All Forum Posts by: Ratho R.

Hello Atul. 

I am an agent in a different market, but some tips I use for my clients should hold true in your area as well. Obviously you want to first check with the HOA if there is one and find out specifically what they cover and if there are deductibles in event of major loss to the buildings etc.

For insurance coverage one way is by finding out how much other owners in the development paid for recent upgrades, such as new flooring, cabinetry and counter tops. (As this is mostly what you would be paying to replace.

Another way as a very rough estimate is to cover about half the market value for interior structures (50%) So, if there's a fire, for instance, people have enough to replace their flooring, their cabinetry and their walls -- anything else would be personal property and falls under the tenants responsibility. 

Hope that gives you a general idea of what to look at. Disclaimer is that this is just a general rule/estimate, so don't hold me responsible for your losses haha. I always tell people to find a local INDEPENDENT insurance agent to help. Avoid captive agents as they only have one option and product to offer you. Independent/brokers are unbiased and have access to many companies to offer you the best coverage and rates available to you. 

Nice work miles. Planning ahead is a crucial step these days.

@Reggie Maggardis right. Life policies have their place, but you can usually accomplish more with good mutual funds or other options.

When I have finance questions like yours, I usually look up an ELP on daveramsey.com. Regardless of how you feel about Dave, his ELPs are always focused on your personal financial goals. I am one for Insurance, so I know he holds his ELPs to high contractual standards. You are sure to get an expert in their field to help you plan the right path there. 

Good luck! 

As has been said here, Umbrella is to cover if your current underlying limits are not enough. Umbrellas are usually tied to the active Auto policy on the account and require you have liability limits of at least 250/500. The umbrella would cover any property and vehicles you are liable for. That is probably why you are running into situations like Safeco wanting you to have all your policies in one place. 

I always recommend finding an independent agent that works in your area to take care of and shop the rates and options for you. Dave Ramsey ELPs are usually the best, but I am a little biased on that. haha. Reason is knowing there is contractual agreements on them to take care of you and your personal financial goals. (If you like Dave or not doesn't matter, you just know you are getting a trusted agent that will work for you and serve your goals and needs while offering unbiased expert advice in their field.)

Hi Mel. I am on the other side of the country, but as an insurance agent I know every area and market has certain risks they need to measure to ensure you get the most accurate coverage and rates. I often have people asking for generic basic rates. The truth is our systems won't really accept basic answers and if we put that in, you are not getting the protection you need or accurate rates to shop and compare. Not sure of your area, but you can look for a Dave Ramsey ELP in that area. We are held to a contractual high standard to always keep the client's financial goals as top priority. You can search by zip code at daveramsey.com

I am a bit biased, but I strongly recommend independent agents/broker. You get an agent that does the shopping for free and you have access to a very competitive market that you normally wouldn't have access to. Independent agents always have the clients interests in mind as they are neutral to what company you work with. Plus, a good agent, will shop the rates for you year after year at renewal time making sure you always have the best coverage and rates available to you.

Hi Andrew. I am a Broker and work every day with people like yourself looking to shop rates. I find Safeco is very competitive and a great company to work with. I am happy to connect and shop all the other companies we work with for you. We are independent so we work for you as a client. 

No offense to other posts but in my experience, any time someone comes to my already with Farmers, State Farm, or any other captive company, we usually increase coverage, benefits and save about 20% or more at the same time. 

Again, no offense intended. Captive companies represented here are great, but as far as options and coverage, you are only getting one choice when you go captive (Just speaking from personal experience doing this every day). Brokers like myself are a free service of shopping rates for several companies at one time. 

Well it is definitely a process. Basically you get out the same way you got in. Little bits at a time. =) I would say go for the lowest balance you have right now. That should be easier to pay off. Then you will get that feeling of having something paid off and that should give you some incentive to go after the next balance. I hear ya on those amazon purchases. Bill me Later on Paypal has been my issue. Similar thing is "No interest when paid off in 6 months." Well you loose track very quickly when you are getting little things here and there. Right now they hit me with almost $20 just in interest each month! So I am speaking from experience. The wife came with a small balance credit card when we got married and a few things I already had. So like I said, we have a small stack of cards I keep stashed away so we don't put anything on there anymore. I like the saying "If you can't afford it, you don't need it" Obviously there are some people that can't afford food and those situations are something else. But keep in mind, saving up to pay off a vacation or trip or outfit, etc will feel SO much better when you are not trying to pay it off later and fighting interest on it. How relaxing is a $1000 vacation if you are paying some 5% interest on it every month after that!?

I would say in summary, scale back where you can. Make some small sacrifices to kill your credit card debt and you will be so happy you did after you are cutting up cards and living without all this debt lingering over head. A little pain now for a long term of freedom to get RE loans and investing purposes. I am all for home loans and OPM when it comes to investing. I am totally against credit cards for random things and paying extra money on money you don't have.

I hope this is helpful and comes across correctly. I am in no way trying to scold you or come down on your situation! haha. There are TONS of people out there with very similar situations. I help people invest for Tax free retirement, but I have a passion for finances and getting people out of the grip of high interest fees. All that does is set you up to take two steps back every time you get one step forward..

@James G. I admire that you even brought this up here. Many are probably in similar situations that this could help them too. Also, it shows that you are wanting something to change...or you would not be asking what to do. haha.

In seeing your note about reducing expenses some. I would first say take a look at that. If you have not set up a monthly budget for personal things like bills, clothing, food, gas, play money to use on dining out and movies etc. (maybe new dancing shoes =). That would be my suggested starting point. If you are spending $300/month on random dining and entertainment, see where you can scale that back a little bit. (I am just throwing out numbers not knowing your actual income etc.) Also, you said you are afraid of old habits putting money back on your paid off credit cards. I agree with @Jean Bolger $23k shows more than just a few emergency situations. I personally take advantage of no interest, but as @Bryan H. said, those are a financial disaster waiting to happen. What I do, is put the cards in a drawer or desk or hidden on a shelf or where ever. Anywhere that is not your wallet or pocket! That way you are forced to actually GET the card in order to put more money on it and it causes you to think before spending.

For what to pay and when. There is a method called snowballing. You can either aim for lowest balance, or highest interest rate. Whatever is more achievable for you. Say you pay $200/month on one credit card, pay as much as you can on that card and pay it off as fast as possible. THEN, when that card is paid off, take that $200 and pay it into another card, for example another $200 card you would now pay $400 until it is gone. THEN you have $400 to put toward something else! And so on... Get the ball rolling and keep it rolling into the next account until things are paid off. (Obviously you can adjust this however it fits into your finances)

As you are doing all of this. Like you said you always saw debt as just a line on a spreadsheet of sorts. Look at those payments now as what you COULD be paying towards another debt..AND all of those payments as what you COULD be adding back into REI or personal budget, etc.

Oh I see what you mean. @Steve Babiak that may look nice on a short few years yes. What if I were to show you the returns from 2004-2007? Then you would be fired up and ready to invest...only to loose some 30%+ that next year! What we are looking at is a long term investment and retirement strategy that allows you to use it to invest in Real Estate as well. It is difficult to use a short term investing mind set when looking at a long term investment vehicle. If I were to tell you that for a few amazing years, let's say 5 of these 10, that you would gain more than the cap we are talking about, say 25% for even numbers, that would sound pretty great. However, that does not give you the "big picture" as the other 5 years of losses would drastically alter those gains. As a licensed agent in my state, I am legally obligated (as well as personal morals) to show my clients the best options for their situations. This can only be done, when my clients are looking for their long term (15-20 years or so) by showing them as much of a long term past that we have seen. Thus we use 25 year average to get a more realistic average.

Perhaps I am misreading your statement, but it looks like we are talking about a long term investment vehicle (Indexed strategies) and wanting to only look at a few recent good years. That would be impossible to give my clients an accurate picture of what they can expect for ROI. The company I work with shows a 25 year average and at this point we are showing an 8.98% average. We also calculate for all costs, management, fees, and whatever else people accuse agents of "hiding" as well as years of gains that we may cap out at, but also years where other investments are loosing, we simply lock in our floor of 0.25% and ride it out. As this video shows, the second the market starts to gain, our accounts start out at the floor and go up. NEVER loosing anything (Indexing) is the only way to get a true average over a long period of time. Yes we get capped out at 15.4%. However, I would rather get that when the market moves some 20-30%, in trade for knowing that any time the market starts to go down, that I will not loose anything I just gained. That is way more stable and much less stressful.

Basically, we just need to keep in mind that using longer term strategies for investing still needs to be structured with the bigger and longer term picture in mind. What we set up for people is a retirement plan, that by itself will secure their retirement ages, while being able to have access to these funds for REI. Thus you can make money from your money and cycle it back into your policy and keep growing both your retirement plan as well as your RE portfolio.

My appologies @Steve Babiak I got ahead of myself and missed the most simple answer to your question. Your question, as to why they chose this period of time...if you notice the posting date of the video (2011), is that it was the most recent point of time. Once again, no scam or smoke and mirrors. They actually took the most recent decade (at that time) to show an example of how indexing works.