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Unlocking the Power of Infinite Banking: How cash Value Life Insurance Works

tlipnicki.sfg@gmail.com (Tracey Lipnicki) — Fri, 27 Dec 2024 02:30:56 GMT

How Cash Value Life Insurance Like PWL and IUL Work to Build Wealth

Unlocking the Power of Infinite Banking: How Cash Value Life Insurance Works

Imagine having your own personal bank. A bank where you’re the depositor, the borrower, and even the lender. Sounds too good to be true, right? Well, this concept is very real and incredibly powerful. It’s called Infinite Banking , and it’s made possible by something called a cash value life insurance policy .

Now, don’t worry—if you’re not familiar with financial jargon, I’m going to break it down for you in simple terms.

What is a Cash Value Life Insurance Policy?

First things first, a cash value life insurance policy is a type of life insurance that does two things at once:

It provides a death benefit (a payout to your loved ones when you pass away).
It builds cash value over time (think of it as a savings account that grows tax-deferred, compounding over time).

When you pay your premiums (your regular payments to keep the policy active), part of that money goes toward the death benefit, and part of it goes into your cash value account . Over time, this cash value grows, compounding tax free (which makes it grow exponentially faster over time), and here’s the real magic: you can access it while you’re still alive (any time you like, for whatever reason you like).

How Does Infinite Banking Work?

Infinite Banking uses the cash value in your life insurance policy to give you control of your money. Instead of relying on traditional banks to borrow money, you can use your policy’s cash value as a source of funds.

Here’s how it works:

You Pay Premiums : Each time you make a payment into your life insurance policy, you’re funding both the death benefit and your cash value account. Over time, the cash value grows. Think of this as building up your own private reserve of money.
You Borrow from Yourself : Once your cash value has grown to a decent amount, you can take a policy loan against it. Here’s the cool part: you’re not withdrawing money; you’re borrowing it. That means your cash value keeps growing as if you never touched it.
You Set the Terms : Unlike a bank loan, there’s no strict repayment schedule. You’re in control. You can repay the loan on your own timeline—or not at all. The loan is simply deducted from your death benefit if it’s unpaid when you pass away.
You Earn Interest Too : While you’re borrowing from your policy, the remaining cash value in the policy continues to grow. Using the right kind of loan, you’re actually earning interest on the money you’re borrowing too!

Why Use Infinite Banking?

Infinite Banking allows you to take control of your financial life without having to depend on traditional banks. Here are some key benefits:

Access to Your Money Anytime : Need funds for a big expense, like buying a car, starting a business, or even paying off debt? You can borrow from your policy instead of taking out a high-interest loan.
Tax Advantages : The cash value grows tax-free, and when you borrow from it, the loan isn’t considered taxable income.
Becoming Your Own Banker : Instead of paying interest to a bank or lender, you’re essentially paying yourself instead. It’s a way to keep money within your own financial system. Using the money for business purposes? Then the interest is tax deductible.
Building Wealth Long-Term : Over time, the cash value grows, and the policy can provide a steady source of tax-free income in retirement or for other future goals. Many policies also come with an option for guaranteed lifetime income.

An Example to Make It Real

Let’s say Sarah owns a whole life insurance policy. Over 10 years, she’s built up $50,000 in cash value. Now she wants to buy a new car for $30,000.

Instead of going to a bank and taking out a loan (and paying interest to them), Sarah borrows $30,000 from her policy’s cash value. Her insurance company gives her the money, using her cash value as collateral. Meanwhile, her full $50,000 cash value continues to grow as if she never touched it.

Sarah sets up a plan to pay herself back over 5 years. She charges herself interest, just like a bank would, but here’s the difference: that interest goes back into her own policy, not into the pockets of a bank. And if Sarah was self employed or a business owner and the business is paying back the loan and the interest, then that vehicle and the interest just became a tax deductible expense to her business.

Why Isn’t Everyone Doing This?

If Infinite Banking is so great, why isn’t everyone using it? Well, it’s not something most people are taught in school. Plus, setting it up requires a specially designed whole life insurance policy from a company that pays dividends or a correctly structured IUL that will allow flexible access to your funds prior to retirement. Not all policies work for Infinite Banking, so it’s important to work with someone who understands the concept.

These types of policies have different licensing and education requirements than financial planning. Also the commissions are lower than earned by financial planners and investment brokers for assets under management, so there isn't any financial incentive for them to incorporate infinite banking into their portfolios.

Is Infinite Banking Right for You?

Infinite Banking isn’t a one-size-fits-all solution. It works best for people who have the discipline to pay themselves back and who are looking for long-term financial growth and control. If that sounds like you, it could be a game-changer.

Final Thoughts

At its core, Infinite Banking is about taking back control of your money. It’s about using a financial tool that grows your wealth while giving you flexibility and freedom. Cash value life insurance is the engine that powers this system, and when used wisely, it can transform the way you think about money.

So, are you ready to become your own bank? It might just be the smartest financial move you ever make.

Schedule a call today for a no-obligation discussion about how infinite banking could help you get financially ahead.

The 401(k) Story: Adapting to the New Age of Retirement Planning

tlipnicki.sfg@gmail.com (Tracey Lipnicki) — Thu, 23 Nov 2023 03:48:03 GMT

The 401(k) Evolution: Navigating Fees, Taxes, and the Changing Retirement Landscape

The 401(k) plan, a familiar term in American retirement planning, has undergone significant changes since its inception. While it’s known for helping employees save for retirement, there's more to its story. This article aims to unpack the various aspects of 401(k) plans, examining the roles of fees, employer contributions, government taxation, and more.

The Origins and Evolution of the 401(k)

The 1970s and the Revenue Act of 1978: The 401(k) was born from a clause in the Revenue Act of 1978, initially aimed at curbing tax breaks on executive bonuses. It was transformed into a retirement savings tool that shifted responsibility from employers to employees.

The Employer Shift: This shift was part of a broader move in corporate America to reduce the financial burden of retirement benefits. Pensions, which guaranteed a fixed amount post-retirement, were expensive for companies. The 401(k) offered a way for employers to
contribute less over time.

The Hidden Costs: Fees within 401(k) Plans

Various Types of Fees: Fees in 401(k) plans include investment fees, administrative fees, and service charges. These fees can total 2.5% to 3.5%, significantly impacting the growth of these retirement accounts.

The Effect on Employees: As employers scale back their contributions, these fees eat into the employees' retirement savings. Many employees are not fully aware of these costs due to a lack of transparency in how they are presented.

The Government's Role in Taxation

Deferred Taxes as a Strategy: The government promotes 401(k) plans as a tax-deferred benefit. However, this setup also allows the government to levy taxes on a larger sum later, as the accounts grow tax-free over time.

Required Minimum Distributions (RMDs): RMDs ensure that this tax is eventually collected. The idea is that as people retire and withdraw from their 401(k)s, the government collects taxes on these larger amounts, which are forced to be distributed or even larger tax penalties applied.

Reduced Employer Contributions: A Cost-Cutting Measure

The Trend of Cutting Back: There's been a notable reduction in employer contributions to 401(k) plans over the years. This change is part of a cost-saving strategy by employers, shifting more of the savings responsibility to employees.

Financial Advisors and Plan Administrators: Understanding Their Fees

The Cost of Professional Management: These individuals and entities manage 401(k) plans, but their services come with fees. Often, these costs are not clearly explained to employees, leading to a lack of understanding about how much is being paid and its impact on savings.

Millennials and the Current Economic Climate

A Generation's Response to Economic Fears: With concerns about market stability and economic downturns, Millennials, in particular, are cautious. Many prefer holding cash over investing in 401(k) plans, potentially affecting their long-term financial health.

Conclusion:

The 401(k) is not just a simple retirement savings account; it's a complex financial tool shaped by historical shifts, corporate strategies, and government tax policies. Understanding these layers is crucial for anyone looking to optimize their retirement savings. It's important to be aware of the fees involved, the implications of tax-deferred savings, and the changing landscape of employer contributions.

Navigating the complexities of 401(k) plans requires a comprehensive approach. If you're looking to understand how these factors affect your retirement planning, let’s connect. Together, we can review your 401(k) strategy and ensure it aligns with your long-term financial goals.

There is a reason that the wealthy do not save for their retirement in 401K plans and instead turn to alternative vehicles using after tax dollars to generate tax free growth and then tax free income that is protected from market downturns instead. If you are interested to see how these alternative investments compare in retirement income, reach out for a free consultation to learn more .

Mastering Credit Cards: Unlock Better Credit Scores and Rewards

tlipnicki.sfg@gmail.com (Tracey Lipnicki) — Sun, 15 Oct 2023 20:33:30 GMT

Mastering Credit Cards: Unlock Better Credit Scores and Rewards

Credit cards can be double-edged swords. While they offer convenience, they also tempt consumers to incur debt that can spiral out of control. However, when used judiciously, credit cards can be powerful tools in bolstering your credit score and earning you valuable rewards.

1. The Credit Score Connection:

Understanding how credit cards impact your credit score is vital. Here's what happens behind the scenes:

Payment History: Consistently paying your credit card balance on time contributes positively to your payment history, the most crucial factor in credit score calculations.

Credit Utilization: This is the ratio of your credit card balance to your credit limit. Lower utilization rates positively affect your credit score. It’s recommended to keep the ratio below 30%.

Credit Age and Mix: Responsibly managing credit cards over time helps in enhancing the length of your credit history and diversifying the types of credit you handle, both influential components of your credit score.

Strategically managing these factors by maintaining low balances, making timely payments, and not overextending yourself helps build a robust credit profile.

2. Playing the Reward Game Wisely:

Beyond credit scores, credit cards can unlock a world of perks that benefit frequent travelers, shoppers, or anyone paying attention to their spending. Here's how you can turn everyday purchases into lucrative rewards:

Cash Back: Some cards offer to return a percentage of your spending. If you regularly pay off your balance, using a cashback card for everyday purchases is like getting a discount on everything.

Travel Perks: For the frequent traveler, cards offering miles or points towards airfare and hotels can translate into free or upgraded travel. Some cards also offer complimentary airport lounge access, hotel status upgrades, and more.

Specialized Rewards and Bonuses: From discounts at your favorite stores to priority bookings at events, cards with specialized reward programs can provide unprecedented value. Some even offer substantial bonuses for new users who meet initial spending requirements.

3. Smart Strategies for Credit Card Use:

Success lies in strategic card usage. Here’s how to maximize the benefits without falling into the debt trap:

Paying Balances in Full: This strategy saves you from interest charges and helps build a positive payment history.

Leveraging the Interest-Free Period: Understanding your card's grace period allows you to benefit from short-term 'loans' without paying interest.

Utilizing Rewards for Regular Spending: Use your credit cards for everyday expenses that you'd pay anyway. By funneling these expenses through your cards, you'll accumulate rewards without additional spending.

Automating Payments: Set up autopay for recurring expenses to never miss a payment, thereby safeguarding your credit score.

4. Recovering From Credit Card Mistakes:

Mistakes happen, but they don't define your financial future. Whether it’s accumulated debt or a hit to your credit score, corrective steps include debt repayment strategies, budgeting, and seeking financial advice. Programs like 'Debt Free Life' are designed to navigate this recovery process, emphasizing personal investment and strategic planning to secure financial stability.

Conclusion:

Credit cards aren't the enemy; inattention to their responsible use is. By understanding and leveraging their benefits, you can not only enhance your creditworthiness but also enjoy perks that sweeten your financial journey. Whether you’re rebuilding or starting your credit story, remember: it's never too late to write a fiscal success story. For tailored guidance and support, especially in navigating credit pitfalls, don’t hesitate to reach out for professional advice.

Call to Action:

Ready to turn your financial life around? Schedule an obligation-free discussion with me , and let’s chart your path to a debt-free life and a future replete with possibilities.

Rethinking Retirement: Strategies for Holistic Financial Security

tlipnicki.sfg@gmail.com (Tracey Lipnicki) — Sun, 15 Oct 2023 20:03:24 GMT

Rethinking Retirement: Strategies for Holistic Financial Security

Who said retirement was supposed to be a countdown to just sipping lemonade on the porch? In today's fast-paced world, it's about so much more. It's travel, leisure, hobbies, and yes, even those unexpected costs that sneak up on us. Traditional views of retirement savings? They're evolving, and it's high time we step into the new age of planning for those golden years.

Section 1: Understanding Your Retirement Needs

Redefining Replacement Rates: A New Reality

Here's a fun fact: retirement could mean spending more, not less. Shocking, right? But think about it. More free time often equals more expenses, from jet-setting to visit the grandkids to picking up that golf hobby you always swore you'd master. It's clear: the old-school replacement rates don't always cut it. We might need a bigger slice of that financial pie to keep the good times rolling in retirement.

2. The Three-Legged Stool: A Shaky Foundation

Picture retirement planning as a stool with three legs—Social Security, employer pensions/401(k)s, and personal savings. Now, what happens if one leg is shorter than the others? Spoiler: It's not comfortable! Too many of us neglect that personal savings leg, and stability goes out the window. Time to even things out for a smoother sit, folks!

Section 2: The Role of Social Security

Alright, let's talk Social Security. It's a safety net, sure, but it's not a hammock. You can't just lay back and relax on Social Security alone. This section is a reality check about what Social Security brings to the table (hint: it's just one dish in a potluck retirement buffet).

Section 3: The Savings Gap Challenge

Money talk is tough, especially when we get into the nitty-gritty of income disparities. This part? It's about understanding where you stand and how "sustainable replacement rates" can be your financial GPS, guiding you toward a retirement that doesn't mean choosing between necessities and niceties.

Section 4: Navigating Retirement Realities for Lower-Income Workers

No sugar-coating here: lower-income workers have a steeper hill to climb. But it's not an impossible hike. We've got practical, doable strategies that can put a summit bid within reach. It's all about knowing the terrain and having the right gear.

Section 5: Innovative Strategies for a Secure Retirement

Expanding Your Financial Portfolio with Cash Value Life Insurance:

Cash value life insurance is like the Swiss Army knife of financial planning—so many tools in one handy package. From growing your funds tax-free to borrowing without losing out on interest, and access to your death benefit while you are alive through living benefits, it's a multitasker that deserves some spotlight in your retirement strategy.

2. Understanding Annuities: Predictable, Lifetime Income

Annuities are the superheroes of the retirement world—rescuing you from the perils of market slumps with the superpower of guaranteed income. Whether it's weathering health storms using income doublers or just securing that steady cash flow, annuities are worth a look in any nest-egg plan.

3. Holistic Planning: Beyond Savings and Investments

Life's unpredictable. So, a game plan that looks at the big picture is the way to go. We're talking health, hobbies, hidden costs—the works. This approach isn't just about surviving; it's about thriving in your later years.

Section 6: Health and Unexpected Retirement Costs

If life throws a curveball (read: health hiccups), it pays—literally—to have a financial buffer. Its important to build that emergency fund, so unexpected bills don't derail your retirement train.

Section 7: The Value of Professional Guidance

Sometimes, we need a hand navigating the maze of retirement planning. Work with a financial coach/mentor, or financial success engineer. They're the experienced guides you want. They’ve work with you to create your personal retirement map, the compass, and have the know-how to help you reach your personal El Dorado.

Section 8: Timing Is Everything: The Sooner, The Better, But It's Never Too Late

Listen, we've all procrastinated at some point, but if you're doing it with your retirement planning, it's time to switch gears. The magic of compound interest is like a snowball rolling down a hill - it needs time to grow bigger. The earlier you start, the more you harness this power. But what if you've hit snooze a few too many times on planning?

Don't beat yourself up; you're not out of the game. It’s true, starting earlier could give your savings more growth muscle, but late bloomers can still catch up. You'll need to be a bit more strategic, perhaps save a larger slice of the pie, and possibly adjust your vision of retirement.

But know this: embarking on a plan now, however late, still puts you leagues ahead compared to leaving it to chance. In the retirement game, having a late plan is your secret weapon against no plan.

Conclusion:

So, here's the real talk—retirement planning is a bit like planting a tree. The best time to do it was 20 years ago. The second-best time? Today. Whether you're an early bird or just waking up to the reality, taking charge of your plan is the ticket to making a difference in your retirement life.

It's about creating a strategy that's not only a safety net but a launchpad for your dreams, ambitions, and peace of mind. Proactive planning is your map, compound interest your vehicle, and resilience your fuel. With these, you're set for a journey toward a destination you deserve.

Let's not mince words: crafting a secure retirement requires effort, consistency, and foresight. But with these powers combined, you're not just waiting for the future; you're building it, brick by financial brick.

Call to Action:

No more sidelines. It's time to step into the retirement planning arena. Whether you’re early to the party or fashionably late, the point is you’re here. Reach out for guidance , upskill your financial literacy, and take the reins. Your future self is counting on you, and honestly, there's no one better for the job.

Navigating Life Insurance: From Underwriting to Finding the Right Policy

tlipnicki.sfg@gmail.com (Tracey Lipnicki) — Fri, 08 Sep 2023 03:03:13 GMT

Navigating Life Insurance: From Underwriting to Finding the Right Policy

Life insurance is a critical financial tool that provides security and peace of mind for you and your loved ones. In a world marked by uncertainties, having a well-structured life insurance policy will ensure that your family's financial needs are taken care of even when you're not around.

In this comprehensive guide, we'll delve into the intricacies of life insurance, including the underwriting process and factors to consider when choosing the right policy. We'll also debunk the notion of "buy term and invest the rest" and shed light on why this philosophy might not be the best approach.

What Is Life Insurance?

The process of purchasing life insurance essentially involves transferring risk from you to an insurance company. You're passing off the risk of your life, income, and the financial well-being of your loved ones being impacted by your death, critical injury, terminal illness, or chronic illness to the insurance company. In return, if the unfortunate event covered by your policy occurs, the insurance company steps in to provide financial compensation as agreed upon in your policy. This financial safety net ensures that your family's financial future remains secure even if you're no longer there to provide for them.

Understanding Life Insurance Underwriting:

Life insurance underwriting plays a pivotal role in this process. It is the mechanism by which insurers assess your risk profile to determine your eligibility for coverage and calculate the corresponding premium rates. The central principle at play here is that the higher the risk of a triggering event occurring, the higher your insurance premiums will be.

Over the years, the landscape of life insurance underwriting has evolved significantly. Insurers now have access to a wealth of data and tools that enable them to make more informed decisions about an applicant's risk profile. These advancements have paved the way for a more accurate assessment of risk, leading to personalized premium calculations based on individual circumstances.

Digitalization and Technology-Driven Data Analysis:

One of the most notable shifts in life insurance underwriting is the embrace of digitalization and technology-driven data analysis. In the past, the underwriting process relied heavily on manual assessments and limited data sources. Today, insurers have harnessed the power of technology to streamline and enhance this process.

Here's how digitalization and technology-driven data analysis are transforming life insurance underwriting:

Access to Rich Data Sources: Insurers now have access to a broader range of data sources that were previously untapped. This includes credit histories, payment records, driving records, and more. By leveraging this additional information, insurers gain a more comprehensive view of an applicant's risk profile.
Efficient Application Processing: Digitalization allows for quicker responses to insurance applications. Online platforms have simplified the application process, making it more convenient for applicants while reducing processing times.
Personalized Premiums: With a more precise understanding of an applicant's risk, insurers can calculate premiums tailored to individual circumstances. This means that those with lower risk profiles may receive more favorable rates, while those with higher risks may see slightly higher premiums.

Types of Underwriting and How Each Is Assessed:

Life insurance underwriting comes in several forms, each designed to accommodate varying degrees of risk and applicant profiles. Here are the main types of underwriting:

Full Medical Underwriting: This is the most comprehensive form of underwriting. Applicants are required to undergo a thorough medical examination, which often includes blood tests, urine tests, and sometimes even EKGs. Insurers assess all aspects of an applicant's health, lifestyle, and medical history to determine eligibility and premium rates. This type of underwriting generally results in lower premiums for individuals in good health.
Express Medical Underwriting: This approach streamlines the underwriting process. Applicants provide some medical information but typically do not undergo a full medical examination. It's a faster option for healthy applicants, of something is found warranting further investigation the process may switch to full medical.
Simplified Issue Underwriting: This type of underwriting involves a simplified application process with fewer medical questions. While it's quicker and more convenient, it's often associated with higher premiums due to the limited medical information collected.
Guaranteed Issue Underwriting: This form of underwriting requires no medical examination or detailed medical questions. Almost anyone can secure coverage, but it tends to be more expensive, and coverage amounts are typically lower.

Debunking the "Buy Term and Invest the Rest" Philosophy:

The "buy term and invest the rest" philosophy has gained popularity as a cost-effective alternative to traditional life insurance policies. However, let's dissect why this approach might not be as foolproof as it seems:

The Investment Myth: Proponents of this philosophy assume individuals will invest the difference between term and permanent life insurance premiums. However, studies show that few actually follow through with consistent investments, putting financial goals at risk and leaving them without coverage or savings for self insurance at the time when insurance is most needed.
Risks as You Age: As the term policy ends, individuals may find themselves uninsurable or facing significantly higher premium costs due to aging or health changes. This can leave them vulnerable without coverage during a crucial time.
Mortgage and Retirement Gaps: Many who adopt this philosophy might not save adequately for their mortgage or retirement. When one spouse passes away, the surviving partner could face financial difficulties due to the lack of replacement income.

Crafting a Comprehensive Life Insurance Strategy:

To ensure your life insurance strategy aligns with your financial goals, consider the following steps:

Define Your Objectives: Clearly outline what you want your life insurance to achieve. Whether it's covering funeral expenses, paying off debts, or providing income replacement, understanding your goals guides your policy selection.
Account for Pre-existing Conditions: If you have pre-existing medical conditions, navigate the underwriting process transparently. Failing to do so can lead to higher premiums or coverage denials later.
Duration of Coverage: Determine how long you'll need coverage. Consider factors like mortgage payoff, education expenses, and retirement timing to tailor your policy's term.
Compare Multiple Quotes: Shop around and compare quotes from different insurers. Working with an independent insurance broker makes this process convenient and efficient as they will do the shopping around and comparison legwork for you.
Consider Conversion Options: If you do choose to go with a term policy, choose one with conversion options, allowing you to switch to permanent coverage if your needs change.
Financial Stability of Insurers: Ensure you choose a financially stable insurer by checking their ratings from reputable organizations.
Renewal and Cancellation Terms: Understand renewal options and cancellation policies. Look for policies that offer flexibility and transparent terms.
Work with a Trusted Broker: Developing a rapport with a reliable independent insurance broker ensures you receive accurate information and make informed decisions.

Conclusion:

Life insurance is a cornerstone of financial planning, providing protection and security to your loved ones. While the "buy term and invest the rest" philosophy might seem appealing, its potential pitfalls make it a less reliable strategy. By following a comprehensive approach to life insurance, understanding the underwriting process, and working with trusted professionals, you can craft a policy that safeguards your family's future and financial well-being.

Financial Empowerment: A Lesson from The Rockefellers

tlipnicki.sfg@gmail.com (Tracey Lipnicki) — Wed, 26 Jul 2023 00:46:20 GMT

Financial Empowerment: A Lesson from The Rockefellers

Have you ever pondered over the financial strategies of the wealthiest families? What are the secrets that have helped them maintain and grow their wealth generation after generation? Today, we're delving into one such financial powerhouse: The Rockefellers.

One of America's most iconic families, the Rockefellers made their fortune in the oil business, creating a legacy that still impacts our society today. But what's truly remarkable is how they've managed to preserve and multiply this wealth for generations, a feat achieved through their unique approach to managing their assets.

The Rockefellers utilized a strategy called the "Family Bank". This strategy, far from being a traditional bank, refers to a specially designed life insurance policy. Here's how it works and why it's been a game-changer for the Rockefellers and many others.

The Power of the Family Bank

The Family Bank, also known as Infinite Banking or the Rockefeller Method, leverages cash value life insurance to create a personal banking system. What makes it truly unique is its flexibility and the many benefits it offers, such as:

Control over your money: Unlike traditional savings or investment methods where your money is locked away for a period of time, a Family Bank provides immediate access to your cash value.

Tax advantages: The money within a Family Bank grows tax-deferred. When structured properly, you can also access it tax-free.

Compound interest: Your money continues to earn interest even when you borrow against it.

Creditor protection: In many states, the cash value in a life insurance policy is protected from creditors.

A legacy for future generations: The death benefit can provide a tax-free inheritance for your heirs, offering them financial security.

Isn't it about time we started thinking like the Rockefellers and take control of our financial future?

Why You Should Consider a Family Bank

Imagine being in control of your own financial system, not having to rely on traditional banks or Wall Street, and enjoying the peace of mind that comes with knowing your money is working for you around the clock. That's what a Family Bank can do for you.

The Family Bank strategy is suitable for a wide range of people, including business owners, parents wanting to secure their children's future, those looking to grow their wealth with minimized risk, and anyone interested in breaking away from traditional financial dependency.

Creating Your Own Family Bank

The journey to creating your own Family Bank begins with understanding your financial goals and resources. From there, a customized life insurance policy is structured to serve as your personal banking system.

Remember, this strategy is not one-size-fits-all. It requires a thorough understanding of your financial situation and objectives, which is why seeking professional advice is crucial. If you're considering establishing your own Family Bank, let's chat. I'm here to guide you through the process and help you make informed decisions.

In the upcoming series of blog posts, we'll delve deeper into the world of Family Banking, exploring its benefits, potential applications, and how it can transform your financial landscape. So, stay tuned and embrace the opportunity to think like a Rockefeller!

The Downside of Depending on Crowdfunding: GoFundMe vs. Life Insurance

tlipnicki.sfg@gmail.com (Tracey Lipnicki) — Wed, 05 Jul 2023 00:53:30 GMT

The Downside of Depending on Crowdfunding: GoFundMe vs. Life Insurance

Last week a friend reached out to me for assistance in setting up a crowdfunding campaign on GoFundMe for a local family. The sudden demise of the breadwinner - a father of two young children - had left the family in a financially precarious situation, as the mother had been caring full-time for their young children.

To understand the situation better, I delved into the world of crowdfunding campaigns. I was taken aback by the sheer volume of requests for donations - there were thousands of campaigns asking for assistance to cover medical or funeral expenses just in my local area alone. Looking into this phenomenon further, I discovered a journalist's article from 2016 highlighting over 30,000 results, and within a span of three weeks, this number had already risen to 33,000 and growing daily since. The common thread between these campaigns was a lack of life insurance.

According to the National Opinion Research Center at the University of Chicago, more than 12 million Americans admit to starting crowdfunding campaigns to help someone outside their immediate family afford their medical bills.

As a financial success engineer, I'm on a mission to help people optimize their money to achieve their ideal life - a life that is financially secure. Financial security implies knowing how much you need for your lifestyle and having a strategic plan to protect your income and assets to assure your financial success. Unfortunately, the increasing dependence on crowdfunding platforms for financial emergencies signals a concerning trend. Let's dive into why crowdfunding falls short as an alternative to life insurance.

#1: The Reality of Crowdfunding

While platforms like GoFundMe make it simple to solicit donations, they often fail to deliver the desired financial results. The Crowdfunding Center reports that the average successful campaign only raises about $7,000, while overall success rates hover around a mere 22.4%. Additionally, these platforms levy fees on the collected donations and while not taxed as income, donations must still be reported as gifts on tax returns, affecting both recipients and donors financially.

#2: The Assurance of Life Insurance

Life insurance provides multiple layers of financial security. It replaces income after the policyholder's death, covers unexpected healthcare costs, pays off debts, and facilitates wealth transfer to heirs. Unlike the uncertainty of GoFundMe, life insurance offers certainty and stability. Purchasing a policy early when in good health secures low-cost coverage for pennies on the dollar.

#3: Additional Life Insurance Benefits

Modern life insurance programs are not the same as the term life or temporary programs that were available to our parents, or which are still provided through employment. Don’t get me wrong, term insurance does still have its place but did you know that term insurance is even less expensive when its included inside a permanent policy?

The other huge benefit permanent policies provide is what are called “living benefits”. Living benefits allow you to access the death benefit in advance (while still living) due to medical reasons such as for chronic conditions where you are unable to work and produce income or if you are diagnosed with critical injury or illness or a terminal condition. The amounts of money available through life insurance which can be paid out either as a monthly payment or in lump sum are much higher (and therefore much more helpful) than what is being achieved through crowdfunding campaigns.

Lastly modern permanent life insurance policies provide both an accessible (for any reason at all) cash value and a return on your premium investment. Did you know that cash value life insurance is one of the best kept secrets that the wealthy use to invest and grow money for use as future tax-free income or for investment equity to reduce the interest they pay lenders?

#4: Crowdfunding vs. Life Insurance: The Fundamental Differences

Dependability and amount of funding are the major points of difference. GoFundMe campaigns hinge on the goodwill of donors and are highly unpredictable, life insurance offers a reliable safety net for beneficiaries. Coverage is another significant aspect - crowdfunding platforms will likely not meet all financial needs, whereas life insurance provides comprehensive coverage tailored to individual needs and budget. Additionally, life insurance proves more cost-effective than potential GoFundMe campaigns over the long term.

#5: The Power of Financial Literacy

Planning for a secure future necessitates financial preparedness. Security and certainty should be top considerations when evaluating financial protection options. Life insurance, with its dependability and comprehensive coverage, offers a solution that outperforms crowdfunding. A consultation with a fiduciary broker can assist in identifying a suitable life insurance policy for your needs and your budget.

In conclusion, crowdfunding might provide temporary financial relief for some, but it doesn't measure up to the security and reliability of life insurance. Crowdfunding's inherent unpredictability and limitations make it a less-than-optimal alternative. Life insurance gives policyholders the assurance that their loved ones will be financially secure, even in unforeseen circumstances. Prioritizing financial security and considering life insurance as a dependable safety net is a prudent move.

If you are interested to learn more about modern life insurance and the types of plans available, you can learn more here .

Unleashing the Power of Choice: Break Free from the Profit-Driven Healthcare System and Pay Less for Better Healthcare

tlipnicki.sfg@gmail.com (Tracey Lipnicki) — Sun, 11 Jun 2023 23:18:51 GMT

Unleashing the Power of Choice: Break Free from the Profit-Driven Healthcare System and Pay Less for Better Healthcare

In a healthcare landscape driven by corporate profits, it can be daunting to work out how to reclaim control of our healthcare spending and therefore financial security.

By unraveling the traditional healthcare plan into separate components and going direct to providers, we can unlock substantial cost savings. However, the ultimate key to reducing expenses lies in prioritizing our health and nutrition, as staying healthy (prevention) is the most effective way to avoid healthcare costs.

Nourish to Thrive: The Foundation of Health

The most potent cost-saving measure lies within our daily choices. Our bodies are intricately connected to the food we consume. We literally "are what we eat". Each day over time, our body gradually replaces every cell, replacing the old ones with new, made from the foods we eat.

Opting for natural, whole foods, especially those high in lean proteins, healthy fats, fiber, food sourced vitamins and minerals, provide essential building blocks for our cells and the nutrients which optimize cellular function and overall well-being. By understanding that the three most prevalent and expensive conditions: diabetes, heart disease and dementia are all nutritionally based, we can empower ourselves to make conscious choices and maintain good health, thereby preventing these diseases.

As a previous professional athlete, food and nutrition are a passion of mine and I can write endlessly on the topic. If you would like more articles about how what you eat impacts your health, intelligence and mental wellness, just let me know ��

Unmasking the Profit-Driven Healthcare System

Being born in Australia I was brought up with an undying belief in a “fair go all round”. This means that everyone should be treated fairly, and “some” should not prioritize excessive profit over doing the right thing by people. Sadly, what I see is that traditional healthcare and insurance "systems" here in the US do prioritize corporate profits over patient well-being in many cases (don't get me started on the processed food industry which absolutely contributes to the problem). I thus feel driven to shed light on unfair practices and highlight other options or choices that can both improve your outcomes and save you money.

Hidden within the traditional healthcare and insurance system are exorbitant markups and a continuous (premeditated) reliance on medications. By taking preventative action through nutrition, then making more informed choices or breaking down our healthcare plans into separate components we can bypass the profit-driven machine, go direct to healthcare providers and take charge of our healthcare decisions.

Here are some options for you to consider:

Cooperative Health Care Insurance: Empowering Members, Reducing Costs

Cooperative health care insurance programs put the power back in the hands of individuals. By managing the program collectively, members choose and pay their healthcare providers and for prescriptions at cash pay prices, leading to significantly reduced bills. This alternative empowers us to demand transparency and affordability, cutting out excessive markups that fuel corporate profits. Depending on the program and region, members can potentially save 20-40% or more on monthly insurance premiums while having much greater freedom of care than through traditional health insurance plans and often without deductibles or copays. Established as non-profit organizations, CEOs are rewarded based on health outcomes and member satisfaction measures not corporate profit.

Cooperative healthcare plans aren't only for individuals and families, as an evolution of corporate self-insurance, these types of plans help companies save significant money compared to traditional employee benefit plans while still outsourcing the plan management. These types of plans are also available for small employers looking to improve employee retention and productivity rates. Research shows that employer provided healthcare makes employees happy and happy employers are more productive and stay longer.

Another option is to break down insurance into the various components and services based on your health and what you need based on your stage of life:

1. Managed Healthcare Services: A Modern Approach

A relatively new option to consider are managed healthcare services like Forward. These innovative healthcare providers offer a comprehensive approach to primary care, focusing on preventive measures and leveraging advanced technologies.

Members receive personalized care plans, comprehensive health assessments, and access to cutting-edge diagnostics. By emphasizing proactive health management, these services aim to prevent illnesses before they escalate, reducing the need for costly treatments.

Managed healthcare services not only prioritize affordability but also empower individuals to take control of their health through data-driven insights and personalized care. Forward costs just $149 per month and includes all your primary and preventative care needs without any copay or deductibles required. Certain specialties are included too.

2. Embrace the Power of Telemedicine: Convenient and Cost-Effective Health Care

Telemedicine offers quality care without the burden of high costs. By opting for virtual consultations, we can access healthcare professionals from the comfort of our homes, saving both time and money. Telemedicine eliminates geographical constraints and reduces travel costs.

Telemedicine services can be purchased on an as needs basis or via monthly subscription and can cover primary and urgent care right up to specialist services. There are now hundreds or providers of telemedicine services in the US. Depending on the services included, subscription plans range from $20 to $100 per month.

3. Catastrophic Health Insurance: Safeguarding Against the Unexpected

Catastrophic health insurance focuses on major events, offering financial protection without exorbitant premiums. The cost of catastrophic health insurance can vary depending on factors such as age, location, and coverage limits. Premiums can range from $50 to $300 per month, making it an affordable alternative to comprehensive coverage.

Catastrophic Health Insurance is commonly used in combination with managed or telemedicine primary care services or with self insurance to cover large or unexpected healthcare costs.

4. Comprehensive or Illness Specific Life Insurance

Comprehensive life insurance plans can provide coverage for chronic, critical, and terminal illnesses, offering financial support during difficult times. Chronic illness coverage provides a monthly benefit vs critical or terminal illness benefits which are paid as lump sum payments. These insurance benefits can be can be used to pay for treatment, replace income, pay off debts or even take a round-the-world trip if that’s your fancy. The premiums for these policies depend on your age and health when you first start the plan.

If you are looking for a less expensive option or you have family risk factors there are plans specifically designed to cover certain conditions like cancer, heart disease and stroke. By covering just that one condition (or group of conditions) you are lowering the risk for the insurance company who can provide you a much less expensive option.

There are also specific insurance plans for long term care costs. Hospice care facilities run between $8,000 to $15,000 per month depending on whether you want a private room or need dedicated care. The Administration of Aging estimates that over 70% of 65 year olds are expected to need long term care, making buying long term care insurance almost a necessity. The rate of both physical and cognitive care increases as we age.

5. Self-Insurance: Empowering Yourself with Financial Flexibility

For those seeking even greater control over their healthcare expenses, who are in good health and who look after themselves nutritionally, self-insurance is an option worth considering. This option also works well in combination with some of the other options mentioned.

By setting aside funds in a Health Savings Account (HSA), cash value life insurance policy (with chronic, critical and terminal illness benefits), or even in an after-tax savings account; individuals can accumulate funds specifically designated for health-related expenses. HSAs offer tax advantages, allowing contributions to be made on a pre-tax basis, and withdrawals can be tax-free when used for qualified medical expenses. Cash value life insurance is funded with after tax dollars (if self-funded; businesses can claim these as tax deductions if established correctly as part of employee benefits packages), but the money paid out for healthcare costs is tax free. Additionally, any after tax expenditure on healthcare costs over 10% of taxable income is tax deductible.

This strategy allows you to take charge of your healthcare costs, providing the ability to negotiate cash pay discounts directly without limit to network. Self-insurance, combined with preventative nutrition (and potentially some of the other options provided too) offers another alternative path towards cost-effective healthcare and greater financial security.

6. Prescription Discount Cards

Prescription discount cards such as QuilityRx go direct to drug manufacturers to negotiate best pricing on behalf of their members who then can search and compare prices pharmacy by pharmacy online. The good cards such as QuilityRx are not only free of charge, but will guarantee their negotiated pricing from any pharmacy trying to price gouge and charge higher prices. It's amazing how many drugs are significantly cheaper using the RX card cash pay price than many insurance copays. Free prescription discount cards are a great companion to all the alternative health insurance options listed above.

Benefits for Businesses: Saving Money and Promoting Wellness

The alternative healthcare funding options discussed in this article are not limited to individuals. Businesses can also benefit from significant cost savings and improved employee wellness.

For businesses who do not currently provide insurance or healthcare benefits to their employees, the adoption of any of the above strategies (which can be implemented in tax advantaged ways for the employer) will improve employee morale, productivity and retention.

Please note that even very small businesses and the self employed can implement these strategies through their corporate structure for a tax advantaged approach.

For businesses who already provide health insurance or healthcare benefits, switching some or all of their programs to these strategies can significantly reduce overall costs as well as improve health outcomes. And yes, costs of insurance do vary based on the health of your employee population, but it is absolutely possible to move your healthier employees to cooperative or managed healthcare plans leaving the remaining employees in their traditional plan. Your healthy employees will thank you for providing them with a more preventative proactive approach under which they are rewarded for their good health by removal of deductibles, copays and network requirements and your business will save significant dollars at the same time. Additionally, implementing wellness programs that focus on nutrition, exercise, and stress management can enhance overall employee health, reduce healthcare expenses and improve employee morale, productivity and retention in the long run.

Learn More

If you are an individual, business owner, or benefits manager interested in no cost review of your healthcare cost and insurance profile to see if there are better options available for you (which can provide you better coverage and better health outcomes for lower cost), reach out for a no obligation conversation. I am here to help.

Unlock the Secrets to Saving Thousands on College Tuition

tlipnicki.sfg@gmail.com (Tracey Lipnicki) — Mon, 08 May 2023 02:40:43 GMT

Unlock the Secrets to Saving Thousands on College Tuition

The Importance of College Education

In today's job market, a college education is increasingly essential for most career paths.

Employers more often than not require college degrees as a prerequisite for employment. In 2017 less than 34% of jobs could be filled with a high school diploma, down from 75% in the 1970s ² and this number is continuing to drop. Even professions like firefighting now require a college degree.

The average college graduate will earn an average 75% wage premium over the average high school graduate and earn double the money over their lifetime ³ .

College is Expensive

Average annual college tuition fees in 2021 ranged from:

$10,000 - $20,000 per annum for community colleges
$20,000 - $40,000 per annum for state colleges (lower end if you live in the state)
$40,000 - $80,000 per annum for private colleges
$80,000+ for Tier one schools like Yale, Harvard, Tufts

The average student takes 5.5 years to complete their undergraduate degree ¹ . The total cost of college for 5.5 years therefore ranges from over $50,000 to nearly half a million dollars.

Alarmingly, only 48% of college students graduate or complete their degrees ¹ .

Paying for College is one of the largest financial investment any parent has to make. Over 68% of parents say they are worried about paying for college ⁴ .

The Financial Impact on Families of Rising College Costs

A survey in 2015 found that 30% of respondents had already reduced the amount of money they were saving for retirement, withdrawn from their retirement accounts to pay for college, or had delayed their retirement. Another 30-40% said they would take these actions in future.

40% of respondents also felt they had an obligation to help pay for their children’s and grandchildren’s college education ⁵ . While it's only natural that parents are willing to help their children and grandchildren get a good start in life, are they really doing their children a favor if they sacrifice their own retirement security and eventually become a burden on their children in their frail years?

I’m not sure if you have heard the term the Sandwich Generation? It refers to people who are simultaneously providing financial support for both their children and parents.

How To Pay Less For College

There are 3 things that you can do:

Start as soon as you can
Understand and Work the Process
Get Help

By doing these things you will win in the following ways:

Your annual tuition fees will be lower as a result of working the EFC/FIA formulas.
You will pay less for the tuition you do have to pay by using an invisible college savings account and taking advantage of tax-free compound growth.
Your child will be accepted into more and better colleges providing them with better career and earning opportunities.
Your student will be better prepared for college and make better college and course selections.
Students who go through this process with us, graduate on average graduate a full year earlier saving a year of tuition
Our student graduation rate is 86% vs 48% of the general student population.

What would these benefits be worth to you?

And what if I told you that because ACF is a non-profit, the cost to you will much, much less than you’ll spend anywhere else and not receive all the benefits I listed above.

Lets Understand How College Funding Works

There are three main sources of college funding:

Needs based aid
Merit based aid
Self-help aid - parent funding & student loans

When thinking about funding for college, it’s crucial to recognize that colleges are businesses.

The application process includes submitting financial information through the FAFSA and, for some schools, the CSS Profile, which the government and the colleges use to determine whether they will provide you with assistance paying for college.

· The FAFSA draws information from your tax return for income and also asks questions about your savings, investment accounts and assets.

· The CSS profile requests even more information about other assets you have they might be able to tap into for college funding and uses an even more parent unfriendly formula to calculate how much you have available to pay them.

It’s very easy to make mistakes on these forms. It's important to know too, that these forms are highly audited (up to 38% each year) to ensure you report everything you have. That’s why for our clients we provide you with a line-by-line guide with exactly how to complete them and what information goes where.

The forms use a very complex formula to produce what is called your EFC or expected family contribution. This could not in fact be further from the truth. This is the amount they believe you can easily pay based on income. As a result of the confusion, this will be renamed in 24/25 to SAI, Student Aid Index.

The formula for what you will actually pay looks like this:

College Attendance List Price

Less any in-state discount

Less Federal needs aid / grants

Less any college funded scholarships / awards

Less your EFC/SAI (generally what you have in college savings and extra income)

= Cost of attendance (generally expected to come from student or parent loans or student work programs).

Now do you notice something strange about this formula?

That’s right there are 2 lines for your contribution to college fees. Both the EFC and the final cost of attendance are paid by you.

Basically, once they have your federal and financial information, they use the college funded scholarships/awards to increase or decrease how much you will pay based on 2 criteria:

How much they think you can afford.
How much they want your student to attend their college – attractive student.

You’ll also note that there is no line for private scholarships or prizes. These currently make up about 3% of the money that pays for college tuition each year. Additionally, in case you are not aware, any of these you receive have to be reported to the schools in your FAFSA, which you have to update any time you receive additional money. What we see happen most of the time is that the schools then then reduce their scholarships or awards by the same amount to offset their value and keep your payment the same. Families in our program will receive coaching and support with how to successfully appeal these and we find they generally receive back at 50-100% of the original grant amount.

Important Points Regarding FAFSA Form and CSS Profile Information

Financial snapshot taken 2 years before college, updated annually until graduation.
Private scholarships, Inheritances, lottery winnings or other financial change must be updated, affecting EFC/SAI and awards.
Retirement plans are no longer excluded from family asset calculations
Net worth calculated without recognizing debts, making families appear wealthier
No more discounts for multiple students from the same family in college

These changes makes it more important than ever to work with a college funding professional early to minimize EFC and the cost of attendance. I have seen this make huge differences to how much families need to pay, at minimum 10’s of thousands of dollars.

Now We Understand The College Funding Formula – Let's Work It To Our Advantage

These are the levers we have to work the formula to your advantage:

1. Starting early and Being first in Line

2. Invisible college savings plan

3. Reallocation of FAFSA/CSS Reportable income and assets

4. Have your child be an attractive student to obtain higher levels of college funded scholarships/awards

5. Analyze your award and appeal/ask for more

Start Early - Be First In Line

Colleges set both place and annual scholarship and award budgets each year. These are limited and handed out on a first come first serve basis, making early applications crucial. Being a front-of-the-line, attractive student increases your chances of receiving scholarships and awards from colleges exponentially.

Birth to Middle School College Planning

The earlier you start saving for college, the more you can benefit from compound interest and (in the right vehicle) tax-free growth.

Avoid using 529 plans for your college savings for the following reasons:

529 Plans are reportable on the FAFSA form and CSS profile so you are literally telling the colleges how much they can charge you.
They are tax free only up to a maximum annual contribution limit.
They are very inflexible – can only be used to pay for college. And yes you can now roll a certain amount over into retirement funds, but those are the only options.
To access the money for anything but eligible education expenses, you will pay full tax rate on it plus an additional 10% penalty.

Instead, I recommend using an Invisible College Savings Plans like Smart Start. These plans come with the following benefits:

These plans are not reportable on the FAFSA or CSS, so not included in the calculation of how much you have available to pay for college.
Tax free growth with no funding limits.
Very flexible – they can be used for college, to buy a car, deposit on a home, start a business, for income or for anything you like.
When you are ready to use your money you take it as a loan – rather than a withdrawal meaning not reportable and no tax on that either.
You can continue to fund and draw lump sums or income for as long as you like.

Smart Start plans can be established based on the amount each month you would like to save, or the target amount you would like to have saved for college. They are also very flexible in terms of being able to adjust or pause contributions on a month-to-month basis if needed.

INSIDER TIP: Take the student loan option and keep saving (or at least have the value compounding) in your invisible college savings plan right through the years your child is in college. Remember student loans are interest free with no payments required until the year after graduation. You might as well use the student loan credit for free to grow your plan’s tax-free compound growth as long as you can.

Freshman & Sophomore Years

The Freshman and Sophomore years are key for laying the groundwork that colleges want to see in your application. Planning early is crucial for maximizing chances of getting into a top-tier college and landing a sizeable scholarship from the college of your choice. Key actions for these years include:

Start career planning, identify activities and subjects of interest. Utilize the eCollegePro careers module for personality and aptitude testing.
Participate in extracurricular and volunteer activities.
Take high schools courses/subjects rated more highly by the colleges
Begin considering college characteristics such as specialties, location, size, and extracurricular activities.
Utilize the ACF database to search for and apply for scholarships.

REMINDER: The Sophomore/Junior calendar year is the snapshot used in the FAFSA form and CSS profile. Asset reallocations and planned expenditures should happen before or during sophomore year to minimize your EFC. Consult a college funding financial professional to optimize financial position.

Junior Year

Although financial changes are now limited, there's still time to improve the academic and social aspects of the college application process. Consider these steps:

Refine career planning using tools like the eCollegePro software's careers module.
Continue participating in extracurricular and volunteer activities.
Narrow down your list of colleges of interest, aiming to apply to at least 6-10 schools.
Start SAT, ACT Test Prep using eCollegePro's comprehensive Test Prep module. Aim to take the tests multiple times, improving each time using eCollegePros different learning style formats which help every student succeed to practice and improve on their scores over time.
Schedule campus visits during the academic year to get a feel for campus life while school is in session.
Make appointments to meet and wow the admissions and financial aid officers of the schools you are considering.

Senior Year

Here's a month-by-month breakdown of key actions for the senior year:

September: Submit admissions applications to at least 6-10 schools - be first in line.
October: Complete and submit FAFSA and CSS funding applications - on exactly October 1st for best results.
November: Receive and review your Student Aid Report (SAR).
December: Apply for private sector scholarships open to seniors.
January: Accept all college admissions offers as they come in.
February: Personally thank providers of any scholarships received.
March: Receive and interpret college award letters with ACF's assistance.
April: Appeal for award re-evaluations and additional funding, your college planner will analyze awards against student profile & college data.
May: Finalize college selection and submit loan applications.
June: Notify non-selected colleges of your decision.

How American College Foundation and Your Advanced Certified College Planner Can Help

We have successfully helped families save tens of thousands of dollars in tuition every year. The most important things you can do to pay less for college include:

Be first in line and start as soon as you can.
Understand and work the process and financial formulas.
Get professional help from organizations like the American College Foundation and the certified college planners who work with them.

The cost of the eCollegePro program is just under $1500 for a lifetime license for each student and their parents, providing invaluable guidance and support for a very low investment, setting your child up for a lifetime of success. eCollegePro is available for families to purchase/gain first student access between final year of middle school and junior year of high school.

ACF every year buys the admissions and funding data from all the colleges in the country. We know how much each student paid, what their grades were, which subjects they took in high school, how much funding they received from where, how much was paid in student loans, the school’s acceptance rates and yields, as well as their graduation rate and loan default rate.

Please note that we don't work with every student. First step will be an interview with the student to determine if we believe we can make a difference and help you pay less and get into a better college than you had originally thought. There will be some work and commitment on behalf of the student to ensure success. If you are interested in working with us, please schedule an appointment for a Free College Planning Process review here .

5 Steps to Ensure You Are Debt Free Well Before Retirement: A Guide to Debt Free Life

tlipnicki.sfg@gmail.com (Tracey Lipnicki) — Sun, 23 Apr 2023 03:02:08 GMT

5 Steps to Ensure You Are Debt Free Well Before Retirement: A Guide to Debt Free Life ^R

In my last article I walked you through my favorite strategies for increasing your retirement income (or bridging your retirement income gap if you have one).

Today we are talking in more detail about the Debt Free Life program offered through Debt Free Life certified agents with Symmetry Financial Group. Lucky for you, I happen to be one of those certified agents :).

Debt Free Life ^R is a proprietary system that combines data science technology, traditional debt payoff methods, and the infinite banking concept to help clients use their money twice to pay off their debts faster and build their retirement nest egg at the same time without spending anything more. Imagine being completely debt free, including your mortgage in just 7-9 years or even less!

This article will outline the steps used by the Debt Free Life program to ensure you are debt free well before retirement.

Step 1: Analyze Your Debts

The first step in Debt Free Life is to analyze all your debts, including mortgages, credit cards, auto and solar loans, student debt, personal loans, and more into the system. The program uses data science technology to review your amortization schedules, interest rates, and payment details to develop a customized plan for you. This step is crucial to understand your current debt situation and determine the best strategy for paying everything off. To begin, meet with your certified Debt Free Life specialist who will enter all your debt information into the proprietary Debt Free Life platform.

Step 2: Combine With Traditional Debt Payoff Methods

Once your debts have been analyzed, the Debt Free Life program combines traditional debt payoff methods, such as the debt snowball and debt avalanche, to create a plan that maximizes your efforts. The debt snowball method focuses on paying off the smallest debts first, while the debt avalanche method focuses on paying off the debts with the highest interest rates first. The program determines which method, or even if a combination, is best for your unique situation. By using both methods, Debt Free Life can help you pay off your debts more efficiently.

Step 3: Use the Infinite Banking Concept

The infinite banking concept is a financial strategy that involves creating your own bank and playing interest rate arbitrage. Instead of paying interest to lenders, you use your money to pay off your debts and grow it tax-free for retirement at the same time, effectively using it twice.

Why should the banks earn interest on your money when you can instead? The Debt Free Life program uses this concept to help you pay off your debts faster and build your retirement nest egg simultaneously. This step is crucial to maximize the use of your money.

Step 4: Pay Off Debts Faster Saving 1,000's In Interest

Using Debt Free Life, clients are able to pay off all of their debts, including their mortgages, in an average of 17 to 25 years less than planned. This is because the program creates a customized plan that combines data science technology, traditional debt payoff methods, and the infinite banking concept to maximize your efforts. Given that mortgage payments can average somewhere between 20-30% of our monthly budget, this can make a huge difference in closing your retirement income gap. By paying off your debts faster, you will not only save 1000's in interest but you can save more money for retirement (or other purchases) and improve your financial well-being.

Step 5: Build Your Tax-Free Retirement Nest Egg

By using the infinite banking concept to pay off your debts and grow your money tax-free for retirement, you're able to build your retirement nest egg faster than if you were only paying off debts or saving for retirement separately. The program creates a plan that maximizes your efforts so that you can achieve financial freedom and enjoy your retirement without worrying about debt.

Are you ready to learn how Debt Free Life could work for you? Schedule a time with your Certified Debt Free Life specialist here and request your personal Debt Free Life Report.

8 Strategies You Can Use to Ensure a Financially Comfortable Retirement

tlipnicki.sfg@gmail.com (Tracey Lipnicki) — Fri, 21 Apr 2023 16:40:28 GMT

You’ve Discovered You Have Retirement Income Gap, Now What?

8 Strategies You Can Use to Ensure a Financially Comfortable Retirement.

Retirement is a time to enjoy the fruits of your labor, but what if you find yourself without enough income to support the standard of living you pictured?

Your retirement income gap is the difference between the income needed to maintain a certain lifestyle and your expected income from current planned sources, such as pensions/retirement plans, social security and savings. This article outlines practical solutions you can implement to bridge the retirement income gap, ensuring a comfortable and secure future.

Most financial planning softwares (and therefore financial planners) will tell you that your main options in this situation are to either continue working longer and delay retirement, or to downgrade your standard of living expectations. There are however much better options I use with my clients to enable them to achieve their desired retirement. I’ll provide a high-level overview of each strategy here, providing more detail in future newsletters.

1. Ensure You Are Debt Free Well Before Retirement

Lucky for you I'm a certified Debt Free Life ^TM consultant. The Debt Free Life proprietary software program uses data science technology to analyze all your debts and amortization schedules (including things like your mortgage, credit cards, auto and solar loans, student debt, personal loans and more) then combines them with traditional debt payoff methods such as the debt snowball and debt avalanche, plus the infinite banking concept to use your money twice: both paying off your debts and growing it tax free for retirement at the same time. You are basically creating your own bank and playing interest rate arbitrage so that the interest normally paid to your lenders goes into your pocket instead, plus it compounds to add to your retirement nest-egg. I’ve been able to help my clients pay off all their debts, including their mortgages, in on average 17 to 25 years less than planned. Given that mortgage payments can average somewhere between 20-30% of our monthly budget this can make a huge difference in closing your retirement income gap.

2. Pay Less For Your Children’s Education

The cost of college is an ever-increasing burden on students and their parents’ retirement alike. Here are just some of the changes which are conspiring to increase your child's cost to attend college.

Over the last decade, the exclusion of traditional retirement accounts from the financial aid calculation has been gradually reduced, and last year it was removed entirely, meaning that all your retirement income is now up for grabs to pay for your child’s education.
More recently at the end of 2021, right before handing over power, the GOP put in place legislation effective this year in 2023 to remove the fees discount for having multiple children from the same family in college at the same time.
While there are still some financial assets exempt from reporting to the colleges, your financial position is now assessed 2 years prior to your student starting college, leaving most families to learn too late how to reallocate assets to pay what can be 10’s of 1000’s of dollars less for their child’s college education.
Merit funding grants and awards take account of the classes and activities undertaken by your student right through their high school career. Again, most families start too late to make a significant difference in their children's cost of education.

My recommendation if you have a child – as soon as you have any inkling that they will attend college – that’s the time to get started. As a Certified Advanced College Planner I can help coach you through the process to ensure your child/ren is able to get into a better college for a much lower cost.

3. Reduce Your Current Health Insurance and Healthcare Costs

The current healthcare system is designed to make as much profit as possible for health insurance and pharmaceutical company executives and shareholders. If you keep yourself reasonably healthy though, there are now alternatives such as coop plans and shared health cost cooperatives that can save you up to 70% of the cost. Shopping around for health coverage on a regular basis is definitely good strategy. As a licensed insurance broker I can help you assess your current plan, plus shop around for you to see if something better is available. As a fiduciary, my obligation is to always put your interests first.

Additionally Quility Rx which is part of the My Quility Savings App will help you shop around for prescription prices. Whether you have prescription cover included in your insurance or not, you can see significant savings by using Quility Rx inside the app to check prices at the different pharmacies near where you live or work. You will be surprised at how much the variance in pricing can be.

4. Outsource Your Future Healthcare Costs to Someone Else

The largest healthcare costs most of us will face in retirement are nursing home care, long term care or home health care costs. 72% of us are going to need at least one long term. Rather than take the $8,000-$12,000 per month for these costs out of your retirement income, other options include: long term care insurance, chronic care income riders within life insurance policies, and annuities which include income doublers in the event you are confined to a nursing home.

5. Significantly Reduce Your Risk by Taking Preventative Action

The three largest causes of healthcare costs in the US are cancer, heart disease and diabetes. The latest research shows that only about 8-12% of the causes of these 3 diseases are genetic while the remainder is based on nutrition, lifestyle and environmental factors. That means we have a huge amount of control over our future healthcare costs and can in the vast majority of cases prevent them from occurring. I’m a big believer in holistic and preventative healthcare using food as nutrition. I’ll provide more details on some of the latest research and my personal approach in a future newsletter.

6. Reduce Your Current and Future Daily Living Expenses

No I don’t mean giving up things that are important to you. We live in a very fast evolving time where technology is improving every second of every day. When was the last time you reviewed your expenses to see if you do in fact need all your current subscriptions, or to see whether there are less expensive and now better options available? Have you ever negotiated price discounts based on being a loyal customer? All of this is possible and more if you know where to look and how to do it. Plus there are now also services that can do the hard work for you. More details to come on your options here in a future newsletter, however a great place to start is understanding your current expenses and budget .

To get a head start, you can check out auto-pilot, which is a do it for you bill negotiation service. You upload copy of the bills you want to ave on, n their term of expert negotiators get to work. Not only will they save you money now, but they will also automatically follow up and try to negotiate an even better eal every 6 months. I find that even if they aren't able to get me n ongoing monthly savings that can till get one of credits to my account which put cash back in my pocket. Just this month they reached out for my regular 6 month negotiation review and were able to negotiate new deal on my and my husband's cell phone bill which is saving us $46 every month with the cost guaranteed not to go up for the next 36 months. I was pretty impressed. My negotiator was great, she communicated with me through the process to make sure that not only would I not lose any benefits I need now, but in actual fact they increased on the ones I do. If you want to check it out for yourself, you can do so here .

7. Leverage Your Home Equity

Home equity can be an untapped source of retirement income. Consider downsizing to a smaller home or moving to a more affordable area (or even some exotic overseas location), which can free up cash for your retirement. Alternatively, look into a reverse mortgage, which allows you to borrow against your home equity, providing a steady income stream. HELOCs are another option depending on your situation.

8. Purchase Future Income At Reduced Rates Today

While I have always understood that an annuity will provide you with much more income over the long term than the same lump sum, I only learned the concept of buying future income through life insurance a couple of years after moving to the US from Australia in 2010. This is because Australia being a semi-socialist country does not allow cash value life insurance since they consider it to be tax evasion; and in order to pay for socialised medicine, education, community services etc, everyone must pay their share of taxes. It's this tax free growth status of the funds within the policy that make cash value life insurance policies (when set up correctly) like an annuity on steroids - with greater flexibility and more bonuses (providing you start investing when you are healthy and sufficient years before retirement).

If you keep an eye on financial news you would have noticed that annuities are coming back in style. While you have have heard stories about annuities in the past, thanks to increased regulation and guarantee requirements these now come with entry bonuses, long-term care doublers, and guaranteed lifetime income riders that are indexed to protect your income from inflation.

If any of these 8 strategies seem like they may be useful to you, feel free to reach out and schedule a call to discuss your personal situation.

In the meantime watch out for future newsletters where I’ll break down each one in more detail. Debt Free Life being first next in line.

How To Calculate Your Current Expected Retirement Income In 8 Easy Steps

tlipnicki.sfg@gmail.com (Tracey Lipnicki) — Fri, 21 Apr 2023 14:32:44 GMT

How To Calculate Your Current Expected Retirement Income In 8 Easy Steps

Retirement is something we all look forward to, but to retire comfortably without stress or worry, we should have a clear understanding of how much retirement income we will have available to us.

In the US, traditionally retirement funding is intended to come from 3 sources. It’s called the 3-legged stool of retirement income and includes:

Social Security
Employer based Pension or 401K plan
Personal savings/investments

Social Security and your employer plan are not designed to fully fund your retirement if you are looking to even maintain your cost of living, let alone increase it. Even personal ROTH and IRA accounts have limits on the amount you can invest each year. This is why it's important to understand your retirement income gap, and then fill it before it’s too late to do so comfortably.

Your retirement income gap is the difference between your desired retirement income, see my previous article for the easy step by step to do this , and your estimated current retirement income.

Desired Retirement Income - Current Expected Retirement Income = Retirement Income Gap

Today’s article will walk you through how to calculate your current expected retirement income, so you can then calculate your retirement income gap.

Step 1: Calculate Your Social Security Benefits

Social Security is a government program that provides retirement benefits to eligible workers. You become eligible once you have paid into social security for at least 40 quarters. To find out your expected social security retirement income, create your My Social Security account here. Once completed scroll down to the Plan My Retirement section and select your retirement age to see how much you will receive.

Please note that given current US debt levels these numbers are subject to change and may either be downgraded or pushed out to older years to keep the program solvent.

Step 2: Understand Your Pension Benefits

If you are lucky enough to have a pension plan, you should be able to view your expected retirement monthly benefit by age either on your annual pension statement or in your online account. If not you can contact your plan administrator and ask. Your pension benefits will depend on the type of plan you have, your years of service, and your salary history.

Step 3: Learn Your Retirement Account Benefits

For 401K, 403b, IRA, ROTH and other retirement accounts, most plans will provide a tool that estimates monthly or annual retirement income for you. If this is not provided automatically, reach out to your fund administrator and request an illustration, provide them with your anticipated age/year of retirement. Make note of whether the distributions are taxable or non-taxable.

Step 4: Estimate Your Investment Income

Should you have money in other investment accounts such as mutual or index funds and even brokerage accounts, you can use the SEC’s Compound Interest Calculator to work out what the expected future balance will be at your retirement age. From there you can calculate your expected retirement income from that balance. As a rule of thumb, 4% per year will have the funds last for 20 years (accounting for average historic market fluctuations), however these days due to longer life expectancy 3% is a safer number to use.

Step 5: Calculate Property Rental Income

To calculate future property investment property income use the following steps:

A. Current monthly rental income x 12;

B. Multiply A. by 1 + expected annual rental growth rate for your area ^number of years until retirement;

C. Multiple B. by 1 - your expected vacancy rate this is your expected gross annual property income.

D. Subtract from C. your estimated annual operating expenses such as HOA fees, insurance, management fees, utilities, trash, water, gardening, property taxes etc.

E. From D. you also need to deduct your annual estimated maintenance and capital repairs costs.

You now have your estimated Property Rental income.

Step 6: Other Sources of Income

Don’t forget to include other sources of income too. Some of you may already have purchased annuities or cash value life insurance policies designed to provide retirement income. Others may expect income from trusts, business income or other sources. Make sure to note all of these for your retirement income calculations.

Step 7: Add Up Your Total Retirement Income

Once you have estimated your Social Security benefits, pension, investment income, rental properties and other sources of income, add them all together to determine your expected total retirement income. This will give you a good idea of how much money you will have available to you in retirement based on current plans.

Step 8: Compare Your Retirement Income to Your Retirement Expenses

Your final step is to compare your expected retirement income to the desired retirement income that we calculated previously . Make sure you factored inflation into your desired retirement expenses in the first step or you may find your income calculations won’t be enough when you get there.

If your retirement income is less than your retirement expenses, this is your retirement income gap.

Next step is to create plans to fill or reduce that income gap. That’s what we’ll tackle in my next article.

7 Easy Steps To Calculate Your Retirement Income Needs

tlipnicki.sfg@gmail.com (Tracey Lipnicki) — Thu, 13 Apr 2023 04:26:59 GMT

7 Easy Steps to Calculate Your Retirement Income Needs

One of the critical steps in planning for a comfortable and secure retirement is determining how much income you'll need to maintain your desired lifestyle.

Many financial advisors, since you won’t be working then, calculate your retirement income needs at around 75% of your current living budget. I don’t know about you, but when I stop working I plan to do more than today. I would like to travel and see more places, try new experiences, participate in more activities and hobbies, eat out more often. None of those things are free, so in my mind I’m going to need more income in retirement not less.

This article will guide you step by step through estimating the amount of future income you’ll need. A future edition will cover planning to achieve that income, but for today let's just take one step at a time.

Step 1 – Analyze Your Current Expenses

My last newsletter broke down how to make a monthly budget by managing your money like a CFO . You can go back and review that article on the link left if you don't yet have a budget or clear idea of your current expenses for this step.

Step 2 – Picture Your Future

One of my favorite ways of picturing the future of any kind is through a vision board. In the old days we used to get nice big sheets of craft card and cut pictures out of magazines of our goals or desired outcomes. For my retirement it will be: things like tropical beaches, trying new restaurants with my husband, traveling to countries I’ve never been to and more. These days you can use Pinterest, Evernote or some other kind of online vision board if you prefer, however there is nothing like sticking your vision board to the refrigerator to remind and reinforce your goals.

Make sure to think about things like: where you’ll live – will you own your home or rent. Will you have more than one home. How you’ll get around, will you own a car, will you need a new car. How often will you travel and where to. Will you join a country or golf club, or take up painting and art classes. Do you want to be able to help your family out financially, etc. Write down all the extra expenses you'd like to include.

Step 3 – Adjust Your Living Expenses For Your Future Lifestyle

Now that you have a good idea of your desired future lifestyle and activities, it should be pretty easy to look at your current budget and adjust it to remove expenses you’ll no longer need in retirement and add in the new fun ones you’ll have instead.

Step 4 – Account for Debt Changes

An important factor that makes a big difference to both how much you can save along the way and how much income you need in retirement is debt. In particular long term debt. The original idea of 25-30 year mortgages was to both make payments affordable as well as enable home buyers in their 30’s to become mortgage free by retirement. Unfortunately the pandemic and rising costs of living have thrown a spoke in the debt free retirement dream for many, and the availability of lower rate refinancing enabled many to refinance their mortgages at lower interest rates but at the cost of new 30 years terms which now push well into retirement. In addition, many have added HEILOC loans, solar leases, car leases and other financing to their budget burden.

A Quility program which enables you to become your own bank and use your money twice to both save for retirement and pay off debt 2-3 times faster without spending anything more, saving you thousands in interest is Debt Free Life ^TM . I’ll cover how that works in more detail in a future newsletter.

Step 5 – Account for Future Healthcare Costs

It’s important to factor in both health insurance costs – which as you know increase as you age, and the cost of care itself. Did you know that 72% of people over 65 will need long term care at some point? The average long term care facility costs on average $100-$150,000 per year. You can offset these costs of course with insurance, and in that case the younger you purchase insurance, the less expensive it is.

Don’t forget also about preventative healthcare and wellness programs. As we age staying fit, strong, eating whole unprocessed foods and having regular wellness checks can help prevent many diseases. Hormone replacement and other anti-aging treatments can also help slow down the aging process and extend our healthy active years. It's important to budget for these too.

Step 6 - Factor in Inflation

Inflation can significantly impact your future purchasing power, so it's crucial to incorporate it into your retirement income calculations. You can use historical inflation rates as a guide, but keep in mind that future rates may differ. Adjust your projected expenses for inflation to ensure your retirement income will cover your future cost of living.

Step 7 – Account for Taxes

Given the current state of US debt and the slowing birth rate in this country, do you believe taxes will go up or down in future?

It used to be said that you don’t have to worry so much about taxes in retirement because you’ll be earning less so will have little tax to worry about. However as we already established, many people intend to have more income in retirement not less. Additionally it is very likely that taxes will also be increased above current rates. Make sure to calculate what your before tax monthly income requirements might be given current tax rates and then build in a cushion for future tax increases.

Your Monthly Retirement Income Goal

Once you have made all 7 calculations and adjustments you now will have a monthly retirement income goal - congratulations! Make sure to add it to your vision board, to keep it top of mind.

The next step is putting in place a plan to achieve it. That will be the topic for my next article.

In the meantime, don’t forget to regularly review and adjust your estimates. Your retirement vision and income needs will likely change over time as changes to your personal situation and life goals do. Know that’s ok. Plans are made to be updated and improved upon. It is better to have a goal and regularly review and adjust it than not having one at all. Waiting to create a goal and plan until you know for sure, will surely lead you nowhere, or even worse, somewhere you do not want to go.

If you have any questions about creating your retirement income goal or need help with any of the steps, I'm here to help - don't hesitate to give me a call.

6 Ways To Live Debt Free

tlipnicki.sfg@gmail.com (Tracey Lipnicki) — Sat, 04 Mar 2023 23:58:44 GMT

6 Tools You Can Use To Achieve a Debt Free Life!

As of February 2023, Americans have amassed more than $925 billion in credit card debt. Yes ‘Billion’ with a ‘B.’ In addition, variable mortgage rates practically doubled in 2022 while student loan debt has hit a staggering federal balance of $1.64 Trillion (which accounts for over 92% of all student loan debt).

Unfortunately our consumer based society encourages us to take on more and more debt. After college and our student loan payments kick in, there is the wedding which more couples now take out loans to pay for themselves, then we purchase a home = mortgage debt, after that we take on car leases, get credit cards, and now solar loans. And I haven't even mentioned medical debt. As a result, many Americans are having to dig themselves out of a debt-sized hole that gets bigger every day as the cost of living increases and the average wage lags much further behind. This sadly leaves little room to even think about saving for retirement.

There are however solutions you use to help eliminate debt and tackle your financial goals. Here I will break down six tools you can use to achieve a debt-free life.

#1: 50/20/30 Budget

When it comes to eliminating debt, focusing on your eventual goals is critical to the success of the strategies you use.

The 50/20/30 budget refers to the percent of your monthly income that you allocate. This budgeting tool uses three categories: “needs,” “wants” and “savings/debt", as follows:

50 percent of your monthly income should be allotted for needs (bills, groceries, living expenses),
20 percent should be spent on wants (entertainment, eating out or a new pair of shoes you might not need).
30 percent of your income should be focused on savings and paying off debt.

The nice thing about this method is its simplicity. It uses an easy formula to draw boundaries on how your monthly income should be spent. More than that, it’s not a particularly rigid budget, so it’s easier to stick to.

#2: Snowball or Avalanche Debt Payoff Methods

There are plenty of methods for tackling debt. Some methods give you time to slowly chip away at your loans, while others require more financial sacrifice to eliminate them in less time. The snowball and avalanche methods (respectively) provide two dollar efficient choices on how to get some quick wins which provide incentive to keep going.

The snowball method is designed for people that struggle to put more toward their loans. By ordering your debts from the smallest to largest and tackling them one at a time you can build momentum to eliminate your debts systematically. The snowball method is ideal for individuals who are motivated by the easy progress of paying off smaller debts first then working toward larger loans.

The avalanche method takes a more fast-paced approach to eliminate debt. With the avalanche method, you will focus on your loans with the highest interest rate first and work down the list. While paying the minimum payments on the rest of their debt, the avalanche method is best for clients who have more disposable income. You won’t see as much initial progress as using the snowball approach, but you will ultimately pay those loans off in less time than other methods due to the interest saved.

#3: Tracking Spreadsheet

Simple and effective, spreadsheets are a great way to keep track of expenses, financial goals and debt. Everyone can benefit from keeping a detailed account of where their money is coming from and what it’s being used toward.

By maintaining these details, you can manipulate the spreadsheets to understand when certain loans can be paid off and what small changes to your spending will speed that process up. Excel and Google Sheets are both great inexpensive options, and you can find plenty of free resources online to sharpen those spreadsheet skills.

#4: Find a Budgeting App

At the end of the day, few tools get it done like phone apps. They’re typically easy to use and always within reach, and for that reason, they’re a great resource for understanding your debts and finances. There are apps for budgeting, monitoring spending and even rolling your pennies into savings which add up to amounts you can use to make large, one-time payments.

More specifically, apps like Quoin and Undebit.it are virtual debt pay-off tools that you can use for thoroughly automated debt tracking. Both options will help track your income and payments while offering a list of strategies they can deploy to tackle them.

Both these apps do require payment, but there are a host of free budgeting apps that they can use instead. I mentioned a couple of them in my last article about managing your money like a CFO here.

#5: Work with a fiduciary

Working with a fiduciary is a great option for people who feel more comfortable letting others take the debt elimination wheel. A fiduciary can be a family member, trusted co-worker or experienced professional — like me - to help guide you through the debt payoff process.

Whomever you choose, your fiduciary has the role of finding the best investment vehicles and money management services to ensure the best outcome for you the client.

While these services have traditionally been expensive, our parent company, Quility, has created Quility Financial Advisors (QFA), providing financial planning for middle America.

Regardless of your financial situation, a trusted financial professional can help pinpoint where you can improve your financial portfolio and look for products to help you meet your goals.

#6: Debt Free Life ®

An example of one of those products, Debt Free Life (DFL), is our proprietary answer for debt elimination.

DFL harnesses the power of a life insurance policy to help you achieve financial freedom without spending more than you already are and in fewer years than it would traditionally take. As a Debt Free Life Certified agent, I can help you create a payment plan that will systematically tackle your debts using tax-free loans from the policy, all while the same money accumulates tax free growth and dividends. You get to use your same money twice so that at the same time as you are paying down your debts, that same money is earning you more for future cash flow needs or retirement.

If you are interested in learning more, reach out for a free debt elimination consultation . I'll create you a free debt elimination Debt Free Life report so you can see just how much time and money you can save by paying your debts. Most of my clients are able to pay off all their debts including their mortgage in 30% of the time or less.

To learn more you can watch this series of videos that walks you through the Debt Free Life process:

Manage Your Money Like a CFO

tlipnicki.sfg@gmail.com (Tracey Lipnicki) — Wed, 18 Jan 2023 03:54:04 GMT

Think of Yourself Like a Business

As any CFO knows, in order to maximize profit you must understand every dollar in and every dollar out. If you don’t do this regularly already I wouldn’t be surprised if you find some outdated or no longer needed subscriptions that can instantly save you some money.

Document and categorize your:

Income – how much money you have coming in each month?
Expenses – how much money and on what you spend each month?

There are a number of ways that you can easily accomplish this. If you like spreadsheets, you can download your monthly bank and credit card statements then allocate your income and expenditures into categories. Email me back and I’ll send you a free, easy to use template with all the categories you’ll need.

If you would rather do it the easier way (like me) there are a number of free apps you can use to connect to your bank and credit card accounts that will pull in and categorize everything for you – provided you feel comfortable sharing your financial info with them. These are helpful not only to understand your current financial situation and budgeting, but also for easy reporting when it comes time to do your taxes.

The apps I like:

Mint: https://mint.intuit.com/
Rocket Money: https://www.rocketmoney.com/

I don’t receive anything from recommending these apps and there are others out there if you prefer. Caveat being that most others I’ve come across are trying to sell you some other kind of service their parent company provides. These two do as well (they have to cover the cost of providing the free service somehow) but it’s not intrusive like the others.

Whether you already have this step covered or you are starting now, shoot me a message and let me know where you are at. That way I can personalize future articles and tips to your wealth building journey.

How to Make Money

tlipnicki.sfg@gmail.com (Tracey Lipnicki) — Sat, 11 Sep 2021 22:52:29 GMT

Make More Money - Start Your Own Business

Look around, you will notice that all of the seriously rich people own businesses and work for themselves not others. You can do the same. This helps you for a few reasons:

Everything you earn is yours , you are not putting in effort to earn for anyone else but for yourself. No-one else is taking the profit over your labor but you.
It will help you minimize taxes . There are many more items you can claim as tax deductions when you are self-employed, including home office expenses, mileage and vehicle deductions for business use of your car, business entertainment expenses, internet and cell phone usage and more.
It will give you a second source of income to help reduce your income loss risk if your job is lost. I recommend starting your business first as a side hustle until you grow it big enough to replace your employment.
In future as the business grows you should be able to first hire others to work with you and if you are successful, eventually step back from actively working in the business and enjoy passive income . Passive income is the holy grail of financial freedom.

There are so many different options for you to do this today. Thanks to the gig economy and ability to build mobile apps and websites without even having to code, the sky is the limit. Please do think about what your business will be before you just run out and buy the first franchise that comes along. Take time to think hard about what you love to do, then look at the need or problem it solves for others.

How To Make More Money From Your Business

Bob Proctor, who has studied the art of making money for over 60 years has developed the formula for making money. He says “The amount of money you earn will always be in exact ratio to:

A. The NEED for what you do.

B. Your ABILITY to do it well.

C. The DIFFICULTY there will be in REPLACING YOU.”

It is important when you are starting your business, any business, that you can first identify a need. Then, in order to earn millions from it, you must be the very best at doing it.

To become the best, you should learn from the best.

Whatever it is you are going to do in your business – find the person who is the best at it, learn from them and do exactly what they say. Then practice, practice, practice until you are as good as, if not better than, the person you learned from.

There Is No Such Thing As Getting Rich Quick

Please do not think that making money can be done without putting in work. There are a lot of get rich quick internet scams out there. Generally, if it is too good to be true - it mostly likely is.

If you are passionate about your chosen business though, it should not feel like work. I’m sure you’ve heard the saying - do what you love, and you’ll never work a day in your life!

Don’t just think of full-time ventures

A home-based business or side hustle can be just as effective at generating extra revenue and/or tax deductions to offset against your PAYG income as a full-time job. Plus, it helps protect you from risk by starting small on the side until you have sufficient income to transition from your W2 employment.

You might also want to consider direct marketing or MLM side hustles. As of 2019 more than 20 million Americans made money from MLM businesses. Just like any other business though, if you go this route you want to find one that resonates with you. No-one likes to be sold to; however, people love to hear others talk about their passion.

Whatever you choose, follow Bob Proctors advice. Make sure there is a need for it, and that you are great at the process. MLM is good for those who are good at networking and don’t mind cold outreach, but not so great for shy introverts. There are however many millionaires who have made their fortunes through network marketing.

And if you are interested in helping people, are good with numbers and a great communicator, perhaps the financial services industry might be a good fit for you. I'd love to talk to anyone interested in what I do. Reach out any time.

The Tax Armageddon is Coming

tlipnicki.sfg@gmail.com (Tracey Lipnicki) — Sat, 21 Aug 2021 18:54:51 GMT

Are You Ready For The Coming Tax Armageddon?

The Pandemic has cost the US a lot of money. Besides extra unemployment benefits, stimulus payments and tax cuts, there has also been rent relief, mortgage forbearance programs, student loan payment hiatus, the cost of the vaccines and their distribution, the cost of hospitalization and medical care/treatment for those who contracted the disease, plus on top of that is the extra treasury funds being pumped into the economy to keep stock prices and interest rates where they are and Biden’s proposed $1.8 to $3.6 trillion dollar infrastructure packages.

In total you are talking tens of trillions of dollars that at some point will have to be paid for.

While Biden is proposing to increase taxes on the rich to do so, the ultra-wealthy are not the ones crying themselves to sleep over this. Why is that you might ask? Because the ultra-wealthy know how to hide both their assets and income to not show any income or assets to be taxed.

ProPublica recently uncovered a trove of secret IRS files including the tax returns of some of America’s wealthiest people – who legally pay almost zero dollars in taxes. You can read the ProPublica article here.

Note that the wealthiest CEOs are not the only people taking advantage of these (and other strategies which aren’t even required to be reported on your tax return). Think of Hollywood celebrities, athletes and politicians who have no interest in making changes to these schemes which would impact their own financial wellbeing.

What taxes in particular should you be concerned about:

So far the following taxes have all been proposed or floated for discussion:

Income taxes for Individuals earning over $453,000 and couples making more than $509,000
Capital gains taxes on taxable investments
Corporate tax rates - this includes small businesses that are structured to protect the business owner from liability
Biden is also considering reducing the tax offset on IRA/401K accounts for those earning over just $80,000 a year
Also on the table are death taxes, either by reducing the tax free amount or increasing the tax rate or both

So who will that leave to foot the increased tax bill?

If you earn $80,000 to a few million as earned income either by trading time for money or from working in your own business, you are Biden’s target.

What is the answer you might ask?

Tax Free Income is a strategy used by my clients for the following benefits:

· Tax Free Income is not reportable income (it does not go on your tax return)

· You can purchase Tax Free Income for pennies on the dollar and also with debt (when structured correctly, the interest on which is a deductible expense) to offset earned reportable income.

· Tax Free Income bypasses probate (to avoid estate taxes which are likely to expand and increase)

· Your Tax Free Income account is available for use as a rainy day fund (you do not need to wait until retirement or a certain age to access it).

If you are interested in a conversation to learn more, reach out here .

The Yellow Brick Road to Passive Income: Making Money While You Sleep…

tlipnicki.sfg@gmail.com (Tracey Lipnicki) — Sat, 24 Jul 2021 19:03:20 GMT

The Yellow Brick Road to Passive Income: Making Money While You Sleep…

There are two ways to increase your income. Besides decreasing your expenses, the other way is to earn more money. This isn’t as easy at it sounds, especially during these uncertain times. If your fixed costs are more than 65 to 70% of your income even after taking my budget advice AND you don’t want to significantly decrease your standard of living, then you need to increase your income.

The Four Ways to Achieve Income Today

Employee (You have a Job) – Your level of active work determines how much you can earn and when you earn it. Your work builds a business for someone else. This approach limits your potential if your only source of income.

Self Employed (You Own a Job) – Your level of active work still determines your income, but everything earned from your output is yours and you control your time. This is better than earning solely as an employee, yet still not enough on average to achieve true wealth.

Business Owner – You now have people that work with you. This gives you leverage to earn much more! Your business is a system and your income does not depend on your own labor. You have a solid strategy for growing wealth.

Investor – You now own INVESTMENTS that work for you! Your income does NOT depend on your active work and your money and assets work for YOU!

Lets take a look at each of these in more detail.

Employee

Generally your income here is limited by your time. Yes, you can get a 2 ^nd or even a 3 ^rd job. You may even get a promotion and earn a higher hourly wage. You are still however enslaved to the number of hours you can dedicate to the activities you are paid for. Your earning potential is limited as a result. Additionally, even while employee productivity has increased exponentially over time, real wages are (except for those of CEOs and the top 1%) not keeping pace with inflation .

Self Employed

Many people have taken the leap from employed to self-employed. This provides you with greater access to tax deductions, plus you no longer need to share the mark-up on your labor with someone else. If you work from home not only does the income generated no longer need to cover office and overhead costs, but your home office becomes tax deductible (a double deduction if you also own your own home).

Business Owner

As a Business Owner – you should leverage systems and employees to multiply your productivity. You can start to step back from the direct work and move into a more strategic, management role. At some point you may be able to step back out of the business and receive the ultimate goal of passive income .

Investor

As an Investor (you can start being an investor while you are an employee) your money (or other assets) are then working for you. You can manage your investments yourself, as an active investment manager/investment business owner, or you can have an expert do that for you – to provide you with passive income. Even better, using advanced investment strategies you can also buy tax free passive income .

Passive Income - The Ultimate Goal

When people talk about financial freedom, either for before or at retirement, they generally are talking about passive income. Income they receive without having to put in work or hours of their own time in return for receiving it. Making Money While You Sleep!

The good news is that anyone can achieve financial freedom with a plan. Not everyone is cut out for or wants to own a business. However, everyone can become an investor and they can buy tax free income.

If you are interested in creating an investment plan to achieve your financial freedom, reach out for a risk free conversation.

Use Debt to Make Money - Not to Buy Depreciating assets

tlipnicki.sfg@gmail.com (Tracey Lipnicki) — Sun, 04 Jul 2021 21:07:52 GMT

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Remember Conscious Spending

As you know I am a big proponent of conscious spending. An important point to remember about things you choose to spend money on, is that some assets depreciate in value, while others appreciate in value. The best kind of assets appreciate, while you also depreciate them for tax purposes – think of things like properties for example. I can claim a tax deduction for the depreciating value of the building, fixtures and contents, while the land value and rental returns appreciate and grow. That gives me a double bonus.

Cars are Expenses Not Investments

Cars however are generally – unless they are collectors’ items – solely depreciating assets. As soon as you take them out of the showroom, they lose 20% (or more) of their value. That’s why when you first buy or lease a car they will offer you gap insurance. Because the insurance value of the car is much less than what you paid for it – just 5 seconds ago.

Interestingly you will often find that the super wealthy aren’t the ones driving around in Lamborghinis and Ferraris. Those are the “want to be rich”, throwing away money on depreciating assets trying to look the part rather than growing their money to build lasting and generational wealth.

You’ve probably heard that those who win the lottery generally end up in debt by at least as much as they won as a result of not knowing how to manage and grow the money they won. Unfortunately this is also common with inherited wealth when the generations do not educate their heirs in the art of managing and growing their legacy. New wealth generally doesn't last more than around 3 generations.

Investable Assets

So what kind of assets should you be investing in? That depends on many things including your interests, your risk tolerance, your investment timeline and more. Options include property, the stock market, exchange traded funds, businesses, cash, bitcoin, gold, mutual funds, bonds, annuities, mortgages, investment life insurance and more. I know many people are afraid of any kind of “investment”, however diversification is your friend. Plus as I mentioned previously there are certain type of indexed investments that can protect your money from loss. A licensed wealth advisor can work with you to understand your financial goals your income and estate planning needs and recommend the best solutions for you.

Beware of Emotional Purchases

On the other side, spending your money on buying a fancy car – has literally the same financial impact as a bad investment. At the end of the car’s life you have neither the money or the car. At least with investing, while you may have a risk, the chances are you will end up growing your money over time on average across your investment portfolio. Especially if your portfolio includes indexed insured returns. Thanks to these new market linked indexed type investment funds, you can now guarantee that your investments won’t ever make a loss.

Given the high rates of growth/return they receive and the easy access to tax free policy loans, they can also be used to pay off debts including your mortgage in much less time, saving you hundreds of thousands in interest.

Use Credit Cards to Your Advantage

tlipnicki.sfg@gmail.com (Tracey Lipnicki) — Thu, 03 Jun 2021 16:57:18 GMT

Credit cards can be used to your advantage, if you are disciplined and know how to manage them.

Where most people get into trouble with credit cards is not paying them off in full each month. Credit card companies bet on this and charge you exorbitant interest rates on overdue balances.

Don't Use Credit Cards if You Can't Pay The Balance In Full

My advice: if you aren’t able to pay off your entire balance in full each month - don’t use credit cards. Credit cards are not intended to be a long-term payment or large purchases option unless you can afford to repay them in full within the interest free period (ideally sooner). Note that some cards do now offer longer introductory or promotional interest free periods.

Credit Card Benefits

If you choose the right credit cards and manage them well you can receive benefits such as cash back, flight miles, hotel points, free insurance, no international transaction fees, points redeemable for products and services, other coupons and discounts. I recommending choosing the card most suitable for your lifestyle and the things you are already spending money on in order to optimise your discounts and benefits.

Don't forget that credit cards also offer you protection from fraud and faulty products. Most credit cards also come with purchase warranty benefits and some even include insurance if your purchase is stolen.

The Best Use of Credit Cards is For Your Fixed Monthly Bills

What credit cards are ideal for is your fixed monthly bills so you can take advantage of auto-pay discounts. Use a high percentage cash back credit card for all your monthly service bills like phone, internet, power, subscriptions, car payments, lease payments, insurance, etc to be automatically deducted from your credit card each month. Gas and other regular monthly expenses can also be included here. Then set up the credit cards to be automatically paid in full, from your bank account each month.

Pay Your Credit Cards Early To Increase Your Credit Score

Here is another trick for you: the credit agencies check your credit usage to determine your credit score 3-5 days before your payment due date each month. You can improve your credit score greatly by making sure to pay off your credit cards each month in full at least 5 days before the date they are due.

A better credit score enables you to get better interest rates when borrowing money. It can also potentially rate you higher for better premiums on your life insurance investment policies.

What To Do If You Already Have Credit Card Debt?

If you have already gotten yourself into trouble with credit cards, do not despair. See my previous article on using your personal bank life insurance policy to snowball your repayments. If you aren’t sure on how to do this yourself, one of the services I offer my clients is a program called Debt Free Life. Part of that program includes me working with you to create a debt repayment schedule and a long-term investment plan. It will improve your credit score and help you save for large future expenses such as college, investments, property down-payments or business start-ups and a financially secure retirement. You can even use the program to pay of all your debts including your mortgage in half the time or less without spending anything more. It's pretty amazing!

If you are interested in an obligation free discussion, you can schedule time with me here.

Long Term Savings & Retirement Investing

tlipnicki.sfg@gmail.com (Tracey Lipnicki) — Thu, 15 Apr 2021 03:37:48 GMT

The most important thing you can do to save for retirement is to start early.

Due to the amazing benefits of compound interest, the earlier you start, the less you need to set aside each month. Lets look at some of the different options available to maximize your investment returns while minimizing tax.

401K Retirement Funds

If you happen to be a W-2 employee, take advantage of any employer operated 401K match offerings. Never say no to free money. Plus, investing money pre-tax means that whatever your top tax rate, the government is effectively giving you an additional investment match of that percentage to grow and earn interest/dividends on. Don’t think they are doing this out of the goodness of their hearts however, they will take their share of your larger retirement account at most likely even higher rates on the way out the other end. Plus, they will force you to take it out on a schedule designed to facilitate them getting as much tax from it as possible. Someone afterall, will have to pay for the trillion-dollar stimulus packages.

Roth IRAs

Many people add to their retirement savings by using Roth IRAs which are invested from after-tax dollars so that the capital component will be tax free in future. The Government does of course limit both the amount of money you can contribute to these as well as how much can be accessed tax free.

The Magic of Universal Life Insurance

A third option, and probably the biggest secret of the wealthy - is universal life insurance.

In 1985, the tax code was updated to allow for investment gains to be held and grown inside a life insurance policy free of taxes. This provided a way for the wealthy to create new types of life insurance policies they could use under the guise of risk protection, to grow their money, while at the same time sheltering it from taxes.

This is where both the rich, and the banks, invest and shelter their money. The right types of life insurance policies can be used to invest money free of capital gains taxes with no tax payable on dividends or interest on any investments held within these policies. Even better, the proceeds can be accessed, via loans, at any age. These loan proceeds (which are not considered income and so don’t impact social security) are also not taxable, meaning that you can borrow your own money without paying any taxes on it and then pay off the loan with the death benefit when you die, leaving the balance to your beneficiaries. Death benefits are also not taxable. Pretty neat right?

Many wealthy people use these types of life insurance policies to fund their retirement.

For retirement investing, I like the IUL or Indexed Universal Life policy. As I alluded previously, your money grows inside the policy tax free and then allows you to borrow against it (also) tax free in future when you need it. The last thing you want to end up with is to find your retirement savings depleted by 30-50% in taxes because your retirement funds are now generating the same or more income than while you were working. The goal is not to just survive on less money when we get older right?

Use Indexed Investments to Protect Against Market Downside

The other reason I like the IUL is that the I stands for indexed. This means that they are linked or indexed to the stock market for gains, but because they are not actually in the stock market, they do not take the losses. When the stock market goes up, the money in your IUL investment also goes up. When the stock market goes down however, your money does not take any losses. This will provide you with a higher average rate of return than the stock market in general over the long term.

The below illustration shows a comparison of an IUL (in blue) compared to the S&P500 which it is indexed to and the value of funds at the end of the 12 year investment period.

Don't Waste Money On Interest

My other favorite thing about the IUL is that these can be used to reduce and pay off faster your non-investment debts (the ones that aren’t working for you to grow more money – like your mortgage, your car loan and any outstanding credit card, medical or college loan debts you may have). You can do this by using your investment life insurance policy as your personal bank, borrowing money out of the balance to pay down the debts then snowballing your extra and minimum payments from each paid off debt back into the insurance policy to repay the loans, paying off your debts one by one in turn, including your mortgage. On average I’ve seen this strategy pay off all debts including the mortgage on average in 9-10 years (instead of 20-30), saving hundreds of thousands of dollars in interest. This saved interest money is then yours to invest, grow and earn more money with.

My last piece of advice before we move off the topic of long term investments is to diversify, diversify, diversify. I’m sure you have heard the saying to never put all your eggs in one basket, well it's good advice.

If you are interested in seeing more about how IULs compare to 401K investment performance over the long term, I made a couple of videos for you here:

Protect Your Assets and Your Lifestyle

tlipnicki.sfg@gmail.com (Tracey Lipnicki) — Tue, 23 Mar 2021 03:22:14 GMT

Don't Leave Your Future Up To Fate

O ne of the biggest impacts on whether you will live out your years comfortably or end up homeless on the street is risk management. If you leave managing risk to fate and don’t take steps to avoid or offset it, an unforeseen change in your circumstances can be disastrous. Be pragmatic in managing your risks.

Imagine what would happen if you were suddenly unable to work, you lost your income earning ability?

What if you were to be diagnosed with cancer or some other major illness?

What if your house burned down?

Or even worse if you or your partner were killed in an accident.

What would life look like for those left behind? Where would the household income come from?

What would the standard of living be like for those left behind?

Could they even keep the house?

Most people don’t like to think about any of these things happening so when they do, it comes as a big shock and their comfortable life all of a sudden becomes very different. Unfortunately, it happens to more people than we like to think about.

In the US one in two women and one in three men will develop cancer within their lifetime.

Half of these cancers are diagnosed in the prime of our lives, either before or during our working years.

And looking at deaths in relation to mortgages, the statistics show than on average one in every 10 people who take out a mortgage in their 30’s will die before they finish paying it off. In your 40’s it's one in five who will not live to pay off their home.

So What Can We Do To Protect Ourselves From Loss?

The definition of insurance is to indemnify yourself against risk. You can do this via self-insurance, for example by having sufficient savings to cover all needed expenses, or you can pass the risk to someone else – for example an insurance company.

Self-Insure with Short Term Savings

Step one is to make sure your budget includes a short-term savings plan. When creating your household or personal budget I recommend working up to setting aside up to 10% of your after-tax income each month into a short-term savings fund. Ideally you want to make sure this fund always includes at least 6 months of income, in the case that you lost your job, suffer a major accident or something else that prevents you from earning income. Once you have at least 6 months of salary tucked away you can use the excess to fund things like property or business investments, to grow money.

Protect Yourself From Disaster With Insurance

For protection of larger assets and against bigger catastrophes, outsourcing to an insurance company may be preferable. You know of car and health insurance, but did you know about mortgage protection insurance?

For most people their largest asset is their home. Mortgage protection insurance can mean the difference between keeping and losing your home should something happen to the income source that is paying the mortgage. I’ve seen it happen far too often where a death results in mortgage payments that could no longer be made. The bank then forecloses and takes the house, leaving the surviving family out on the street.

There are insurances for death and/or disability and critical or chronic illness that can provide you with cash to cover medical costs and expenses should you need. There are also extremely cost effective insurances to cover yourself for cancer, heart attack and/or stroke. These are especially helpful if you have a family history of cancer or heart disease.

There are business insurances that will buy out the shares of your business partner/s should something happen to them. Now there are even investments with built in insurance that will protect your investments from downturns in the stock market.

Use Life Insurance Like the Rich

The rich use many different types of insurance to make sure they are always financially protected. The wealthy are big users of life insurance. They use it to protect their wealth and to grow and leave estates to their heirs.

Besides the fact that whole life policies provide benefits to those left behind if you pass away, many new types of life insurance policies include living benefits, such as moneys payable for disability, chronic illness or lump sums in the case you are diagnosed with a terminal illness or cancer. Plus there are the new types of life insurance investment universal life policies that provide tax free growth and tax-free income benefits – these are my favorite secret of the wealthy.

The most important thing to remember however is to make sure that when disaster strikes - and it will in some shape or form - that you are protected. Did you know that an estimated 50% of bankruptcies are caused by illness or medical debt? Don't let yourself become a statistic.

If you are interested to learn about the different insurance options that can protect you? Reach out for a chat with me here .

Did Donald Trump leave us a golden egg for retirement savings before he left office?

tlipnicki.sfg@gmail.com (Tracey Lipnicki) — Wed, 03 Mar 2021 23:43:23 GMT

The secret retirement income vehicle of the ultra-wealthy – the Indexed Universal Life policy or IUL - just got more affordable and even more tax-free.

With all the publicity around parliamentary bills and what is and is not included, you may have started to realize that our politicians often use sensation-bills like the Cares Act and other big legislative or policy changes that attract a lot of attention, to provide cover while they slide in un-noticed the things they really want.

One such change that was passed under cover of the Covid Relief Bill on December 21st was what seemed like a very minor update to IRC Code Section 7702. IRC Code Section 7702 regulates the sheltering of funds from taxation within life insurance policies.

The amendment reduced the minimum guaranteed rate that insurance companies must provide on whole life policies from 4% to 2% due to the current economic climate. This in itself seems harmless; however, the result means a lower cost of insurance to the insurance companies for whole life policies and allows more of your policy premiums to be invested for growth and returns. Conversely, there was also an inverse increase on how much one can accumulate within a life policy before the policy hits MEC (the point at which growth becomes taxable). Industry experts believe that cap will be about 100% higher for new policy vehicles created based on the new cost structure rules. Note: existing policy and cost structures cannot be changed.

So was this a golden egg left by Donald Trump intended for the wealthy? Potentially so. This legislation was included at the same time as payment of stimulus checks to high income earners was taken out. And IULs are a favored retirement investment vehicle of politicians and the ultra-wealthy. This small gift will provide IUL owners with much larger retirement income returns and tax savings than a few thousand dollars in stimulus checks.

Used the right way the savvy retirement investor can now be millions of dollars better off, leaving even more in generational wealth to their children.

The good news is that with knowledge, anyone can take advantage of this kind of investment which provides both tax-free growth and tax-free retirement income with no downside, even when the market falls.

If you are interested in a no-pressure conversation and to see a side-by-side comparison of how much additional retirement income you could receive from an IUL versus your 401K, you can schedule time on my calendar for a financial goals chat here .

Negotiate Your Bills - Or Have Someone Else Do It For You

tlipnicki.sfg@gmail.com (Tracey Lipnicki) — Sat, 20 Feb 2021 18:26:28 GMT

How To Spend Less: These are some the ways you can pay less for your bills - thus reducing your expenses.

A fter going through a budgeting proces s and consciously looking at your monthly spending, you may have found that you are spending more than 65% of your income on your monthly cost of living expenses. As such you have 2 options:

Spend Less, and/or
Earn More.

In this article we will focus on spending less.

How To Spend Less

Your goal here is to keep your fixed costs to as low a percentage as possible of your income. This leaves you with more disposable income to invest and build wealth, as well as to enjoy your life.

The number one way to cut your expenses is to negotiate your bills - or have someone else do it for you.

One difference in particular I see when it comes to regular bills is that the wealthy generally pay less, not more – despite being able to afford more. Wealthy people grow up believing they should pay less and are taught to negotiate. This is true for two reasons:

They are brought up inside running businesses, and manage their own lives the same way; and
They have an internal locus of control. MEaning they believe they can control their environment and thus how much they pay for things.

How to Pay Less for your Bills

Given that regular monthly bills make up the bulk of our fixed expenses, it makes sense to tackle and negotiate these down first. Here are my top 3 ways to do that.

1. Take advantage of monthly account pay billing

Most if not all service providers will give you discounts for setting up your bills on auto-pay. Even better – put those bills on a credit card that give you the best cash back or points and get even more in benefits. There are many cards available today without annual fees that will pay up to 5% or even 6% back on your purchases making your savings on these bills even greater. Credit cards if managed well are also helpful in improving your credit score. I'll talk more on credit cards in another post.

2. Use your business or side hustle to get better business rates than are available for personal customers.

Businesses are often afforded better rates or plans than consumers. Cell phone plans for example are often less expensive for businesses than individuals. It pays to always check and ask what business rate plans are available. Also don't forget that any business charges are tax deductible against business income - even if the deductions are more than your income - in which case you can offset them against other W-2 income and/or carry undeducted losses forward to future years.

3. Negotiate and ask for a cut in your rate.

You would be surprised how effective saking for a discount or rate reduction can be. This is especially the case if you have been a customer for a while on automated billing with a positive payment history. Many companies will offer loyalty discounts to keep you as a happy customer. It is much less expensive for them to provide you with a discount that to find and attract a new customer to replace you. Use this to your advantage.

Not everyone has the time or the confidence to negotiate their own bills however. Luckily, there is a great new service called AutoPilot that can do this for you. There is no charge for the service up front, AutoPilot only charges in arrears - only if they save you money – out of the money you save, making it a win/win all around. You can learn more about AutoPilot for consumers here .

If you are a business owner and would like to see how much AutoPilot can save you in energy, internet, merchant fees, security and other business related expenses you can review AutoPilot for business here .

Your Millionaire Baby

tlipnicki.sfg@gmail.com (Tracey Lipnicki) — Sat, 13 Feb 2021 18:47:22 GMT

How The Rich Create Generational Wealth

Today let’s talk about generational wealth. How do the rich both maximize their income and lifestyle AND pass on even more wealth to the next generations?

The answer “life insurance” is probably not the one you expected. However thanks to the tax free treatment of investments inside a life insurance policy you can now leave a million dollar legacy to your children for as little as just $100 per month.

Let's look at how that might work.

Just after your baby is born you take out an Indexed Universal Life (IUL) insurance policy for them and contribute $100 per month. The initial death benefit is a little shy of $200,000 but set to increase over their life.

By age 25, you have contributed $28,800. At this point you can take a Tax-Free policy loan distribution of around $60,000 to give to your child for their 25th birthday to be used for any purpose – could be to pay off student debt, for deposit on a house, purchase a car, all of the above – anything.

Your child then takes over contributing to the policy $100 per month until age 65.

By age 65, the total contribution to the policy is $78,000 = $28,800 by you and $49,200 by your child.

During this time the death benefit has been gradually increasing each year to reach over $1MM by the time they turn 64.

At age 65 they stop contributions and start taking income instead. The expected annual income they could draw is just shy of $98,000 per year (over $8000 per month) completely Tax-Free. Whilst still leaving an extremely sizable death benefit for their heirs when they pass of between $500K to $1MM, depending on age and amount of income withdrawn at the time of passing.

If your child were to live to age 90 they would have taken over $2.5MM in Tax-Free income ($3.5MM if they live to age 100) from the policy that had a total cost of $78,000. A 321% (449%) return on investment, not even including the $500K to $1MM death benefit that is left for their heirs which pushes the ROI up to 378% if they pass at age 90.

If you are interested in creating your own millionaire baby, feel free to reach out for a free consultation and we can run some illustrations and scenarios for your family’s generational wealth building strategy.

Create a Budget that includes a Fun Allocation

tlipnicki.sfg@gmail.com (Tracey Lipnicki) — Wed, 10 Feb 2021 16:48:38 GMT

One of the most important things that you can do is create a budget. Where a lot of people come unstuck when it comes to building wealth is to spend their money first and save what’s left over. Instead you should do it the other way around. It doesn’t have to be complex, but know how much you make each month, and first deduct your fixed monthly expenses to work out how much is left. Ideally your fixed monthly costs shouldn’t be more than 50-65% of your monthly income after taxes.

You’ll then want to set aside at least 5-10% of your net income for long term savings or retirement and another minimum 5-10% for short terms savings. The rest is your discretionary spending (including your fun allocation) for things like nights out, clothing purchases, etc. But ideally you want as much of your money as possible working for you and making more money, not tied up in depreciating assets that don’t.

Three very important points to remember here:

Don’t forget about your taxes. And yes we will be working to minimize taxes as much as possible, but as your investments and/or side hustle businesses grow and bring in more income (more on these later) there is likely to be some tax payable, especially if you cut the cord on your PAYG job. Make sure you set aside tax money from your income each month before your budget allocations so it doesn’t come as a shock at the end of the quarter or year.
As your income grows, your lifestyle expenses should not grow in line. Yes, they will grow as you start to upgrade your lifestyle, but don’t become car and house poor, or spend 6 months’ worth of income on a Rolex watch. Wait until you can buy these things out of your monthly discretionary spending money without digging into your savings.

The 5-10% you are putting into short term savings and investments should however grow in percentage over time, ie: start when your income is low with 5% each month, then increase to 10%, then 20%, then 30% and even more as your income grows.

Your short-term savings initially is your emergency fund. Ideally you want to aim initially for at least 6-12 months of total income in your emergency savings account. That way if you lose your job or something bad happens you have money to tide you over until you can get back on your feet. Think of it as a type of self-insurance. Beyond this it should be used to fund investments and business start-ups.

If you are interested in a chat to review your budget and the best way to achieve your long and short term savings goals, I'm here to help. Reach out to request a free consultation here .

Control Your Own Destiny and Invest In Yourself

tlipnicki.sfg@gmail.com (Tracey Lipnicki) — Thu, 04 Feb 2021 16:47:17 GMT

One of the biggest differences between the wealthy and the poor is their belief in who controls their destiny.

My number one recommendation for anyone looking to build wealth is to use conscious decision making (locus of control) in every aspect of your life to make decisions about your finances and your future in general.

If you haven’t heard of locus of control, it’s your belief about whether you control your destiny or whether you believe it is controlled by external forces, for example fate or anything or anyone who is not yourself. Research has found that those with a strong internal locus of control are healthier, wealthier and happier than those who don’t control their own destiny.

Ask any successful person and they will tell you their journey began with a vision. Yours should too.

Use Visualization

Visualize your future, what it will look like. Create yourself a vision board of your future success and what wealth means to you. Once you know what you want, make a plan to get there. You can then take steps to achieve that goal. We become what we think, that’s why visualization is so important. Or to say it another way, if you can’t see where you are going – how can you get there?

You don’t have to start big, even very small steps will get you there over time. Plus it will help you build confidence every time you gain a small win along the way.

Don’t worry if you are currently in debt. There are wealth management programs to help with that too. Imagine being able to pay off your mortgage in less than half the time, saving hundreds of thousands in interest and being able to create multiple income streams to support a wealthy retirement.

This is all possible if you know how. Don’t be afraid to dream, visualize and plan this into reality.

Be Conscious About Money

Whenever you spend money, be mindful about it and your financial future. Ask yourself whether that expenditure or purchase will take you closer to your goal. If not, is it really worth spending? And if you decide that yes it is, then evaluate the options, don’t just pay the asking price. Wealthy people when they spend money will buy quality, because they know it lasts longer, but they also want to get the best price. Every wealthy person I know will negotiate the best deal and ask for a discount. They may not always get it, but if you don’t ask you definitely won’t get it.

The wealthy also control their own destiny when it comes to income. How many truly wealthy people do you know who work for someone else? The wealthy own businesses. They teach their children to own and run businesses. You can do this too. I’ll provide more details on this later.

Ask for help along the way

No-one is master of everything. The wealthy employ specialists, the best in their fields to ensure that they will be successful. If you want to be wealthy, seek help from an experienced wealth management advisor, who can understand your current situation and work with you to create a plan that will take you to where you want to be.

Invest in Your Personal Development

Don’t forget to invest in yourself. It’s important to create personal and financial goals then develop yourself to be the very best you can in your field. Remember back to my last article , find someone who is the very best at what you want to do and then copy them, practicing and practicing until you become great at it too. That doesn’t mean you have to invest in expensive courses either. Books are your friend. The man (or woman) who reads, is the man (or woman) who succeeds.

Two of my favorites:

· Rich Dad, Poor Dad by Robert Kiyosaki and Sharon Lechter

· Think and Grow Rich by Napoleon Hill

Managing and being good with money is a great life skill to have, and to pass on to others.

Money ABCs

tlipnicki.sfg@gmail.com (Tracey Lipnicki) — Sun, 03 Jan 2021 16:42:45 GMT

If you want to be good at something, first find someone who is already the best at what it is you want to do and copy them – do exactly what they tell you.

Before we start, here is a pearl of wisdom for you. It’s not mine, and I’m not sure who said it first, but a lot of people who are both wealthy and exceptional at what they do live by this rule. If you want to be good at something, first find someone who is already the best at what it is you want to do and copy them – do exactly what they tell you. Then practice, practice, practice until you become great, the very best you can be.

This Blog is about building wealth, so I wanted to start by looking at the best at being wealthy, how they got there and how they grow wealth, even while they sleep.

Who Has The Money?

We can break down the ownership of wealth in this country into 4 main groups: the top 0.1% who hold over 80% of the wealth, the top 1% and the top 4% who share just over 10% of the wealth and the bottom 96% (ie: the vast majority of Americans) who between them hold less than 10% of US wealth.

You may not be surprised to learn that the 96% earn their money by trading time for dollars. If you are reading this blog, most likely you are one of them. It’s ok, I used to be too.

The first thing that I learned about this pretty quickly, is that yes, you can earn money (sometimes even quite a lot) from doing this. At one point I was earning around a quarter of a million dollars a year. However, earning money for someone else is not going to have you join the ranks of the super wealthy. Instead we need to learn to flip the transaction around and have our money work for us instead.

How Do We Learn About Money?

We learn how to handle money, often poorly, from our parents. There aren’t classes in schools or even in universities that teach wealth management or money growth strategies. Young adults aren’t taught how to balance a check book or how credit cards work. Let’s take a look at how learning about money varies between each of wealth class groups.

The (bottom) 96% in wealth ownership are taught by their parents to pay taxes, save their money in banks and earn good credit - which they use to accumulate things like large home mortgages, cars and swimming pools, handbags and designer clothes. They care what other people think, and they want to look the part.

The top 4%, in the wealth stakes, instead are taught by their parents to run a business, to protect their income against loss, to minimize the taxes they pay and to invest their money – using it to make more money.

The top 1% of the wealthy don’t just have a single business, they have multiple streams of income – ideally passive income. And rather than putting their money in banks (where the banks use your money to make more money for themselves), they become their own bank.

The top 0.1% of the wealthy, are additionally brought up to use other people’s money to invest and therefore earn exponentially even more income.

These are the financiers or finance capitalists. This is where the term capitalism originated from.

The Lipnicki Agency (and this blog) takes lessons from the wealthiest groups and make them actionable so that anyone, including wage earners can increase their wealth and secure their financial future.

Make sure you bookmark this website and follow me on social media for your weekly actionable strategies to grow your wealth.

Smart Money Moves - Build Your Wealth Blog

Unlocking the Power of Infinite Banking: How cash Value Life Insurance Works

How Cash Value Life Insurance Like PWL and IUL Work to Build Wealth

Unlocking the Power of Infinite Banking: How Cash Value Life Insurance Works

What is a Cash Value Life Insurance Policy?

How Does Infinite Banking Work?

Why Use Infinite Banking?

An Example to Make It Real

Why Isn’t Everyone Doing This?

Is Infinite Banking Right for You?

Final Thoughts

The 401(k) Story: Adapting to the New Age of Retirement Planning

The 401(k) Evolution: Navigating Fees, Taxes, and the Changing Retirement Landscape

The Origins and Evolution of the 401(k)

The Hidden Costs: Fees within 401(k) Plans

The Government's Role in Taxation

Reduced Employer Contributions: A Cost-Cutting Measure

Financial Advisors and Plan Administrators: Understanding Their Fees

Millennials and the Current Economic Climate

Conclusion:

Mastering Credit Cards: Unlock Better Credit Scores and Rewards

Mastering Credit Cards: Unlock Better Credit Scores and Rewards

Rethinking Retirement: Strategies for Holistic Financial Security

Rethinking Retirement: Strategies for Holistic Financial Security

Navigating Life Insurance: From Underwriting to Finding the Right Policy

Navigating Life Insurance: From Underwriting to Finding the Right Policy

What Is Life Insurance?

Understanding Life Insurance Underwriting:

Digitalization and Technology-Driven Data Analysis:

Types of Underwriting and How Each Is Assessed:

Debunking the "Buy Term and Invest the Rest" Philosophy:

Crafting a Comprehensive Life Insurance Strategy:

Conclusion:

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Financial Empowerment: A Lesson from The Rockefellers

Financial Empowerment: A Lesson from The Rockefellers

The Power of the Family Bank

Why You Should Consider a Family Bank

Creating Your Own Family Bank

The Downside of Depending on Crowdfunding: GoFundMe vs. Life Insurance

The Downside of Depending on Crowdfunding: GoFundMe vs. Life Insurance

#1: The Reality of Crowdfunding

#2: The Assurance of Life Insurance

#3: Additional Life Insurance Benefits

#4: Crowdfunding vs. Life Insurance: The Fundamental Differences

#5: The Power of Financial Literacy

Unleashing the Power of Choice: Break Free from the Profit-Driven Healthcare System and Pay Less for Better Healthcare

Unleashing the Power of Choice: Break Free from the Profit-Driven Healthcare System and Pay Less for Better Healthcare

Nourish to Thrive: The Foundation of Health

Unmasking the Profit-Driven Healthcare System

Cooperative Health Care Insurance: Empowering Members, Reducing Costs

1. Managed Healthcare Services: A Modern Approach

2. Embrace the Power of Telemedicine: Convenient and Cost-Effective Health Care

3. Catastrophic Health Insurance: Safeguarding Against the Unexpected

4. Comprehensive or Illness Specific Life Insurance

5. Self-Insurance: Empowering Yourself with Financial Flexibility

6. Prescription Discount Cards

Benefits for Businesses: Saving Money and Promoting Wellness

Learn More

Unlock the Secrets to Saving Thousands on College Tuition

Unlock the Secrets to Saving Thousands on College Tuition

The Importance of College Education

College is Expensive

The Financial Impact on Families of Rising College Costs

How To Pay Less For College

Lets Understand How College Funding Works

Important Points Regarding FAFSA Form and CSS Profile Information

Now We Understand The College Funding Formula – Let's Work It To Our Advantage

Start Early - Be First In Line

Birth to Middle School College Planning

Freshman & Sophomore Years

Junior Year

Senior Year

How American College Foundation and Your Advanced Certified College Planner Can Help

5 Steps to Ensure You Are Debt Free Well Before Retirement: A Guide to Debt Free Life

5 Steps to Ensure You Are Debt Free Well Before Retirement: A Guide to Debt Free Life R

Step 1: Analyze Your Debts

Step 2: Combine With Traditional Debt Payoff Methods

Step 3: Use the Infinite Banking Concept

Step 4: Pay Off Debts Faster Saving 1,000's In Interest

5 Steps to Ensure You Are Debt Free Well Before Retirement: A Guide to Debt Free Life ^R