JoeTaxpayer

I remember watching “It’s the Great Pumpkin, Charlie Brown”  every year when I was a kid. Linus never gave up, but was left disappointed. Will the Tea Party come to its senses, or are we just Linus, all grown up?

I’ve seen enough murder mysteries for my gut reaction to be, “Enough so your family won’t need to sell the house, drop out of high school, and move to van down by the river; But not so much they are happy to see you in the casket, or worse, conspire to put you there.” While I offer this tongue-in-cheek, it actually starts a dialogue for discussing your true needs, a minimum and maximum amount.

Let’s start with the biggest expenses many of us are up against, our house and funding college for our children. If your kids are already adults, your spouse may not want to keep the house after you pass. If you still have school age children, or your spouse will stay in the house, it would be a great start to have that mortgage paid in full with the life insurance proceeds. Term life’s coverage will  remain the same for the duration of the term, but you’ll be making mortgage payments, so will have less need for the mortgage-targeted portion of the insurance. This factor will help offset inflation a bit over that term. You are likely saving for your children’s college tuition, and should account for this as well. From College Data, “According to the College Board, the average cost of tuition and fees for the 2012–2013 school year was $29,056 at private colleges, $8,655 for state residents at public colleges, and $21,706 for out-of-state residents attending public universities.” This is more than a three to one range from state school to private.  It’s okay to estimate on the high side and find you have a bit extra. So far, these two costs might range from a low of $100K, up to $500K or more. Medical school anyone?

Next comes the real math. How much is your income that insurance will need to replace? Financial authors still tend toward the 4% rule, suggesting that you can withdraw 4% of a nest egg each year, adjust for inflation, and have a good chance of not running out of money. This means that for every $10K you make, $250K in life insurance is required to replace that stream of income. For a $40K/yr income, $1 million is needed. Of course, one doesn’t live off their gross income, but rather their net. This is what’s left after Social Security, Taxes, Retirement Savings, etc. That’s why this math is not an exact science, but rather, a starting point for how to determine your insurance needs.

Once you have a number in mind, it’s time to start shopping. Are you in good shape, physically? Do you smoke? (Gee, I hope not!) Do you have any pre-existing conditions that might make you seek to find life insurance without a medical exam? These are among the things to consider when shopping for your policy. On a personal note, we bought our policies 15 years ago when our daughter was born. After the terms came up for renewal, we stuck to the same value policies, as our college savings and mortgage payoff needs dropped, but inflation make up the difference. In five years, the mortgage will be gone, and the college bills will at least be a known quantity. And it’s fair to say that most days, my wife prefers me to the bundle of cash she’d get if I passed on.

It’s not just adios, but probably goodbye. Last weekend, St. Louis was the host city for FinCon, the Financial Blogger’s Conference. So far, it’s been in Chicago, Denver, and now St. Louis.

This is The Gateway Arch which Wikipedia tells us is a 630-foot monument in St. Louis, Missouri. Clad in stainless steel and built in the form of a flattened catenary arch, it is the tallest man-made monument in the United States. I hadn’t given it much thought in my life until the SyFy TV show Defiance was released, and the arch is a prominent feature in the show.

FinCon was the brainchild of Phil Taylor, the blogger better known at PT Money, and this year, the number of attendees hit the 500 mark. The people that came are nothing short of amazing. When you combine the love of a topic, the desire to write about it, and the urge to connect, there’s a magic that happens.

This year, author and financial editor of the  Today Show, Jean Chatzky gave a keynote address. She really knew how to relate to the audience. Jean shared her story of how she got started in the business, and after being told she’d never make it to TV, didn’t just get on television, but did it in NYC, the last place one expects to get a break. Her next project is the expansion and promotion of her Money School, an online seminar series to help you improve your finances. My fellow bloggers and I are likely to come back with more on Jean’s Money School. From the bit I saw of it, she’s going to help a lot of people.

There were so many bloggers who gave a talk that I really run the risk of leaving off someone who deserves a mention, but here are the ones that stand out in my mind –

Rob Bennett – I’ve met Rob at prior FinCons and he strikes me as one of the most passionate people out there. Rob gave a talk at Ignite, an evening function in which each speaker has 5 minutes to share an idea via a set of 20 slides timed to change at 15 second intervals. Rob has a message to share, but somehow his message isn’t welcome in many financial forums. What’s Rob’s message? It seems to be twofold, first, stocks actually do get overpriced. Any of my readers old enough to remember the crash of ’87? No? No problem, we had another crash from 2000 through Mid-02. I know, that was still over a decade ago. The latest crash occurred from Mid-07 till Jan ’09. It would seem that Rob’s observation is correct. Another Rob, Schiller to be specific, had a similar idea. He doesn’t get kicked out of finance forums, that I know, instead he gets a Nobel prize. Which is pretty cool. The second part of Rob Bennett’s message is that by using data that we know, the PE10, which happens to be popularized by Robert Schiller, we have a tool to judge market valuation. If there’s a problem with the process Rob discusses, it’s that it takes time and patience. Check his site out, and see what you think.

Barbara Friedberg blogs at her site about saving, investing, and building wealth. She gave a regular length talk containing a mix of writing and investing advice that were right in line with my own opinion. Patience, asset allocation, and she even offered a quote that I loved – “Investing should be like watching grass grow or paint dry. If you want excitement, take $1,000 and go to Las Vegas.” (Paul Samuelson)  Barb prefers indexing, as do I, and even suggested that if one wanted to buy individual stocks, they should limit that portion of their assets to 10%. On a side note, a newer blogger and I were talking over lunch, and she was determined to go all in, choosing stocks from the very beginning of her investing life. It’s tough to explain to a new investor why they are not going to be the chosen one who beats the market year in and year out.

Eric Rosenberg – Eric is a big deal (ask him, he’ll tell you), he offers great financial writing at his blog, DJs on weekends, and just announced to his readers that he’s engaged. I may be twice his age, but I’m the first to admit there’s far more to be learned than I’ll ever know, and I’m always happy to learn from Eric.

Romeo Jeremiah didn’t offer a talk, but we did spend some quality time together at the hotel bar. He writes about finance, relationships, and life, and whether one agrees with him or not, he offers his views respectfully and with great insight. He was away from the US with his son last year and missed FinCon. Great to see him this year and catch up.

As I started to say, a great group, and with 500 attendees, it was impossible to chat with each and every one. If you were there and I didn’t meet you, I’m sorry, I look forward to next year. If we met, it was great. There’s no one I spoke to that wasn’t interesting, a rare time to be with a group that has no one you wanted to walk away from. If you missed FinCon this year, you can buy a virtual pass and see what the fuss was all about.

This Sunday may feature a roundup of FinCon posts. A lot to read and learn.

I don’t often post a “gone fishing,” but I’ve slowed down the past month or so, family, new career, and a lot going on.

Today is the start of FinCon13, the financial bloggers conference, and I wouldn’t miss it for anything.

It’s a time to meet with other bloggers who write about a variety of financial topics, and get a chance to chat live with people whose writing I’ve enjoyed during the year. More than that, the people that come to FinCon are an amazing group, the function almost takes on a family reunion experience.

So that’s where I’ll be through Sunday night. Back next week with more to share.