In my role as a Financial Planner with Ashworth and Sullivan Wealth Management Group I have been conducting Life Insurance Audits, now a routine part of the firms practice. There have been a number of mistakes that the Audit process has brought to light and that we have since corrected. There are 3 most commonly made mistakes that I wanted to highlight so that you may be spurred to take action and engage in a Life Insurance Audit.

The Wrong Amount of Insurance

Insurance Agents are often accused of overselling or encouraging more coverage than people feel that they need. So it begs the question, what is the right amount of Life Insurance? There is a simple answer to a question that seems to bewilder many advisors; insure something for what it is worth. So as to not debate the value of a human life we should consider the Economic Value that someone has to the ones that they love. There are calculators that can assist in this measure, but for a good rule of thumb consider:

• A person between ages 25 and 45 should have 20 to 30 times their income.
• A person between ages 45 and 55 should have 15 times their income.
• A person between ages 55 to 60 should own 10 times their income.
• Someone in retirement should have an amount equal to their assets.

Style

Many of the individuals that I have seen lately have missed this in a major way. There are basically two broad categories in the style or type of Life Insurance that exist.

• Term – As the name indicates, this insures you for a term or period of time and will then expire without value at the end of the term.

• Permanent – As the name indicates, this insures you for your entire life. It lasts as long as you do.

Again to not be accused of oversimplifying there are many nuances to each of these that should be considered. One of the newest and most attractive features are living benefits that pay for Long Term Care coverage should it be needed during life.

It seems that the lure of a low cost term insurance has caused many to not consider the ramifications of entering into retirement without life insurance coverage. The ramifications typically result in a lower retirement income or withdrawal rate from retirement plans…. Not fun and often can’t be reversed if you wait to late! At the very least going through life with term insurance only can result in a loss of security and financial flexibility.

Beneficiary Designation

The mistakes that are made with Beneficiary Designations are subtle but can potentially have major ramifications. Insurance Agents are often in the role of a salesperson and not that of an advisor or planner. This sometimes causes a lack of coordination between beneficiary designations and wills and or trusts. In full disclosure, I am not an attorney and yours should be consulted when reviewing your beneficiary designations. The most common mistake that I see here is when a married person names their spouse as the primary beneficiary or a parent/grandparent names a minor/young adult. You may say, “What’s wrong with that?” Potentially nothing, but properly structured testamentary trusts with the surviving spouse/child as the beneficiary gives greater protection for he/she actually getting the proceeds that were intended for them. This proper wording can provide a layer of protection against litigation, maybe even future spouses etc. Bottom line is that you should pay close attention to your beneficiary designations!

These 3 Mistakes in Life Insurance: 1) the wrong amount of coverage. 2) the wrong type of coverage and 3) improper beneficiaries were the three that were most commonly found problems in our recent Audits. There were many other errors and oversights that surfaced.

Take the time to have your policies reviewed so that you have a greater peace of mind. Contact me to set up a free consultation.

Certain things, like the sun rising, or the tides shifting, can be counted on. It’s also true that when government shrinks as a share of GDP, things start to pick up.

For the past three years, gridlock in Washington has held total spending by the federal government basically flat. This means federal spending has fallen from more than 25% of GDP to 22%, creating more room for the private sector.

Contrary to popular Keynesian thinking, this means entrepreneurship will have a more pronounced, and positive, economic impact on the economy. In other words, the “end of the world” trade, which hasn’t really worked in the past four years is becoming more dangerous. We expect gold to fall, while bond yields, the dollar, and stock prices rise.

We don’t disagree with the angst of many over deficits and debt, but things are rapidly getting better. Tax revenues are up sharply and we are forecasting a budget deficit of about $725 billion, or 4.5% of GDP, this year. In 2014 and 2015, we expect deficits of near 3% and below 2%, respectively. This is not magic. It’s what happens when spending is contained.

It’s not that deficits matter all that much; but it’s a sign of how wrong the pessimists can be. And the same thing is happening in markets. The “smart guys” at hedge funds have been short the dollar and stocks, while long gold and bonds. But, in the past year, this trade has not worked.

And the fundamentals suggest this trade will continue to be a loser. We think stocks and growth are still underappreciated.

Gold is well above fair value. Comparing its value to oil, corn, copper, M2, nominal economic growth or even the monetary base suggests that it is worth somewhere between $800 and $1,100 an ounce today. We’re forecasting further declines in gold over the next 12 months. It probably won’t be a bloodbath, but it’s not the asset to be long.

The same goes for bonds. At the start of the year, we were forecasting a 10-year Treasury yield of 2.85% at year end. Historically, this would have been an outsized jump in yields, especially if the Fed does not move to tighten. A more sanguine forecast of 2.4% still means capital losses.

Even if you think the Fed won’t raise rates until 2015, yields are too low. If the Fed held short-term rates near zero for two years and then hiked them to 4% over the next two years and held them there, the average funds rate for the next decade would be 2.8%. Slap a premium of 0.5% on this for the 10-year Treasury and a yield of 3.3% is the result.

Meanwhile, despite a sharp increase in equity prices recently, the S&P 500 still has a generous earnings yield of 6%. Stocks are still cheap and we expect further increases. In other words, not letting the conventional wisdom get you down has been, and will continue to be, the profitable trade. – Brian Wesbury of FT Portfolios

This information contains forward-looking statements about various economic trends and strategies. You are cautioned that such forward-looking statements are subject to significant business, economic and competitive uncertainties and actual results could be materially different. There are no guarantees associated with any forecast and the opinions stated here are subject to change at any time and are the opinion of the individual strategist. Data comes from the following sources: Census Bureau, Bureau of Labor Statistics, Bureau of Economic Analysis, the Federal Reserve Board, and Haver Analytics. Data is taken from sources generally believed to be reliable but no guarantee is given to its accuracy.

This post was recently submitted to Regus Blog when they asked me to Guest post on their site back on April 24, 2013. Regus office space provides flexible office environments for small or satellite businesses. Having been a user myself of their facilities; I enjoy the creativity that often flows within the environments that they create.

Many Have been faced with this idea of starting or investing in a fledgling business. Enjoy the advice provided by expert Alan Urech.

It’s a new opportunity! Exciting thought of getting in on the ground floor…. Being a bootstrapper or an Angel Investor sounds cool, Right? But then you hear all of the horror stories about people losing large amounts of money investing in startups. Fact is most startups fail. So how do you know when to invest in a fledgling company? It is a tough decision that I have seen many people struggle with; Often times it may even be a friend or relative presenting you with the idea. So what DO YOU DO? What Is Your Next Move? Take the gamble or do you play it safe? Below are 5 Criteria that expert Alan Urech looks for when facing this decision.

I recently heard Alan Urech speak as a part of a panel discussion regarding Entrepreneurship. Alan’s background is impressive to say the least, a serial investor and entrepreneur.  His background includes HBO & Company where he was part of a team that saw the organization’s expansion from an initial start-up of under US $3 million to over $180 million dollars in revenue within 12 years. During this period, Mr. Urech was instrumental in developing very successful healthcare product lines which significantly expanded the Company’s overall profitability. HBOC was sold in 1998 for US $13.8 Billion to McKesson Corporation, starting their information technology division.

The Management Team

• Do they have passion?
• Are they good business people?
• Do they have good character?

He added that there should ideally be these types of individuals on the team.

•  The Entrepreneur
•  The CFO Type
•  The People Person
•   The Peace Maker

What is the opportunity?

• Is there at least a $500 million market that exists if done well?

We are NOT going to be friends

• This may seem harsh but it is business. He doesn’t allow relationship or emotion to cloud his judgment regarding investing decisions. I would suggest this is one where many people get tripped up.

What is the value?

• Does this product already exist? Are there others who are doing it better? Is this new or innovative?

Financials

• He has to see 3 to 5 years’ worth of a company’s financials.  Another panelist added, if the company does not have 3 to 5 years’ worth yet, the want to see the founder/entrepreneur have another income source outside of the new business being created.

What other ideas or recommendations would you share with someone facing this decision? E-Mail me at todd@toddburkhalter.com or tweet your responses….

We thought the Panic of 2008/09 was caused by government policy mistakes, not a breakdown of the capitalist system.  Specifically, we don’t believe the bubble in housing would have happened if the Greenspan Fed had not pushed interest rates down to 1% in 2003/04.  And, yes, Fannie, Freddie and the Community Reinvestment Act played a role, too.

But the biggest problem was overly strict mark-to-market accounting rules (M2M) which acted like an accelerant for the crisis.  They turned what was probably a $400 – $500 billion bad loan fire into a multi trillion dollar inferno.  And then instead of fixing the bad accounting rule, the government tried to fill the gaping hole itself – with TARP and Quantitative Easing (QE).  In other words, while many saw “market failure” and a “government fix,” we saw “government failure” compounded by “policy mistakes.”

As a result, we thought once the accounting rule was fixed the economy would bounce back rather nicely.  It was not a surprise that the market fell nearly 40% after TARP and QE were put in place, but finally bottomed when investors realized in March 2009 that M2M rules would be fixed.

The conventional wisdom does not see the world this way.  Many are convinced the Great Recession really never ended and any good data or market rebound is the result of a “sugar high” – created by easy Fed policy and government stimulus. 

We don’t believe this.  Excess government spending harms economic growth and QE has ballooned the Fed’s balance sheet, but not the M2 money supply.

In other words, what government has done to boost growth is less effective than many believe.  More importantly, because the entrepreneurial spirit is still alive and well in America – a wave of new technology – the Cloud, Smartphone, Tablet, Fracking, and 3-D printing – is boosting growth and creating record levels of profits.

It’s what we call The Plow Horse Economy.  New technology is boosting growth while government policy mistakes create headwinds. 

The entrepreneur is winning.  And, last week, the S&P 500 reached an all-time record high close – in other words, the right hand side of the V has been finished off.

Some call it a new normal, others a sugar high, while still others are convinced that it’s all just a new bubble.  We think the growth is “real” and the entrepreneur is the hero.

This information contains forward-looking statements about various economic trends and strategies. You are cautioned that such forward-looking statements are subject to significant business, economic and competitive uncertainties and actual results could be materially different. There are no guarantees associated with any forecast and the opinions stated here are subject to change at any time and are the opinion of the individual strategist. Data comes from the following sources: Census Bureau, Bureau of Labor Statistics, Bureau of Economic Analysis, the Federal Reserve Board, and Haver Analytics. Data is taken from sources generally believed to be reliable but no guarantee is given to its accuracy. This article is contributed by Brian Wesbury, Chief Economist for First Trust Portfolios.

 You may continue to follow Brian Wesbury on twitter and Wesbury 101 at these links to learn more.

Your On! The “On Air” indicator lights up… and we are talking. Nerves, You would think but Chris Dekle the host of Business Radio X does a phenomenal job at creating a relaxed environment. I am thankful to Chris and Business Radio X for allowing me the opportunity to be a guest on their show.

This was a great opportunity for me to share some of my thoughts about financial planning and my firm Ashworth and Sullivan Wealth Management Group. Certainly an added treat was meeting and learning more about an additional guest of the show, Co-Founder of Uber Trade Yvonne Riner.

Tune in here to listen to the Business Radio X interview of myself and Yvonne Riner.

Thanks for listening!

1) “The Pop Ins” can KILL productivity

Seeing how this office sticks to a schedule is quite impressive. Productivity is center stage of the office environment. Ashworth & Sullivan had hired a business consultant to examine their business and one of the recommendations was to do more “time blocking”; an example would be to text or e-mail an associate with a suggested time to discuss a case or non time sensitive matter as opposed to just popping in to someone’s office and interrupting their work flow. When someone interrupts your work flow if only for a mere 5 minutes; that 5 minute interruption can often result in a 15 minute loss of productivity. Time blocking and maintaining a schedule allows for greater focus and higher productivity.

2) Independence

My new firm values independence much like I always have in the past. Being within a firm that is not tied to any company that creates their own financial product allows for the client’s objectives to always come first; as it should be! Unfortunately, there are companies that put their agenda ahead of clients. I have seen that happen before and talked about the value of independence in an earlier article, Why  Independence.

3) True Client Focus

This is one of the biggest cultural differences that I have noticed in my first week. I have been with organizations in the past that were more of sales organizations than true planning firms. At Ashworth & Sullivan Wealth Management Group the focus is on managing the money of the limited households that we serve, not hunting down the next deal. The proof is in the numbers; the client wins.

4) The Office – “Home Field Advantage”

I have been anxious for guests to come into my new office. The well appointed Class A office space makes quite an impression, which I have heard referred to as our “home field advantage.” One of my first business colleagues that visited my new office exclaimed, “Wow, welcome to the big leagues” upon arrival in our lobby. Certainly fun to have clients and guests here, but also just a great environment to be in each day.

5) The Importance of a Great Staff

I have been made to feel very welcome as I have joined this new team. The staff has done a great job with the on boarding process and helping to handle numerous details. I do already feel a part of the team; however the focus here is certainly on business as opposed to water cooler type chatter. A great staff is critical to any organizations success.

I am thankful to be at Ashworth & Sullivan Wealth Management Group. My knowledge and career will certainly continue to grow from this pivotal career move. It will be both fun to see what lessons come next as well as fulfilling to have my clients benefit along with me due to this new business home.

Weekly Update – January 22, 2013

Markets closed out another positive week, shrugging off lackluster consumer confidence and
moderate earnings reports to hover around multi-year highs. For the week, the S&P 500 gained 0.95%, the Dow gained 1.2%, and the Nasdaq gained 0.29%.[i]

In Washington, Congressional Republicans backed off from a debt showdown against a
resolute President Obama that could have risked a government default on debt. Republicans said they were prepared to raise the debt ceiling and allow the federal government to borrow operating expenses for the next three months, kicking the fiscal can further down the road.[ii]

To be frank, we’re frustrated with Congress’ inability to make hard choices about spending
and debt. Allowing the U.S. to fall into default would be catastrophic, given that the world treats U.S. government debt as essentially default risk free. Despite their promising rhetoric to use the debt ceiling debate to force widespread fiscal reform, many politicians seem to have abandoned that position in favor of baby steps.[iii]

Federal Reserve Chairman Ben Bernanke spoke on Monday, showing support for the fiscal
cliff deal reached on January 1, but emphasizing that lawmakers still need to come to an agreement over the debt ceiling. The chairman also claimed that the Fed’s unusual December move to tie monetary policy to unemployment and inflation targets was designed to provide financial markets with greater clarity.[iv]

Earnings reports show that the final quarter of 2012 ended well, with many firms
reporting better-than-expected (but not mind-blowing) results. However, business leaders are still cautious, noting that the debt ceiling debate and uncertainty over potentially higher corporate taxes clouds their 2013 outlook. On the positive side, many firms are bullish on the U.S. economy and are confident that trends show an ongoing recovery.[v]

In a rare confluence of events, Monday was both a national holiday and the inauguration
of President Obama’s second term, starting the week off fairly quiet for markets. There will also be relatively few economic reports released this week, meaning that traders will turn their attention to remaining earnings reports from firms like Google (GOOG), Starbucks (SBUX), and McDonald’s (MCD). Investors will also be paying close attention to new reports about the strength of the housing market, which are widely expected to show a continued recovery.[vi]

Weekly Update – January 14, 2013

Markets were upbeat last week, closing positive for the second week in a row as traders digested the
first fourth-quarter earnings reports and fresh economic data. The S&P 500 was pushed to a new five-year high, gaining 0.38%, while the Dow rose 0.4%, and the Nasdaq increased 0.77%.[i]

The debt ceiling debate is already in swing, with headlines dominated by the idea of minting a trillion
dollar coin as a way to sidestep a vote on the ceiling. The comedic suggestion was made in an act of political one-upmanship but isn’t a true solution. We hope that with that suggestion out of the way, Congress can get back to its job of making necessary decisions to tackle the deficit and put the U.S. back on firm fiscal ground.[ii]

With equities at five-year highs, it’s time to start thinking about whether the fundamentals can support
further upside. Next week, analysts will turn their attention to a slew of economic reports and more earnings data. According to FactSet Research, S&P 500 companies are expected to report overall earnings growth of 2.4% for the fourth-quarter of 2012. This is much better than the third-quarter’s 1%
decline; however, much of the growth is expected to come from the financial sector, meaning that other sectors are expected to see growth of just 0.2%.[iii]

Perhaps even more important than the data will be the attitude of business leaders about their prospects
this year. Their opinions could provide us with an important clue about growth prospects for the U.S. and global economies. Analyst opinions are mixed, as some expect an upbeat outlook from businesses, while others think we’ll see more guarded opinions.[iv]

Analysts will be also listening closely to Ben Bernanke’s first appearance of the year; scheduled for Monday,
January 14, 2013 at 4:30 PM. The Fed chairman will be speaking about the economy, and some Fed watchers believe he may discuss a potential end to the Fed’s asset-purchase program.[v]

Whichever way markets move in the coming weeks, we’ll be paying close attention and seeking out opportunities where they arise. While we’re pleased with the way markets have performed thus
far, we’re always on the look out for reversals and turbulence, and we strive to build portfolios that can withstand short-term gyrations.

__ This content was provided by Entreprenuer.com at http://m.entrepreneur.com/blog/225449