Money Matters: Income Basics

If you are an astute financial guru with years of experience and knowledge, this blog series will likely bore you to tears. This series is for the young and young at heart who don't quite know where to start. This simplified equation will help you to clear up confusion about budget building basics and clear up the misconceptions that may be plaguing you, and it is important to understand the basics before you move into more complex issues like credit, income taxes, etc. Having an income allows you to create goals for your finances (and pay your expenses). My top 5 financial goals are listed below:

1. Save for my son's college education (should he choose to go)
2. Save for retirement
3. Travel to at least 2 countries a year
4. Build a home
5. Build a strong empire/legacy to leave to my son

For our purposes we'll use the following definition for income: all funds flowing into your bank account from all sources. This includes wages, money received from business activities, unexpected gifts, interest, etc It is important to know where your money is coming from. For most people starting out, their income comes from working a job and receiving a direct deposit on some set schedule throughout the month.




If this is your only source of income, it will be much easier for you to track. If you have multiple streams of income, it is important to know when and how much to expect at any given time. This is one area of your finances that you have complete control over! Yes, you have complete control of your finances and no one can convince me otherwise.




You may be limited on a job by your title; however, if your job offers opportunities for advancement and higher pay, you should strive to obtain that higher pay grade. If there are no offers for advancement, you may (you should) find a place that allows you to grow and be promoted. If you are an entrepreneur, you know that your income is dependent on your efforts. What can you do within your business plan and parameters to boost your income? How can you attract more paying clients and referrals? This is for you to determine and there are several industry leading experts in this area!




Once you've mastered your income, you can start building a plan to reach your financial goals. Your income is your choice, and it is the most important piece of creating a boosted budget!

Money Matters: Understanding the Equation

Once you've taken the time to discover where your money is coming from, where your money is going, and how your money is growing, you'll need to make a plan to get to where you need to go! This is where budget planning comes in handy! What are your top 5 financial goals? My goals are

1. Save for my son's college education (should he choose to go)
2. Save for retirement
3. Travel to at least 2 countries a year
4. Build a home
5. Build a strong empire/legacy to leave to my son

How can I achieve these  goals? I must set forth a realistic yet challenging budgeting and savings plan and know what options will get me to my goals in a way that truly suits my needs. The equation below is a very simplified way to understand your monetary goals:

Income = Expenses + Investments

 Although simple, if you understand what each component contributes and how to balance the equation, your financial goals are attainable.

Income: all funds flowing into your bank account from all sources. This includes wages, money received from business activities, unexpected gifts, interest, etc

Expenses: all fixed or variable outflows (rent, electricity, water, etc)

Investments: all money moved strategically and intentionally to a separate account to gain interest credit and the interest added to this account

If you've never created a budget or need a coach to guide you along the path, Start Young Financial Group and finance coach Latasha Kinnard are the place to be and the person to know! You'll have access to resources and tools that will help you create your best budget and live your healthiest financial life possible! The Virtual Budget Box is a great option for beginners or anyone who just needs help putting it all together while the 90 Day Income to Empire Intensive Course is a great option for people who are looking for a hands on, one-on-one coaching to not only reach their financial goals, but to surpass them! Get started on your path to financial freedom today!

Money Matters: Coming, Going, Growing?

This year we are going to spend a lot more time talking about finances and budgeting! When it comes to your money, you need to know where it's coming from, where it's going, and how it's growing. If you miss any one of these three areas, you can end up in a lot of trouble! This is when Payday loans and high credit card balances can create a huge sinkhole in your financial pathway! You don't want to get sucked in to a sinkhole!


How do you take control of your finances and start making smarter decisions? You start with the beginning: income. How much money do you bring home each week, biweekly, monthly? Once you have this figure, you need to look at your expenses, ALL OF THEM! This is not the time to get cute with yourself. Be honest with your expenses. Count how often you stop at the drive-thru for coffee and how many packs of roasted unsalted peanuts you buy when you stop to pay for gas. These little expenses add up very quickly over time!


Next step, determine what expenses are necessary, acceptable, and extravagant. Try to reduce your extravagant expenses to zero or less than 10% of your income. Yes, it may be nice to go to the beach every weekend in the Summer, but the amount that you spend on fuel, food, and lodging (if your relatives don't live there) could be better utilized in category three: money growth!


The last category is your money growth. What kind of investments do you have, stocks, bonds, insurance, annuities? Is that investment strategy working for you and your family? If not, you need to reevaluate your strategy, and I'd love to help!


Visit the Prosperity Legacy webpage today to schedule a free consultation by filling out the "Contact Us" form (please include 3 dates/times that you are available), and remember: when it comes to your personal finances, you need to know where your money is coming from, where it's going, and how it's growing.


~Shanta Wilkerson

Smart Money: What is life insurance?

When it comes to life insurance, there is a lot of misinformation and lack of education. There are 5 types of life insurance available on the market: term, whole live, universal life, variable universal life (I do not offer this product.), and indexed universal life. Term is the cheapest, but it expires after a certain period and you may be left without coverage or your coverage premium spikes. Whole doesn't build as much cash value, but these are the two most people know about. Variable is invested in the stock market and if you die at the wrong time, you could have less than your face amount to leave behind. Universal life builds at a set percentage, and indexed builds at a percentage based on the market. Of course if you just need coverage, you should find an agent who is honest and willing to share all of this with you so you can plan accordingly. I would love it if people did pay their policies for the year at tax time.

When I meet with potential clients, I start by completing a financial analysis. This is a very important tool when deciding which of these products best fits their current needs and their goals.

I use the DIME theory of insurance.

• Debt - how much consumer debt do you have? This can be covered with a term insurance policy.
• Income - how much income needs to be replaced for 8-12 years? This  needs to be covered with a permanent insurance policy.
• Mortgage - how many years and how much remains on your mortgage? This can be covered with a term insurance policy.
• Education -  how many children do you need to fund through college if you pass away before they get there? This can be covered with a term insurance policy.

Some people are firmly set against life insurance, and of course it's their right to choose one way or the other, but we readily insure cars, phones, homes, apartments and all kinds of material possessions without regard for the vehicle that we use to make the money to make these payments: our bodies/lives. If an individual has other means to replace their income, pay off their home, settle all their debts, pay for their children to maintain life and attend college after they are gone, and have their money work for them, I applaud them! The benefit, in my opinion, of investing with life insurance is that it gives you protection on your life while making you money at the same time. It's a great place to start your investment plan!

Life insurance is a contract that you purchase from an insurance agency that allows them to invest your money for a certain period of time. In exchange, the agency promises to pay your beneficiary upon your death and to pay you interest along with payments for any other provisions specified (disability income, long term care, children's insurance, etc) for a specified amount of time and money. Term contracts do not offer cash value accumulation. You can pay for your contract in small increments or in a lump sum.When you die, the company will then pay your beneficiaries your contract. This is how and why wealthy people (white or black or other) pass down wealth to their families. You don't pay $250k for a $250k contract, you only pay $26,520.95 and you own it. These are the things that more people need to be aware of! Let's kill the stigma around life insurance by becoming educated about how to use it and protect ourselves and our families while we can!

Smart Money: How to Invest your Income Tax Refund

2016 is fast approaching which means income tax season is coming! If you are like many Americans who receive an income tax refund, you have already estimated your refund and you're anxiously awaiting W-2s! So while you are mapping out what you could potentially do with your refund (if you get one), make sure you prioritize. Put the most important things FIRST: life after tax season! There are several things you can do to maximize the use of your refund and position yourself for life after refund. Including (not limited to):

• invest in bonds
• invest in stocks
• pay your current bills up for 6 months
• buy & pay up your life/health insurance for a year or two
• start a business
• DO NOT buy or finance a vehicle, jewelry, anything from Aarons, Rent-a-Center, etc!

Let's focus on two options: business and insurance. In 2013, I received an income tax refund of $1,118 and started my natural product line. I invested those funds to start a business that I was passionate about without going into debt. Another great option is life insurance. Life insurance is a great investment tool to have in your portfolio (not term or whole life). When you receive your income tax refund, pay it up for year or two! No new "bills," and your life is covered!

Let's take a look at some numbers for me. I am a 25 year old female, no tobacco usage, with no medical issues, and I have not been prescribed any medications in several years (since a bad stomach flu in 2012). I also have a four year old son that I want to protect. Here are a few options available to cover me and my son for a year (these numbers are for 12/17/2015):

Foresters
Smart UL $250,000: $1,275.31
20 Year Term: $484.60

AIG
Elite Index II $250,000: $817.60
20 Year Term $250,000: $186.50

Mutual of Omaha
Guaranteed UL $250,000: $$1,144
20 Year Term $250,000: $452


These are just a few options that I have available. Keep in mind that permanent insurance is customizable, and the right agent will customize a protection plan that fits your needs and your budget. Stay tuned for more information about how to customize your life insurance to fit your needs and your budget. Be blessed!

~Shanta Wilkerson