December 4, 2024 • 21 mins
Discover how to protect your financial future with insights from newly licensed insurance advisor Jonathan Foster on the Wolf Financial Podcast. Join us as we navigate the world of insurance portfolios and financial planning, exploring how to avoid becoming "insurance poor" while still safeguarding your income and assets against life's unpredictable turns. You'll learn the crucial role insurance plays in mitigating financial risks and hear real-life stories about the emotional and financial impacts of having—or lacking—adequate coverage, particularly as retirement looms. If you're curious about how to enhance your financial resilience, this episode promises to equip you with the knowledge you need.
We also dive into the essential function of life and disability insurance in ensuring financial security for families facing unexpected challenges. Jonathan discusses the delicate balance young adults must strike between managing high debt and securing life insurance. By the end of our conversation, with additional insights from Sara, you'll walk away with a comprehensive understanding of various financial strategies and the importance of consulting professionals to make informed decisions. Plus, we'll clarify why past performance isn't a guarantee of future success and remind you about the advisory services available through USA Financial Securities. Don't miss this opportunity to fortify your financial planning toolkit.
Learn more about Wolf Financial Advisory:
https://www.wolffinancialadvisory.com/
Disclosure: Robert Wolf, James Koenig, Sara Wolf, and Michael Rock are investment advisor representatives of, and securities and advisory services are offered through, USA Financial Securities. Member FINRA/SIPC. Additionally, Amanda Opulskas and Adam Wallace are registered non-solicitors of USA Financial Securities, A registered investment advisor. 6020 E. Fulton St., Ada, MI 49301. Wolf Advisory Services and Wolf Financial Advisory are not affiliated with USA Financial Securities.
The strategies and concepts discussed are for educational purposes only and do not represent specific investment, tax, or estate planning advice. Investing carries an inherent element of risk and it is in everyone’s best interests to consult a tax, legal, or investment professional. The opinions expressed herein are not meant to provide specific investment advice or serve as a prediction for future stock market performance. Past performance does not guarantee future results. Securities and advisory services are offered through USA Financial Securities, member FINRA/SIPC. A registered investment adviser. Wolf Financial Advisory and USA Financial Securities are not affiliated entities.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Voiceover (00:00):
The strategies and concepts discussed are for
educational purposes only and donot represent specific
investment, tax or estateplanning advice.
Investing carries an inherentelement of risk and it is in
everyone's best interests toconsult a tax, legal or
investment professional.
Past performance does notguarantee future results.
Securities and advisoryservices are offered through USA
(00:22):
Financial Securities memberFINRA/ SIPC, a registered
investment advisor.
Wolf Financial Advisory are notaffiliated with USA Financial
Securities.
Wolf Financial Advisory.
When it's important to you,it's important to us.
This is the Wolf FinancialPodcast.
(00:42):
Here's your host, Rob Wolf.
This is the Wolf FinancialPodcast.
Rob Wolf (00:47):
Good day everyone.
Rob Wolf here with the WolfFinancial Podcast.
Today I got Jonathan Foster,associate of mine with the firm.
Hey, jonathan, how you doing.
Jonathan Foster (00:56):
I'm doing good today.
Thank you for having me.
Rob Wolf (01:04):
So, jonathan, you just really started the next phase
of your career.
You just got licensed to doinsurance products, and how's
that been going for you?
Jonathan Foster (01:09):
It's been a whirlwind of information.
I'll say Really, it's opened myeyes a lot more to what we
really do here and how muchabout the clients that we see.
You actually have to learn inorder to actually make these
products make sense for them.
Now, a lot of the time it'seasy to say, oh, we had a
(01:32):
conversation, I know enoughabout someone.
Yet what I found is, with howdetailed we really go into it,
you come to find everythingabout those people.
Rob Wolf (01:44):
You know, if you are looking at how do I bring a
person to a better spot thanwhere they're at now, right,
it's important to get as muchinformation about them, whether
or not they've been a client ofyours for for just a day or for
(02:05):
years.
We constantly need to begaining more and more
information about our clients sothat we can always reassess
their needs moving forward, astheir needs change.
So tell me a little bit aboutyour experiences and maybe some
of the conversations you'restarting to have, as you're
(02:27):
meeting with people now as anadvisor, going forward.
Jonathan Foster (02:31):
Yeah, it's experiences different or differ
by every single client that yousee.
Of course, that is to beexpected, with them being their
own personalities.
A big thing is that you findthat every situation is unique
and no matter what it is, youcould be doing the same thing
every single meeting, talkingabout the exact same things, yet
(02:52):
the details from those peopleis what changes.
Rob Wolf (02:55):
And you mentioned to me the other day.
Somebody asked, jonathan, arewe going to be insurance poor if
we do that?
Right, because I've heard thata lot.
You know people, let's face it,nobody likes writing an
insurance check.
You know, I don't like writinga check for my auto insurance,
my home insurance, my disabilityinsurance, my long-term care
(03:16):
insurance, my life insurance,the building insurance.
I mean, we go on and on and on.
And I understand why peoplethink, man, we're just insurance
poor until something happens,especially if something happens
and you don't have an insurancefor it, right?
(03:36):
So a fire happens and you'reunderinsured or you don't have
full replacement cost on yourhome, then we find out how
important insurance is.
Or, even more devastating, ayoung parent passes away,
leaving several children leftbehind with a spouse that may
(04:00):
have made less money, right?
How are these children providedfor if there's no insurance?
So I've been on both sides ofthe equation where I've seen
people where they've had adevastating life event that had
insurance and having adevastating life event without
(04:21):
the insurance.
The emotional issues,especially surrounding a death
or disability, they're the same.
But then when you add in thecomplexity of a financial
concern on top of that, if theydon't have the insurance just
(04:42):
accelerates the anxiety and fearto the a very difficult level
of just so much unknown.
And then you add money on topof it.
It's just a really difficultthing.
So my response to people is canyou afford not to have the
(05:02):
insurance?
Right?
I mean, even as we get olderand I'm thinking about life
insurance right now if you thinkabout all the income streams
that come in during yourlifetime, they don't just stop
when you retire, right?
Okay, so I retire, I might havea pension.
(05:23):
Right Now there's not a lot ofpensions anymore, but some
people still have pensions.
Well, when you retire, if youhave to take your pension in a
monthly amount, you have tochoose whether or not you want a
survivor benefit on that.
If you choose not to have asurvivor benefit, you get what's
called the straight lifepension, which is the highest
(05:44):
amount available to be paid outfor the rest of your life.
And some people like to do thatbecause they say well, you know
what?
I'm healthier than my spouse, Ishould be the one that lives
longer anyway.
So I'm just going to do thestraight life.
Well, then a month into it, acar accident happens and that
spouse getting the pension diesand now we have the surviving
(06:08):
spouse that not only lost thatpension check, but they also
lost a social security check,right?
And if you're a married coupleand you've been in the US and
you've been paying in socialsecurity taxes all along the way
, you're both going to bereceiving social security checks
until the first spouse dies andthen you don't.
(06:31):
Now you're down to one checkand a lot of people forget the
financial impact of the loss ofthat social security check.
Now, for some people, thesocial security isn't a lot
because it's based on thesmaller of the two checks.
So if I have a family where onespouse was bringing in $1,000 a
(06:54):
month and the other spouse wasbringing in $2,500 a month,
regardless of who passes away,the survivor is going to keep
the $2,500 a month.
So there's $1,000 of net incomelost for the month or $12,000
for the year.
But what if both spouses werebringing in a significant amount
of social security?
(07:15):
They were both bringing in$3,000 a month, $36,000 a year,
$72,000 between the two of themand one of them dies.
Well, going from 72,000 down to36,000, that's a pretty big
chunk, right?
So, regardless of your situation, sometimes it does make sense
(07:37):
to carry forward insurance Inthis case carrying forward
potential life insurance orperhaps you know.
The other thing is you know weretire, we don't necessarily
carry disability insuranceanymore, but then our thoughts
go on to well, what if I getsick and I have to go into a
facility?
Right, and then my thoughts gofrom disability over into
(07:59):
chronic illness, long-term care.
How do I protect the assetsthat I built so that, if I do
get confined to a facility, Ican continue to pay for my needs
without blowing the money thatmy spouse might still need to
live off of and or my potentiallegacy that I may want to leave
to my beneficiary?
(08:20):
So there's so many reasons whyhaving a good insurance
portfolio matters.
Obviously, you got to put foodon the table, you got to live
your life, we got to haveexperiences in our life and we
don't want to be paying so muchin insurance premiums that keep
(08:41):
you from living your life,because if you're doing that,
you're living in fear.
There is a balance, but it's soimportant for people to
understand there's purposebehind protecting what you have.
You cannot build until youprotect and have a solid
foundation, and that's why I'msuch a big advocate of making
(09:03):
sure younger people haveappropriate life insurance, term
insurance if need be, to coverthose income years that our
older clients look at that, thelong-term care aspect, the
legacy planning to protect whatthey've built.
It could be as simple as havingthe correct auto coverage for
(09:23):
your liability limits, because Idon't know anybody that's lived
a really long time, that'sdrove a real long time, that
probably hasn't used their autoinsurance at least once.
Right, you only need to use itonce to know how valuable it can
be.
Okay, so again, if you thinkyou're insurance poor, you
(09:45):
really need to be thinking aboutwhat are you really saying?
Are you saying that you'repaying so much in premiums that
you're not taking care of yourother basic needs?
If that's the case, youprobably need to reconsider your
insurance portfolio.
But if you just don't like whatyou're paying for insurance but
(10:06):
you're living your life andyou're living it quite
comfortably just remember theprotection that that insurance
is providing you, that if andwhen you end up utilizing it,
it's going to be there and it'sgoing to do what it's designed
to do, which is to provideincome to either you or your
(10:26):
spouse and or pay for expensesthat otherwise you would have to
draw down from your portfolioand joining us now is Sarah Wolf
, a certified financial planner.
Sarah, have you had anybodytalk to you about being
insurance poor, and what's yourresponse to them?
Sara Wolf (10:45):
Yeah, so obviously most people don't use that term,
but I do find a lot of peopleare insurance poor and my
response to them is always goingto be that they're never
guaranteed the next day.
So no matter who you are, whatage you are and at what health,
you are never guaranteedtomorrow.
So I say it's better to justhave a plan, put something in
(11:09):
place and then better to do thatthan not have a plan at all.
Rob Wolf (11:14):
You know that's a good point, because a lot of people
are sort of all or nothing,right.
So they say well, you know, Iwas told I was supposed to have
X amount of insurance.
Well, I can't afford that, soI'm just going to put it off.
Well, guess what, if you'reshort, you're short.
Something is better thannothing.
Get that insurance in placethat your budget will allow for
(11:38):
so that you do have somethingright.
So if you do a financial planand the financial planner says
wow, you know, you make somereally good money here, but your
family really depends on thatpaycheck and you're really short
on life insurance and youreally need a couple million
dollars more of life insurance,and he throws he or she throws
(11:59):
out a premium, he said I can'tafford that.
You know we got too many thingsgoing on.
Well, how much can you afford?
Can you afford to add $500,000to the insurance portfolio?
Maybe it's not covering thewhole amount, but I've never met
a widow that said her husbandhad too much life insurance.
Right, it just doesn't happen.
(12:20):
And I will tell you frompersonal experience dealing with
clients that where a tragicevent happened, where a spouse
passed away when there was lifeinsurance in the portfolio, the
amount of stress caused by thefinance portion there just isn't
(12:41):
the stress.
It's still trying to overcomethe emotional loss of a spouse.
But at least they know theirhouse is fine.
They don't have to worry aboutthe mortgage payment, the car
payment, because everything'spaid off right.
They don't have to worry aboutdo I have to go back to work?
(13:02):
Those things are taken care of.
I'll add on to that as well.
Sara Wolf (13:07):
It's also really important A lot of people don't
think about.
They have to cover the cost ofchild care if you lose a spouse.
What if one person is stayinghome?
If they die?
Well, the other person's notgoing to stop working.
They need someone to take careof the child.
So all of a sudden there's achildcare expense, same with the
other spouse.
(13:27):
If the spouse who was stayingat home, their spouse, dies, the
person who's staying at homehas to go back to work.
Someone's going to need to takecare of those minors.
Rob Wolf (13:33):
And then the question is if I have a breadwinner and
the family has chosen to have,let's say, in the traditional
family model, husband goes towork, wife stays at home helping
raise the children, right,they've made that decision to
(13:54):
sacrifice a two-income householdfor them to have that parent
always at home with the child.
Father passes away or motherpasses away let's say mom passes
away.
If it was important enough formom to stay home and be with
(14:16):
these kids during theirformative years, shouldn't mom
have enough life insurance onher?
That would allow dad now to beable to stay home during those
same formative years and alsohelp these children process what
is probably one of the biggesttraumatic issues in their life
(14:40):
up to that point a loss of aparent.
Or do we have to put it wheremom passes away and dad's got to
go right back to work and nowgrandma and grandpa are watching
them or whoever?
That's not what the plan was.
The plan was to have someonethere all the time during these
(15:02):
kids' formative years, andthat's why I'm as big of a
proponent of having enoughinsurance on the spouse at home
as the spouse that's working,because I want to give both
spouses the financialopportunity to be able to make
(15:22):
that decision of do I want tostay home, right?
Do I want to have a housethat's paid for, right?
That's what the power and themiracle of insurance can do.
Sara Wolf (15:37):
It's all about taking off a burden.
Rob Wolf (15:40):
Absolutely, because there's enough burden when a
loss happens to begin with.
Last thing we have to do is addeven more burdens on top of
that.
So I'm a big proponent ofmaking sure you're covered for
the right amount.
No more, no less.
Okay, so again, life insurance,disability.
Too many people have too littleof disability insurance.
(16:04):
Your chances of becomingdisabled are far greater than
you having a premature death,but yet you know same issue
You're a walking ATM.
I unplug you whether you die orbecome disabled.
Okay, we got the same issues.
(16:26):
We got the financial hardshipsthat's created because you're
not able to earn income anymore,right?
So disability in some cases isas important as life insurance,
because the chances of youbecoming disabled are so much
greater than a premature death,although we do know that death
does occur.
(16:46):
There's no guarantee of adisability.
There is a guarantee of death.
So we just know it's going tobe a matter of when, not if,
with life insurance, but withdisability, there's a whole
other host of factors that gointo that.
Everybody needs car insurance,everybody needs home insurance,
(17:07):
renter's insurance, right?
So you know, you guys arefairly young, you're 25 years
old, right?
And you guys are on a budget,right?
You're still trying to buildyour lives.
So what are some of the thingsthat you guys struggle with as
you move through your financialcareers?
Sara Wolf (17:26):
when it comes to money, Well, I think I can speak
from a place of privilege,actually.
So I'm a 25-year-old who's notin a circumstance as most
25-year-olds.
I do own my own home.
I have extremely little debt,so the main things I'm worried
about is, of course, paying mymortgage and making sure I can
sustain my lifestyle.
(17:46):
I like to go at least once ayear to go see my in-laws in
Washington State, but other thanthat, I don't have much to
worry about.
But Jonathan, I think, canspeak a lot more as to probably
more the regular struggles of a25-year-old more of the regular
struggles of a 25-year-old.
Jonathan Foster (18:06):
Yeah, so the generic generation for us is
really anywhere from, I'll say,21 to 26, where you don't have a
home yet, because right now thepricing of homes are just
outrageous, especially with theinterest rates.
I do have a lot of credit carddebt, mainly because the career
path that I chose before thiswas an automotive industry where
you make money by paying foryour own tools.
(18:28):
So that's a lot easier to dowhen you're put in that position
than you think.
And as of right now, it's notat the top of my mind for life
insurance yet I know ifsomething was to happen to me,
my significant other wouldsuffer.
So it's bittersweet to hearthings like this, really,
(18:51):
because I know that I havenothing on me other than what we
have here through our work andI know that in some cases that's
all some people can reallyafford.
Yet with having the debt, withhaving pretty much a home search
right now, it's if I was tohave a life insurance policy
(19:11):
that would ensure that theycould go out, pay off their own
debt, pay off the debt that Imight have left behind, or go
and get a home that's what wouldbe probably the miracle maker
for me.
Rob Wolf (19:23):
Insurance is an important part of an overall
financial plan.
It's not the sexiest thing totalk about, but boy is it
important.
You know it's a lot more fun totalk about investments and rate
of return and what money can dofor you for down the road.
But boy, it's hard to buildwhen you haven't protected.
(19:46):
And it's like building a houseon quicksand If you don't build
on a firm foundation, whensomething happens because
something usually does thathouse that you've spent so much
time and energy to build isgoing to come crumbling down.
(20:07):
So if anyone out there listeningis struggling with this issue,
I would encourage you to talk toa financial advisor.
If you don't have a financialadvisor, come see us at Wolf
Financial Advisory.
Visit us at our website,wolffinancialadvisorycom.
Give us a call on our phone,269-982-1988.
(20:33):
Come talk to someone that canrelate to what you're going
through.
Okay, because we've all been inthe position.
We've all had struggles.
We all have an idea of whatthat life cycle looks through.
We can match you up with theadvisor that makes the most
sense for you, that you can havea good relationship with, that
(20:57):
you can relate well with.
So with that, jonathan, sarah,thank you for joining us today
and we look forward to havingyou join us on our next podcast,
wolf Financial Podcast.
Voiceover (21:11):
Thank you for listening to the Wolf Financial
Podcast.
For additional informationabout our firm, please visit our
website,wolfadvisorieservicescom.
The strategies and conceptsdiscussed are for educational
purposes only and do notrepresent specific investment,
(21:32):
tax or estate planning advice.
Investing carries an inherentelement of risk and it is in
everyone's best interests toconsult a tax, legal or
investment professional.
Past performance does notguarantee future results.
Securities and advisoryservices are offered through USA
Financial Securities Member,finra SIPC, a registered
(21:52):
investment advisor.
Wolf Financial Advisory are notaffiliated with USA Financial
Securities.
The strategies and concepts discussed are for
educational purposes only and donot represent specific
investment, tax or estateplanning advice.
Investing carries an inherentelement of risk and it is in
everyone's best interests toconsult a tax, legal or
investment professional.
Past performance does notguarantee future results.
Securities and advisoryservices are offered through USA
(00:22):
Financial Securities memberFINRA/ SIPC, a registered
investment advisor.
Wolf Financial Advisory are notaffiliated with USA Financial
Securities.
Wolf Financial Advisory.
When it's important to you,it's important to us.
This is the Wolf FinancialPodcast.
(00:42):
Here's your host, Rob Wolf.
This is the Wolf FinancialPodcast.
Rob Wolf (00:47):
Good day everyone.
Rob Wolf here with the WolfFinancial Podcast.
Today I got Jonathan Foster,associate of mine with the firm.
Hey, jonathan, how you doing.
Jonathan Foster (00:56):
I'm doing good today.
Thank you for having me.
Rob Wolf (01:04):
So, jonathan, you just really started the next phase
of your career.
You just got licensed to doinsurance products, and how's
that been going for you?
Jonathan Foster (01:09):
It's been a whirlwind of information.
I'll say Really, it's opened myeyes a lot more to what we
really do here and how muchabout the clients that we see.
You actually have to learn inorder to actually make these
products make sense for them.
Now, a lot of the time it'seasy to say, oh, we had a
(01:32):
conversation, I know enoughabout someone.
Yet what I found is, with howdetailed we really go into it,
you come to find everythingabout those people.
Rob Wolf (01:44):
You know, if you are looking at how do I bring a
person to a better spot thanwhere they're at now, right,
it's important to get as muchinformation about them, whether
or not they've been a client ofyours for for just a day or for
(02:05):
years.
We constantly need to begaining more and more
information about our clients sothat we can always reassess
their needs moving forward, astheir needs change.
So tell me a little bit aboutyour experiences and maybe some
of the conversations you'restarting to have, as you're
(02:27):
meeting with people now as anadvisor, going forward.
Jonathan Foster (02:31):
Yeah, it's experiences different or differ
by every single client that yousee.
Of course, that is to beexpected, with them being their
own personalities.
A big thing is that you findthat every situation is unique
and no matter what it is, youcould be doing the same thing
every single meeting, talkingabout the exact same things, yet
(02:52):
the details from those peopleis what changes.
Rob Wolf (02:55):
And you mentioned to me the other day.
Somebody asked, jonathan, arewe going to be insurance poor if
we do that?
Right, because I've heard thata lot.
You know people, let's face it,nobody likes writing an
insurance check.
You know, I don't like writinga check for my auto insurance,
my home insurance, my disabilityinsurance, my long-term care
(03:16):
insurance, my life insurance,the building insurance.
I mean, we go on and on and on.
And I understand why peoplethink, man, we're just insurance
poor until something happens,especially if something happens
and you don't have an insurancefor it, right?
(03:36):
So a fire happens and you'reunderinsured or you don't have
full replacement cost on yourhome, then we find out how
important insurance is.
Or, even more devastating, ayoung parent passes away,
leaving several children leftbehind with a spouse that may
(04:00):
have made less money, right?
How are these children providedfor if there's no insurance?
So I've been on both sides ofthe equation where I've seen
people where they've had adevastating life event that had
insurance and having adevastating life event without
(04:21):
the insurance.
The emotional issues,especially surrounding a death
or disability, they're the same.
But then when you add in thecomplexity of a financial
concern on top of that, if theydon't have the insurance just
(04:42):
accelerates the anxiety and fearto the a very difficult level
of just so much unknown.
And then you add money on topof it.
It's just a really difficultthing.
So my response to people is canyou afford not to have the
(05:02):
insurance?
Right?
I mean, even as we get olderand I'm thinking about life
insurance right now if you thinkabout all the income streams
that come in during yourlifetime, they don't just stop
when you retire, right?
Okay, so I retire, I might havea pension.
(05:23):
Right Now there's not a lot ofpensions anymore, but some
people still have pensions.
Well, when you retire, if youhave to take your pension in a
monthly amount, you have tochoose whether or not you want a
survivor benefit on that.
If you choose not to have asurvivor benefit, you get what's
called the straight lifepension, which is the highest
(05:44):
amount available to be paid outfor the rest of your life.
And some people like to do thatbecause they say well, you know
what?
I'm healthier than my spouse, Ishould be the one that lives
longer anyway.
So I'm just going to do thestraight life.
Well, then a month into it, acar accident happens and that
spouse getting the pension diesand now we have the surviving
(06:08):
spouse that not only lost thatpension check, but they also
lost a social security check,right?
And if you're a married coupleand you've been in the US and
you've been paying in socialsecurity taxes all along the way
, you're both going to bereceiving social security checks
until the first spouse dies andthen you don't.
(06:31):
Now you're down to one checkand a lot of people forget the
financial impact of the loss ofthat social security check.
Now, for some people, thesocial security isn't a lot
because it's based on thesmaller of the two checks.
So if I have a family where onespouse was bringing in $1,000 a
(06:54):
month and the other spouse wasbringing in $2,500 a month,
regardless of who passes away,the survivor is going to keep
the $2,500 a month.
So there's $1,000 of net incomelost for the month or $12,000
for the year.
But what if both spouses werebringing in a significant amount
of social security?
(07:15):
They were both bringing in$3,000 a month, $36,000 a year,
$72,000 between the two of themand one of them dies.
Well, going from 72,000 down to36,000, that's a pretty big
chunk, right?
So, regardless of your situation, sometimes it does make sense
(07:37):
to carry forward insurance Inthis case carrying forward
potential life insurance orperhaps you know.
The other thing is you know weretire, we don't necessarily
carry disability insuranceanymore, but then our thoughts
go on to well, what if I getsick and I have to go into a
facility?
Right, and then my thoughts gofrom disability over into
(07:59):
chronic illness, long-term care.
How do I protect the assetsthat I built so that, if I do
get confined to a facility, Ican continue to pay for my needs
without blowing the money thatmy spouse might still need to
live off of and or my potentiallegacy that I may want to leave
to my beneficiary?
(08:20):
So there's so many reasons whyhaving a good insurance
portfolio matters.
Obviously, you got to put foodon the table, you got to live
your life, we got to haveexperiences in our life and we
don't want to be paying so muchin insurance premiums that keep
(08:41):
you from living your life,because if you're doing that,
you're living in fear.
There is a balance, but it's soimportant for people to
understand there's purposebehind protecting what you have.
You cannot build until youprotect and have a solid
foundation, and that's why I'msuch a big advocate of making
(09:03):
sure younger people haveappropriate life insurance, term
insurance if need be, to coverthose income years that our
older clients look at that, thelong-term care aspect, the
legacy planning to protect whatthey've built.
It could be as simple as havingthe correct auto coverage for
(09:23):
your liability limits, because Idon't know anybody that's lived
a really long time, that'sdrove a real long time, that
probably hasn't used their autoinsurance at least once.
Right, you only need to use itonce to know how valuable it can
be.
Okay, so again, if you thinkyou're insurance poor, you
(09:45):
really need to be thinking aboutwhat are you really saying?
Are you saying that you'repaying so much in premiums that
you're not taking care of yourother basic needs?
If that's the case, youprobably need to reconsider your
insurance portfolio.
But if you just don't like whatyou're paying for insurance but
(10:06):
you're living your life andyou're living it quite
comfortably just remember theprotection that that insurance
is providing you, that if andwhen you end up utilizing it,
it's going to be there and it'sgoing to do what it's designed
to do, which is to provideincome to either you or your
(10:26):
spouse and or pay for expensesthat otherwise you would have to
draw down from your portfolioand joining us now is Sarah Wolf
, a certified financial planner.
Sarah, have you had anybodytalk to you about being
insurance poor, and what's yourresponse to them?
Sara Wolf (10:45):
Yeah, so obviously most people don't use that term,
but I do find a lot of peopleare insurance poor and my
response to them is always goingto be that they're never
guaranteed the next day.
So no matter who you are, whatage you are and at what health,
you are never guaranteedtomorrow.
So I say it's better to justhave a plan, put something in
(11:09):
place and then better to do thatthan not have a plan at all.
Rob Wolf (11:14):
You know that's a good point, because a lot of people
are sort of all or nothing,right.
So they say well, you know, Iwas told I was supposed to have
X amount of insurance.
Well, I can't afford that, soI'm just going to put it off.
Well, guess what, if you'reshort, you're short.
Something is better thannothing.
Get that insurance in placethat your budget will allow for
(11:38):
so that you do have somethingright.
So if you do a financial planand the financial planner says
wow, you know, you make somereally good money here, but your
family really depends on thatpaycheck and you're really short
on life insurance and youreally need a couple million
dollars more of life insurance,and he throws he or she throws
(11:59):
out a premium, he said I can'tafford that.
You know we got too many thingsgoing on.
Well, how much can you afford?
Can you afford to add $500,000to the insurance portfolio?
Maybe it's not covering thewhole amount, but I've never met
a widow that said her husbandhad too much life insurance.
Right, it just doesn't happen.
(12:20):
And I will tell you frompersonal experience dealing with
clients that where a tragicevent happened, where a spouse
passed away when there was lifeinsurance in the portfolio, the
amount of stress caused by thefinance portion there just isn't
(12:41):
the stress.
It's still trying to overcomethe emotional loss of a spouse.
But at least they know theirhouse is fine.
They don't have to worry aboutthe mortgage payment, the car
payment, because everything'spaid off right.
They don't have to worry aboutdo I have to go back to work?
(13:02):
Those things are taken care of.
I'll add on to that as well.
Sara Wolf (13:07):
It's also really important A lot of people don't
think about.
They have to cover the cost ofchild care if you lose a spouse.
What if one person is stayinghome?
If they die?
Well, the other person's notgoing to stop working.
They need someone to take careof the child.
So all of a sudden there's achildcare expense, same with the
other spouse.
(13:27):
If the spouse who was stayingat home, their spouse, dies, the
person who's staying at homehas to go back to work.
Someone's going to need to takecare of those minors.
Rob Wolf (13:33):
And then the question is if I have a breadwinner and
the family has chosen to have,let's say, in the traditional
family model, husband goes towork, wife stays at home helping
raise the children, right,they've made that decision to
(13:54):
sacrifice a two-income householdfor them to have that parent
always at home with the child.
Father passes away or motherpasses away let's say mom passes
away.
If it was important enough formom to stay home and be with
(14:16):
these kids during theirformative years, shouldn't mom
have enough life insurance onher?
That would allow dad now to beable to stay home during those
same formative years and alsohelp these children process what
is probably one of the biggesttraumatic issues in their life
(14:40):
up to that point a loss of aparent.
Or do we have to put it wheremom passes away and dad's got to
go right back to work and nowgrandma and grandpa are watching
them or whoever?
That's not what the plan was.
The plan was to have someonethere all the time during these
(15:02):
kids' formative years, andthat's why I'm as big of a
proponent of having enoughinsurance on the spouse at home
as the spouse that's working,because I want to give both
spouses the financialopportunity to be able to make
(15:22):
that decision of do I want tostay home, right?
Do I want to have a housethat's paid for, right?
That's what the power and themiracle of insurance can do.
Sara Wolf (15:37):
It's all about taking off a burden.
Rob Wolf (15:40):
Absolutely, because there's enough burden when a
loss happens to begin with.
Last thing we have to do is addeven more burdens on top of
that.
So I'm a big proponent ofmaking sure you're covered for
the right amount.
No more, no less.
Okay, so again, life insurance,disability.
Too many people have too littleof disability insurance.
(16:04):
Your chances of becomingdisabled are far greater than
you having a premature death,but yet you know same issue
You're a walking ATM.
I unplug you whether you die orbecome disabled.
Okay, we got the same issues.
(16:26):
We got the financial hardshipsthat's created because you're
not able to earn income anymore,right?
So disability in some cases isas important as life insurance,
because the chances of youbecoming disabled are so much
greater than a premature death,although we do know that death
does occur.
(16:46):
There's no guarantee of adisability.
There is a guarantee of death.
So we just know it's going tobe a matter of when, not if,
with life insurance, but withdisability, there's a whole
other host of factors that gointo that.
Everybody needs car insurance,everybody needs home insurance,
(17:07):
renter's insurance, right?
So you know, you guys arefairly young, you're 25 years
old, right?
And you guys are on a budget,right?
You're still trying to buildyour lives.
So what are some of the thingsthat you guys struggle with as
you move through your financialcareers?
Sara Wolf (17:26):
when it comes to money, Well, I think I can speak
from a place of privilege,actually.
So I'm a 25-year-old who's notin a circumstance as most
25-year-olds.
I do own my own home.
I have extremely little debt,so the main things I'm worried
about is, of course, paying mymortgage and making sure I can
sustain my lifestyle.
(17:46):
I like to go at least once ayear to go see my in-laws in
Washington State, but other thanthat, I don't have much to
worry about.
But Jonathan, I think, canspeak a lot more as to probably
more the regular struggles of a25-year-old more of the regular
struggles of a 25-year-old.
Jonathan Foster (18:06):
Yeah, so the generic generation for us is
really anywhere from, I'll say,21 to 26, where you don't have a
home yet, because right now thepricing of homes are just
outrageous, especially with theinterest rates.
I do have a lot of credit carddebt, mainly because the career
path that I chose before thiswas an automotive industry where
you make money by paying foryour own tools.
(18:28):
So that's a lot easier to dowhen you're put in that position
than you think.
And as of right now, it's notat the top of my mind for life
insurance yet I know ifsomething was to happen to me,
my significant other wouldsuffer.
So it's bittersweet to hearthings like this, really,
(18:51):
because I know that I havenothing on me other than what we
have here through our work andI know that in some cases that's
all some people can reallyafford.
Yet with having the debt, withhaving pretty much a home search
right now, it's if I was tohave a life insurance policy
(19:11):
that would ensure that theycould go out, pay off their own
debt, pay off the debt that Imight have left behind, or go
and get a home that's what wouldbe probably the miracle maker
for me.
Rob Wolf (19:23):
Insurance is an important part of an overall
financial plan.
It's not the sexiest thing totalk about, but boy is it
important.
You know it's a lot more fun totalk about investments and rate
of return and what money can dofor you for down the road.
But boy, it's hard to buildwhen you haven't protected.
(19:46):
And it's like building a houseon quicksand If you don't build
on a firm foundation, whensomething happens because
something usually does thathouse that you've spent so much
time and energy to build isgoing to come crumbling down.
(20:07):
So if anyone out there listeningis struggling with this issue,
I would encourage you to talk toa financial advisor.
If you don't have a financialadvisor, come see us at Wolf
Financial Advisory.
Visit us at our website,wolffinancialadvisorycom.
Give us a call on our phone,269-982-1988.
(20:33):
Come talk to someone that canrelate to what you're going
through.
Okay, because we've all been inthe position.
We've all had struggles.
We all have an idea of whatthat life cycle looks through.
We can match you up with theadvisor that makes the most
sense for you, that you can havea good relationship with, that
(20:57):
you can relate well with.
So with that, jonathan, sarah,thank you for joining us today
and we look forward to havingyou join us on our next podcast,
wolf Financial Podcast.
Voiceover (21:11):
Thank you for listening to the Wolf Financial
Podcast.
For additional informationabout our firm, please visit our
website,wolfadvisorieservicescom.
The strategies and conceptsdiscussed are for educational
purposes only and do notrepresent specific investment,
(21:32):
tax or estate planning advice.
Investing carries an inherentelement of risk and it is in
everyone's best interests toconsult a tax, legal or
investment professional.
Past performance does notguarantee future results.
Securities and advisoryservices are offered through USA
Financial Securities Member,finra SIPC, a registered
(21:52):
investment advisor.
Wolf Financial Advisory are notaffiliated with USA Financial
Securities.
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