Month: July 2019

Life insurance is an investment, not a cost

by admin

Another important factor is not to reduce our search to the local market. There are very good international insurance options with very competitive premiums and different levels of sophistication. Therefore we must always advise ourselves properly to make the right decision at all times.

When should I take out my life insurance?

When should I take out my life insurance?


Some people think that life insurance should take it when they are older, or that they must have dependents to just hire it. The truth is that life insurance is designed to cover our human capital during our professional life. That is, in the retirement or retirement stage it is NOT necessary to maintain life insurance, since from that moment it will be our financial capital (investment plan) responsible for generating the necessary income.

We must bear in mind that at an older age, the probability of death will be higher, so the cost of insurance will also be higher. To give you an idea, for every five years that we pass up, the cost of insurance increases on average 50%. Therefore, the best time to make sure is now!

For what amount should we take out life insurance?

For what amount should we take out life insurance?


It is common to see people who buy life insurance for 50 or 100 thousand dollars without any previous analysis. Even cost is sometimes the most important attribute for your decision. This way of thinking is not correct, especially for someone who takes the administration of their assets seriously. A simple method to know the amount to hire the insurance is as follows.

  1. Determine the amount of annual spending your family faces
  2. Subtract the amount that is covered by a third person, for example, your wife or your husband. The balance is the annual flow of funds that you must cover
  3. Assume a conservative return rate and divide the previous amount by that rate. The result is the objective amount of our coverage.

For example, if the annual expenses we want to cover are USD 45 thousand and we expect a conservative return of 6% per year, the amount of insurance to be contracted will be: US $ 45,000 / 6% = USD 750,000.

That is, if the insurance is activated, the amount to be received will NOT be used to directly cover our expenses, but we will invest it so that the annual income generated (for example, 6%) allows us to cover our expenses. This methodology prevents our assets from becoming extinct over time and additionally helps consolidate our assets in the retirement stage.

How much can life insurance cost?

How much can life insurance cost?


Life insurance is not expensive when analyzed correctly. Let's look at the example of a term international life insurance for one million dollars (person who requires USD 60,000 annually assuming a return of 6%). For a 35-year-old person who seeks to cover his human capital until his retirement (65 years), the annual premium will be around $ 3,000.

In the case of universal insurance, the premium triples (for the savings component). If the coverage were only USD 250 thousand, the annual premium would be a quarter. As you will see, they are not very high figures, considering the amount of insurance.

Take control of your money

by admin

Are you worried about maximizing your financial situation? Then this article is for you. Here are the steps to take to take control of your money.

Most of us have the purpose of making good investments, minimizing taxes, overcoming inflation, and managing money. However, even if you recognize how important it is, much can happen between you and this will:

What, then, are the steps to take?

bank

  1. There never seems to be the right time to dwell on this subject;
  2. When he finally decides to devote some time, he is assaulted by a paralysis, not knowing where to start, or afraid to make mistakes.

Gathering a whole financial plan can seem scary. You may have even created a plan that you are having difficulty following or are confused about which steps to take first, or are afraid that it will not cover all the necessary vectors.

 

Determine Your Current Position

cash

This is the starting point. To know where you are currently you need to know what your assets are, and your liabilities, ie what you have at the current market value (eg, house, car, deposits, shares, etc.) and what you owe: credit of the house of the car). The difference between one and the other is your starting point (or, Net Worth).

Example:

Imagine the simplistic case of a stock you bought for $ 1 in 2008. The market value of the stock is currently $ 10. In your assets you must account for $ 10 and not $ 1. income and expenses, in terms of cash flow, ie inflows and outflows of money. Why is it important?

  • Indicates your effective savings and investment capacity.
  • Let's see what level of life you're leading.
  • Let us evaluate if it is above or below your possibilities.
  • It identifies problem areas.

Particularly in the aspect of expenditure, divide expenses by category, be diligent and detailed, and above all do not underestimate your expenses.

Conclusion

Conclusion

Now you know, set financial planning, what are the initial steps to take and how to determine your current situation. If at the end of this exercise you find that you are not where you would like it, do not be discouraged.

The first step in solving a problem is to recognize that it exists. In the next article we will address (i) the definition of objectives and (ii) the development of a plan to achieve them.

Can I stop paying a loan or mortgage loan?

by admin

From Arayat Credit, we recommend to all natural or legal persons, that in the case of not being able to face the loans contracted, due to different situations, unemployment, dismissal, lack of income, cessation of activity, non-payment, etc. The last thing we invite is to not give notice of this new situation to the entity or entities and stop paying the monthly installment of the loans arranged. The consequences are always harmful to the borrower.

 

Debts continue to increase

Debts continue to increase

1st application of late payment interest, late fees, claim for unpaid fees via mail, then by telephone. Meanwhile the debt continues to increase, until reaching the third default that the law stipulates, the legal claim begins. Depending entirely on the type of loan and guarantees deposited and their ownership.

 

Mortgage loan

Mortgage loan

It has one year to pay off the debt plus all the expenses generated, meanwhile, the entity has requested the foreclosure to be executed by the judge, then its deposited mortgage guarantee will be auctioned, being in many cases auctioned below the value of the debt incurred , generating the loss of good and will continue to appear as delinquent.

 

Personal loans

Personal loans

The effects are not minor, since when contracting it, the entity may have taken all of its present and future assets as a guarantee (house, car, payroll ...). The entity will ask the judge to seize these assets. In the case of intervening guarantors, they will have to face the debt, and may also lose their own assets.

 

Conclusion before the obvious impotence

Conclusion before the obvious impotence

Arayat Credit, can if you wish to speak with your entity, we understand that it is easier to reach a mutual agreement than to resort to the judicial system, always expensive, “a bad agreement is always better than a good trial” . Refinancing is in most cases the solution, stipulating a period of lack is another resource that is currently offering good results for all parties.