September always brings Life Insurance Awareness Month, so I want to start this by saying that, if you're reading this, there's a 100 percent chance that if I see you, hear from you, or get a call from you in the next few weeks, I am going to ask you if you'd like to review your coverage with our team.
Before you roll your eyes and think, "here we go," let me say we need not look any further than our social media feeds to realize that too many of us and our loved ones are unintentionally under-insured. Unfortunately, we never hear about the people who were insured correctly. We hear the horror stories.
But that's enough gloom and doom for today. It's life insurance month, and I want us to put on our party hats and celebrate all the wonderful things that life insurance allows us to do, and the opportunistic decisions it allows us to make - while we're still alive. Any of you who've set foot in our office have the seen the sign that says "Growing Wealth, for Generations." Some of you may see that tagline and think we're only thinking about future generations, when we're actually trying to help you accomplish your goals and dreams for your future. There's never a better time to start saving and compounding your money than now.
But, what about those of you who have a family business or a family farm, or your retirement assets are in rental properties and real estate. Or maybe you have an old fashioned pension which means you don't have to pull from your IRA until the IRS forces you to. When talking with our high net worth clients, the 80/20 rule seems to apply here. Twenty percent of you are always going to have your assets in highly liquid accounts. The other 80 percent of you have that pension, or that family farm, or other non-liquid assets. You don't want to sell your business or your family farm while you're alive, and you can't sell your rental properties because that's where your income is coming from. Some of you in this 80 percent do still have good pensions that deliver monthly income as long as you're alive, and you can't just cash that out because you elected to take lifetime payments years ago.
Regardless of how your assets are held, all of you have specific goals, whether that's caring for a special needs child with a trust after you're unable to, or passing on the farm to your kids without debt (but also maintaining capital to operate it). Another scenario we've seen happens when a business-owner client has three children (for example), but only one of them is interested in the family business. The question then becomes how to equitably split assets while the keeping the business in the family. Or, perhaps you don't have the cash right now to give to your alma mater or other organization, but your goal is to leave a defined amount upon your death. You're wrestling with that amount because you don't know what will be left after you pass some assets to your children, and you don't want to short-change anyone.
The answer in all of these scenarios is...drumroll...life insurance! Life insurance allows you, as long as you have the cash flow, to fund any of the above goals, in addition to protecting your family in case of tragedy. Often, when I utter the words "life insurance," the immediate reaction is a glazed look, or even contempt, because the assumption is that I'm just talking about someone benefiting from death. But hold on a second. All of us at some level know that, even if it takes a while, we will die someday. When we do, somebody will or won't benefit, based on the decisions we've made.
Now that you're armed with these facts, you might be thinking, "Dave, you've just blown my mind! You mean I'm going to die? And my decisions affect others?" Yes you will, and yes they do.
Here's the deal. I want you to think about what you'd like to do, if you had unlimited resources, for your children, nieces, nephews and other family members, with your business or farm, for your alma mater, for your favorite charity, for your neighbor who's been mowing your lawn for $10 for years. If resources were unlimited, what would you do? Think about it, write it down, and next time I ask if you'd like to review your life insurance plan or if your life goals have changed recently, you'll have more information to share with me.
A lot of people get bogged down in whether their portfolio is going up or down or it's worth more or less. But I believe all of us have responsibilities as humans to be good stewards of our assets. So think big when you're dreaming about what you'd do, share that with our team, and let's figure out a solution that allows you to realize your bigger goals while eliminating the day-to-day "will I be broke?" devil on your shoulder. When he does pop up, you can simply take note and move on, knowing you have a bigger plan in place and that your money is doing what you want it to for future generations. I look forward to hearing your thoughts.