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re: Wife pregnant for first time...
Posted on 5/28/14 at 10:30 am to YipSkiddlyDooo
Posted on 5/28/14 at 10:30 am to YipSkiddlyDooo
I think the point is that he wants to give her the option not to remarry and not to worry about lower QOL for any period of time.
1
Posted on 5/28/14 at 10:45 am to GenesChin
quote:
I think the point is that he wants to give her the option not to remarry and not to worry about lower QOL for any period of time.
Bingo. I also have stipulations about how the money can be used if she does re-marry. Its pretty simple planning to be honest
I'll get to your other post when I have some time.
Posted on 5/28/14 at 1:46 pm to GenesChin
quote:
This gets into a risk aversion utility function. Different for each person. If I gave you a 50-50 shot at winning megamillions or gave you 80:20 shot at winning 1 million, which would you choose? Depending on your risk aversion you choose differently. Hard to say what is the right amount of zero capital exposure. Sucks more that you personally have a hard time judging that for yourself (as in everyone). What people think is in their best interest and what is in their best interests aren't always in sync.
I was getting more at opportunity costs. Lets say, after taxes, the difference is only .5-1% difference between WL and investing the difference over a 30 year period. Is that difference worth 100% capital exposure instead of 0% capital exposure, regardless of risk aversion. This is just saying we looked at the past 30 years or something. Obviously, if you are an extremely risk tolerant person, looking forward, investing the difference to potentially gain a much higher return may be better.
I do agree though that different investors need different investments, just as different insureds need different types of insurance (obviously).
quote:Yep. I don't really sell these very often, for that reason. They aren't my favorite.
Essentially though, ROP investment is a depreciating asset. Inflation eats at it every year and the longer you live, the less valuable it becomes.
quote:
Insurance is necessary for everyone in my opinion. Protecting assets/cashflows is just smart and insurance companies make money by pooling risks not necessarily at your expense. Since pooling risk is not available to an individual, insurance is a cheap way to get valuable protection. I can't see a scenario that is not a Bill Gates type individual, where the ROR exceeds the utility of decreased risk
I was getting at comparing straight rate of return on cash value to a side investment fund isn't really apples to apples, because of the risk aversion points you mentioned earlier.
This post was edited on 5/28/14 at 1:47 pm
Posted on 5/28/14 at 8:41 pm to EveryonesACoach
I think it is responsible to purchase term life insurance.
How much is enough? I'm not certain, but I would consider buying a little more while you are young because it will be relatively inexpensive and your family will need the most when the kids are very young.
Some people think you need to make it where your family does not have to work. I'm not sure that is the best for their mental health. You should have enough insurance so that they do not face hardships like foreclosure, repo, bankruptcy, etc. I do not think people should live for generations off of a trust fund. It does not seem like a productive, substantial life to me, but I'm not a trust fund kid so maybe I'm just jelly.
How much is enough? I'm not certain, but I would consider buying a little more while you are young because it will be relatively inexpensive and your family will need the most when the kids are very young.
Some people think you need to make it where your family does not have to work. I'm not sure that is the best for their mental health. You should have enough insurance so that they do not face hardships like foreclosure, repo, bankruptcy, etc. I do not think people should live for generations off of a trust fund. It does not seem like a productive, substantial life to me, but I'm not a trust fund kid so maybe I'm just jelly.
Posted on 5/28/14 at 8:52 pm to GoCrazyAuburn
quote:
stipulations about how the money can be used if she does re-marry.
Control of funds from the grave can lead to unintended consequences. There may be a circumstance that you actually would agree to, but because of the stipulations there is not flexibility.
For instance, "only for my kids college". Let's say your son join the Marines, gets the GI bill and goes to college for free and your daughter goes to West Point. That money is hog tied. I would be very careful in trying to anticipate all the things that might happen that you need to when you control assets from the grave.
If I die, whether my wife marries again is up to her. We don't have stipulations regarding future spouses in our wills.
Posted on 5/28/14 at 10:27 pm to makersmark1
(no message)
This post was edited on 5/28/14 at 10:30 pm
Posted on 5/28/14 at 10:32 pm to makersmark1
quote:
Control of funds from the grave can lead to unintended consequences. There may be a circumstance that you actually would agree to, but because of the stipulations there is not flexibility.
Agreed. I also just realized I left out "could" in my comment you quoted. whoops
That is a really important part to that comment. I personally don't have any type of stipulations like that, but I have clients who do. It all depends on what they want.
quote:
For instance, "only for my kids college".
I know it is just an example, but that is paid for if I die.
This post was edited on 5/28/14 at 10:33 pm
Posted on 5/29/14 at 12:12 am to makersmark1
quote:
We don't have stipulations regarding future spouses in our wills.
I would put stipulations and alter the will if my future wife were to remarry after my death. Mostly to protect any children I have though.
Knowing my current GF likely soon fiance, she needs some guidance on finances or else it all would be going towards Lululemon and Z Gallerie furniture
Posted on 5/29/14 at 2:08 am to GenesChin
I didn't/wouldn't consider becoming life partners and having kids with a woman who couldn't be trusted to run a household in case something happened to me. I already knew that at age 20. That consideration was for me part of the difference between rentals and potential keepers. What happens if I'm incapacitated but not dead? You have to find someone you can rely upon to make good decisions.
We have an executor and will at-the-ready in case both she and I die simultaneously, that's prudent IMO. But she'll be fine as well as my kids from a practical and fiscal standpoint if I predecease her.
We have an executor and will at-the-ready in case both she and I die simultaneously, that's prudent IMO. But she'll be fine as well as my kids from a practical and fiscal standpoint if I predecease her.
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