Awareness is key to change, but you also need action. In fact, you need focused, decisive and immediate action to see change and to get yourself back on the road to financial independence.
There are a lot of decisions to make when forging your way to financial independence, there are also countless paths to each destination and countless solutions to each problem. Most folks are also juggling more than one financial goal: retirement, emergency funds, college education for children. How do you prioritize? How do you find the right solution for retirement or long-term care? All the decisions can be overwhelming, which causes many to check out of their own financial situation. While taking a step back when one feels overwhelmed is a natural response, refraining from taking action can ultimately do more harm than good.
Definitive action can both propel you towards financial independence and protect the traction you’ve already made. The sooner you start investing in your financial future, the more your funds can grow due to compound interest. The longer you wait to address any financial problems, the more these minor issues can snowball into larger issues, which can often be the case with debt. Also, if you haven’t taken decisive action to establish an emergency fund or invest in the proper form of insurance, an unexpected event can derail you further from your route to financial independence.
Our Advisors at Trilogy try to help you take the guesswork out of making a decision. Some of the worst indecision is born from not knowing the results of choosing Option A over Option B. However, our Advisors /Life Planners can run various scenarios for you, showing the consequences of different courses of action – helping you see which decision may be the right one for you. More importantly, they are here to support you through difficult situations, so the rest of your road to financial independence will be smooth sailing.
Financial planning involves thoughtfully outlining objectives and setting goals in your Life Plan. With anything, the possibility of running into obstacles, options, and challenges throughout your financial journey is unavoidable. That’s why it is important to implement some sort of checks and balances to mitigate these challenges. Insurance is one of the best ways to account for unforeseen conditions and events in your financial plan. The thought of utilizing insurance can be daunting. It makes the possibility of losing your car or home due to an accident, flood, or fire a reality. That’s exactly why we create a financial plan – to be prepared for the unexpected. Our team is committed to coaching you through the process, so that you can make an informed and confident decision. There are various types of insurance services available that your Trilogy Financial advisor can help you navigate so you can handle the many uncertainties that life throws your way.
Read on to discover these insurance services.
Insurance Services Provided by Trilogy Financial
Every Trilogy Financial Advisor is committed to helping you build the legacy you have always desired to leave through the following services:
Term Insurance
A term insurance policy is the most common form of temporary life insurance. The term usually lasts for a specific “term” of years. Term insurance is also a form of insurance that is rented. Meaning, you pay a monthly premium for the insurance, but it expires after the allotted time frame. The duration can range from five to thirty years.
Term insurance protects liabilities that will cease to exist after a specific period, such as providing extra cashflow for raising children. It is a simple life insurance plan that protects against the possibility of an untimely death. A death benefit is granted if the insured passes away during the policy's stated tenure.
Because death is unpredictable, term insurance plans are essential. The family may experience a significant financial loss if the family's primary provider passes away. A term plan covers the loss. It benefits the family, allowing them to cover lifestyle costs and continue to address their financial objectives.
Permanent Insurance
Permanent insurance can be considered “owning” insurance coverage. Like term insurance, you pay a monthly premium; however, in permanent insurance, the range is continuous and does not end within a time frame.
For instance, even after your children have moved out and your liabilities have diminished, you may continue to carry some form of insurance to cover your loved ones and compensate for your end-of-life needs.
Permanent insurance premiums are more significant than term insurance premiums because, unlike term insurance, the insurance company may never have to pay out the policy. Permanent insurance can be used as an income and an insurance tool. Both a death benefit and a cash value factor are included. You can access the money as the value increases by taking out a loan or a withdrawal, and you can terminate the insurance by withdrawing the cash value.
Long-Term Care Planning
Long-term care planning, at its foundation, entails ensuring that you or a loved one's needs are adequately met when they can no longer care for themselves. Therefore, as you age, having a practical plan becomes more and more crucial. While many maintain their independence well into their senior years, it never hurts to plan.
Any long-term financial plan should consider long-term care costs, especially if you are in your 50s or older. You are unlikely to qualify for long-term care insurance if you already have a disabling condition. Most over 75 applicants will not be accepted by long-term care insurance providers. Most persons who purchase long-term care insurance do so between 50 and 60.
Risk Management
Risk management entails recognizing, assessing and managing risk. A well-executed risk management program is built on a foundation of standardized risk assessments to assist businesses in prioritizing their risk based on its potential impact. This procedure will inevitably reveal hazards affecting the company's fundamental competencies.
As financial Advisors, it is a part of our job to help you navigate your financial well-being, which includes helping you mitigating certain risks. Identifying your risk factors is your first defense, followed by avoiding or limiting risks to your income and survivors. Insurance is your quality line of defense.
Importance of Insurance in Financial Planning
Here are some factors that make insurance an essential aspect of your Life Plan:
Financial assurance: You feel safe knowing that the insurance policy will cover the damages in the event of an emergency.
Tax advantages: Insurance lowers your taxable income and provides financial benefits.1
Risk protection: Insurance prepares you to deal with any financial loss you might suffer in the event of an unplanned circumstance.
Meeting your prerequisites: Several insurance policies are available to cover the various risks you can encounter.
Peace of mind: Insurance plans assure you that your funds will not be compromised in the event of an emergency.
*This information is not intended as authoritative guidance or tax advice. You should consult with your tax advisor for guidance on your specific situation.
Why Choose Trilogy Financial
Your financial plan should be strategically in line with your insurance. Our Trilogy Financial Advisors use a comprehensive strategy to offer insurance policies tailored to your specific needs and Life Plan. We understand the risks you face and how to help improve your financial life. Our Advisors will work with you to develop a deeper understanding of your alternatives, pinpoint practical needs and make plans for the care you and your family deserve.
To help you build the life you’ve dreamed, we collaborate with the most reliable insurance firms with a track record of being financial secure and capable of paying claims.
Get Started with a Financial Advisor Today
Everyone has a distinct level of risk, and before purchasing insurance, it is critical to identify risks and establish how to limit the likelihood of them occurring. We understand that everyone has a varying level of comfort and experience in navigating finances and Life Plans. That’s why our Advisors are committed to being both a partner and coach to support you as much or as little as you need, so you can make the best decisions for you and your family.
At Trilogy Financial, our Advisors will guide you through your daily financial decisions to keep you on track and set you up for your real-life goals. If you have any questions concerning insurance or any other element of your financial life, get in touch or visit our website today to book a meeting with an advisor
Over the course of working with so many individuals and families, I’ve found that many people think financial planning, investing, and retirement planning are a sprint to the finish line. While on paper, maxing out your 401(k) each year and building an all-stock portfolio for maximum growth potential seems like a good plan, fast and big investing can actually slow down your progress to your goals. Let’s look at why.
The Dangers of Little Liquidity I always enjoy working with enthusiastic young couples who want to do everything in their power to reach their desired retirement. However, in the process of focusing on their long-term retirement goals, they neglect their short-term needs.
For many of my clients in their 20s and 30s, I may recommend contributing enough to their 401(k) to get the employer match, if one is offered, and contribute some of their paycheck to build an emergency fund and savings. This can help them avoid focusing so much on their long-term retirement goals that they neglect their short-term goals, from buying a house to paying off student loan debt. I generally recommend that my clients build a reserve fund that can cover three to six months’ worth of living expenses.
Dipping Your Toes In Versus Diving Head First
I said it earlier but I’ll say it again; investing and financial planning is a marathon, not a sprint. I’d much rather be the tortoise—slow yet steady and consistent—than the hare—fast yet unpredictable—when it comes to my investing strategy.
One of the more underrated strategies for financial security is making consistent and periodic contributions to your portfolio over a long period of time. As I mentioned earlier, younger individuals and families may not have the income yet to max out their 401(k), but they can make consistent contributions and increase them over time as their income increases. Like the tortoise, saving for retirement and other long-term goals is all about perseverance and consistency, even if it is at a slower pace.
It’s easy to let emotions get in the way, and many investors fall prey to the newest investment strategy that claims a higher return on investment. But the fact of the matter is, there is no controlling or predicting the market. I tell my clients that instead of focusing on what they can’t control, it’s helpful to focus on what they can control: the capital they invest.
Whether the markets are high or low, consistent contributions can have a powerful long-term effect. Additionally, maintaining a well-diversified portfolio and rebalancing if needed each year can help ensure your portfolio matches the appropriate level of risk you’re willing to take. Adhering to this motto and disciplined strategy can help you avoid the common trap investors fall into: buying high and selling low, and chasing high returns.
The Risks of Aggressive Investing
Too often, financial advisors tell young individuals in their 20s and 30s to keep close to 100% of their portfolio in stocks. The theory is that young investors have decades to ride out volatility and make up for any lost returns. While this may work for some individuals, I’ve had a number of younger clients who don’t feel comfortable taking such risks, even if they have decades to try to make up for losses.
Investing entirely in stocks isn’t necessarily the way to go, even if it makes sense on paper. It’s nearly impossible to entirely remove emotions from investing. Too often, I’ve seen investors give up when their portfolio takes a big hit. They lose motivation to keep investing, and they struggle to keep their eyes on the finish line of their long-term goals.
Incorporating investments, like bonds, that offer lower returns and lower risk, may help you feel more confident in your portfolio and avoid the rollercoaster of emotions if your portfolio takes a hit during a downturn.
Next Steps
Like the tortoise and the hare, fast investments don’t mean you’ll reach the finish line first. While it can be difficult, it’s important to tune out the noise of the media and focus instead on what strategies make sense for your unique situation, risk tolerance, and short and long-term goals. While not as exciting, I believe slow and steady can win the race, and without as many speed bumps along the way.
As an independent financial advisor, my mission is to make a meaningful impact on the lives of my clients and the people they love. I help families make informed decisions with their money and pursue a strong financial future. If you’re interested in learning more about balancing your short and long-term goals, I encourage you to reach out to me. Call my office at (949) 221-8105 x 2128, or email me at michael.loo@lpl.com.
