What is Income Protection and Why do we need it?

We know for a fact; plans and dreams are built on the potential income which we will earn over our lifetime.

Loans for University, Car Loans, Mortgages, Personal loans for Weddings, etc are all built on the potential income earned by the individual or the family.

In the last few decades, this has encouraged people to now start thinking about having Income Protection.

Now there are two potential reasons why a person can lose income:
1. Loss of Employment/Economic Downturn
2. Loss of Income due to Bad Health

If a person losses his/her job on average they can get a job within 6-9 months, even if not at the same level maybe with a 20-30% pay cut, hence it has been a recommendation to always hold liquidity to cover expenses for 6 months as a buffer.

But, if a person falls sick or gets disabled it would immediately put a stop to income.

Now the question usually asked is... well all my expenses for treatment would be covered by my Medical Insurance... Reality: Medical Insurance (individually purchased or by the company or government) would usually pay bills related to the treatment; but what about the daily expenses?
The family would still have to cover mortgage payments, education fees of the kids, might need to change lifestyle and or the house, other expenses like car loans.

Hence, Income Protection... Ensuring the family continues to get the income which the family would require in the event a person falls ill to be able to meet the financial commitments and to continue living the same lifestyle.

www.sanjaytolani.com

#sanjaytolani #speaker #author #28000 #incomeprotection #income #financialplanning #mdrt #topofthetable

Note: All proceeds from the books are donated to charity.

WHEN IS THE BEST TIME TO BUY LIFE INSURANCE?

So one of the most important questions asked about Life Insurance is...

WHEN IS THE BEST TIME TO BUY INSURANCE?

I mean, would it not make sense to invest the money in Hard Assets instead? Hard Assets give you higher returns...don't they?

Well, to get maximum return out of a Life Insurance policy, ensure you buy it "1 DAY before you die"; it would generate the maximum return; no asset class can match that rate of return. #LOL

But then that rises a bigger question... Which day is that??? Unfortunately, not all of us know (some claim to know) when that day is. So the best day to buy Insurance was "YESTERDAY", as our last day could be today.

Question: Do you want the same regret tomorrow? "I wish i had insurance yesterday"

"NOW" is when you have the power to protect your hard earned wealth and income.

Your delay... Your Loss...

If you want to know "How much is enough?" you can read more in "28000 - Make Every Day Count"

www.sanjaytolani.com

#sanjaytolani #speaker #author #mdrt #topofthetable #lifemember #orderonline #charity

Note: all proceeds from sale of the book goes to charity.

RMB Is Now a Reserve Currency. What It Means for Treasurers

The International Monetary Fund (IMF) announced Monday that the Chinese renminbi (RMB) has met the criteria to be included in the Special Drawing Right (SDR) basket of currencies. Effective October 1, 2016, the RMB will join the U.S. dollar, euro, Japanese yen and British pound in the SDR basket.

For corporate treasury and finance professionals, this news could make the RMB a more attractive option for both payment and funding.

Debra Lodge, head of RMB business development, North America at HSBC, believes that adding the RMB to the SDR basket could change the way that some U.S. companies view their foreign exchange risk both onshore and offshore. “This may challenge large U.S. companies—who purchase inventory from China—to rethink their purchasing strategy and shift to buying goods with RMB or simply add RMB into their currency hedging portfolios,” she said. “The bottom-line, U.S. companies will need to be RMB ready as the currency continues to reach key milestones in 2016.”

Additionally, some experts believe that U.S. companies may look to the RMB as the U.S. is expected to raise interest rates any day now. “We will see more U.S. companies considering raising capital in RMB, especially as many expect that the U.S. will raise rates in coming weeks,” said Martin Maciak, head of development, Americas at HSBC Global Banking and Markets.

However, for the RMB to truly progress into a global currency, some changes will likely need to take place in China. “There are still many capital controls in place that prohibit the currency from being freely used and until that happens, it can't be mentioned in the same breath as the USD, EUR or JPY without an accompanying asterisk,” said Alfred Nader vice president, Latin America and the Caribbean Western Union Business Solutions and an expert on the RMB. “Because of this, you won’t see a rush towards the RMB anytime soon. You will see a trickle, and the Chinese will have to be content with this until they loosen their capital controls. After all, a trickle is better than nothing.”

View from Asia

The SDR basket was a major topic of discussion during a plenary on the RMB at the recent Sibos conference in Singapore. A quick poll of attendees found that 62 percent believe that the RMB should be added to the SDR basket.

But not all experts believe the RMB belongs in the basket at this time. During the Sibos plenary, Amol Gupte, region head of treasury and trade solutions, APAC for Citi, said that while he expected the IMF to include the RMB, he didn’t think it should. “The reason I say ‘no’ is, I’d like to see much more capital account convertibility before it becomes a reserve currency,” he said. “If you are a reserve currency, you want to incent a foreign investor not just to own their own currency but to own somebody else’s currency as well. That’s what a reserve currency is. To do that, you need a lot more trust, transparency and liquidity for it to really succeed. I think it still needs to mature.”

Gupte asked attendees to consider what exactly will happen once the RMB achieves SDR basket status and becomes a reserve currency. “Sure, there will be some countries that will buy the RMB as a reserve currency, but that’s not going to change anything in my view,” he said. “You think of world reserves today; about 70 percent of the world reserves are in the dollar, about 15 percent are in the euro, 5 percent in the sterling, 5 percent in the yen and 5 percent in everything else. Is that going to change by a big magnitude if the vote is ‘yes’? I don’t believe so.”

Copyright © 2015 Association for Financial Professionals, Inc.

All rights reserved.

Here are some secrets about Life Insurance which the Super Rich are not telling you

So as an advisor to several Ultra HNI families and after several discussions with them, I have realized that the way Life Insurance is perceived by some of the SUPER SUPER Wealthy families is very different from the rest of the population. Below I have tried to quickly summarize some of those observations and comments.

The Ultra HNI Clients buy Life Insurance; EVEN IF THEY DON'T NEED IT!!!! WOW... !!

Now why do they buy it then? (The Million Dollar Question)

1. Liquidity! A lot of wealthy families are "Asset Rich" but liquid poor. The Life Insurance policy becomes a quick tool to create liquidity when any key person in the family passes away to ensure Hard Assets are not liquidated in a "Fire Sale". It also protects the reputation of the family

2. Income Replacement: AND I get this question asked a lot... But don't the Super Rich have passive incomes and established businesses?? Well they do, But when the primary breadwinner passes away, these income sources may start to dry up, so the Life Insurance provides a quick buffer to help stabilize the income flow.

3. Wealth Transfer: We all work very hard to build HARD Assets; It is essential that these HARD Assets are transferred to the next generation without loosing value. Taxes, Transfer fees, Probate costs, Lawyers, Trusts, Foundations, the more complex the structure the more fees the estate has to pay. Life Insurance ensures those payments are made without touching any of the assets in the estate. Hence ensuring full Wealth Transfer.

4. Hedge against the Future: But don't the SUPER RICH already have a secured future? Well just like a car, every estate needs to have Shock-Absobers, Seat Belts and Airbags. You may be in a Rolls Royce, but you would still need the essential protections from uncertainity. Life Insurance is the Shock Absober in the Estate Value. It hedges the pot holes on the way. Life is unpredictable and so is your estate value.

5. Life Insurance as an Asset!! Life Insurance is not considered an expense on the Super Rich Income Statement; one of the reasons why a lot of people think the Super Rich don't have it..It is on the Balance Sheet as an Asset. No wonder a lot of people have the Myth that Life Insurance is only for the Poor and not the Rich. Life Insurance is an option (for all the traders and accountants out there) which is always "in - the - Money" which means; it will always have value for an estate even at its worst performance. Its a Liquid Asset/Property on the Balance Sheet of the SUPER RICH

This is a quick summary of the discussions I have had with many families. If you believe you know someone who could benefit from this information. Please share it.

‪#‎sanjaytolani‬ ‪#‎author‬ ‪#‎speaker‬ ‪#‎financialcoach‬ ‪#‎mdrtlifemember‬ ‪#‎MDRT‬#28000 ‪#‎orderonline‬

www.sanjaytolani.com

What financial resolutions should be planned for the new year?

So with the new year round the corner... Bonuses might come through... but more essentially.. What financial resolutions should be planned for the new year?

Some tips when planning (Not a new mantra...just some wisdom and old information which we might have been forgotten or ignored)

1. Preplanning or Re-Planning your Budget: Sometimes we ignore some of the small sources of income and also miss out on the small leaks of expenses in our daily busy lives. Once a year... it would be good to be reflective and just relook at where some of the money just disappeared....Only a small leak is needed to sink a boat... would be good to recheck the small leaks

2. Emergency funds: If you are thinking.."What emergency fund?" ...Well imagine if you did have an emergency? Something as simple as loosing your job! The rule of thumb for emergency funds is 6-9 months of expenses... It's a buffer good to keep a check on...sometimes it gets dried up... best time to top it up is usually when the bonus flows in..

3. Plan for Big Life Changes: Marriage, Children, Starting a business or buying a house, Kids going to University or even retirement... When best to start saving for these potential life events? Answer: The sooner the better... the cost of delay can be very expensive. Time passes by very fast and these commitments will just come knocking on the door...

4. Start paying down your debt: Very essential that you consider the cost of the debt which you may be carrying... Personal Loans and Credit Card debt is one of the most expensive forms of debt.. Try to avoid carrying debt that's not essential... and paying it down is most important..to ensure that other financial commitments can be met in the future. Exactly one of the reasons to ensure your children don't start life with a debt.. plan for their university while you can.. giving them a strong foundation will ensure they get a slight head start at facing life with confidence.

5. Protect your Income: All of the above strategies can go down the drain; if the source of your wealth dries up.. YOUR INCOME... Income Protection is very essential for any budget and financial plan. Your income can be hampered due to two potential reasons... loosing your job or a major recession (Point 2 is what comes handy then) or you if you fall sick and are unable to work; then who continues to pay off the debt or pay off expenses? Insurance companies have in the last 30 years started building income protection products usually called Critical Illness Protection Plans which would provide you a lump sum which would support your family for an additional 3-10 years.

6. Fulfill atleast one dream or desire: Do put aside a small fund to ensure you fulfill your desires as well.. or else regret kicks in or end up taking up unnecessary debt. No point in killing desires... But plan these splurges as well.

If you find it useful.. please share this with your friends and family as well. A lot more tips have been written in my book "28000 - Make Everyday Count" which is available in 3 Languages: English, Hungarian and Bahasa Indonesia

www.sanjaytolani.com

#loveyourfamily #plan #income #retirement #debtmanagement #incomeprotection #financialplanning #budgeting #sanjaytolani #speaker #author #28000

Planning your retirement?... you have a lot of work cut out for you....

So this is a slightly long article... but I felt I should write down my thoughts for my friends and family....

1. Longevity: People are living longer than ever before... (not healthier but longer)... very important to think how long will your income last after you retire. Setting up a minimum income guaranteed every month should be the first criteria for your retirement plan.

2. Healthcare Costs: We know we are going to live longer... cost of healthcare is also increasing... how are we going to manage this risk? Health Insurance? Health Care Fund on the side? Critical Illness Insurance for experimental medication? Long Term Care Insurance for nursing homes? Cost of Changing a house in case of disability? WOW... overwhelming isn't it? Even as I type this... I can feel this is something everyone should always have on their radar of planning.

3. Government Support: Never underestimate the power of this support... sometimes its the only thing that might help... but also don't overestimate this support as government policies change and you don't want to be left without any coverage. So plan as if you have to fend for yourself alone... this is an additional support level.

4. Inflation: Yes every financial planner talk about it... how real is it.... very real .... how can it affect your future income...BIG TIME... do not loose sight of this rate... it can creep up real fast and eat into your income pie... make sure your minimum income guaranteed every month is inflation protected... or 20 yrs into your retirement (when you are even more old) you might be struggling to make ends meet... so Watch it very carefully.

5. Investment Risk: Yes we all talk about risk too... Low risk... Low returns... High risk ... high returns... so what happens if we start taking risk with our pension money... well either we have a lot more than we need...or we are gonna be facing a huge challenge to catch up... watch it very carefully as well... take risks early..and reduce it as you grow older..when you cant afford to loose...

6. Legacy: An over rated and over used word... but its something we all can relate to... how do we want to be remembered? the person who was an asset or a liability on the family?? what did you do for the next generation(s) to remember you? Some of us want to be remembered for our deeds... and some of us really don't care... so painting everyone with the same brush is probably unfair.. however... as we grow older... we do want to be recognized and not totally forgotten by society... and especially our grand kids.. so think about it...

If you liked this article... please share this with your friends... I have written a lot more in my book "28000 - Make Everyday Count" which is now available in 3 languages - English, Hungarian & Bahasa Indonesia

www.sanjaytolani.com

‪#‎retirement‬ ‪#‎retirementplanning‬ ‪#‎sanjaytolani‬ ‪#‎author‬ ‪#‎speaker‬‪#‎financialplanning‬ ‪#‎investments‬ ‪#‎insurance‬ #28000 ‪#‎orderonline‬ ‪#‎retire‬‪#‎lifeinsurance‬

Economic Summary for the week ended 15th Nov 2015

The International Energy Agency said stockpiles of oil stand at a record 3 billion barrels. Indeed, oil prices returned to their August lows, losing some 8% as the entire commodity spectrum came under pressure. These are certainly interesting times. Although the USD is the global reserve currency, the US economy is quite insular (exports contribute only around 13% of GDP). As such, the FED is focused on their domestic economy, which is expanding at a reasonable pace, somewhat out of sync with broader global weakness. This could continue to perpetuate USD strength.

Key questions for investors are therefore whether non-USD liquidity (for example from the ECB) can make up for US tightening and whether current exchange rates already fully reflect impending rate hikes.