Posted by RichSlick under Author Tour Comments Off on Stop Thinking Turkey, Start Thinking Insurance
It’s time to stop thinking about that turkey and start thinking about insurance, the following is a guest post from Baily Harris.
*How Much Insurance Do You Really Need?*
Reducing insurance coverage can seem like a good way to save money, but
doing so could lead to expensive problems later on. At the same time, you
don’t want to buy too much insurance and waste your money on coverage you
don’t really need. The following guidelines will help you determine if you
are under or over insured.
Every state in the nation requires motorists to have some form of auto
insurance coverage. Lenders and dealerships also require customers to carry
a minimum amount of auto insurance on vehicles that are leased or listed as
collateral on an unpaid loan. Minimum requirements can vary depending on
where you live and your personal situation.
Everyone should purchase an auto policy with some form of liability
coverage. Liability covers other people’s expenses when you are at fault in
an accident. The amount of liability that you need purchase is dependent on
the amount of time you spend on the road (your risk level) and whether or
not you have overlapping liability coverage. For example, if you rarely
drive and have an umbrella insurance policy that provides additional
liability protection, you can probably keep the liability levels in your
auto policy relatively low.
Purchasing collision and comprehensive coverage is also important if you
have a nice vehicle. Collision covers damage done to your vehicle in an
accident. Comprehensive insurance provides coverage for non-traffic related
incidents, such as theft, vandalism, and damage from falling objects. If the
value of your vehicle is not equal to one year’s worth of insurance, you can
probably forgo both collision and comprehensive coverage–you’d be better
off saving the money for a new car.
You can also choose to purchase additional coverage such as personal injury
protection (PIP) or underinsured motorist protection. PIP covers your
medical expenses regardless of who was at fault in an accident. This type of
insurance is not necessary if you already have good health insurance
coverage. Uninsured motorist protection helps cover your costs if you are
involved in an accident with someone who has no insurance. This type of
coverage is not absolutely necessary but is worth exploring when you
consider the fact that 16 percent of today’s drivers are uninsured.
Although home insurance is not required by law, you will undoubtedly have to
carry some form of coverage if you are paying a mortgage. Even if you aren’t
making payments on your property, home insurance is still a good buy.
To begin with, you should have enough insurance to cover 100 percent of your
home’s replacement costs. This amount may or may not be equal to the market
value of your home or the outstanding amount on your mortgage loan. What is
important is that it covers the cost to rebuild your home from the ground
You will also want to purchase coverage for the personal possessions inside
your home. The only way to determine how much insurance to buy in this
situation is to take inventory of your possessions. Determine how much they
are worth and how much money you might need to replace them. Coverage is
often limited to 40 to 75 percent of the amount that your home is insured
for. However, you can purchase a floater policy if you think you need
Your home insurance policy should also provide some type of liability
protection so that you are covered if someone is ever injured on your
property. Liability coverage levels vary. As with auto insurance coverage,
your home insurance liability coverage can be kept to a minimum if you also
carry an umbrella insurance policy.
A final home insurance coverage option is loss of use protection. This type
of coverage will reimburse you for hotel bills, restaurant bills, and other
living expenses that may be incurred if you are forced to leave your home
after a disaster. If you live in a high-risk area, loss of use coverage is
Guest Post: Today’s post is a guest post from Tom Becker, an Australian entrepreneur building a website that allows Ozzies to
easily and quickly compare credit cards from top banks such as ANZ and Aussie among others. When he isn’t working, which doesn’t happen often, Tom enjoys the outdoor life, good food and travel.
The 10 Characteristics of a Successful Entrepreneur
Many people wonder how their life would change if they were to become a successful
entrepreneur. Few people, however, find success in achieving such a goal. What makes
these people succeed where so many others have failed? Why do they thrive in the
world of entrepreneurship, while others just get lost? Here are some traits that
have been proven over time to be important in successfully becoming an entrepreneur.
1. Persistence (at the right thing)
Try and try again, they always say. And in the case of being a successful
entrepreneur this could be the most important trait, with one very significant
caveat: entrepreneurs who are successful tend to be able to discern what is worth
pursuing and what isn’t. Many people have failed in their initial attempts, but
those who keep at it learn from their failures and turn that into success.
In this case it doesn’t kill the cat. Many successful entrepreneurs became
successful because they were curious as to how something worked or how to build
something better, faster, cheaper etc.
3. Staying focused
Keeping oneself focused on a successful future is not something everyone can do when
the chips are down. To keep working to attain a future goal may be one of the
hardest things anyone can do, but a successful entrepreneur will keep their focus on
the road ahead even when times are tough.
This is where almost 100 percent of people who fail go wrong. They talk like they
know what they are saying, but they never take the action to make it work.
Successful entrepreneurs excel at this trait, taking decisive action and without any
5. Never judging yourself
Most people will beat themselves up with guilt when they make a poor decision or
something fails. Most successful entrepreneurs however see this merely as a learning
experience, and what they learn from the failures will be part of what makes them
successful in the future.
It’s hard to get anything you want if you can’t persuade someone. Everyone does this
in one form or another practically every day. Those that excel at this excel in the
world of business as well. Whether you are selling a product or selling yourself,
the more persuasive you are the more successful you will be.
No one wants to deal with an unscrupulous businessman, and successful entrepreneurs
know this. Your success can only be as big as your reputation, and if that gets
ruined it’s tough to fight back. Doing business in an honest and ethical way will
not only make you feel good, but bring you more customers as well.
8. Leadership abilities
There are people who lead, and people who follow. You are most likely not going to
find a successful entrepreneur in the second category. The skill to lead others is
not an easy one, but the ability to get results from people is a key to success for
any company. Successful entrepreneurs are experts at communicating their vision and
having people follow their plans.
Going hand in hand with leadership abilities, the entrepreneur’s ability to
communicate with others plays a huge role in their success. It doesn’t matter if the
person is a vendor, a customer, or a partner, being able to communicate with people
in a way that makes them feel important while getting what you need is always one of
the top traits of a successful entrepreneur.
10. Passionate and enthusiastic
Why do successful entrepreneurs sometimes talk a lot, and can come across a little
loud? Because they are passionate about what they are doing and will
enthusiastically tell people about it. This could possibly be the number one trait
responsible for one’s success. Without passion and enthusiasm for what you do, how
can you expect anyone else to care or listen to what you are selling or talking
These are only a few of the characteristics that can make someone a successful
entrepreneur. You may be able to think of more on your own, but you can’t argue that
these traits are pivotal in the overall success of an entrepreneur. Develop these
and it is possible that one day you can be one of them.
About the author
Tom Becker is an Australian entrepreneur building a website that allows Ozzies to
easily and quickly compare credit
cards from top banks such as ANZ and Aussie among
others. When he isn’t working, which doesn’t happen often, Tom enjoys the outdoor
life, good food and travel.
I had the privilege of conducting a brief Q&A interview with Wade Slome, author of How I Managed $20,000,000,000 by Age 32 (available at www.Sidoxia.com). Please feel free to ask questions throughout the day as Wade will provide commentary. A random drawing will be held for a free copy of Wade’s new book, to enter simply leave a comment or question to enter the drawing.
Question: Wade, managing 20 billion by the age of 32 is fairly impressive, your extensive training and education is equally impressive, can you tell us what you feel were three most important experiences that got you to the point of managing such a large pool of money and brought you so much success?
Answer: There were a number of influences, but undoubtedly family encouragement along with the importance placed on education played a major role in my success. Beyond that, a quote that rings true for me comes from philosopher Albert Schweitzer who stated, “Success is not the key to happiness. Happiness is the key to success.” If you are passionate about your professional pursuits, then I strongly believe success will accrue to that individual over time. Fortunately for me, I found my passion in investing.
Question: It seems there is a great deal of advice to avoid the media and talking heads on TV lately, what alternative resources would you recommend today’s investor seek out to achieve better returns?
Answer: The society we live in today is geared towards instant gratification and short-termism. The “Cramer-ization” of America with the get-rich-quick trading strategies only hinders wealth creation and delays retirement. The best media sources come from individuals that have invested money, for long periods of time, and have been successful throughout economic cycles. It’s entertaining to listen to all the intellectuals opining about imminent Armageddon, but if you truly listen to the seasoned pros like Warren Buffett, Jeremy Siegel, Bill Ackman, Howard Marks, and other veterans, you quickly realize that periods like these are great for investing. Your audience would be much better served by reading a good investing book (no plug intended) rather than listening to a talking head spewing the headlines of the hour. Irrespective of investment style, the achievement of long-term superior returns comes from independent thinking, going against the herd, and as Warren Buffett says, “buying fear and selling greed.”
Question: There are still autopsies being performed on the cause of the current economic calamity but do you feel that more government regulation is needed to prevent future banking and economic crisis? If not, then what will help change the way Wall Street does business
Answer: Yes, heightened regulation is necessary, and we have already seen dramatic changes in our financial system. The fact that investment banks (i.e., Bear Stearns, Lehman Brothers, Merrill Lynch) that existed for generations evaporated in a blink of an eye is clear evidence regarding the need for increased transparency and regulation. Over history, the sentiment pendulum of government regulation swings from one end to the other, and we are clearly coming out of a period where regulation was sorely lacking.
Fear and greed have existed as long as humans have existed. For example, rampant speculation and manipulation took place in the “Roaring 1920s,” accompanied by margin lending going off the chart. The massive banking collapses occurring in the late ‘20s and early ‘30s led to constructive regulation, such as the Glass Steagall banking act of 1933 (separated commercial and investment banks) and the establishment of the FDIC (Federal Deposit Insurance Corporation for insuring bank depositors’ money).
More recently, over the last decade or so, we have seen a number of large schemes and frauds perpetrated (Enron, WorldCom, Canary Capital, rogue traders Nick Leeson [Barings Bank] and Jerome Kerviel’s [Societe Generale], etc.), and now you can add the Bernie Madoff scheme to the list. I can guarantee you, this will not be the last securities fraud or scheme we see or hear about. Greed and fear will always be a part of our financial markets and white-collar crimes will persist. Eventually, these scams are uncovered, people go to jail, lessons are learned, and productive regulation is implemented.
Question: Your new book offers advice on asking critical questions before selecting a financial adviser. Can you give us a sneak peek by sharing with us one thing a person should ask when selecting a financial adviser in today’s tough market conditions?
Answer: The most important question has three answers: fees, fees, and fees. If you are buying high ticket items like automobiles and homes, most people shop around and are not bashful when asking about price. So if you are potentially paying thousands in fees for an adviser’s services, then why not shop around? Unfortunately, you almost need to go to law school to read and understand the masses of fine print in brokerage statements and prospectuses. Make your adviser explain ALL fees in terms you understand, and if you get unclear or evasive responses, then I encourage investors to move on.
Your average broker may be charging you multiple load fees, management fees, 12-b1 fees, surrender charges, administrative charges, excessive trading commissions, etc. The less you spend on fees, the more you keep, the earlier you retire, and the more vacations and toys you can buy. The industry trend is shifting towards “Fee-only” advising. I’m obviously not the only “Fee-only” adviser around, but the transparency and clarity around this fee-structure is vastly superior in my opinion. Unlike most brokers, as a “Fee-only” adviser, I have no products to sell and no inherent conflict of interests in the portfolio management process. Under the “Fee-only” structure if the investor portfolio depreciates in value, then the adviser’s paycheck goes down in sympathy. Therefore, both the client and adviser have an incentive to create wealth. On the other hand, most brokers are commission-based, and therefore they collect their commissions up-front. As a result, brokers can tuck away commission and use them for cruises and sports cars whether the client portfolio tanks in value, or not.
Rich, I think you struck a chord with that question!
Question: Wade, I appreciate the time you’ve taken to answer these questions on your virtual blog tour. Do you feel that bloggers can fulfill the need for alternative media and provide a better forum for investment ideas, investor education and information exchange?
Absolutely. Just like stocks, in the blogosphere there will be a lot of dogs, but there are plenty of hidden gems. The difficult part for the average investor is separating the wheat from chaff. As I mentioned earlier, I am partial to those bloggers that have invested their own money, suffered from their own battle scars, and have a true passion for investing.
What do you think might be the potential pitfalls with relying on bloggers
for financial advice?
Answer: Everybody’s financial situation is unique, and has the potential of getting tremendously complex when you introduce such things as retirement planning, tax planning, estate planning, insurance strategies, education planning, etc. Certain bloggers will be more educated and equipped in providing answers to difficult questions, while others will not. Readers need to educate themselves and continually ask questions. Investing is both an art and a science, so readers have to be skeptical in their consumption of blogger advice.
If you haven’t seen the movie, “Super Size Me,” it’s a documentary that follows an individual who voluntarily decides to eat McDonald’s fast food for breakfast, lunch and dinner for 30 days. What you soon realize is that his health rapidly deteriorates due to the barrage of greasy Big Macs and fried Apple turnovers. The same principles apply to financial bloggers – subjecting yourself to trashy information will be harmful to your investing health. Fortunately Rich, your blog has nothing to worry about!
Question: Wade, we’re excited about your new book and I’m sure Get Rich Slick readers will be eager to read it but can you give us a sneak peak at what your next big project might be?
Answer: Right now I’m having a blast with my book tour and doing quite a few speaking engagements to better educate investors on the pitfalls and opportunities in investing. The next step, who knows? Maybe I’ll start my next book . . . How I Managed $40,000,000,000.00 by Age 42?!!
Wade W. Slome, CFA, CFP®
Sidoxia Capital Management, LLC (www.Sidoxia.com)
Plan. Invest. Prosper.
Special guest, Wade Slome, author of How I Managed $20,000,000,000 by Age 32 will be stopping by on a virtual blog tour tomorrow. Please be sure to stop by and visit for a brief interview and discussion with Wade. Readers posting a comment or asking a question will be entered in a random drawing to win a free copy of Wade’s book.
We all know that the financial markets are in uncharted territory at this time.
That’s why people are looking for someone who understands what’s happening – to give them solid advice.
If you’d like to get a sneak preview, visit Wade’s site over at www.Sidoxia.com