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3 Things 4-10

Thing One What's Your Motivation? The author of the WSJ Best Selling book, Ultralearning, Scott Young, recently wrote a thought-provoking article called "The Paradox of Effort". It's a brief but fascinating look at motivation and shortcomings. The last few paragraphs are key and have been excerpted below: "You have the ability to put in far more effort into things than you normally do. The reason you don’t is that, most of the time, a full effort isn’t necessary. We think that a full effort will be draining, that we ought to save our energy for when we really need it. Yet, more often than not, the opposite is the case. When we really use our full effort toward a central concern that matters deeply to us, we feel more energized — not less. The paradox is that life is often easiest when it is hardest. When you’re working on a pursuit that may fail if you don’t take it seriously, you find the energy to take it seriously. And, in doing so, you find the other nagging things in life that needed effort weren’t so hard either. The key is to find the one thing that will necessitate all the rest."

Thing Two Why Buy Life Insurance There's an old saying in the life insurance business, "Buy term, and invest the rest." The thought behind the phrase is pretty simple. Insurance is for mitigating risk. Investing is for creating a return on invested capital. Don't mix the two unnecessarily. If you need to buy insurance, you should buy the least expensive kind and only buy it for the amount of time that you've determined you need it. Then, if you have money left over, you should invest it in a manner that minimizes your expenses and is consistent with your tolerance for risk. But how do you know if you need life insurance? Take a look at the eight items listed below. If you can relate to any one of them, you likely need to give life insurance further consideration. ............. 1 - To protect your family in case you die prematurely. This is the most basic reason for purchasing life insurance. People die unexpectedly all the time. If that person happens to be the primary breadwinner in a family, that death might create undue financial hardships in terms of liabilities that persist after death like mortgages, car payments, etc,. And even if that person isn't the primary breadwinner, the untimely death might create financial issues where none existed previously like childcare, homemaking, and even the loss of any secondary income. Income replacement properly summarizes reason number one for purchasing insurance. 2 - To create an estate. You might determine that you will not be able to leave behind the type of estate that you would like to. You can use life insurance to "create" an estate to pass on, provided you can pay the premiums. The earlier you make this decision the better as age and health sell life insurance. 3 - To protect an estate. When you die, your heirs will have to pay taxes on what you pass to them. If you would like to keep the government from taking too much of what you had planned to leave your loved ones, you can buy insurance for the purpose of paying the estate taxes, thereby relieving your heirs of that burden. 4 - To guarantee insurability. Many young parents (and grandparents) who are worried about potential health issues purchase insurance on their young children to establish insurability while they're young and inherently more insurable. The idea is that as they get older they can always increase the coverage amounts of existing policies without providing evidence of insurability through health exams. That means that if they develop health conditions later in life, they're already covered. 5- To create a cash value savings account. With anything other than a term policy, there is the opportunity to build up a cash value by routinely paying the premiums. This is a kind of forced saving account. It's not the best way to save, but it's an option. 6 - To protect a business if a key person dies. Business owners will often purchase key person insurance policies to protect themselves against the untimely demise of a key employee. The specific knowledge, skills, and abilities of the deceased individual are typically not easily replaced, but the proceeds from key-person policy can help buy the business time to rebuild the lost knowledge by providing capital for additional resources and training. 7- To protect remaining partners in a business if one partner dies. There are cases where one partner dies and it would be impractical, for any number of reasons, for the surviving partner to continue in the business with any of the deceased partner's heirs. Policies known in the business as buy-sell agreements allow for this by making funds available upon a partner's death to "buy out" the heir's interest in the business. 8 - As a part of an employee's compensation package. There are times when a business buys life insurance on an employee, who is usually an executive, as a fringe benefit to that employee.


Thing Three Just A Thought "Facts can be ignored, but their consequences cannot be escaped." -Thomas Sowell

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