Handing in My Resignation

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This is another post about changing jobs that were instigated by a phone call from a friend who was thinking about handing in his resignation and moving to another job. You can check out my previous posts – “Should I Change Jobs” and “Leaving a Job, Talk to an Adviser” which cover those topics and some of the things you should consider before making the decision to change jobs.

Handing in My Resignation – Do Not Burn Bridges

This post is focused on handing in your resignation, once you have done your homework and have made the decision to leave your current job. There are many ways to resign, however, the bottom line is that you never want to burn any bridges. In my experience, I have found that over the years you work with many people in many different companies and functions. Over the years you work with these same people many times even if you change jobs. You never know when good contact, a friend or a colleague can help you with a project, or the next job.

Handing in My Resignation – Be Professional

Always be professional, especially when you are handing in your resignation. Wait until you have a firm offer from the new company and then turn in your resignation to your boss. The personal touch is always best. By that, we mean to set up a meeting and do it in person or over the phone if they are in another city. Then provide the written signed letter of resignation. Keep your letter short and to the point and provide a final date, which will indicate your last day.

You should also extol the virtue of the company, the colleagues, and your experience and learning at your old company. Never say anything negative in your letter or even verbally. This is all part of networking, not burning bridges, and keeping your relationship professional!

How Much Notice Do I Need to Provide

The amount of notice varies a lot depending on the local laws, the company, how you feel about the company, even the level you are at within the company. If you are trying to maintain excellent relationships, giving a longer notice so they can find someone to replace you and you can transition to may put you in good standing over the longer term. Some people will bounce back and forth between companies a lot. Keeping a professional flavor to the relationship is always the best approach.

Some companies are very concerned about security and this really depends on company policy as well as the type of job you have. Some companies will accept resignations and walk you to the door because they are so concerned about security issues, while others will take advantage of the last few weeks to learn as much as possible from you. Whichever occurs don’t take it personally, it is just business and company attitudes about the security of information.

Being Nervous, Feeling Like You Are Letting the Team Down

Many people have a professional and nonprofessional relationship with their teammates at a company. If you are working on a project you may feel that you are letting the team down by leaving. You may even feel that you are letting the company down if they have treated you well over the years.

Sure some people will be disappointed that you are leaving and will be sorry to see you leave. Your boss may even be upset. Not because it is you that is leaving, but because he or she now has to replace you and find someone to fill in for you.

Members of your team, even your boss will be happy for you especially if you are leaving for a better situation. Whether it is better pay, less stress, more benefits or even a more interesting job, they will be happy for you. They might even be a bit envious and some will want to stay in touch so that they too can follow you, especially if they can improve their financial situation.

So bottom line, don’t be nervous and don’t feel guilty about handing in your resignation.

Say Nice Things

Before you leave as well as after you leave, always say nice things about the people and the company. No one wants to listen to a negative tirade about how bad it was at some other company. You never know when it might come back and cause you problems in future jobs, future sales, or future relationships.

If a job, company, or colleague is really not that great, then do not say anything at all. People will still get the message, and you will not be blamed as being negative or worse sued for libel.

There are some situations that are just not tolerable and this situation forces you to leave. If it is illegal, then you really should do something about it. Regardless you want to get as far away as fast as possible from this situation. Avoid being caught up in something that is really not good for your career and/or even freedom.

Feel free to leave comments and suggestions about this post, handing in resignations, changing jobs, etc. Our readers will benefit from constructive helpful comments.

Leaving a Job, Talk to an Advisor

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Leaving a JobOur last post was about a friend of mine who was contemplating leaving a job that they had been at for over 20 years. There are all kinds of issues to consider in making this kind of decision and we listed some of them in the post – Should I Change Jobs.

This post is more focused on what should I do when I change jobs about the pension money that is given to us when we leave a job. In Canada, you are not just handed the money, instead, the law requires that these funds be placed in a locked-in RRSP which you can only gain access to at age 55 or later. Even then you can only take out a certain percentage each year, around 6.5% initially. There are some laws that let you transfer some of the funds to a regular RRSP at a later date.

Leaving a Job- Talk to a Financial Adviser

This is where you need to get really serious about your retirement planning. You are leaving a company, they are giving you the vested amount of your pension and it will be locked into an RRSP. How should you invest it? What risk should you take? What are the regulations about withdrawals? There are loads of questions such as this which only someone in the business working every day on these subjects can really help you with.

Find a good financial adviser, who knows what they are talking about and is not just trying to sell you stocks and mutual funds. In fact, it is a good idea to interview several before making a decision about where you should place your investments.

Talk to friends, business associates, and professionals. Don’t just take one answer because it sounds good or they sound really confident. You need to collect as much information as you can and make your own decisions about what is right for you.

Even this post and blog is only one source and we blatantly will tell you that we do not have all of the answers. Each person is different, has different requirements, and different goals. Investigate and make the most informed decision you can.

Once You Have Made a Decision, Monitor Your Investments

This is so important. You cannot just make your investments and then walk away without tending to them on a regular basis. Treat your retirement plan and investments like a garden. It needs regular care, weeding, and watering.  So does your retirement RRSP.

Weed out the poor performing stocks, mutual funds, and any other investments you may have. Evaluate your risk tolerance. Invest in new growth investments, and collect dividends and interest on a regular basis. Pay attention to the investments. Never place it all into one stock or mutual fund, diversify and avoid high-risk investments unless you can afford to lose it all.

Meet with Your Financial Adviser

Starting a new job is always stressful, and leaving a job is also stressful. Just look at the issues to consider that we discussed in the previous post – Should I Change Jobs. However, this will pass. You will get settled into the new job. Get to know the people. Learn what you need to learn. Perform at a level that meets the needs of the new organization you moved to.

Once this period is over, and it should only last 3 to 6 months at the most, set up regular meetings with your financial adviser. Review your investments and assess the health and income that you are receiving from your investments.

This is so important and most advisers will initiate these meetings as well. However, if they do not do this, then you need to take the initiative. Meet with them on a regular basis. Review your statements. Make sure that everything is invested in a manner that meets your needs.

In summary, when you have answered the question – Should I Change Jobs – the next step is huge in the sense that now you are responsible for managing your retirement fund and making sure that you have enough money to retire and live the quality of life that you need and want.

Comments about this post are welcome as are ideas and subjects that we may not have considered.

Discuss Finances with your Spouse

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Discuss Finances with your SpouseMy friends in the financial planning business routinely tell me about couples who do not share information with each other about their finances and how one spouse or the other has no clue about what would happen to them financially if the other spouse were to suddenly pass away. Discuss Finances with your Spouse. A car dealer also told me that routinely many guys will come in and purchase a car, which is a major purchase. They do not even tell their spouse about it before completing the deal. Another friend of mine was looking for some advice about investments. So I sat down with him to go over what his options were.

I expected his wife to join in and at least listen. She not only did not join in the conversation, she said she had no interest in the subject and felt that her husband would make all of the right decisions. What a mistake in my opinion. In fact, now he has been diagnosed with short-term memory loss and probably does not even remember the conversation that we had with each other. This is another reason both spouses should be involved and at least know what the other is doing. Now she has no idea of what he is doing or has done and must investigate at some point. all of this could easily be prevented. It does not mean that she has to make the decisions in this case, but at least know where everything is, how much money is involved, and what the investments are.

Discuss Finances with your Spouse – Get in Involved

Even my own wife will not get involved in the details, although I have introduced her to our financial adviser and I routinely discuss investment changes with her, I know she is only half listening.

It is a well-established fact that women live longer than men. Chances are that your wife will have to deal with the aftermath of your investment planning. Doesn’t it make sense that she should know what is going on? I purposely used these genders in the previous sentence, since this appears to be by far the norm. With baby boomers retiring in droves it is even more important that everyone take more interest in planning their retirement years.

Men and Women have Different Goals and Objectives for Retirement

It should not be surprising that men and women have different ideas about retirement. Even though you have been with your spouse for many years your plans and opinions about what you would like to do in retirement may be quite different.

The only way to get at this is to start talking about your finances and your plans. Using a financial plan as the catalyst is a good way to start. A financial plan requires assumptions to be made about your needs for retirement. So discussing these assumptions will go along way to getting each other engaged in planning your finances.

Two Heads Better than One

Two heads are better than one anyway and I have definitely found that with my own spouse. Some of her desires are different from mine. She has come up with ideas and suggestions that I would not have thought about.

Sometimes when you state an assumption and someone asks you to justify that assumption, you are going to find out that you cannot. This challenge is good in that it makes you think things through better. So take challenges in a positive light and not as an affront to your planning skills.

Discuss Finances with your Spouse – Who Is Dominant

This subject may seem archaic. However, in every relationship, one spouse will be more dominant than the other in various areas. If one cares more or has more expertise, let them take the lead. However, never relinquish the topic solely to the other spouse. You need to stay involved for the reasons I mentioned earlier. Make a contribution to the discussion.

Your dominant spouse will appreciate your input and thoughts. Keep a mature attitude about the subject. Do not let your emotions get the better of you.

It is not easy to do a financial plan emotionally with your spouse. But it is well worth the effort. Once you have all of your assumptions made and the facts about your current situation identified, developing the financial plan is pretty simple! Use a third-party to assist in developing the plan. They can act as the common sense expert to help you through this emotional process.

Baby Boomers Retiring

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Baby Boomers RetiringBaby Boomers retiring in droves and the banks are issuing study results galore about retirement and baby boomers who will be flooding the market over the next several years looking for something to do. The first wave of baby boomers turns 65 this year. As a result, if they have not already retired prior to 65, then many will begin retiring this year.

The banks do all of these studies and report the obvious. Many are concerned about retirement. What will they do, do they have enough money? Will they be bored and will they go back to work? The answer is yes to all of the questions. Also no to all of the questions. It really depends on the person and the situation that they are in.

How Silly Are These Surveys?

I have a neighbor who retired last year at 65. His wife has been retired for several years. She is a retired teacher and he retired from a senior job at the government. We chatted one day. He expressed the concern that they do not know if they have enough money for retirement! Well of course they do,. But it comes down to lifestyle and how they want to live their life after retirement.

So forget all of these so-called surveys and focus on your situation.

Baby Boomers Retiring – Plan For the Future Now

Regardless of age (if non-baby boomers are reading this post, then you should pay attention to this part), you should have a financial plan. It does not have to be complicated. Basically, you need to assess what your retirement lifestyle desire will be in real terms. Then map out a financial plan to help you achieve your goals.

The later you start this plan the more difficult it will be for consumers to achieve their objectives. Starting early makes it very easy. While starting at 65 really means you must live on what you have and the pension income that you take in. A financial adviser can assist you with the development of the plan in terms of the numbers. However, you are the one who must do the work along with your spouse. Decide what kind of lifestyle you want and what you can afford.

Health

The bank surveys also show those baby boomers are concerned about their health and what impact their health will have on their retirement. Obviously, if you are in ill health, you are not going to be able to some of the things you planned on. All you need is one serious bout of sickness to make you realize that life is precious and you had better enjoy it as much as possible while you can.

Once you have a stroke or some other debilitating problem, no matter how much money you have, you are not going to be able to do all of the things you planned on including travel, sports, etc.

In Canada, medical costs do not play as significant a role as they do in the US because the government covers our routine medical costs. In the US, if you get sick and have no coverage, then you run the risk of either being totally broke or you do not get treatment and you die prematurely from something that is easily treatable.

Baby Boomers Retiring – Summary

The bottom line is to plan for your retirement taking into account your lifestyle needs and desires along with the amount of money you expect to have available during retirement. The two will have to be balanced no matter how much money you have. Apply a business-like manner to managing your assets and grow them to ensure that you have what is needed for retirement. For baby boomers, it is never too late to develop your plan, however, you will need to limit your objectives in order to meet your goals and objectives for retirement.

Enjoy your life now. If health issues become significant, they will put more of a crimp on your activities than money ever will, so figure out what you want out of life and go after it while you still can.

 

 

 

 

Age 60-Do You Have Enough for Retirement

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Do You Have Enough for RetirementOk, this is a question that everyone wants to know the answer to. Do you have enough for retirement? The answer is different for every person, since it depends on their financial situation, their pension plan if they have one, and their savings in registered plans and nonregistered plans, and whether they own their own house or not.

Let’s assume you are 60 and thinking about retirement and wondering if you have enough savings set aside. To start with if you are 60 today and in relatively good health, there is a good chance you will live for another 30 years. If you work to age 65, then you will have 25 years that you will need to live on your retirement funds, pension, and social security benefits.

Average Account Balances

According to recent studies, consumers in their 60s had an average account balance of $144,000 at the end of 2009 savings. This is a very low number and may not take into account savings in non-registered plans, homes, cottages, etc.

If you are married and your spouse also has some savings, then you might be a bit better off, so before you get really paranoid about retirement savings, make sure you take into account these other factors. Where will your income come from? Here is a list of items to consider for both you and your spouse:

  • Company pension
  • Social security
  • Registered plans ( 401k’s, RRSP, etc)
  • Non registered savings
  • Sale of cottages, 2nd homes, etc
  • Sale of investment properties
  • part-time jobs

Complete your own inventory to assess what you may have in terms of annual income based on the list above. If we missed some, please let us know by leaving a comment on the blog at the end of this post.

If you find that you do not have enough savings and/or income, here are several steps you can take to begin rectifying the problem. Note that you are starting very late if you are 60, but better than not at all, right?

Do You Have Enough for Retirement – Build a bigger nest egg

If you are in your 60s and all you’ve got saved is $200,000 in a registered plan, you may not have enough funds to live on.

Using a common rule-of-thumb withdrawal rate, you would withdraw 4% of your $200,000 nest egg in the first year of retirement, or $8,000. That amount is likely to be inadequate. If you do not have other sources, then this amount is not enough and you really do not want to touch your principle if you can avoid it. What to do?

Reducing consumption now and saving more is the only real answer we can give. This is all about your personal comfort and quality of life during retirement and it is important that you take control of it now to try to make some level of quality of life work for you that is acceptable.

The rule of thumb currently is that you need about 30 times in assets of the initial withdrawals during the first year of retirement. For example, if you need $50,000 per year indexed to inflation starting at age 65 until age 95, then you need $1,500,000 in your portfolio at age 65. This is a far cry from the $200,000 average savings that many people have. If you can reduce the $50,000 by accounting for pension, social security, and other income, the amount of savings you will need will decrease accordingly.

Check your asset allocation

It is time to be conservative with your investments and focus on generating income from your investments. You cannot risk investing in speculative stocks and you need the income. Triple A bonds and blue chip stocks with a history of paying their dividends and increasing their dividends year over year are good things to consider.

Diversify your savings. Do not put all f your savings in one investment and do not chase that too good to be a true, sounding investment. You cannot afford to lose everything in something that is very risky. Speak to several advisers and form your own opinion. Don’t follow someone’s advice blindly.

If you are concerned about risk, GICs are the safest investment, however, they do not pay very much in terms of income. You will be able to sleep at night!

Find out what your limits are in terms of contributions to your retirement plan and contribute the maximum every year until retirement to maximize your savings for retirement.

Do You Have Enough for Retirement – Delay retirement

Now, this is an ugly thought, especially if you are planning to retire shortly. However, if you do not have savings and income, you may not have any alternative. Delaying retirement for several years can make a huge difference in terms of spending, savings, and your own well-being. You also delay the draw down on your savings as well which will benefit you over the life of your retirement.

Many people enjoy getting out every day to mingle with people and it gives them something to do.

Semi-retirement might also be an option for some folks. Working three days a week for example still generates some income. But also allows more time for you to explore your interests and spend time with the grand lids. It also keeps you sharp in terms of the business world as well. They say that you need to exercise the body as well as the mind to lead a fit life well into retirement.

Delay taking Social Security

Taking social security early comes with a price. Most plans as well as pension plans penalize the retiree by reducing the amount of money they pay out each year if they retire early. Every year you delay taking your pension or social security benefits will provide you with an increase in your payments, which can be a huge benefit in later years.

One last point to consider if you do plan to take your pension and social security early. If you are also planning to work, your taxes could claw back some of these benefits depending on how much you make.

Check with an investment adviser or pension specialist to assist you in any of these decisions.

Secrets to Retirement Planning

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Secrets to Retirement PlanningEveryone wants to have a comfortable retirement. A healthy retirement and to be able to take advantage of the free time they now have.  Like everything else, you can increase your chances of achieving these goals if you plan for retirement. The Secrets to Retirement Planning are pretty simple once you understand them. Plan financially, emotionally and look after your body as well. The fundamentals of meeting these goals are pretty straightforward:

  • Sufficient funds to do the things you have always wanted to do
  • Healthy bodies and minds
  • Interesting and challenging things to do

If you have these three things, chances are all the details will work themselves out, and you will have a wonderful retirement. Sure, there will be challenges along the way, family issues, and surprises you could not predict. However, if you have dealt with the retirement planning issues of money, health, and interests, you should be able to weather these small storms.

Secrets to Retirement Planning

Let’s take a look at these three areas in more detail.

Sufficient Funds

The answer for everyone is, of course, different. You need sufficient funds in your retirement to meet your basic needs for a safe and healthy life. Beyond that is what you really need to enable you to meet your retirement goals.  Starting when you are younger and setting aside at least 10% of your salary every year in savings should get you to where you want to be when you retire.

Of course, you will have to save more if you have lofty goals. Develop a plan based on your current lifestyle and spending habits. Calculate how much money you need to save based on the year you retire and the expected life span. Assume a conservative interest rate as well, forcing you to save a bit more. With these basic tools and plans, you should find yourself in a good position come retirement.

Follow the basic rules of diversifying your investments, never put all of your investments in one basket, if it sounds too good to be true, then it probably is, and try not to chase speculative investments; invest for the long term.

Healthy Bodies and Minds

This is probably the easiest for many people. All you need to do is exercise the body and mind to stay sharp and enable you to enjoy all of the things life offers well into your old age. Too much of a good thing is also bad, so 3 days of exercise for 30 minutes each week is probably sufficient for most people. Overdoing it, as in seven days a week marathon running, for example, will probably wear out your joints well before you usually would. Who wants to go through knee or hip operations with the associated immobility?

Swimming is an excellent low-impact exercise and is great for sore knees and hips. Even if you are not a good swimmer, just getting out and being active in the pool is great exercise. Consider some of the swim gym classes as well, where you exercise in the water.

You also need to challenge the mind and keep it sharp. Working will help with this as long as your job requires some thought. Experts indicate that doing crossword puzzles, playing games, and working on various projects will also help to keep the mind sharp. How about doing math to keep your mathematical skills high? You can impress the kids at the store by adding up your costs before they can punch it into the cash register. Did you ever notice that when the cash register is not working, most have no idea how to add it?

Interesting and Challenging Things to Do

If you become a couch potato, you are probably headed in the wrong direction. When asked what he was doing in retirement, one friend of mind answered by saying he gets up in the morning, has his coffee, reads the paper, and watches the grass grow! This indicates someone who has no outside interests and is bored. Needless to say, his friends were appalled. Fortunately for him, he was able to land some small contracts which will keep him going for a while; however, he needs to find something exciting and challenging to occupy his time.

It does not matter what it is. Go back to work, take up some hobbies, volunteer, travel, do something. The only essential criterion is to make sure you look forward to getting up in the morning to tackle what you have planned for the day. Of course, if travel is on your list, you also need to be able to afford it.

Don’t wait. Start planning for your retirement when you are young, and you will be sure to have a very successful, enjoyable retirement lifestyle! Comments are welcome!

A Will In Your 20’s or 30’s!

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A Will In Your 20'sMany young people think of estate planning and financial planning as something only seniors must do. A Will In Your 20’s? The truth is, if every adult with a spouse, child, or business, regardless of age, had solid plans in place when they were young we would all be very well off during mid-life and into our senior years. People with A Will In Their 20’s and 30s are in the prime of life. They have a lot of years to set aside money for later. If you start early then you do not need to set aside very much each year. You can end up with a really nice nest egg.

Young people marry, start a family, and buy a home. Some will also start or buy a business so there are a lot of pressures on the financial side of life. This can be made easier if you have a solid financial plan, an estate plan, and a will to protect you and your young family.

A Will In Your 20’s or 30’s

Whether we realize it or not we all need to think about the following as we take steps in our lives:

  • Getting married
  • Having Children
  • Buying a home
  • Saving for retirement
  • Buying life insurance
  • Starting a business
  • Preparing a will

A Will In Your 20’s! And Having children

Once you have children, you have taken on a huge responsibility that goes on whether you are alive or die in an accident. One of the ways to ensure that your child has the life you had hoped for them is to have a will that states how your assets will be used to support them and who will look after them. If there is no will, someone in the government will decide who will raise your kids and how the money will be used.

Your will can also state how the funds will be used to support the kids when they have access to the funds and who will manage the funds until they are old enough to manage the funds themselves.

Buying a home

When you buy your home, most couples will do so in a joint tenancy which means that if one dies, the other takes over the ownership of the home automatically, called a right of survivorship. The house remains out of the estate and probate is not required for its transfer to the surviving owner meaning you pay less probate or death taxes as a result.

Without joint tenancy, you have tenancy-in-common which doesn’t provide a right of survivorship. The half of a house owned by a deceased tenant-in-common falls into the deceased’s estate, where it’s subject to creditors, claims, and delays.

Saving for retirement

Savings plans for retirement should start early in life. Investors should consider how these assets will be handled in probate. Plans in some situations can be transferred to spouses tax-free. In the early years when you do not have a lot of savings, many people will take out insurance coverage to protect their families should something happen to them.

Buying life insurance

Leaving a life insurance policy to a spouse directly also keeps the insurance proceeds out of the estate. This ensures that there are funds in the spouse’s hands no matter what is going on in the estate. This is better for the spouse. On the other hand, there are excellent reasons to name the estate as the beneficiary of a life insurance policy. The main benefit is that it provides cash in the estate that can be used for paying taxes. Or paying debts (such as paying off the mortgage on the couple’s home).

Life insurance can also be used to provide money that can be distributed to one of the children. For example, the deceased was leaving his or her major asset – a business or farm, for example – to one child. If they didn’t have enough assets to give a similar amount to another child. Another use of life insurance is to create funds for holding property such as a cottage in trust.

Life insurance is much cheaper at younger ages than it is when people are older. Young people should consider the various ways that life insurance can be used to their advantage. It can replace income. It can pay out a mortgage, leaving the widowed spouse with a clear title to the home. Also, it can provide funds to leave in trust for the children. It can provide cash flow to be used to pay taxes and expenses.

Starting a business

Finally, young people are tying up a great deal of time, effort, and capital in a business. They must plan right from the start to protect their families in the event they pass away prematurely. If the business is incorporated and there are other shareholders, there should be a buy-sell agreement put into place. It should clearly state what happens to the shares of a deceased shareholder. Often the agreement provides that the other shareholders will buy back the shares. In a fledgling company (and often in more established ones, for that matter), this probably means that a life insurance policy owned by the company will be taken out on the shareholder’s life.

Start your planning today. Talk to a financial adviser and assess what your next steps should be. Enable a high quality of life during retirement as well as high quality of life for your family should something happen to you.

Why you Need to Have a Will

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Why you Need to Have a WillWe have had a will ever since we were married which has been over 35 years. It was just the smart thing to do. We wanted to make sure that our kids and significant other were looked after in case something happened. However every once and awhile we run into someone our age who does not have a will. Why you Need to Have a Will? We are amazed that they have not done something about this major issue. Perhaps they just have not thought things through. Or they have this silly emotion that it puts you one step closer to the grave. You would be surprised at how many people actually think this.

Why you Need to Have a Will

If you are a responsible adult, then it is time to step up and do the right thing for your family. If you need to make some tough decisions, then make them, but get on with it. Here are some of the reasons why you should not delay this one more day!

  • Your kids
  • Your home
  • Saving for retirement
  • Purchasing insurance
  • Business ownership
  • End of life decisions

Having a will is only a part of estate planning. We will focus on this element on this blog, but please give some thought on how you want your estate dealt with in preparation for the time when you can no longer make decisions.

Many of us think of estate planning as something only seniors must do. The truth is, it’s essential for every adult with a spouse, child or business, regardless of age, to have solid plans in place. People in their 20s and 30s are in high gear. They may marry, start a family and buy a home. Some may start or buy a business. It’s all about getting started in life and nobody wants to think about taking their foot off the accelerator.

Having a will can provide some protection for the important people in your life  and assets that you have.

Why you Need to Have a Will – Children

If a young couple is killed in an accident, their young children must be raised by someone else. If the parents haven’t made wills, they have lost the opportunity to choose the new guardians of their children, and to have the children raised together in one family with someone they know. Most parents, confronted with the choice, would rather not have extended family members dispute guardianship in court. And certainly not many would want to risk the children becoming wards of the government.

Using a will, the parents can also make provision for money to flow from their estates to the guardians of the children to help pay for raising the children. This could be vitally important if two or three children are left behind to join a different family that already has two or three children of its own.

Buying a home

Even young people without children should plan ahead for a premature death that leaves one of them widowed. As mentioned, a will is essential – but estate planning doesn’t stop there. Some assets are not governed by a will, namely jointly held assets and assets with designated beneficiaries. It’s important that everything works together.

One of the largest purchases a young couple will make is a family home. They must understand the legal effect of a jointly owned home as opposed to a home held as tenants-in-common. An incorrect title can have a devastating effect if it causes a widowed person to lose his or her home as well.

Joint tenancy, which is by far the most common way that couples own their property, provides a right of survivor ship to one owner when the other passes away. It keeps the house out of the estate; probate is not required for its transfer to the surviving owner. Tenancy-in-common doesn’t provide a right of survivor ship. The half of a house owned by a deceased tenant-in-common falls into the deceased’s estate, where it’s subject to creditors, claims and delays.

Saving for retirement

Couples often start contributing to RRSP’s when they’re young and they need to understand the legal, tax and financial effects of naming a beneficiary. They also need to consider who will be named as the beneficiary of life insurance policies. Leaving insurance proceeds directly to a spouse will have quite a different effect than leaving them to an estate, depending on what else is going on in that estate.

Because assets of a deceased are deemed to have been sold immediately before death, any tax that has been deferred becomes payable. RRSP’s are funded with pre-tax dollars, so on the death of the owner, the deemed sale triggers the payment of taxes on the RRSP. The payment of this tax can be avoided on the death of the RRSP owner if he or she names a spouse as the beneficiary. When a spouse is named, the payment of tax is deferred again – until the spouse dies or takes the money out. This also protects the spouse in the sense that the RRSP doesn’t fall into the deceased’s estate so it is safe from claims, creditors or litigation.

Buying life insurance

Leaving a life insurance policy to a spouse directly also keeps the insurance proceeds out of the estate, ensuring that there are funds in the spouse’s hands no matter what is going on in the estate. This is better for the spouse. On the other hand, there are excellent reasons to name the estate as the beneficiary of a life insurance policy. The main benefit is that it provides cash in the estate that can be used for paying tax or paying debts (such as paying off the mortgage on the couple’s home).

Life insurance can also be used to provide money that can be distributed to one of the children. For example, the deceased was leaving his or her major asset – a business or farm- to one child. They didn’t have enough assets to give a similar amount to another child. Another use of life insurance is to create funds for holding a property such as a cottage in trust. So it’s very individualized depending on what the person is planning to do, and based on what assets already exist.

Life insurance is much cheaper at this age than it is when people are older. Young people should consider the various ways that life insurance can be used to their advantage. It can replace income. Life insurance can pay out a mortgage, leaving the widowed spouse with clear title to the home. It can provide funds to leave in trust for the children. It can provide cash flow to be used to pay taxes and expenses. Young couples should ensure that they are neither under-insured nor over-insured.

Starting a business

Finally, young people who are tying up a great deal of time, effort and capital in a business must plan right from the start to protect their families. If the business is incorporated and there are other shareholders, there should be a buy-sell agreement put into place that clearly states what happens to the shares of a deceased shareholder. Often the agreement provides that the other shareholders will buy back the shares. In a fledgling company (and often in more established ones, for that matter), this probably means that a life insurance policy owned by the company will be taken out on the shareholder’s life.

Living Wills

You might be incapacitated by an accident, stroke or some other complication. Who do you want to make the decisions about your care and medical treatment? How far should they take the treatment in terms of trying to save your life? These are all questions that you do not want to leave up to just anyone. It should be someone you trust and not a court appointed bureaucrat!

Making Money off Blogging

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Making Money off BloggingThis is a re-post of an article I read on Market Watch about Making Money off Blogging. It is re-posted here in it’s entirety. We posted this article here since many of our friends wonder about what Adsense and blogging is all about and why would I spend so much time working on something like this. It is foreign to the entire concept of going to an office, getting a paycheck and not working for your self. I thought that maybe they would see this and understand a little bit more why I blog:

Jan. 12, 2011, 12:01 a.m. EST

Making Money off Blogging

Successful bloggers describe how they made a go of it

By Marty Orge

SAN FRANCISCO (MarketWatch) — Blogs are an ever-growing presence on the Internet, but can you make money in this crowded field? Certainly, some people do, and a big part of their success is choosing the right topic to write about — and then sticking to it until the audience, and advertisers, come.

There were 126 million blogs on the Internet in 2009, the most recent figure available, according to Pingdom.com, which tracks Internet growth. Some provide a healthy income for their authors.

Start with passion, and the money will follow, said Joel Comm, a new-media marketing strategist in Loveland, Colo., and author of “KaChing: How to Run an Online Business that Pays and Pays.”

“Niche is the way to go, and micro-niche is even better,” Comm said. “To be successful with a blog you need to find your passion.” Successful bloggers want to write about whatever they’re passionate about, he said, even if they don’t get paid.

For example, if you love dogs, there’s a niche. “I’m partial to Yorkshire Terriers,” Comm said, “so I could blog about Yorkies, defining my niche even more,” he said. “Find a topic where you can display your knowledge and become the blogging expert about it.”

Not always about the cash

For Neal Schaffer, who earns $100 a month from blogging and gets 20,000 visitors each month, it’s not about the money. Blogging is a way to attract potential clients.

Schaffer is president of Windmills Marketing in Newport Beach, Calif. He blogs about social-media strategies for professionals and businesses at WindMillNetworking.com.“Because I built a trustworthy relationship, people reading my blog are ready to purchase services I offer. Blogging is free advertising for my business,” he said. “It is in my consulting and speaking business where I make a living.”

Schaffer uses Google AdSense and affiliate marketing programs. Google offers AdSense, which delivers ads, free to site owners and bloggers. Payment is usually based on how many visitors come to the site or click on the ads. Affiliate marketing programs pay bloggers when visitors click on their proprietary ads.

Praveen Puri

is a financial and software blogger in Aurora, Ill., and author of “Stock Trading Riches.” He earns an average of $250 a month from four blogs, including Simple-Trading-System.blogspot.com and unix-simple.blogspot.com.

“I make about $50 from selling my books on my blogs, $10 from Amazon affiliate sales, $140 from sponsored posts through PayPerPost.com, Blogertise.com and SocialSpark.com, and $50 from selling paid links directly to advertisers,” he said. “I work on my blogs about 16 hours a week.”

Long hours and minimal income don’t deter Puri. For him, blogging is like a hobby. “Most hobbies cost money,” he said. “With blogging, I’m enjoying a fun hobby where I’m actually making more than I have to pay out.”

Puri said his blogs also help him gain credibility as a source on Unix programming and financial investing. And he does want to see a bigger payoff from his blogging. “There is the hope that I will eventually make a breakthrough where one or more of my blogs or posts go viral and exponentially create a big audience where I could make more money.”

Marc Matsumoto,

a New York-based editor and publisher of the food blog NoRecipes.com, said he makes $1,000 a month in blog ad revenue and gets 160,000 visitors to his blog a month.

But his blog serves as the gateway to other income. Matsumoto said he has gotten paid recipe-development jobs for periodicals, books, and packaged-goods companies from his blog. “I’ve also gotten paid food-photography gigs primarily for packaged-goods companies. Almost 100% of my leads come through my blog,” he said.

“I work 40 to 50 hours a week on purely blog-related activities,” he said. “I left a job as a marketing executive three months ago to pursue the blog and work on it full-time. A blog is a portfolio piece that helps you build your brand and secure other work.”

Blogging for real money

Nick Veneris is chief executive of Xomba.com, an online writers community. Writers post original content and share AdSense revenue.

“Our users made a total of $45,000 last month, so, yes, Google ads do pay,” Veneris said. Xomba shares AdSense revenue 50/50 with writers, with some individuals making $1,000 to $3,000 a month. According to Veneris, topics that pay the most are technology, retail sales and shopping, entertainment, health and business.

Meanwhile, Marc Aarons said he earns $2,000 a month after two years of blogging about mobile broadband on Mobile-Broadband-Reviews.com.

“Ninety percent income is from Google Ads,” Aarons said. “They work.” The Atlanta, Ga.-based blogger spends two to four hours a day on his blog, “with a morning commute to the kitchen.”

Aarons credits his success to hard work and transparency. “Hardly anyone is willing to support you, let alone hand over any money to you, without transparency,” he said, referring to being up-front and clear about advertising relationships.

“For many people who’ve had some level of success on the Internet, transparency has usually been a big part of making that happen,” he said

Always Provide Value

Also, successful bloggers must first provide value, Aarons said, and make money later. Doing so builds the trust and creates the relationship that’s necessary to build an audience. “You want your visitors to search for you, find your message resonating and stick around because you solve problems for them,” he said. “That’s the name of the game.”

New-media marketing strategist Comm agrees. “It’s all about bringing value to the conversation. What do your readers want? If all you think about is making money, that’s putting the cart before the horse. Bring value to your blog first. That’s the only way to make money.”

Carving out a micro-niche

“It’s important to know your niche and to continuously feed a blog or website when the subject is hot,” said Talya Schaeffer, founder of the blog CyberBlackFriday.com, which features online Black Friday sales.

Schaeffer’s research showed Black Friday-related searches begin in September and end right after the event. Schaeffer saw the trend unfold and watched as it intensified in November. “I updated the site frequently with the latest Black Friday deals this holiday season and generated $4,000 between October and November using Google AdSense and affiliate programs with retailer websites,” Schaeffer said.

Frugal-minded web surfers have helped Chelsea Rustrum earn $10,000 to $12,000 a month with her website and blog FreeMania.com.

“My audience is mostly moms between the ages of 25 and 45 who are interested in saving money, trying new products free of charge and printing coupons for items they buy anyway,” she said.

Rustrum publishes FreeMania.com in Santa Cruz, Calif. “I’ve also recently worked out of Florence, Bali and Thailand. I can work anywhere, all I need is my laptop and a stable Internet connection.” She monetizes her blog using Google AdSense, Commission Junction and Hydra Network.

Sending Out Newsletters

Along with blogging three or four times a week, Rustrum also sends out emails to 150,000 subscribers. “My priority at this point is building a community that is engaged and social, which will naturally result in more visitors and more time spent on the site. The more unique, high-value content I can offer, the better.”

Rustrum said that, to be successful, bloggers must figure out what they are good at and what they are passionate about — and then blog about that. You need a clear vision. “Don’t start out with the intent to build a blogging empire,” she said.

“It sounds cliché but I truly believe if you write about something you’re passionate about the people will come. And when the people come, the advertisers will come,” Rustrum said.

As chief executive of SheFinds Media and publisher of SheFinds.com, BrideFinds.com and MomFinds.com, Michelle Madhok has built a web and blogging empire, earning $1.3 million a year.

Madhok started SheFinds.com in her apartment in New York City in 2004 and made about $30,000 a year. She worked 70 hours a week. Her niche worked and traffic and sales increased each year. By 2008, “we were doing about $500K in sales,’’ she said. “This year I’m working 50 hours a week and we’ll gross $1.3 million and get more than 1.2 million visitors to the sites.”

Transparency — it’s the law

Whether earning $1,200 or $1.2 million a year online, today’s bloggers are careful to be transparent about advertising income. There are two reasons for this openness, said Lorrie Thomas, chief executive of the online marketing agency WebMarketingTherapy.com in Santa Barbara, Calif.

The first reason bloggers are open about advertising income, Thomas said, is because most blogging income comes from online ads and links to affiliate advertisers. Thomas said bloggers are open about their advertising stream of revenue because they want to attract even more advertisers. High earning sites attract new advertisers.

The second reason bloggers strive for transparency? In 2009, the Federal Trade Commission updated the FTC Act of 1980 — specifically, the guidelines for consumer endorsements and testimonials. The FTC mandated that bloggers disclose clearly on their sites if they are getting paid in free products, affiliate revenue or online ads. Failure to follow the FTC guidelines could result in a cease-and-desist order.

Marty Orgel is a freelance writer in the San Francisco Bay Area.

Ten Financial Steps

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Ten Financial StepsNo one wants to think about their death, however part of financial planning is to take this scenario into account so that your family is well protected and looked after in case you do die. Financial planning is also important to ensure that your quality of life meets your objectives and that your family has a quality of life that is satisfactory. There are Ten Financial Steps to consider as you plan your financial life.

This is the time of year to put everything in order and complete one of your New Year’s resolutions.

Without a will, what happens to your kids? to your wife? How will they support themselves? What will they do when the bank will not release your assets because there is no will? How will they pay the bills and buy groceries? These are just a few of the reasons why you need to have a will and what can happen if you do not have one. Basically, you need to assume that all of your assets will be frozen until a government bureaucrat decides how your assets should be distributed.

Ten Financial Steps

Your will

When you pass away, your family should look after the funeral or memorial first, however, the will should be consulted in case there are any special circumstances concerning the memorial that are mentioned in the will, but then they’ll have to focus attention on finding a copy of your will. Make sure your will is up to date and make sure your executor knows where to find the executed copy, and knows which lawyer prepared it for you. Having this information available makes their job much easier in an already stressful situation.

Your assets

Your executor will have to gather information on what assets you owned at the time of your death. Prepare a complete list and update it annually. Tell your family who your financial advisers are since they will likely need them for help in dealing with your assets after you are gone.

Funeral costs

Your family will be in a fragile state emotionally when you pass away. It will be difficult for them to negotiate funeral costs at that time. Solve this issue by planning your funeral today or delegating someone who can carry out the family’s wishes. You can even prepay for your funeral if you want. Visit a local funeral home to discuss it.

Bank accounts

If your spouse shares a bank account jointly with you, they will be able to access the cash immediately after you pass away. Joint bank accounts make sense for this reason. Consider making the bank account(s) used for day-to-day expenses joint accounts. Also, ensure that any corporation bank accounts have more than one signing officer so that those accounts can be dealt with efficiently.

Life insurance

Make sure your family knows who your insurance adviser is. Further, make sure at least one insurance adviser knows about every policy you might own, and ask him to keep a record of this information for you.

Government benefits

Three types of benefits may be available to your surviving family members. If you have contributed to the Canada Pension Plan, there will be a death benefit (a one-time payment, to a maximum $2,500), a survivor’s pension (a monthly pension paid to your surviving spouse, averaging about $300, but which can be as high as about $560), and a children’s benefit paid to a surviving child (a monthly benefit of about $215 a month per child under age 18 or up to age 25 while still a student). Your family must apply for these benefits after you have gone.

Registered plans

Any registered retirement savings plans or registered retirement income funds owned by you at the time of your death can generally be transferred on a tax-free basis to a registered plan in your spouse’s name (or to a dependent who is a minor or has a disability). Simplify things for your heirs by reviewing your named beneficiaries on these plans today. Ensure the right people will receive these assets when you are gone.

Employment matters

Your family should call your employer to determine whether there are any amounts owing. Such as salary, vacation pay, or bonuses. They should also inquire as to whether the employer can pay any amounts as a tax-free death benefit. For example, up to $10,000 can be received tax-free where it is considered a death benefit in recognition of an employee’s service. Let your family know who they should contact at your office in the event of your passing.

Your debt

Have you purchased insurance to pay off your debts in the event of your death? If you’re insurable, make life easier for your family by doing this. Term insurance (the cheapest) is just fine. Especially if the debt has a term to it and is expected to be paid off in the future.

Summary of information

Much of the information you will want to provide about assets, contact names, and so on, should be summarized in one document. If you do not have a document template, search for one on the internet. Or ask your lawyer or funeral home if they can provide a document for gathering this information.