Estate/Legacy App

This is the 14th exercise in a series designed to walk you through an entire financial plan.  The exercise is embedded in an Excel spreadsheet you can download and save for personal use.  You can read the backdrop for the exercise HERE, or just jump right in with the instructions given below:

You’re creating a legacy whether you want to or not, and purposing yourself to make that a story filled with meaning isn’t a box to be checked off, but a different way of living.  And while your estate and your estate plan is merely a part of the legacy you’ll leave, it’s certainly an important part, and we’ve developed an app to help you do that.

Begin or revisit your personal estate plan by completing the Legacy Plan exercise.  Included is an estate checklist to ensure you have the necessary documents updated with the appropriate provisions inside of them.  As you work through the process of getting your documents in line with your Personal Principles, develop your survivor guide which should accompany your estate-planning documents to provide additional details of your wishes to those you leave behind.  You’ll find this downloadable booklet app by clicking HERE.

Incidentally, my coauthor, Jim Stovall, has changed the way millions of readers, and Lord knows how many moviegoers, understand the word legacy through his book, and subsequent movie, The Ultimate Gift.  If you haven’t read it yet, I encourage you to do so.  It is a fast, refreshing read that acts as a great launching point for a legacy plan going well beyond the numbers.

For those who are encouraged to take additional steps to ensure they leave a legacy, not just an estate, the themes exhibited in The Ultimate Gift are now available as tools you can find at

And of course, you can also read more on the topic in the book Jim and I co-authored, The Ultimate Financial Plan.

Gratitude and Gratuity

by Jim Stovall

During the current economic downturn, I realize many businesses and individuals are having a difficult time making ends meet.

Recently, my coauthor Tim Maurer and I released a book dealing with money and personal finance (  As a result of the publicity and promotion of that book, I have had the opportunity to talk with many groups and individuals about the economy, budgets, and personal finances.  While speaking to a group of people who work in the restaurant and food industry, I was shocked to find out how much economic conditions affect consumers’ tipping practices.

My first life experience in the world of business and commerce involved delivering newspapers.  I quickly discovered if I was reliable, dependable, got the newspaper on the porch or where the customer wanted it, and kept it dry during inclement weather, I could receive some generous tips.  I found that good service often brings a disproportionately higher tip.  This is to say that many times for slightly exceeding expectations, you can receive a tip two or three times larger than you would otherwise expect.

When you and your family or colleagues go out to eat, everyone knows that the standard expectation for tipping is a minimum of 15%.  If you cannot afford to comfortably pay for your meal and minimal tip within the context of your budget, you simply cannot afford to eat out.  Regardless of your personal financial condition or the prevailing economic trends, the person who serves you deserves to be compensated appropriately.

Experts disagree on how you should handle substandard or poor service.  Some feel you should not tip at all or limit your tip while others feel you should discuss your situation with your server or, better yet, management.  I feel if you’re going to withhold a tip, the server should understand why.  Withholding a tip should indicate the service was so poor that if your meal had been deficient to the same extent, you would discuss not paying your bill with the management.

Apparently, many consumers find a number of minor complaints in their own minds sufficient enough to withhold the tip, but they never express their displeasure or the reason for their actions with the server.  Tips are discretionary as are most standard expectations in polite society.  If you withhold a tip without discussing it with your server, it says more critical things about you than the waiter or waitress.

I have a personal problem with establishments that put a standard gratuity on the bill.  I guess there’s nothing wrong with it if it’s disclosed up front, but I simply think the practice defeats the time-honored tradition of tipping.  Invariably if there is a mandatory tip already added to my bill, that is generally all I will pay.

One of my favorite quotes from President Harry Truman says, “We will give millions for charity but not one penny for tribute.”  President Truman was expressing the sentiment that we enjoy being generous but not having things taken from us or required of us by people who feel entitled to what we have.

As you go through your day today, remember the people who serve you, and treat them as you would want to be treated.

Today’s the day!

Fulfillment Plan App

This is the 13th exercise in a series designed to walk you through an entire financial plan.  The exercise is embedded in an Excel spreadsheet you can download and save for personal use.  You can read the backdrop for the exercise HERE, or just jump right in with the instructions given below:

This chapter’s Timely Application has three parts.  The first part is for all readers of any age, and it is an exercise to give you the opportunity to define what the optimal retirement looks like for you.  After defining retirement on your own terms, you’ll conduct some self-analysis placing your own personal tendencies on a continuum ranging from “spendthrift” to “hoarder.”  (It’s always interesting to revisit your Personal Money Story to pinpoint events in life that may have helped create these tendencies.)  After examining your strengths and weaknesses regarding short-, mid-, and long-term planning, you’ll articulate what your Fulfillment Plan would ideally look like.

The second and third parts of this exercise are for readers within striking distance of a transition toward some form of retirement.  The Retirement Income Sources tab will help you determine what your sources of income will be in retirement.  Then, contrast your expected income with a Retirement Budget to complete this chapter’s exercises.

Click HERE to access the Fulfillment Plan app!

The Art of Amazing

by Jim Stovall

Defining success is the initial barrier most people face.  If they instantly had the opportunity to flip a switch and become successful, they haven’t determined what that illusive term “success” means to them.  Success comes in many sizes and shapes.  It is not a one-size-fits-all proposition, but instead success is a custom-made garment designed to serve you throughout your life.

Once you have defined what success means to you, you’ve got to have a plan of action for how to get there.  I have been searching for a number of years to find a simple, one-step process to help people move toward success as they have defined it.  As usually happens, great wisdom comes not in the form of an insightful answer, but instead, it appears as a penetrating question.  Once you have defined what that customized success looks like for you, and you are pursuing it as a part of your daily routine, you simply need to ask the following question as you approach each task.  “What would I do right now if I were amazing?”

This seems to cut through the clutter and clarify the critical issue faster than anything I have ever found.  The question, “What would I do if I were amazing?” doesn’t require us to be amazing or even act like we’re amazing.  It simply assumes we have the ability to act amazing when dealing with the single task before us at any given point in time.

Lifetime goals can be broken down into long-term objectives and short-term activities; but at some point, no matter what our goal, we are faced with the next single task at hand.  It may be as simple as a phone call, a meeting, or a conversation.  It may require us to meet or greet a new person.  But whatever that activity, if we can answer the question, “What would I do right now if I were amazing?” we then stand at the fork in the road and are faced with that inevitable question, “Do I do the least I can do, the minimum that is expected, or will I perform this next task as if I were amazing?”

If you perform enough tasks at that level, soon people will begin to say of you, “That person is amazing,” and they will be right.

As you go through your day today, accept the fact that you won’t always have the right answers, but from now on, you’ve always got the right question.

Today’s the day!

Tax Myths And Rules App

This is the 11th exercise in a series designed to walk you through an entire financial plan.  The exercise is embedded in an Excel spreadsheet you can download and save for personal use.  If you haven’t yet, please read the posts divulging the 5 Tax Myths and the 5 Tax Rules.  If you have, you’re ready to jump into the exercise with the short explanation below:

Tax Myths & Rules

Put your own tax acumen to the test by reviewing each of the Tax Myths and Rules to see how well you’re avoiding and applying them in your life.

With the aid of this spreadsheet, you’ll be able to examine your own posture toward each of the five tax myths and rules.  You can then determine what actions you can take to avoid letting tax implications lead instead of follow in your financial planning.

Click HERE to access the Tax Myths & Rules App!

Annuity Audit App

This is the 10th exercise in a series designed to walk you through an entire financial plan.  The exercise is embedded in an Excel spreadsheet you can download and save for personal use.  You can read the backdrop for the exercise HERE, or just jump right in with the instructions given below:

It is my hope that this is an extremely brief exercise for you, but many people who have long-term relationships with folks in the insurance, brokerage, or banking industries have a lifetime of annuities built up.  If that is your scenario, it is very important that you do this exercise to get a handle on where your money is and what it is doing (or not doing).

When you did your Personal Balance Sheet or Mutual Fund Audit App, you probably pulled together the statements for any annuities you own.  These statements often lack the information you’ll need for this exercise, so I also want you to pull together each of the contracts you received at the inception of your annuity policies as well.  Then, using the App (link below), fill in the information cataloging the following: owner[i], annuitant[ii], beneficiary[iii], contract value, surrender value, cost basis (the sum of your contributions), and the surrender schedule.  Some of this will be on your statement, but the remainder will be in your policy contract. You may have to do some digging.

Once you’ve collected the information, the analysis should start with a diagnosis of the investment value.  If it is a fixed annuity, you’ll know very quickly if the rate is competitive with today’s rates.  If it is a variable annuity, examine how it has performed versus the various benchmark indices.  If it is an equity indexed annuity, the chances are very good that it is not a phenomenal investment, but it also probably has a very long and steep surrender charge which may make it prohibitive to move at this time.

If you determine you’d prefer to be out of an annuity contract, here are the questions to ask:

  • What, if any, surrender charge exists?
  • Is the surrender charge cost prohibitive?
  • How much longer will the surrender charge last?
  • How much have you contributed (what is your cost basis)?
  • How substantial would the tax impact be (would you have to pay a lot in taxes)?
  • Is there a gain on which you would have to pay a penalty if you are under age 59½?

Again, remember to make these decisions slowly because there are many moving pieces with annuities.  It is best to speak with a fee-only Certified Financial Planner™ practitioner AND a Certified Public Accountant prior to making any final decisions.

Click HERE to access the Annuity Audit app!

[i] The person who made the investment in the annuity

[ii] The person upon whose life the actuarial calculations in the annuity policy were based (this is often the same person as the owner)

[iii] The person or people to whom any annuity proceeds will be directed upon the death of the annuitant

Mutual Fund Audit App

This is the ninth exercise in a series designed to walk you through an entire financial plan.  The exercise is embedded in an Excel spreadsheet you can download and save for personal use.  You can read the backdrop for the exercise HERE, or just jump right in with the instructions given below:

Most of the information you’ll need to complete this exercise should already be together from the Personal Balance Sheet exercise earlier in this series, but if not, pull together the most recent holdings information that you have for your various investment accounts.  If you have online access to these accounts, it will be as easy as printing out the page with your current holdings.  If not, pull together each of the most recent statements for all of your investment accounts.

Aggregate your holdings using the form we’ve made available for this exercise online.  Segregate them between investments that are inside of retirement accounts (like your 401ks, 403bs, IRAs, etc.) and nonretirement accounts (there is a tab for each on the spreadsheet).  For any mutual funds, you’ll want to have the name of the fund and the five-letter symbol.

Now, navigate your web browser to  With the tools here, you’ll be able to use that final column of your Investment Audit to fill in the Manager Category column.  (You can examine your mutual fund managers with the tools on Morningstar using the basic service at no cost.  Another good, free resource for the analysis of stocks and mutual funds is Yahoo’s Finance web site

Plug the symbol of each of your mutual funds into the “Quotes” field on Morningstar.  The main page for each fund will show you a 10-year chart with a graphical depiction of your fund’s performance alongside its benchmark.  Just below the chart, you’ll see a tool that will allow you to click and drag the timeline backwards to see a longer fund history if it’s
available.  You can also hit the “Performance” tab and select the “Expanded View” to see even more detail about the fund’s numerical performance.

Using the tips in this post, you should now be able to classify each of your funds.  In the Action column on the right hand side of the worksheet, check any of the Return Chasers and Index Huggers for additional review.  Again, Return Chasers should be well understood, carefully monitored, and dumped if misunderstood.  Index Huggers should be replaced.

Click HERE to access the Mutual Fund Audit app!

Long-Term Disability Income and Long-Term Care Insurance Apps

In order to help you navigate the two most complex forms of personal insurance, I’ve created two “apps”–in the form of Excel spreadsheets–that you can use to create a plan, analyze any policies you have and obtain apples-to-apples quotes for new policies, if needed.  You can find the backdrop for the disability income exercise HERE and the long-term care exercise HERE, or just jump right in with the instructions given below:

Screenshot 2017-03-08 11.52.30These exercises are each a three-step process.  Step One is to determine what you need.  This is accomplished by writing out a Disability Plan if you are in your 30s, 40s or 50s.  If in your 50s, 60s, or beyond, you need to articulate your Long-Term Care Plan.  Not everyone needs insurance, but everyone needs a plan.  Start the process by writing out a paragraph beginning with the following sentence: “If I became disabled [suffered a long-term health care incident], here’s how I would handle that financially…”

Step Two is to understand any coverage that you already have.  The online exercise includes a template with spaces to fill in for the primary features mentioned in this two-part blog series.  Once you have completed the template, you’ll better understand the coverage you have.  Step Three is to determine what you actually need and want in a policy and create a template to retrieve quotes and find the best coverage.  You’ll be better prepared for the engagement with the insurance agents because your template will ensure you’re comparing apples-to-apples, a very difficult thing to do with long-term disability income insurance and long-term care insurance.

Click HERE to access the long-term disability income app and HERE to access the long-term care app!

Home and Auto Insurance App

This is the seventh exercise in a series designed to walk you through an entire financial plan.  The exercise is embedded in an Excel spreadsheet you can download and save for personal use.  You can find the backdrop for the exercise HERE or just jump right in with the instructions given below:

In order to know if your home and auto insurance policies are providing you with the appropriate levels of coverage, you’ll want to collect the declaration pages for all of your home, auto, condo, and renter policies.  The Application Exercise online will provide a chart to fill in your various coverage limits next to our recommended minimum limits.

After you’ve tailored your desired limits with the help of an independent planner who does not accept commissions or referral fees for the sale of insurance, you can use the Application Exercise to shop your coverage with several carriers.

Click HERE to access the app!

A Financial Emergency

by Jim Stovall

We have all heard and read a lot recently about the financial crisis or monetary emergency that we are facing.  These reports, most often, define the looming disaster in terms of billions or even trillions of dollars.  While we are certainly facing some difficult economic times around the world, the most critical financial emergency we are facing, individually and collectively, is represented by $1,000.

A recent survey showed the staggering reality that 64% of Americans don’t have $1,000 set aside as an emergency fund.  This is an alarming statistic because, with the cost of all the complex devices that make our world possible, a non-functioning refrigerator, broken transmission, or even a leaky roof can use up a $1,000 emergency fund and more.

It’s not a matter of if you’re going to have a $1,000 emergency.  It’s a matter of when.

These 64% of respondents to the survey were asked what they would do if they had an emergency since they don’t even have $1,000 set aside.

  • 9% of them said they would take out a loan;
  • 17% declared they would borrow from friends or family;
  • 9% replied they would get a cash advance on a credit card;
  • 17% replied they would simply disregard other monthly expenses to cover the cost of the emergency; and
  • 12% actually said they would have to sell or pawn some of their personal possessions.

In my latest book, The Ultimate Financial Plan, my co-author Tim Maurer and I explore every aspect of the financial decisions that are faced by you and your family; but it all starts with an emergency fund.

There is a tremendous benefit to having an emergency fund that goes far beyond covering the cost of an emergency.  It could commonly be defined as a good night’s sleep.  If you are one of the majority of Americans that don’t have even a minimal $1,000 emergency fund, you need to declare your own emergency now, and begin compiling reserve funds for that next inevitable bump in the road.  You can turn a broken air conditioner, a visit to the minor emergency medical center, or an unanticipated tax bill into an annoyance instead of living with these realities as a looming emergency.

The number one cause of divorce, depression, and dissatisfaction in our society is reported to be worry over money matters.  I’ve got to believe that the majority of the worry is not about retirement, college education, or paying off the house.  Most worries are about those routine, daily matters that come to us unexpectedly and can only be resolved with money.  Money is far from the most important thing in life; however, with respect to the problems that money solves, there is simply no substitute.

As you go through your day today, realize that relaxation and peace of mind may be only $1,000 away.

Today’s the day!