since. That was even more sad for me to find out. I had to tell their family when they called that no money was coming from the life insurance company.

I still remember meeting Mary many years ago, and she was a great baker - had the privilege to taste one of her cakes. I was sad to be in the position to tell her that because of her condition (sarcoidosis of the skin) she would be declined for life insurance. I remember she had a son - about 7-8 years old. I felt bad having to tell her that I could not help her make sure her son would be taken care of. She had just received the notification from her job that she could not have life insurance through them either, because they had changed providers and she had to go through the underwriting process.

Her medical condition stayed in my mind even though I met her about 10 years ago because it hadn't been long since Bernie Mac had died from sarcoidosis of the liver. Being a fan, this left a profound impression on me.

When I met John, I learned that he had a 5 year old son and he worked out of town - about 2 hours away - so he spent a lot of time driving up and down the highway. His medical condition didn't look too serious at the first glance. He had high blood pressure. Since I had been with the life insurance company for a number of years at the time, I already had quite a few clients with the same condition.

I remember John saying that he didn't really take care of this health but he was in his 30's, so I thought it was no big deal. I thought he still kinda sorta took care of his health. He had a son to take care of, right?! Well, I was surprised when his application came back as a decline for life insurance because his blood pressure was no way close to under control.

Some months later I received a call from his parents and found out he had passed - and not due to an accident. So I had to tell them that they had no life insurance money coming in to help with raising his child.

These situations are some of the saddest that I had to live through during my years with the life insurance company. It's hard to be unable to help people. On a logical level, I understand that it was out of my control. On an emotional level, I still wish I could have helped these families - as well as the other ones where I met people who could not qualify for life insurance.

Please remember this:
The best time to apply for life insurance is NOW. When you are healthy, it is the best time to protect yourself; once something happens, like being diagnosed with a serious medical condition or becoming terminally ill, it is too late. 

My Stories from the Field - Chapter 2

This is the second post in a long sequence where I want to share stories of real people I have met either while working with a life insurance company, or as an independent investment adviser. My goal is to share their stories so I can impart the lessons I learned in the hopes that these lessons will also serve others - this is for you, my readers!
*All my subjects will be either John or Mary, for privacy reasons.

Today I have on my mind a couple of stories related to the second big mistake people make when it comes to life insurance. The first mistake is that they don't have any life insurance, even though the family needs the protection life insurance offers, since the estate is not big enough (at least for the time being) to take care of the family in case the unexpected happens. The second mistake is that John (or Mary) has life insurance but nobody in the family knows where the policy is or what company it is through. Unfortunately, this mistake is quite common, especially in situations where all the children are grown and live away from the parents' home, and the parents are still in great shape - physically and mentally.

Since none of us can guess when we pass away, or whether we will have time to plan everything while being sick, or we might have an unexpected end, it is best to have all the paperwork in place for those we leave behind; and most importantly, let them know where everything is and who they need to contact.  If you are not sure how to keep track of your important papers and where to do it, I can share a document I created for women who want to take charge of their financial life. Please contact me via this site and let me know you want my help with this. I promise you will not receive a bunch of unwanted emails later.

While working with the life insurance company, I met a family that had recently taken care of the funeral for the grandfather of the family. Mary shared with me on that occasion that she and a cousin had been in charge of finding the life insurance policy that her husband's grandfather had had. They spent many hours in a room full of papers or all sizes and colors. This is how she learned that the elderly preserve all papers that were once important, even though they were no longer needed. The expected and much needed life insurance policy was never found.

Many years ago, one of my clients, Mary, had to deal with all the financial consequences of her mother's passing. She called me to ask how she could find out what life insurance company her mother might have had a policy with. I still remember her exact words to me, even these 10 years or so later. She said: "Knowing my mom, I'm sure she had a life insurance policy. I just cannot find any papers in her house. Is there a way to find out which company she had her policy with?"

And I had to tell her that there was no central place where this info would be listed. Sure, it seems logical to protect this personal info. However, even with providing all sort of security questions or info that nobody else can have, there is no way for a family member to find out in one place about someone's life insurance policies. The only idea that crossed my mind at the time was that she could call various life insurance companies and ask. There were 2 major challenges with her predicament: 1. she would have to spend a long time talking to each company while answering a lot of questions to prove the legitimacy of her question, while still not knowing whether she had the right company; and 2. she would never have the certainty of knowing for sure that her mother didn't have a life insurance company, since she would never call all the companies in the United States.

All this happened because Mary's mother didn't have any records regarding life insurance policies. There were no directions for Mary to follow upon her mother's death. And there were no electronic drafts by a life insurance company from the mother's bank account. At least this second element would have helped a lot with the search.

I hope these stories gave you some food for thought, maybe even some dinner conversations with your family - whether you need to tell your family where to find your documents or whom to call, or to learn from your parents and grandparents what you need to do when they pass.  I know this is not an exciting topic (it is even scary, perhaps) but I can assure you there will come a time when you are happy to have had this conversation, especially if you are the one left behind to face the passing of a loved one.

With the holidays coming up, this may be your best opportunity to tackle the subject with your family. According to the Chinese, "the best time to plant a tree was 20 years ago; the next best time is now."

Please remember this:
The best time to talk about painful things and about complicated financial things is when you have a clear mind and all your loved ones around you, and not when you are emotionally drained, or even in no shape physically or mentally to deal with final arrangements for a loved one. 

My Stories from the Field - Chapter 1

This is the first post in a long sequence where I want to share stories of real people I have met either while working with a life insurance company, or as an independent investment adviser. My goal is to share their stories so I can impart the lessons I learned in the hopes that these lessons will also serve others - this is for you, my readers!
*All my subjects will be either John or Mary, for privacy reasons.

While working with the life insurance company, I met a lot of blue collar workers in Virginia, as well as some in Tennessee (on a couple of road trips for the job). One lesson that always stood out to me regarding the importance of life insurance is that people need to make sure they have policies in place before something happens to them. None of us is guaranteed tomorrow, and we have to take care of our families for when we are no longer around to do it.

A couple of instances I met people who told me stories of their neighbors who passed away and didn't have life insurance in place. I will share here a couple of those stories.

In a family the adult daughter passed away unexpectedly, and the parents started asking the neighbors for donations in order to be able to bury her. Fortunately for the family, they were surrounded by helpful people who contributed what they could, and they were able to bury her. Unfortunately, not even a month later, John (the father) passed away due to a heart attack, also unexpectedly. He also left the family without the money to bury him - no life insurance either.

The spouse and remaining children had to go around the neighborhood again and ask for help. The second time around, things were event tougher - the neighbors were also tapped out now. The neighbor who shared this story with me never knew how they managed to pay for his funeral but they saw that the expenses were kept to a minimum.

While this is an example of solidarity and it shows how great it is to have helpful neighbors, the main lesson to learn is that covering the funeral costs is not a duty that should be passed on to the family, relatives or friends, and much less the neighbors. They are not responsible for someone not being considerate and caring enough to not leave the family in a tight spot financially.

The second lesson I want to share today is from someone in the Eastern part of Virginia. She told me of a friend who was caring for her grandfather in that area, let's call her Mary. She received a call that her father had passed away - he lived in the Western past of the state. She had to make arrangements regarding her grandfather's care in order to travel across state in order to take charge of the funeral arrangements. After running across state she found out that her father didn't have any life insurance, and she had to look for ways to come up with the money.

While in the process of figuring that out, she received a call from the person she had left with her grandfather and found out that he had also passed away. She ran across state to take care of his funeral - he did have life insurance. Afterwards she had to get back to the Western part of the state to take care of her father's funeral arrangements. She had to accumulate more debt by traveling back and forth because of the situation that she was left in.

Of course there is no reason to believe this is going to happen to any one of us. However, this does happen to people. So the moral of the story is to take care of our family by protecting ourselves with life insurance. The type and the amount will vary from one person to the next, so it is best to talk to a professional that can help. What is always true, is the fact that something is better than nothing. It can all be helpful.

Please remember this: 
"Dear life insurance company, please let me know how I can return this check I received when my spouse passed away. I now have too much money coming to me from all the life insurance policies we had," said NOBODY ever.

Create More Income Month - Chapter 4

For the last post of the month, I want to focus on creating a stream of income through investing the money you earn from your business. Before going into any ideas on this topic, I want to make sure that these are only ideas, and are not meant to be financial advice. Nor do they apply to all of you who are reading these lines. The one piece of advice I want to start with: talk to an investment adviser that will take into account your personal financial situation and create a plan specifically designed for you. Of course, there is no obligation for that person to be me, though I can be - for anyone who would like a consultation.

When deciding to invest, the first thing you need to know is that you have to make a long-term commitment. Getting into the market should not be seen as a short-term plan to get rich because that is very risky. There are people who are preoccupied with timing the market and buying stock that they estimate will grow in value and then sell it for more; also a great many of them end up losing even the shirt off their back. Therefore, unless you can afford to lose the money you play in the market, this most likely is not the best scenario for you.

The reason I decided to have this post as part of the month on streams of income, is that when you invest you are creating a stream of income for the future. This is a way to build your egg-nest that will generate your stream of income. It can be your retirement plan or it can be an investment that generates income that has no preferential tax treatment. This is a choice between qualified and non-qualified plans, in financial speak. Here is the translation:

1. Qualified plans receive preferential tax treatment - money that goes into these plans is either before-tax, which means it goes in before being taxed and gets taxed when it comes out; or the money goes in after-tax and is taken out tax free. These plans are either Traditional (with before-tax money going in) or Roth (with after-tax money going in). The money you invest in these plans has to be for your retirement or else you lose your tax advantages, and may also be liable of penalties.

2. Non-qualified plans do not carry any tax advantages - you are paying taxes on the money going in and also have to pay taxes on any gains as you accumulate them. This is the type of long-term investments that one would make because they want to increase the value of their estate and the market has traditionally had higher returns than any other investments. There is a risk involved because there are no guarantees of a return on the investment. The growth of the funds usually beats anything a savings account can generate over a long period of time.

My hope with this post is that I can inspire some of my readers to start investing (or continue) so they can have a stream of income for themselves in the future - be it in retirement or before.

Create More Income Month - Chapter 3

This week I would like to address those of my readers who are experienced in their field, achieved expert status and most likely have been in that industry for a long time. I'm not saying that someone who is in the first years cannot apply these ideas, I only have the opinion that an experienced person is more likely first to be interested in doing this, and second to have more confidence in their ability to go through with the plan.

One idea to make more money in your business is to start a new stream of income by teaching people in your field how to build a business in the field, or people who are interested in getting started in your field of business how to enter the industry.  

I have a friend who is an attorney, and a very good attorney with a successful practice. She came out of the big lay firm to start her own business a little while ago, and her business is growing to the point where she was able to bring in an associate. Besides growing her business in the field she operates in, the law, she has also developed a side business connected to her law firm, where she works with attorneys who are interested in opening their own practice. 

This friend has earned my respect with her business knowledge and acumen. I'm proud of her accomplishments and I feel blessed to be her friend. On top of the success she has achieved in her field, she also wants to mentor others to build businesses in the same field. Her idea to grow her business through this program comes from a place of abundance, where she understands that helping other attorneys build a practice does not affect her business - there are enough clients for everyone.

If you have a good understanding of your industry and know more than a lot of people who are in the same industry, or if you know how to build a business, you can develop a stream of income by teaching others to enter or build a business in your industry. There is no downside to this business endeavor. 

Create More Income Month - Chapter 2

This month we are talking about ways to make more money in your business. After we talked about the way to select ways to develop new revenue streams, we will talk about how to execute on starting and growing those revenue streams.

Let's first list a few revenue streams:
1. Start a new business
2. Develop a new product/service in your existing business
3. Expand in a new market: geographic or demographic
4. Develop partnerships with complimentary businesses and cross-sell
5. Write a book about your expertise

There are other ways to expand your business, so please write some of your favorite ones in the comments. This week we are exploring some ways to implement the strategies mentioned above.

The first step in working on any of these ideas is to write down the ideas you have about starting the business or the revenue stream. Once you list them all in the order you have them in your head, you start arranging them in a mind map, so you can figure out how they work together. This is a great way to make sure that you cover all the ideas that are in your head. Many times we think that the ideas we have will stay in our head - writing them down ensures that we don't lose them.

The second step is deciding what stream of income we are going to pursue first. After it passes the values test and we establish that this stream works with the mission and the vision, we figure out the actions that we need to do in order to start and grow the income stream.

If developing different products/services or expanding in new markets, your business plan is a great way to have a working action plan. The most important thing about a business plan is to use it continuously. It is not supposed to stay on a shelf, it is supposed to be worked on. A business plan is meant to be changed according to the needs of the business.

If your goal is to develop partnerships with complimentary businesses, you can consider business that are in areas that are also needed for your clients. While you can get referrals from your partners and make money from those sales, there is also the added possibility of making money by becoming an affiliate for your partners and making money from referring clients to them. You can also increase your revenue from these partnerships when your partners sell your products/services - while you pay them a commission or affiliate fee, your sales increase.

Many business people share their expertise through books they write, while also leveling up their expert status. This may not be a huge source of revenue but it can bring some money from book sales while also opening doors to new opportunities: speaking engagements, workshops and seminars related to your field of expertise.

These are a few ideas that hopefully will give you some food for thought. Please add your own ideas in the comments and let's exchange some interesting thoughts.

Create More Income Month - Chapter 1

Are you leaving money on the table?

We are talking to the business owners, independent contractors, mompreneurs and all women solopreneurs this month. As the summer is over and the families are back home and ready for the new school year, many entrepreneurs choose September to refocus and recommit to their business goals. We will be focused on business growth this month, so we can all grow our businesses together.

This first week, I would like to talk about business growth by developing new streams of income. This can apply to you if you own a business and are looking to develop new revenue streams, or if you have a job and are considering a side hustle to increase your income. Whether you have a business already or just considering one, you need to have a goal that motivates you to do the work, so you can succeed. 

Once you have a goal, you are set to start working on your business. The next step is to make a plan for it. If you already have a business, you probably already did this, but if your business is still just an idea in your mind (or on paper), you need to give some deep thought, put on paper and then make clear what your values are - personal and in business. You write down your business vision and mission; they should be reflected in your business goals. 

This will help you stay focused when you feel an inkling of the S.O.S. (shining object syndrome) - a condition quite common to the entrepreneurs. Too many times we all start new paths in business because we think that the new idea can be our next big success, because we get excited for the new opportunity and because we want to try multiple things when we think more stuff done will bring more money. While these ideas and opinions are not necessarily a bad things and are not necessarily wrong, they are not conducive to high levels of income. 

The best way I can illustrate this point is to paint a picture: if the income is in a bag in the middle and each of the ways you choose to get the money to come to you is a direction you pull the bag, you will not be able to drag the bag in any direction. You will move a few steps in one direction and then another few steps in a different direction, but will never make great progress in any direction.

If you focus on what thing and make progress in that direction, then you move the money bag in that direction for a while. You can always pivot and make changes in your business, then you will make progress in that other direction. You can add as make revenue streams as you want, as many times as you want, as long as you are committed to each new direction at the time that you are working on it.

The best way to make sure you stay true to your values is to ensure your actions are aligned with your mission and vision. As long as you focus on the goals that contribute to your mission, your actions will fall in line. Your actions will lead the money bag in the direction you are going. 

Let's go into more ideas next week.