Payments (premiums) are made towards your account value upon which time it begins accruing interest. Monthly deductions and charges are then taken from the account value (insurance protection charges, etc). Essentially, premiums made above the cost of the insurance are credited as cash value towards the policy which can later be withdrawn or taken out as loans.

Some typical uses can include but are not limited to:

• Final expenses
• Income replacement
• Debt coverage
• Estate liquidity and replacement
• Educational needs
• Pension maximization
• and many more

Benefits of having a Universal Life Insurance Policy:

• Flexible – The insurer decides the amount of insurance and premium payments they make and receive (subject to policy minimums)
• Death benefit – proceeds are tax free to the beneficiary
• Tax deferred cash growth – under federal income tax law
• Access to cash value – cash can be accessed at any time

Universal Life Insurance offers greater flexibility over Whole Life Insurance in that the insurer can easily transfer money between the insurance and savings policy components. Also, the cash value of the plan grows at a variable rate which adjusts monthly.

While we don’t generally endorse or promote universal life insurance we do work with companies that can provide further guidance and advice. Life insurance can be a very useful tool to protect your family against the unexpected, please consult us or your Las Vegas financial advisor for more information.

See my original post here for more information. and see here for more information on John in Kenya.

It’s great to see hard working entrepreneurs have success!

Greg

I’ve known for nearly 10 years now that I’ve been using DFA mutual funds that there are a few reasons they don’t fit neatly into Morningstar’s rating systems. This article “Should You Invest In DFA Funds?” calls into question just how relevant Morningstar ratings can sometimes be. Keep in mind, Morningstar Star ratings are a measure of ACHIEVEMENT – NOT APTITUDE!

Ironically the question isn’t really should you invest in DFA funds but rather CAN you invest in DFA Funds? They’re not available at your local Schwab or Morgan Stanley as you might think. DFA Funds are implemented only by financial advisors who have been through their training program and generally are pure fee only financial advisors – primarily registered investment advisors. OR you could be an endowment or large institution – they generally have access to DFA funds due to their size and the consistent process they follow on their investment committee’s.

GREG PHELPS EARNS ACCREDITED INVESTMENT FIDUCIARY DESIGNATION FROM FI360

LAS VEGAS, NEVADA DECEMBER 27TH 2011 — Greg Phelps of REDROCK WEALTH MANAGEMENT, LLC has been awarded the Accredited Investment Fiduciary® (AIF®) designation from Fiduciary360 (fi360), an organization offering training, tools and resources to promote a culture of fiduciary responsibility and improve the decision making processes of fiduciaries. The AIF designation signifies knowledge of fiduciary responsibility and the ability to implement policies and procedures that meet a defined standard of care. The designation is the culmination of a two-day course and examination.

Phelps, a resident of Henderson, NV is President of REDROCK WEALTH MANAGEMENT in Las Vegas. Phelps specializes in retirement wealth preservation and income planning for a select group of financially secure clientele.

Fi360, based near Pittsburgh, Pa., is the first full-time training and research facility for fiduciaries, and conducts training programs at universities throughout the United States and abroad. In addition to the AIF, fi360 also offers the Accredited Investment Fiduciary Analyst™ designation, making those who earn the designation the only recognized professionals trained to perform fiduciary assessments, which measure how well investment professionals are fulfilling the fiduciary duties required of them by the applicable investment legislation, case law, and regulatory opinion letters.

REDROCK WEALTH MANAGEMENT is an independent registered investment advisor firm. The firm specializes in serving the retirement investment and financial planning needs for affluent clientele in Las Vegas, Henderson, and nationally. Now serving as an Accredited Investment Fiduciary®, Phelps plans on launching a national service providing fiduciary portfolio management reviews, audits, analytics and portfolio asset allocation services through REDROCK’s subsidiary firm Investment Portfolio Advisors Portfolio Architect service.

About fi360
Fi360 offers training, tools and resources to promote a culture of fiduciary responsibility and improve the decision making processes of investment fiduciaries – individuals who manage money for others. It licenses the Prudent Practices for Investment Fiduciaries from the Foundation for Fiduciary Studies. Fi360 provides investment education and training programs and awards the Accredited Investment Fiduciary® (AIF®) and Accredited Investment Fiduciary Analyst™ (AIFA®) professional designations through the Center for Fiduciary Studies. It develops sophisticated Web-based tools and reporting, including the innovative Fiduciary Score™ and the Family Fund Fiduciary Rankings™ for trustees and investment professionals through Fiduciary Analytics. For more information on future events, training programs and fiduciary products, visit www.fi360.com.

Bill Miller is one of the most closely watched money managers in the industry, so it was big news when he announced his decision last week to step down as portfolio manager of Legg Mason Capital Management Value Trust (LMVTX) early next year. His departure also adds an intriguing chapter to the long-running debate regarding the value of active stock selection.

Miller’s most frequently cited accomplishment is the fifteen-year period from 1991 through 2005, during which Value Trust outperformed the S&P 500 each calendar year, the only US equity fund manager to have ever done so. His success attracted a wide and enthusiastic following: Morningstar named him Portfolio Manager of the Decade in 1999, Barron’s included him in its All-Century Investment Team that same year, and a Fortune profile in 2006 described him as “one of the greatest investors of our time.” A former US Army intelligence officer and philosophy student, his formidable intellect covered a wide range of interests, and he believed that conventional investment analysis could be enhanced with insights drawn from literature, logic, biology, neurology, physics, and other fields not obviously related to finance. His expressed desire to “think about thinking” suggested an unusual ability to assess information differently from other market participants and arrive at a more profitable conclusion.

Miller’s bold and concentrated investment style would never be confused with a “closet index” approach. Big bets on Fannie Mae, Dell, and America Online, for example, were rewarded with handsome gains (as much as fifty times original cost in the case of Fannie Mae). Unfortunately, similar bets in recent years revealed the dangers of a concentrated strategy as heavy losses in stocks such as Bear Stearns and Eastman Kodak penalized results. For the five-year period ending December 31, 2010, LMVTX finished last among 1,187 US large cap equity funds tracked by Morningstar. Considering the enormous variation in outcomes among these carefully researched ideas, Miller’s overall investment record presents an interesting puzzle: How can we disentangle the contribution of good luck or bad luck, of skill or lack of skill?

Over the May 1982–October 2011 period, annualized return was 11.28% for the S&P 500 Index and 11.76% for the Russell 1000 Value Index. Value Trust slightly outperformed the S&P and underperformed the Russell index by over 0.40% per year. A three-factor regression analysis over the same period shows the fund underperformed its benchmark by 0.08% per month.

Do these results offer conclusive evidence of the failure of active management? Not necessarily. The fund’s expenses are above average at over 1.75% and provide a stiff headwind for any stock picker to overcome. Gross of fees, the fund’s performance over and above its benchmark goes from –0.08% to 0.07% per month. This swing from negative to positive raises an interesting point that Ken French speaks to at every Dimensional conference. There are almost certainly some mistakes in market prices and almost certainly some skillful managers who can exploit them. But who is likely to get the benefit of this knowledge—the investor with his capital or the clever money manager? If stock-picking talent is the scarce resource, economic theory suggests the lion’s share of benefits will accrue to the provider of the scarce resource—just what we see in this instance.

To cloud the discussion even further, both of these results, positive and negative, flunk the test for statistical significance; in neither case can they be attributed to anything more than chance. So even with twenty-nine years of data, we cannot find conclusive evidence of manager skill—or lack thereof. This is the inconvenient truth that every investor must confront: The time required to distinguish luck from skill is usually measured in decades, and often far exceeds the span of an entire investment career.

Miller is well aware of the challenge of distinguishing luck from skill and has conspicuously declined to boast about his results, even when they were unusually fruitful. He has acknowledged that topping the S&P 500 each year for fifteen years was an accident of the calendar and that using other twelve-month periods produced a less headline-worthy result.

Commentators have said that Miller has “lost his touch” or that his investment style is no longer suitable in the current market environment. These arguments strike us as the last refuge for those who find the idea of market equilibrium so unpalatable that they search for any explanation of his change in fortune other than the most plausible one—prices are fair enough that even the smartest students of the market cannot consistently identify mispriced securities.

Where does this leave investors seeking the best strategy to grow their savings?

When asked by a New York Times reporter in 1999 to sum up his legacy, Miller replied, “As William James would say, we can’t really draw any final conclusions about anything.” Twelve years later, this observation seems more useful than ever. And investors would be wise to treat even the most impressive claims of financial success with a healthy degree of skepticism.

________________________________

REFERENCES

Andy Serwer, “Will the Streak Be Unbroken,” Fortune, November 27, 2006.

Edward Wyatt, “To Beat the Market, Hire a Philosopher,” New York Times, January 10, 1999.

Tom Sullivan, “It’s Miller Time,” Barron’s, October 12, 2009.

Diana B. Henriques, “Legg Mason Luminary Shifts Role,” New York Times, November 18, 2011.

S&P data provided by Standard & Poor’s Index Services Group.

Morningstar data provided by Morningstar Inc.

Russell data copyright 2011, Russell Investment Group 1995-2011, all rights reserved.

I’m also rolling out a new website within the next month – Investment Portfolio Advisors – stay tuned!

Term life insurance is used primarily as a death benefit to aid the dependents of the deceased. This can cover debt, funeral costs, and even for future use by such dependents. Common use of term life insurance is due to the cheaper rates over regular insurance. The premium paid is based off how likely it is that the insured will die over the given term of the plan. For most, term life insurance is used only until there is sufficient funds within a savings plan to comfortably cover these expenses should an unexpected death occur.

The most common form is level term life insurance. Rather than renewing yearly, premiums can be locked in for terms of 10, 15, 20, and even 30 years. Most policies will have some form of option to convert to a Universal or Whole Life policy. This is very beneficial to individuals who have contracted some sort of illness that would cause them not to be able to renew their term life policy. These options usually don;t last through the entire term of the life insurance and are only convertible up to a certain age.

Here are some rates based on a 20-year $500,000 level term policy from USAA.

While not everyone needs life insurance, many people do for specific financial planning reasons. The big question is what TYPE of life insurance is appropriate. More often than not buying term is the most appropriate way to go. Whole life insurance can prove to be an inefficient vehicle for insurance, and in most cases insurance coverage and investing just shouldn’t be mixed together.

We recommend a low load low cost provider out of Florida for most of our clients insurance needs. As a fee only financial planner – we never accept any commissions from the sale or recommendation of any insurance products.

She asked what Kiva was – so I explained it’s micro loans around the world. It’s helping impoverished nations expand through entrepreneurialism – one by one.

She thought it was interesting. The email I had said I had a credit and money was waiting to loan out. I asked her to pick the next loan.

She ran through probably 30 different individuals and groups seeking money. The conversations in her head must have been really interesting, because the conversations each one generated were interesting enough on their own!

Seamstress looking for a sowing machine, barber looking to buy a new chair, and a single mother of five – a farmer – looking for funds to put windows on her what appeared to be a mud hut. We even learned what a ger is – I doubt you’ll recognize a “ger” as a mongolian felt cone shaped tent.

Kiva is really interesting. What’s even more interesting is listening to her rationale for making a loan versus my rationale. She didn’t like long payback schedules – those don’t bother me. As a money person – I would rather a borrower come up with a manageable payment schedule than try to rush a payback and fall short. That just leads to frustration and a sense of failure.

She didn’t want to loan money unless it was directly for a business. I understood that. For example she thought lending to put windows in a house wasn’t necessarily helping her grow her business. I explained if it kept her family warm at night – that’s one less thing she has to worry about as a farmer and it may help her work harder without even realizing it.

There are a lot of borrowers looking for money in the middle east. Right or wrong we both shy’d away from borrowers in Pakistan or Palestine. There are plenty other people in regions around the world that need money – and DON’T live in places that generally hate America.

We agreed on some, disagreed on others, and in the end we lent money to John in Kenya. Here’s John’s story:

John, who lives in the Kongowea, Kenya, is a water vendor. He is married and has five children, two of whom are in school. He supplies water to neighborhoods. This idea came from the fact that there is a challenge of water delivery in the area. In addition to this, he also owns a motorcycle that he uses to transport people around the area. He is employed as a chef and has rental houses.

A loan of 40,000 KES will help John add more water kiosks. Although the high cost of living has reduced the disposable income of many customers needing transportation services, John intends to purchase more motorcycles in the future. He believes the income from the business will improve the quality of life of his family.

It just seems logical that water distribution in Kenya can serve many purposes. We both liked John, and wish John the best!

Kiva.org is the website if you’re interested. If you’re wracking your head trying to come up with highly unique Christmas ideas – I’m sure giving a Kiva loan to someone would make the most unusual and creative gift card under the tree for anyone!

Greg

It is human nature to want to save money. One area that is often discussed involves consumers take care of simple, routine legal matters themselves. Why force someone to pay an attorney if one is not needed? The problem is in determining what is a simple matter that does not require an attorney’s assistance.

People often think estate planning falls into this category. After all, it is assumed that wills, powers of attorney, and even trusts, are routine forms that anyone could simply fill in for themselves. Why should an attorney be needed?

As with many things in life, the answer depends on the individual’s skill and risk tolerance. The recent Florida case illustrates what can happen with the typical use of a do-it-yourself (“DIY”) will.

The first sentence of the statement of facts in the case of In Re Estate of Aldrich, the Court stated that on April 5, 2004, Ms. Aldrich wrote her will on an AE-Z Legal Form. Ms. Aldrich itemized her assets in her DIY will, leaving them to her sister, Mary Jane. If Mary Jane died before Ms. Aldrich, these itemized assets would have passed to Mr. Aldrich. Unfortunately, Ms. Aldrich appears to have not appreciated the importance of a residuary clause and failed to leave such a clause in the will. Perhaps Ms. Aldrich did not understand the distinction between specific and residuary bequests.

Ms. Aldrich failed to update her will following Mary Jane’s death. Ms. Aldrich inherited cash and land in Florida from Mary Jane. Upon Ms. Aldrich=s death, her estate was probated.

Ms. Aldrich’s two nieces entered the scene and claimed an interest in the cash and Florida land which Ms. Aldrich had inherited from Mary Jane. The nieces claimed that since Ms. Aldrich’s Will did not specify the cash and land, and did not contain a residuary clause, that they received an interest in those assets pursuant to Florida’s intestacy laws. Of course Mr. Aldrich believed that all of the assets should go to him.

Mr. Aldrich put forth three (3) different arguments for why he should receive the entire estate under the Will. Nevertheless, even though he was probably correct that his wife intended for him to receive everything, he lost the case. While the Will was clear as to who was to receive the specific assets listed, it also failed to show an intent to dispose of anything else. Consequently, the Will’s silence regarding the cash and land did not allow the Court room to insert an intent. The Court was not going to revise the Will.

Under Florida law, as in common in most jurisdictions, if the Will does not dispose of all of the decedent’s property, such property will pass under that state’s intestacy laws. Failure to include the residuary clause in the Will resulted in those assets not specifically listed in the Will passing to Ms. Aldrich’s intestate heirs, which included her nieces.

About the Author

Jay R. Larsen is a partner of the Firm and practices primarily in the area of estate planning, tax problem resolution, asset protection, business formation, and probate. Mr. Larsen received his undergraduate degree in finance from the University of Utah (Summa Cum Laude) and his law degree from Brigham Young University (Magna Cum Laude). He went on to receive an L.L.M. in Taxation from the Washington School of Law, Washington Institute for Graduate Studies.

Mr. Larsen is a member of the Nevada and Utah Bar Associations, the Southern Nevada Estate Planning Council and the Tax, Probate and Trust Sections of the Nevada State Bar Association. Mr. Larsen authored the article “Avoiding Probate: Pitfalls and Perks,” Nevada Lawyer, Vol. 4, No. 3 (March 1996). He also has authored many articles for the Probate & Trust Review, the Firm’s newsletter, as well as articles for various continuing legal education publications. Mr. Larsen is a frequent speaker to private and public groups on Trusts, Probate, Estate Administration, Taxation and Wealth Preservation.

Roger retired some years ago to pursue a passion of his – saving and rehabilitating wildlife in southern California. Roger and his wife Diane had been running their animal sanctuary on a shoestring budget for years – mostly with the help from extremely limited donations and a lot of volunteer work – as well as an immense amount of personal sacrifice.

Roger and Diane truly love the animals they care for. Their animals are their kids – and to speak to Roger personally you’d sense in an instant just how much they care.

My wife and I took our twin boys on a summer vacation a few years back, and the first stop on the trip was Wildhaven. We had a great time, enjoying the animals and the shows they have there. I can only imagine as a child seeing these amazing creatures up close and personal.

I donated to Wildhaven that day – I wanted our family name to be a part of something special there.

There are certainly a lot of donors to Wildhaven who share the same respect for wildlife that the Williams’ do. Fortunately (and unfortunately) for the animals they save and rehabilitate, there are scarcely enough donors to keep Wildhaven running. I’m sure they could always use more – as with every charity especially in these challenging financial times.

If you have children or grandchildren, Wildhaven is a special place. I wouldn’t recommend missing a chance at experiencing wildlife closeup. For more information or to donate to Wildhave, please visit the Wildhaven Ranch Website.

Wildhaven’s Mission:

Created in 1994 and operated by the San Bernardino Mountains Wildlife Society, Wildhaven is a not-for-profit organization consisting of a wildlife sanctuary, an education and visitation center for endangered and indigenous wild animals for the San Bernardino Mountains.
Wildhaven moved to its current 35 acre ranch in the community of Cedar Glen in 2000. Along with much of the Cedar Glen community, Wildhaven Ranch was devastated by the horrific “Old Fire” of 2003. But thanks to the dedication of our staff and volunteers, as well as the efforts of community and government leaders, Wildhaven is now fully functional with plans to expand and enhance its current facility.