I'm a daydreamer.

Recently, I took a road trip to Bullhead City, Arizona, to deliver my mom's car to her as she begins her annual snowbirding.

This is my mom, Carol. Hi, Mom!

This is my mom, Carol. Hi, Mom!

It takes 28 hours to do the whole drive. Naturally, it's a lot of time to think.

Driving through the scenic routes of Missouri, New Mexico, and Arizona, I began to do what everyone does: I daydreamed.

I daydreamed about my friends - the friends that I've made in the past, the friendships that I'm currently building today, and the friends that I've yet to meet.

I daydreamed about my career - the immense growth that I've achieved, and the lessons still to be learned.

I daydreamed about my family, and everything we've been through - how, despite all of our foibles, we've always been there for each other, and always will be.

(Okay, I admit it. I daydream a LOT).

But, in my brain, daydreaming isn't unproductive or lazy. In fact, I like to call it something else - planning.

I like to think that I daydream because I'm planning about how I'll handle situations when they come up. That my brain is flexing its muscles so that it's ready when I need it. So, when I'm daydreaming about crazy situations that probably won't ever happen, I'm really making sure that - if they do happen - I'm ready.

Which is why we need to have a conversation about long-term care.

Time after time, I've spoken to friends and clients who are confused by long-term care.

What is it? Do I need it? Will I actually use it? Isn't it expensive?

I get it - long-term care isn't the sexiest or simplest concept. It may seem like something that may be uncomfortable to think about, let alone plan for.

However, we've all been in situations where sudden illnesses or accidents have forced our friends and loved ones to resort to an incredibly expensive patchwork of solutions that caused unnecessary strain and hardship on finances.

The fact is, long-term care works like most other insurance: you must buy it before you need it.

The first step to reducing fear is to increase understanding.

Let me try to help:

What is it?
Long term care includes all care (medical and non-medical) that meets health and personal needs. It's care that helps people with their daily activities when they are unable to do them for themselves.

When do people need it?
People need long-term care when:

  • They're seriously injured or have a disability (temporary or permanent);
  • They become weak or frail as a result of old age;
  • They develop a cognitive impairment that causes memory loss or confusion;
  • They have a chronic condition that limits their daily activities.

Will I need it?
70% of people over 65 will need long-term care at some point in their lives. But, that doesn't mean it's not applicable when you're younger - 40% of all long-term care is provided to people under 65.

Aren't I already covered?
Sadly, probably not.

  • Health insurance plans and Medicare do not pay for extended long-term care needs.
  • Most disability insurance does not cover long-term care situations. Disability insurance only acts as a partial income replacement, not as a payment for care. Disability benefits also generally end when you reach age 65.

Don't get me wrong - I'm not trying to scare you. I'm trying to make sure that you have all the information you need to make the best decision for your family.

All I want you to do is two things:

  1. Have a conversation with your family and loved ones about what your options would be should something happen. Similar to an emergency plan, make sure everyone is on the same page.
  2. Make sure you have a smart plan about how you'll be able to afford long-term care, if it happens. Whether it's an HSA, life insurance, or even leveraging your home equity, make sure you know what your options are.

Okay, maybe driving through Missouri isn't very scenic. But it's worth it when you arrive here:



PS - all of the information today came from an excellent website from Minnesota's Department of Human Services. If you're not in Minnesota, I encourage you to check with whatever resources that may be available in your state!

These hot summer days were made for the lake.

Lake season is almost over.

Did you also look at your calendar and freak out when it said August? Just like that, it seems like summer '16 is in the books.

I recently was having dinner with a good friend of mine and we were talking about Minnesota's favorite summertime activity: boating on the lake. In my opinion, there's nothing that beats floating away doing nothing.

This is my to-do list every cabin weekend.

My friend is a new dad with an 8 month old, and so naturally we talked about all the trials and tribulations involved with being responsible for a tiny infant - including how to handle him on a boat. 

One of the things we talked about at length was infant life jackets. Sure, you see pictures like this when shopping for them:

But actually, your experience with an infant life jacket probably goes like this:

Aww, look how happy they look!

The thing is, no matter how much they hate life jackets (actually, I think most adults hate them too), they're a necessary element of safe boating. It's really important that you take all the measures you can to stay afloat. That way, no matter how much you sink down into the lake, your head remains above water.

Since I'm a finance guy, I of course thought of some ways that this classic lake lesson applies to income protection. 

What if there were a way that you could take part in market gains (float along with a high wave) but never eat the losses (sink underwater)?

Spoiler: There is a way, and it's awesome.

How it Works

Say that you reposition a portion of your retirement dollars into a product, and choose indices that you want to tie your upside earning potentials to (like the S&P). Each year, you'll get an interest credit on the money in the product based on the returns of the index, up to a cap.

So, for example, let's say you put $100k into a product with a 4% cap, designating the S&P as your index of choice (it's the most popular). If the S&P goes up 10% that first year, you'll get 4% interest credited on your policy. Now, you have $104k - and here's the kicker:
It can never go down.

So the next year, if the S&P drops, you keep your $104k and your starting point for the index is the new lower number.

You could also select a plan where you designate how big of a downside you're comfortable with. This works similar to above, but you select a downside cap (i.e., -10%) and based on the performance of the index you can get returns anywhere from -10% to +15% (for example). You can never experience losses lower than the cap you chose.

Remember, income protection trumps income growth over the long run.

If you lost 30% one year, it would take a 43% gain just to get you back to where you started. If you never have to make up for the losses in the down years, smaller amounts in the up years lead to less volatile and positive performance over the long term.

Got it? Good.

Enjoy the lake - and the infant life jacket pictures - while they last!


"If I had one chance to see into the future, I would ______________."

I would like to see what roads are like with self-driving cars. 

(They're coming. Are you ready?)

But really, maybe the more responsible thing to say is that I would want to see what happens with interest rates over the next 50 years. 

Lately, I've been getting numerous comments about the stock market - specifically, if the market is going to crash soon. People are hearing about the run up in indexes over the past few months coupled with China's slowing economy and thinking: should I be worried?

So is the market going to crash soon? Here's my answer:

I have absolutely no idea.

Unfortunately, I am not clairvoyant. Neither is your CPA, your bookkeeper, or even the guy on the news. The most educated people can talk about what might happen soon, but even then it's only in terms of statistical probabilities.

Since it's not super useful to debate on whether or not the market will crash tomorrow, the best thing you can do today is to make sure the money you have in the market is long-term and can withstand the crash.

In other words, make sure your money is protected by time.

By time I mean, make sure that you have your money allocated into different buckets based on:

  1.  The purpose of the money; and
  2.  When you expect to need the money.

For example, for anyone nearing that magical 50 age milestone (like, erm, myself), it's time to get serious about income planning for retirement and ensuring the money you've saved is available after you've made the decision to move beyond your "real" job.

If you're nervous about your money, let's talk about options on how to tie your investment to market gains while avoiding market losses. 

(Yes, it's possible, and it's awesome).


5 Minutes to Protect Your Income (Seriously)

If you pay attention, you can’t go a day without hearing something in the news or the media about retirement planning and the myriad of topics surrounding income planning for our later years. Usually, these commercials profile mature individuals enjoying their retirement years on some beach.

Unfortunately, there’s another type of income planning and protection that isn’t as sexy and therefore doesn’t get nearly the coverage.

I believe our media, political leaders, business leaders and advisers have done a disservice in glossing over this essential protection.

I'm talking about income protection insurance, otherwise known as disability insurance.

Many people think that disability insurance does not (or will not) apply to them because they immediately picture a frail person in a wheelchair and think, "That's never going to be me." That might be true, but most disability claims are actually for back injuries, cancers, and heart disease. Sound a little closer to home?

How many benefits or fundraisers have you been to because someone you love is in tough financial shape after being struck with a chronic illness, debilitating disease, or tragic accident?

As it turns out, we’re much more likely to live and survive these events than we are to die.  If they happen during our working years, we are in danger of losing our ability to earn an income that will support the lifestyle for which we’ve become accustomed (to say nothing about the increased expenses that result after such a diagnosis or accident).

Do me a favor: take 5 minutes this month to increase your awareness surrounding your knowledge of income protection and the specific coverage you carry, if any.

These term sheets can be hard to understand - I'd be happy to help if it all looks Greek.

Statistics show that during our working years there is a 25% chance we will suffer an illness or accident that will prevent us from doing our job for at least 90 days.  Isn’t it worth five minutes of your time to make sure that risk is covered?


If you want to know more, give us a call or check out this website for some outstanding unbiased resources.

Happy learning!

- Darryl