Additional Benefits of Having Life Insurance

This article from US News & World Report offers a good look at some of the additional benefits available to having life insurance.

 Life insurance seems like a straight-forward financial product. Insurance companies receive premiums and in exchange they pay out a death benefit to policyholders' beneficiaries. However, these plans can be much more complex than that.  
 "There are a lot of options – much more than people realize," says Cliff Wilson, chair of the board of directors for Life Happens, a nonprofit that educates the public on insurance matters. 
Some policy perks are geared toward certain populations, such as the USAA Military Future Insurability Rider, which lets service members convert a military policy upon retirement. But other life insurance perks can be had by virtually anyone.

One of the best ideas from the article was the possibility of adding a LTC rider to your policy.
 1. Pay for long-term care expenses. Long-term care insurance is expensive, and adding a rider to a life insurance policy can be an effective way to get this coverage. Specialty products that combine life and long-term care insurance are also available. 
Whether the coverage comes as a rider or a specialty policy, using long-term care benefits typically reduces the amount of the death benefit. While there is an extra cost for adding long-term care coverage to a life insurance policy, it can be more cost-effective than buying two plans. 
It can also be a good choice for people who want long-term care insurance, but aren't sure if they will need it. "They are going to get coverage, but they aren't spending money on a policy they aren't going to use," says Jimmy Lee, CEO of The Wealth Consulting Group in Las Vegas. 

Are Restaurant Earnings a Sign of The Economy Slowing

The Orlando Sentinel has an interesting look at how McDonald's recent earnings announcement, One challenge for McDonald's: More Americans are packing their lunches.
Americans packed lunches and made more dinners at home this spring, leading to traffic declines across the restaurant industry. For McDonald's, the trend led to disappointing second-quarter results after months of strong growth.

A Stifel Nicolaus analyst on Tuesday downgraded his ratings on a number of restaurant companies, including Chipotle and Panera, predicting that the U.S. will fall into a recession early next year. A slowdown in the restaurant industry is one of the first indicators of an economic slowdown, because dining out is one of the first things people give up when they're feeling uncertain about the future.

Most Important Question to Ask Before Considering Home Flipping

Daniel Goldstein writes in MarketWatch:

With low interest rates, tight inventory and high demand for entry-level homes, the number of houses being flipped (i.e., bought and resold within 12-months) in the U.S. in the first quarter of 2016 reached nearly 44,000, or 6.6% of the total home and condo sales in the U.S. That’s the highest percent since 2006, when nearly one in 10 houses bought was a so-called flip, according to Irvine, Calif.-based RealtyTrac, a real-estate research group.

The article lays out why a number of factors are creating the favorable current conditions for house flipping. The question I hear when talking with most first-time home flippers is what is the single most important thing to consider if you've never flipped a home before?

The answer is always the same. It's all about the price you but the home at, not sell. The author asked a seasoned real estate lender his thoughts and he said:

While it seems backwards to think the money is made on the front end of the deal rather than the back end, that’s just how a veteran house flipper approaches it, said Richard Levine, president of Greenbriar Lending LLC in Rockville, Md., a private lender for real-estate investors who has personally worked on or financed about 500 flipping deals.

It's a great read for anyone considering, flipping a house for the first-time. One thing I would add for the first-time home flipper is that you want to do 10X the amount of research you think you would need. 

Flipping a home offers a significant potential for profit or pitfall. Having as much analysis as possible, should help minimize your total risk. 

Lastly, as the author noted is helps to have a number of friends or professional acquaintances that are familiar with the real estate industry.

To be a successful home flipper, you’ll need a lot of friends, especially friends who are contractors, home inspectors, accountants and lawyers, not to mention real-estate agents.

Are Warehouses Better Than Skyscrapers for Real Estate Investors?

Interesting read from, The new trophy buildings of U.S. real estate, on the increasingly global competition for US Industrial real estate...

Move over, iconic Manhattan skyscrapers: warehouses are becoming a big play for global investors, too. It used to be that global investors focused on U.S. real estate investment were only interested in glitzy office towers in just a handful of high profile locations, like Manhattan, Los Angeles or Miami.
Now, those investors – hailing from locations as diverse as the Middle East, Germany, Singapore, China and Canada – are feeling pressure to achieve returns. To find opportunities in a competitive market, they are looking beyond tall towers to the more horizontal planes of the country’s strategic logistics corridors filled with enormous “big box” institutional-quality distribution centers.

Over the last five years, ownership of industrial real estate has been illustrated by a phenomenon of major investors building or aggregating large-scale portfolios across the country instead of taking on buildings one-by-one. Most notably, the 2015 acquisition of the Industrial Income Trust’s (IIT) 58 million-square-foot, $4.55 billion U.S. industrial portfolio made Singapore-based Global Logistics Properties (GLP) the second-largest owner of industrial property in the United States, second only to San Francisco-based Prologis. Additionally, the Abu Dhabi Investment Authority (ADIA) and PSP Investments of Canada purchased Exeter’s entire portfolio of industrial assets in December for $3.2 billion, comprising of roughly 58 million square feet.

1 Reason Businesses Fail to Change Their Business Model

Very interesting look at the failure of Eastman Kodak, to handle a successful  transformation of their business into the digital world, by Scott Anthony (@ScottDAnthony).

The right lessons from Kodak are subtle. Companies often see the disruptive forces affecting their industry. They frequently divert sufficient resources to participate in emerging markets. Their failure is usually an inability to truly embrace the new business models the disruptive change opens up. Kodak created a digital camera, invested in the technology, and even understood that photos would be shared online. Where they failed was in realizing that online photo sharing was the new business, not just a way to expand the printing business.

Social Media Risks Abound for the Wealthy

Should wealthy families have a social media plan? has a very insightful article, Unique Cyber Risks Your HNW Clients’ Kids Face, that examines how social media use among the children of affluent and ultra high-net worth parents, can lead to quite the cyber risk.
For high-net-worth families, such risks are exacerbated by the fact that their wealth is a target. In some cases, affluent people also are public figures whose children can be easily tracked on Twitter, Instagram, Snapchat, Facebook and other online platforms. Even if your children are highly responsible, they may find themselves with others who are not.  

Cyberbullying can be as seemingly naive as 10-year-old Jimmy group-texting his pals that 10-year-old Maya is “ugly and stupid.” But if Jimmy continues to make such hurtful comments, and Maya physically harms herself because of them, his parents may be liable for defamation, not to mention Maya's emotional distress, sleeplessness, anxiety and worse. 
Many parents have no idea their child is texting, emailing or sending photographs deemed to be defamatory and libelous. They may be similarly shocked to learn their homeowners insurance may not cover the legal losses related to these activities. “Few homeowners policies address and absorb personal injury losses from libel and slander,” said Lucarelli. “If parents aren't vigilant, they can lose all their assets.”

Many insurers do not provide coverage protecting families from the financial costs related to cyberbullying, such as the settlement or verdict amount or the legal costs of defending the lawsuit. I definitely agree with the author. The amount of cyber risk the affluent and high-net worth individuals and families face is only going to grow. Back in June 2015, I wrote, Do You Need A Family Social Media Plan...

Not Everyone’s Social Media Risk is the Same

 For those in prominent positions or in professions considered high earning, it is exponentially more important to take steps to mitigate as much of the risk as possible. In today’s litigious society, paying to defend you or your family from a mere accusation could easily exhaust the limits of even a high-end homeowner’s policy. It is important to take a concrete look at how much risk you are willing to accept. An in-depth look at your assets, liabilities, and earnings potential provide a basis for calculating your risk potential.

How to Lower Your Family’s Social Media Risk 

In addition to mitigating your family’s social media risk, it is important to consider a cost-benefit analysis of proper insurance coverage. One of the most cost-effective ways to ensure you and your family are protected is through purchasing excess liability coverage. This type of coverage is most often referred to as a “personal umbrella.”

Before you decide to purchase any insurance policy, it is important to understand what you are buying. For a “personal umbrella,” it is important to understand that this type of coverage is secondary. This means it requires you having primary insurance such as a homeowners or renters policy. The reason it is called a “personal umbrella” is that it sits over your primary insurance policies.

Since it is supplemental, it works when the limits of the primary policy have been exhausted. For this reason, it is important to understand the relation between the limits on your primary insurance and excess liability coverage. The coverage on personal excess policies does not start until the underlying limit has been reached. In this instance, it is extremely important to match your primary policy limit to your umbrella limit, so no gap in coverage exists.

The coverage offered under personal excess liability policies varies. One important item to consider is whether or not the money for defense is included within the coverage limit or is separate.

Creating A Family Social Media Policy 

While insurance coverage is great, the best way to protect you and your family is to adopt a family social media policy. A family social media policy can include a number of items but most of all, you should look to establish what is ok to be shared and what type of information needs to remain private.

Financing Commercial Real Estate Investments With Crowdfunding

From National Real Estate Investor

 Crowdfunding Fills Construction Lending Gap Left by Banks 

 “Construction financing is getting much more challenging,” says Doug Opalka, senior managing director with HFF, a financial intermediary. Some lender are offering smaller loans for new construction projects. Others are less likely to lend at all.
Regulations created after the global financial crisis force banks to kept cash in reserve to offset the risk of investments like construction loans. 
The rules are now finally being enforced, after years of uncertainty over how they would be put into action, notes Opalka. Many banks have already lent as much as they can without putting more cash on reserve.  
“Multifamily real estate is a very common property type for crowdfunding… Real estate continues to represent somewhere north of 90 percent of crowdfunding,” say Roderick. Apartment properties provide steady cash flow and stability.  
Also, rental housing is a type of real estate many crowdfunding investors are already familiar with. Apartment development still seems like a relatively safe bet, compared to other investment options. Even though developers are opening hundreds of thousands of new apartments, strong demand seems likely to fill the new units in most markets.  
The percentage of vacant apartments nationwide is still far below 5.0 percent, even if that percentage is growing slightly. Rents continue to grow at a healthy rate in most markets, according to data firms including Reis Inc., and MPF Research.  
Most crowdfunding websites still provide loans for new apartment projects. The products range from permanent loans to smaller, mezzanine loans, or preferred equity.