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5 Things You Need to Do Now to Get a High Paying Job

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Many people want to secure a high-paying job to ensure they can easily make ends meet, but figuring out how to land one isn’t always simple. Fortunately, there are steps anyone can take to put them on the path toward a more lucrative position. Here are five things you need to do now to get a high-paying job.

1. Establish Your Expertise

In many cases, high-paid professionals are known for being subject-matter experts in their niche. As a result, spending the time to establish your expertise and cement your reputation as highly knowledgeable in your field works in your favor. It can position you as a go-to person for specific tasks or when particular types of information are required, which makes you a more valuable addition to any company’s workforce.

Overall, establishing your expertise isn’t as challenging as it seems. First, you need to excel in any related roles you currently hold, particularly when tasks align with the niche. Heading online and creating content that showcases your knowledge or establishes you as a thought leader can also work well. Similarly, engaging in forums to share your expertise as a means of helping others solve problems can work wonders.

2. Spend Time Networking

Forging professional relationships is a classic recommendation when you need access to job opportunities for a good reason. Many openings aren’t publicly advertised, meaning they’re only accessible if you have a direct connection through someone you know. Plus, by building these relationships, you may be able to secure referrals, which can elevate your position as a candidate.

Networking also has other benefits. For example, you may be able to find a mentor who can help you navigate your chosen field. Your network can also serve as a support system in some cases, providing guidance when you face unexpected difficulties.

3. Acquire the Right Skills

When it comes to career success, skill-building is critical. However, if you want to work toward a high-paying job, you need to make sure that you’re acquiring the right capabilities. While foundational skills are a must, it’s also wise to hone capabilities that relate to skill gaps in your industry. If demand for a particular skill is high, but the supply of professionals with the ability is low, it makes you a far more desirable candidate.

Along with acquiring abilities that relate to current skill gaps, try to identify the skill gaps that will exist in the near future that could prove lucrative. For example, capabilities that align with emerging technologies that have significant potential in your field can work well, as it allows you to bring something to the table that lets companies leverage these new advancements.

4. Develop Leadership Capabilities

Many high-paying jobs involve shifting into management roles. As a result, spending time developing your leadership skills can be an excellent way to increase your access to more lucrative opportunities.

Several approaches can work well for honing your leadership skills. Formal courses are an option, as well as volunteering to head up projects or any other work-related opportunity that lets you step up as a leader.

5. Take Smart Risks

In many cases, taking smart risks can make it easier to access higher-paying positions in less time. For example, when exploring new job opportunities, don’t be afraid of trying for roles that are just a bit outside of your comfort zone. In many cases, if you bring most of what the hiring manager wants to find to the table, you could still be a contender, even if you aren’t a 100 percent match. While it means you’ll face a learning curve if hired, it’s a risk that can pay off if you’re suitably dedicated to learning once you secure the role.

Another smart risk is taking a prominent role in a high-visibility project. If you meet or exceed expectations while doing so, you can elevate your reputation. Plus, it can put you on management’s radar, and that can open doors that may otherwise be closed. As a result, it could put a high-paying job within reach faster, making it worth the effort.

Do you have any other tips that can help someone get a high-paying job as quickly as possible? Have you tried any of the strategies above and want to tell others about your experience? Share your thoughts in the comments below.

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In Defense of Financial Advisor Fees

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I was a fee hater.

Like a younger, more handsome John Bogle, I would rail on fees. I’d stand on every rooftop screaming about avoiding fees at all cost.

For this reason, when I was a financial advisor, I provided what I thought was top-notch service and undercharged for it every day.

How much did I charge? My minimum fee was $500 per year.

Undercharged? There is no such thing, Joe! Less fees = better. Duh! You should have charged $300!

Think so, do you? Sit close, young padewan, while Uncle Joe tells you a story:

My Experience With Fees

Early in my career I lucked into the opportunity to give speeches on behalf of one of the top advisors in the country. I’d fly wherever he wished and spoke to rooms full of people about good planning. In exchange, he allowed me to move my offices into his suite.

Awesome! What a break for a new advisor; I’d get to see the inner workings of a well-honed operation and maybe glean some tips.

At first I was disappointed. All I saw was what looked like a cookie-cutter assembly line of advice and deliverables. Many clients received offshoots of similar advice. The firm never stuck their neck out. They avoided complex situations at all cost.

That lead me to believe that he was among the best in the country only because he could “sell” people on ways he’d jack up their fees.

…and jack he did. I rarely saw him charge less than $2,500 for planning, then garner asset management fees on top of that. He was a fee-based selling machine.

One day the operations manager and I were talking. I asked a polite question about how redundant their process management workflow seemed. To give you an idea of what I thought about this guy: I’m sure the term “cocky smartass” wouldn’t be far off the mark.

He said, “Have you noticed that we charge five times what you charge?”

I smiled. “Yes.” What a loser. I could never charge what they did! They were just leeches, skimming off of their client’s blood.

He said, “We charge five times more because we’re five times better than you.”

I took it personally.

I shouldn’t have.

Three months later, we were in agreement:

he was five times better than me.

Why He Was Better

This planner was so good, I’d worked right under his nose and hadn’t noticed his skill. The systems were sublime. Where I’d seen cookie-cutter assembly lines before, now I saw a brilliant asset allocation arrangement. Where I’d believed he was charging excess dollars to put boring plans in place, he was dotting every “I” and crossing every “T” for clients…mostly doing the boring stuff that usually was swept under the rug.

In short, he had a proven system of asset management and plan building. If you wanted that service, he covered his costs with his fees. If you didn’t want it, you should probably look elsewhere.

He didn’t try to be everything to everyone.

What You Can Learn

You don’t have to pay $2,500 or more to some advisor if you’re willing to perform the critical tasks that this advisor captained for his clients:

1) Design a plan that covers the six areas of financial planning and rigorously maintain the plan according to a set schedule. Make sure everyone involved is up-to-speed with the details.

2) Build a system to check and maintain your assets against your plan. He had systems in place to notify him when assets deviated too much from the plan. Build your own set of alarms.

3) Carefully guard against taxes and excess fees. This seems like an oxymoron, because this advisor charged a ton of money, but his fees were largely performance based. To increase his fees (and his client’s net worth) he had to ensure the plan was a lean-mean-return-gathering-machine. The only way to do that was to develop a comprehensive tax strategy (example: tax efficient investments outside of IRAs while tax-eaters inside shelters) and low-cost investments.

4) Scour insurances for opportunities. This advisor would review all of his client’s insurances regularly (every two years) to find wasted money. He’d also use insurances wisely to plug holes. One place he nearly always recommended: disability coverage.

5) Build legacies. He was the adamant that everyone either had a family or charitable organization they’d want to have flourish if they couldn’t use their own money. He’d make sure that the estate plan was air-tight and (as with insurance) review these plans every two years.

6) Set communication systems. Clients received a newsletter every six weeks. There was a conference call scheduled for two quarters of the year, along with two face to face meetings. Generally, the face to face meetings were comprehensive and the phone calls were “just checking up.” While he “allowed” only one member of a marriage to take part in phone calls, he was adamant that both spouses attend meetings. He’d become especially irate if one didn’t understand finances and didn’t want to participate. His thinking: if the knowledgeable spouse passed away, the other was screwed.

He also wasn’t afraid to call every client when markets imploded. During the 2002 and 2008 crisis, his whole team was on the phone non-stop, sharing information and passing along strategies. Usually, he wasn’t changing course, because his asset allocation model was already designed to weather downturns. However, clients loved hearing from him.

Was some of this overkill? Maybe. Often insurance and estate planning needs didn’t change. However, when something did, the advisor was on top of it fairly quickly.

It’s a Choice

During my 16 years as an advisor, there were many clients who refused to pay fees even though they would have been far better off had they paid this advisor. It’s fine to accomplish your financial goals without an advisor (in fact, if you’re willing to complete the six steps above, I’d recommend it). But if you decide not to, make sure you’ve designed systems for success and aren’t just being cheap.

Financial planning is just one example. Are there areas of your life where you’d be better off paying a fee and you just can’t do it? Are you cheap?

(Photo credit: Hands Clenching Dollars, Muffett, Flickr; Couple and Advisor, Jerry Bunkers, Flickr)

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5 Ways To Prepare Your Investments For A Recession

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Preparing ahead of time for a recession can protect you against making costly mistakes and adding undue stress to your life!

The U.S. economy is slowly starting to disintegrate, and many experts are predicting that the next recession is going to hit hard. Citizens worldwide are feeling the effects of inflation on their finances, and as such, they’re also noticing that their investments are more prone to failure. Investors are uncertain about what the future holds, but they do know that they want to protect their portfolios against recession as much as possible. Don’t wait until the recession hits, but rather, prepare for the rocky road ahead with the following tips:

  1. Establish A Plan For Your Budget

The first step to ensure that your finances remain in the positives is to know where your money is going in the first place. Get a better picture of your spending habits by checking your expenditures for at least a month. During this time, consider how much income you have and how much you’re spending. You can use this exercise to also cut back on your spending in certain categories and adjust your budget as needed.

  1. Avoid Unnecessary Spending

During a time when the stock market is down and recession hits hard, it’s crucial to not spend money unnecessarily. Every penny you spend needs to be spent on a necessity! The easiest place to make some budget cuts is by eliminating luxury items and experiences such as travel, high-end fashion or anything else you don’t actually NEED. Whenever possible, you can further reduce your overall spending by purchasing household goods and groceries in bulk.

U.S. senator, Elizabeth Warren, authored a fantastic book titled, Your Worth: The Ultimate Lifetime Money Plan. She explained that the best way to spend money is by breaking it down into 50/30/20 categories. That means 50% of your income is invested into necessities, 30% of it on wants, and 20% on savings. Though savings account interest rates are still fairly modest, opening an online-only savings account can net you up to 2% yearly interest. Though it may appear daunting to get started, even saving small amounts of money to get started can yield fantastic returns!

  1. Create An Emergency Fund

Though having an emergency fund is always a smart investment, it’s even wiser during a recession. Should you lose your income or unforeseen circumstances arise, your emergency funding can help pay for your education, medical expenses or home repairs. To figure out how much money you can reasonably set aside for emergency expenses, you will need to look at your overall monthly spending and budget accordingly.

Though by no means is it a rule of thumb, it’s good to have about three or four months of living expenses put aside. Depending on your lifestyle and living situation, however, you may need to have enough money to cover at least a year’s worth of expenses. This is undoubtedly the case if you have young kids or a newborn to look after.

  1. Eliminate High-Interest Debt

During a recession, high-interest debts should be the first to go. Credit card debt is usually the most expensive type of debt that families have, and if you’re struggling with your finances, all the more reason to eliminate credit cards from your life. Having said that, you may need to reach out to a financial advisor or a credit counselor to help you get your spending on track.

Here’s a jarring statistic: the national average for credit card rates have surpassed 17%! The U.S. Federal Reserve has also revealed that they’re going to raise interest rates for the remainder of this year, and as such, eliminating credit card debt is a good way to go. Not having all of these interest rates stacking up will help you cut household expenses.

  1. Understand The Risks Of Investing

Though you should aim to keep risks fairly low in your investment portfolio, you don’t need to completely eliminate it to remain successful. There are some bonds primed to bloom. Most stocks recover after the worst effects of the recession subside, and if you have steady income and plenty of years to go before retirement, investing can actually help you, even if some of your investments are best categorized as risky. Learn how to invest to suit your requirements. Of course, if you’re older and nearing retirement, you will want to choose stocks and general investments that are less risky and don’t require much time to bounce back should you look to unload. In either case, you will still retain the ability to sell your stocks quickly even if the market takes a big hit. Don’t over-monitor your assets, but still play it by ear! For those nearing the retirement age, choosing cash equivalents and bonds provides adequate cushioning against a volatile market.

 

What Is The Cost Of A Gut Renovation?

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When you own a home and want to remodel, the idea of tackling a gut renovation is often appealing. Getting down to the studs allows you to update every aspect of the home. You can easily replace plumbing, electrical, and HVAC components. At times, you can even move walls, vault ceilings, and otherwise, adjust the layout. Plus, you can redesign the entire space to meet your needs and match your stylistic preferences. However, gut renovations are expensive. Here’s a look at the cost of a gut renovation.

What Is the Cost of a Gut Renovation?

Technically, the cost of a gut renovation can vary depending on several factors. The size of the home, the number of stories involved, the required systems updates, and the nature of any repairs are factors. Whether hazardous materials – like asbestos or lead paint – are present impacts pricing, as well as changes like moving walls and vaulting ceilings.

The finishes you choose for the new design also matter. Higher-end flooring, cabinets, hardware, and other finishing items come with bigger price tags, boosting the total cost.

Additionally, your location plays a role in the cost. The prevailing wage for contractors and construction workers varies from state to state and city to city, and the same is true of materials. As a result, you may pay more or less than others with similar properties if you’re in a higher or lower-cost area.

With that in mind, the average cost of a gut renovation usually falls in the $100,000 to $200,000 range. Just bare in mind that your property could cost more or less, depending on the factors listed above and other details.

How to Estimate the Cost of a Gut Renovation

In most cases, estimating the cost of a gut renovation is challenging, typically because certain issues aren’t revealed until the entire structure, and underlying systems are exposed. Additionally, unless you’re in the construction industry, you might not know material costs in your area, how much specific structural changes usually run, or all of the required steps to make your vision a reality.

As a result, it’s often best to map out your gut renovation. Outline every room that’s involved, the features or finishes you want, and any structural adjustments. Additionally, for structural changes, get a formal building plan in advance, preferably one that’s created by an engineer or similarly licensed professional.

After that, present your project to several capable, licensed, and insured contractors in your area. Meet with them to discuss your vision and answer any questions they may have about the project or plans. Additionally, learn more about their capabilities. Then, request official quotes.

By getting several quotes, you can gain insights into prevailing rates in your area. Just make sure every estimate includes details about contingency funds, as that money helps deal with the unexpected. It’s also wise to follow up and see what sorts of situations may make the quote inaccurate, such as the impact of shifting material prices during the renovation period.

Compare the quotes line by line, as some contractors may include steps, features, or services that others don’t. Additionally, don’t default to the lowest bid, particularly if it’s far below the others, as that could indicate the contractor overlooked a critical part of the project or lacks the necessary experience to offer an accurate estimate.

Factoring in the Hidden Costs of a Gut Renovation

While contractors can often provide reasonably accurate bids for your project, the cost of the renovation itself isn’t all you’ll contend with during the project. With a gut renovation, living in your home while work is underway may not be an option. Along with being uncomfortable, there are potentially laws that make it illegal. As a result, you may need to find a place to stay for several months.

Living in another location can come with a range of expenses. It may alter your commute times to work, require you to drive more so that you can visit your home, pay utilities on two properties, have insurance for two properties, and more.

Plus, a gut renovation usually means you need to store all of your belongings. This could make adding and securing sheds in your backyard a must, or you might need to rent a suitable storage unit or temporary options like containers from a company. Depending on how much you own and how long the renovation takes, this adds up quickly.

Even if you’re able to live in the house, you could see expenses increase. For instance, when your kitchen is torn out, cooking may not be an option. As a result, you may rely more on dining out or food delivery, which is typically more expensive.

Plumbing Updates

If your plumbing is getting updates, you might not have access to clean water at home. With this, turning to bottled water might be your only option, and that’s far more expensive than what comes from your tap.

Consider how the gut renovation will impact every aspect of your life. That way, you can identify and factor in potential hidden costs that increase the price tag of the total project.

Are you surprised by the cost of a gut renovation? Have you tackled a gut renovation and want to tell others about your experience, including unexpected expenses you encountered that threw off your budget? Share your thoughts in the comments below.

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Can I Move Out Of My Parent’s House With No Money?

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How To Move Out With No Money

Figuring out how to move out with no money isn’t easy. In many cases, moving comes with some significant expenses. For example, there are deposits required when you rent an apartment. Additionally, you’ll need to have a way to get your belongings to your new place, as well as pay your bills moving forward. However, that doesn’t mean that you can’t move out of your parent’s house with no money. Here are some options that can help you make it happen.

Start with a Budget

Even if you don’t have any savings to support your move, you may be able to make it work, depending on your income. Create a budget that outlines your current expenses. Next, add in costs you’d need to handle once you move, including rent payments, utilities, renter’s insurance, groceries, and similar expenses. Usually, you can find the average cost for those expenses in your area with a bit of research.

Once you know what you’ll need to cover, compare that to your income. That lets you see if you can potentially afford to move out, as well as if you have room in your budget to start saving for deposits and moving expenses.

Focus on Low-Cost Rentals

While you may have visions of having a luxury apartment, if you don’t have any money set aside, you’re going to need to start out in a low-cost rental. This might include small studio apartments or roommate arrangements.

With the latter, you may be able to save a bit more on your move. For example, if a friend has a room they’re willing to rent – and the landlord allows it – you might not need to cover security or utility deposits. Even if you do have to contribute to a security deposit, what you’d need to pay could be far less than if you moved out on your own.

If you need to move out as quickly as possible, you may be able to talk to other family members or friends to see if you can stay with them for a short period while you get on your feet. However, you do need to have a frank conversation to ensure everyone’s on the same page regarding how this plays out. Additionally, it’s best if you can show a concrete plan – including a timeline – that lets them know when you’d be ready to move into your own place.

Sell Your Excess Stuff

If you want to reduce the cost of your move and give yourself a little cushion, sell any personal belongings that aren’t essential. While it could mean living a little sparsely initially, it lets you get a bit of cash that you can use to cover transporting your other property to your new place, handle security deposits, or build up a small emergency fund to make sure you’re ready for the unexpected.

Secure or Maintain a Source of Income

When you don’t have a financial buffer, maintaining a source of income is essential if you’re going to move out of your parent’s house. Ideally, you want something reliable and reasonably consistent, especially if you want to rent a place on your own. Otherwise, you may have trouble meeting the income requirements for the rental.

In some cases, you may want to supplement your core income, as well. Options through the gig economy can be excellent ways to bring in a bit more money. Plus, if you start before you move out, you may be able to build up some savings to support your move.

Live within Your Means

Living within your means is crucial if you don’t have a financial buffer. Make sure you keep your expenses as low as possible and focus on saving before you move and after you transition into your new place. An emergency fund provides you with some security, so it’s crucial to build one as fast as possible.

While this can mean forgoing niceties for a while, it’s a sacrifice worth making if moving out is important to you. So, focus on keeping your expenses down and stash as much cash as possible. That way, you’ll increase your odds of success.

Do you have any other tips that can help people figure out how to move out with no money? Did you manage to move out on a dime and want to tell others about your experience? Share your thoughts in the comments below.

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Five Financial Questions Women Should Ask About

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It’s no secret that women face unique financial challenges. From the gender pay gap, to managing household finances, it can be tough for us to make informed decisions about our money. To empower ourselves and make sure we’re on the right track financially, we need to ask the right questions. Here are some of the most important ones.

What Insurance Should I Have?

Insurance is a big (and often surprising) topic for women: we live longer, are more likely to experience a disability that impacts our earnings, and are more likely to support children or elders. We have a stronger need for a safety net.

As a high-level guide: max out any employer-sponsored coverage (like through your job) and then get an individual policy for the remainder of your need, as your budget accommodates.

Life Insurance

Life insurance is a tax-free gift you give the next generation, and term life insurance is inexpensive. Buy what you can afford, on the private market or through your employer.

Disability Insurance

Disability insurance is so important for women – it will replace a portion of your income if you can’t work, and you want to target 60% and 70%. Especially if you are a single mom or supporting family. To achieve this target, you will probably need a private policy in addition to any coverage from your employer (if available).

Long-Term Care Insurance

And finally, if you’re approaching retirement, long-term care insurance is important if you want to make sure you don’t have to spend all of your savings on health care in retirement. It can be very expensive, so don’t purchase this til you’re older and approaching the need for it.

These are just general guidelines – there’s no one right answer when it comes to insurance. It’s important to talk to an expert (like a financial planner) about what kind of coverage makes sense for you given your unique circumstances.

What is the Best Way to Budget?

There’s no one right way to budget your money – find the method that works best for you and stick with it! Consistency is much more important than perfection.

The Envelope Method

Some people use the “envelope system” where you put a certain amount of cash into an envelope for each category (like groceries, entertainment, and transportation). That’s all you get for that category for the month. This is great if you have to be very careful and want to stay away from credit cards entirely. It’s also a great system if you like using a physical planner over software/apps.

Budgeting Apps

If you prefer using technology to manage your finances, there are a number of great budgeting apps out there that can help you track your spending and set goals. Some popular options include Mint, You Need a Budget (YNAB), and EveryDollar.

Spreadsheet Budgeting

For those who like having more control over their budget (and who are comfortable with Excel or Google Sheets), creating a budget in spreadsheet form can be a great option. This method gives you a lot of flexibility to track your spending in the way that makes the most sense for you.

Pay Yourself First

One of the best ways to make sure you’re saving enough money is to “pay yourself first.” This means that as soon as you get paid, you put some money into savings before you spend any of it. This can be difficult at first, but if you make it automatic (i.e., set up a direct deposit from your paycheck into your savings account), it will become easier over time.

What is the best way to save money?

Again, there is no one right answer to this question – it depends on your goals and financial situation. But the upshot is that you can build an emergency fund or improve your generational wealth. Here are some general tips that can help you get started:

Increase Your Income

It can be very challenging, but to save money, you need to bring in more money than you spend. You can lower your costs and watch your spending, but you can also increase your income through a side hustle, a raise at work, or a promotion. You could sell extra things around your house. You don’t need to make a huge commitment – even small improvements in your earnings can make a big difference.

Automate Your Savings

Set up automatic transfers from your checking account to your savings account so that you’re automatically putting away money each month. This is a great way to make sure you’re always saving something, even if you don’t have a lot of extra money.

Join a Savings Challenge

A savings challenge is a great way to encourage you to save more money and get some community support. There are all kinds of challenges out there (like the 52-week challenge, where you save $52 in week one, $51 in week two, and so on), but the important thing is that you find one that works for you and stick with it. Dasha Kennedy at the Broke Black Girl runs a great year-long savings challenge to help women save $1000.

How Much Do Women Need to Save For Retirement?

As much as you can.

Women retire disadvantaged: we generally receive lower social security benefits due to lower earnings. We also tend to live longer (which means more years in retirement), and we’re more likely to experience a period of disability. All of this points to the need to have a larger retirement nest egg.

Target 20% Savings

Controversial opinion: I encourage all women to target 20% of pre-tax household income for savings. That is a lot. But most of us are playing catch up, and starting from lower earnings. Build up to it by increasing your savings rate little by little, and remember that even small amounts add up over time.

Invest Your Savings

You want to make sure your money is working hard for you, and one of the best ways to do that is to invest it. Investing can be intimidating, but on average, female investors outperform by 1% because we are less likely to panic. 1% is what professional investment advisors charge. Set up auto investment, choose low fee index funds and increase your contribution little by little. Like saving, successful investing is about consistency and patience.

What Biggest Money Mistake Should Women Avoid?

The biggest mistake you can make is to hand your finances off to a partner and ignore them. Women are socialized to do this (and it’s changing, slowly) but we pay for it. If you are widowed or experience divorce, you will be adding a terrifying and steep learning curve to a personal crisis.

Additionally, and I say this as Chief Financial Officer of our family, financial decisions will be better with your input! Even though I do this for a living, my husband often has great insight and our decisions benefit from his involvement. Don’t discount your ability or perspective, especially given that women are better investors.

How to Transfer Assets to Children Before Death

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If you are a parent, you already know it’s important to plan for your children in case something happens to you. One way to do this is by transferring assets to them before you die and in your estate planning. This can be done in a number of ways, and each has its benefits. In this blog post, we will discuss the different options available to you and how each can help protect your children’s future.

Remember: Generational Wealth building isn’t just for parents: grandparents, aunties, and uncles can change the shape of the entire next generation.

Work with A Family Law Attorney and a Tax Planner

family law attorney

There are many different ways to transfer assets to your children, and almost all of them require a lawyer and have tax implications. It is important to consult with an attorney as well as a tax planner, both to choose the transfer structure that is right for you and also to ensure that the documents are compliant with Federal and State property and tax law.

Draw Up a Will

One way to transfer assets to your children before death is through a will. A will is a legal document that outlines how you would like your assets to be distributed after you die. A will doesn’t actually transfer ownership of your assets until after you die, but it can be used to specify exactly who should receive what.

If you have a will, it is important to keep it up-to-date as your life and circumstances change. You should also review it regularly with a family law attorney to make sure it still meets your needs.

One important note: a will is great for establishing your wishes for the distribution of your assets are followed, but it will not keep your estate out of probate. Probate is the legal process of distributing a person’s assets after they die, via the courts in your state. It can be time-consuming and expensive, if you have substantial or complex assets, so many people choose a trust.

Create and Move Assets Into A Trust

will and trust documents

A trust is an arrangement in which one person (the trustee) holds and manages property for another person (the beneficiary). It’s a critical part of estate planning. Transferring assets into a trust can help avoid probate because the trustee can distribute the assets according to your wishes without having to go through the court system.

Moving assets into a trust that can be managed by a trustee will give your children access to the assets when they reach a certain age while ensuring that the assets are managed responsibly.

One common type of trust is a living trust, which is created during your lifetime. You can name yourself the trustee, which gives you control over the assets during your lifetime. Then, when you die, the trust remains in force and the beneficiary can receive the assets without having to go through probate. You can even trigger the execution of your trust before you pass away.

This is a good option if you want to maintain control over the assets during your lifetime, but also want to avoid probate.

Name Beneficiaries on Financial Accounts and Insurance Policies

name beneficiaries

Most financial accounts and life insurance policies allow you to name a beneficiary. This means that the account or policy will be transferred to the named beneficiary upon your death, without having to go through probate. Having updated beneficiaries is the cheapest and easiest way to transfer assets such as retirement accounts, bank accounts, and life insurance policies.

It is important to review your beneficiaries regularly and update them as needed, especially after major life events such as marriage, divorce, birth, or death. This can be especially important for single parents and blended families.

Transfer Assets During Your Lifetime

Another way to transfer assets to your children before death is through a gift or by selling the asset to them for less than its fair market value.

The upside of this option is that you are still around to help them manage the asset. The downside is that lifetime transfers have serious tax implications that vary depending on the value of the asset and your state’s laws.

Gift Assets to Your Children

You can give $16,000 per year, per child (or any other recipient) without needing to file any tax forms or pay any tax. If you are married, you and your spouse can each give $16,000, for a total of $30,000 per child. More importantly, the current (2022) Federal gift tax lifetime limit is $12.06 million per person, and you can also double it if married. While it would require you to file a form, gifts of any size can be given to your children without owing any gift tax, as long as the total amount gifted during your lifetime does not exceed the $12.06 million limit.

Sell Assets to Your Children for Less Than Their Fair Market Value

sell assets to children

You can also sell assets to your children for less than their fair market value. This is The most advanced move, absolutely requires a competent lawyer and tax planner, and is generally most appropriate for family businesses. Generally, this involves a contract in which you sell the asset to your children for an agreed-upon price that is less than the fair market value.

There are a few different ways to transfer assets to your children before death. The most common ways are through a trust, naming beneficiaries on financial accounts and insurance policies, or transferring the assets during your lifetime.

Each method has its benefits and drawbacks, so it is important to discuss your options with a family law attorney and tax professional to choose the option that best suits your family.

End-Of-Life Care Costs

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End-of-life care is a treatment someone nearing death receives in the final days, weeks, months, or sometimes years of his or her life. During this time, medical care and support continue regardless of whether the patient’s condition is curable or not. Many receive professional medical care in hospitals, nursing homes, or even in their own home. Patients are then placed in either palliative care or hospice care, and the costs are paid by Medicare, Medicaid, private insurance, charities, the individual, or other payment programs. Here are some things to know about end-of-life care costs.

Eligibility for Medicare’s Hospice Benefit

  • The patient must be 65 years or older
  • Diagnosed with a serious illness
  • Certification from a doctor that he or she has six months or less to live
  • Agrees to forgo life-saving or potentially curative treatment
  • Hospice provider must be Medicare-approved

Medicare provides care for two 90-day periods in hospice, followed by an unlimited number of 60-day periods. At the start of each period of care, a doctor must re-certify that the patient has six months or less to live.

Medicare’s hospice coverage includes a broad range of services:

  • Nursing care
  • Medical social worker services
  • Physician services
  • Counseling (including dietary, pastoral, and other types)
  • Inpatient care
  • Hospice aide and homemaker services
  • Medical appliances and supplies (including drugs and biologicals)
  • Physical and occupational therapies
  • Speech-language pathology services
  • Bereavement services for families

Hospice costs not covered by Medicare

  • Room and board
  • Emergency care such as ambulance fees or emergency room costs
  • Treatment or prescription drugs attempting to cure illness

Hospice costs are paid for in the following manner: Medicare – 85.4%; Medicaid – 5%; managed care or private insurance – 6.9%; other (including charity and self-pay) – 2.7%.

Respite care is a short-term break for caregivers of terminally ill patients. The patient can stay for up to five days in a Medicare-approved nursing home, hospital, or hospice facility.

Some Costs

Studies showed 42% of people died at their home at $4,760 in their last month of life. Whereas in a hospital it cost $32,379. Dying in a nursing home was the second most expensive, hospice care was third, and the emergency room.

Now that all of this has been explained, there are some things you need to do or things you should do to prepare for these costs.

Planning

You have to save for it. A lot of retirement planning is determined by how much you are going to spend in retirement. Heck, that’s basically all of what retirement planning is. You need to save and plan for this.

Not everyone has to be concerned about it. If you have all of your debts paid off and your retirement account is in a place where you don’t have to be worried about running out of money, then you probably don’t have to think about it too much. That doesn’t negate the fact that you should plan, your planning just looks a little different. Instead of buying final expense life insurance, maybe you’re buying a plot in a cemetery.

If you have all of your debts paid off and your retirement account is in a place where you don’t have to be worried about running out of money, then you probably don’t have to think about it too much. However, that doesn’t negate the fact that you should plan; it will just mean that your planning may look a little different from that of others. For example, it may be the perfect time to think about looking into final expense policies.

Final expense insurance is a life insurance product that’s purchased to pay for burial and/or funeral expenses. It’s also called burial insurance and senior insurance. In most cases, the benefit from the insurance product reimburses the costs incurred from burial and funeral, as this can take longer for those to get paid out. This could provide significant help to you and your family when that time comes and is something that you may want to consider if you want to start thinking about these scenarios now.

Planning will look different for everyone, but your circumstances don’t excuse you from planning. So, start thinking about it today.

Final expense insurance is a life insurance product that’s purchased to pay for burial and/or funeral expenses. It’s also called burial insurance and senior insurance. In most cases, the benefit from the insurance product reimburses the costs incurred from burial and funeral, as it takes longer for those to get paid out.

End-of-life care is a necessity for most people. It’s important to plan for it.

Related reading:

How Medicaid covers hospice care

The Cost of Medicare Plan G in 2022

10 Financial Hacks for a Funeral

Disclaimer:

**Securities offered through Securities America, Inc., Member FINRA/SIPC. Advisory services offered through Securities America Advisors, Inc. Securities America and its representatives do not provide tax or legal advice; therefore, it is important to coordinate with your tax or legal advisor regarding your specific situation. Please see the website for full disclosures: www.crgfinancialservices.com

Pros and Cons of Self-Employment

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self-employment

The number of businesses that have started since the start of the pandemic has shot through the roof. People realized how short life can be and decided to take their earning potential and work-life into their own hands. Here are a few stats to illustrate the self-employment picture in the U.S.:

  • As of 2019, the self-employed section of the population accounted for nearly 30% of total employment (Source).
  • As of November of 2021, there are 9.9 million self-employed people in the United States.
  • 96% of self-employed people don’t want regular jobs (Source)

Business structures

Sole proprietorship – There is no separate business entity. You are the business entity. That means your assets and liabilities are your assets and liabilities. Banks are more hesitant to lend to sole proprietors than they are for other entity types.

Partnership (LP/LLP) – An limited partnership (LP) has one general partner with unlimited liability and all the other partners have limited liability. Creditors can come after all of the general partner’s assets including things they personally own. Limited liability partners can only lose what they put in. A limited liability partnership provides limited liability to all partners. Profits are paid through on personal tax returns, except for the general partner – they must pay self-employment taxes.

LLC – Very similar to the LLP in terms of how profits, losses, and liabilities are treated. Profits are passed through to employees on personal returns. However, members of the LLC are required to file and pay self-employment taxes. 

Retirement plan options

As a self-employed individual, you have a few options when it comes to retirement accounts – Traditional IRA and Roth IRA (available to everyone), SIMPLE IRA, Solo 410(k), and SEP IRA.

Traditional IRA and Roth IRA – Contribution limits up to $6,000 ($7,000 if you’re 50 and older). Withdrawals prior to 59 ½ are subject to a 10% tax penalty unless certain conditions are met.

SIMPLE IRA – available to employers with fewer than 100 employees. Contribution limits up to $14,000 ($17,000 if 50 or older). Employer match available.

Solo 401(k) – Contribution limit is $61,000 ($67,500 if 50 or older). Available to self-employed individuals and self-employed individuals that have their spouse as their only employee.

SEP IRA – Contribution limit is 25% of employee compensation up to $61,000.

Click here for more information about business retirement plans.

Be your own boss

You get to set your own hours and work with whoever you want to. There’s no one to tell you what to do and how to do it. For people that like to make their own schedule and like to go to the beat of their own drum, self-employment makes a lot of sense.

Earning potential

There’s no ceiling on your earning potential. You don’t have a salary range, you make what you make. You can make $10,000 or you can make $10 million. That’s a double-edged sword though, your effort determines your income. You will only make money if you work for it. Someone who isn’t a self-starter, should not be self-employed.

Costs

You have to pay for everything. Whatever the cost of business is for your sector or industry, that’s on you. Health insurance, you have to pay for that. There’s no business or employer that can foot those costs for you. Same with your retirement plan, a lot of employers offer an employee match. If you’re the business owner and the employee, ALL of your contributions are your responsibility.

Related reading:

6 Ways to Save Money When You’re Self-Employed

How to Be Self-Employed Safely and Wisely

Disclaimer:

**Securities offered through Securities America, Inc., Member FINRA/SIPC. Advisory services offered through Securities America Advisors, Inc. Securities America and its representatives do not provide tax or legal advice; therefore, it is important to coordinate with your tax or legal advisor regarding your specific situation. Please see the website for full disclosures: www.crgfinancialservices.com

Finance Lessons Learned from the Pandemic

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The Covid-19 pandemic changed life for two years and there are definitely still elements of what life was in the world today. No doubt there were some terrible things that happened. People lost their lives and their jobs. But there were also positives that came out of it. We’re going to highlight the lesson we can learn from this pandemic, particularly some personal finance lessons we can learn.

Working from home

This new type of work does not apply to everyone and I don’t like leaving people out, but this needs to be talked about. Working from home and articles about it took over during the pandemic and continue to be discussed.

Working from home, at least from some of those articles and studies, appears to be a net positive for employees and employers. Let time commuting, less overhead costs, more productivity thanks to no commute, increased job satisfaction, and improved work-life balance.

Thanks to the work-from-home setup, people who were able to do that moved out of the city or rented an Airbnb for an extended amount of time. In either case, those people were, likely, able to reduce their housing costs by moving to the suburbs or giving themself a little vacation/change of scenery.

Savings rate

A lot of people saved money during the pandemic thanks to stimulus payments. In April of 2020, the personal savings rate for Americans was 33%. In March of 2021, the personal savings rate for Americans was 26.6%.

The savings rate has fallen since then but is still above 12% which is higher than it was before the pandemic (less than 10%).

Stimulus payments

According to the National Bureau of Economic Research (NBER), most Americans either saved or paid down debt with the majority of their stimulus payments. 40% of the stimulus payment was spent, 30% was saved and another 30% was used to pay down debt.

Personal finance lessons

I think there were a lot of personal finance lessons that can be learned from the pandemic. Here’s a list of them below:

People saved more money

The future was very uncertain so people were more conservative with their spending and less conservative with their savings. That mindset shouldn’t change. The future, in principle, is uncertain. We do not know what tomorrow holds, so saving for a rainy day/goals/retirement is very important.

You don’t need to spend money to have fun

At the very beginning of the pandemic, you couldn’t go anywhere. Quarantine and lockdown orders came in right away. Instead of getting together in person, people utilized Facetime, phone calls, and Zoom. I, personally, had group Zooms with family members where we played and had conversations like we would if we were in person.

Diversification is important

Early in the pandemic, the market tanked. We lost over 30% in six weeks. Granted, it came right back up not long after, but that might not always be the case. If you don’t have time to ride out the ebbs and flows of the market, it’s important you get your asset allocation right. Talk with your adviser to make sure your investment matches your time horizon and risk tolerance.

Get rid of debt

You never know when your job and your ability to earn can be taken from you. Some people lost their jobs, some people were furloughed, and some people just weren’t able to go to work. If you don’t have an income, the only other part of the balance sheet you can affect is your expenses. Get rid of your debt. That’ll help you reduce your expenses in case that happens (you can also save more).

Protect your loved ones

Get life insurance. A lot of people passed away during the pandemic. If you contribute income to your household, you need to make sure you financially protect the people that rely on your income.

Related reading:

5 Personal Finance Tips from the Pandemic

How to Regain Control of Your Finances Amid the Pandemic

How to Save Money on Your Post Pandemic Vacation

Disclaimer:

**Securities offered through Securities America, Inc., Member FINRA/SIPC. Advisory services offered through Securities America Advisors, Inc. Securities America and its representatives do not provide tax or legal advice; therefore, it is important to coordinate with your tax or legal advisor regarding your specific situation. Please see the website for full disclosures: www.crgfinancialservices.com