One best action step you can take to build wealth is to keep good records. I just experienced a small earthquake near my home and it made me think about if I was prepared for a disaster. Of course, I have all of my insurance in place- health, property,life and disability. But there are many important papers that should be secured off site or on a disc that I can grab and go. Instead I have a pile of papers in a file cabinet. I started a list of important documents that I will scan or make copies and put in my safe deposit box in another city. I will update these records once a year. That is a small step I can take and part of a good financial plan to build wealth. I will gather these records:

Copies of the purchase and sale of any home or property and receipts for improvements

Copies of the first two pages of the individual and business tax returns

Copies of the car titles, registration, driver’s license and insurance information

Copies of marriage certificates and birth certificates, social security cards, green cards, and passports

Copies of all insurance policies (medical, life, home, auto, health)

List of important phone numbers

Digital copies of important family photos

List of important prescription medications

Photograph of inside and outside of the home

List of important family members phone numbers and emergency phone numbers

List of investments,credit card numbers, bank account numbers, etc.

Preparation can help ease the anguish caused by disaster. It can also hasten the task of recovery. The is an important step to build wealth and maintain it. Don’t think it is unnecessary or it won’t happen to you. Statistics will prove you wrong. Build wealth with your own personal evacuation box.

The post Build Wealth with Your Personal Evacuation Box first appeared on Whole Hearted Way.

I received this reader question recently and wanted to respond publicly:

“I would like to no more about this programs and does it really works? I have made a few investments on the stock exchange through information that i got from Penny Stocks newsletters but was unsuccessful. I want  more wealth but dont no how to start or what to begin with.”

This program is not something I made up or just discovered on my own. It is a well researched and verified process that Certified Financial Planner Licensees use if they practice comprehensive financial planning (which many do not). I have used it personally and in my financial planning practice and found that it works ALL the time if followed correctly. The problem is that many of you will not follow it. Why? Because it isn’t fast, it isn’t sexy, there are NO get rich quick schemes and NO, your life is going to change forever moments.  What it does is give you a road map to arrange your finances to support your current lifestyle and your projected lifestyle (and that means different things to different people). It means taking into consideration how you live, play, what your risk tolerance is, what your tax bracket is and a host of other details.

Where do you start? You start with a strong money foundation and that is following Step 1. to Step 3.

Step 1. Cash and Credit. Cash flow and credit is the life blood of your financial plan. Understanding how much you take in and how much you spend shouldn’t be a painful exercise but a motivator to work with what you got in the best way possible.

Step 2. Risk Management. Everything you acquire can be taken away in one full sweep (and I know you have seen it happen) without the proper insurance.  Getting the right insurance that fits your needs and your budget is a strong step in preserving what you are building on.

Step 3. Estate Planning. You are not building wealth just for you but for your family. A few easy legal documents can insure that they get what you have worked so hard to build and get it easily and without taxation. I have seen so much grief and family burden due to lack of a few simple estate planning documents.

Step 4 is Identify Goals. There is a saying that if you reach for nothing, that is what you will get. What does the future hold for you? Do you see yourself working part-time at age 50? Or would you like to not work at all at age 60? Or maybe you want to change careers or open up a small business? Maybe you would like to send your kids to a private college? Maybe you want to go back to school to learn a new trade? Perhaps you just want to get out of debt and start an investment plan? Whatever you want, that will cost money and you can figure out how to afford those things by goal setting. Unfortunately, it isn’t going to just happen one day. You are going to make it happen by planning for it. Now that you have a solid wealth foundation, you can begin to invest.

Step 5 Investment Planning.  There is nothing complex here.  You pick out (a process called asset allocation)  no-load mutual funds with a variety of asset classes and asset styles based on the return you want, the risk you are willing to take, and the taxes you are willing to pay. Once you have your allocation, it is set it and forget it time. Sorry, I just haven’t seen the research that market timing (darting in and out of investments) works but asset allocation does. You revisit this asset allocation once a year.

Step 6 Retirement Planning. Retirement planning is all about using  these wonderful tax deferred retirement plans (401K,403b,457,etc.) to help us build wealth to meet our goals. Let’s face reality folks. Even if you loved your job and will work everyday until you drop, there will be days,  months, or years during your lifetime that you cannot work. Then you should have your investments replace your earned income.

Step 7 Tax Planning.  I am all for getting the most bang for your buck and tax planning provides that in your wealth building program. For every dollar that you invest, if you can get ten cents to fifty cents back from the government, well why not do that?  That is why so many deferred compensation plans, IRAs, SEPS , etc.  are so popular. They provide a lot of bang for the buck. Don’t get greedy by wanting tax free everything but do take tax implications into every investment decision you do. The difference between 5% taxable and 5% tax free is huge if you are in a high tax bracket.

Those are the 7 steps to build wealth and I go into detail for each one. I have also given you  resources that I value to help you even more. There are links to get a free credit report, and links to fee-only Financial Advisors, and links to financial calculators.  If you aren’t the do-it-yourself type, I am always available to help mentor you through the steps. What is different about me, Wealth Coach Fern, is that I empower you with the information and the tools to build your own wealth program.

Why is that so important? Because studies have shown that most of you will follow through on a comprehensive financial plan if you “own” it. That is what attracted me so much to the coaching model. I want you to be successful and I can coach you through a complete personal financial plan. I have 30 years (gulp! I am old) experience in this field and very passionate about it. If there is any way I can make it easy or if you need more info on a topic, let me know. I want you to build wealth and wealth beyond money!

The post Does this Wealth Program Really Work? first appeared on Whole Hearted Way.

What can you do?

• Plan far ahead by having proactive family discussions. Invariably, one child takes on the bulk of the care giving responsibilities. This can cause tension and resentment that can be avoided by discussion.

• Target specific scenarios so that it is easy to discuss difficult subjects such as when Dad can no longer drive.

• Consider Late-in-life care such as long term care insurance and in-home care insurance. Children can end up writing a check for the premiums or sharing costs with parents.

Joe Birkofer tackles the issue of negative inheritance in the Rice University financial planning class that he teaches. He asks a simple question: “What’s the Black Death for a financial plan?”

The answer: “it’s your parents“.

Coaching Question – How do you plan on taking care of your parents?

The post Black Death of a Financial Plan first appeared on Whole Hearted Way.

Disability insurance – do you need it? How much? What kind? Is it better to pay for it individually or through a group disability plan. What are some of the common features?

No one likes to think about needing disability insurance. We all think it is just for older people but statistics show that the younger people are affected.  It might be assumed that the aging of the workforce may be a factor in the increasing numbers of disabled workers. Disability, after all, rises with increased age. But the average age of disabled workers is actually falling. In 1970 the average age of a disabled worker was 52 years. In 2000 it had fallen to 49 years.

A qualified person with a disability has a 1 out of 100 chance of getting a job when compared to people with similar qualifications.

Note that only a minority of people with disabilities would actually qualify for SSI or SSDI (disability income) since “total disability” or inability to work is a requirement to qualify for such income.

Hear this podcast by John Ryan CFP® to learn all about disability insurance.

The 7 Questions You Must Ask Your  Regarding DI Insurance

The post Disability Insurance-The 7 Questions You Must Ask first appeared on Whole Hearted Way.

The post Long Term Care Insurance- It’s Not Just for Your Parents Anymore first appeared on Whole Hearted Way.

The first three steps in this do-it-yourself financial plan are building a firm financial foundation. When we have insurance to offset our risk, we won’t be tempted to dip into our long term investment plans and screw that up.  There are lots of posts and resources here to help guide you to the right insurance at the right price with the right vendors.

Feel free to share your resources, too.

The post Do-It-Yourself Financial Plan Step #2 Risk Management first appeared on Whole Hearted Way.

With all the disasters happening out there, I had to let you know my favorite resource on the subject-Charles Wilson of Risk Smart Solutions. Charles is a fee-only insurance expert with whom I have personally used to review all of my risks-home, auto, business, rental properties, etc

The link above is an interview I did  with him:

“Earthquake! Storms! Protect Your Home and Business with these 3 Tips”

What you will learn:

• 3 Tips to Prepare your home and business for a disaster

• What are the most overlooked ways to increase coverage and reduce costs.

• How you can get the best coverage, price and service before you sign anything.

Failure to prepare is a preparation for disaster. Step #2 of your financial plan is risk management.

Listen to this expert who doesn’t even sell insurance.

Here is a  special report that Charles wrote on how to prepare for disaster.

The post Earthquake! Storms! Protect Your Home and Business with these 3 Tips first appeared on Whole Hearted Way.

1. Get serious about an Emergency Kit for you  home and office
2. Your business will not survive without a Contingency Plan
3. A Financial Plan is the essential last step

Emergency Kit

• House or office may be dangerous or impossible to enter
• It is likely there will be NO outside help for 3 to 7 days
• Three to seven days of supplies are essential
  • Water, food (no cooking)
  • Clothes, shoes, rain protection, sleeping gear
  • Medicines, radios, flashlights, batteries, some cash, etc.
  • Special needs for babies, elder people, pets
  • Have a family contact plan and practice/ update it every quarter

Contingency Plan

• Up to 80% of small businesses disappear in a major crisis if there’s no plan
• Backup or copies of data, project details, equipment and supply inventories
• Contact information for employees, vendors, clients, etc.
• Consider needs to shelter in place, transportation back to homes, families’ safety
• Create a team with assigned responsibilities to handle basic business, employee and customer needs, access to all information/ equipment/ supplies/ cash/ etc.
• Specific plans will depend on your business type and needs
  • Can all employees work from home?
  • Will you need an alternate, temporary site?
    • Find a realtor who can help list available sites;
    • Consider a competitor’s premises in another area

Financial Plan

• Your business and your family will need money or access to funds to weather the recovery period
  • LOC
  • HELOC
  • Stash of cash – small bills and accessible
  • Consider insurance coverage options
    • EQ on your home
      • Check with broker or agent: CEA, Geo-Vera
      • Coverage is expensive and limited and deductibles are high
      • Building, minimal contents and additional living expense
  • Business EQ coverage
    • Full coverage can be expensive and deductibles are high
    • EQSL might be a minimal alternative
    • Prevention steps as an alternative to insurance
      • Prevent collapse – various retrofit projects
      • Prevent fire from inside; prepare for fire from outside
      • Consider parking a car outside the garage for easy access

-Charles Wilson, Risk Smart Solutions

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Trip-cancellation coverage is best for travelers who are spending a lot of money for a nonrefundable itinerary.

The post Is Travel Insurance Worth the Cost? first appeared on Whole Hearted Way.

The House approves the Senate bill. Not a single Republican voted for it, but 219 Democrats did – and by a vote of 219-212, the House of Representatives sent the Senate’s version of landmark healthcare legislation toward President Obama’s desk. The President signed the bill into law on March 23.

But the fight is far from over. The House of Representatives also passed a collection of amendments to the Senate bill by a 220-211 margin, but the Senate must also approve this reconciliation bill – exactly as it is worded. If that doesn’t happen, then guess what … there will be another vote on the Senate version of the bill in the House.

“If those people think they’re only going to vote on this once, they’re nuts,” Sen. Orrin Hatch (R-UT) said on Bloomberg Television March 20. Hatch claims that Senate Republicans have the votes to force a modification of the bill passed on March 21 and boot it back to the House for a second vote.

Will the reforms be overturned? Twelve state attorney generals have already filed in court to contest the bill. The coincided with the moment President Obama signed the bill.(source) What are the odds the Supreme Court will throw the reforms out? Probably pretty slim. Look at the precedents of Medicare and Medicaid. When both those federal programs were enacted, the Court twice upheld a broad federal role in health care. Yet, is this time different? The bill has different mandates than Medicare or Medicaid.

The big reforms will take effect in 2014. If you are looking forward to health insurance reform, you will have to wait a while before many of the big changes occur.

• Starting in 2014, individuals will be required to have health insurance coverage or pay an annual penalty which could climb to $750 or 2% of their income (alternately $695 or 2.5% of income), whichever is larger. Inmates, Native Americans, and those with religious objections would be exempted.
• In 2014, if you aren’t enrolled in an employer-sponsored health care plan, you will have to buy coverage yourself. You could shop for it through a state insurance exchange. The federal government will offer $500 billion worth of assistance to help insurance shoppers buy coverage through these state exchanges. Undocumented immigrants would not be able to buy coverage.
• After 2014, businesses with more than 50 employees could be fined as much as $2,000 per worker for failing to provide the option of coverage.(source)
• In 2014, insurers will be required to provide coverage to all Americans regardless of their health status.(source)
• Medicare spending will be cut by about $500 billion over the next decade, mostly in reduced government payments to Medicare Advantage plans. Democrats have claimed this will not shortchange Medicare recipients.(source)
• Federal money coming from the bill could not be used for abortions, with exceptions made in cases of rape, incest, or danger to a woman’s life.

What changes are about to happen in 2010? These new rules would go into effect presently thanks to the new law.

• Insurers will be barred from revoking existing health insurance coverage on an individual, unless fraud or misrepresentation can be shown.
• Insurers will not be able to limit the amount of money that can eventually be paid out on a health care policy, and it will be harder to limit the amount of money that can be paid out annually.
• Seniors will get $250 payments to help them out if they face a coverage gap in the middle of the Medicare Part D prescription drug coverage plan.
• Children will be able to stay on their parents’ health care policies until age 26, and they won’t be denied coverage because of pre-existing health conditions.(source)
• Adults with pre-existing health conditions will get a chance to enroll in a national high-risk insurance plan – albeit a temporary one.
• Small businesses that sponsor health care plans for their workers could qualify for tax credits of up to 50% of the cost of the premiums they pay.

New taxes? Yes – starting in 2013. Approval of these reforms will also bring a new 3.8% tax on investment income for individuals earning more than $200,000 and households earning more than $250,000, so the effective capital gains rate will be 23.8% for these taxpayers in 2013. Also, these taxpayers will be able to keep 8.8% less of the income resulting from taxable stock investments. The Medicare tax rate on households with income over $250,000 will also rise in 2013, from 1.45% to 2.35%.

A huge savings? Maybe. The non-partisan Congressional Budget Office estimates that the health care reforms will reduce the federal deficit by between $65-118 billion over the next decade and by more than $1 trillion in the decade after that.(source) The proof is in the pudding, as all large entitlement programs such as Social Security and Medicare are all currently bankrupt. Might this add insult to an already bloated national debt? If history is any indication, more than likely the cost of this legislation could be disastrous for the US economy. Time will tell.

Submitted by Curtis Smith CFP®, Founder of Interactive Capital Management in Sugarland, Texas

The post Health Care Changes in America first appeared on Whole Hearted Way.