Skip to main content

Monthly Archives: July 2010

Older posts

Our Golden Career Paths

Posted on by 3

brick path

Happy Friday DINKS.  This week we are discussing our education and our career choices. As a DINK we are currently working, and hopefully we are successful at our jobs.  My question to you is…Are you happy at work?

So often we fall into a career that we never planned.  Finance was never supposed to be on my career path.  I was accepted into University in the Urban Planning program.  However, after four years, I graduated with a BA in Economics.  I started to work at the bank part time while I was studying full time at university.  My career grew from there.  Along the way it took an unexpected turn off the path of Urban Planning onto the road of Personal Finance.  The rest is history.

Usually, our chosen subject in school directly leads to our career upon graduation. However, how can we adjust and adapt when the unexpected happens?  When you applied to college or university what influenced your subject of choice?  If you are an Accountant, have you always liked numbers? If you are a Nurse, have you always been a caregiver or provider? Sometimes life is unexpected, but sometimes it is planned.

There are many things that influence a person’s decision for a chosen subject or a career choice. Sometimes we follow our hearts and choose what we love.  Sometimes we choose a job that we like a little bit, and that we do very well.  Some other times, we just follow the path that has already been paved for us.

According to CNNMoney Science, Math, and Engineering majors earn the highest salaries during their careers. However, the article also says that your school of choice is just as important of a decision as your subject major. When you chose your major at college or university did you choose a subject where jobs were high in demand, or a subject that you really loved?

Here are some other articles that we rounded up for your reading pleasure. Enjoy and have a great weekend!

——–
(Photo By JoshDubya)

Insurance in the Afterlife

Posted on by 1

mountain sun

Many of us wish to leave a financial legacy behind for our loved ones after we pass away.  Providing for our loved ones may come natural for most of us, and it usually doesn’t end upon death. If someone has not accumulated enough wealth throughout their lifetime to cover all final expenses, then life insurance is an alternative option to cover the costs.  Purchasing a Life Insurance Policy can be a key element in estate planning and leaving a legacy for surviving beneficiaries.

Financial advisors as well as some insurance advisors tell clients that insurance should be used for two purposes. The first purpose is to cover all final expenses upon death such as outstanding debts, as well as funeral and burial costs. The second reason to purchase life insurance is to continue maintaining a certain lifestyle for your family. If you are the sole provider for your family, you may want to ensure that your family’s lifestyle is maintained after your passing.

I don’t necessarily agree that these are the only two reasons to purchase a life insurance policy. Sometimes people buy life insurance not out of necessity to cover final expenses, but as a final gift upon their passing. Not enough life insurance is never good because we may not be fully protected.  However, too much life insurance protection is also not a good thing, as the monthly premiums can be very costly.

My Dad has a life insurance policy on himself which names both my sister and I as the beneficiaries.  You may remember from previous posts that Tara, my sister, and I are both DINKS, and we both work in the Financial Services industry.

Last year when my Dad retired we reviewed his expenses and created a fixed budget since he is now on a fixed income.  I told my Dad that the life insurance policy premiums are an unnecessary monthly expense, and he should cancel the policy.  My sister and I both have good jobs. Although the monetary gift is appreciated, it is not necessary.  My Dad doesn’t currently support my sister and I financially, and therefore he shouldn’t feel the need to do so in the future.  However, my Dad doesn’t want to hear anything about our financial opinions, and he still has the life insurance policy.  He says that it is his last wish, and he wants to leave us a financial legacy.

As a DINK some of us are employed by companies and some of us are self employed.  If you have a career that provides employee benefits, we should take advantage.  At this stage in our lives, our life insurance policies should be through our employer’s group benefits. The rates for group life insurance are cheaper than individual policies and the premiums are usually assumed by the employer. Do you have insurance coverage? If so, is it to maintain a lifestyle, offer a financial gift, or to cover final expenses?

If your answer to that question is D, none of the above, then your life insurance premiums are an added monthly expense.  Regardless of the reason behind a life insurance policy, there should be a reason and a purpose for the protection. Do not incur the cost of life insurance premiums if it is an expense that you can spare.

PS: Be sure to enter our Insurance book giveaway for more info! Only 2 entries so far and we’re giving away TWO books so the odds are looking good.

(Photo By HamedSaber)

Retiring Happy

Posted on by 1

As I assist my clients and their families plan for retirement, we look at several different factors other than money.

I ask my clients “What is important to you?”

According to an article posted on YahooFinance titled “Secrets to a Happy Retirement”, money is listed as the very last item on their list of criteria for a happy retirement. There are five different areas of financial planning that I explore to help my clients successfully plan for a happy retirement.

Family is a very important topic that we discuss when planning for a successful retirement. Family is usually the very first topic that people choose when I ask my clients to pick their top two priorities during retirement.  Sometimes retirees will provide child care for their grandchildren during retirement; sometimes they will relocate to be closer to their families.  All of these life changes require planning.

A person’s home is very often the second most selected topic when clients pick their two priorities during retirement.  Very often people downsize during retirement. When a person decides to sell their current home and buy a smaller home, or relocate to a retirement community, there is extensive planning involved, especially regarding finances and taxes.

Work is another topic that often comes up when I discuss retirement with my clients. Usually people retire because they are eligible for a company pension, or they are at an age that provides government assisted benefits.  Financially the person may be ready to retire, but mentally and socially they are not ready to say good bye to their jobs. Many people’s circle of friends come from their work life.  How many of us change friends when we change jobs? When you no longer work, will you keep your friends?

A self employed individual has a harder time accepting retirement than a company employee. This is usually because of the personal attachment to their own business.  Planning for the Business to be sold or closed, is something that we need to consider when planning for the retirement of a self employed business owner.

The legacy that a person wants to leave behind is a very important aspect of retirement that needs to be planned. A personal legacy could be a monetary donation to a charity or organization; it could also be a trust fund set up to plan the financial future of a child or grandchild.  A personal legacy may also be in the form of a memorial foundation set up in our name to honor a cause.  It is very important to draft a will and keep it up to date when planning our retirement.  This will ensure that our final wishes are carried out.

There are many things other than money that we should consider when planning for retirement. Money doesn’t always make us happy, and it is not always the only thing that matters in our lives.  Yes, money is important.  But, it is not everything.

——
(Photo By FoxyPar4)

Book Giveaway: “Questions and Answers on Life Insurance”

Posted on by 7

Questions & Answers on Life InsuranceHi Dinks! Ready for another giveaway?  Just got this one in the mail and it sure covers a LOT.  Not something you read for pure entertainment, but def. worth having around.

Here’s a clip from the press release:

In Questions and Answers on Life Insurance: The Life Insurance Toolbook, Tony Steuer uses an accessible Q&A format which educates and empowers readers with the information necessary to craft the best life insurance policy to benefit their lifestyle, needs, and goals.

Life Insurance is like a parachute, you may only need it once, but when you need it, you really need it. And just as important as your pilot, plane, and training are, your parachute is essential to your well being and needs to be packed correctly. In an emergency situation, Life Insurance will be that necessary element that guides you and your family to safe ground.

With twenty years of experience in the life insurance business, Anthony Steuer delivers a practical, one-of-a-kind resource to guide you through the basics–and the finer points–of life insurance and helps you choose the policy that is just right for you and your family. Using a simple question-and-answer format, Steuer covers everything you need to know about life insurance, including how to:

  • Differentiate between types of policies
  • Find and evaluate a policy and company
  • Hire a trusted agent
  • Understand the practice of underwriting
  • Monitor a policy’s performance

Sound interesting? Tell us what you’re grateful for in the comments below, and you’ll be entered to win. We’re giving away TWO copies so your odds of getting one are automatically doubled :)  We’ll pick the 2 winners this Saturday night at Midnight – good luck!

———
More info via Amazon: Questions and Answers on Life Insurance: The Life Insurance Toolbook

——-
*Giveaway is now over* Congrats goes out to Tim and Kelli! Check your email for details on how to claim them. Thanks for participating everybody – will be doing more as time goes on :)

The Cost of Our Jobs

Posted on by 5

black and white tie

Today we will discuss our jobs…as an expense in our monthly (or weekly) budgets.  I read an interesting article on MSNCareers titled “Is Your Job Costing You Too Much Money?” It discussed the price of having a new job, and all of the added expenses that come along with changing careers.

When we are thinking about changing careers we need to consider more than just the annual salary and benefits. We should take all other expenses such as wardrobe, transportation, and lunchroom facilities into consideration when deciding to accept a new job offer.  In the end, our decision to accept a new job offer could end up becoming a costly mistake.

As an example, in the world of banking, the career change from an administrative center into a bank branch generates a huge change in personal expenses.  The dress code guidelines for bank branch employees are very strict.  Hair and Makeup should always be styled, heels should be between 1-2.5 inches, and, in my case, a collar should always be worn; such as a blouse or a suit blazer.  In an administrative center the dress code is less strict, and the attire is usually business casual.  Therefore the cost of a complete wardrobe change can be very expensive.

One of the main expenses that an employee can have is the luxury of eating out. I call it a luxury because not everyone can afford to spend an extra $50 to $100 per week on personal food.  The article on MSN Careers also discusses the “I’ve had a long day, and I don’t feel like cooking” excuse.  This decision adds additional dinner expenses when we do a quick fast food drive by on the way home from work.

An administrative center or call center can sometimes employ hundreds of employees, whereas a bank branch usually employs less than 30 people.  In a career location where the number of staff is smaller, the kitchen may also be smaller.  Therefore, options for bringing a lunch may be limited, and buying our lunches may become an added weekly expense.  Think of your last week at work.  How many days did you buy your lunch?

The geographic location of a new job is also something to consider along with the associated costs. When I started my career at the bank I worked in an investment call center in downtown Montreal.  As I also live downtown, I walked to work every day.  However, now that I work in the bank branch I have to drive my Honda every day to and from work.  Although my Honda Civic is generally good on gas consumption, driving in a large city is always costly in gas.  In the winter months I don’t drive my car to work.  December until March, I use the public subway which is an added expense of $70 per month for those four months.

What monthly expenses do you have that are specifically related to your job?

———
(Photo By Okko)

Is it Better to be Rich or Wealthy?

Posted on by 4

Happy Friday DINKS. As we get ready for this hot and sunny end of July weekend we will discuss our money; how we save it and how we spend it.  As I look over my bank account and investment account balances at the end of this month I find myself thinking…Why am I saving money?

As a DINK we have (in most cases) made the choice not to have children.  Therefore, who are we going to leave all this money for when we pass on to bigger and better things? On Tuesday James wrote a post titled “Wealth Building Strategies for 2010″ about building wealth.  Although the post was very informative, it made me think…if I don’t have children do I really need to save all of my extra money?

As a financial planner I always advise my clients to save for their retirement.  I also advise them to either save, or to buy life insurance for their estate, to cover the cost of all final expenses. However, if our monthly expenses are paid, and we don’t need to leave an estate legacy for our children, is it ok to spend and not save our disposable monthly income?

This brings me to ask the question…If you are a DINK should we be rich or wealthy?  Although the two may be interchangeable by some, please don’t let them be confused with each other.  Being rich means that your income substantially surpasses your expenses, and you have an excessive disposable monthly income.  But, it also means that you spend most of it.  Being rich is about enjoying life, by spending your hard earned money.

Wealth on the other hand is all about preservation, and growing your wealth. Many wealthy people live simple lives. They choose to invest their money on personal assets that appreciate in value over time; such as collectable art and real estate.  Wealthy people do spend money, but usually they get something in return.  They don’t necessarily spend it on personal material goods with nothing to show for it afterwards.

I have a client who has over 5 million dollars invested in various term deposits.  However, when he comes to see me at the bank, he refuses to pay more than .25 for his parking meter.  My client has 6 children.  Although they are all successful professionals, he still feels the need to preserve his wealth to leave a legacy for his children and grandchildren.

As we head into the weekend I ask you DINKS, would you rather be rich or wealthy?

Here are some other articles that we found around the net this week. Enjoy!

————
(Photo By RicardoDiaz)

It’s OK to Talk About Money

Posted on by 5

It may be because I work in Finance but I have never been shy to talk about money.  My friends also all work in finance. We are used to dealing with money, therefore we are all very open about money.

We discuss everything including when we are broke and how we are planning to spend our next quarterly bonus. When I say I’m broke it doesn’t mean that my bank account is at 0; it just means that I have already spent my disposable income this week.

Historically it has been a faux-pas (literal translation Do Not) to discuss money in public, outside the walls of our private homes.  However, in more recent years and especially since many people have fallen into hardship because of the global economic crisis; it has become more accepted to discuss money with others.

My whole life revolves around money. This is what I do for a living; I help people plan their money.  My sister Tara also works in the financial services industry, therefore she is also very open about money.  My sister and I discuss money with our parents all time.  We especially discuss personal finance with my Dad because he has recently retired. My Dad is currently adapting to his new financial life on a fixed income.

In my opinion people should not be ashamed to talk about money.  Whether we don’t have any money, if we are working towards building our personal wealth, or if we are swimming in our millions, people should be open to the discussion of money.

Here are 3 reasons why it’s OK to talk about money:

  1. Be proud of what you have accumulated, but don’t brag about it. You worked hard for it, but one wants to talk with a self centered bragger.
  2. Do not be ashamed about your bank account. If your current financial situation is less than a millionaires do not be shy to discuss your hardships.  Many people (I’m sure) are also living through the same situation, and therefore we can learn from the experiences of others.
  3. Advice is priceless. Before people make a decision they like to discuss their options with others.  It is ok to give your opinion on the subject of money, even if you are not an expert. It may be nice for people to hear the opinions of other people and not their financial advisor.  In the end we all make our own financial decisions.

(Photo By TaniaSaiz)

Credit Chaos

Posted on by 2

lightningOver the last few years during the financial crisis people have lost their jobs, homes, and in some cases their families.

When our backs are up against the wall, it is in human nature to look for a quick fix…a band aid solution that helps temporarily but does not heal long term. A quick solution to a personal financial crisis is to use credit in the shore term, in the hopes of finding a job in the long term and being able to repay the debts.  But, what happens when your income does not support the debt repayment?

There are usually two options (other than filing for bankruptcy) for people who are drowning in debt; a consolidation loan through a financial institution, or a consumer proposal through a credit consolidation company.

A consolidation loan is a personal loan that is authorized by your financial institution to consolidate all of your various debts into one easy payment. This is the best option for your personal score and the most hassle free choice of the three options.  However, many financial institutions have stopped offering credit consolidation loans to clients due to the high default rate.  The interest rate on a credit consolidation loan is generally higher than other types of personal loans but it is lower than the usual 19% on a credit card.

Credit consolidation loans are also very difficult to get approved. If a client is already drowning in debt, the odds of another financial institution granting more credit are very slim. I always tell my clients when they are pre approved for credit to always take it, even if they don’t need it at that time. Because when they do need it, their situation may be less desirable, and therefore the loan will not be approved. As long as the payments on a credit consolidation loan are made on time your credit score remains excellent.

There are no negative impacts on your credit score, and the only paperwork required are all of your credit card, loan, and line of credit statements.  All previous credit cards and loans/lines of credit will be closed.  Once the credit consolidation loan is paid off over a maximum of 5 years, clients can begin to rebuild their credit.

A consumer proposal is filed via a credit consolidation company. It is not a consolidation loan, as consumer proposal companies are not financial institutions.  A consumer proposal is handled by a third party who will negotiate with your creditors to lower the interest rate on your debts.  A lower interest rate means that the payments will go towards the principal debt and therefore the balance owing will be paid off faster.

Similar to a consolidation loan, all of your credit cards and loans will need to be closed.  However, unlike a consolidation loan, a consumer proposal has a negative effect on your credit bureau.  It is not the same as declaring bankruptcy but it has the same negative effect without the bad stigmatism that bankruptcy can have.

A credit consolidation company will pay off the debts on your behalf; and your monthly payments will be made directly to the credit consolidation company, along with their usual 15% fee.  The interest rates on your debts will be lowered but the fees for a credit consolidation can be costly.

A consumer credit proposal is less desirable than a consolidation loan because of the negative affects it has on your credit score.  However, if a credit consolidation loan is not available then a consumer credit proposal maybe the only option.

———
IMPORTANT: Make sure to research exactly what you’re getting into before you sign any paperwork! There are some very good banks and institutions out there that can help you out and get you back on track, but there are even more really really BAD ones that will prey on you. So please do your research and understand what you’re getting into before jumping in :)

(Photo By ElGarza)

Wealth Building Strategies for 2010

Posted on by 2

Hello All,

There is ton of information out there on wealth building on the web.  Unfortunately most of it isn’t that good.

That said, I came across this video while searching the web for tips on building wealth.   Its a half hour show from The Urban Wall Street Project – a program focused on wealth building for African Americans.  The great thing about this show is that it covers a lot of the basics of  building wealth, but also goes into some of the more advanced strategies people can utilize to build wealth.

Enjoy!

A 50/50 Relationship

Posted on by 12

heart necklace

This week I have encountered two situations where two of my colleagues, who are both women, have started dating and married men with money.

Now, one of them expects her husband to spend his family riches on her, and the other accepts her boyfriends lavish gifts with open arms.  She never demands, although she does expect. I know that we have discussed this subject before on DINKS but I just can’t stand it when women (or men) expect to have things handed to them, especially if those things are money.

I think that searching for a husband is a mission, and finding someone with money is just a bonus like finding a buried treasure.  I would never make money criteria for dating.  However some people do.  Our culture promotes money and sometimes exploits the women who are looking for it by disguising it as if they are looking for love through TV shows like MillionaireMatchmaker and TheBachelor.

Every relationship is different.  I strongly believe in an equal financial contribution into a relationship, but only if your income permits that contribution.  Of course there are other ways, such as taking care of the home, that people can contribute into a relationship.  My boyfriend Nick and I earn approximately the same annual salary.  Although since I work in finance and due to the turmoil market these past few years, his income has been higher than mine.  Despite the recent difference in our incomes I would never expect him to shower me with expensive gifts or to assume all of our housing costs.  If your relationship is not a 50/50 contribution is it doomed to fail?

Tamara is an assistant manager of customer service at my bank branch. She started dating a man about 3 months ago.  He earns almost double her annual income. He wanted to go on vacation but she can’t afford it. Needless to say, she is going on vacation at the expense of his Visa card. We were discussing tips and she said “Oh he will take care of it.”  Next Sunday Tamara leaves for Cuba on her $2300 all inclusive vacation on a private island.

Jane is the head teller at my bank branch. She married and now has a child with the son of the wealthiest client in our branch.  He isn’t very nice to her, but she stays with him so that his family can provide for her and her son.  The son has everything handed to him and now since they are married she expects the same.  She drives a car paid for by the family business, and she lives in an apartment owned and paid for by her father in law. She earns her salary at the bank and spends it on expensive material goods such as $20 Butter Nail polish because all of her living expenses are paid for in full.  She has been pushing her husband for some time to open a joint bank account, and therefore, free access to all of the money.  However, for one reason or another he always refuses.  He just pays her with a weekly allowance.

These two women have become so financially dependent on their other halves that they would never be able to survive on their own.  In my opinion this is not a sustainable relationship or good financial planning.  It is ok to depend on your other half in your time of need, but it is not ok to become financially dependent.

——
(Photo By Kanir)

Older posts

Boost Your Brand – Advertise with Us!

Advertise With Us

You cannot copy content of this page