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January/February 2004

Commentary - Hans H. Mathisen

Seven Life Insurance Mistakes- This is required reading, as so many of us are guilty of one or more of the common mistakes outlined in LIFE LETTER for January, 2004. If any of these points strike a note with you, then you may want to give me a call. Better late than never?

How to Make Your Heirs Hate You- LIFE LETTER for February covers a classic subject. After more than a quarter century in the financial services field, I've come across many persons who are just too busy to set aside the time it takes to arrange their affairs properly. And to sit down with their heirs, explaining how everything has been arranged. Please, why don't you do it right? I'll be pleased to meet with you to get the ball rolling. I can also refer you to the very best legal, accounting and tax experts available if you don't already have these people on your team. Call me if you need that extra little push to get going.

THE STOCK MARKETS - 2003 was a very good year for all uf us who were invested in blue chip stocks and mutual funds. For the year, the Nasdaq Index grew 50.1%; the Dow Jones Index was up 25.32%; the Standard & Poors 500 Industrials Index increased 26.38%, and our own TSX Composite Index rose 24.29%. The European and Asian major indexes were also higher, with German's DAX up 37.08% and Hong Kong's Hang Seng up 34.92%. And the upwards trend in the markets is continuing. As of February 2, 2004, the TSX Composite Index has increased 5.10% year to date.

Are YOU participating in the new Bull Market? Or are you still invested in GICs and Canada Savings bonds? As you know, unless you hold these investments inside your RRSP, the very meagre return you get is fully taxable.

Still on investing, and if you keep track of my past financial commentaries, here's how my very own two, very conservative, portfolios are faring:

PORTFOLIO #1: March 7, 2003 to Jan 26,2004, the return is 20.11% PORTFOLIO #2: April 28 , 2003 to Jan 26,2004, the return is 25.17%

If you want to pick my brain on where and how I invest, please call me.

HAPPY INVESTING!
Sincerely,
Hans Mathisen



 

 

 

LIFE LETTER

Seven Life Insurance Mistakes

No two families build their life insurance programs exactly the same way. Following are seven common mistakes that some people make that you can avoid or correct:

The Wrong Amount - Having too much life insurance can be as bad as not having enough. By doing a comprehensive needs analysis, your life insurance advisor can help you choose the right amount.

The Wrong Type - There are many types of life insurance policies to choose from. They are designed to suit different situations in an ever changing world. Your advisor can help you find those that best fit your needs and pocket book.

The Wrong Reason - Did you ever buy a policy to get rid of someone or to "help out" a friend in the insurance business? Do you know the reasons why you bought each of your present policies? Are they still valid?

Not Reviewing Present Policies - You may be able to rearrange your present life insurance to give you additional coverage at no extra cost. It may be possible to upgrade some policies for fewer premiums than new insurance.

Ignoring Other Assets - Life insurance provides cash at death. The more cash that is available from other sources, the less life insurance may be needed. For example, if business interests can be converted to cash at death by means of properly funded buy-sell agreements, the amount of personal life insurance a business owner requires may be reduced.

Forgetting Employment and Government Benefits - How much group life insurance do you have? What are the present amounts of your death benefits in your employer's pension plan and from the Canada Pension Plan? Did you consider them when you last bought a life insurance policy? Has anything changed since then?

No Overall Plan - Many people buy a policy here and a policy there until they have an insurance hodge-podge that can be confusing and over priced. Your life insurance is best coordinated with your other assets and benefits to meet your long and short term objectives. Your aim should be to have an overall plan you understand that can save you and your executors time and money.

What if I get disabled and can't afford premiums?

The last thing anyone wants to worry about when they become disabled is ongoing payments. A benefit that can be added to most life insurance policies, generically known as a Waiver of Premium Benefit, can pay premiums for you if you become disabled for a certain length of time (waiting period) or longer.
Definitions and waiting periods in a Waiver of Premium benefit may not be suitable for some people. An alternative is a small personal disability policy with a shorter waiting period or definitions that are better for you.

Time to review our life insurance plans?
Call Hans Mathisen today at (306)242-7042.
or email -
hans@mathisen.ca

Copyright 2004 Bowen Financial Inc. All rights reserved

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LIFE LETTER

How to Make Your Heirs Hate You

Your death will create problems. There will be three types - emotional, legal and financial. You can do certain things now, while you're alive, to reduce or increase these problems and make your heirs either love you or hate you.

EMOTIONAL PROBLEMS
You can increase the emotional upset after your death by leaving your affairs in a mess. Hide your will, or better still, don't make one. Have a number of secret bank accounts and investments.

Keep the records of your assets and liabilities scattered in so many different places that even you couldn't remember where they all are. Make only a mental summary of the things you own and owe - don't write them down.

Assume that you'll always have total control of your faculties and a perfect memory. Plan to live forever.

LEGAL PROBLEMS
Creating legal problems after your demise can further aggravate the emotional trauma. Hide or destroy legal documents. If you own an interest in a business, avoid making a buy-sell agreement. If you're forced to have one, make sure it conflicts with the terms of your will.
Announce at least once a month that you're planning on revising your will, then die without one.

If you do make a will, name your Spanish-speaking second cousin in Brazil as your sole executor and your great grandfather as the guardian of your infant children, without telling them. Trust no one.

FINANCIAL PROBLEMS
Increasing the emotional and legal problems will, of course, increase the expenses your death will create. However, the experts your family will have to hire to straighten out the mess will be appreciative.

You can make the financial problems even worse for your family by leaving as little money as possible and having what little you do leave go to strangers. Emphasize that you expect a very expensive funeral, a three-day wake and an Italian marble mausoleum.

Specify the use of the top legal and accounting firms to advise your executors. Then leave as little cash as possible. Leave only assets that cannot be sold for one reason or another. If they can be sold, make sure the money must go to creditors.

If you have a business buy-sell agreement, make sure it is under-funded. Don't buy any life insurance. If you have some, cancel it. Try to leave your family totally destitute.

Yes, the foregoing is tongue firmly in cheek and the exact opposite is recommended. It is unfortunate, though, just how many estates will compound the problems for those left behind. Simple steps should be taken now to avoid making your heirs hate you.

Want help organizing your affairs?

Call Hans Mathisen today at (306)242-7042.
or email -
hans@mathisen.ca

Copyright 2004 Bowen Financial Inc. All rights reserved

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Mathisen Financial, Inc.
335 Redberry Road
Saskatoon, Saskatchewan S7K 4W5
Bus. (306) 242-7042 Fax. (306) 242-4314
Email:
hans@mathisen.ca