What is Your Net Worth, and Why Should You Care? Steve Knudson Quoted

One of Intermountain Financial Group’s financial advisors , Steve Knudson, was quoted in the article, “What is Your Net Worth, and Why Should You Care?”

You probably know how much you make each year, and maybe even what you spend each month, but do you know your net worth? And more importantly, how to use the information in a way that matters?

Knowing your net worth can have a significant impact on your budgeting, spending, and retirement plans.

What is net worth?

Simply put, net worth is everything you own minus what you owe. While online calculators can be used to run the actual numbers, it’s important that you determine assets from debts accurately, to arrive at the most accurate breakdown.

Create a personal balance sheet with two categories: What you own (assets), and what you owe (liabilities). The “owned” category should include checking, savings, certificates of deposit, investment and brokerage accounts, retirement and college savings plans, and the value of vehicles you own outright (which can be found using Kelley Blue Book).

If you own furniture, electronics, art, technology, or jewelry worth significant value, those items are assets, as is the equity (what you own) in your home or investment property. (It is not the market value of your home — unless you own it outright).

Conversely, the “owed” category should include the balance you owe on your mortgage loan, student loan debt, auto loans, credit card bills, taxes owed, alimony or child support, and lease obligations you may be bound to for a car or rented dwelling.

Though actual calculation of net worth is simply subtracting what is owned from owed, it’s imperative that your balance sheet “inputs” are accurate.

Financial expert Steve Knudson of Intermountain Financial Group says that relying too heavily on net worth becomes problematic when based on unrealistic projections of unpredictable forces.

For example, if you’re invested in stock markets and the economy is booming, so is your net worth. Market values plunge one day — your net worth goes with it. An overstated net worth analysis can lead to borrowing things you can’t actually afford, and underestimating what you need to put aside for retirement.

“I have seen far too many portfolios trashed due to over aggressive valuations on real estate and private company stock valuations that have never materialized,” Knudson says.

Here are three simple ways to put your net worth balance sheet into action:

See where you stand with retirement

Forbes contributor and financial adviser David John Marotta, president of Marotta Wealth Management, says that saving 15% of your take home pay each year throughout your working life should theoretically provide sufficient savings for retirement, even with the ebb and flow of the market. Obviously, the exact number that percentage amounts to will change with your salary throughout the years.

Using your net worth balance sheet, you can easily arrive at a very basic spot check of how well you’ve planned for retirement so far.

Let’s suppose you started contributing to retirement five years ago, and your annual take home pay has been $40,000 for that time. Sticking to basic math, you should have about $30,000 earmarked in a retirement account. Of course, you may have more, or less, based on the investments you’ve made and employer matches, but the 15% rule is a simple way to see where you currently stand. If you’ve fallen short, you’ve got some catching up to do, either by spending less, saving more — or a combination of both.

Start a debt elimination strategy

Retirement planning is about strategizing a way to live in an essentially income-less scenario, aside from what you’ve saved. Ideally the “owed” section in your net worth balance sheet will be blank when you retire — even if that’s far from your reality today.

The steps you take now to eliminate debt can be just as important as what you contribute into retirement savings, particularly if the debts you carry have you paying far higher interest rates than your investments earn.

Using your “owed” column, formulate an action plan for long-term debt elimination that will allow you to eventually enter into retirement debt-free. Start with the highest interest rate loans first, and work your way down. As you whittle loans away, you’ll free up more funds to build liquid assets, and invest for retirement.

Focus on long-term planning

Knudson suggests a triangle-style approach to net worth analysis that focuses on three critical aspects of long-term financial management: income, access and growth.

To determine income needs, calculate your monthly fixed expenses compared to your monthly cash flow. If monthly income sufficiently covers those costs, Knudson says “there is no need to “burden an investment portfolio with bonds or low performing investments.”

To evaluate access, add up the total of your “owned” assets that are completely liquid, meaning that if a financial emergency happened tomorrow, you could withdraw your money without paying fees or penalties, or selling assets that may or not be worth peak value.

If most of your “owned” column consists of property, stocks, bonds or mutual funds, consider shifting some assets into more liquid savings tools to protect your long-term financial affairs. Once you’ve determined income and access, Knudson suggests investing the balance of cash in a long term growth portfolio to hedge against inflation, provide for appreciation, and invest for opportunities.

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Steven Knudson quoted in article regarding “6 Ways to Test Your Financial Literacy Today”

Written by: Stephanie Taylor Christensen

Improving your personal finance know-how is a goal worth aspiring to, but with so much to learn, how do you know where you stand when it comes to financial literacy?

Here are six aspects of money management to test your own financial literacy:

Budget basics

While there are plenty of online and mobile app tools that ease the burden of budgeting, your dedication to managing spending, eliminating debt, and saving as much as you can is key. The longer and more consistently you budget, you’ll begin to identify and plan for those red flag financial events like car repairs, vacation expenses, gifts, and medical bills so you don’t have to turn to using high-interest credit cards.

If you have debts, your budgeting plan should also include eliminating them, systemically, based on the interest rate on each loan. (Hint: Pay down the one that costs you the most, first).

Pre “financial crisis,” budgeting was about not overspending. In light of renewed focus on the risks of living paycheck to paycheck, the advice has shifted not to living within your means, but well under them.

In her book “Money Rules,” finance expert Jean Chatzky  says anyone under the age of 35 should aim to save 10% of what they earn. Anyone older who hasn’t saved yet should strive to save 15%. If those numbers aren’t feasible, identify what you can save — even if it’s $10 a month, and start doing it automatically.

doing it automatically.

Saving strategically

Building savings is the hallmark of financial security and is important in financial literacy, and it’s important no matter how much money you make.

Though saving can be as simple as putting money in a savings account, true financial literacy is about saving strategically, and staying current on what savings tools pay you for your business, while costing you nothing.

Search current deposit interest rates on checking, savings, money market accounts and certificates of deposit using a comparative tool like Bankrate.com, and consider only accounts that don’t require an account minimum, or charge fees to access or transfer your money.

If you’re comfortable with online banking, you’ll typically find higher rates than brick and mortar institutions offer.

Although  deposit interest rates have been paltry over the past few years, the idea is to make savings systemic, and consistent. Take advantage of automatic savings plans (also called ASPs), or automatic deduction options that an employer might offer so that a portion of each paycheck goes directly into savings, without giving you the opportunity to miss it.

Understanding fees

Banks got hit hard with regulatory legislation following the 2007 financial crisis, and they’ve got to make up for lost revenue in the form of fees.

It’s estimated that banks need to recoup, on average, between $15 and $20 a month from each depositor just to earn what they did in the past, according to an analysis on checking accounts by Oliver Wyman, a financial consulting firm.

If you’re unsure whether you’re paying fees to bank or use a credit or debit card, educate yourself by examining statements and the latest terms of your accounts online. If you’re in a product that doesn’t fit your needs, be proactive and seek one that is a better fit — before you dish out hundreds of dollars on a year on pointless fees. If you can’t find one at your current institution, a credit union may be a less expensive alternative.

You may never see an actual “bill” from a financial planner and wealth adviser, but rest assured, they don’t work for nothing. However, different advisory firms have different policies. Some get commissions from trades made on your behalf, others work on a flat- fee, and others take a percentage of the value of your portfolio, in a “ “you don’t win if I don’t win” approach.

The fee you are paying will be reflected in some shape or form on statements you receive, but it may be clear as mud. If you have no idea what you’re paying a financial adviser, ask. If you feel the value of their services is worth what you’ve paid, you’ve developed a good relationship. If you don’t, move on. The beauty of being financially literate is the power to make informed decisions.

The importance of expecting the worst

You probably know you need auto, renters, and homeowners insurance, but long-term financial planning and wealth building is highly correlated to an understanding of insurance as a risk-management tool that can protect you, your family, and your wealth for the long-term.

Familiarize yourself with the major benefits and drawbacks of different kinds of insurance, like term-life, disability, and long-term care, even if it seems like they don’t impact your life today.

Steven Knudson, financial adviser at Intermountain Financial Group, says that not having adequate life insurance is a disaster waiting to happen, and that anyone in their 50s and beyond should “obtain some level of long-term care insurance to avoid the catastrophic loss of a chronic illness in later years.”

Though employers may offer some level of insurance coverage, including for death and disability, it may not be enough to cover your survivors, and/or your assets. “Even if you have a group long term disability plan at work, pick up a personal fixed income protection in a non-cancellable disability insurance plan,” Knudson says.

Savings is largely based on preparing for the unexpected, and undesirable, aspects of life, too. Henk Pieters, certified financial planner and president of Newport Beach, Calif. based Investus Financial Planning, says that regardless of income, all clients should have at least 3-6 months worth of living expenses covered in an FDIC insured savings account — provided they have a very stable career.

Business owners and those in industries or salary tiers that present higher degrees of professional uncertainty need to save an entire year’s worth of living expenses.

Impact of tax laws

You know that taxes take a chunk out of your paycheck but the more you understand about them, the more you can leverage taxes to your advantage and increase your financial literacy.

There are many expenses that the government allows as deductions for tax reasons, including business-related travel, entertainment, and mileage. Education costs, child-care credits, mortgage fees, and expenses related to job-hunting, relocation, or a home-based business can mean paying fewer taxes, too.

Some charitable gifts and donations, including items made to qualifying non-profits, and funds that you “gift” to relatives or loved ones, whittle your tax burden too.

If you sell assets that appreciate in value, like stocks or bonds, you’ll need to pay capital gains taxes on them, but a qualified financial adviser can help dentify the best strategies to keep the most amount of money you legally can.

Use credit for good

Credit is often blamed as a reason people struggle financially, but when used as it was originally intended, it’s one of the greatest means of financial empowerment you can access and a key to financial literacy.

Building and maintaining healthy credit habits opens opportunities to borrow from lenders who can help you to build wealth, whether you choose to start a business, buy property, or invest in your future.

Steve Dyches and Tony Christensen, Financial Services Professionals, Awarded

Steven Dyches and Tony Christensen are Recognized as Agency Rising Leaders

Intermountain Financial Group, LLC the Utah agency for Massachusetts Mutual Life Insurance Company (MassMutual), awarded Steve Dyches and Tony Christensen with the Agency Rising Leader award, recognizing each of them as two of its top financial services advisors.

The Rising Leader award recognizes individuals who have achieved the highest level of all-around sales and service performance in their first five career-contract years.  Dyches has qualified in his fifth year and Christensen in his first.

Christensen attributes his success to the strong support from his Sales Manager, and the strength of the company he represents. “The tools available to me, the support I receive from my sales manager and general agent, and the strength of the products available for my clients is why I have reached this level in my career.” said Christensen. “We are able to service our clients, assist them with their financial strategies, and help them feel positive about their futures” continues Dyches. 

“Steve and Tony continuously exhibit exemplary sales skills and top performance characteristics,” stated Todd A. Reid, General Agent. “We congratulate both of them for their accomplishment and look forward to the continued years of success.”

Steve joined the agency 5 years ago after practicing law for almost a decade. He is a graduate from the J. Reuben Clark Law School at Brigham Young University. Christensen is a graduate from Dixie State College with a Bachelor degree in finance.

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About the Firm:

For more than 157 years, local residents and businesses rely on Intermountain Financial Group to help them secure their financial futures. The company significantly impacts Utah’s economy as seen in the numbers below (as of December, 2010):

  • More than 14,000 policyholders and clients1
  • Managing over $711 million in assets2
  • Over $3.9 billion in life insurance coverage in force3
  • Over $28 million of life insurance benefits (claims) paid4
  • More than $8 million in dividends to whole life policyholders5

The company has been in awarded the national Sloan When Work Works award in 2010, 2009 and 2008, as well as the Work/Life Award by the Utah Department of Workforce Services in 2010, 2008 and 2007 naming them one of Utah’s best places to work. The company currently has offices in Salt Lake City, Utah and St. George, Utah.

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*Securities and investment advisory services offered through qualified registered representatives of MML Investors Services, LLC. member SIPC.  (Salt Lake City Agency – 6340 S. 3000 E., Suite 500, SLC, UT  84121 – (801) 943-6277)

MassMutual Financial Group is a marketing name for Massachusetts Mutual Life Insurance Company (MassMutual) and its affiliated companies and sales representatives.

Insurance offered through MassMutual and other fine companies.

1.            An insured, owner, or payer of a MassMutual policy or contract.

2.            Includes values of MassMutual and subsidiary insurance companies’ insurance and retirement products and investment products offered through MML Investors Services, LLC, a MassMutual subsidiary.

3.            Amount of individual life insurance in force as of 12/31/10 related to products issued by Massachusetts Mutual Life Insurance Company and its subsidiaries, C.M. Life Insurance Company and MML Bay State Life Insurance Company.

4.            Amount of individual life insurance claims paid from 1/1/10 to 12/31/10 related to products issued by Massachusetts Mutual Life Insurance Company and its subsidiaries, C.M. Life Insurance Company and MML Bay State Life Insurance Company.

5.            The amount of dividends to whole life policyholders in 2010.

Local Financial Services Professional Recognized at the Top

Patrick Latimer is Recognized as an Agency Rising Leader

Intermountain Financial Group, LLC the Utah agency for Massachusetts Mutual Life Insurance Company (MassMutual), awarded Patrick Latimer with the Agency Rising Leader award, recognizing Patrick as one of its top financial services agents.

The Rising Leader award recognizes individuals who have achieved the highest level of all-around sales and service performance in their first five career-contract years.

Patrick attributes his success to the strong support from the agency and the variety of training programs available to him. “The agency helps me keep current on trends and products that I may knowledgably service my clients in the way that is best for them.”

“Patrick is a focused and client-minded individual,” stated Todd A. Reid, General Agent. “He goes beyond what is expected for his clients, and enjoys working with each individual and business as they strategize for the future.”

Patrick has three years of experience in the financial services industry and focuses on families and small business owners. Patrick is active in local civic and religious groups, and is currently the Vice President of Business Networking International (BNI).

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About the company:

For more than a century, the Intermountain Financial Group/MassMutual (IFG) www.intermountainfinancialgroup.com has provided a comprehensive offering of a diverse array of products, including life insurance, annuities, disability income insurance, long term care insurance, retirement planning products, mutual funds, and access to money management to individuals and businesses in Utah and most of United States. IFG currently has offices in Salt Lake City, Provo, and St. George, Utah. IFG has also been recognized as one of the best places to work in Utah by the Work/Life Awards Committee for 2010, 2008, and 2007 and the national Sloan When Work Works award in 2009 and 2008.

 

*Securities and investment advisory services offered through qualified registered representatives of MML Investors Services, Inc. member SIPC.  (Salt Lake City Agency – 6340 S. 3000 E., Suite 500, SLC, UT  84121 – (801) 943-6277)

MassMutual Financial Group is a marketing name for Massachusetts Mutual Life Insurance Company (MassMutual) and its affiliated companies and sales representatives.

Insurance offered through MassMutual and other fine companies.

Cancer Research and Treatment Organization Gets Donation from Utah Agency of MassMutual

Salt Lake City, Utah Cancer Research and Treatment Organization gets Donation from MassMutual

MassMutual continues support of breast cancer awareness through major donations and innovative programs


The Salt Lake City chapter of the American Cancer Society received $1,000 as part of an innovative National Breast Cancer Awareness program from Massachusetts Mutual Life Insurance Company (MassMutual) in the name of Kim Hemenway and Renee Tribe of Intermountain Financial Group, the Utah general agency of MassMutual.

“I’m delighted that local women struggling with breast cancer and the agencies that serve them will benefit from our donation and commitment to the cause,” said Kim Hemenway of Salt Lake City. “We look forward to continuing our support of organizations that provide information and hope to women with breast cancer.”

Hemenway and Tribe, whose firm is based in Salt Lake City, recently conducted an informative financial seminar geared toward women.

Their efforts are part of a MassMutual program that makes charitable contributions to local breast cancer awareness programs in the names of its local agents who work extensively with women’s groups and women clients. Under the program, MassMutual uses its educational financial seminars for women to also raise awareness of breast cancer.

“We’re very heartened to know that we’re playing a role in educating women about not only their finances but also their health,” said Beth Wood, vice president of MassMutual’s Women’s Markets. “And we’re especially appreciative of Kim Hemenway’s and Renee Tribe’s efforts in such an important cause.”

MassMutual’s breast cancer awareness initiative is one of many ways it supports women personally, professionally and as business owners. For example, MassMutual continues to be a leader in providing life insurance coverage for breast cancer survivors, updating its underwriting guidelines to reflect the positive long-term survival benefits of early detection and new treatments.

Additionally, MassMutual is recognized as a leader in efforts to improve understanding of women’s diverse financial needs, to support women agents in the field, and to educate women on financial issues. MassMutual sponsors a variety of research and educational projects and events that promote a greater understanding of women’s individual financial needs and how financial services companies can best meet them.
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About Intermountain Financial Group, LLC

For more than 156 years, local Utah residents and businesses rely on Intermountain Financial Group to help them secure their financial futures. The company has been awarded the Work/Life Award by the Utah Department of Workforce Services in 2008 and 2007 naming them one of Utah’s best places to work and the national Sloan When Work Works award in 2009 and 2008. The company currently has offices in Salt Lake City, Utah; St. George, Utah; and Provo, Utah. The agency has over $530 million in client policy and account values as of year-end 2008, as well as over 18,000 clients.

About MassMutual

MassMutual Financial Group is a marketing name for Massachusetts Mutual Life Insurance Company (MassMutual) and its affiliated companies and sales representatives. MassMutual and its subsidiaries had more than $360 billion in assets under management at year-end 2008. Assets under management include assets and certain external investment funds managed by MassMutual’s subsidiaries.
Founded in 1851, MassMutual is a mutually owned financial protection, accumulation and income management company headquartered in Springfield, Mass. MassMutual’s major affiliates include: OppenheimerFunds, Inc.; Babson Capital Management LLC; Baring Asset Management Limited; Cornerstone Real Estate Advisers LLC; The First Mercantile Trust Company; MML Investors Services, Inc., member FINRA and SIPC (www.finra.org and http://www.sipc.org); MassMutual International LLC and The MassMutual Trust Company, FSB. MassMutual is on the Internet at http://www.massmutual.com.
Securities and investment advisory services offered through qualified registered representatives of MML Investors Services, Inc. member SIPC. (Salt Lake City Agency – 6340 S. 3000 E., Suite 500, SLC, UT 84121 – (801) 943-6277)

MassMutual Financial Group is a marketing name for Massachusetts Mutual Life Insurance Company (MassMutual) and its affiliated companies and sales representatives.

Insurance offered through MassMutual and other fine companies.

CRN201009-109878

Intermountain Financial Group Hires New Recruiter

Intermountain Financial Group, the Utah General Agency of Massachusetts Mutual Life Insurance Company (MassMutual), has promoted Anton Brog to serve as the Agency’s recruiter. Mr. Brog will actively be recruiting individual’s to join the firm in the financial advising capacity helping people and businesses with their financial needs.

Mr. Brog joined the Intermountain Financial Group in late 2007 to head their strategic alliance department and recently accepted the added position as recruiter. “We are excited that Mr. Brog has accepted this new position within our management team,” stated Mr. Todd A. Reid, JD*, CLF, General Agent. “He has the knowledge, the fortitude, and the experience to expand the Agency’s already strong team of financial professionals.”

Mr. Brog, who earned his MBA with the University of Utah, has over nine years of experience in the financial services specialty and is a registered principal with the Agency. “I am looking forward to utilizing my advanced skills in the sales and marketing arena’s to be able to promote this career opportunity for an award-winning agency,” Mr. Brog said. “I am jumping right in and will be creating a strong presence at the local universities and in the Utah communities.”

About the company:

For more than 156 years, local residents and businesses rely on Intermountain Financial Group to help them secure their financial futures. The company has been in awarded the Work/Life Award by the Utah Department of Workforce Services in 2008 and 2007 naming them one of Utah’s best places to work and the national Sloan When Work Works award in 2008. The company currently has offices in Salt Lake City, Utah; St. George, Utah; and Provo, Utah. The agency boasts over $740 million assets under management as of year-end 2007.

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* Licensed but not practicing
**Securities and investment advisory services offered through qualified registered representatives of MML Investors Services, Inc. member SIPC. (Salt Lake City Agency – 6340 S. 3000 E., Suite 500, SLC, UT 84121 – (801) 943-6277)

MassMutual Financial Group is a marketing name for Massachusetts Mutual Life Insurance Company (MassMutual) and its affiliated companies and sales representatives.

Insurance offered through MassMutual and other fine companies.