1. Have an Emergency Fund - 6 months to a year of expenses (if possible).
2. Live Within Your Means - Save First, Spend Last.
3. Have Additional Income - Start a Passive Income Business
4. Pay down high interest debt (credit cards etc).
5. Don't Panic - Be real about risk tolerance.
6. Diversify Your Investments - Diversification can help reduce your portfolio's risk
7. Keep Your Credit Score High - You'll be more likely to qualify for financing with more manageable interest rates.

BONUS:

Implement permanent cash value life insurance into your financial plan. If you qualify, this can provide long term and tax smart savings, which can be accessed during harsh financial times. You can repay what was borrowed and put money back into your pocket. Of course you will also be able to transfer a sizable financial legacy income tax free to your heirs should you die early.

Feel welcome to contact us to learn more by tapping on the button below.

* Please note that death benefits are typically reduced if policy loans are not repaid.

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The Need For Smart Capital

Many Americans are looking towards diversifying their portfolios to hedge against the risks we've discussed.

The foundation of a diversified portfolio is an asset allocation that includes a variety of investments, but not all assets are created equal. A study by world renowned economist and Yale professor Roger Ibbotson proves that it is economically beneficial to include permanent life insurance in a portfolio as a part of the fixed income asset class1.

Few realize that the cash value of life insurance can also be considered part of this asset class and substituting it for traditional fixed income assets has the potential to improve portfolio performance and decrease volatility, earning its place as smart capital (see chart below).

As always, feel welcome to contact us via the button below to learn more about how you can use permanent/cash value life insurance as a smart financial tool, just write Life Capitalized™ in the subject line.

1 https://www.wealthmanagement.com/data-amp-tools/life-insurance-asset-class

Keep in mind that we suggest Permanent Cash Value Life Insurance as a savings alternative or supplement. When you have a long investment horizon and the risk tolerance to invest in stocks, you should go invest in stocks or other well researched investments for the potential to achieve a higher expected return.

In the spirit of saving, implementing a whole life policy in your financial plan will be noticeably better than investing in CDs and bonds in your own in a taxable account. If you must cash out early, you will get a poor return.

That’s almost exactly like investing in EE bonds, isn’t it?

I got a quote for a single premium whole life insurance policy from a well positioned Mutual Life Insurance company which has successfully kept their promises to policy holders for over 130 years. I looked into a single premium policy because it’s most comparable to investing a lump sum in EE bonds and holding it for 20 years.

This chart shows the guaranteed cash surrender value and death benefit over the years:

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