3 Ways Life Insurance Can Benefit a Charity You Love

Would you like to make a charitable gift to help organizations or people in need; to support a specific cause; for recognition such as a naming opportunity at a school or university? Perhaps you would do it just for the tax incentives. There are any number of reasons, and life insurance can be one of the most efficient tools to achieve these purposes. So the question becomes, how does this work?

Let me list the ways.

1. Make a charity the beneficiary of an existing policy. Perhaps you have a policy you no longer need. Make the charity the beneficiary, and the policy will not be included in your estate at your death. This also allows you to retain control of both the cash value and the named beneficiary. If you want or need to change the charity named as beneficiary, you can.

2. Make a charity both the owner and beneficiary of an existing policy. This gives you both a current tax deduction along with removing the policy from your estate. Once you gift the policy, you no longer have any control over the values.

3. Purchase a new policy on your life. Life insurance is an extremely efficient way to provide a large future legacy to a charity in your name without needing to write the large checks now. The premiums are given directly to the charity which then pays the premiums on the policy. The charity also owns the cash value as an asset. I am using this concept in my own planning.

Many charities would prefer to have their money upfront, but if you cannot write that large check or don’t want to part with your cash today, a gift of life insurance is a most efficient method to leave a large legacy in your name.

Inflation, Low Rates, and Home Appreciation

The combination of inflation and low mortgage rates usually leads to much higher compounded rates of home appreciation. For owners of property, high rates of inflation and appreciation are welcomed and appreciated. For buyers or tenants, however, the skyrocketing purchase and rental prices are not liked much at all.

Rapidly increasing rates of inflation are not very helpful for our consumer purchasing power for basic goods and services like food, utilities, dining at restaurants, or gas or transportation prices. However, the best traditional hedge against inflation is, was, and probably always will be something called Real Estate. This is true partly because home values tend to increase at least as much as the reported annual rates of inflation.

Using the old investment formula called The Rule of 72, investors can quickly calculate how soon their investment will double in value by dividing the number 72 by an estimate of annual appreciation gains. In many boom markets over the past few decades, especially in California and other popular housing regions across the U.S., values have appreciated by anywhere between 7% and 10% per year over the period of five to 10+ years.

A home that appreciates at 10% per year (72 divided by 10 = 7.2 years) may double in value every 7.2 years during a more solid economic “boom” era. Another home that appreciates 7% each year can double in price every 10.2 years during a relatively strong economic time period. Or, a home appreciating in value just above the historical inflation numbers at 5% per year is quite likely to double in value every 14.4 years.

Over the past 50 years or so, a significant amount of family generational wealth has been created by buying and holding onto one, two, three, five, 10, or 20+ homes while benefiting from the magical power of compounding inflation and homes appreciation gains.

During a 30-year mortgage term, a home can double in value two, three, or four plus times. The quick or slow appreciation percentage rates for homes and other types of real estate are dependent upon a wide variety of factors such as buyers’ demand, the availability of affordable third party loan sources, the local housing inventory supply, quality property location, and local and national unemployment trends.

While the most common mortgage loan is typically for a 30-year term, the average hold time for a mortgage on a home is 10 years prior to the homeowner selling the property, paying it off in full, or refinancing with another new mortgage. This is a major reason why the 30-year fixed rate is tied directly to the movement of 10-year Treasuries, or the 10-Year Treasury Constant Maturity Rate. In recent years, 10-year Treasuries have hovered at or near all-time record lows right alongside 30-year fixed mortgage rates.

The most important factor which usually determines whether or not a housing cycle is positive, negative, or flat is directly related to the cost and the ease of availability for third party capital sources such as banks, credit unions, and private money funding sources.

Peer-to-Peer Payment Apps: A Brief Overview

The growing influence of the web has reached to an extent where we can roam around cashless. No, I am not talking about going cashless with your ATM card in the wallet, which would take care of the needs. But, this is one of the scenarios where you can go cashless and cardless at the same time. Just with a swipe on your touch screen you can make payments or transfer funds or initiate a payment to the merchant or to anyone as you wish.

Yes, it is happening. Moreover, there are people who are worried about the safety and security of their payments, which prevents them from using this payment mechanism, where you can go cashless and cardless without any further worries of carrying money with you all the time.

One of the examples of this payment wallet could be best illustrated by the Paytm wallet that is one of the coolest payment gate way. Let us think about a situation where you are planning to hire a UBER cab for your next journey. It is late in the night and you need to get home from office. You are not carrying cash with you and it is a little bit difficult to find ATM’s nearby. But, you need to get home and you are going to hire an UBER. What do you do?

Your UBER app shows the payment options as: “CASH” and “Paytm.” Which one do you select? As we have already discussed you are in short of cash. Now the only option you are left with is the Paytm. You check on the Paytm option and within minutes your UBER is here. You enjoy one of the coolest ride home and your Paytm takes care of your payment. Here, there are quite a few advantages of not having to carry cash around.

You have been traveling alone at night with a stranger. We cannot prevent disasters such as theft which happens at the most unexpected time. But, with cashless and cardless payments we are ensuring that there is more security to our lives and assets than ever and also, we are saving ourselves the effort of always keeping money with us.

The payment happens instantly as you are dropped at your destination. You can go home and have a sound sleep. Also, think about your situation where you went out for a team dinner. And, all of you planned to split the bill amongst the team. Now you have the easiest way of payment with you. You can transfer it via the payment wallet and burp merrily after a delicious dinner at one of your favorite restaurants.

So, what exactly is this peer-to-peer payment app?

Let me not give you any complicated definitions, if you haven’t heard of it before, I wish to make it easier for you. This system acts or takes up the responsibility of a messenger or carrier, which would provide you with a bridge to transfer or initiate payments from your bank account to another individual or merchant’s account or card via a software app. Ain’t it easy?

These days we can observe that a number of youngsters are in awe of these apps that makes it easier for them to go around without the typical difficulty of carrying cash or card with them every time they wish to make a purchase or transfer back the money someone had lend them. But, there are still those who are worried about the safety, which you can take a chill pill, because it is safe and secure.