Childrens wealth seminar  Here is a semianr I taught at for high school kids in September of 2010.

Touchy Subject.

Today I thought that I would take a few minutes and talk about the use of insurance to fund you children’s education, and why would you do that. There a several reasons but lets get the touchy one out of the way first, Life Insurance is not for the dead it is left for the living and I know that when my children grew up I did not have any life insurance on them and never wanted to think about what would my wife and myself do it one of the kids died.

I did  have a young girl that I took to Daddy daughter dates, taught her to drive, and she showed up to our home every Friday night to babysitter our kids. I was her surrogate dad because her father had died one day at work.

 One day she was at girls camp by the river where she went to get water, she slipped in the water it was icy and swift  there was a waterfall just down stream and Shirley died. There was no money to take care of funeral  arrangements so a collection was taken. No plan was made for her death or education.

If Shirley had not slipped in the river and died she would have wanted to get and education but she did not have the grades or physical skills to get scholarships, and her mom had no money.

An inexpensive answer to this would of been a cash value life insurance policy

The reason is self explanatory for death but why for education? The government has a IRS code called 529 and it is a plan where we can put money away for our family to pay for college education. The good points of the 529 is that it is and grows tax deductible, the problem is that if you use it it needs to be with an accredited school, what happens if your child wants to go to a trade school and you have the money in the 529 but it is not accredited you can not use it with out being taxed, oops.

If you use cash value life insurance and start at a very young age of investing your children could have a large college tuition fund by the time they go to school, the money in the insurance policy grows tax free and when you borrow from it the money is tax free as long as the policy is in force. When the kids graduate and are adults they can keep the insurance coverage on themselves and protect their family from having funeral bills when they pass away.

This is not really complicated but their is more to it. I suggest that if you have children and you are concerned about your children’s wealth it is important for you to talk to a financial advisor who has an insurance license or work with an insurance agent  and ask about the benefits I have addressed in this article.

Please do not take this as legal advice you should check with an attorney and your accountant for any changes in the laws.

Happy Mothers Day!

It is Sunday morning and it is Mothers Day, I had to leave home and come to my office because our internet was not working today.

Scince it is Mothers Day and I would like to spend it with my wife and see my mom I would just like to tell all the Mothers to have a wonderfull Mothers Day.

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I saw this motivational video and had to ask myself, will our children finish strong? Will you? How will you keep getting up?

I am going to make this so children can understand Dollar Cost Averaging

Since I made the statement of I am going to make this so children can understand it I need to Qualify just a bit I teach this to Children 14 years old and above. I usually have a diagram of a bucket to demonstrate putting the money in, so here goes. We will be doing this for a 6 month period of time.

Dollar cost averaging done easy, let’s say you have a favorite soda pop and you will spend $100.00 a month to buy stock in the soda company. The soda stock is selling for $10.00 a share and you have $100.00 to buy the stocks how many shares can you buy. That’s right 10 shares the 1st month.

The2nd month the stock is selling for $5.00 a share how many shares can you buy that’s right 20 shares.

 The 3rd month the stock is selling for $1.00 a share how many shares can you buy that’s right 100 shares.

The 4th month the stock is still selling for $1.00 a share and you  buy another 100 shares.

The 5th month the stock goes back to $5.00 a share and you buy 20 more shares.

The 6th month the stock goes back to $10.00 a share and you buy 10 shares.

Over the six months you have spent $600.00 on soda stock and you have bought;

10 shares

20 shares

100 shares

100 shares

20 shares

10 shares

Total amount of shares is 260

Now that you have 260 shares and they are worth $10.00 a share you now have $2600.00 worth of stock.

You see when you go from $10.00 to $1.00 it is a 90% loss but when you go from $1.00 to $10.00 it is a 1000% gain.

Now hopefully I have explained Dollar cost Averaging so children can understand it.

Please help me with your comments to make sure I did a good job. Thanks