Search Results for “three-alternatives-to-a-budget/budget-lesson-part-5/debt-burnout/budget-lesson-part-3/travel-expenses-why-i-splurge/future-dreams/garage-sale-manual/subscribe-by-email/contact-me/save-your-family” — Page 91

A Problem With Life Insurance

It’s pretty common for someone to buy a life insurance policy and make a minor child or grandchild the beneficiary.

English: $10,000 life insurance policy for Pre... — English: $10,000 life insurance policy for President James A. Garfield, the twentieth President of the United States. Discovered in a family scrap album dating from the late 1800’s. (Photo credit: Wikipedia)

Bad idea.

The reasoning is usually something along the lines of making sure the money goes with the kid, no matter where he ends up, but that money is mostly worthless until the kids grows up. With the UGMA/UTMA (Universal Gift/Transfer to Minors Act) laws, depending on your state, it can be nearly impossible to access that money or use it for the support of the child.

For example, in Minnesota, I would have to go through the following steps:
Complete a Petition for Appointment of Guardian and Conservator with a $322 filing fee and request it be reviewed without a hearing.
Notify any interested parties.
Consent to and pay for a background study.
Establish a custodial account at the bank and maintain separate accounting for the money.

That’s just to access the money. As a conservator, I’d be able to use the money for “support, maintenance, and education”, but that does not include investing in a 529 college fund. I could theoretically invest in ultra-conservative growth funds, but if the investments shrink, I could be on the hook for the difference. I’d be a “conservator”, charged with conserving the asset.

After all of that, when the kid turns 18 (or 21 depending on the setup), the money is his to do with as he pleases.

Have you ever met an 18 year old who made really good decisions about money? I had a friend who had a settlement trust pay her a lump sum at 18, 21, and 25. Each time, she bought a new car and partied with her friends for a month before the money was gone. That was nearly $100,000 down the drain.

It’s a much better idea to visit an attorney and set up a trust. Make the trust the beneficiary of your life insurance policies. Then, define who will be the trustee under what circumstances. That way, you can make sure your kids and grandkids can actually be supported by your money.

Transparency

Business

A friend–let’s call him me–recently had a bit of a hangup with a business relationship.

On a long-term project, there were some unavoidable setbacks. My friend decided to work through them, hoping to get everything back up to speed…before the customer noticed.

It’s a funny thing, but customers like to look at status reports on long-term projects. A couple of months after the biggest problem, the customer called my friend wanting an in-person status update. They told him to be prepared for an uncomfortable conversation.

Crap.

Now, the setbacks were truly unavoidable. Things came up that were entirely outside the realm of my friend’s control, but he had to deal with them anyway. When the problems were laid out in front of the customer, it went from uncomfortable to a discussion on how to expand the business relationship.

Transparency for the win.

Bad things happen. Anybody who doubts this is clearly not equipped to deal in the adult (that’s adult in the “grown-up” sense, not adult in the “porn” sense) world. Companies know that bad things can happen to derail a project. They are going to be more interested in how you get the project back on track than anything else.

When things go wrong, be open about it. Your customers/family/friends/one-night-stands will appreciate not having to wonder what’s going on.

My Favorite Present

Parenting

My favorite Christmas present this year was the one I gave to my 13 year old son.

Allow me to walk you through his evening….

First, he opened one of his presents. It was just a small box, about 3 inches by 4. A Japanese puzzle box. Inside the box was a note that read:

Closed off in the smallest room you will find a clue to bring you closer to your prize.

When he checked the cabinet below the sink in our basement bathroom, he found another note that sent him to my business website one a page with a url that contained “the square of my children”. When he eventually figured out that I meant their ages, not their quantity, he found a clue on my website.

This lead him to a section of his Minecraft server. It’s effectively a no-man’s land because he and his friends set off a nuke and turned it into a giant pit. They fall down and die there. Inside the pit was a cave. Inside the cave was a clue. The clue read:

Grandma and Grandpa love you.

What do you do when someone says they love you? You either get scared of the commitment and end a perfectly good relationship, or you say “I love you, too”. When the kid finally called his grandparents to tell them he loves them, they told him to give his parents a kiss.

I’m a jerk.

He came over and gave me a hug and a kiss. I handed him a piece of paper. When he looked at it, he asked if it was supposed to be torn in half. I reminded him that he has two parents, so Mom got a hug and a kiss, too. The resulting clue read:

The Answer to the Question of Life, the Universe, and Everything

Naturally, this points to The Hitchhiker’s Guide to the Galaxy, but the boy hadn’t read far enough into the book to understand the reference, so he had to hit google. After spending time looking for chapter 42, he finally thought to look at page 42, which had this clue:

My Little Pegasus

Two steps to the right

Two steps forward

Two steps up

This clue started at the My Little Pony I set next to a Pegasus in my daughters’ room. The boy was in dense mode because he had to ask his sister what a Pegasus was. She also had to suggest he open the closet door when one step forward made him bump his nose on it.

For all of that work, he got the Ticket to Ride game. He laughed the entire way through the treasure hunt, then decided he hated the whole process. However, for two nights running, he’s stopped the video games to play his new game with his family.

It’s a present he’ll remember forever.

My Investment Portfolio

Business

I’m not a financial adviser. I haven’t taken any of the classes or certifications that allow me to give investment advice. Please don’t take this post as advice.

This is me, sharing what I have chosen to invest in. These investments are scattered across a few different IRAs and brokerage accounts. Copy me at your own risk.

BAC – Bank of America: I bought this low. When any major bank is low, it’s time to buy. I bought in stages starting at about $5 per share. What I’ve got now has given me a 57% return.

CVS – CVS Caremark: I bought this on the advice of a friend. It’s shown a 6% return over the past few months.

IAU & GLD – Gold ETFs: I wanted a way to get some precious metals into my IRA, so I bought a gold fund. It’s down 7%, but I’m confident it’s going to come back.

MSFT – Microsoft: This is one of the first stocks I bought with my 401k 10 years ago. It’s up about 5% since I rolled it into my current IRA.

PAYX -Paychex Inc: I hate payday loans, but a friend recommended this stock and it has given me a 10% return.

SIRI – Another recommendation from a different friend. I don’t think it will ever hit the moon, but you won’t see me complain about the 60% return, either.

SLV – Silver ETF: Another precious metals venture. It’s down 3% overall, but that’s varying day to day. A couple of weeks ago, it was around $19 per share, so it’s up nicely since then. I predict it will continue to rise.

SYK: Stryker Corp: Another friendly recommendation. This one is down 2%, but the recommender thinks it’s a good long-term bet, so I’ll hold it for a while.

VB – Vanguard Small-Cap ETF: I like Vanguard funds in general. This one has given me a 5% return.

VIG – Vanguard Dividend ETF: This one pays dividends, which is usually a sign of a strong stock. 1% return.

VWO -: Vanguard Emerging Market ETF: If our economy has problems, emerging markets tend to thrive in response, so I’m hedging my bets with this. It has lost 4% so far.

IDMOX – An ING family fund that has served me well. 13% return.

VFINX – Vanguard S&P index fund. 2% return.

RICK – Rick’s Cabaret: A few days ago, I read an article about Rick’s Cabaret losing a lawsuit that made all of it’s New York strippers into full employees entitled to minimum wage. The article mentioned that Rick’s is publicly traded, which amused me, so I bought a few shares.

Those are the positions I have with one brokerage, across three accounts. I didn’t share the balances, but overall, I have had a 10% return on these investments.

Now, I’ll share the contents of my wife’s inherited IRA. This money was entirely in a money market when she inherited it last year. She got nervous and would only let me play with half of it. That half has averaged a 20% return since June 2012, with part of it hitting 29%.

These are all Fidelity funds for a specific 401k program. I have no idea our accessible the funds are to the general public. We are working on an IRA-mandated withdrawal of this money, so it will be moving over the course of years.

PYR INX LFC 2010/2035/2040/2045/2050 – These are targeted date funds. Each of them has had at least a 20% return.

SM&MID Cap Equity – This fund currently has a 29% 1 year return.

That’s my investment portfolio. Some gambles, some amusement, some solid investments. I think I’m doing pretty well. What do you think?

Not the Center of the Universe

Parenting, Relationships

On Sunday, I dropped Punk #3 off at a birthday party. She walked into the yard, saw her friends and took off running. I confirmed times with the birthday girl’s mother and left. I went home and had Punk #2 help me with repairs to Coffin #1. It is Halloween season, after all.

When I came back two hours later, they had just finished eating cake and were about to open up presents, so I got to hang around for a while.

I noticed some amazing things:

Fully 75% of this family’s living room was devoted to play space for the kid. As you walk in the front door, you get to see a giant pile of toys and kid-craft crap. Most of what is traditionally a gathering area was taken over by kid.
Of the dozen or so children who came to the party, close to half of the parents stayed. Really, is your precious little snowflake so endangered by her friends that you can’t come up with something better to do that watch her play with her friends and ignore you for two hours while under the supervision of the resident parent?
Clowns. Ok, it wasn’t technically a clown, but a guy named Mr. Fun who hands out whoopie cushions and entertains kids while wearing odd clothes counts as a clown, to me. I get it, you want your special little snowflake to have a memorable birthday, but if every party is big and over-the-top, which one will she remember? Maybe she’ll only remember a sense of entitlement.

I very firmly believe that children should not be raised to feel like they are the center of the universe. Not even to Mom & Dad. They need to know that we have lives and interests that aren’t them.

Mothers and fathers NEED to have lives and interests that are entirely separate from their children. If your entire focus for 20+years is on the lives of your little brats, what is going to happen to you when they move out? Are you prepared to abandon two decades of self-training and suddenly become your own person again?

Husbands and wives need to have time to themselves that excludes the children. When the monsters finally leave, you need to be able to have a relationship that doesn’t revolve around who spilled what where and who’s turn is it to clean it up.

Children are not–and should not be–the focal point of a household. Leave them at a birthday party. Let them find a way to entertain themselves for a few hours. Go on a date.

I promise you, letting your kids see their parents happily doing things together–even if it’s gleefully leaving them with a sitter–will do more for their long-term well-being than knowing you’re standing in the corner at a birthday party watching her fake a fart with a 25 cent toy.

Let her be independent. Let her know that other priorities do exist for other people. Let her fall down and scrape her knees. Let her figure out how things work for herself.

That is life, after all. Let her live it and don’t forget to live it for yourself.

Oklahoma Tornadoes

News

English: A radar image of a supercell thunders... — A radar image of a supercell thunderstorm, which was producing tornado that was passing through Moore, Oklahoma at the time of the image. (Photo credit: Wikipedia)

My heart goes out to all of the victims of yesterday’s tornado in Moore, Oklahoma.

I couldn’t imagine hearing that my kids’ school was demolished around them. Twenty or more dead children in any community is devastating.

On top of the sheer horror of dead children, the town is nearly wiped off of the map. Will they rebuild or cut their losses?

I hope everyone in the town was well insured, but that’s never the case. There will be many in the town that will have lost everything: their homes, their families, their jobs. Family is irreplaceable, but so is your home, if you don’t have insurance. To lose it all and not even have a place to mourn….

Have you checked your insurance policy to make sure you are covered in the event of whatever natural disaster is common in your area?

To help the victims, text REDCROSS to 90999 to make a $10 donation. It’s the least you can do.

Search Results for: three-alternatives-to-a-budget/budget-lesson-part-5/debt-burnout/budget-lesson-part-3/travel-expenses-why-i-splurge/future-dreams/garage-sale-manual/subscribe-by-email/contact-me/save-your-family

Related articles