#MoneyMasterClass Recap–Week 28

These months keep flying by! Here’s a little reminder of what we’re all doing to “pay” for this Money Master Class on Twitter.

Have y'all done your gifts to a women's shelter or local food bank for July yet? Just a friendly reminder the MMC is not "free." You've got to pay up!
— Gail Vaz-Oxlade (@GailVazOxlade) July 7, 2020

And here’s our first task that spins off of last week’s discussion about emergency funds.

#MoneyMasterClass Time to set up an auto deduction from your account to a HISA (your FU Account). Convert your intent into action. Commit $25 per pay to your FU Account. Over time boost the amount you’re saving to grow your stash of cash.
— Gail Vaz-Oxlade (@GailVazOxlade) July 7, 2020

Life Insurance

Like last week’s topic on wills, this topic of life insurance is a little foreign to me. It isn’t something that I’ve looked into before, as I didn’t understand what it was, so it’s been interesting to start that learning process.

#MoneyMasterClass Do you have insurance on your car? On your home? On your stuff? Why?
— Gail Vaz-Oxlade (@GailVazOxlade) July 7, 2020

#MoneyMasterClass When you buy insurance you are spreading the risk of whatever you might lose between you and the insurance company. More chance you might claim = higher premiums. It doesn't matter if it's cars, homes, or future income.
— Gail Vaz-Oxlade (@GailVazOxlade) July 7, 2020

#MoneyMasterClass Since EVERYONE except insurance salesmen hate talking about insurance, let's start with the insurance you should NOT buy. If you haven't heard me bang on about this, here ya go: pic.twitter.com/xeCUu1FTWc
— Gail Vaz-Oxlade (@GailVazOxlade) July 7, 2020

#MoneyMasterClass But Mortgage Life Insurance isn't the only wasteful Insurance. Let's add 2 more: pic.twitter.com/MT8ckqEpdj
— Gail Vaz-Oxlade (@GailVazOxlade) July 7, 2020

#MoneyMasterClass Buying insurance shouldn't feel like a trip to the dentist. The rules are simple: buy enough of the right kind and you'll be fine. Read on… pic.twitter.com/QMEVpreHBQ
— Gail Vaz-Oxlade (@GailVazOxlade) July 7, 2020

#MoneyMasterClass Covered by life insurance through work? How much does the plan provide? Is it enough? When you change jobs, will you still be healthy enough to qualify? Individual insurance stays w you as long as you pay your premiums.
— Gail Vaz-Oxlade (@GailVazOxlade) July 7, 2020

#MoneyMasterClass Young people think death is a long way off. With the odds are in their favour, life insurance premiums are a waste of money. This is a paradox. Here's why: pic.twitter.com/9qdm7GWBEv
— Gail Vaz-Oxlade (@GailVazOxlade) July 7, 2020

#MoneyMasterClass No product in the financial world has been more maligned than life insurance. Why? Well, there's the heated & often vicious debate that’s raged between the proponents of term insurance versus those who favour permanent insurance.
— Gail Vaz-Oxlade (@GailVazOxlade) July 7, 2020

#MoneyMasterClass The other part of the problem is that people have been “sold” insurance – as opposed to making an informed buying decision – and that’s left a really bad taste in consumers' mouths. Shop wisely. Know what you're buying. More tomorrow.
— Gail Vaz-Oxlade (@GailVazOxlade) July 7, 2020

#MoneyMasterClass Insurance is NOT an investment; it’s risk mitigation. Insurance is about taking care of the “what ifs” so the amount it will pay out to help your family cope should be your primary consideration.
— Gail Vaz-Oxlade (@GailVazOxlade) July 8, 2020

Types of Insurance–What’s Best?

#MoneyMasterClass Premiums aren't the only consideration. First figure out how much insurance you need and then choose the type of insurance that will give you the level of coverage you’re looking for.
— Gail Vaz-Oxlade (@GailVazOxlade) July 8, 2020

#MoneyMasterClass It's NOT “term vs. permanent insurance.” Term insurance may be best for those who need a whopping amount of coverage. Permanent insurance may be a better for people who plan to keep their coverage > 15 years.
— Gail Vaz-Oxlade (@GailVazOxlade) July 8, 2020

#MoneyMasterClass Regardless of what type of insurance you buy, don’t name your estate as beneficiary. Insurance benefits are free of income tax when left directly to beneficiaries, but face probate if the benefits become part of an estate.
— Gail Vaz-Oxlade (@GailVazOxlade) July 8, 2020

Margaret makes a good point. https://t.co/fQIw6F0FON
— Gail Vaz-Oxlade (@GailVazOxlade) July 8, 2020

#MoneyMasterClass Using a reputable insurance broker who does not simply sell 1 or 2 company's product is key to better buying.
— Gail Vaz-Oxlade (@GailVazOxlade) July 8, 2020

#MoneyMasterClass Think of term insurance as an expense, like rent. While it will give you comfort and peace of mind, it accumulates no residual value.
— Gail Vaz-Oxlade (@GailVazOxlade) July 8, 2020

#MoneyMasterClass Term insurance is cheaper than permanent insurance because the stats are in favour of the insurance company with term insurance, which may or may not pay out. With permanent insurance the company must pay out, it’s only a matter of when.
— Gail Vaz-Oxlade (@GailVazOxlade) July 8, 2020

What to Consider

While life insurance is not something I’m familliar with, years ago I used to sell travel insurance and learned then the value of preparing for the unexpected. Back then, I also learned that it is worth reading into the fine print of a policy because you may think you’re covered for something, but in reality a little clause can cancel out your coverage. The other thing I learned was that it’s worth knowing who underwrites the policy–in other words where the money is coming from and who decides what to pay out on a claim.

But that’s a completely different type of insurance! It’s so helpful to see how Gail’s laid out these steps for assessing each of our particular needs.

#MoneyMasterClass When shopping, start w how much you'll need. Here's a formula to consider: pic.twitter.com/O5fegSa2TY
— Gail Vaz-Oxlade (@GailVazOxlade) July 8, 2020

#MoneyMasterClass In deciding how much insurance you should buy, answer the following questions: pic.twitter.com/R2Fjh1yeqW
— Gail Vaz-Oxlade (@GailVazOxlade) July 8, 2020

#MoneyMasterClass Next, decide how long you'll need the insurance coverage to last. pic.twitter.com/F4BhrT9uHq
— Gail Vaz-Oxlade (@GailVazOxlade) July 8, 2020

Fear

What a topic! But life advice from Gail is the best in my opinion!

Like this little nugget: “Every time you stare fear down you will become more confident, more courageous and more willing to try new things.”

This weekend’s task is to choose something we’ve been afraid to do and then do it–and whether it is done poorly or with excellence does not matter. What matters is to face fear and move into it.

#MoneyMasterClass While we're on the topic of risk mitigation, let's talk for a moment about "fear" and the dumb things it makes us do.
— Gail Vaz-Oxlade (@GailVazOxlade) July 9, 2020

#MoneyMasterClass People are afraid of being seen as mean so they never say no even when it's the right answer. People are afraid of seeming unfair they they overcompensate by being nicer than they should be.
— Gail Vaz-Oxlade (@GailVazOxlade) July 9, 2020

#MoneyMasterClass People who are afraid that their lives will never be better commit financial suicide by attempting to spend their way out of their misery.
— Gail Vaz-Oxlade (@GailVazOxlade) July 9, 2020

#MoneyMasterClass If you find yourself spending $$ you can ill afford to spend to keep up with your social group, that's fear.
— Gail Vaz-Oxlade (@GailVazOxlade) July 9, 2020

#MoneyMasterClass If you can't every enjoy spending money, forgoing even the smallest pleasures, that's fear.
— Gail Vaz-Oxlade (@GailVazOxlade) July 9, 2020

#MoneyMasterClass If you spend money on others because they'll blow you off if you don't pay, that's fear.
— Gail Vaz-Oxlade (@GailVazOxlade) July 9, 2020

#MoneyMasterClass If you're always worried if someone likes you enough, loves you enough, or admires you enough, you're doing it all wrong.
— Gail Vaz-Oxlade (@GailVazOxlade) July 9, 2020

#MoneyMasterClass Some people are so insecure in their relationships that they let mates walk all over them just to keep them. Does your pal spend $$ you know is going to hurt later? Does your mate abdicate all financial responsibility? Do you feel like a second-class citizen?
— Gail Vaz-Oxlade (@GailVazOxlade) July 9, 2020

#MoneyMasterClass Just as there are risks in investing, risks in life (death or disability), so too there are risks in relationships. Holding tight regardless of the damage is just fear acting like an anchor. You must be brave if you want a better life.
— Gail Vaz-Oxlade (@GailVazOxlade) July 9, 2020

#MoneyMasterClass Being afraid is normal. Letting fear ruin your life is sad. It's time to face your fear and make a plan for a different life.
— Gail Vaz-Oxlade (@GailVazOxlade) July 9, 2020

#MoneyMasterClass If you're always taking the blame, stop. If you diminish your own value, it'll be easy for fear to grab hold and nuzzle in for the long haul. You are better than that!
— Gail Vaz-Oxlade (@GailVazOxlade) July 9, 2020

#MoneyMasterClass Our circumstances do not define us. You have the power to make your life whatever you want it to be.
— Gail Vaz-Oxlade (@GailVazOxlade) July 9, 2020

#MoneyMasterClass Every time you stare fear down you will become more confident, more courageous and more willing to try new things.
— Gail Vaz-Oxlade (@GailVazOxlade) July 9, 2020

#MoneyMasterClass This weekend, picking something you've been afraid to do and DO IT! It doesn't matter if you do it well or do it badly, just do it. If it needs more work, take a deep breath and try again!
— Gail Vaz-Oxlade (@GailVazOxlade) July 9, 2020

Did you accept the challenge? What did you choose to do this weekend? How was it for you to face a fear?

New to the Money Master Class? There’s still time to get started!
Check out this Twitter Archive to see all of Gail Vaz-Oxlade’s #MoneyMasterClass tweets from the start.
Find the resources, spreadsheets, and quizzes here: Money Master Class
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Start here with the Money Master Class Intro and Week One Recap

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Money Rules
Debt Free Forever
CEO of Everything
Money Smart Kids