Kevin Bemel ·
Find More Money to Invest
About the source date and illustrations
The date is transcribed from Posts – Sunday 2023. The original publication date has not been independently verified. Historical figures, links, and event announcements are preserved as written.
Some illustrations from the source document are not reproduced here. Original image credits are shown for the BLS material retained in this article.
The cover photograph is illustrative. Photo: Kaboompics.com on Pexels · Pexels License.
5 minutes to read.
You may not want to think about this question. Do you have sufficient assets so that if you were to pass away, the people who depend on your financial support could survive?
Yes. Then you may not need life insurance.
No. Then life insurance can help make up the shortfall.
Among the many types of life insurance, most are a waste of your money. Before we get into this further, let’s look at the job market stats.
Job Market
The number of unemployed people per job opening ticked up slightly from 0.5 to 0.6. Still, this is lower than it has been for at least 15 years.
Remember, the unemployment rate, of 3.6% (5,957,000 unemployed workers), only counts people who are actively looking for work. The labor force participation rate for June 2023 was 62.6%, unchanged for three months. This is almost 1% below the pre-pandemic February 2020 rate of 63.3%, meaning there are 1.17 million fewer people participating in the labor force now than before COVID.
Were these people looking for work, there would be 20% more job seekers. This would translate into unemployed people per job opening of 0.73, still a favorable job-hunting climate.
State-by-State Unemployment Rates
Employment rates for the states, territory and district range from a low of 1.9% in Nebraska, New Hampshire, and South Dakota to a high of 6.1% in Puerto Rico. Seventy-five percent have unemployment rates between 2% and 4%. The median unemployment rate is 3.25%.
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The states and territory with the five highest unemployment rates are:
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Those with the five lowest are:
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Note that the highest of the lowest five is less than half of the lowest of the highest five and is about one-third of the highest.
What Should You Do?
Job growth remains strong, and inflation still exceeds the Federal Reserve’s target of 2%. So, it’s likely the Fed will increase interest rates soon to slow down the economy, which could result in higher unemployment and increasing the competition for jobs.
Even as supply chain constraints ease, labor shortages give workers leverage to get higher pay. Overall, wages are increasing, though whether they are keeping pace with information depends on the job and the things people buy. For example, the prices of packaged foods are increasing even as those for eggs and meat moderate.
If you can get a job with greater responsibility than the one you have now, you should be able to get a salary that will more than compensate for inflation. With the Federal Reserve still seeking to slow the economy, job-hunt now and get a contract that will shield you from layoffs.
Otherwise, consider the trade-off between how much you like your current job, how much job security you have there if recession hits later this year, and how badly you want to better your position. If you opt to keep your current job, perhaps you can find a side gig to increase your income.
Smart Life Insurance
You may have heard the phrase, “buy term and invest the rest.” It represents the most advantageous strategy for buying life insurance.
Think about auto or health insurance. Do you pay extra premium that is invested on your behalf? No. You look for the lowest insurance cost that gives you the coverage you need from a reputable company. The same strategy applies to life insurance.
Term life insurance is the most affordable option because all it does is protect your family financially in the event you pass away and there aren’t enough assets to replace your income.
You may have heard of whole, variable, or universal life insurance. All these combine term life insurance with an investment vehicle. But, because of the fees, lack of access to your investment, and fewer investment options, it’s a rare case indeed when it will outperform a properly managed, separate investment.
Perhaps you have been told life insurance companies offer sophisticated investment management services. That’s true. So do mutual funds and exchange traded funds (my previous newsletter explains the difference bit.ly/3XLp6Fa). Once you have at least $25,000, you can establish a managed account where professionals will create a customized portfolio of investments for you.
Another argument for life insurance combined with an investment feature is you invest even if you lack the discipline to set money aside for this purpose. But these days, you can setup automatic contributions to an investment just like you would with life insurance premium payments. Why pay more to the insurance company? Take the savings and invest it.
As your wealth grows, you can reduce your life insurance coverage, using the premiums you save to grow your investments. Eventually, you may be able to get rid of your life insurance coverage.
Where are you on this journey? Have you set your financial goals?
How can I help you? Call, text, or email me.
Kevin
P.S. Don’t miss this week’s episodes of The WAY to WOW Shows:
Monday, July 10, 10:00 a.m. PT / 1:00 p.m. ET – Trusts & Estate Weekly on what happens if you don’t have a will or trust.
Join us live https://www.eventbrite.com/e/633479242467.
Watch the replay https://youtube.com/playlist?list=PLCEw2fI1wAPIQbJD0tdcS8kzFEcpZ0DXz.
Tuesday, July 11, 11:00 a.m. PT / 2:00 p.m. ET – Business Lessons from the Military with special guest Rabbi David Becker from Jewish Friends of the American Military.
Join us live https://www.eventbrite.com/e/633485601487.
Watch the replay https://youtube.com/playlist?list=PLCEw2fI1wAPKJNrThFkrivOdTnYZFYNir.
Wednesday, July 12, 12:30 p.m. PT / 3:30 p.m. ET – People Making Money, with my guest Brian Larky who proves that the worst day working with wone is better than the best day doing pretty much anything else.
Watch the replay https://youtube.com/playlist?list=PLCEw2fI1wAPJjhfe-kkJd0sVsGuTfjWWo.
Or watch live on:
Facebook https://www.facebook.com/TheWAYtoWOWshow/
LinkedIn https://www.linkedin.com/in/kevinbemel/
Twitter https://twitter.com/TheWAYtoWOWshow
Twitch https://www.twitch.tv/thewaytowowshows
Telegram The WAY to WOW Shows channel.