Here are some things that I read recently that I wanted to share my thoughts on:
France Just Won the World Cup. Here’s How Much Their Players Get (Time.com, by Julia Glum)
How many of us dream big (me!) and aspire to play in the World Cup? Or if you are already past your prime (like me) – how many hope their kids get a chance one day? When I saw how much money gets rewarded, I am thinking that might not be a bad thing for my kids to work towards one day. Now that the 2018 World Cup has been completed (congrats France!), we now know what the various teams will make in terms of a bonus. Winner France gets to split a nice chunk of change, with each player expected to get a cool $330k lump sum. This is in addition to the hundreds of thousands (and millions) of dollars they earn in salary and endorsements. Granted, this is much lower than getting 4-year basketball contract for $153mil to play with the Lakers (hi Lebron – if you are reading this) but hey, not too shabby! Bringing us back to reality for a minute, the US Census Bureau says the average US worker makes $59k…or $72k if they have an advanced degree. The World Cup bonuses are reliant on a couple factors, many of those factors are out of the players control, but for any team that made it to the world cup qualifying rounds means you got yourself a nice little payday. The money aspect of sports always intrigues me….and it also makes me wonder if I should have tried playing soccer (or ice hockey, or tennis, or golf) when I was younger. Unfortunately there were no ice hockey teams near me, because I thought I held my own in the frozen pond down at the end of my street. I might be in the wrong business!
Young Adults Are Broker Than Ever — Here’s One Uncomfortable Reason Why (Yahoo Go Banking Rates, by Stephanie Asymkos)
Millennials can’t catch a break. They continue to get a bad rap for a variety of different reasons, and there is no shortage of media coverage pointing it out. This generation (also known as Gen Y, or those born between 1982 and 1996) is known for building up massive debt loads, from things like student loans to credit card debt. Many have housing expenses, car payments, and oh yeah… they have a life and like to go out! This generation arguably needs financial planning as much as anyone, yet rarely have any money “saved” and many times cannot afford to pay for financial advice. At the end of the day, I agree with the thought that the responsibility comes with the parents and proper education around money. Starting from a very young age, kids should be taught many life lessons and so they aren’t expected to live on the parents payroll. To my client’s who welcome a newborn into the world, I always provide a book called “Yes You Can… Raise Financially Aware Kids”. I feel this is a step in the right direction – making sure the parents are well-equipped to provide sound investment advice and financial tips. I vow to do my best educating my kids so they can hopefully lead the next generation of kids to more promising financial circumstances. One of the first nuggets they will earn early on – the power of saving and the power of compounding. And I will pile on financial lesson after financial lesson until they fly the coup!
Is Life Insurance a Smart Investment? (Investopedia, by Amy Fontenelle)
I’ve received a few inquiries lately from people out of the blue, asking to talk to them about using life insurance as an investment. Life insurance is typically known as a vehicle in which would pay a death benefit to survivors at the insured person’s death. But there is also an investment component which some people use for long term savings and growth. And just like most things, there are two sides to this story and depending on who you talk to – you’ll get varying responses to “is life insurance a good investment?”. People with life insurance backgrounds will typically steer you towards YES, and other non-insurance people will tend to lead you towards NO. My response, right out of the gate, is IT DEPENDS. It depends on the situation of the person, what they are looking to accomplish and what their goals are. I don’t think there is a one-answer-fits-all, and I attached this educational link above because it discuses the pros/cons fairly well. In the conclusion it says using insurance as an investment is usually good for high net worth people looking to avoid the estate tax – but I would add there are others who can benefit from it also. Life insurance can help people who are looking for a tax-free way to receive income, or to pass money on to their heirs..regardless of tax bracket. And for people who maximize their 401k or IRA savings, and are looking for other vehicles to diversify into, the riders and features of a life insurance product make it definitely worth considering. This strategy is not for everyone, heck maybe not for most people, but there is definitely a need for it in a number of situations. Feel free to call me for an honest discussion about it.
I hope you enjoyed my thoughts!