Finance I: Debt Counseling and Debt Consolidation

Debt is a huge financial issue in the United States. Between credit cards, car loans, mortgages, and other miscellaneous bills, the average American household owes over $45,000 not including a mortgage. According to the latest information from the Federal Reserve, Credit debt has exceeded $3.5 trillion. More and more people are purchasing products and services using credit. There has been a dramatic increase in the number of car and student loans over the last 5 years, and this is nothing compared to the credit card debt in each household which has surpassed an average of $15,000. There’s no doubt as to why they call it “drowning in debt.”

Money problems keep a lot of people awake at night. For some, the stress becomes so bad it causes relationship issues. When people make purchases, they often don’t think about how it all adds up. For example, someone may have a mortgage and two cars that they are making payments on. For most people this is a manageable situation, but add the utilities, cable, cell phones, internet, insurance, etc. and it becomes apparent that bills stack up. Add fast food to the mix and monthly expenses often go beyond a person’s monthly pay. This causes people to turn to credit cards, adding to their debt.

*A special note on debt: finances are a prominent cause of depression throughout the world.

Debt Counseling and Debt Advisors

Many people in dire straits turn to debt counselors or debt advisors to help them prioritize their financial situation and get them out of the red. Debt counseling has become a big industry over the past 30 years. Debt counseling services range from simple budgeting to an overhaul of an entire lifestyle.

The number one goal of a debt counselor is to understand what a person’s financial goals are and examine the specific actions that are causing them to deviate from that goal. Most people have long-term financial goals, but unfortunately, the way they live and spend money is a direct contradiction to their goal. Without good spending habits, people tend to spend money without thinking about their long-term goals.

A good debt counselor will first look at the client’s current debt. Unfortunately, without taking the legal route to bankruptcy, debts must be paid. Some debt counselors and debt advisers will help clients get in contact with debtors to make arrangements to get things paid off. Very often, a business will be glad to work with someone who owes them money, because it means that they will eventually get paid. This can often be accomplished for sums of less than $10,000. Utility companies are always happy to work with customers as long as they are kept in the loop. If someone waits until the power has been turned off to make a arrangements, it is often too late.

Moreover, a debt counselor who really understands finances will understand that there is such a thing as “good” debt. For example, a mortgage is an asset, and as long as it is being paid it is considered good debt and will help and individual’s credit score. Even credit cards with a low interest rate and moderate balance are considered to be examples of good debt, because timely payments make a big impact on a person’s credit report. The key that a debt advisor understands is that 12 credit cards with a moderate balance is not the same as one or two.

The debt counselor will then take a closer look at their client’s spending habits. If a person only makes $1000 per week, yet spends $1500, there’s a problem. Debt counselors will look at everything. They will often ask for a number of different receipts and bills. They will inquire about how often a person or family eats out, how far they drive each day to work, how much they may spend on services such as Uber, how much monthly cellular service costs, etc.

Counselors will tailor a personalized payoff strategy and organize all the client’s debts on a spreadsheet. This information is fully explained to the client who is also taught how to modify their spending habits. They will make recommendations as to which debts should be handled first and which could wait. Usually, the counselor will advise that smaller debts should be taken care of first so that they can be removed from a credit report. For many clients, paying off a bill offers them the psychological momentum to continue with their budgeting.

Success Tip: There are a number of non-profit debt counseling organizations that offer services for free. While they may not go as in-depth as a paid advisor, a client won’t be adding to their debt by using them. As a sales agent, you can expand on the fact that you are trying to help people get the services they need from trustworthy sources, and a good non-profit debt counselor is a great match.


There are no educational requirements to become a debt counselor, though most professional advisors will have a degree in finance or business. Degrees in finance usually involve extensive courses in mathematics, accounting, and financial instruments. Many debt counselors spent years in the investment side of finance. However, to become a member of the National Foundation for Credit Counseling (NFCC) an applicant usually has a degree in finance. Some states require debt counselors to be licensed as financial advisors.

Many larger debt counseling businesses will often have associate counselors, which often do not need to meet the same educational requirements as the primary advisors do. However, many of them are usually in a training program within the company to help them learn the required skills to become a qualified advisor.

Keys to remember about debt counselors:

  • They are typically good with numbers and have an education in finance
  • They will help clients come up with a plan to overcome debt problems
  • They closely examine the client’s current debt and determine which debts are good for the client and which debts need to be taken care of
  • They examine the client’s spending habits in order to suggest changes that will allow them to pay off more debt

Debt Consolidation

Debt consolidation is different than debt counseling, though there are many debt advisors and debt counseling companies that will offer debt consolidation as an option. Debt consolidation involves taking a number of small to medium size debts and consolidating them into one larger debt with, hopefully, a lower interest rate. There are a number of ways this is done and for different reasons, but generally, the total debt a consolidator will deal with is less than $50,000.

Ways debt consolidation is accomplished:

  • Transferring outstanding balances to a single credit card
  • Refinancing or getting a second mortgage to cover outstanding balances
  • Getting a small loan to pay off outstanding balances

Debt consolidation companies often focus on the last method above. Many of these companies act as middlemen and pay off the debts and create a “loan agreement” for the client to pay them back. Of course, most companies that use this method are trying to make money, and they do so by contacting a client’s creditors and making deals with them. For example, a $550 bill that is accruing 10% monthly interest, a consolidator may make a deal to pay the company a $480 lump sum pay off (in truth, they would likely pay less). The consolidator will then add the original $550 to the client’s overall loan amount and charge between 10% and 21% apr on the loan. So the consolidator earned $70 right off the bat and they will continue to earn interest on the loan. Add 12 to 15 debts of this average amount to the full consolidation loan and the company has made between $800 and $1000 just for making the deal, and will earn anywhere from $1200 to $5000 on the loan’s interest.

But not all debt consolidators are out to make a quick buck. There are non-profit agencies that will work with clients and help them make arrangements to transfer balances to a single credit card, or work with a local lender to get a loan to cover the debts. These non-profit agencies will also help consumers make deals with their creditors to lower costs.

Some quick information about American Debt:

  • The average American household has $15,000 in credit card debt
  • The average American household has $45,000 in total debt, not including a mortgage
  • The average American household has 2 auto loans averaging $23,000 each
  • The average American household spends roughly $635 on phone, internet, and cable each month
  • The average monthly transportation bill for a household that regularly uses a service like Uber is $600
  • The average American household spends an average of $400 on fast food each month
  • The average American household spends $270 per month on specialty coffees
  • Credit card debt alone has surpassed $3.5 trillion
  • More Americans than ever are using credit cards to make purchases
  • The average credit card interest rate is 13.9%


Debt is the American way. Our entire credit system is built on the idea of debt. Some debts can make an individual’s credit score stronger, but if payments aren’t made and debts begin to default, it can be a bad thing. Debt counselors work to help clients who have found themselves “under water” and help them find a stronger financial future.

Debt consolidation is a method of debt relief that takes a number of a clients current debts with different companies and places them under one payment. This can happen in a number of ways, but debt consolidation companies generally create a single loan that pays off the debts and requires the client to pay them back for the service.

As a sales agent, it is important to focus on the emotional side of the sale. Debt counselors are often empathetic with the financial problems of their clients, even more so when their client is part of our target demographics. By emphasizing the idea that our aim is to ensure that people in need get the support they need from trustworthy professionals, you will help to create a bond between them and the advisor.

With Geo-Fencing, we can promote a financial advisors services to help those in need and target demographics like homeowners, renters, men and women of certain ages, households with an income over $100,000 and more by using our special targeting groups.

Finance 2: Retirement Planning

On average, Americans will be retired for around 16 years. For many, this is a long time to support oneself without a paycheck to rely on. Unfortunately, many Americans do not plan ahead and try to live solely on their Social Security. This can mean a drastic change in lifestyle and a big reduction in expenses. Dreams of retirement once included vacations, cruises, and time with grandchildren…now, for many, the vacations and cruises are out the window, and grandchildren don’t just visit, they’re residents.

Much of the problems associated with retirement revolve around inadequate planning. Many people think that because they’ve been paying into Social Security for 40 or 50 years that they are set for the rest of their lives. In order to get a better understanding of what the future holds for most, we must consider American life expectancies

So, if a person decides to retire at the average retirement age of 65 and they are healthy, could they live off Social Security benefits alone? The average Social Security paycheck in 2017 for someone retiring at the age of 62 was $1077 per month and $1482 for someone retiring at the age of 70. For most this is not enough to live on. As a general rule, to live modestly after retirement, it is a good idea to have 15 times one’s normal annual pay set aside at the time of retirement.

Crucial Information:

  • If a retiree has not paid off their home and they still have a car payment, they will require, on average, $45,000 per year for roughly 25 years to maintain their lifestyle (this figure includes an average yearly inflation rate of 3.2%)
  • Most pensions do not cover the needs of people who retire, which is why many of them, unfortunately, end up working well into their 80s
  • Depositing $1000 per year into an account that earns roughly 5% interest would be worth almost $80,000 after 30 years, more than doubling the deposited value. (a 10% account would be worth over $160,000, and a 20% account would be worth over a million dollars!)
  • People need to start planning their retirement early on so that they can live the comfortable lives they deserve
  • The pensions for newer teachers have decreased by 25% over the past decade and they need to supplement their retirement plans with individualized services

Retirement Planning

Planning for the future is always important. Some people go about planning on their own, while others get in touch with a financial advisor who specializes in retirement planning. Planning can be as simple as putting a little extra money aside each paycheck to high-risk investing. Either way, it is good to consult a professional to ensure your plan will meet your needs.

Depending on the specific occupation of the worker, they may have a pension and/or other retirement benefits. For example, members of the military, police officers, firemen and women, EMTs, and teachers have pensions to help them during retirement. Many individual employers offer individual retirement plans like 401Ks, and some of the larger corporations will have pension plans for some employees. All of these arrangements are typically made through a financial advisor that works directly with the company.

Still, many people prefer not to rely entirely on what the government or on what their employer offers. Some people want to live it up when the time comes to retire and leave the workplace behind. They want to go on cruises, visit other countries, or buy a boat. They don’t want to be living check to check each month. They especially don’t want to be one of those many millions who are still working after retirement age just to get by.

What is a retirement planner and what do they do?

Most financial advisors have the ability to help someone plan their retirement, but there are some individuals and companies that focus specifically on this part of the finance industry. A typical retirement planner advises clients on miscellaneous accounts that tend to earn interest over time, and how much should be invested and at what intervals. A good retirement planner will also pay close attention to the individual needs of their client. For example, a teacher making $35,000 a year doesn’t have the same investment abilities as a CEO making $100,000 a year. Moreover, some people are more willing to take chances with investments than others are. Therefore it is crucial for a planner or advisor to tailor a plan to a clients financial situation, personality, and long-term goals.

In most cases, a true retirement planner has a license with the state and complies with all regulations of the Securities and Exchange Commision (SEC), and they typically have a degree in finance.

Primary Functions of a Financial Advisor in Terms of Retirement Planning:

  • Examine a client’s current financial status and current retirement plans
  • Examine the client’s financial goals, and if the client is unsure of their goals, help them to create some
  • Help clients understand the importance of saving for the future
  • Create a customized retirement plan based on a client’s financial ability, personality, and goals
  • Offer client’s advice when changes need to be made to their current plan
  • Create supplemental retirement plans for clients with government or employment benefits
  • Ensure that clients without the financial means to do so, do not take too many investment risks

How do I sell to the retirement planner?

First of all, remember that they are educated people. If you bring up certain financial facts, they may test you on it just to make sure you are knowledgeable. The following lessons will get into specifics about different account types and other options a retirement planner may provide. It is suggested you get an overall familiarity with these financial items not only because you will sound informed when talking to people in the financial industry, but also for your own future.

Retirement planners/financial advisors are generally busy people. When they get calls from clients asking them to make changes to their accounts, buy or sell stocks, or commit to any other transactions, they need to do so promptly. Failure to complete a task given to them by a client can result in huge fines and even loss of licensing. For this reason, all their phone calls are usually recorded for legal purposes. What all this means to you is that you need to be respectful of their time. There is no need to hurry, just keep in mind that if they answer your call between customer calls, they may have other things going on in their mind.

Be professional, and always attempt to create the emotional connection. With Geo-Fencing, we can promote these types of businesses to demographics like income over $100,000, credit score over 700, net worth over $100,000, affluent shoppers, luxury shoppers, golfers, active investors, international travelers, people actively seeking financial advice and more using our special targeting groups.

Finance III: Estate Planning

What is an estate?

A person’s estate is comprised of everything they own. Car, home, other real estate, checking and savings accounts, investments, life insurance, furniture…basically all of a person’s possessions. Just about everyone has an estate.

Estate Planning Overview

While some people are concerned about their current financial situation or their financial future during their lifetime, not many consider what happens after they have passed. Unfortunately, many people fail to plan for what happens to their assets after they die. The fact is, what a person owns can’t be taken with them when they die. Moreover, some people pass long before they begin to think about their own death. Anyone who has assets should take the time to ensure everything is managed in the unfortunate case of death in order to prevent their family from the hardships of dealing with estate issues while they are in the middle of grieving.

When no prior arrangements have been made regarding a dead person’s property and assets, the state is put in the position of having to make to decisions about who gets what. This is called probate. A probate court determines how to split up property and assets when there is no prior indication from the recently deceased as to how things should be handled. Sometimes having a will isn’t enough to circumvent the probate process either. If significant time has passed since the will was written or there has been significant changes in the deceased’s life (such as marriage, divorce, or new children) a probate court can intervene and make the ultimate decisions on the distribution of assets. Attorney fees can eat up a lot of the probated assets, so it is important to periodically review and update an existing will to ensure property and assets are distributed as originally intended. Financial advisors don’t get involved in the process of writing wills, that’s a legal process, and it is always good to have a good lawyer to help if there is significant assets in question.

Financial advisors will, however, help a client determine what is needed to ensure beneficiaries are taken care of and not placed in a bad position themselves. For example, some people will leave a home to their child or children, but the home still has a mortgage with $100,000 left on it. If the correct mortgage insurance isn’t purchased, the children may be on the hook for a large portion of that loan. While the intent of leaving a home to one’s children is a loving and honorable one, it may end up putting the children through a financial hardship.

A financial advisor will often get involved in asset management. This is especially crucial when someone who recently passed has a number of bank and/or investment accounts. In many cases, a beneficiary can’t just take over an account. The account needs to be closed and the proceeds given to the beneficiary listed in the will or decided upon by the probate court.

When a person dies—and it is a “when” and not an “if”—it is probable that they would have liked control over how their things are given to people or organizations. To ensure their wishes are carried out, they need to provide instructions stating whom they want to receive items, what the specific items are, and when they will receive it. Moreover, they want it to be done with the least amount paid in taxes, legal fees, and court costs.

That is the core of estate planning—making a plan in advance and naming whom you want to receive the things you own after you die. However, it is not always so simple and there is much more involved. Good estate planning will often also include the following:

  • passing one’s values along with assets.
  • include instructions for care in cases of disability prior to death.
  • naming of guardians and inheritance managers for minor children.
  • provide for family members with special needs without disrupting government benefits.
  • provide protection from creditors for loved ones who may be irresponsible with money.
  • include life insurance to provide for family.
  • include disability income insurance to replace one’s income in cases where one cannot continue to work.
  • include long-term care insurance to help pay for one’s care in cases of extended illness or injury.
  • provide for transfer of business at time of retirement, disability, or death.

Effective estate planning will also minimize taxes, court costs, and legal fees. Moreover, estate planning is an ongoing process that should be reviewed and updated as there are changes in the family and financial situations (and laws)

Estate planning is for everyone.

It is not just for “retired” people, although people do tend to think about it more as they get older. Unfortunately, we can’t successfully predict how long we will live, and illness and accidents happen to people of all ages. Estate planning is not just for “the wealthy,” either, although people who have built some wealth do often think more about how to preserve it. Good estate planning often means more to families with modest assets, because there is more for them to loose.

Success Tip: Veterans often contemplate the implications of death more than the general public, and for this reason they are more likely to hire someone to help them with their estate planning needs. As sales agents we are trying to help connect supportive advisors with these men and women.

Too many people don’t plan.

Individuals put off estate planning because they think they don’t own enough, they’re not old enough, they’re busy, think they have plenty of time, they’re confused and don’t know who can help them, or they just don’t want to think about it. Then, when something happens to them, their families have to pick up the pieces. If there’s no plan in place, the state has one, and rarely is everyone happy with the state’s plan.

At your death: If you die without an intentional estate plan, your assets will be distributed according to the probate laws in your state. In many states, if you are married and have children, your spouse and children will each receive a share. That means your spouse could receive only a fraction of your estate, which may not be enough to live on. If you have minor children, the court will control their inheritance. If both parents die (i.e., in a car accident), the court will appoint a guardian without knowing whom you would have chosen. Given the choice—and you do have the choice—wouldn’t you prefer these matters be handled privately by your family, not by the courts? Wouldn’t you prefer to keep control of who receives what and when? And, if you have young children, wouldn’t you prefer to have a say in who will raise them if you can’t?

An estate plan begins with a will or living trust.

A will provides your instructions, but it does not avoid probate. Any assets titled in your name or directed by your will must go through your state’s probate process before they can be distributed to your heirs. (If you own property in other states, your family will probably face multiple probates, each one according to the laws in that state.) The process varies greatly from state to state, but it can become expensive with legal fees, executor fees, and court costs. It can also take anywhere from nine months to two years or longer. With rare exception, probate files are open to the public and excluded heirs are encouraged to come forward and seek a share of your estate.

In short, the court system, not your family, controls the process. Not everything you own will go through probate. Jointly-owned property and assets that let you name a beneficiary (for example, life insurance, IRAs, 401(k)s, annuities, etc.) are not controlled by your will and usually will transfer to the new owner or beneficiary without probate. But there are many problems with joint ownership, and avoidance of probate is not guaranteed. For example, if a valid beneficiary is not named, the assets will have to go through probate and will be distributed along with the rest of your estate. If you name a minor as a beneficiary, the court will probably insist on a guardianship until the child legally becomes an adult.

For these reasons a revocable living trust is preferred by many families and professionals. It can avoid probate at death (including multiple probates if you own property in other states), prevent court control of assets at incapacity, bring all of your assets (even those with beneficiary designations) together into one plan, provide maximum privacy, is valid in every state, and can be changed by you at any time. It can also reflect your love and values to your family and future generations. Unlike a will, a trust doesn’t have to die with you. Assets can stay in your trust, managed by the trustee you selected, until your beneficiaries reach the age you want them to inherit. Your trust can continue longer to provide for a loved one with special needs, or to protect the assets from beneficiaries’ creditors, spouses, and irresponsible spending. A living trust is more expensive initially than a will, but considering it can avoid court interference at incapacity and death, many people consider it to be a bargain. Planning your estate will help you organize your records and correct titles and beneficiary designations. Would your family know where to find your financial records, titles, and insurance policies if something happened to you? Planning your estate now will help you organize your records, locate titles and beneficiary designations, and find and correct errors.

Most people don’t give much thought to the wording they put on titles and beneficiary designations. You may have good intentions, but an innocent error can create all kinds of problems for your family at your disability and/or death. Beneficiary designations are often out-of-date or otherwise invalid. Naming the wrong beneficiary on your tax-deferred plan can lead to devastating tax consequences. It is much better for you to take the time to do this correctly now than for your family to pay an attorney to try to fix things later.


Estate planning is a process, both legal and emotional. An asset holder determines how he or she wants their things distributed based on whichever qualifications they choose and that determination becomes legal.

Estate planning largely involves a lawyer or lawyers, but if there is a significant amount of liquid assets, such as investment and other financial accounts, a financial advisor will typically be consulted. In some cases, lawyers who specialize in estate planning will also double as financial advisors.

As a sales agent, your job is to help communicate the idea that there is a connection between the needs of people and the services the advisor offers. With Geo-Fencing, we can promote these types of businesses to demographics like income over $100,000, credit score over 700, net worth over $100,000, affluent shoppers, luxury shoppers, golfers, active investors, international travelers, people actively seeking financial advice and more using our special targeting groups.

Finance IV: Traditional and Alternative Investments

This lesson will cover a number of the fundamental investment choices a person can make through a financial advisor or broker. As a general rule, these products are good to know about, but they can be especially important to you as a sales agent dealing with professionals in the finance industry.

You may be wondering why this information can be important to you. First of all it will show your prospect that you are informed and willing to learn about the industry you are calling. Secondly, when you have an overall view of financial products and what they can mean to people, you will have a better way of relating the needs of our heroes to the advisor/broker.

Investments of one type or another are a central part of most financial strategies and can be separated into two primary groups: Traditional and Alternative.

Traditional Investments

Interest Bearing Savings Accounts

Interest bearing savings accounts are typically managed by banks and credit unions. They can be simple interest or compound interest accounts and a wide range of interest rates are available. Money placed into these accounts has already been taxed and is not taxed at withdrawal.

  • Simple Interest Savings Accounts. These accounts offer simple interest in the range of 1% to 4.5%.
  • Compound Interest Savings Accounts. These accounts offer compound interest and range anywhere from 2% to 20%, depending on the bank and amount of investment.

Individual Retirement Accounts (IRA)

IRAs are long-term accounts specifically for retirement. An account holder deposits money into the account just as they would a savings account, but these accounts have the ability to earn more interest over time. Depending on the IRA type, withdrawals can be taxed and even penalized. Annual IRA contributions are limited based on salary or earnings form self employment. For example, you can invest up to $10,000 per year if you earn $50,000 a year or less.

  • Traditional IRA. The money deposited into the account is pre-tax and the earnings are not taxed. The holder of the account can deduct deposit amounts from the earnings they claim on their annual taxes, but they must pay taxes when they take the money out of the account.
  • Roth IRA. The money deposited into the account is post-tax, so the account holder has already paid taxes on the amount deposited. The earnings of the account are not taxed and when the account holder takes out money, the withdrawals are not taxed .

*You can open an IRA account for every (human) member of your household

401(k) or 403(c)

A 401(k) or 403(c) is like an IRA, but it is usually offered by a company or institution to its employees. Generally, companies will make a contribution to match an employees contribution. Some companies will match 100% of the employee’s contribution, but 50% is normal. When it comes time to withdraw money from the 401(k) or 403(c) the withdrawal amount is taxed. *If your employer offers a 401(k) or 403(c), you should invest in it. They will often take the amount you choose directly out of your paycheck.

A529 Savings Account

An A529 Savings account is for educational purposes. You can have a separate account for each child and contribute up to $10,000 tax free per year. These accounts often have good interest rates, and if you plan to send your kids to college, it is a good idea to open these accounts. This account type will be discussed further in the next lesson.

Stocks, bonds, mutual funds and other exchange traded investments are considered securities. Securities are closely monitored by the Securities and Exchange Commission (SEC)

What is a security?

A security is an investment option that is normally traded on the market. It is best to consider the market as a conceptual place where people exchange investments throughout the day. While there are physical markets, like the New York Stock Exchange, there is no real “money” exchanged there, only the concept of value. Moreover, the market decides the value of the investments depending on public perceptions.


The most common types of securities involve stocks and bonds. A stock is a proportional ownership of a company. Not all businesses have stocks, and not all corporations that do have stocks offer them to the public. But for companies that do, it is an opportunity to increase the value of the company.

For example, suppose XYZ Corporation decides to go public and sets the value of their company at an arbitrary $100,000. They decide to issue 100,000 shares at $1 each, but they decide to keep 50,000 shares for corporate owners. So there is 50,000 shares available for the public to buy. As more and more people begin to “like” XYZ Corporation, for lack of a better term, the value of each share goes up. Let us say the value goes up to $2.50 per share. Now XYZ Corporation is worth $250,000. Moreover, the people who bought shares of the company at $1 each gained a 150% increase on their investment!

The stock market is generally the place where people make the most money on their investments. However, it is also one of the more risky places to invest money if one doesn’t know what they are doing. The market fluctuates on a daily, even hourly basis. In general, the market remains fairly stable and typically trends upward over time. This doesn’t imply that every company does well, but most remain stable over time.


A bond is a debt instrument. When someone owns a bond, they are essentially the banker for someone else. The bond buyer lends money, and, in return, they get a piece of paper that documents a promise to pay a certain amount of money on a certain date or dates in the future. Bonds can be transferred to anyone at any time and much like stocks, trades occur quickly. Bonds can be issued by businesses and the government.

Bonds all come with a face value, which is the amount the bond will be worth on its maturity date, meaning that the issuer will buy the bond back at a stated date for the face value. Some bonds promise regular payments over a period of time; these are called coupon bonds. There is still risk involved in bonds, however.

Market risk comes from the fact that interest rates fluctuate from day to day. That fluctuation causes the debt side of the bond to change. When rates go up, the price of a bond goes down, and vice versa.

Credit risk is the chance the issuer will fail or default on all or part of their obligations and not pay bond-owners. Generally speaking there is more risk getting involved with corporate bonds than municipal bonds and government bonds, but corporate bonds tend to have higher returns.

Mutual Funds

A mutual fund uses pooled money from many investors (sometimes tens of thousands) to achieve specific investment goals. The goals range from general investing in stocks and/or bonds to buying stocks in companies in certain countries or industries ensuring that there will never be a losing year to finding high-risk high-growth stocks. There are more mutual funds available to buy than there are stocks. The profits from the investments are shared proportionally among all the investors according to how much each investor has contributed.

Mutual funds are the best way to get started in investing, because the individual stocks are chosen by someone or a group that knows a bit about the market. In the past there was a lot of problems with shifty brokers, but new regulations have put a stop to that.

A good example of a mutual fund is a 500 Index Fund, which invests your money in the S&P lineup of the 500 largest publicly traded companies in America. Generally speaking, these companies are safe to invest in, and as an investor in a 500 Index Fund, you’re getting a piece of all 500 of the companies.

Some mutual funds allow the buyer to withdraw cash from the fund every day. Some funds once issued checkbooks to withdraw money, now most of them perform an electronic transfer to a savings or checking account to use the requested money or issue a debit card that looks much like a credit card.

Above were the primary investment types. There are others, such as Exchange Traded Funds (ETFs), Real Estate Investment Trusts (REITs), Bond Funds, Foreign Funds, Hedge Funds (super high-risk), All-weather funds, etc., but understanding these instruments is well-beyond the scope of this training module.

Alternative Investments

There are a number of investments that aren’t as popular as the ones listed above, but that doesn’t imply that they may not fit someone’s financial goals. In fact, many of these are used to supplement an investment plan, sometimes in a fun way. Why “fun”? Because the investor is usually able to take on a more hands-on approach.

Precious Metals

  • Gold: While gold isn’t that standard anymore, it still has a great deal of value. While the price of gold is constantly fluctuating, it generally rises in the long-term. An investor can own gold bars, but only up to a certain weight each. Gold has over a 5,000 year track-record of being valuable, so it’s hard to go wrong.
  • Silver: Silver isn’t valued as high as gold and the price per ounce doesn’t rise as much, but it still has a good long-term value.
  • Platinum: Per ounce, platinum has a much higher value, but it is more scarce. More and more precious metal investors are getting into the platinum market.


Many investors, often called “angel investors”, will invest in miscellaneous businesses that they feel are likely to succeed. They will either take a percentage of controlling interest in the business, or they will lend the business owner money at a relatively high interest rate. Unless the investor has a great deal of knowledge about business and financing, they will usually seek the advice of a financial advisor.

Angel investing can be high risk, especially with smaller businesses. The failure rate of small businesses is over 50% in the United States. Some angel investors make huge sums of money (think Shark Tank), while others find their investments a failure. An investor can take a business owner to court, but it is unlikely they will get their initial investment back.

Why is all this important to you as a sales agent? First of all, when you are talking to an individual who knows a great deal about investing, having a basic understanding of different types of investment tools makes you sound knowledgeable on the topic. You want to sound like you are calling them for a reason, not that you just got off the phone with the owner of a sandwich shop and they just happened to be next on the list.

Moreover, we are trying convince potential advertisers that our connection to people in need can be a benefit to them. In order to do this, a connection must be made between them and what the financial advisor/broker does. When you can confidently state that public servants are likely to choose mutual funds as an investment choice, for example, it demonstrates that you know a bit about the demographic we are trying to help and it relates their needs to what the adviser or broker offers.

With Geo-Fencing, we can promote an advisor/broker to the right demographics like income Over $100,000, credit score over 700, net worth over $100,000, affluent shoppers, luxury shoppers, golfers, active investors, international travelers, people actively seeking financial advice and more with our special targeting groups.

Finance V: Education Investments

Form many parents, their children’s education is very important and often a financial priority. Every parent wants their child to be successful and go to college to earn a degree. While the statistics are often misunderstood, college graduates who obtain a degree in a non-humanities major earn roughly 400% more over a lifetime than do non-college graduates and are more likely to be hired by a large company or government agency. In other words, education is highly Valued—but it is expensive…you can buy a house for the price of some 4-year degrees.

In 2018, the average annual tuition cost for a private college was $34,000. The average cost of a state college was $25,000 and community college was $10,000 per year. Some college tuitions can be upwards of $120,000 per year. For most people, these prices are hard to swallow, and they are only going to go up. A student seeking to earn a bachelor’s degree or higher is looking at a huge financial burden. However, there are ways to invest in the academic future of one’s children or oneself so that they are not paying off student loans for the rest of their lives.

*Special Note: defaulted student loans never drop off your credit report and are often not included in bankruptcy proceedings.

There are a number of different options available to help someone save for education purposes. The main one we will focus on is the 529 plan, which many financial advisors or brokers can help with. Many of our heroes, especially younger ones, have children. Connecting these men and women with supportive advisors or brokers who will help them reach their goals is important.

What is a 529 plan?

A 529 plan is a tax-advantaged savings plan designed to encourage saving for future college costs. 529 plans, otherwise known as “qualified tuition plans,” are sponsored by states, state agencies, or educational institutions and are authorized by Section 529 of the Internal Revenue Code.

There are two types of 529 plans: prepaid tuition plans and college savings plans. All fifty states and the District of Columbia sponsor at least one type of 529 plan. In addition, a number of private colleges and universities sponsor prepaid tuition plans.

What are the differences between prepaid tuition plans and college savings plans?

Prepaid Tuition Plans. Prepaid tuition plans let a college saver or account holder purchase units or credits at participating colleges and universities (usually public and in-state) for future tuition and mandatory fees at current prices for the beneficiary (future Student). Prepaid tuition plans usually cannot be used to pay for future room and board.

Most prepaid tuition plans are sponsored by state governments and have residency requirements for the college saver and/or beneficiary. Prepaid plans are not guaranteed by the federal government. Some state governments guarantee the money paid into the prepaid tuition plans that they sponsor, but some do not. If the plan’s prepaid tuition payments aren’t guaranteed, there may be a loss of some or all of the invested money if the plan’s sponsor experiences a financial shortfall. In addition, if a beneficiary doesn’t attend a participating college or university, the prepaid tuition plan may pay less than if the beneficiary attended a participating college or university. It may only pay a small return on the original investment.

College Savings Plans. College savings plans let a college saver open an investment account to save for the beneficiary’s future qualified higher education expenses – tuition, mandatory fees and room and board.

Withdrawals from college savings plan accounts can generally be used at any college or university, including sometimes at non-U.S. colleges and universities. A college saver may typically choose among a range of investment portfolio options, which often include various mutual fund and exchange-traded fund (ETF) portfolios and a principal-protected bank product. These portfolios also may include static fund portfolios and age-based portfolios (sometimes called target-date portfolios). Age-based portfolios automatically shift toward more conservative investments as the beneficiary gets closer to college age.

All college savings plans are sponsored by state governments, but only a few have residency requirements for the college saver and/or beneficiary. State governments do not guarantee investments in college savings plans. College savings plan investments in mutual funds and ETFs are not federally guaranteed, but investments in some principal-protected bank products may be insured by the FDIC. Similar to most investments, investments in college savings plans may not make any money and could lose some or all of the money invested.

What fees and expenses are involved in a 529 plan?

It is important to understand the fees and expenses associated with 529 plans because they lower your returns. Fees and expenses will vary based on the type of 529 plan (college savings plan or prepaid tuition plan), whether it is a broker- or direct-sold plan, the plan itself and the underlying investments. You should carefully review the plan’s offering circular to understand what fees are charged for the plan and each investment option.

Prepaid Tuition Plans. Prepaid tuition plans may charge an enrollment/application fee and ongoing administrative fees.

College Savings Plans. College savings plans may charge an enrollment/application fee, annual account maintenance fees, ongoing program management fees, and ongoing asset management fees. Some of these fees are collected by the state sponsor of the plan and some are collected by the plan manager. The asset management fees will depend on the investment option you select. Investors that purchase a college savings plan from a broker are typically subject to additional fees, such as sales loads or charges at the time of investment or redemption and ongoing distribution fees.

How does investing in a 529 plan affect federal and state income taxes?

Investing in a 529 plan may offer college savers special tax benefits. You should make sure you understand the tax implications of investing in a 529 plan and consider whether to consult a tax adviser.

Contributions. Many states offer tax benefits for contributions to a 529 plan. These benefits may include deducting contributions from state income tax or matching grants. But college savers may only be eligible for these benefits if you invest in a 529 plan sponsored by your state of residence.

Withdrawals. If you use 529 account withdrawals for qualified higher education expenses, earnings in the 529 account are not subject to federal income tax and, in most cases, state income tax. However, if 529 account withdrawals are not used for qualified higher education expenses, they will be subject to state and federal income taxes and an additional 10% federal tax penalty on earnings.

What restrictions apply to an investment in a 529 plan?

There will likely be restrictions on any 529 plan you may be considering. Before you invest in a 529 plan, you should read the plan’s offering circular to make sure that you understand and are comfortable with any plan restrictions.

Investments. College savings plans have certain pre-set investment options. It is not permitted to switch freely among the options. Under current tax law, an account holder is only permitted to change his or her investment option twice per year or when there is a change in the beneficiary.

Withdrawals. With limited exceptions, you can only withdraw money that you invest in a college savings plan for qualified higher education expenses without incurring taxes and penalties. Beneficiaries of prepaid tuition plans may only use their purchased credits or units at participating colleges or universities. If a beneficiary doesn’t attend a participating college or university, the prepaid tuition plan may pay less than if the beneficiary attended a participating college or university. It may only pay a small return on the original investment.

Connection to Financial Advisors/Brokers

While scholarships and grants are not handled by Financial advisors or brokers, the 529 Education plans can be. Brokers who deal with securities will often also deal in the 529 plans because they usually involve the inclusion of an IRA or mutual fund as an investment instrument. Needless to say, these plans are not a big part of their business, mostly because the public is unaware of them.

As a company we are trying to connect people with the services they need, and often when it comes to investments they are unsure about what to do. This compounded on top of the fact that most people have never heard of a 529 plan means that finding finance professionals knowledgeable on the subject of education investments is a good selling point.

  • Some folks are relatively young and starting new families. They are generally more mature and think a lot more about the future of their family. Having access to an advisor who will work closely with them on a financial plan for their children is a great benefit.

With Geo-Fencing, we can promote a financial advisors services to help those in need and target demographics like homeowners, renters, men and women of certain ages, households with an income over $100,000 and more by using our special targeting groups.

Finance Killer One-Liners

  • Many people do not want to rely solely on their retirement benefits, so they are looking for a trustworthy advisor/broker to help secure their futures.
  • Did you know that most parents would like to ensure their children’s educational future and they need a good financial advisor to help them make the right choices.
  • “Do you offer Veterans/Police Officers/Firefighters/EMTs/Teachers discounted services?” If no then: “By offering even a minimal discount, you can increase your profile in the community.” If yes then: “Perfect! With Geo-Fencing, we can display your discount information to the right demographics using our special targeting groups”
  • People need someone to help them start planning their retirement early on so that they can live the comfortable lives they deserve.
  • (Debt Counselor):  People deserve a debt counselor who will have their best interests in mind so that they can live a more comfortable life.
  • (Financial Advisor/Broker): Do you work with any of the 529 Plans for your state? Many younger families look to the future of their children and need some guidance from a knowledgeable and supportive advisor.
  • Did you know that some people supplement their retirement plans buy purchasing stocks and/or mutual funds? These honorable men and women need an advisor to assist them in making the best decisions for their future.
  • Many people would like to begin investing their hard-earned money, and they deserve a professional and collaborative advisor/broker to guide them through the process.
  • For someone who specializes in what you do, doesn’t it make smart business sense to market to the right demographics like households with an income over $100,000, affluent shoppers, luxury shoppers, people actively seeking financial advice and many more to potentially boost your clientele and income?