eMetro Times March2018 V318 | Page 4

Page 4 March 2018

BUSINESS AND FINANCE

DO I REALLY NEED LIFE INSURANCE ?

by Andrew Jernigan

Let ’ s face it . Most people put off buying life insurance for any number of reasons — if they even understand it . Take a look at this list — do any of them sound like you ?

1 . It ’ s too expensive . In the ever-increasing budget of a young family , things like day-care and car payments and possibly student loans eat up a good chunk of the money each month , and a lot of people think that life insurance is just outside those “ necessities ” when money ’ s tight . But two things : life insurance is often not nearly as expensive as you might think , especially when you can get a good policy for less than the cost

DAVE SAYS

Chris

Dear Dave , My wife and I have $ 72,000 in debt from student loans and a car loan . We ’ re trying to pay off our debt using the debt snowball system , and we each make about $ 45,000 a year . She ’ s a teacher , and she ’ s planning on going back to school for her master ’ s degree , but she ’ s thinking about quitting her job to do this . She ’ ll be able to make more money

of a daily cup of coffee at the local café , and well , if money ’ s tight now , what if something happens to you ?

2 . That ’ s that stuff for babies and old people , right ? People of a certain age remember Ed McMahon telling them their grandparents couldn ’ t be turned down for any reason and figure that ’ s the target demographic for life insurance . Or , you might have been offered a small permanent insurance policy for your newborn , attractively presented with a cherubic infant on the envelope . The truth of the matter is that these are very specific insurance products — just as there are many insurance products for adults in their working years .

3 . I ’ m strong and healthy ! You eat right , you stay active , and everyone admired how grounded and centered you are . You passed your last physical with flying colors ! That ’ s GREAT ! But you ’ re neither immortal nor indestructible . It ’ s not even that something could happen to you — though it could — so much as when you ’ re at your strongest and healthiest , there ’ s

with the additional education , and she would only be unemployed for two years . The degree program will cost us $ 2,000 out of pocket per semester for two years . Does this sound like a good idea ?

Dear Chris , There ’ s no reason for your wife to quit her job to make this happen . Lots of people — especially teachers — hold down their jobs and go back to school to further their education . I ’ m not sure trying to make it on one income when you ’ re that deep in debt is a good idea .

Whatever you do , don ’ t borrow more money to make this happen . Cash flow it or don ’ t do it . We ’ re talking about $ 8,000 total , and you ’ ve got $ 72,000 in debt hanging over your heads already . My advice would be to wait until you ’ ve got the other debt knocked out , then save up and pay cash for school . You could slow down your debt snowball , and use some of that to pay for school , but I ’ d hate to see you lose the momentum you have when it comes to getting out of debt . The choice is yours , but don ’ t tack on any more student loan debt . I know her income will go up with a master ’ s degree , so from that standpoint , it ’ s a good thing to do . But if you do a good thing a dumb way , it ends up being dumb !

- Dave

Rebecca no better time to get a policy to protect your loved ones . If you fall seriously ill or suffer significant injury later , it will make it tougher to get that kind of policy , if any at all .

4 . I have life insurance through my job . Many people are offered life insurance as part of their employee benefits coverage – and often , it ’ s the first time they encounter life insurance and have no idea that a $ 50,000 policy , or one or two times their salary , isn ’ t as much as they think it is . It sounds like a lot of money ( and it is !) until you figure that it has to cover some or all the expenses for your loved ones in your absence . Plus , if you leave the job , it ’ s typically the type of insurance that doesn ’ t “ move on ” with you .

5 . I don ’ t have kids . Sure , kids are a big reason why some people get life insurance . But that ’ s not the only litmus for needing protection . If there is anyone in your life who would suffer financially from your loss — your spouse or livein partner , a sibling , even your parents — a life insurance policy goes a long way in making sure

Dear Dave , My grandmother passed away a week ago . She was 98 , and I know both she and my grandfather had prepaid for their funerals in 2004 . However , there were outstanding costs of $ 1,500 with the funeral services we had to pay out of pocket because she had outlived the insurance policy attached to the pre-payment plan . I know you say it ’ s always better to pre-plan , not prepay , for a funeral . Can you refresh my understanding of this ?

Dear Rebecca , Let ’ s use a round figure , and say the cost of a funeral is $ 10,000 . What would $ 10,000 grow to 25 years from now if it were invested in a good mutual fund ? Now , juxtapose that number with the increase in the cost of a funeral over that time . The average inflation rate of consumer-purchased items is around four percent . So , the cost of funerals , on average , has risen about four percent a year . By comparison , you could ’ ve invested that money , and it would ’ ve grown at 10 or 12 percent in a good mutual fund .

Now understand , I ’ m not knocking folks who are in the funeral business . But lots of businesses that provide these services realize more margin in selling pre-paid policies than they do in caskets . In other words , they don ’ t make as much money selling the casket as they do selling a pre-paid

everyone ’ s still OK even if something happens to you .

6 . Life insurance — it ’ s on my list … eventually . There ’ s no deadline on life insurance , no mandate from the government on purchasing it . Your parents may have never talked to you about its importance , and it ’ s certainly not the most invigorating topic for conversation . But don ’ t let your “ eventually ” turn into your loved ones ’ “ if only .”

If any of this sounds daunting , just know that it doesn ’ t have to be . You can start by doing a

policy on the casket .

Do you understand my reasoning ? If we knew the exact date she pre-paid , and how much she pre-paid , that figure invested in a good mutual fund would be a whole lot more than the cost of a reasonable funeral . It ’ s the same principle behind the reason I advise folks to not pre-pay college , or just about anything else , that ’ s likely far into the future . The money you could ’ ve made on the investment is a lot more than the value of pre-paying . Pre-planning , on the other hand , is a great idea

quick calculation on your own to see if you need it with this Life Insurance Needs Calculator . And just know that you can also talk things through with me — at no cost . I will help you figure out how much you may need , and also find a policy that fits your budget .

Andrew Jernigan , Independent Insurance Broker :: Representing the leading top-rated companies in the country to the best clients in the East Atlanta area .

Content provided by www . LifeHappens . org .

Insurance : Annuities : Retirement : IUL

J . ANDREW JERNIGAN

DR . ROUSSY

Licensed Field Underwriter

P : 205-767-0507

Group Plans : Benefits : College Funding

for many things — including funerals . I ’ m truly sorry for your loss , Rebecca . God bless you all .

- Dave

DANIEL S . DIGBY Attorney at Law

* Dave Ramsey is CEO of Ramsey Solutions . He has authored seven best-selling books , including The Total Money Makeover . The Dave Ramsey Show is heard by more than 13 million listeners each week on 585 radio stations and multiple digital platforms . Follow Dave on the web at daveramsey . com and Twitter at @ DaveRamsey .

Daniel S . Digby & Associates , LLC 946 South Main St . NE , Conyers GA 30012

Phone : [phone]

Fax : [phone]

Email : DSDIGBY @ BELLSOUTH . NET

START A DOG GROOMING BUSINESS BY NICOLE DAVIS

If you love dogs , why not start a dog grooming business or any business for that matter . Starting a small business is a great way to possibly reduce taxable income . Statistically , most businesses do not turn a profit for several years . As such , your taxable income can be reduced by the amount you are in the red if the total investment is at risk . You do want to make a profit eventually as your business grows . Paying taxes on any profit you make will be no sweat off your back because you will be making money hand over fist . Right !?

From IRS . gov :

To be deductible , a business expense must be both ordinary and necessary . An ordinary expense is one that is common and accepted in your trade or business . A necessary expense is one that is helpful and appropriate for your trade or business . An expense does not have to be indispensable to be considered

necessary . It is important to separate business expenses from the following expenses :

• The expenses used to figure the cost of goods sold ,

• Capital Expenses , and

• Personal Expenses .

By starting a business , you will also become a member of the small business community and hopefully be able to foster economic growth and create jobs . So , what are you waiting for ? If you love dogs , groom . If you love food , cook . If you love fashion , design . Whatever your passion , take what you love and make money doing it .

Nicole Davis , CPA Butler-Davis Tax & Accounting 770-500-5341