Covid-19 has us all thinking about our own mortality, families are thinking about what happens to my family if I die too soon. Unfortunately, most families only own life insurance through their employer, yet we cannot depend on life insurance on our jobs because our jobs are not guaranteed and, usually they will not provide enough life insurance coverage to: leave your family the ability to pay all the expenses that you were covering for them while alive and leave them a legacy. In the Holy Quran, Surah Baqarah 2:240 states that, “husbands that die with a wife left behind to bequest maintenance for at least 1 year”. We must make sure our family can sustain whether we are living or returned back to Allah, it’s our duty.
Life insurance is the best way to do that because it provides an instant estate for your heirs, think about it, when most people want to leave their families houses, why not leave them MONEY, which will pay for the homes and other items. Term life insurance is the best way to accomplish this, it’s low cost which makes it easier to purchase larger amounts to be able to leave generational wealth, it’s pure insurance and works like your car/home insurance because you’re only paying for protection. I always say, “Death is the only Guarantee in life and Life insurance is the cheapest insurance you can buy, because you get to name your own price”. Let’s make sure we are gifting from the grave as our family is gifting us with dua’a from earth. My Salaams
Helena Clemons is a native of Brooklyn, NY; where she has resided in Atlanta, GA for the past 15 years; and has been state licensed in Life & Health insurance and a Financial Coach for 20 years. She’s been happily married for 25 years and has 4 adult children. Helena and her family also run a family business MBGW GLOBAL LLC of which she is the CEO/CFO: their focus is business development, real estate, health initiatives and novelties that make a statement. She dedicates her time educating families about business, wealth generation and credit repair, as she truly believes in group economics and community empowerment.
Today’s Market & Future Outlook
Real Estate experts continue to monitor and track the impact of the Covid-19 pandemic and its effects on our economy. Recent data shows that we are currently in a seller’s market that is slightly shifting downward, with home values slowly decreasing. This is partly because even though mortgage interest rates are lower than ever, millions of US borrowers still can’t receive a home loan since they are out of work. Despite this downward shift in home values and rising unemployment rate, the Georgia marketplace continues to be resilient with signs of future improvement. Experts believe that we should see a recovery starting in late 2020 or 2021. As of April, buyer activity has started picking back up and normalizing as homebuyers continue to move forward with their home ownership plans. Recent statistics show that homes are selling 3 days more quickly than last year this time. This means if you’re a homeowner planning to sell, this summer is still the hottest time to buy and sell your home.
Steps to Financially Survive
If you want to be financially successful during this economic shift, there are 4 action steps to help you survive and thrive. The first and most critical step is create a personal budget and stick to it. On a spreadsheet, list out all of your monthly expenses and include ALL of your debt. Include credit cards, student loans, car payments, mortgage, etc. Create a budget of all of your spending per pay-period. Then list your income and subtract your expenses from your income to determine your net profit. You always want your net profit to be a positive number so that your expenses are less than your income and you are not in the negative every pay-period. Try to allow some excess cash for savings. Work every month to evaluate your actual spending using a financial app. I recommend Mint.com. Check yourself if you have overspent last month and make adjustments to the budget as needed or make a stronger effort to stay within your budget. Your entire family has to be on board with the budget in order for it to work. You can follow the Dave Ramsey “Total Money Makeover” budget plan to help you get started.
The second step is to categorize & cut expenses so that you can maximize your cash flow. Categorize each expense as A, B, C, and D. A’s are must-haves, B’s are wants, C’s are luxuries, and D’s are expenses that have no purpose and you may not even know where they came from. The goal is to cut, cut, and then cut some more until you only have A’s & B’s left. Try to start by cutting out all D’s this month. Then next month cut as many C’s as you can. Try to see if you can free up $1000 of your money and put it aside for the 3rd action step.
The third action step is to systematically pay off all of your debts & save for emergencies. Paying off debts will allow you to free up more of your cash flow and have money for emergencies. More than ever now, companies are willing to work out payment plans, remove late fees, and defer payments for those impacted by Covid-19. Now’s the time to reach out to companies and see how you can benefit as well. Using the Dave Ramsey Plan, read “Total Money Makeover” and follow the steps to get out of debt. Once you’re able to pay off all of your debt, you will have more cash back into your pocket that you can use to invest and build wealth.
The fourth step is to put all of your focus and efforts into increasing your personal wealth. Set goals for your personal wealth and long-term financial freedom. Write down your goal with specific dates and numbers that you want to obtain. If your goal is to earn an extra $1000 per month of passive income, then you will need to research and find out what others have done to obtain the same goal. Then mimic their steps and exactly follow what they did so that you can have the same results. Once you determine your plan of action, systematically work the plan focusing only on completing the actions. Also remember to reward yourself for achievements! As you go along, reward yourself as milestones are reached and check them off. I personally have a purse fetish, so I often treat myself to a Coach bag every-time I reach a milestone. Maybe you just want to go out to eat at your favorite restaurant. There is nothing wrong with rewarding yourself for a job well done!
When You’re Ready to Start Investing
When you’re ready to start investing there are a ton of different ways you can diversify your portfolio. In my opinion, you’re ready to start investing if your debts are paid off, you have at least $1000 set aside in savings for emergencies, and you have a positive net profit every pay-period.
If you’re ready, then a portion of the excess cash can be divided and invested into REITs & stocks. Two resources that can get you started are Fundrise for REITs and Robinhood for stocks. When it comes to stocks, I prefer high dividend paying stocks and investing long term. That strategy is because of my personal goal of building passive income for retirement. Your personal goals may be different, therefore your strategy should match your goal. I truly recommend watching and subscribing to Graham Stephan and Andrei Jikh’s Youtube videos to learn more about stock investing.
Real Estate investing is a strong classical method for earning passive income, especially for retirement. You can flip or hold, but based on my studies, some of the wealthiest investors invest in multi-unit rental properties and hold to receive rental income. Others choose the Flip, Flip, Hold strategy. Again, your strategy should reflect your personal goal. There are also many tax advantages that real estate investing allows. I recommend listening to Del Walmsley & Tom Ferry podcasts to learn more about investing in Real Estate.
Business Ownership is another big investment that also allows tax advantages. Purchasing an existing business or starting your own is a great way to build wealth in the form of a company that can be passed down to future generations. Many of my wealthier friends have formed partnerships to build a business and invest together. Pulling together your resources, whether financial or “sweat equity” and working together as a team often makes you stronger and more successful than someone working solo.
Finally, don’t forget your kids and the need to save for their college and/or your retirement. The last thing you want is to have your children get into debt to attend school. Similarly, investing a portion of your income into a IRA or 401k will allow you to have multiple streams of income for retirement. If you want to learn more about how to build wealth for retirement, I direct you again to listen to Del Walmsley’s Lifestylesunlimited podcasts and follow his strategy.
Real Estate Ownership
The homeownership rate continues to increase as more people place value in homeownership. If you’re thinking about buying a home in the near future, here are 4 steps to help you get ready.
1. Start saving for your down-payment and closing costs and figure out how much home you can afford. Use a Home Buying calculator to know your purchasing power and potential costs. Most real estate agents and lenders will have these tools available on their websites.
2. Get a Pre-Qualification letter from a lender or Pre-Approval Letter
3. Get a Real Estate Agent
4. Do your research on home ownership, costs of buying, and the current market
5. Tour homes (in-person and/or online)
Islamic Financing Options
If you’re considering using Islamic (Faith-based) Financing instead of conventional, there are a couple of good options out there that allow Muslims to avoid Riba. There are 2 sources that I would recommend for faith-based financing:
1. Guidance Residential
2. University Islamic Financial (UIF)
There are a ton of resources and programs out there to assist First-Time Homebuyers, Repeat Homebuyers, Investors, and people impacted by Covid-19. Reach out to your real estate expert or financial advisor to find out what resources they have that can help you.
Born in Hempstead, NY and raised in Atlanta, GA Jameela is a recognized entrepreneur, investor, and IT professional. She holds a Master's degree in Computer Information Systems and is a Licensed Realtor and owner of Esa Realty, LLC. She was the former CEO and owner of Rashid Technologies and Founder of Risala Islamic Academy in Stone Mountain, Ga. She has experience in buying and selling real estate and has owned & flipped 6 properties since 2012.
by Zanaida Wakatama
As of January 27, 2020, paper and electronic filings will now be received and processed, by the IRS, for refund or payment for this tax season. Before you rush to complete your taxes, let’s take a moment to make sure you have compiled necessary and pertinent information. Here are some suggestions to get you started.
Choosing the standard or itemized deduction - The standard deductions for 2020 are as follows: Married Filing Jointly- $24,800, Married Filing Separately- $12,400, Head of Household-$18,650, Single- $12,400. Choosing the itemized deduction is only advantageous if you have high mortgage interest, give an exceptional amount to charity or pay high state and local taxes. Unless the latter apply, the standard deduction is best.
Income from a job or contracted work- By now your employer or business for whom you worked as a contractor should have completed and sent out their required W-2s and 1099s. If you have not yet received your documents look forward to receiving them by mid February. Any delay beyond then should prompt you to contact Human Resources and if no response then contact the IRS for next steps to ensure that you enter accurate numbers to avoid penalization.
Childcare expenses- If you have qualifying dependents, child under 17 or disabled person, for whom you pay for childcare you may be eligible for a tax credit of $2,000 per qualifying child. A bit of information is needed from the childcare provider to properly report the expense on your return. From your provider you may have received or need to request documentation that states their employer identification number (EIN) or social security number, the duration of service and total amount paid. Services can be received from establishments, individuals as well as family members that are not parents and live outside your home. Care provided only while you were working and not by a nanny or personal assistant can be reported.
Record keeping- Whether you’re tech savvy or old school decide on a consistent format for saving your tax information. Choose a cloud platform to scan and upload your documents or take out the trusted manila folders to add your documents as you receive them. You will refer to either your actual or virtual folder when you are ready to reference them during the tax preparation process. A copy of the accepted return from the IRS should be added to the “folder” later for safekeeping.
Once you’ve decided on your record keeping format and compiled all of your paperwork, go to a trusted tax preparer or office to file your 2020 tax return. You may visit the IRS website to locate businesses in your area. Tax returns are to completed by Wednesday, April 15, 2020. Happy Filing!
Later issues will cover additional tax topics. What kinds of tax or financial topics would you like covered?
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