PRECIOUS METALS AND INSURANCE

When Helping with Estate Planning, I am Asked About Precious Metals and Insurance

Investments are assets.  Precious metals are also assets but not investments.  Precious metals do not produce income, investments do.  Investments add to the income section of a profit and loss statement.

Precious metals are in an asset sector called the speculation sector.  When speculators use money to purchase precious metals they are speculating that in the future others will spend more United States currency compared to today when buying, for instance, an ounce of gold.  Speculators guess precious metals will appreciate.  They additionally “bet” if United States currency falls out of favor, future purchasers of the speculator’s precious metals will exchange with the speculators what the speculators need (food, clothing, etc.) in exchange for the precious metals the speculators possess.

Speculating is not a bad word especially when the speculator has self-imposed rules.  Common every day speculators, compared to Wall Street speculators, do not speculate with more than between five or ten percent of their net worth.  Regarding speculation, however, at least precious metals will not turn into a liability.  Comparatively if a speculator speculates with real estate (not for rents, but for appreciation) the real estate is a liability right away because have to pay expenses of taxes, insurance, and maintenance.  A liability adds to the expense section of a profit and loss statement.

  Most life insurance is a liability because there is the expense of a reoccurring premium.  The single type of life insurance investors buy is term insurance, which is much less expensive compared to other life insurance like whole life, universal, etc...  Life insurance is for asset protection or income producing protection.  A provider to a family is an asset to their family because he produces income.  If the provider dies, he wants his family to have a million dollar term life insurance death benefit to invest then live off of the income the million dollars produce since his family will no longer have the income the provider generated while he was alive.

TRIM THE HEARTH AND SET THE TABLE

“Make your house fair as ye are able, trim the hearth and set the table.”
– Christmas song

December is a great time of year to make sure your house is in order, as fair as ye are able. I’m not just talking about putting up decorations made of pine boughs and hiring a carpet cleaning guy to get the place ready for a big party. Trim the hearth also means watching your financial affairs carefully and planning for a brighter future. If, like most Americans, you have noticed your bills keep going up but your income does not, there is another way to come out with more “net positive.”

You can find tons of money in next year’s budget even if you do not get a raise in January. How?

Here is a great tip: Check your credit card statements carefully. Is BGM still billing you for their Cassette Tape of the Month Club? What other services you aren’t using or products you do not need from companies keep dinging your card on a monthly basis? A few phone calls could save you hundreds per month.

It’s a great time to make sure your interests are protected and that the government is not taking more of your money than you need to pay!

There are also a couple of things we can do to help here at Metz Legal Services, PC. First of all, if you’re managing properties, make sure you’re appealing your property taxes every time. It is not too late, to appeal your 2010, payable 2011 taxes. But time is running out. There is no reason to give Uncle Indy extra chunks of cash. This is something we do at three different times during the year and we get a kick out of helping you keep your hard-earned pennies.

This is also a great time to make sure the family is protected by reviewing your will. A great referral for us is that person in your family who does not have a will at all! Roughly 4 out of 5 people that you know do not have one at all. They may think, wrongly, that “grandma will get the kids if I die.” Unfortunately, without a will, that is a decision the state will make. Don’t let your loved ones leave it in Uncle Indy’s hands! If you overhear someone during this holiday season commenting that they do not have a will, tell them to give us a call. Instead of making it a New Year’s Resolution next month and then forgetting about it, we invite you to call our office today to set an appointment.

Thanks for letting us help you set the table for many generations to come!

UP FRONT BAIL OUTS

The authority for a city in Indiana to act as a governmental entity comes from the Indiana Code which the Indiana Legislature passed into law. One group of elected decision makers working for the city and for voting taxpayers is council members. Council members each individually make decisions like every other human being using their own preferences. Two examples are: i) council members who appropriate a half million dollars for the city to purchase buildings prefer to spend taxpayers’ money and lose tax revenue from private ownership of the real estate; and ii) council members who vote to loan taxpayers’ money as wholly forgivable prefer to forego the city making a profit (interest). Is the thinking behind these two preferences productive for the taxpayers?

Private decision makers who prefer making profit must think critically before venturing into a new, productive opportunity. Private decision makers (private venturers) are motivated to do so, compared to politicians, because private decision makers have their own “skin in the game.” Private decision makers must think through income and expenses. If income is not greater than expenses, private decision makers would not move forward with the possible new venture because there is too much risk.

Politicians who prefer to influence private venturers’ profit decisions with selling buildings under cost, providing money with forgivable loans, and incurring construction costs for private venturers’ developments while spending taxpayers’ money, directly cause private venturers to lose clarity. Private venturers allow the expenses they do not have to pay for because the city is paying with taxpayers’ money, to trump the risk and reward analysis. Such private venturers do not figure out how to manage the real risk in order to move forward since they are getting “bailed out” up front. Up front bail outs lead to hurt feelings, sour relationships, poor decisions, and lost jobs.

IDENTIFYING DECISION MAKERS

The authority decision makers hold is great and affects many people. Decision makers make judgment calls that once are made, carries with such judgment calls long term effects whether good or bad. Decision makers’ thinking leading up to the judgment calls is important to understand. Decision makers who are elected officials, for instance, make judgment calls once they get elected which most of the voters do not even know about. Elected decision makers commonly are not held accountable about their thinking.

One reason elected decision makers are not held accountable is because voters do not identify who exactly is making the judgment calls. If decision makers are not identified, then voters cannot explore the thinking of the decision makers separately since voters do not know whose thinking to explore. Decision makers are difficult for voters to identify because when judgment calls are made, terms like Congress, the Indiana Legislature, the City Council, or the City are used.

The City of Elkhart, for example, is not a decision maker. The term City refers to many different groups of people like the City Council, departments, the Mayor’s staff, and citizens themselves. The term City is a collection of many different people some of whom are decision makers. The City being made of the collective individuals cannot make judgment calls. The City is incapable of being held accountable for its thinking because the City does not think. The City’s representative legislative group, namely the City Council, is also incapable of being held accountable for its thinking because the City Council does not think, the elected members of the City Council think.

In order for voters to make those with judgment call authority accountable, voters must understand who is making the decisions and supposedly thinking. Voters cannot get confused with collective terms like City and City Council but must identify who is the elected official who is supposed to think before making a decision. Once voters begin keeping tabs on an elected official about such elected official’s habits of thinking, voters will understand the attitude of the elected official and better understand whether the elected official is a servant leader.

DO NOT GET CAUGHT UP IN SEMANTICS - JUST DO IT

When the velocity of cash flow is like a gluttonous bubble, the phrase “market share” is overused without understanding. During recessions the phrase is not used as much. Regardless of good economic times, or bad, the phrase has less relevance to a solid enterprise than sales people think.

A well thought out enterprise defines market by initially answering the question, “Who are the buyers?” The most faithful buyers are buyers who recognize they cannot do without and want what the enterprise is selling. The buyers’ perceived value of what the enterprise sells is greater than the price so the buyers buy.

There is something to sell today, but most importantly tomorrow and days, weeks, months, years, or decades after tomorrow, on which buyers will spend more compared to their spending in the past. A solid enterprise, after identifying buyers, answers “What do the buyers want to buy?”

After the enterprise identifies buyers and identifies what the buyers want to buy then, and only then, should the enterprise figure out how to supply the buyers with what they want. The enterprise must communicate to the buyers that the enterprise has what the buyers want. The bottom line is the enterprise must figure out who to sell to, what to sell, and how to sell it – and in this order.

MOTIVATION

How concerned is our society about motive? How often do we hear in police shows about a criminal's motive?

We are motivated to do something either because of need or due to passion. Do we first learn motivation by need rather than passion?

Those of us who are parents could do everything for our children even after they become adults. We could consume ourselves to meet their every need until the day we die. How then would our adult children ever become motivated to do something for themselves? Every person must face their own needs to become motivated to help themselves.

We learn motivation from our own need unless stopped from doing so by parents or government. Once we embrace our very own motive to do something, we can begin a search for our passion. On this journey we can eliminate the things we are not passionate about. When we focus on our passion, we become motivated not due to need but because of the strong emotion attached to our passion. A person motivated to do something out of passion cannot be stopped and is contagious.

"I can do everything through [Jesus] who gives me strength." Philippians 4:13

You Are Worth Every Last Penny You Are Paid

A friend once told me not to underestimate the value of what I do to serve others professionally. Do I believe the value added to a client or a client's business is me? Do the client and employees of the client believe my standing alongside them adds value?

The people served will not believe you add value unless you believe it yourself first. When giving away something free, whether your time, a writing like a blog, or your dedication to serve, you are communicating you have have no value. Naturally the people who receive your free offering do not perceive a value either. You certainly do not communicate your worth by giving away yourself for free so how are they going to know unless you charge for your time, expertise, and wisdom.

The people you serve will not understand your value added until they have "skin in the game." Your responsibility is to discover what you give away then charge for all current free offerings. Only then will others embrace the value you add to them and their enterprise. Only then will transformation of their enterprise be substainable.

What your customers want is sustained change for the bottom line of their business. As a leader your responsibility is to communicate clearly your customer must pay for you to effectuate change that is lasting.

To discover the change your customer needs the most, you must begin with the customer paying you to listen and ask good questions. What is the customer's outcome? What are the implications for the customer when the customer reaches the outcome? What does the client see as the value added when the outcome is achieved?

How is the customer going to get there? Who is going to help the customer get there? The best form of selling is allowing the customer to reach the conclusion themselves that you are the solution. When the customer pays you (preferably up front), the customer immediately adds value because the customer effectuated change: the customer gave you money from his business to have you on his team.