Financial Planning, Retirement Plan, 401k, Investment Blog

Financial Planning, Retirement Plan, 401k, Investment Blog

Recent Financial Planning & Management Articles

What You Need to Know about COBRA Health Benefits

Posted October 15, 2009 by Bernz

In today’s unstable job market, the possibility of sudden job loss is on the minds of many Americans. Being downsized in the current economy deals a double blow as it is more difficult to find a new job when most employers are tightening their belts and reducing their workforce.

Unemployment not only means the loss of a steady income but also the end of group health insurance. That can put a family at risk until a new job picks up the slack. COBRA health benefits can help in this situation.

COBRA stands for Consolidated Omnibus Budget Reconciliation Act. The Act was originally drafted in 1986 and has been recently updated as part of the presidential stimulus bill. COBRA provides for a continuation of health benefits for employees and independent contractors in certain situations.

All employers who have 20 or more employees are required to maintain group health insurance benefits for terminated employees for a standard period of 18 months. The catch for the employee is that he or she now has to pay the premium that was once paid by the employer. That can still be a substantial amount of money monthly but it is often less expensive than paying private individual health insurance premiums. Read More »

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Posted in Health insurance | No Comments »

What is Term Life Insurance

Posted September 29, 2009 by Bernz

Shopping for a life insurance policy can be confusing and frustrating. There are many different types of policies with different rules and privileges. Premiums vary significantly across providers and product types.

One of the most popular types of life insurance is term life. Term life is straight life insurance without any of the bells and whistles. Whole life, on the other hand, usually carries an investment portion which grows in value and can be cashed out over time. Term life pays the face value of the policy at the time of death of the insured.

Term life insurance has both positives and negatives in comparison to whole life. On the positive side, the premiums are usually significantly lower than whole life premiums because there is no investment portion. Many individuals with term life insurance find that having a separate investment account allows them to have more control over both their insurance and investments. Read More »

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Posted in Estate Planning, Life Insurance | No Comments »

Emergency Fund: How Much Do You Really Need?

Posted June 23, 2009 by Bernz

Keeping an emergency fund available for unforeseen crises is a financial planning tip that is widely quoted. Any number of situations could come up where you may need to dip into this short term savings fund, such as loss of job (a more likely occurrence with the current economic situation), emergency medical expenses, or home repairs.

But how big does this emergency fund really need to be? Some financial planners suggest three months salary is a good general rule. If you would ask Suze Orman, (yes I do watch her show especially the “Can You Afford It” segment) she will say 6-8 months or even one year if you can afford is more advantageous. However, the right answer for you will depend on your circumstances and the risks that you are trying to cover. Some of the risks that people put aside savings for can be covered less expensively with insurance.

Take home repair for example. If your air conditioner or furnace were to quit for good, the expense of buying a new one might damage your current cash flow. Read More »

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Posted in Financial Education, Financial Goals, Frugality, Investing in Real Estate, Retirement Planning, Saving Money, Wealth Building | 2 Comments »

Dogs of the Dow- Investing Strategy That Needs to be Retired?

Posted June 21, 2009 by Bernz

I was doing some research online about stock investing two days ago and came across this strategy and thought I should share my insights with my readers.

The Dogs of the Dow is an investing strategy first promoted 35 years ago by Michael O’Higgins, a fund manager who now runs his own firm. The strategy calls for choosing the 10 stocks in the Dow 30 index that have the highest dividend yields at the end of the year. You hold these stocks until the end of the following year when you re-balance your portfolio based on the new Dogs. A dividend yield is calculated by dividing the dividend by the stock’s price. Therefore, the stocks with the highest dividend yields have the lowest stock prices and may be ready for a jump.

Because all of the stocks in the Dow 30 are large cap, stable companies, the Dogs of the Dow strategy states that the companies chosen are likely to be solid in bad times and rise quickly in price in good ones. 2009’s Dogs are: Alcoa, AT&T, Bank of America, DuPont, General Electric, JPMorgan Chase, Kraft, Merck, Pfizer, and Verizon. Read More »

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Posted in Financial Education, Investing Strategies, Stock Market Investing | 2 Comments »

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