Lynnette Khalfani - The Money Coach™ Newsletter 3-24-2006
Lynnette Khalfani, The Money Coach – March 24, 2006 Newsletter
Happy Spring from The Money Coach!
I’m taking a break today from Financial Boot Camp and other activities to offer you some money management tips, and to make all my subscribers aware of several items of importance. For more info, read on, or simply click on a headline below if you see something of immediate interest.
In this newsletter:
Calling All Women: Would You Like to Be Featured in Essence Magazine?
I’m working with Essence Magazine on an upcoming feature about women who have been able to make important changes to their personal finances in just 30 days. The editors at Essence know that many of you have read my book, Zero Debt, or taken the 30-day Zero Debt Challenge. Even if you haven’t, you may still have a story to tell about how you improved certain money matters in less than a month. Anyone who wants to share their story, please send an e-mail to Kimberly Allers at kallers@essence.com. Put “30-Day Financial Fitness Challenge” in the subject line. Feel free to forward this message to a friend.
Why Looking For the Next Microsoft or Google Could Be Hazardous To Your Wealth …
Recently, I interviewed a number of financial experts to get their opinions about how to become a more successful investor. I got a lot of practical wisdom including the following advice from one advisor whose clients are all millionaires:
“I tend to believe that most people should stay away from individual stocks unless they’re really familiar with the company or the people running the company,” says Greg Sullivan, managing director at Harris Bank. “Everyone is looking for that next Microsoft, Cisco or Google. But they don’t realize how many of these companies don’t pan out.”
I couldn’t agree more. Given that there is a universe of well over 5,000 publicly-traded stocks, why should you rack your brains trying to pick the one or two – or even five, seven or 12 – stocks that could be “winners”? Instead, stick to those index funds which spread out your risk and offer the prospects for better long-term returns. “Even managed funds are fun and exciting on a year by year basis because they sometimes do very well,” says Sullivan. “But with index funds, you’ll generally have higher returns in the long-run, less stress, and less taxes to worry about. There’s also less oversight that’s necessary, so I recommend index funds for most people if they don’t have professional management to work with them.”
Pre-order now from Amazon.com
Come Step Out for a Day of Finance, Fitness and Fashion!
In April 2006, you can join other savvy women for a day of knowledge and learning to help strengthen your financial future and maintain your health and wellness. You will also have fun along the way.
Prudential Financial is sponsoring the Stepping Out Conference, which is also supported by some of the country’s most prominent organizations and endorsed by prestigious non-profit groups dedicated to empowering women in all areas of their lives.
Lynnette Khalfani, The Money Coach, will be one of the featured speakers at this conference as it travels across the country. You can meet her in the San Francisco/Santa Clara, CA area, in Philadelphia/Cherry Hill, NJ, and in Chicago/Rosemont, IL. For more information or to register for the conference, visit http://www.steppingoutconference.com.
The State of the Black Union 2006 With Tavis Smiley
Thanks very much to all of you who wrote me following my live televised appearance on C-SPAN during the State of the Black Union 2006. What an amazing symposium! Television and radio talk show host Tavis Smiley organized the event. I can tell you from first-hand experience that Tavis and his team put on a stellar conference – one that will have positive social, economic and political consequences for many years to come. For those of you who may not know, Tavis has organized The State of the Black Union for seven years. This year, he invited 35 of the nation’s top opinion makers, thought leaders and experts in a number of fields to discuss the issues of primary importance to the African-American community. The goal of the State of the Black Union was to talk about ways to make Black America better, thereby making America itself better. I was honored to be on of the first panel which focused on economic empowerment and personal finances. All the participants were distinguished in a multitude of ways, including the fantastic Rev. Floyd Flake of New York, the incomparable actor and civil rights activist Harry Belafonte, and the always insightful Cornell West of Princeton University, to name just a few notable panelists. During this historic event, Tavis unveiled a book called The Covenant With Black America. This fascinating book should be required reading for every person in America – regardless of race. Following the State of the Black Union, which was held on February 25th, The Covenant immediately zoomed to #1 on Amazon.com and it’s been in the top 10 ever since.
If you haven’t already bought your own copy of The Covenant, I strongly encourage you to do so. Here’s a link to the book on Amazon: http://www.amazon.com/gp/product/0883782774/qid=1142016373/sr=2-1/ref=pd_bbs_b_2_1/102-3609550-9868956?s=books&v=glance&n=283155.
Also, here’s a description of the book:
Six years’ worth of symposiums come together in this rich collection of essays that plot a course for African Americans, explaining how individuals and households can make changes that will immediately improve their circumstances in areas ranging from health and education to crime reduction and financial well-being. Addressing these pressing concerns are contributors Dr. David Satcher, former U.S. surgeon general; Wade Henderson, executive director of the Leadership Conference on Civil Rights; Angela Glover Blackwell, founder of the research think tank PolicyLink; and Cornel West, professor of Religion at Princeton University. Each chapter outlines one key issue and provides a list of resources, suggestions for action, and a checklist for what concerned citizens can do to keep their communities progressing socially, politically, and economically. Though the African American community faces devastating social disparities—in which more than 8 million people live in poverty—this celebration of possibility, hope, and strength will help leaders and citizens keep Black America moving forward.
Disability Coverage on the Job Isn’t Enough
Most of you probably know whether or not you have disability coverage through your job. For those of you with this insurance, I’m guessing that many of you don’t know exactly how much disability insurance you have. It’s also likely that you are unfamiliar with the conditions you must meet in order to have that coverage kick in. After all, very few people spend their lunch hours or their free time poring over insurance documents. But possessing enough coverage, and having a policy that is flexible enough to benefit you if necessary, is an important part of protecting your personal finances. So make a point to read through your benefits package, or ask a human resources professional at work for guidance to learn about the specific disability insurance coverage that you have. How soon does it pay your benefits after your first day of missed work due to a disability… after the 30th or 60th day you’re off the job or some other time?
In many cases, disability protection through your employer’s plan covers only 60% of your salary. Imagine that. Many of you have a hard time getting by on 100% of your paycheck. Think of how severely you’d feel that crimp in your budget, or in your lifestyle, if you had to get by on just 60% of your take-home pay. What’s more, do you realize that company-paid disability payments are fully taxable? Ouch. That 60% payment gets slashed further by Uncle Sam dipping into your pocket. Finally, disability insurance you obtain at work is not portable. In other words, if you lose your job, quit, or your company folds, that insurance vanishes.
Making Disability Insurance Affordable
If you are the sole breadwinner in your family, disability insurance is especially vital. But even in two-income households, if your partner or your children rely on your income, disability coverage is important. For individual disability coverage, the average cost of an annual policy is $1,277, according to LIMRA International.
To lower your disability insurance costs:
This will add to any existing coverage you may have from work. It’s much easier and far less expensive to get disability coverage when you are employed versus unemployed or self-employed. So getting another policy now means that if you ever sever ties with your employer for any reason, at least you’d still have disability coverage. And here’s another reason to get supplemental coverage. The National Safety Council says that two out of three disabilities occur off the job, and aren’t covered by workers’ compensation.
The “elimination period” refers to the period of time between the date your disability begins, and the time you are eligible for benefits. So let’s say you a disability policy with a 30-day elimination period. That means your insurer will begin making payments to you 30 days after you first suffer a disability and can’t work. A policy with a 90-day elimination period is common, and will be cheaper than a policy that requires your insurer to begin kicking out payments to you 30 or 60 days after you become disabled. Also, picking a shorter length of time that the insurer must pay you can also keep those disability premiums down.
When it comes to obtaining disability coverage, this is a definitely an area where putting in a little extra time and effort could pay off for years to come.
Some of you heard me yesterday during a financial planning roundtable discussion
on NPR. If you missed it, you can hear it now by visiting NPR's site at
http://www.npr.org/templates/story/story.php?storyId=5076482. Be sure
to also visit my website (http://www.themoneycoach.net)
for updates on my future media appearances, public speaking engagements, and
other activities.
Finally, did you know that under a new law, starting this month the minimum payments on many of your credit card payments will double? The good news is that the new law will force you to wipe out your debts faster, so you’ll pay less interest and finance charges on your credit cards. The bad news is that higher minimum payments may spell financial trouble for a lot of you – especially if you are cash-strapped and already having trouble making ends meet. For tips on how to deal with higher payments on your credit cards, read my Money Blog at http://themoneycoach.blogspot.com/
Wishing you a lifetime of prosperity …
Lynnette
P.S. Feel free to forward this email to any friends, family or colleagues you know who are serious about trying to fix their finances in 2006.