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