How much?

How much life insurance coverage I need to buy was something that really wasn’t important to me until I got married.

My first policy was a $250,000 30 year term life insurance policy and I thought that was plenty.  It was not until we had our first son that I quickly realized that was not nearly enough.

After his birth, I decided to increase it substantially.   That was over two years ago.  With us in the process of building our first home and a second son on the way, I’m left wondering even with that increase if I really have bought enough life insurance.

Update: We now have our third son and I have increased the amount of life insurance I have on myself.  Check the end of the post to find what I’ve increased my term life insurance to and my rationale.

I know many struggle with this same decision so I wanted to shed some light how much life insurance is enough.

First things first, life insurance is for one purpose: income replacement.  While there are times where life insurance can aid in more complex estate planning strategies, a majority of the time it’s purchased to take care of your family once you’re gone.  My reasoning for purchasing life insurance is that I want to leave my wife and kids without any debt and the ability for my wife to not worry about finances in the event of my unexpected passing.

Life Insurance Coverage to Buy Rule of Thumb

As you can imagine, how much life insurance you need to buy will differ for each person.   As a general rule of thumb, it will be a multiplier of your current income based on your age.  To illustrate here’s an example that you can use:

Life Insurance Table

Life Insurance Needs Analysis

To determine how much term life insurance you need, you need to perform a needs analysis.  Here’s a step by step guide to calculate how much insurance you might need.

Life Insurance Coverage Example

To help illustrate how much life insurance you might need to buy, looks look at an example.  First, let’s consider some assumptions.  We’re looking at a 30 year old male who makes $100,000 a year.  He wishes to give his wife a $75,000 a year income for 30 years if he were to die unexpectedly.  We’re also assuming that the wife works and makes a $35,000 a year income.  The final assumptions is that there is $400,000 of outstanding debt to pay off (for example, a mortgage and student loan debt), $10,000 for burial expenses and a 6% growth rate on the proceeds.

Life Insurance Example

Term Life Insurance Amount Needed

Based on the above assumptions, the husband would need to buy $993, 629 of term life insurance.   The calculations are as follows:

Life Insurance Needed

Shop Around

When buying life insurance, be sure to shop around rates.  I’ve seen life insurance companies differ greatly in their premium amounts.  To give you a gauge of what to expect to pay, the $250,000 policy that I mentioned that I took out when I was 28 cost me around $220 a year.   That’s it!  A couple reasons that it was so cheap was:

1. I was young (why does that seem so long ago?)
2. I was (and still am) in good health.

Nonetheless, that’s a small price to pay to ensure that your family is taken care of after you’ve gone.

More Kids = More Life Insurance (Update)

As I mentioned at the beginning of the post, our second son was on the way and I was left wondering if I had bought enough term life insurance to cover my family. Now writing this post, we have welcomed our third son and once again, I’m left wondering if I have enough. Here’s what I’ve done to this point.

After returning from Iraq and losing the SGLI (military insurance), I purchased a 30 term policy with a face amount of $250,000 (mentioned above). When our first son arrived, I purchased a separate 30 year policy with a face amount of $500,000. In case you can’t add, that brings the sum total to $750,000.

Do You Really Need More Insurance?

To most people that seems like a lot of insurance – and it is. But the Rose household wasn’t done producing babies

Our second son soon arrived and I knew that I needed to up the insurance amount. At this point, I was done going through life insurance medical exams and was ready to really up the ante. This time I had decided that I buy another 30 year term policy, this time for a lump sum of $1,500,000. That’s a lot of zeros, huh? Trust me, it felt weird for me, too.

So now I have a total of $2,225,000 of term life insurance. Cha-ching.

My rationale. Somewhat going against the calculation above, I went for a more simpler approach. I thought to myself how much of an income would my wife need to take care of herself and the kids in case I wasn’t around. We decided that $100k would be adequate.

Secondly, I concluded that 5% was an attainable rate of return (or withdrawal rate) that she could get on the money if she invested it. Really simple math says that $2,225,000 x 5% will get her $112,500 a year. Should be more than enough to take care of mama and the kiddos.

Life insurance is a must. If you don’t have any yet, see how cheap it is by using the quote engine below. Or you can get a free life insurance quote here.

photo credit: karmablue

Reading is said to be the spark behind creative thinking, and is one of the most predominate traits of individuals said to pertain a level of “higher intelligence”. Is the thought of gaining intelligence through reading actually viable? I believe that it is not intelligence that is gained through reading; rather it’s the exposure to other people’s thoughts and perception of events and processes that generally will lead to you being better rounded thinker. One of the most dangerous characteristics or life paths anyone can have or follow is to surround your self with a few like minded thinkers, and believe that the thought process your small group has come up with is proper, and more dangerous than proper is correct!

Reading other people’s thoughts and ideas are the key ingredients to being successful in life (beyond being very naturally intelligent). By reading through stories of people who were in similar situations to your own, and hearing their stories of success and how they perceived the difficulties along the way, you will be able to better separate yourself from your normal thought train and tackle a situation with more “proper” guidance.  I can’t tell how many times I’ve read a book by a successful entrepreneur to immediately have a burning desire to apply some aspects of their success to my own life.   Don’t believe me?   Ask my wife.  She’ll be first to tell you how after I read Tim Ferriss’ Four Hour Work Week, I wouldn’t shut up about it.  Thanks to Tim, I hired my first VA (virtual assistant) that was able to free up some of my time of many of the mundane details that you have from running a blog.

Having diagnosed the process and benefits of reading, there are some books that have changed the way I have thought, as well as opened me up to some great ideas I, and the majority of the world, would initially have thrown out as hogwash. My favorite books that help characterize the process, and more important mental game of becoming an entrepreneur are all listed below with a small synopsis of their content.

Top Must Reads for Entrepreneurs

1The 4-Hour Workweek by Timothy Ferris

Tim’s book takes the prize for the best book I’ve ever read that revolves around business and entrepreneurship.  Ever.  I want my kids’ kids to read this book.  This book provides a non-standardized idea of how to approach daily situations, and how to think of them with new perspective. It also teaches you positive thinking to maximize your potential.

2Smarter, Faster, Cheaper by David Siteman Garland

This book goes through some cheaper and less main stream ways to market your new personal business. The book focuses on the importance of blogging and an atypical approach. I had the pleasure of meeting David at one of his “Rise” Entrepreneurial lunches up in St. Louis and I’m here to say that HE IS LEGIT. I was so pumped to meet him, that I filmed my own thoughts on what it takes to become an entrepreneur…..while I was driving. Kids, don’t try that at home. This guy is a firecracker and he knows his stuff.  Also, beware of fluffy pink bunnies – no petting allowed!

3Book Yourself Solid by Michael Port

This book goes through an in depth analysis of why it may be more important to market yourself opposed to marketing your actual business. It also gives guidelines for how to attain more clients and raise your business profile.

What’s funny about this book is that it’s been on my shelf for years.   I’m not even sure who recommended it, but it’s been a great addition to my reading library.  When I asked fellow entrepreneur Matt Sapaula what books he would recommend, this was tops on his list.   I knew I had good taste

4The Brand You Call You by Peter Montoya

A great book that teaches you about how marketing your personal attributes can be more successful and important than marketing your business.  This book really helped put into perspective how to differentiate myself from all the competition…like this blog

I’ve been a huge fan of this book for years and recommend it to every new small business person that I encounter.   As you can imagine, I was blown away when Peter called me out of the blue to tell me how he liked my blog and I was doing a tremendous job marketing myself.   I’m pretty sure he felt good when I told him that his book inspired me to create it.

5UnMarketing by Scott Stratten

Yes, this book might be more marketing related, but I couldn’t leave Scott out of this list.  This book goes through the approach of viral marketing techniques and social media becoming the predominant source of profitable businesses. What I like about Scott so much is that he’s just a real dude.   It’s hard not to respect that about him.   Plus he likes Pearl Jam.   What else is there to say?

6Creating Your Own Destiny by Patrick Snow

I was pleasantly surprised when Patrick sent me a copy of his book completely unsolicited.  This book is an inspirational learner of how to fulfill your personal dreams and how to find true happiness in life.  Think it’s silly to have big dreams?   Think again.   Patrick’s dream is to have a NFL team in Hawaii and is raising money to try and make that dream happen.   Tell him that it’s stupid to dream big.  I dare you.

7The Tipping Point by Malcolm Gladwell

This book is an in-depth look at the phenomenon of a small idea turning huge, and how the critical point is referred to as the “tipping point” by the author.  I was amazed on how the kids show Blues Clues was able to take the Sesame Street concept and blow it up.  If you’re looking to grow your business with the same magnitude as Paul Revere galloping on his horse through the U.S. country side, this book is an excellent read.

8Overwhelming Odds by Susan and Denny O’Leary

This inspirational story of a man who is given overwhelming odds of failure, and the story of how he succeeded in life. I was so fortunate to meet Susan and Denny’s son John, and a small intimate gathering put on by the next author on the list.   John was involved in a horrible burning accident as a child that left him nearly for dead – the doctors telling his parents that he had a 1% chance to survive the night.

John did survive and used that tragedy to inspire others to be better people and also better business leaders.   If you need help in redefining your purpose in life, this is a must read.  Find out more about John and his professional speaking business at Rising Above.

9Crush It by Gary Vaynerchuk

How can you not love Gary V?   This guy is loud mouthed, full of energy and lives and breathes entrepreneurship.  His book gives a guide of how to think successful in life, opposed to the ordinary how to be successful type novel.   Favorite word of the book:  Passion.  <<<<YOU better have some passion if you’re going to Crush It!

10Delivering Happiness by Tony Hseish

How do you top selling a business for $265 million at the age of 24?  How about selling another company for a mere $1.2 billion.  Even though I new the outcome of the book (see previous sentence where he sells company for $1.2 billion), I was on pins and needles seeing how Zappos.com almost didn’t make it.  Think Tony was worried?  Nah.   He decided to go ahead with a scheduled trip to climb Mt. Kilimanjaro.  Now that is an entrepreneur that has brass balls.

11Fight The Good Fight by Ben Newman

I didn’t know what to think when a buddy of mine recommended this book to me. I have to say, I’m thankful that he did. Fight  the Good Fight shares the story of a son who loses his mother at a young age. Later on in life, his grandmother delivers a gift to his son that will change his life.  Turns out his mother had kept a memoir of her life, so that her kids could see the courage and inspiration she had – despite her illness.

I can’t remember the last time a book moved me the way that this book did.  I’m thankful to have it as part of my reading library, and excited to share it to others.

12Industry Transformers by Dan Sullivan

You’ll hear more about Dan Sullivan here in a bit.   This was a book that I couldn’t pass on, especially when I found out I could get it on my iPad for $12.99.   What makes this book so good for entrepreneurs?  How about 10 interviews from 10 awesome entrepreneurs that have all developed their own Unique Process™ through the Strategic Coaching program (that I’m happily enrolled in).  If you ever wanted to know how an entrepreneur started from the ground up, how they learned from their mistakes and were able to fully capitalize on them then this is the read for you.

A few of my favorite interviews are with Phillip Tirone from 7 Steps to 720 Credit Score and Joe Polish from Pirahna Marketing.  Both were well respected in their industries and were able to develop their own unique product that launched them into the stratosphere.   I’ve been fortunate to speak to Phillip directly a few times and I’ve inspired by his continued drive as well as his love for his family.

For Financial Advisors

If you’re a financial advisor and looking to differentiate yourself from the crowd, another good book from Dan Sullivan is Unique Process Advisors.   I’m more than halfway through the book and my wheels are already spinning.

13Rich Dad, Poor Dad by Robert Kiyosaki

Many people feel that Kiyosaki is full of crap with his Real Estate riches and Cash Flow Quadrant.    While I have to admit that much of his advice lately (for me, at least) doesn’t hold a lot of water, his book Rich Dad, Poor Dad was the first book that really got my entrepreneurship juices flowing.  This book tells a tale of two separate people and their life choices. It analyzes these choices to come to some type of conclusion on the more appropriate way to think. Thanks to his book I always knew there was and always will be something more.

On the “Need to Read List”

14Purple Cow by Seth Godin

This book teaches you how to re-market your existing business to satisfy the evolving business needs in an ever changing world. Thanks to Pat Flynn from Smart Passive Income for getting this book to me. Mike from Oblivious Investor also recommends this book in addition to The Dip and Tribes.

15Enchantment by Guy Kawasaki

I just recently was introduced to Guy Kawasaki in an interview that he did on The Rise to The Top.com.  I had heard of Guy but didn’t really know much about his story.   This “guy” just oozes success.  I immediately bought his new book Enchantment but also realized that I need to check out his other stuff, too.  Another highly recommended book of his is Art of the Start.

Want a little more insight into how Guy Kawasaki’s mind works?  Check out this witty quote of his:

“Don’t worry, be crappy. Revolutionary means you ship and then test… Lots of things made the first Mac in 1984 a piece of crap – but it was a revolutionary piece of crap.”

16Never Get a Real Job by Scott Gerber

I ordered this book as an add on to one of the other books mentioned above.   Sometimes Amazon is good at suggest titles I might like.  Sometimes they suck.   How could I pass on this title though?  I’m itching to finally getting this puppy cracked open.

17Thank You Economy by Gary Vaynerchuk

This is Gary V’s anticipated second release.   To be honest, I didn’t even read what the book was about.  I bought because Gary put his name, heart, and soul on it; so I know it will be good.

18The Dan Sullivan Question by Dan Sullivan

I just joined the Strategic Coach program this year and I’m really excited to see what it can do for me.  Dan Sullivan the creator has written several books including this one.   I figured with a wildly successful coaching program, the guy has to know what he’s talking about; so this has been added to the “must read” list.

19ReWork by Jason Fried and David Heinemeier Hansson

I’ve heard a lot of good things about this book.  Heck, even Seth Godin says, “Ignore this book at your own peril”.  Plus, he’s like one of like 100 entrepreneurs and authors that vouch for this book.

What Do Friends Have to Say?

Knowing there had to other great entrepreneur books out there, I decided to ask some of my friends on Facebook, Twitter, and the blog to give me their top picks.  Here’s what they had to say.

20Who Moved My Cheese by Dr. Spencer Johnson

From Matt Bishop on Facebook saying, “Wonderful, short, very good.”

21The E-Myth by Michael Gerber

Matt Sapaula, Phil from PT Money and  Glenn from Free From Broke all recommended this book.  That’s a trifecta!

22Career Renegade by Jonathan Fields

MD from Studenomics recommends this book.   Honestly, I don’t know how I left this one off the list.  I haven’t read his book, but I absolutely love his blog.   Jonathan is currently in the process of releasing his second book and I’ve signed up for his tribe newsletter that has been filling us in through the entire process.   A great resource for anyone looking to release a book.

23How to Win Friends and Influence People by Dale Carnegie.

Glenn from Free From Broke and Mixergy CEO Andrew Warner both highly suggest this book.  Turns out I forgot I even had this book (though I loaned it and never got it returned – Whew!)

24Awaken the Giant Within by Tony Robbins

Baker from Man Vs. Debt says reading this book , “Fundamentally changed my life.  I read it while transitioning from poker into Real Estate and it shifted how I viewed myself and my life/business relationship. ”

25The Go-Giver by @BobBurg

Recommended by Jeff Haywood, CPA via his Twitter account

All of the above listed books are great for anyone who would like to start their own business, or is just looking for a release from the conformist thought process of the majority of Americans. There are many differing viewpoints in the world today, and these books will give you some motivation as well as enlighten you on the thought process behind success.

Indiana Jones racing through some foreign land seeking his next archaeological find is an adventure that this treasure seeker would never get tired of.  Who doesn’t get excited about finding a treasure? Especially, if it’s free money.  Whether it’s finding a $20 bill in the parking lot of the mall or an old bond that your grandparents bought you, it’s always a nice treat to be able to add some cash to your wallet and get free money.

photo credit: xbolotax

Unlike Indiana Jones, you don’t have to head to some remote location to battle the local natives to find a secret treasure. In fact, you don’t even have to leave the comfort of your own living room. Here are some lost treasures that you can find simply with a few clicks of the mouse.  Are you ready to go treasure hunting and find unclaimed property?

State Treasure

Free Money at NAUPA

What if you had a long lost uncle that bequeathed a portion of his vast estate, but you never knew of it?  Well, your state treasury department just might.  Most states have dedicated departments responsible for getting money back to its rightful owner.  The National Association of Unclaimed Property Administrators is comprised primarily by the treasurers of each state. The group’s web site, www.unclaimed.org, allows you to search under participating states.

A quick visit to the site and all I had to was click my state (Illinois), in the dropdown menu.  Selecting that took me to my state’s Treasury department site where all I had to do was enter my name and see if I was destined to find my missing fortune.  Alas, the results revealed “No Records Found” and I’m off to my next treasure hunt.

Find Missing Money Here

NAUPA also runs a site that allows searches of all participating organizations and by an individual’s name, www.missingmoney.com. This site claims to have information on over $16B in lost bank accounts, orphaned retirement funds, stock shares from splits , tax refunds, or items left in storage lockers and safe deposit boxes. You name it, they’ve got it.

The site even shares a few success stories of people who stumbled upon the site only to find they had an old paycheck or life insurance claim that they never received.  Could I be one of the lucky one?   It tool all of five seconds to realize that I was not.

Treasury Hunting

Show me the money!

If you believe that you have some old bonds that got lost over the years, you might still be in luck.  Go to Treasury Hunt at www.treasurydirect.gov, where you can enter your Social Security number or any family member who may have once owned a missing bond.  You can be begin your “Treasury Hunt” to see if you are owed anything to hopefully get free money.

I had owned some Series EE bonds over the years thanks to my grandmother purchasing them for me.  I had cashed them in over the years, but; maybe, just maybe, there was more that I was missing.   Once again, my treasure hunt hit a brick wall when I got this message:

We’re sorry, but no match was found on our database for the criteria you entered. Our database is updated often so please try your search again at a later date.

Don’t let my empty results stop you. Here’s some info from the Treasury Hunt site to help you find your missing money.

Please Note: The Treasury Hunt database is limited.

• Treasury Hunt does not contain a record of all savings bonds. This system only provides information on Series E bonds issued in 1974 and after.
• Treasury Hunt may not completely identify any/all savings bonds you may have lost… only those that have reached final maturity and were issued in 1974 and after. You can’t search for undeliverable bonds in Treasury Hunt. To file a claim for bonds, you must submit one of the following:
  • For lost, stolen or destroyed bonds, submit Form PD F 1048.
  • For undeliverable bonds (bonds not received), submit Form PD F 3062-4.

  You will need to provide information about dates of purchase, names on bonds, and other pertinent data.

• Most records for registered Treasury notes and bonds can be searched through this system.
• Please keep in mind, under the Privacy Act of 1974, if you are not the bond owner or co-owner, we are limited in the information we can provide.

What about pensions?

Life Insurance Claims

For me, this a treasure I won’t be able to find since I’ve never had a pension.  If you’re like me, then here’s your chance to help out a loved one. Who knows-they may pay you a finder’s fee

If you have a family who worked for a company that offered a pension, it’s a possibility that they may have some money left from a current or former employer.  All you or they have to do is go to the pension benefits guarantee corporation, www.search.tbgc.gov/mp and search your name and the state you reside.

I pulled a list from Illinois and was amazed at the number of the names that appeared.  If you think you have a shot, go to the site and get your free money!

Old Life Insurance

Finally, the National Association of Insurance Commissioners has a life insurance company location system that will allow you to look for a lost policy, with as little evidence as a premium payment received from long ago.  The site has a nice “how to” guide to helping you find lost policies, but I was unable to find anything that I was owed.

The site also suggests:

If your state insurance department is unable to locate the correct insurance company, you should go to your local library and request Best’s Insurance Reports. This annual report lists insurance company names and addresses, reorganizations, mergers, name changes and bankruptcies during the last year.

Finally, many life insurance companies are members of life insurance trade associations. You should also contact one of the following trade associations for additional assistance in locating the company that services your existing policy.

If that doesn’t yield you any results, there is an alternative.  You can visit www.mibsolutions.com and they will conduct a search for a $75 fee.   That $75 is whether they find something or not.  Before you pay, better have a hunch that there is something out there for you.   I didn’t go for the fee since I was trying to find treasure, not lose it.

Get Your Benefits

Get your government benefits

Do you qualify for a support from a governmental program?  Are you a a discharged honorable veteran?  These are just a few examples of assistance that you may qualify for if you head to www.govbenefits.gov. Once there, you’ll have to go through a 80-100 question quiz answering some basic info questions. It takes you a mere five minutes and once you complete the questionnaire, a printout will share what you may qualify for.  Here’s some more info from the site:

The first of these initiatives to reach the Internet was GovBenefits.gov, an effort to provide citizens with easy online access to government benefit and assistance programs. The GovBenefits.gov mission focuses on reducing the expense and difficulty of conducting business with the government and increasing citizen access to benefit information. At the time of the site’s launch, it featured 55 programs, representing the ten original Federal agency partners. The website now includes over 1,000 programs representing 17 Federal partners.

Time to Get Free Money!

Although my quest to get free money on-line fell short, I’m sure there will be somebody that reads this post that will benefit.  If you find free money, be sure to contact me and let me know.  I’ll be sure to pass it on to the rest of my readers.

Update:

On October 31 and November 1, business and financial institutions must submit their unclaimed property reports to the various state treasuries. And for consumers, these dates are important to remember as they could be losing property that is rightfully theirs. In fact, did you know that states can legally take money away from you after a period of inactivity? It happens all the time and it’s called escheatment. Each state has abandoned or unclaimed property laws which allow them to claim abandoned property (bank accounts, safe deposit box holdings, stocks, bonds, etc.) after a specific amount of time. Generally speaking, three to five years is the trigger for dormancy – but it varies by state.  The bottom line is, the state could owe you money!

photo credit: Ro9.flickr

Do you have that favorite restaurant where you can just close your eyes and imagine taking that gratifying first bite? Where any resemblance of that eatery’s scent leaves your stomach grumbling and yearning for more? Are you hungry yet? I know I am. For me, that restaurant is the west coast born and raised chain In-N-Out Burger.

Never heard of In-N-Out burger?  If so, first my apologies for having never experienced the greatest burger on the planet.  One reason why you may not have tried it before is that unfortunately they are only available in 4 states (California, Nevada, Arizona, Utah).   I say “unfortunately” because I currently reside in Illinois and most days of the year consist of me wallowing in my own self misery of not being able to enjoy a tasty Double-Double at my leisure.  (Just in case you don’t know, the Double-Double is their version of McDonald’s Big Mac only 1,000 times better. Scratch that. 1,000,000  times better.  Yes, it’s that good).  Luckily, my mom retired and relocated to Las Vegas and  bought a home approximately 7 miles from an In-N-Out Burger.  As you can imagine, my first stop after leaving the airport is not my mom’s house or some silly casino.  Oh no.  It’s In-N-Out time!

In-N-Out is So Good.

It doesn't get much better than this.

Double-Double with cheese + fries +chocolate shake = absolute bliss.   There isn’t a meal that I could pick to replace that.  Well, maybe add another cheeseburger   It’s good for breakfast, lunch, dinner, brunch, late night snack or even dessert.  In-N-Out is the only meal that will make me cry twice.  Once, after I take my first bite because it’s so delicious.  I also shed a tear at the last bite, because I don’t know when the next bite will be.

In-N-Out Burger is Fresh

Got In-N-Out?

In-N-Out is not your typical fast food restaurant that the meat patties taste like microwaved cardboard.  Their patties free of additives, fillers and preservatives of any kind.  But it’s just not the meat.  The lettuce, tomatoes, and cheese are all fresh, too.  I almost forgot the fries!  Where most fries come straight out of a bag, In-N-Out cuts their fries at the store one potato at a time.

K-I-S-S: Keep It Simple S……..

How Simple Is That?

Have you noticed how most fast food chains change their menu on a consistent basis?  You can order anything from chicken tenders, snack wraps, breakfast burritos and now caramel lattes.  In-N-Out has stuck to their guns and kept the same menu that has led to its continued success: burger, fries, and a drink.

Simple = Perfection.

In-N-Out Burger is a Cult

In-N-Out doesn’t need to run advertising to build its fan base.  Word of mouth advertising from its cult fans (people like me) has grown the In-N-Out name into the behemoth that it is today.  When the chain opened a new location in Arizona, there was a four hour wait to get their mouth on the prize.

In-N-Out has also made the prime time. It’s made appearances in such flicks as Swinger and The Big Lebowski and TV shows Arrested Development and The Simpsons.   Stars such as Angela Jolie, Beyonce’, Paris Hilton and Tom Hanks have openly shared their infatuation with the burger joint.  When the New York Giants were in town for Super Bowl XLII, coach Tom Coughlin ordered In-N-Out for lunch for the entire team. Now that’s one cool coach!

They Have a (Not So) Secret Menu

I have enjoyed In-N-Out for most of my life so I’m kind of embarrassed to admit this.  It wasn’t until a couple years ago that I finally discovered that the chain has a secret menu. What!   Who ever heard of a fast food chain having a secret menu?   As the popularity of the “secret menu” grew, In-N-Out finally confessed and put the secret menu on their website seen here:

Shhhh.....It's a secret.

The most popular of the secret menu is ordering your burger “Animal Style” where the burger is cooked in mustard, extra “secret sauce” is added, with pickles and grilled onions.  Although they confessed their secret menu on their site, they still didn’t tell the whole truth.  Fact is the secret menu has many more secrets.

100 X 100 Masterpiece

For example, the menu (above) shows you can order a 4 x 4 (4 meat patties and 4 slices of cheese), but you can also order a 2 x 4 (2 meat patties and 4 slices of cheese).  In fact you can order almost any combination that your little heart desires.  Up until 2004 there was no limit.   In fact, one die hard fan, Will Young, ordered a 100 x 100 (Yes, that’s exactly what you think it is), on Halloween night at the Las Vegas location.  Check out the pic to the left that shows this heart clogging monstrosity.  Will and his 7 friends consumed the entire burger in one sitting.   Now that’s dedication!  After that incident, the chain thought it would be wise to put a cap on the limit.

Other secret menu items not listed:

• Double Meat = like a Double Double without cheese.
• 3 by Meat = three meat patties and no cheese.
• Animal Style Fries = fries with cheese, spread, grilled onions and pickles (if you ask for them).
• Flying Dutchman = two meat patties, two slices of melted cheese and nothing else
• Veggie Burger = burger without the patty or cheese.
• Neapolitan Shake = strawberry, vanilla and chocolate mixed together.

They Are Great to Their Employees

I can remember back to my high school days when minimum wage was around $5 per hour and In-N-Out Employees started off making $8.50…..and this is for a fast food joint!  Jobs now start off paying an amazing $10 per hour and with it comes paid vacations and a very generous 401k plan.  No wonder the employees are so happy to greet when you enter the restaurant.  According to their website, store managers earn just under $100,000 per year.  Wow!

How popular are the jobs? In the past year, the chain has opened up several new locations and each time there have been hundreds of people camped out in lines for a their chance to work there.  More notably was a blazing hot day in Mesa, Arizona where an estimated 600-800 people lined up beginning at 6:30 a.m. hoping they were one of the lucky 60 that would land the job.  They say landing a corporate executive job is hard to get, but this is ruthless.

Even My Wife Loves It

The Mrs. Stamp of Approval

Having been born and raises in the Midwest, my wife had never had the luxury of the In-N-Out experience.  She’s not the biggest burger fan, but I assured her that In-N-Out is not “just” a burger.   On a trip to visit my mom in Vegas, she got to experience what I had hyped up for so long.   The result……success!   She absolutely loved it and even ate it again when we went back the next day (yes, I’m obsessed).

Don’t Just Take My Word For It

I know I’m not the only one that is partial to the great taste of an In-N-Out Burger.  I sent a out a message on Facebook and a “Tweet” on Twitter soliciting reasons why people love In-N-Out burger.  Here’s what they had to say:

@MyTwoDollars:  After moving away from Southern California, In N Out is one of the things I miss the most. Their burgers are fantastic, and their fries, which are cut from potatoes as they are needed, are the best fast-food fries ever. Ahh, In N Out, how I miss you. They are putting one in NM, but I will be living in CO by then!

@Bargainr: The food is fantastic and what makes them really exceptional is that they offer great pay and education reimbursement options too. That’s rare in a fast food joint.

@CashMoneyLife: In & Out Burgers are the best fast food burgers you can get, and their fries and shakes are top notch. Unfortunately, they aren’t available where I live, so I’ll have to get one when I go out to Vegas in January. Is there a more perfect combination than Vegas and In & Out Burger?

@PTMoney: My wife, a native Californian, introduced me to the greatness of In N Out Burger when we met. I’ve been hooked since. We live in Texas, but every time we’re in Las Vegas or So. Cal. we have to hunt one down. Love it! I heard a rumor one may be coming to the Dallas area. I’m excited and scared for my health all at once.

@StevenJacobRoss: (My best friend from California was kind of enough to share this message.) Not only do i love it, but i am getting it for dinner in about 2 hours. But what i love most about it is that i have one a block a way from where i live and i can always rub that in your face (Aren’t friends great?)

L. Cremer: The fresh cut fries rock, the toasted bun is perfect, and the crunch of fresh onion can’t be beat! I also really like that they haven’t expanded too quickly. Expansion so often ruins the product and they haven’t fallen in that trap. And they obviously get the principle of supply and demand. I eat there once a month when I’m in AZ. There are 2 in Tucson and 1 in Tempe and they have lines around the block every time I go! I’m hoping they’ll move east to Texas soon! Or maybe I don’t hope for that – could be dangerous to have one nearby …

@CurtisASmithCFP: Love In-in-Out. Can specialize your burger and the sauce is heavenly!

As you can see, my friends love In-N-Out Burger, too!  Knowing that there had to be more In-N-Out fans, I did a quick search on Twitter to see what other people had to say.

Twitterers Love In N Out, too!

Don’t Let In-N-Out Buger Pass You By

If you happen to be visiting the west coast for the first time, be sure to swing by an In-N-Out Burger.  I promise you won’t be disappointed.  Be sure to report back and share how much you loved it!

Update:

In early December, my family and I went to visit my mom in Las Vegas.  Of course you know where my first stop was……right?   You guessed it.   The first picture below is the In-N-Out Burger Las Vegas sign (the main one).  There is actually one closer to my mom’s house, but that would have been an extra 15 minute drive and my stomach couldn’t wait any more.

In-N-Out Burger Las Vegas

All in all, in the course of over 7 days, I ate In-N-out 5 times!   Would have had it 6 times, but the last day we had to catch an early flight and unfortunately they are not open by 6:30 a.m.

Attention In-N-Out Burger Executives:  I highly recommend you open early for fanatics like myself

I would totally work here.

In-N-Out Burger Animal Style

As many times that I have visited my favorite burger joint, it’s hard to believe that I had never tried the Animal Style off the secret menu.   I decided to give it a go with the fries.  I’m sad to report back that I was unimpressed.  I like the sauce and the grilled onions (even though I’m not an onion fan).  But the cheese just didn’t mesh well with me.  It’s the ONLY time I didn’t enjoy something from there.   Don’t worry – I made up for it by devouring 3 cheeseburgers.

Giving Animal Style a Try

The last night my wife and I ate a full Mexican dinner at The Venetian, but that didn’t detour me from eating In-N-Out Burger one more time.  On the way back to my mom’s house we stopped through the drive thru for one last burger and a chocolate shake.

It.Was.Heaven.

I'll miss you.....

I’m not sure when we’ll be able to get back to the west coast for some In-N-Out. I can only suppress the inner craving. In-N-Out, I miss you dearly. Until next time….

photo credit: DTrigger05

photo created by Pete from Logos For Websites

Before every financial decision you make, you have to ask yourself, “Does it make sense?”.  In the world of personal finance, what makes sense for one may not make sense for the other.  Several factors will play into the final decision.   Today’s collection is 107 (with two bonus) things that make good financial “cents”.   Most everything here can be applied to anybody and at any point in their lives. Happy reading!

Healthy List of What Makes Good Financial Cents….

1. You Need A Budget, period. Until you see your budget on paper, you’ll never have a full understanding of where your money is going. I assure you that setting up a budget is easier than you think.  Need help setting up a budget ? Consider Clariity.com for online financial planning needs.
2. Use The Budget. Following a budget helps you live according to your financial goals. By setting spending and saving goals, and adhering to them, you can make sure your money is working for you, rather than you being a slave to your (lack of) money.
3. Before you can get out of debt, you need a positive cash flow. Having a positive cash flow takes some work, but everyone can do it — including you! Start by reading this guide on how to Earn More and Spend Less, and start working your way toward financial freedom today.
4. Pay Yourself First and Last. The concept will make the average person wealthy with time. Pay yourself by investing, by funding your retirement, and by growing your emergency fund. Be sure to pay yourself last, too.
5. Have a Sufficient Emergency Fund. A well stocked emergency fund can help reduce your risk of financial catastrophe.  Always expect the unexpected.
6. Implement Dave Ramsey’s Debt Snowball. Having a mountain of debt can leave you feeling discouraged. Implementing the debt snowball plan can give you hope as you take your baby steps towards financial freedom.
7. Implement Debt Snowflaking. If doing a debt snowball doesn’t work, then consider debt snowflaking. It’s a similar premise with the same end result- being debt free!
8. Do A Balance Transfer. If your credit card just jacked up your interest rate, consider doing a balance transfer. It could save you hundreds of dollars.
9. Pay off the Credit Cards. It’s easier to keep track of your credit cards interest rates when there isn’t a balance. Make strides to become debt free by paying off your credit cards.

10. Fix Your Credit Report. Many credit reports have a few errors. It’s not that difficult to fix your credit report whether the error is caused from financial institution error or fraud.

11. Don’t Underestimate Your Credit Score. The good thing is that you don’t have to spend any money to improve your credit score or repair your credit (despite what some advertisements may lead you to believe). You can easily get your free credit score and report card. This report will help you better understand how credit score works and how to improve yours.
12. Don’t Wreck Your Credit. Your credit is one of the most important aspects of your life. Be conscience of it and definitely don’t take it for granted. Avoid these 7 things to keep your credit in check.
13. Understand Your FICO Score. You always hear about improving your FICO score, but how do you improve something you don’t understand. It’s important to understand the basics of your FICO score so that you can improve it and more importantly not hurt it.
14. Use coupons. I love coupons and other ways to save money. You can often find coupons on the back of your receipts or find online savings at places like Ebates. Using coupons frequently could save you thousands of dollars a year.
15. Practice Frugality. Why are you frugal? Are you frugal because you are trying to get out of debt? Or save for a down payment? Or just to put food on the table for your family? Frugality is a means to an end. Not the end itself.
16. Automate Your Finances. Results are achieved my automation. Paying off a credit card, funding your emergency fund, or contributing to your IRA can all be done automatically and prevent you from coming up with another excuse.
17. Stay Focused On Your Goals. Focusing on paying off debt can lead to great results, but sometimes you may find you lose your focus. Sometimes it is a struggle and you have to remind yourself what the end result is.
18. Delay gratification. Want the newest and the best? Who doesn’t? You can save a lot of money and feel better about your purchase if you are willing to delay gratification and wait until the price drops or you can afford it.
19. Discerning Luxury from Necessity. Learn to recognize wants versus needs. Do you need it….or do you REALLY want it? For a majority of the time, it is usually the latter.


9. Pay Off Your Credit Cards

20. Don’t Envy Debt. Just because somebody has the nicest things doesn’t mean that they own them. Being envious of other people’s debt will put you in the same trap that they are in.
21. Recognize When Enough is Enough. Are you working extra hard to buy extra stuff that you don’t actually need? How many hours of your working day go towards unnecessary expenses? Then maybe it’s time to realize that you have enough.
22. Spending to Save. Sometimes you need to spend money to save in the long run. Spaving the latest frugality trend.
23. Pay More For Quality (in certain situations). Paying a little more for a higher quality product may save you from having to replace it sooner. Don’t mistake quality with name brands though. Do your homework and make sure it’s worth the extra expense.
24. Good Shopping Habits Make Cents. Researching your purchases could wind up saving you a small fortune in either purchase price or repair savings. Through the combination of deal finding sites, company research tools, and product review sites, you can narrow down your intended purchase to the product that makes the most sense.
25. Use Good Judgement When Making Purchases. Sometimes you feel the urge to buy something expensive, but often it makes more frugal sense to set goals and delay gratification.
26. Avoid ATM Fees to Save Cash. ATM fees are a tax on convenience. What better way to save money than to just avoid ATM Fees altogether?
27. Save on Gas. Gas prices are above $2 per gallon and anything less is not sustainable. By keeping track of your cars gas mileage, and thus your cars cost per mile, you can be more conscious of your driving decision and save money on gas.
28. Save Money On your Cell Phone Bill. Do you really need a Crack BlackBerry or the iPhone? If your cell phone bill is as much as a car payment, it’s time to cut back. Don’t waste money on your cell phone bill.
29. Bring Your Lunch To Work. Brown-bagging your lunch each day can add up hundreds of dollars of savings a month. Don’t become a hermit, though. Find some frugal friends to brown bag it with you.

30. Rent Before You Buy. If you save and invest properly then you can rent and do just as well as a homeowner (or better).

31. Shop For the Best Mortgage Rates. The difference between a 5% loan and a 5.5% loan is only 1/2%. But you stretch that over a 30 year life on a $200.000 mortgage, 1/2% can equal tens of thousands of dollars. Be sure to shop around and find the best mortgage rate possible.
32. Buy a Home. If you’re financially able, it’s time to live the American Dream. Make sure you have the right motives on being a homeowner.
33. Don’t blindly follow financial rules of thumb. Your mortgage payments will determine how affordable your house is. A large down payment is preferable but if the payments are ok then zero down payment on a house is just fine.
34. Pay off your house. Pay off Your Mortgage for a guaranteed return on your money. Plus, you don’t pay taxes on the free shelter services you receive. One of the biggest advantages of paying off your mortgage early is peace of mind. Once you’ve paid it off, you’ll wake up every morning and fall asleep every night knowing that the roof over your head is 100% yours. For many people, you can’t put a price on that sort of security.
35. Buying a used car instead of new. Buying used will save you thousands immediately vs. buying a new. There are a few things to consider when buying a used car. You should try and get a record of all maintenance on the vehicle and also some info on the previous owner. A little information should reveal what kind of care was taken on the vehicle.
36. Stay Away From Extended Warranties. When buying things don’t buy extended warranties, but don’t forget to take advantage of free manufacturer’s warranties.
37. Buy in Bulk. Get to know your grocery list and take advantage of warehouse stores. Find ways to save by buying in bulk to stretch your dollar.
38. Barter. With bartering you offer goods or services in exchange for…goods or services. If you have an extra bike, but want a nice backpack, you might be able to find someone who wants a bike but has an extra backpack. You can swap. The same is true of services.
39. Perform Home Maintenance Tasks. Besides hospital bills, there isn’t a bigger budget killer than a major home repair. Performing simple home maintenance tasks will increase the life of our home and it’s appliances and keep your budget on track.
40. Research Your Vehicle Expenses. Save Money on Car Repairs by accessing fair and reasonable repair cost estimates online. It’s easier than ever to find out if you’re being cheated.
41. Don’t be Consumed by Your Bills . Look at Bills, Pay the Bills, Forget about Bills and then move on. There are far too many good things in life to be consumed.


22. Spend To Save

42. Make More than the Minimum Payment. Paying extra towards your loans now, goes a long way later!
43. Go Green, but Do it Cheaply. Going green is becoming contagious. If you decide to go green, make sure you do it cost effectively.
44. Don’t count all your eggs before they’ve hatched. Paper gains are only paper gains until you sell them and make them real; likewise, it’s cash flow today that counts, not 10 years from now. So always pay attention to what your money is doing for you *today*, not what it might do for you far off in the future.
45. Have a Garage Sale. The stuff you can’t sell online, you could sell from your garage on the weekends. You can make some good extra cash and free up tons of storage space by doing this.
46. Start a Garden. You can be self-sustaining just as our ancestors by growing your own vegetables. Not to mention that growing your garden is cheaper too!
47. Stop buying crap. You need this, you want that, oh, how about this too? We’re all guilty of buying useless stuff in the moment and forgetting about it as soon as we get home. Figuring out how to stop buying crap will free you from financial burdens as well as mental ones as well.
48. Don’t be a Control Freak. Having your hand in everything causes you stress and can even hurt you financially. When you can let go of some of your control, it helps create a balance in your life and frees you from being affected by life’s little noises.
49. Manage Your Finances Online. Being able to keep track of all your finances online will have them in one central location which will free up time and help organize your life. There are plenty of online resources for improving your financial health.

50. Set up Reminders to Pay Your Bills. Ever find that with everything going on in your life you forget about a bill and miss it’s due date? One way that can prevented is to set up a Google Calendar to set up due date reminders.

51. Get Rid of Your Clutter and Get Organized. Don’t be hindered by a world of clutter. Get organized and let your creativity flow.
52. Be a Savvy Traveler. If traveling is in your blood, but not quite in your budget, then you need to implement travel hacking to save on every aspect of your adventurous journeys.
53. Do not go out to eat. Even the cheapest fast food meal costs more than cooking meals at home. To say nothing of the health benefits.
54. Use rewards programs. Get free money when you buy groceries, gas, or shop online. Who doesn’t want to get free money for shopping?
55. Sign Up For Longer Subscriptions. Sometimes it is worth it to look at lifetime (or even annual) subscriptions. Example: If you and your family of 4 intend to visit the local zoo a few times per year, a lifetime membership could pay for itself after 5 years (or 17 visits) without accounting for price hikes.
56. Research Your Flights. You can save a ton of money on airfare. However, it isn’t always the best idea to just look at travel aggregators. You also need to look at the airline websites, account for the time of year, the time until the trip, the day, and more.
57. Shop Around For Your Health Care. Being a Comparison Shopper for Health Care Services can stand to keep hundreds of dollars in your pockets. There are online resources to determine if the quoted cost of the medical test or procedure you need is reasonable. Check in advance.
58. Use Technology to Get Rid of Cable . There are a ton of options to get rid of cable using technology nowadays. You could hook your computer up to your TV, stream to your TV from your computer through an Xbox 360 or PS3, or stream to your TV from Hulu and other video sites through an Xbox 360 or PS3. Satellite and cable bills are soaring and getting TV for free is a pretty sweet deal.
59. When “Free” Things Aren’t Free: Beware of the Hidden and Indirect Costs. Not all free things are by definition “free” if they cost you in other ways. Be sure to read the fine print and understand what you are getting yourself into.


60. Protect Yourself From Identity Theft

60. Protect Yourself from Identity Theft. Don’t become a victim of identity theft. Use vigilance to protect yourself and learn how to avoid identity theft. Easiest way to not become a victim? Prevent it from happening to you.
61. Go On a Diet. There are many reasons to go on a diet. Looking good and improving your health are some common reasons that most go on a diet. If you eat right, chances are you will have less visits to the doctors office. What’s that mean to you? Less co-pays and more money in your pocket.
62. Go to a Community College. Attending a community college is cheaper, allows you to figure what direction you want to go in, and will help ease your way into university life. Besides, I went to a community college and see how I turned out?
63. Get an Internship. Interning with a company in your field will help you decide if that’s the career field for you. If during the internship you realize that may have made a mistake in your career choice, better to realize now than after you already received the diploma.
64. Join The Military. What other job guarantees a paycheck and benefits for you and your family? You got it – the military. Many people are well aware that the US military can be a dangerous profession, but there are also many benefits that people may not be aware of.
65. Get Your MBA. Getting a graduate degree is generally a great career move. However, picking an MBA program can be a daunting task. Use this checklist to help narrow down your choices.
66. Graduate Without Debt. Entering the workforce with a hundred thousand dollars in debt could provide a great wake up call, but you would be better off limiting the amount of debt you graduate with. By using savings vehicles, financial aid, and ways to reduce costs, you can do just that.
67. Learn From Others. Would you rather learn from somebody else’s mistakes or your own? Learning from someone else’s experience can prevent you from following in the same path.
68. Market Yourself Daily. Whether you realize it or not, everyday at your job is an opportunity to market yourself to your colleagues, superiors, clients and others. By understanding that the way you present and handle yourself in the workplace is what defines the type of worker people see you as and taking little steps to present yourself as a serious, confident, and capable worker and leader, you will increase your opportunities in the future for promotion and a higher salary.
69. Have a Backup Job. The term “layoff” has become so common that many expect that they might be next. But why wait until you get the axe? Start looking for a new job now, just to see what’s out there. Who knows. You might even find a better one than you have right now.

70. Never stop learning. You should always stay on top of your skills, including applying for an MBA program or completing professional licenses and certifications to increase your income.

71. Subscribe to a Personal Finance Blog. Whether it’s investing, budgeting or getting out of debt, it’s easier to lean on others for support, especially if that person has gone through it too. Find a personal finance blog that resonates what you are looking to achieve. It may help you achieve your goals sooner and more effectively.
72. Buy a Good Personal Finance/Motivational Book. There are plenty of great reads to help you save money, build wealth, plan for retirement, and help you get out of debt. A couple of my favorites include: I Will Teach You to Be Rich, Dave Ramsey Total Money Makeover, 397 Ways to Save Money, 365 Ways to Live Cheap, 10,001 Ways To Live Large on a Small Budget, Career Renegade
73. Listen to Audio Books. Finding time to invest in yourself is smart, especially in today’s rocky job market. If you have a commute, as many do, listening to audiobooks is a straightforward way to make productive use of that time.
74. Know Your Worth. One of the best ways to analyze if you are being paid what you are worth is to use GlassDoor.com. Unlike a payscale, this does not give you an industry salary based on your job title. It allows you to search by company and find out what people in the same position earn. Knowledge is power, and that is never more true than when it comes to your salary.
75. Quit Your Job. Sometimes a part time job is not all its cracked up to be. Run the numbers and find out how much you really earn. If the numbers don’t add up, it may be time to quit.
76. Go back to school if you lose your job. If you get laid off from a dying industry then you might be better off in the long run to go back to school.
77. Marry a Rock Solid Spouse. If your spouse is not on board with your plan, then it’s not going to work. Communicate with your spouse what your goals are and how you can achieve them together. Have a spouse that likes to spend? Don’t worry. With a little work you’ll be able to convert them from a spender to a saver.
78. Avoid Bankruptcy Like the Plague. Bankruptcy will follow you everywhere you turn. Try to do your best to avoid it.
79. Teach Your Kids About Money. Bad habits start early, that’s why it’s imperative to give your children a strong foundation of basic money management skills. Before you teach then, do a self evaluation and make sure that you are not passing on your own bad money management skills.
    

    79. Teach Your Kids About Money

80. Let Your Kids Pay Their Own Way Through College. Paying for you kids college will not help them succeed and could put you in a bigger hole financially. Your retirement should be the priority, then your kids college education.
81. Value Your Time. How much is your time worth to you? Time is our most precious asset. Don’t devalue it and quantify what your time means to you.
82. Know Your Net Worth. The calculation itself why be pointless, but always having a general understanding of the value of your net worth proves to be helpful in the financial planning process.
83. Know the Basics of Checking Accounts. All your money runs through your checking account. Nowadays a checking account has more fine print attached to it than HD TV’s. Make sure you understand the basics of your checking accounts to prevent unnecessary fees down the road.
84. Open an Online High Yield Savings Account. It’s hard enough to save as it is. Why let your savings waste away in a brick and mortar account that barely pays you interest? Opening up an online high yield savings account can help boost your savings in so many ways.
85. Use a CD Laddering Strategy. Try this different way of saving that gives you security, liquidity, and a higher interest earned on your cash: Create a CD ladder and in no time you’ll be saving like a pro. Trust me. Building a CD ladder is easier than you think.
86. Learn more about your investments. Most people spend more time programming their universal remote than learning about what investments they own. Nobody cares about your money (ie investments) like you do, so spend some time and figure out what you are invested in and why.
87. Have a Solid Financial Plan. Having a sound financial plan is key to being able to survive an emergency of any kind. When you have a plan, you’re going to be much more sure about where you are, and where you’re headed.
88. Write down your investment policy. Regardless of your investing style – writing down your investment policy statement is a great way to make sure you stay on track. It can be very simple or very complicated – it’s up to you.
89. Start Investing. You’ve done your research and you’ve written your investment policy statement. It’s now time to start investing.

90. Implement Proper Asset Allocation. When a deep recession hits, little is safe from being affected regardless of how well you are diversified. That’s why it is more important than ever to diversify beyond market sectors or brokerages.

91. Save for retirement. Saving for retirement is one of the most important things you can do. Should you invest in 401k or IRA? Always take the employer match if you have a 401k, otherwise consider a Roth IRA or Traditional IRA.
92. Open a Roth IRA. By far the best retirement planning tool ever. Opening a Roth IRA will give you tax free money at retirement. *
93. Contribute to Your 401k. Once your eligible, sign up for your company’s 401k plan. Contribute enough to at least get the match. If you can afford more, go for it.
94. Keep Funding Your 401k, No Matter What. It may seem like your 401k is going everywhere except for up, but if you stop funding it then you’ll definitely have no options at retirement. Whether your employer has a match or not, it doesn’t matter. You need to keep funding your 401k for retirement.
95. Avoid Talking Yourself out of Investing.  One of the biggest obstacles to your financial goals is going to be the myths you encountered about investing; know the truth to set yourself (and your money) free!
96. Rolling Your 401k into an IRA. Whether you leave a job or retire, it will usually make sense to roll over your 401k into your own IRA. You’ll have greater control, more flexibility, and more investment options to choose from.
97. Buy life insurance. Most people need some life insurance and it is a good idea to research how much life insurance to buy. Most people recommend term life insurance, but there may be times when whole life insurance is not a bad idea.
98. There’s no stupid question, especially personal finance questions. The Internet is filled with great resources. If you look in the right places, you can even ask experts like Liz Weston, Larry Swedroe, and Steve Rhode for their advice. For example, you can ask your question on Moolanomy Answers and have your question answered by some of these experts, or even by a Certified Financial Planner™ like Jeff Rose- that’s me .
99. Hire a Professional. When managing your own investments becomes too overwhelming, it might be time to hire a professional financial planner to assist. Be sure to do your homework, though and make sure you are hiring the right person for the job. Don’t know where to look? We might have to consult a secret society to find the right financial planner for you.

94. Keep Funding Your 401k No Matter What

100. Do Not Chase Performance. Just because an investment is up 50% year to date, doesn’t mean it’s going to keep going up. Make sure whatever you invest into fits your goals and time horizon. Don’t let the performance tail wag the investment dog (or something like that…..)
101. Get Your Estate in Order. Often individuals are so concerned with building wealth of paying down debt they forget the importance of a valid will and power of attorney!
102. Keep Your Important Documents in a Safe. Having your important documents stored in a safe place, like a fire safe or safety deposit box is a good idea. You will want to keep your tax returns, life insurance policies, stock certificates, and anything else you want protected.  Not sure how long to keep them?  Be sure to check out my post on how long to keep your financial statements.
103. Know When To Outsource. There are only so many hours in the day that one can devote to their family, business, recreation, etc., and you need to determine how much time and effort you are willing to spend on your business. Outsourcing costs money. But so does time. In the long run, outsourcing may prove to be the least expensive and most efficient option.
104. Diversify Your Income Streams. Sole reliance on a single income source is a bit risky so check out some ways to make extra money in your spare time. It’s amazing what just a small increase in cash flow can do to your psyche, not to mention your retirement savings.
105. Create Your Own Stimulus Check. Getting lump sum checks are nice, but wouldn’t be nicer to have a stimulus check every month? Figuring out creative ways to create your own stimulus check will be beneficial and more reliable than the one you received from the government.
106. Become a Millionaire. Becoming a millionaire is not extremely difficult. It takes money, time, discipline, and a little luck. Most millionaires are not born, they are made.
107. Donate To Charity. Chances are no matter how bad your situation is, there is somebody worse off. Be thoughtful of those in need and consider donating to a charity of your choice. Many people have excuses to not donate. Don’t be one of those people and let your philanthropic side out.

Bonus

108.   Don’t Forget to Tithe. Before you pay yourself, you should willingly give to the reason why we all exist. You can’t earn your way to Heaven by giving and you won’t be excluded from Heaven by your lack of giving. Nonetheless, be sure to tithe.

Double Bonus

109. Subscribe to This Blog. Getting free quality information from a Certified Financial Planner™ makes total financial “cents”.  Sign up for my feed or weekly e-mail subscription today.

Thanks to everybody for their posts.   This couldn’t have been done without you.  Special thanks to Pete from Logos For Websites for the cool post pic.  As you may know, Pete does good logos for blogs, too.  Hence the awesome logo on this blog

What makes good financial “cents” to you?

*Restrictions, penalties and taxes may apply.  Unless certain criteria are met, Roth IRA owners must be 59 1/2 or older and have held the IRA for 5 years before tax-free withdrawals are permitted.

Securities offered through LPL Financial, Member FINRA/SIPC

photo by Τchasty ♥

The Traditional IRA and its offshoots (SEP, SIMPLE, rollover and Roth IRAs) play a leading role in helping millions of U.S. taxpayers invest for retirement.  However, many IRA owners are unaware of the opportunity they have to consolidate their multiple IRAs by using a “Super IRA” strategy (most common is a rollover 401k).  An IRA consolidation strategy can lead to reduced fees and increased buying power.  I’ve had several instances where an individual has had several old retirement plans from previous employers.  That has included defined benefit plans, 401k’s, TSP’s, 403b’s and Keough plans.   The paperwork alone was cumbersome and consolidating has made tremendous sense.

If you like this article, please be sure to also check out 401k Tips: What Not To Do, Rollover IRAs Offer a Wide Range of Benefits, 7 Things To Know About The 2010 Roth IRA Conversion

IRA Consolidation Case Study

The following is a common scenario involving a worker (Patrick) who has changed jobs several times throughout his career.  He has been diligent about saving for retirement, but his assets are scattered.  An IRA consolidation strategy is suggested, and the section concludes with a three-step action plan for investors like Patrick.

Patrick’s Profile:

• Frequent job changer, age 62, is approaching retirement.
• He has lost track of his numerous retirement savings arrangements.
• He turns to his advisor for help with simplifying his financial affairs.

During his career, Patrick has accumulated various retirement accounts but has lost track of the status of each.  He is 62 years old and is thinking of retiring from his current job.  He has three retirement plans with former employers [a profit sharing plan, a target benefit plan and a 403(b) plan], four Traditional IRAs, a SIMPLE IRA, two Roth IRAs, an Individual(k) plan he established when he owned his own business and a Thrift Savings Plan he now has as an employee of the federal government.  He is also the beneficiary of his deceased wife’s nonqualified deferred compensation plan and her Traditional IRA.  In an effort to simplify his life, he turns to his financial planner for help.  This is a strong case for implementing the “Super IRA” consolidation strategy.

Step 1:  Understand the Rules

• A person who owns multiple SEP IRAs and Traditional IRAs can combine them into one “Super IRA” at any time.
• If the person also owns a SIMPLE IRA, he or she can transfer or roll it to a “Super IRA” after participating in the SIMPLE IRA plan for at least two years.  The two-year period begins when the first SIMPLE IRA plan contribution is made to the individual’s SIMPLE IRA.
• A “Super IRA” can receive ongoing SEP plan contributions and annual Traditional IRA contributions.
• Ongoing SIMPLE IRA plan contributions must first be contributed to the participant’s SIMPLE IRA.  If the individual has participated in the SIMPLE IRA plan for at least two years, he or she can transfer or roll over the SIMPLE IRA into one “Super IRA.” (Note: special rollover rules may apply.)
• A “Super IRA” can receive rollovers of eligible assets from all types of qualified retirement plans [e.g., 401(k) plans, profit sharing plans, defined benefit plans, etc.], 403(b) plans, 403(a) plans and governmental 457(b) plans.
• A Roth IRA cannot be transferred or rolled over into a “Super IRA.”  Multiple Roth IRAs can be combined to create a “Super Roth IRA.”  Under the Pension Protection Act of 2006, effective in 2008, participants in qualified plans, 403(b) plans and governmental 457(b) plans can directly roll over eligible plan assets to Roth IRAs if conversion rules are satisfied.
• Spouse beneficiaries of qualified plans and SEP, Traditional and SIMPLE IRAs generally can consolidate their inherited accounts into their own “Super IRA.”

Step 2:  Consider the Potential Benefits of a “Super IRA” Strategy

• Increased buying power, which allows for more sophisticated investment strategies
• One fee vs. multiple fees
• Simplified investment tracking
• Beneficiary organization and consolidation
• Consistent service
• Streamlined paperwork
• Simplified retirement income planning

Step 3:  Work With Your Advisor

Investors should work with their advisors to determine whether a “Super IRA” asset consolidation strategy makes sense for them.

In our scenario, Patrick’s planner asks him the following key questions:

• Do you have the most recent statements from each of your retirement accounts?
• What type of investments do the plans hold?
• Are any of your retirement plans invested in employer securities?
• Is your goal to consolidate your accounts as much as possible?
• How long has it been since you first participated in the SIMPLE IRA plan?

Patrick’s  goal is to consolidate as many of his retirement accounts as he can into one “Super IRA.”  He obtains copies of his most recent retirement account statements to review with his advisor.  He first participated in the SIMPLE IRA plan a year and a half ago.  He does not hold employer securities as a plan investment.

After reviewing the statements, Patrick and his planner determine he could combine the following retirement accounts into a “Super IRA”:

• Profit sharing plan
• Target benefit plan
• 403(b) plan
• Five Traditional IRAs (the four he owns outright and his inherited IRA)
• Individual(k) plan

In another six months (two years after first participating in the SIMPLE IRA plan), he could transfer or roll over that balance to his “Super IRA” as well.  Patrick cannot combine his two Roth IRAs into his “Super IRA,” although he could consolidate them into one “Super Roth IRA.”  And he cannot roll over the nonqualified deferred compensation plan.  Although he could combine the plans as outlined above into one “Super IRA,” it would be best for Patrick and his planner to carefully examine the types of investments currently held by the various plans to see if a rollover is the wisest course of action from a taxation standpoint.  For example, special tax rules apply to distributions of employer securities from qualified retirement plans.  This would be case of NUA or Net Unrealized Appreciation.  Keep in mind, a consolidation strategy may not always be suitable.  An advisor, or a tax or legal professional, can help identify the best course of action to incorporate the best investment services.

Are you candidate for a “Super IRA” strategy?  If so, feel free to contact me and I would be glad to review your situation.

Questions For Your Financial Planner

As the year rolls on, risk and credit are being repriced and financial markets remain in some turmoil.

In the last few client reviews I’ve had, the clients have all stated that they haven’t even looked at their statements.   If you find yourself in this situation and retirement is creeping around the corner, this is highly not suggested.

Now, more than ever, you need to be on top of your financial situation.  Your portfolio could be completely intact, but most likely there might be some opportunities to take advantage of.

When meeting with your financial planner, here are 7 questions you should ask to get a better sense of where the market dump has left you.

1. What is my true financial situation?

Re-examine your investment goals, time horizon, risk tolerance and financial circumstances. Have any of these objectives or circumstances changed?

Have you added to your bond and money market investments during this volatile time? If so, will that more conservative investment mix still allow you to meet your long-term goals of saving for your children’s college education and funding a retirement income plan?

Allow your planner to assess your true financial situation by providing complete information on your current financial picture. Make sure to include not only your  investments held with them,  but other investments as well, including bank savings accounts.

2. How should I be thinking about risk in this environment?

Did you used to consider yourself an aggressive investor prior to 2008? It’s time to truly ask yourself what your risk tolerance is.  Has it changed — or are you just feeling natural unease following a downturn?

The hardest thing to do when markets and stocks are going down is to stay the course.  For some, that happens because they have taken too much risk at the top of the market. Many investors end up going to cash or bonds when markets are declining. Eventually, after a recovery begins, they think, ‘What have I been missing?’ They eventually come back in, but miss a good deal of the recovery.

Communication is vital in financial planning process

3. Do I need to reconsider my time horizon?

How long is your time horizon? All things being equal, you can afford to be more aggressive if you have a longer time horizon. For example, most planners would recommend that the investment mix of a 32-year-old be more heavily weighted in equities than that of someone who is close to retirement.

Do you have multiple time horizons? A 32-year-old who is saving for a down payment on a house in three years would be investing a portion of her money with a three-year time horizon despite the fact that retirement may be 33 years away. Given the short time frame, it would be prudent to invest those assets more conservatively because there is little time to make up any losses.

Can you adjust your plans to retire? Perhaps you once planned to retire early at 62 and your investment portfolio shrank in 2008. Ask your adviser to calculate how long you would have to work beyond 62 to build a portfolio that can produce a lifelong income stream. If you could wait to retire at 65, you would add three more years of income and investing, while reducing your withdrawal phase by three years. It would also enable you to postpone the year you start claiming Social Security benefits. If you claim before your full retirement age, your benefits would be reduced for life.

4. Does my investment strategy need readjusting?

If you are retired and withdrawing income from your investment portfolio for living expenses, talk to your financial planner about taking out less today and over the next several years. This approach can help make your investments last longer. You can’t predict or control the stock market, but you can control your income withdrawal strategy.

5. How do changes in my personal life affect my financial situation?

If you can answer “yes” to any of the questions below, your planner may need to adjust your investment mix to provide for these changes.

• Have you changed jobs or decided to take a buyout offer or early retirement?
• Did you get married, have a child or become a grandparent?
• Has there been a divorce, or is your son or daughter getting nearer to needing money for college tuition and expenses?
• Do your grown children need temporary financial assistance?
• Are you now helping to financially support a parent or parents?

6. What if I haven’t invested enough for retirement?

Talk to your financial planner about a number of possible strategies to help build up your assets prior to or during retirement:

• Delay retirement until you are 65 or older. If you could use a few more years to invest, it may be worth thinking about staying in your current job or starting a second career.
• Work part time in retirement. Bringing in extra income may keep you from using up your retirement savings too early. Nearly one-quarter of adults 65 to 74 years old are in the work force.
• Reduce your spending during market declines. By cutting expenses in a down market, you can significantly lessen the financial impact on your portfolio. Retirees who move everything from stock investments to bond and money market investments risk missing out on the potential gains generated by stocks once they recover.
• Contribute as much as possible to your retirement plan. If you are 50 or older, you may be able to make catch-up contributions that set aside an additional $5,500 for a total of $22,000 401k contribution for 2012. If possible, try not to borrow or make a large withdrawal from your retirement plan.

7. Are there any tax implications for my moves?

Did you sell an investment  in December, hoping that you could take a loss on your next year tax return? If you want to buy that same investment in the current yer, keep in mind you must wait for more than 30 days. Otherwise, you violate the “wash sale” rule and you will not get the benefit of the loss to offset other capital gains.

If you have never met with a financial planner before, check out my guest post at Get Rich Slowly on 8 questions you should ask before you hire a financial planner.

Be sure to consult a tax professional about this and other tax issues.

Source: Capital Guardian

photo by worshiphim24_7

Baghdad 2005, Just North of Green Zone

In January 2005, I left the comfort of my family, friends and home to begin a 15 month deployment to Baghdad, Iraq.  Although I knew the difficulty and hardships that I would face, I also believed it would be an excellent opportunity for my wife and I to get a jump start financially.  You would think that being overseas and unable to spend as freely as you can in the States would give every soldier an opportunity to save some serious bucks.  Especially, since the military really promoted all the extra money we would make with combat pay, hardship pay, imminent danger pay, hazardous duty pay and family separation allowance. All of which was federally tax free while we were on ground.  I guess that was there way of trying to take your mind off the fact that you were heading into a combat zone.  But hey, I guess it never hurts to focus on something positive.

Nonetheless, many of the soldiers I deployed with were equally excited to sock away some cash while we were gone. Unfortunately, what I saw was a different picture. Despite the excellent pay that we received,  I saw many come away with nothing saved.  In fact, I witnessed many coming home in more debt after deployment than before we left.  It made me contemplate what I did differently that allowed us to save and what future soldiers could do to maximize the money earned while in combat.

1. No Major Pre-Deployment Debt

One thing that worked huge for us is that we didn’t incur a lot of unnecessary debt prior to being deployed.  Many soldiers were buying brand new laptop computers, high tech electronics, and special ops gear before we left.  I could possibly justify the laptops, but most of the special military gear was a bit premature since we weren’t sure what the government was going to issue us.  Most of it was just to look “Hooah” or have the “coolest” gear.  I called it the “Black Hawk Down” syndrome.  You might not be Delta Force, but you’ll try and look the part. The two major expenses that I incurred prior to deploying were:

1. Lasik surgery
2. My wife’s engagement ring.

Our goal was to have those both paid off in the first couple of months, which we did.

First week of being there, hence the smile

2. We had a plan

As I stated above, we had a goal to take care of the Lasik surgery expense and the engagement ring as soon as we could.  Luckily, my wife and I had no student loan debt and these were the only two items that were left to be paid off.  Once we paid those off our goal was to boost our savings and max out our Roth IRA’s.

3. Automatic Investing

One thing that I’ve always been a big fan of when it comes to investing is the systematic withdrawal.  The concept of “out of sight, out of mind” works amazing for anybody that is trying to save.  We had it set up where each of us was depositing $100 a month into our Roth IRA’s. Once we got our savings up  we were going to max out the remaining balance.  By setting up the automatic monthly withdrawals, it made it to easier to write a check to make up the difference. The other benefit of automatic investing is dollar cost averaging, which takes the guess work out of trying to time the market.

Only few weeks till I go home, hence bigger smile

4. Be ready for the unexpected

When I left, my wife and I were renting out a home with friends of mine so our expenses were exceptionally low.  We had talked about buying a home once I got back, but that quickly changed.  Half way through my deployment, a family friend had offered to sell his home to us for sale by owner at a very good price.  It was exactly what we were looking for and at a price that we couldn’t pass up.  So while serving my country in a foreign land, I purchased my first home.  If we hadn’t of made a plan, I don’t think financially we would have put ourselves in the position to purchase the home.  I’m now thankful we did.

5. Limit the Unnecessary Purchases

You would think that being overseas that you wouldn’t have a chance to really spend any money.  That is a major myth. The truth is that there are PX’s (Post Exchanges) readily accessible to any soldier.  There you can buy electronics, snacks, souvenirs, magazines, books, etc.  Also, the availability of the internet made online shopping a snap.  One example is a buddy of mine special ordered a pair of Nike running shoes for $150.  Since they were special order, it would take an extra few weeks for the shoes to be shipped.  He then ordered a regular pair of Nike running shoes at $140 to last him until the others came in.  Did I mention he already had a pair of Nike running shoes that were just fine? $300 later he now had two pair of brand new Nike running shoes to go with the pair that didn’t need replaced. That might be an extreme example, but I have countless others of soldiers wasting their money while overseas.

Home on leave

6. Excellent Supporting Cast

My wife was incredible of keeping track of our finances while we were away. Keep in mind, we were just newlyweds, but we were able to get on the same page of what we wanted to accomplish financially.  You hear many stories of a soldier’s wife/husband spending the money while the soldier is away.  I can tell you for a fact that it happens.  We had many soldiers whose wife (we only had male soldiers, so sorry if I’m discriminating) went on shopping sprees with all the new money that was coming in.  I was very fortunate to have a wife that shared my vision in securing our financial future.

7. The Lottery Syndrome

Once we returned home many that had been able to save some cash went on buying sprees.  New cars, trucks and Harley’s were quickly snatched up.   I even had another soldier who had reenlisted while were overseas and received a $15,000 tax free bonus.  All of which was gone in the first month of being home!

Any newly deployed soldier has an excellent opportunity to get on the right track while on deployment.  Consider some of the steps that I did that helped us and apply those to your situation if you can.  More importantly, learn from the examples of those who fell into financial traps and avoid those situations.

This was guest post that I had done on my buddy Patrick’s site Military Finance Network. The original post title was Managing Money While Deployed. If you know of anyone that is a military member, past or present, I encourage them to check the site out.

Don't Forget About Your Beneficiaries

What’s your legacy plan?  This is a question that I often ask my clients.  I ask this for many reasons, but the main reason is to get them thinking about what happens when they are not here.  Have they taken care care of their wills, life insurance polices, and for this discussion: retirement plan beneficiaries.  I’ve already shared a few stories on the importance of your beneficiary designations, but I can’t stress this enough.  This time I want to focus on retirement plans- specifically, IRA’s, and 401k’s.

Since their introduction in the early 1970s, Individual Retirement Arrangements (IRAs) and qualified plan assets such as 401(k), 403(b), and 457 plans have become an important component of many investors’ retirement plans. While the intent of these accounts is to supplement Social Security and provide income during retirement, many affluent investors may not need or be able to spend all of the money in their retirement accounts. This creates an opportunity to leave these accounts for the benefit of heirs. This post outlines the fundamentals of beneficiary designations which are important not only in terms of leaving a legacy but also to ensure that estate and income taxes don’t unintentionally consume retirement plan assets. It should be noted that a full discussion of the tax impact of such designations is beyond the scope of this post; investors should seek appropriate counsel prior to making any investment or tax decision.

Tax Considerations

Assets in qualified retirement accounts are considered “income in respect of a decedent”. As such they are includable in a decedent’s estate on which taxes are due within nine months after death. In 2009, the maximum federal estate tax is 45%, and the exemption equivalent amount is $3.5 million. In an estate where the qualified account is a sizable estate asset, depending on who is the account beneficiary (for example a non-spouse which does not qualify for the marital deduction), without advance planning for payment of estate taxes the account might have to be liquidated to pay them. This distribution could in turn trigger an income tax liability to the beneficiaries. (Note that there is an income tax credit available to beneficiaries for estate tax paid.) With proper beneficiary planning, this can be minimized or avoided.

Definition of Beneficiary

As illustrated  below, beneficiaries of qualified accounts are considered to be either “designated” or not. A designated beneficiary is a living person for whom a life expectancy can be calculated. A non-designated beneficiary (called simply a “beneficiary”) is anything else. This is a critical distinction in determining how the assets are paid out of the account.

Designated Beneficiary

A designated beneficiary can be further classified into two types — the spouse and everyone else (“non-spouse”) In some situations, trusts can be considered designated beneficiaries, assuming they are set up correctly.

Spousal Beneficiaries

The account owner’s spouse is usually listed as the beneficiary of the account upon the account owner’s death. In fact, in many cases, the spouse has to approve the designation of an alternative beneficiary. As a beneficiary, the spouse has four options allowed by the IRS:

1. Leave the money in the account.
2. Take a lump sum distribution.
3. Take an annuitized distribution based on their life expectancy.
4. Roll the assets over into their own IRA account.

This last option is only available to a spousal beneficiary, and is often called a “Spousal Rollover”.

Non-spousal beneficiaries

A non-spousal beneficiary could be children, grandchildren, nieces, nephews, or any other living person the account owner chooses. These beneficiaries have three distribution options allowed by the IRS:

1. Leave the money in the account.
2. Take a lump sum distribution.
3. Take an annuitized distribution based on their life expectancy.

Non-spousal beneficiaries cannot roll the account into their own account as a spouse can. One very popular strategy for non-spousal beneficiaries is the third strategy – taking distributions based on life expectancy. This is often called the “Stretch IRA”, and for a child beneficiary they can stretch the distributions into the future for as long as they are expected to live– 30, 40, or even 50 years — depending on their age when the account owner dies.
There are two primary benefits to this strategy:

1. Most of the money remains in the account, and grows on a tax-deferred basis,
2. The beneficiary only pays income tax on the amount that comes out each year, stretching out their income tax liability over many years, instead of having to pay it all at once if a lump sum distribution is taken. (If estate tax has been paid due to income in respect of a decedent, a pro-rated income tax deduction is allowed the beneficiary. Contact a tax advisor for more information.)

Non-Designated Beneficiaries

Non-designated beneficiaries include any beneficiaries for whom a life expectancy cannot be determined, such as non-qualified trusts, charities, and the decedent’s estate. Qualified accounts with non-designated beneficiaries must be distributed either within 5 years of the owner’s death if they die before attaining age 70½ or, if the owner had already attained age 70½ and was receiving required minimum distributions, these must continue until the account is depleted.

Multiple Beneficiaries

It is possible, and quite common, to have more than one beneficiary identified for a qualified account. IRS rules issued in 2002 have made planning for this situation much easier. Beneficiaries now have a “Gap Period” between the date of death of the account owner, and September 30th of the following year, called the “Designation Date”, in which to separate the account for each beneficiary. This provides beneficiaries more flexibility in their planning and the opportunity to take distributions as they wish.

Hypothetical Example of “Gap Period”

For example, if an account listed 3 beneficiaries, two children and a charity, and the accounts were not split before death or during the Gap Period, the account would have to be completely distributed within 5 years of the owner’s death because the charity is a non-designated beneficiary. This would cause an income taxable event for the beneficiaries more quickly than they may have wished. However, if the account were split into three separate accounts, one for each beneficiary, the charity’s portion would go to the charity, and each child would be able to decide how they wanted to have the money distributed, including taking it out as a Stretch IRA, based on their individual life expectancy.

Other Planning Considerations

• Ensure that contingent beneficiaries are named. Beneficiaries cannot be named after the death of the owner/participant, and if the primary beneficiary is dead, and no contingents are named, the estate becomes the beneficiary and the account must be distributed within 5 years.
• Ensure that beneficiary designations are current on all of retirement accounts as changes may be necessary due to births, deaths, marriages, and divorces.
• Coordinate beneficiary designations on all qualified accounts with those listed in their will or in their estate planning documents. Beneficiary designation forms control who legally is entitled to the account, not the will.

photo by .bryan.stupar.