Our Story

Our Story

March 28. 2016

The Question

I was asked a few months ago to share our story about how we got to the point of helping other people with their finances. It is a question I've been asked only a few times since we started our journey to debt freedom. But don't worry, I won't go into too many boring details, but I hope by share our story, it will encourage others in their own journey.

My wife Julie and I meet in 2001 and got married in 2002. Back then, we were both fairly recently divorced and trying to get our lives back on track. The biggest debt we had back then was our mortgages. Yes we had other debt like credit cards, car loans, etc... but that wasn't what was killing us financially. It was our over spending. 

Neither one of us were living on a budget and we had absolutely no idea where our money was going. After getting sick and tired of the collector calls, over due and shut off notices, having my car repossessed, etc... we knew we needed to do something. But what were we going to do? We didn't have a clue.

The Radio Show  

Then one day, Julie told me that she had heard a radio program that talked about finances and the host of the show had a class that taught people how to handle money GOD's and Grandma's way. She suggested that we attend a free preview for the class that was being held at a local CHURCH and that she really wanted to go check it out. I could tell that she was reluctant suggesting this approach to getting some sort of grip on our finances for 2 main and 1 minor reasons. 1) I didn't believe in God. 2) I didn't go to church for any reason except for weddings and funerals. And 3) What she was suggesting sounded like a get rich quick scheme. But I could tell she wanted to go, so I went... That class was Dave Ramsey's Financial Peace University (FPU). That was in January 2007, and it changed our lives.

Fast Foreword

Today, I'm happy to say that we have paid off the majority of our debt, about $80,000 worth of it. The only debt we have left is Julie's student loans. This debt free journey has not been easy. Our income to debt ratio has never been a big one and there has been some serious bumps in the road, but we picked ourselves up, dusted ourselves off and pressed foreword.

Since 2007, we have coordinated about a dozen FPU and a few Legacy Journey classes at OUR church, as well as done some one on one coaching. Currently, Julie and I have received our Life Insurance licenses and incorporate financial coaching in with the selling of good Term life policies. It has been very rewarding over all. But here is the best part. We (Julie and I) are not the heroes in this story. The heroes are all the people who have had their "I've had it!" moment and buckled down and got control of their lives. Julie and I were just the guides in their debt freedom story.

What's Your Story?

So I ask you this, where are you in your story? Have you started? Are you well on your way, or have you finished and are now guiding others? Believe it or not, people are watching you along your journey. Share your stories as much as you can without sound like your boasting. There are people out there who are hurting financially. Don't point fingers at them and tell them how they're screwing things up, but inspire and guide them with your story.

Toujours Prêt

Debt is Not inherited, Unless

Debt is Not inherited, Unless...

March 21, 2016

What you Own, has to go Towards what you Owe

A question was asked last week about a loved one’s debt. Does debt get passed down to heirs when you die? The short answer to that is No, it doesn’t. But there is a catch to that. What you own, has to go towards what you owe. Let me explain...

Let’s say you and your spouse jointly own a home that is valued at $100,000. So that means you each own 50% or $50,000 of your $100,000 home. I know you probably don’t think of owning your home that way, but legally, that’s how it is.

Now, if your spouse passed away (God forbid) and they owed $20,000 on a credit card that was in THEIR NAME ONLY. Legally, you don’t have to pay that $20,000. That was their debt and it died with them, UNLESS your spouse owned some assets. And in our example, they do. They own $50,000 of your $100,000 home. 

So there are a few ways you can handle this. 1) you can pay the debt as if it were your own. 2) you can sell your home to get the $20,000 out of your spouse’s $50,000 share. Or 3) you can pay off the debt with either saved money or out of life insurance benefits. In any case, the debt has to be paid out of the deceased’s assets. What you own, has to go towards what you owe. Just an FYI though, life insurance proceeds are NOT typically part of one’s estate, unless it’s beneficiary position is tied to the deceased’s estate somehow. So it is not normally an asset of the deceased. I just used life insurance benefits as a possible way of paying off debt in this example.

Not Enough Assets

So what if there aren’t enough assets to pay off all the debts? Well, just like your budgets, you only have X amount of money to pay on your bills, you only have X amount of money from the deceased’s assets to pay on their debts. You just have to choose who gets paid and who doesn’t. In this case, you just inform the creditors that aren’t going to get paid that your loved one passed and provide them with a death certificate proving their death. That’s it, the debt is gone.

Just Grieve

I hope I made this clear enough for you to understand. The passing of a loved one is a stressful, gut-wrenching event that causes most of us to not think clearly. So I want to give you permission to not deal with any major financial decisions at that time and just grieve for about 6 months to a year until your brain starts working right again.

Toujours Prêt

What Can Cause High Life Insurance Premiums

What Can Cause High Life Insurance Premiums 

March 14, 2016

Some time ago, after the The Role of Insurance lesson in the Financial Peace University class we coordinated, a class member came up to me and said, "We looked for life insurance and didn't find the premiums Dave [Ramsey] was talking about." Believe it or not, I get that question a lot. So I thought I'd share with you the 6 categories that could cause your premiums to run high.

6 Categories

Sex and Age: It is a well known fact that women tend to naturally live longer than men do. So because of that, premiums tend to be higher for men. Age is a factor too. As you can see in the chart below. The older you get, the shorter your life expectancy is. That's really a no-brainier.               

                                                Ages        Male             Female

30           $13.93           $12.04

40           $19.09           $16.77

50           $36.47           $29.24

These monthly premium rates are based on a standard $100,000 20 year Term policy for a non-smoker. Before medical exam.

Health History - Yours/Family: What your current health is, has a big factor on what your premiums will be. Being over weight, having diabetes, high blood pressure, heart condition, cancer scare, etc... can all have a negative effect on your premiums. Even certain medications you're on are taken into account and can raise premiums, and rates can sometimes double because of your overall health. Your family's medical history is also taken into account. Any illness or diseases in your siblings, parents, or grandparents are looked at to see if the chances of you getting them are there. For instance, if your grandmother, dad (on the same side), and brother all died of cancer, the chances of you one day getting cancer too is greater than if there was only one or no cases of cancer in your family history.

Smoking: Is another big factor that we all know about. Even if you use the popular e-cigarettes these days, they can, and most likely, double the premiums you would have gotten if you didn't smoke at all. To give you an example, using the same numbers as above, the premiums for a 30 year old smoker are, Male: $25.03 and $21.24 for a Female. As you can see, there is a big difference.

Job or Career: This can be a factor too, because let's face it, some jobs are more dangerous than others. So depending on your occupation, your premiums may be higher.

Hobbies: Believe it or not, this is also a factor. Again, skydiving is far more dangerous than someone who paints, just to give you an example.

So there you have it. The 6 categories that could cause your life insurance premiums to be high. Now in all fairness, if you are planning to get life insurance, be TRUTHFUL when answering these kind of questions. Because if you were to die at age 50 from let's say a skydiving accident and you lied about that being your hobby since you were 18 years old just to get a lower premium, that could be a big factor on whether or not your beneficiaries get a lower death benefit check or if they get a check at all. So be truthful.

Traditional IRA vs Roth IRA Part 2

Traditional IRA vs Roth IRA: Part 2

March 7, 2016

Review From Last Week

Let’s take a moment and briefly review what an IRA is.
An IRA means Individual Retirement Arrangement according the current tax codes. The IRA itself is NOT the investment. “IRA” tells the IRS how the investments inside the IRA are going to be treated. You have to have an earned income to contribute to an IRA, and are only allowed to have a maximum contribution of $5,500 ($6,500 if you’re over 50) per year or up to you yearly income if you make under $5,500 per year.

What is a Roth IRA?

The Roth IRA was named after Senator William Roth, who was a major advocate for IRA reform. So the Roth IRA was established as part of the Taxpayer Relief Act of 1997.
IRA’s and Roth IRA’s are almost identical with a couple important differences.


1) There are income limits: If you are married Filing jointly, making $188,000 per year or more. Or a single making $127,000 per year or more, you can not contribute to a Roth IRA.


2) Tax free growth: Unlike the traditional IRA, a Roth IRA is not taxed as you start taking the money at retirement. That’s because you are taxed as you are putting the money into the Roth. That means the whole time you are contributing into a Roth and the investments start to grow, they are growing TAX FREE! That’s a big deal! Because in all investments, it’s not what we put into them that makes up the majority of the investment. It’s the growth!

How Important is it Really?

Let’s just say you couldn’t put in the maximum contribution of $5,500 into either a traditional IRA, or a Roth IRA, but you could do half… $2,750. If you contribute that amount each year from the age 18 to 65 at a 10% rate of return, that would be $2,880,304.72. Not too shabby!


Now at current capital gains rates, if this was in a traditional IRA, that $2,880,304.72 would be taxed at 20%. Which means you would have lost over a half a million dollars in taxes, but in the Roth, you would have the whole $2,880,304.72.


Now here’s the kicker… That whole time you were putting $2,750 into either the traditional IRA, or a Roth IRA, you only contributed $129,251.88. The rest, ($2,748,302.84) was growth. So this is a big deal. It is important!