Broker Check


Frequently Asked Questions 

What is Liquidity?

Liquidity is typically referring to cash on hand or that which can be accessed within 72 hours or so.  Common assets ranked from most liquid to least liquid:  

  • Cash
  • Checking & Savings Accounts
  • Non-Qualified (not retirement) Accounts
  • Life Insurance Cash Values
  • Retirement Accounts
  • Real Estate

The reason for the order is because as you move down the line it takes longer to get to your money!  Retirement Accounts for those under 59.5 years old also carry a hefty tax penalty.

How Liquid Should I Be?

To understand how liquid you should be, there are two ways to find your answer.

1) A set number of months needed to cover critical living expenses (housing, food, health care, ect.)

2) A set number of months of income covered
Obviously, the ability to cover months of income is favorable to expenses, as you use income to cover expenses.

Optimum Financial Health: 6-12 Months of income accessible within 72 hours without being subjected to penalties.

Do I Need Disability Insurance?

Unless you have a rich relative willing to finance your lifestyle until you’re back on your feet, yes you should have disability insurance. Disability insurance is the answer to the question, "If something happens to me, how will I cover my expenses?"

FACT: You're 3x more likely to suffer an illness or injury that keeps you out of work than you are to die.

How Much Should I Save?

Saving today is the key to tomorrow's Financial Health.  For most people, saving 15-20% of their income will set them up nicely for the future.  This may seem like a huge amount when most Americans save 2-3%.  Small but incremental improvements will yield big gains in savings ability in the future.  

How Much Life Insurance?

There are a lot of ways to calculate life insurance.  Most of them are complex and take ridiculous things into account.

Easy rule of thumb? 


That's your actual current earning potential (assuming no increases in income) and really what you're trying to replace.

ROTH or Traditional?

Everyone's favorite depends!  But on what?  Do you think that you'll be in a higher tax environment at retirement than you are right now?  If so, the ROTH is the way to go.  Tax environment is a combination of your tax bracket from earnings as well as the amount of deductions you have.  Remember, if your goal is to pay off your house and kick the kids out, the two biggest deductions most Americans have are now not an option.

Have a Question?

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