A bank draft reminder record is a great way to make sure that all charges being taken out of our account(s) are legitimate and accounted for.  On several occasions, I have ran into charges that continued for several months after they should have been discontinued.  It is either impossible or, at the very least, a terrible hassle to attempt to retrieve money that has been withdrawn from your account dating back several months or more.  A bank draft reminder record will help you to spot illegitimate drafts immediately and take care of them before the situation is out of control! 

A bank draft reminder record also helps you to keep track of HOW MUCH money should be taken out each month for various expenses.  This allows you to IMMEDIATELY detect a draft amount that is extremely high and get that taken care of immediately.  A few years ago we had a cell phone bill that was extremely high for a few months in a row.  Little did we know that we were being charged for overage text messages when we thought that our plan was unlimited.  To make a long story short, we wasted several hundred dollars simply by losing track of our account.  We could have upgraded our plan to unlimited at any time for $10 a month!!

For business owners with significant income and cash flow that are looking to SAVE ON TAX and also CONTRIBUTE HEAVILY TO A RETIREMENT PLAN, there are some wonderful options.  

The main obstacle is simply a lack of knowledge about what those options are.  Many simply set up 401k's or similar plans to keep employees happy but these plans only allow the employer to contribute very small amounts for himself that will do very little to produce the type of retirement plan that he or she desires. 

However, there are now plans available that allow business owners to benefit from the following features:

  • allows business owner to remove funds from his company for his personal benefit.
  • the company DEDUCTS the cost of the program as an ordinary business expense.
  • there is no regulatory limit on the funding for the business owner.
  • pension based plans rarely provide tax mitigation and have funding caps.
  • the program removes plan assets from the reach of company creditors.
  • the money in the program grows on a tax-free/tax deferred basis.
  • the business owner can later take income tax-free without income limitation requirements.
  • the program passes a death benefit onto the heirs income tax free.
  • the program is based upon tax code section 79 that allows for all of these benefits.

    Ya... I want more information on this!

401k Alternatives

The most common retirement options available to employees are through 401k's.  While these certainly have their place, many are not aware of alternatives that have significant advantages over the 401k.  For example, if an individual has a 401k option through their employer that matches up to 4%, but wishes to contribute more, let's say 10%, they should be aware of some options that will likely yield better returns in the long run and protect their money better as well. 

They can simply contribute the 4% that the employer will match, and take the other 6% and contribute that to a retirement vehicle that will protect the investment from any losses, and allow them to take the money TAX-FREE when they need it in retirement.  A 401k is a tax-deferred retirement vehicle, but if you are of the belief like I am that taxes are VERY LIKELY to increase in the future, the end result will be paying more taxes in the future than you would in the present.

This may seem a bit confusing, but a trusted advisor can help you to make sense of it all.  For now, suffice it to say that there are excellent alternatives to the 401k that protect your money better, allow for excellent growth potential, and have great tax advantages.  Please contact us for more details or a free consultation at info@prospersbs.com.

    Contact us today!

One of the most effective ways to fund a retirement plan for people in their 30's, 40's, or even 50's, is through indexed universal life insurance.  The concept is to simply overfund a life insurance policy to accumulate significant cash value.  The main advantages to using this vehicle to fund a retirement plan are the following:

1) Downside protection - Some IUL's guarantee a 3% return every year even if the market goes down and allow for returns up to 14% cap.  This concept has allowed for historical average returns with many carriers of around 8% and guarantees that the portion of your premium allocated to your retirement fund will gain over time! 

2) Tax free income-At retirement - You will have the option to take out annual tax free income!  This is a huge benefit as most of us believe that taxes are very likely going to increase in the future.  Let's assume that you are in a 30% tax bracket at retirement and your cash value accumulation allows you to take out a $70,000 tax free annual income.  This would be the equivalent of $100,000 that you have to pay taxes on!!

3) Death benefit protection - All along the way, you will have permanent death benefit protection to take great care of your family in the event that something were to happen to you prematurely or later in life!!

    To Learn MORE.... Contact us!

We all know that if we have bad credit we can be penalized when it comes to interest rates on our loans.  This is true for mortgage loan as well.  Here are a few  little-known tips to improve your credit scores and give you a chance at better interest rates. 

First, you must remember that this is a process and won’t change your scores overnight.  It takes time and some diligence on your part.  If you’re planning on refinancing or purchasing a new home, you’ll want to use these tips 3-6 months before you start applying for a new mortgage. 

Second, be aware of credit repair scams.  There are lots of good and reputable companies out there that really can help you, but there are also plenty of scams out there.  The Federal Trade Commission website has plenty of information on the rules of credit repair.  You should get familiar with these rules to make sure you’re not doing more damage than good, and not being scammed. 

Third, get a current copy of your credit report.  You can go to www.annualcreditreport.com and request a report from each of the three major bureaus.  You want to keep inquiries to a minimum since each inquiry can impact your score by as much as 50 points (most won’t be that impactful, but some can be).  Mortgage and auto inquiries have a 14 day window before they get counted as multiple inquiries, so if you’re shopping lenders, do so within that timeframe so you don’t adversely affect your scores.

The last tip for the day is to not close all of your existing accounts.  If you have multiple credit cards, spread out the debt onto a couple of them so none of your cards have high balances.  Then, once debt is paid off, those long-term credit lines with balances available help boost your score.  These lines of credit show that you are able to have credit available to you and be disciplined enough to use that credit wisely. 

Taking the time to be up to speed on your credit, and using little tricks like these can save you thousands of dollars over your life time, so take a few minutes and make sure you are credit savy!

Don't just go to some goofy seminar... take the time to really plan for your retirement!
Most of us have a natural tendency to think of retirement planning as something that we don't need to really worry about until we are in our 50's.  Even though most of us realize that we should be preparing for it NOW, we are usually very passive about it and allow retirement planning to take a backseat to our other priorities.

However, allow me to point out a few staggering numbers that might ignite your urgency if you are in your 30's or 40's, or even younger.  

If a 45 year old female starts a life insurance policy funded as a retirement plan at $300 monthly, she would be projected to have $125,711 in her retirement account after paying in $75,600 at age 66, along with a death benefit all along the way of $250,000.  This would allow her to take out $14,464 annually in tax free income beginning at age 66.  

In contrast, another female at age 35, with the same contributions and death benefit, would be projected to have $266,726 in her account at age 66 after paying in $80,511, allowing for a tax free annual income of $31,283!!

As you can see, timing is everything in retirement planning!  The best time to plant a tree was 20 years ago, but the second best time is today!  Please contact us today for a free consultation at info@prospersbs.com or call 855-876-5252

    Don't wait any longer!

What is it?

A pre-need plan is a dedicated funeral fund used to pay the predetermined expenses of a funeral, cremation or burial. Many people have chosen to make funeral or cremation arrangements prior to their death due to costs. These arrangements are commonly referred to as funeral preplanning, prearranging, pre-need, or a dedicated funeral fund.

Funeral preplanning can offer peace of mind - knowing that your wishes will be respected and that the family has fewer burdens during a time of grief.

Others find that by pre-funding their funeral and burial expenses, any additional life insurance they already have purchased may be used for its original purpose and not for funeral expenses.

Why should I get it or think about getting it?

No one likes to think about death, let alone plan for it. In many families, discussing one's mortality is an extremely uncomfortable topic. But it is a topic that should be discussed and planned for well in advance of your death.

By pre-planning your funeral, you relieve your family of having to make important financial decisions during a period of great stress and grief-a time when people aren't thinking very clearly and may not know what to do because you never made your wishes known.

It's easy to say, "Don't make a fuss. I don't want a ceremony. Just bury me and be done with it." But it is important to realize that the ritual of a funeral and/or memorial service isn't for the deceased but for the living. It is a time when friends and family can gather together to grieve openly and to provide support for one another.

Pre-planning your funeral can be very informal, and as simple as following a pre-planning checklist (Below) and sharing your wishes with a family member. More Formal arrangements in the form of a preneed contract can be set up with a funeral director and pre-funded through life insurance, bank trust agreement, or another method.

Pre-planning, when done properly, can give you peace of mind because you know that your arrangements are ready and pre-funded.

Pre-planning Checklist
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College is EXPENSIVE!!!! The best way for a parent to help their child pay for college, without either the parent or the child going into debt with loans, is to start saving early. Early means the younger the better. with compound interest the longer the period over which you save the more the savings grow. Also the longer the period in which you contribute the smaller the incremental payments.

Assuming no interest, if you were to calculate that $40,000 will be needed for college and you begin putting the money away monthly two years before the child begins college you will have to sock away $1,666.67 per month for 24 months. However, if you start 18 years before you only have to save $185.19. Remember this is without interest. If you factor in the interest that the savings will earn, the monthly payment will be less. Again, the longer the period, the greater the impact of the interest, so the sooner you start the less you will have to contribute each month to reach your goal.

There is always the dreadful fact that there is always a TAX when you have a savings account. This is where Life insurance on the child comes into play.

Life insurance on the child gives a parent both tax sheltering and flexibility in the use of the funds. There are three parties to a life insurance contract: the insures, the owner and the beneficiary. When the child is born the parents take out a policy on the child. Assuming the child is healthy, the parents can purchase a very large policy for a relatively low premium payment. The child is the insured but the parents are the owners and can make themselves the beneficiaries. As payments are made cash builds up in the cash portion of the policy. Under the current Tax laws, the investment income generated by an insurance policy are not subject to income tax. So the cash value grows tax free. When the child is ready for college the parents can cancel the policy and withdraw the cash value or keep the policy and borrow the sash value at a low interest rate. If the child decides not to go to college the parents as owners of the policy , can keep the money in the policy or withdraw it and use it for something else. At some point the parents may want to transfer ownership to the child but they are not required to do so.

Life insurance on a child is not for everyone. However, it is one option that can be considered when planning for your child's college education.

One common obstacle for retirement is a poor performing 401K or 403B.  Many of our clients have 401K options from their employment that they are participating in or contributing heavily to.  They face significant penalties for withdrawing money prior to age 59 1/2.  Well what is one to do if the market drops heavily and you see a large chunk of your retirement nest egg suddenly flushed down the toilet? 

Recently I spoke with a man about 12 years from retirement who just lost over $50,000 of his $300,000 retirement account.  He was devastated by the loss and frustrated that he could do nothing with the account for about 6 to 7 more years.  However, he was contributing about $500 more monthly than what his company was matching.

So the good news is that he can open a new retirement policy with the extra money, get protection from market losses while still allowing for market gains, and continue to get his company match through the 401K!!  And even better, he can set himself up for tax-free income from the 2nd account in retirement.  Sound too good to be true?  Once you find out the details you will discover that it is true, and the numbers are staggering!!

My last few articles have been on the topic of the personal balance sheet.  A while back I read about the concept of the personal balance sheet and one’s net worth being compared to a bathtub.  I can’t remember which book it was in, but here’s a shout out to whoever came up with the analogy.  Here’s how it works: You have the faucet and the drain.  If you’re thinking financially, you’ve probably already figured out that the faucet is your income, or money coming in, and the drain is your expenses.  The end goal is to get the bathtub as full as possible.

Obviously, if the drain is wide open, there’s a fair chance that the tube will never fill up because water is leaving as fast as you can get it out of the faucet.  Conversely, if you close up the drain and crank the faucet wide open, the tub will overflow pretty quickly.  If only it were so easy in real life, right?

The same concept does apply in our financial lives.  It’s important to keep more coming in than going out.  Our culture tends to think that budgeting is for those with a weak faucet, and those with a weak faucet think they can’t ever be rich.  This is the doing of advertisers selling their goods.  You have to remember that this is your REAL life. 

Any financial decision you make needs to take into consideration the effect it will have on your net worth.  That brand new car will be awesome, but it could slow the rate your bathtub is filling up, so maybe it would be better to buy a nice used car instead.  Don’t get caught up in the race with the Jones’s just to end up with an empty bathtub down the road.  Don’t fall victim to the idea that a wide-open drain signifies a full bathtub.  There are plenty of people out there spending every dime they get.  Once the faucet shuts off, and it does for all of us, these people are going to with they’d kept the tub full

The end discussion here is that you don’t have to have a huge faucet of money to “get rich”.  You also don’t have to completely plug your drain.  You just need to consider each decision in the context of your bathtub.  “Is this going to help fill up my bathtub, or is it going to drain my bathtub?”  Instead of thinking about what that next paycheck can buy today, think about how you can build wealth and protect against a rainy day with that paycheck.  In time, you’ll become one of the “millionaire next door” types who has learned to control their money, rather than their money controlling them.  Here’s to getting wet!!!