As we continue to grow and continue to be Loud, will always appreciate you for taking 5-10min of your day to read what I have to say, thank you!

This week I want you to check your W4/Withholdings on your paystub, are you withholding too much and can increase your paycheck?

Pssst…This won’t be about webinars/seminars/conference, it got too boring writing about those in Hawaii so it will come at a later date.

Am I Good?

How many times have you asked your self this question?

I truly ask myself DAILY, not some of that is am I good physically & mentally because this football player battles some demons. However, the Am I good, Financially? That question is the sole question that is my duty to be able to answer for all my clients, with the answer of YES you are good! Go live your life.

So I will ask you (unless you’re my client), Are you Good? It’s not an easy answer, truly isn’t nor should it be. You may be a more risk taking type of person so you will always say yes or vice versa but to truly be “good” it takes time, planning and the ability to grind. Let’s dive into what makes you “good”.

Mentality

As you have seen me write about Money Mindset a time or two, you know that I will continue to preach about being in a positive relationship with your money prior to taking on this wealthy journey with your full might. If you so choose not to, those bad habits will sneak back up on you and you will revert to them quickly. What does a positive relationship with money look like? Well I want you to think of your latest purchase (idc if it’s coffee, a car, home or spotify premium), how did that purchase make you feel?

Seriously….think about the emotions you had before, during, after and right now. If you had to double think the purchase, mentally could calculate how much you have in your account after the purchase or lack the joy and enthusiasm you had going into the purchase than you have an abusive relationship with your money. Your money owns your mental game and that is a game that you need to take control of first! We won’t dive into how to improve this relationship in this issue but I will have something out soon.

Insurance

To truly be good, you need to be good NO MATTER what happens, from accident, dismemberment to death or just wisdom teeth being yanked from your skull (boy was that fun last year). You need to be squared away, so what insurance do you NEED: in no particular order ;)

Life Insurance - at least get the basic, when you die your legacy can continue. There are many different ways to utilize Life insurance (will have something on that in September)

Health/Dental/Vision Insurance - Yeah…so you broke your leg, want that to be all out of pocket? Employer health insurance is very common, at the very least you can go to the ACA Marketplace. Yes, some procedures will overlap with dental/vision and your health insurance, trust me I just utilized that for my 4 wisdom teeth.

Disability Insurance - Short term DI = Maternity leave coverage (in the US), I say that again Short Term Disability is your MATERNITY LEAVE COVERAGE…sorry fellas not Paternity. Short term gives us the coverage from usually 7days-90 days or so. Long term DI is for the more serious side, where it will last well over 90 days, years maybe even the rest of your life!

Property & Casualty - Simply put this is your Home/Auto/Collectibles and get the damn Umbrella coverage, this covers a couple million more in case of a lawsuit.

Income

Is your income good to go? This has some layers to it and I want to highlight my opening paragraph asking you to look into your withholdings. Did you know by adjusting your W4 you can increase the amount of money in your pocket per pay check?! Yes, it’s legal and something not a lot of people take advantage of.

Why does it matter? Well, if you like giving the government an interest free loan all your, then be my guest! The 2023 average refund in the us is $2,753 published by the IRS. SO this means that for the entire year your $2,753 or $229.42 per month, were just being used however they chose without helping you in your cash flow situation or hell just by earning interest. There are many arguments/statements that people state the interest is like $100…well this is true $100 (4%) isn’t that much in the grand scheme of it however is an extra $229.42 per month, going to help you pay bills, put into emergency savings? The answer is of course it is!

Thus I want you to use this calculator from the IRS to adjust and make proper changes to benefit your family…yes owing the IRS a little or even $0 is an IDEAL SITUATION.

Now that I went down that rabbit hole a wee bit, let’s get back to Income to answer am I good. This is complex, aside from the W4, if your income is not over expenses currently, then you will be screwed if we cannot fix that issue. However, people’s expenses change throughout life and a good barometer is 80% of your current income needs to be replaced by your retirement/savings planning for when you choose to retire whenever that is!

Savings

So…You have heard it a million times before.. Pay yourself first. Well truly we all should but that is difficult in practice if we have never done it. Our industry calls it “Reverse budgeting”, which simply taking 25% out into savings/investing buckets, then utilizing the remainder to pay your bills. All admit, we are transitioning to this as well and I will keep you up to date on that progress. It isn’t something you can do immediately it takes time to adjust so start with 5% of your income, work your way up.

Take advantage of free money from your employer matching your 401k, of course!

The most important piece of Savings to answer if you are “good” is your emergency savings! Experts say 3-6 months of savings, up to 12+ months if you are a business owner. I love following that as well, I also like to take it a step further and tie it to your Short Term DI and Long Term.

For Example, Short term DI policy (pays out after 7 days and pays for 60 days, at 60% of your income), Long-term DI Policy (Pays out after 90,180, 360 days and will pay for up to age 67, 60% of your income). So if we do this correctly, our emergency savings of just 3 Months, will actually stretch further because 7 days in, you will only be using 40% of your emergency fund, after 60 days you will go back to using 100% then again at 90 days (if that is your plan, you can adjust this to kick in right after STDI, depends on premium cost), 60% is covered until you are off DI.

In this example written out for my #’s people, Income = $100k, assuming we need to replace your income 100%, Emergency savings of 3 months.

Emergency Savings = $25k

STDI Pay out = $5k monthly

LTDI Pay out = $5k Monthly

Emergency Savings Month 1 = $25k-$1,944 (7day waiting period) - $3,333 (Amount not covered by STDI)

Month 2 = $19,723 - $3,333 (amount not covered by STDI)

Month 3 = $16,390 - $8,333

Month 4 = $8,057 - $3,333 (Amount not covered by LTDI)

Month 5 = $4,724 - $3,333 (Amount not covered by LTDI)

Month 6 = Will be when you run deficit if emergency fund is only funded for 3 months and you want to replace a 100% of your income (typically that is not the case).

So I ask again, are you good?

Next Week’s Issue

Aloha! Next week I will take you on the adventure of our vacation to the Big Island and Kauai, hit upon some tips, insights into being gone for 2 weeks and plans for rentals that you can participate in…if allowed shh.

Hottest Tweet of the Week….

#NoBSWealth Clip of The Week

Cannot wait until next week or just want more, check out our podcast @nobswealth and catch us on Youtube. You can always follow me on Instagram and Twitter as well! Or just email me, [email protected].

Most importantly come check out our Website and give us some feedback. Make sure to subscribe to this newsletter and if you are wanting time to chat with me 1on1 you can schedule that here!