Although I am a licensed attorney, I do not practice law. Yet, I combine my passion for personal finances by helping people as a licensed registered investment advisor and providing holistic wealth advising for goal-oriented individuals. This blog aligns with my passion for sharing my knowledge with goal-driven individuals looking to enhance their financial literacy and amplify their wealth. Welcome!
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When considering spending money, your return on your investment is top of mind. However, the return on your investment is always important. When investing your money or purchasing insurance, investing and insurance don’t mix, as they each serve different primary objectives.
Invest in something that embraces your risk tolerance and goals and most likely returns the best return.
Instead, insurance helps to mitigate your risk exposure and liability. Insurance provides protection if something happens that can result in a potential loss, such as death or disability.
Some insurance policies have an investment vehicle but are usually not cost-effective for reaching your investment and financial goals.
They often fall short of providing adequate life insurance.
These vehicles are more costly than alternative investments or life insurance options and include a big upfront commission.
Suppose you are considering investing or purchasing insurance.
While they may be giving advice, they may not act in a fiduciary capacity. If so, they may not be held to the standard of putting your needs first. Providing full disclosure and transparency regarding potential conflicts of interest is eye-opening and essential.
Prioritize seeking investment and insurance advice from a fiduciary, as they have a legal duty to put your needs first.
People should not listen to Tik Tok life insurance salespeople. They do not know your finances and therefore do not know what’s best for you; Sadly, they often provide misinformation.
I will never forget when I heard a life insurance salesperson say: “wealthy people don’t invest in anything that starts with a ‘4.’”
This person falsely explained that wealthy people invest in life insurance rather than employer retirement plans such as 401Ks. When in reality, many people do become 401K millionaires.
Investing $22,500 into your 401K for 20 years and earning 8% yearly can reach about a million dollars. This is the potential benefit of long-term investing. Many people become wealthy from 401Ks.
Check out the Amplify My Wealth Goalsetting Calculator to determine how much you need to save to reach your financial goals.
Term life insurance can lessen risk in the event of loss of life, helping to meet the financial needs of your loved ones.
While term life does not have an investment component or retained value if the insured lives beyond the term of the policy, it is less expensive than other life insurance, and once in effect, it immediately covers the insured’s life as opposed to an alternative vehicle that fluctuates with the value with the market.
Term life is an excellent complement to your financial plan and a diversified portfolio of low-cost mutual funds and ETFs.
Also, when you no longer need the coverage, you can allow the policy to lapse and instead use the premium dollars for another financial goal.
Proceed with caution if an advisor provides a plan that generates lots of fees and commissions for the advisor, emphasizing life insurance and lots of money moves.
Instead, a diversified portfolio with a buy-and-hold approach of investing in low-cost investment vehicles like mutual funds and ETFs generates fewer fees and taxable consequences.
You should always consider the impact of the cost you incur when making investment choices within your financial plan.
While life insurance is essential to a financial plan, do not overlook the other components.
Your personalized financial plan protects you and your family by keeping your finances in order. Your personalized financial plan ensures you have money for what means the most to you now and in the future.
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See how you can get started now with a personalized financial plan and my advice, Alissa.
I provide fee-only fiduciary financial advising and never earn commissions or fees or sell you insurance, annuities, or securities. Rest assured that I embrace the concept of investing and insurance don’t mix. See more.