The Prosperity Blog

What to Know about Taxes Right Now

There aren’t many downsides to being rich, other than paying taxes and having relatives asking for money.—Bill Murray

The 2018 tax returns we file this year are the first returns filed under the new Tax Cuts and Jobs Act. Today, I wanted to give you some tax updates—and perhaps more importantly—update your thinking on taxes. As we navigate the tax code, too often, our desire to avoid taxes can influence our financial decisions—for the worst!

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Living Longer: 7 Financial Strategies for Longevity

“How old would you be if you didn’t know how old you are?”
–Satchel Paige, Baseball Hall of Fame pitcher

Life itself is the blessing that comes before all other blessings. Yet in investment circles, “Longevity risk” is spoken of in the same way as market risk, interest rate risk, or the threat of a bad economy. It’s a risk to be managed, as if it’s a bad thing.

The typical financial strategies for longevity aren’t much fun. The fear of running out of money is real enough to inspire extreme frugality in some people. However, we think there are better strategies than just tightening your belt! To be financially prepared for the future, we need to think in terms of living a prosperous life—not simply “managing longevity risk.”

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Confessions of a (Former) Impulse Buyer

The following is a guest post from our friend Kate Phillips of Total Wealth.

I have a confession to make: every day I work on the dark side… helping ruthless corporations apply behavioral science and make you purchase products you don’t really want in quantities you absolutely do not need for the money you probably don’t have to impress people you don’t really like.

—Maciej Kraus, Ted Talk on Behavioral Economics.

According to a new article and video from The Atlantic, consumerism in America has reached an all-time high. In 2017, we spent $240 billion on consumer goods such as jewelry, watches, books, luggage and phones—twice as much as in 2002, even though the population only grew by 13 percent during that time.

What’s happening? Online shopping has driven impulse spending to new levels… and the savings rate to its lowest point in 6 years, according to TradingEconomics.com.

Shopping has become a favorite pastime, a way of life, even a socially-accepted addiction in the U.S. And you don’t have to be financially stressed or in debt to feel the effects. Perhaps you can relate to some part of my embarrassing personal story—or benefit from the tips that helped me reign back my spending.

When Spending Becomes a Problem

A number of years ago, I had a wake-up call one day when the mailman dropped off a package on my doorstep. It contained a product I had seen on a late-night “infomercial.” I remembered watching the commercial. But I had no memory of ordering the product.

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Harnessing the Power of Innovation

“Skate to where the puck is going, not where it has been.”
—Walter Gretzky’s advice to his son, Wayne.

My husband, Todd Langford (creator of Truth Concepts financial software) and I have recently learned about some amazing game-changing technologies. We have been exposed to ideas and inventions that have literally shifted our thinking of what is possible!

In this post, we’ll share some of our favorite technologies and resources to improve the quality of your life. We’ll also relate a bigger-picture framework that can help you embrace change with less overwhelm. And finally, we’ll look at how you can profit from innovation!

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Easy Money!? 15 Ways to Create Passive Income

Recently we got a listener question for The Prosperity Podcast: “Is there really such a thing as passive income?” Yes, there is! True passive income isn’t quite as rare as Santa Claus or the Easter Bunny. However, as Spencer Shaw and Kim Butler discussed in this podcast episode, there can be a LOT of grey area between earning active income (such as a job) and completely passive income.

By definition, something that is “passive” would require little to no active work or time commitment. The IRS defines passive income as only coming from two sources: rental activity or “trade or business activities in which you do not materially participate.” However, many strategies thought of as “passive income” may indeed require some work, either intermittently or in the beginning. For instance, authors or songwriters may earn passive income royalties based on work done in the past. In this article, we’ll explore 15 ways to create passive income—and semi-passive income.

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Converting Term Insurance to Whole Life

There are two types of life insurance that we heartily recommend. One is dividend-paying whole life insurance—usually set up to maximize cash value, if that is the policy holder’s desire—and term insurance that is convertible to whole life. We wrote about convertible term insurance in “Convertible Term Insurance: The Third Option,” which is an excellent primer on convertible term life insurance.

Is it time to convert your term to whole life? Today, we want to address what happens “next”—the how’s and why’s of converting convertible insurance. But first, let’s start with a quick recap on what we mean by convertible term insurance.

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Understanding Life Insurance Dividends

What are life insurance dividends and how do they work? What kinds of companies pay dividends? Are life insurance dividends taxable? What are your life insurance dividends options? In this article, we’ll try to answer “everything you always wanted to know about life insurance dividends but were afraid to ask!”

What are life insurance dividends?

Mutual Life Insurance companies share their profits with participating policy holders. They do so via a dividend. This dividend is declared annually, usually around the end of the calendar year. You may have seen recent announcements about 2019 dividend payouts. Many companies declared their biggest dividend payouts ever, including:

  • Northwestern Mutual, which will pay policy holders $5.6 billion in 2019.
  • New York Life announced that the company expects to pay eligible participating policy owners a record dividend payout of $1.8 billion.
  • MassMutual (Massachusetts Mutual) expects to increase dividend payments to $1.72 billion.
  • Guardian Life will pay a $978 million dollar dividend this year, also a record payout.

Note this dividend is listed as a dollar figure and only sometimes an interest rate (more later on the latter).

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