THE TRUE FINANCIAL PLANNER

A TRUE Financial Planner DOES NOT PEDDLE/SELL any product from any Takaful ,Insurance,Unit-trust or Will writing Company.
Sadly IN MALAYSIA the true independent Financial Planners that are Exclusive Skilled Qualified Professionals do not receive the attention of the regulators.  

People enlist the help of a financial planner because of the complexity of performing the following:
Providing financial security and ensuring that all goals of personal finance are met
Finding direction and meaning in one's financial decisions;
Understanding how each financial decision affects other areas of finance; and
Adapting to life changes to feel more financially secure.

The best results of working with a comprehensive Independent financial planner, from an individual client or family's perspective are:
To create the greatest probability that all financial goals (anything requiring both money and planning to achieve) are accomplished by the target date, and
To have a frequently-updated sensible plan that is proactive enough to accommodate any major unexpected financial event that could negatively affect the plan, and
To make intelligent financial choices along the way (whether to "buy or lease" whether to "refinance or pay-off" etc.).

The client should establish that the planner is competent and worthy of trust, and will act in the client's interests rather than being primarily interested in selling the client financial products for his own benefit. 
As the relationship unfolds, an individual financial planning client's objective in working with a comprehensive independent financial planner is to clearly understand what needs to be done to implement the financial plan created for them. 

A financial planner's step-by-step written IMPLEMENTATION PLAN of ACTION items, created after the plan is completed, HAS MORE VALUE to many clients than the plan itself. The comprehensive written lifetime financial plan is a technical document utilized by the financial planner, the written implementation plan of action is just a few pages of action items required to implement the plan; a much more "usable" document to the client.

Article by:
Rodzman AR
Chartered Financial Consultant,ChFC,
Shariah Registered Financial Planner,SRFP,
Registered Financial Planner,RFP.

Fattening Your Savings

Let's FATTEN your SAVINGS

Rule No.1
Buy only what you need not what you want.
We have to make sure if its a need or a want ? A need is something that we could not live by on to another day.All you need are basic necessities like food on the table,heat,normal clothing,basic transport and of course health.
Other that THINK hard before making that purchase .....

Rule No.2
Buy only with the passive money.
If you have no money to spare do not buy anything that you do not need.If you really want to,then use money from dividends coming from investments or from savings created specifically for future purchases.

Rule No.3
Never use money borrowed from the bank.
These days we tend to spend from the credit given to us by the bank either by easy payments schemes,personal loans,or credit cards.Like it or not as good as it seems on offers,look out for hidden charges from fine prints that most of us never take time to read.

Rule No.4
If you are not sure refer to Rule No.1
Do some window shopping if you really go crazy over something that you want.Do not buy anything but just have a good night sleep and the next morning see how we have gone without it and still survive !
Still not sure go back to RULE No.1

Article by Contributed by:
Rodzman AR,
Chartered Financial Consultant (ChFC),
Syariah RFP,
Registered Financial Planner ( RFP )

Beware of the CC Trap.....................

It's been a great week and in Malaysia we are having another week with almost alternate days of holidays.
That's where you will see signs of SALES every corner of the road with big discounts.
Only buy what you need with cash available and never never use money from your credit card although it may very,very tempting.
The twist to personal finance management is always a challenge during this time of the year where its festive season all over the world.
The trick is to manage your personal just like a small business.

Income - Expenses = Profit                    

Profit in a personal capacity means surplus.If there is a deficit than my friend you might be at the mercy of the bank or worst the 'loan sharks' these days the plastic cards known as THE CREDIT card.

• Have a business
• Thinking of quitting your job
• Thinking of Retirement
• Starting a Business                                           
• Lots of Money 
• Lots of Assets and cash Poor
• How to stop working with lots of cash reserves
• Risk mitigation using Takaful or Self Insured
• Estate Distribution woes
• Stuck and no Financial Map
• Problems in personal finance    

      You may have tons of issues. Let's pause ,take a look, analyse and see how we could help you !

Need help!

Give me a twit or visit us at http// www.greenifinancial.com

Succession Planning and Its Impact on the Performance of Small Micro Medium Enterprises within the Manufacturing Sector in Johannesburg

The study found that there was a gap between perceived and actual status of succession planning in the SMMEs studied. It further revealed that there was no preference to recruiting from outside versus developing inside talent in preparation for succession planning. This finding can provide guidance to other SMME owners while making their succession planning, while it provides opportunities for managers. Most of the top managers surveyed indicated that they will be retiring in next 5 years and indicated that company had no succession plan or exist strategy. This finding has serious implications for the SMMEs studied and must take succession planning very seriously, otherwise they will come to a halt suddenly when the leadership leaves the enterprise for whatever reason, either due to natural death or otherwise. SMMES studied did not put plans in place to groom, train and develop top managers. As a way forward some strategies that can be followed to address the key variables are:

Business Strategy: An organisational structure should be implemented so that employees know who is next in line and what is expected of them, so that if anything is to happen to top management that company can still carry on. Exiting top management and shareholders should have contingency plans in place to ensure that the business can outlive them and that they have a proper exit strategy in place to carry over shares to the new management or new shareholders. The business strategy can add great value to a company if it needs to be sold.

Skills development: Identified top managers should be groomed and developed to ensure that they know what is expected to fill the vacant positions. It is of paramount important to ensure that these potential managers are fitted with all the necessary knowledge and skills to manage the top management of their companies.

Succession Planning: Implementing a formal succession plan is very important to ensure that all aspects have been looked at if something is to happen. The succession plan should also be reviewed annually to ensure managers’ suitability for positions and to ensure that all aspects have been accounted for. In conjunction to a good succession plan it is also necessary to have a good performance management system to ensure that potential top managers are identified from within or to see were individuals can be improved or where skills should be recruited from outside. Duties should be delegated in such a way that the business can operate if one or more key persons are absent thus employees should be multifunctional and flexible.

It is evident from this study that the manufacturing sector has not changed from those recorded in earlier studies. The conclusion from this study served as a wakeup call to the SMMEs which took part.

The gaps that can be observed in the two preceding graphs show the perceived importance of the variables by the companies and what is actually implemented. The significance gap level of 0.5 was used and the following findings were made in respect of each variable:

Business Strategy: There was a gap of 0.73 in respect to what the companies perceived to what is to their advantage and what they are implementing. This variable represented the statements in regard to the company’s utilization of an exit strategy for their shareholders and top management, and whether their succession planning is aligned with the business strategy that they follow. It can be inferred that the respondents perceives highly of what needs to be done but the implementation is not up to the level expected.

Governance: There was no significant gap between responses in regards to the companies’ governance. The GAP is very small so the assumption can be made that respondents implemented governance measures according to what they perceive as good practice. Governance is used to see in what way the business is controlled by shareholders, procedures and managers.

Skills development: The study established that there was a gap of 0.53 in regard to the implementation and perceived advantage of skills development. Skills development is of paramount importance to succession planning as the new up and coming generation needs the proper training and development to function as the new leaders and to ensure the sustainability of the company.

Succession Planning: Succession planning had a significant gap level of 0.63 which illustrate that companies perceive succession planning as a measure to ensure sustainability in their companies, and that they recognize succession planning as a value adding component of their business. Although they do acknowledge that succession planning is value adding but they do not follow the necessarily follow steps to move from their current state to the preferred state.

Common issues found in case studies

Common issues that were identified within the case study, was that there is a lack of succession planning in most SMMEs. As most of these companies are still owned and managed by their founding members it creates a problem of sustainability. These shareholders will also be reaching pensionable age within the following few years and it is important to ensure that all plans are drown up before hand, to ensure that these companies remain operational and functional even when the owner isn’t personally able to manage.

References

Ajay K Garg & Erich Van Weele (May 2012), Succession Planning and Its Impact on the Performance of Small Micro Medium Enterprises within the Manufacturing Sector in Johannesburg, International Journal of Business and Management: Canadian Center of Science and Education (Vol. 7, No. 9). 

'The Economy Stole My Retirement'

By SARAH E. NEEDLEMAN And EMILY MALTBY

Danny Sullivan dreams of gardening and spending time with his grandchildren, but that's just a fantasy. Retirement is out of his reach, at least for the foreseeable future.

The weak economy has been tough for small-business owners across the board, but for millions of entrepreneurs in their 60s and 70s, the consequences have been particularly frustrating. Sarah Needleman has details on The News Hub.

The 62-year-old founder of a small catering company spends his days helping stock bars with beer and ice, wooing potential new clients and juggling the 20 to 30 different events his firm handles daily.

"I am so tired," he says. "I don't know that I'll ever be able to retire."

The weak economy has been tough for small-business owners across the board, with their total revenue inching up by just 3% since 2007 and declining in fields such as construction (-12%), real-estate services (-3%) and retailing (-2%), according to financial-software maker Intuit Inc. But for entrepreneurs in their 60s and 70s, the consequences have been particularly vexing.

Many of them are stuck in "business purgatory," unable to retire and forced to hang on for a recovery that economists say could still be a long way off.

Mr. Sullivan has struggled to sell Arguello Catering Inc., the Redwood City, Calif., business he started 21 years ago, at a price anywhere near the $850,000 or so he figures he needs to stop working. He reckons that about 70% of his nest egg is tied up in the 25-employee company.

Its annual revenue has fallen to roughly $2 million from $3 million before the recession, Mr. Sullivan says. He has tried, without success, to boost the business's value by branching into new markets, expanding hours of operation and adding healthier menu options. He says he got three offers for Arguello this year, but they were far too low.

Nearly half of the 799 small-business owners surveyed in August by The Wall Street Journal and Vistage International, an executive-mentoring organization, expect to retire after age 65, with 38% saying that their planned retirement date is later than they had predicted five years ago. In addition, 56% said most of their retirement nest egg is tied to their business.

Stuck in 'Business Purgatory'

View Slideshow

Jason Henry for The Wall Street

Danny Sullivan has struggled to sell Arguello Catering, the Redwood City, Calif., business he started 21 years ago.

Baby boomers, in many cases, were blindsided by the recession and its effect on their retirement plans, says George Vozikis, director of the Institute for Family Business at California State University in Fresno.

"Boomer entrepreneurs grew up believing in the American dream that you could start a business and eventually sell it for a good return or pass it onto your kids," adds Aaron Chatterji, associate professor at Duke University's Fuqua School of Business in Durham, N.C. "Because of the financial crisis and subsequent recession, that is more difficult today."

Judy Lawton, 69, says she would like to sell the small staffing company she started 27 years ago. She figures she needs to sell it for close to $2 million to live comfortably. But her company was hit hard by the job-market slump, and its revenue is down by about 60% from before the recession.

Ms. Lawton says she continues to work 12-hour days, meeting with prospective clients sometimes until late at night. She says she can't afford to expand her business, which is down to 13 employees from 35 a few years ago. She recently sold her office building for $3.1 million to help pay off a $900,000 Small Business Administration-backed loan that she secured to survive the recession.

Ms. Lawton listed her business for sale last year through a broker, but all of the offers she received were "insulting," she says: as little as $250,000, plus installments that would vary depending on performance. So far, she has turned them down.

"You don't work for almost 28 years at [building] a company and give it away," says Ms. Lawton, adding she won't settle for what she considers a low offer, given the strong reputation and client base she has cultivated.

She hasn't taken a vacation in years because she can't afford to travel. "The economy has stolen my retirement," she says.

When the economy is tight, putting money away for retirement is much harder, says Gibb Dyer, professor of entrepreneurship at Brigham Young University's Marriott School of Management in Provo, Utah. At the same time, "it's more difficult to sell your business because it's valued less," he adds.

"The average business coming to market has lower earnings [than] it did in 2007-2008, therefore the prices are lower," says Barry Evans, partner at Acquisition Services Group, a business brokerage in San Diego. "If a business has lost 20% of its earning power in the past few years, it will sell for at least 30% less today."

The median selling price for U.S. small businesses during the first half of this year was $150,000, down 25% from $200,000 in the first half 2008, according to BizBuySell.com, an online small-business marketplace. The firm's findings, reported by business brokers, are based on listings and recent sales in 70 major U.S. markets.

In the first half of the year, 3,332 small businesses exchanged hands down 40% from the first half of 2008, it found.

Andy Birol, a small-business consultant in Pittsburgh, says many of his older clients are at a crossroads: "They either have to sell for far less than they need or deserve to get out, or they have to muster up the energy to recommit themselves to the business," he says. "They're conflicted."

Fourteen years ago, when Dan Cawley, 60, started real-estate brokerage Cawley Chicago Commercial Real Estate Co. in Downers Grove, Ill., he planned to gradually sell shares to his employees so he could retire by 70. But the recession hit just at the wrong time.

Last year, the company started offering property-management and consulting services and business has improved.

"The employees, they were concerned about the financial viability of the company," he says. "I wasn't even sure if we'd survive. This grandiose plan was blowing up."

Today, Mr. Cawley spends his 10-hour workdays training his sales team, meeting with landlords and property owners and running staff meetings. He also travels the country to build relationships in other states.

He has delayed his retirement plan for five years. He hopes to sell his first installment of shares next year.

"Every dime is in the company," he says. "I have no alternative savings, except Social Security. And I certainly can't live on that."

Write to Sarah E. Needleman at sarah.needleman@wsj.com and Emily Maltby atemily.maltby@wsj.com

Listening to Complainers Is Bad for Your Brain

Exposure to nonstop negativity actually impairs brain function. Here's how to defend yourself.

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Do you hate it when people complain? It turns out there's a good reason: Listening to too much complaining is bad for your brain in multiple ways, according to Trevor Blake, a serial entrepreneur and author of Three Simple Steps: A Map to Success in Business and Life. In the book, he describes how neuroscientists have learned to measure brain activity when faced with various stimuli, including a long gripe session.

"The brain works more like a muscle than we thought," Blake says. "So if you're pinned in a corner for too long listening to someone being negative, you're more likely to behave that way as well."

Even worse, being exposed to too much complaining can actually make you dumb. Research shows that exposure to 30 minutes or more of negativity--including viewing such material on TV--actually peels away neurons in the brain's hippocampus. "That's the part of your brain you need for problem solving," he says. "Basically, it turns your brain to mush."

But if you're running a company, don't you need to hear about anything that may have gone wrong? "There's a big difference between bringing your attention to something that's awry and a complaint," Blake says. "Typically, people who are complaining don't want a solution; they just want you to join in the indignity of the whole thing. You can almost hear brains clink when six people get together and start saying, 'Isn't it terrible?' This will damage your brain even if you're just passively listening. And if you try to change their behavior, you'll become the target of the complaint."

So, how do you defend yourself and your brain from all the negativity? Blake recommends the following tactics:

1. Get some distance

"My father was a chain smoker," Blake confides. "I tried to change his habit, but it's not easy to do that." Blake knew secondhand smoke could damage his own lungs as well. "My only recourse was to distance myself."

You should look at complaining the same way, he says. "The approach I've always taken with complaining is to think of it as the same as passive smoking." Your brain will thank you if you get yourself away from the complainer, if you can.

2. Ask the complainer to fix the problem

Sometimes getting distance isn't an option. If you can't easily walk away, a second strategy is to ask the complainer to fix the problem.

3. Shields up!"Try to get the person who's complaining to take responsibility for a solution," Blake says. "I typically respond to a complaint with, 'What are you going to do about it?'" Many complainers walk away huffily at that point, because he hasn't given them what they wanted, Blake reports. But some may actually try to solve the problem.

When you're trapped listening to a complaint, you can use mental techniques to block out the griping and save your neurons. Blake favors one used by the late Spanish golfer Seve Ballesteros during a match against Jack Nicklaus--a match the crowd wanted Ballesteros to lose. "He was having difficulty handling the hostility of the crowd," Blake says. "So he imagined a bell jar that no one could see descending from the sky to protect him."

Major League Baseball pitchers can sometimes be seen mouthing "Shields on!" as they stride to the mound, he says. He adds that his own imaginary defense is "more like a Harry Potter invisibility cloak."

A related strategy is to mentally retreat to your imagined favorite spot, someplace you'd go if you could wave a magic wand. "For me, it was a ribbon of beautiful white sugary sand that extended out in a horseshoe shape from a private island," Blake says. "I would take myself to my private retreat while people were ranting and raving. I could smile at them and nod in all the right places and meanwhile take myself for a walk on my private beach."

Blake first saw the picture of the island in a magazine, and the image stuck with him. Eventually, he got a chance to try it for real. "It turned out the island was for rent, and it was the same one I'd seen," he says. "So I rented it for a week. And I got to take that walk."

12 Tasks That Killer Employees Always Finish Before Noon

A recent study published in an American Psychological Association journal, Emotion, suggests that early birds are generally happier than night owls.

More than 700 respondents, ranging from ages 17 to 79, were surveyed and asked about their emotional state, health, and preferred time of day.

Self-professed "morning people" reported feeling happier and healthier than night owls. Researchers hypothesize that one of the reasons could be because society caters to a morning person's schedule.

It's certainly true that the working world does. Working "9-to-5" is more than an expression, but a standard shift for many Americans. It also stands to reason that those who like rising with the sun are also the most productive employees in the office.

Do you want to be more like them? Then take note of the tasks these high-functioning, productive, and more awake employees have completed before lunch:

1. They make a work to-do list the day before. Many swear by having a written to-do list, but not everyone agrees on when you need to compose it. According to Andrew Jensen, a business efficiency consultant with Sozo Firm in Shrewsbury, Pa., the opportune time to plan a day's tasks is the night before. "Some people like to do the to-do schedule in the morning, but then they might have already lost office time writing it out," he says. "It helps to do that to-do schedule the night before. It also will help you sleep better.

2. They get a full night's rest. Speaking of sleeping better ... lack of sleep affects your concentration level, and therefore, your productivity. Whatever your gold standard is for a "good night's rest," strive to meet it every work night. Most health experts advise getting a minimum eight hours of shut-eye each night.

3. They avoid hitting snooze. Petitioning for nine more minutes, then nine more, then another nine is a slippery slope that leads to falling back asleep and falling behind on your morning prep. Ultimately it also leads to lateness. "Anyone can be made into a morning person," Jensen says. "Anyone can make morning their most productive time. It could be that for the entire week, you set your alarm clock a little bit earlier, and you get out of bed on the first alarm. It may be a pain at first, but eventually you'll get to the point where you're getting your seven to eight hours of sleep at night, you're waking up with all your energy, and accomplishing the things around the house you need to before going to the office."

4. They exercise. Schedule your Pilates class for the a.m. instead of after work. "Exercise improves mood and energy levels," Jensen says. Not only that, but "there have been studies done on employees who've exercised before work or during the work day. Those employees have been found to have better time-management skills, and an improved mental sharpness. ... Those same studies found these workers are more patient with their peers."

5. They practice a morning ritual. Jensen also recommends instituting a morning routine aside from your exercise routine. Whether you opt to meditate, read the newspaper, or surf the Web, Jensen says "it's important to have that quiet time with just you."

6. They eat breakfast. Food provides the fuel you'll need to concentrate, and breakfast is particularly important since it recharges you after you've fasted all night. Try munching on something light and healthy in the morning, and avoid processed carbs that could zap your energy.

7. They arrive at the office on time. This one is obvious, right? Getting a full night's rest and keeping your sticky fingers off the snooze button should make No. 7 a cakewalk. If you're not a new employee, then you've already figured out the length of your average commute. Allot a safe amount of time to make it to work on schedule.

8. They check in with their boss and/or employees. We all know the cliche about the whole only being as good as the sum of its parts. In other words, if your closest work associates aren't productive, then neither are you. Good workers set priorities that align with their company's goals, and they're transparent about their progress.

9. They tackle the big projects first. You can dive right into work upon arriving in the office, since you made your to-do list the night before. And Jensen suggests starting with the hardest tasks. "Don't jump into meaningless projects when you're at your mental peak for the day," he says.

10. They avoid morning meetings. If you have any say on meeting times, schedule them in the afternoon. "You should use your prime skills during the prime time of the day. I believe that mornings are the most productive time," Jensen says, also noting that an employer who schedules morning meetings could rob his or her employees of their peak performance, and ultimately cost the company.

The exception to this, he adds, is if your meeting is the most important task of the day. "Sometimes you have to schedule a crucial meeting, or a client meeting, in which case you'd want to plan for a time when employees are at their peak."

11. They allot time for following up on messages. Discern between mindless email/voicemail checking and conducting important business. Jensen's company, Sozo Firm, advises clients that checking their inbox every couple of minutes takes time away from important tasks. Instead, set a schedule to check and respond to email in increments. Consider doing so at the top of each hour, to ensure that clients and colleagues receive prompt responses from you.

12. They take a mid-morning break. Get up and stretch your legs. Or stay seated and indulge in a little Internet surfing. According to Jensen, it's actually good to zone out on Facebook and Twitter or send a personal text message or two. "You should take 10-minute breaks occasionally," he says. "Companies that ban any kind of Facebook [use], texting, or personal calls can find it will be detrimental. Those practices increase employee satisfaction."

Just be sure not to abuse the privilege. "The best employees will respect their employer's time, and the worst-performing employees will find a way to waste time even if the company forbids personal Internet use," Jensen explains.

Read more: http://money.usnews.com/money/careers/articles/2012/08/08/12-things-killer-employees-do-before-noon#ixzz24niEXxsk

For Those Who Want to Lead, Read

by John Coleman

When David Petraeus visited the Harvard Kennedy School in 2009, one of the meetings he requestedwas with author Doris Kearns Goodwin. Petraeus, who holds a PhD in International Relations from Princeton, is a fan of Team of Rivals and wanted time to speak to the famed historian about her work. Apparently, the great general (and current CIA Director) is something of a bibliophile.

He's increasingly an outlier. Even as global literacy rates are high (84%), people are reading less and less deeply. The National Endowment for the Arts (PDF) has found that "[r]eading has declined among every group of adult Americans," and for the first time in American history, "less than half of the U.S. adult American population is reading literature." Literacy has been improving in countries like India and China, but that literacy may not translate into more or deeper reading.

This is terrible for leadership, where my experience suggests those trends are even more pronounced. Business people seem to be reading less — particularly material unrelated to business. But deep, broad reading habits are often a defining characteristic of our greatest leaders and can catalyze insight, innovation, empathy, and personal effectiveness.

Note how many business titans are or have been avid readers. According to The New York Times, Steve Jobs had an "inexhaustible interest" in William Blake; Nike founder Phil Knight so reveres his library that in it you have to take off your shoes and bow; and Harman Industries founder Sidney Harman called poets "the original systems thinkers," quoting freely from Shakespeare and Tennyson. In Passion & Purpose, David Gergen notes that Carlyle Group founder David Rubenstein reads dozens of books each week. And history is littered not only with great leaders who were avid readers and writers (remember, Winston Churchill won his Nobel prize in Literature, not Peace), but with business leaders who believed that deep, broad reading cultivated in them the knowledge, habits, and talents to improve their organizations.

The leadership benefits of reading are wide-ranging. Evidence suggests reading can improve intelligence and lead to innovation and insight. Some studies have shown, for example, that reading makes you smarter through "a larger vocabulary and more world knowledge in addition to the abstract reasoning skills." Reading — whether Wikipedia, Michael Lewis, or Aristotle — is one of the quickest ways to acquire and assimilate new information. Many business people claim that reading across fields is good for creativity. And leaders who can sample insights in other fields, such as sociology, the physical sciences, economics, or psychology, and apply them to their organizations are more likely to innovate and prosper.

Reading can also make you more effective in leading others. Reading increases verbal intelligence (PDF), making a leader a more adept and articulate communicator. Reading novels can improve empathy and understanding of social cues, allowing a leader to better work with and understand others — traits that author Anne Kreamer persuasively linked to increased organizational effectiveness, and to pay raises and promotions for the leaders who possessed these qualities. And any business person understands that heightened emotional intelligence will improve his or her leadership and management ability.

Finally, an active literary life can make you more personally effective by keeping you relaxed and improving health. For stressed executives, reading is the best way to relax, as reading for six minutes can reduce stress by 68%, and some studies suggest reading may even fend off Alzheimer's, extending the longevity of the mind.

Reading more can lead to a host of benefits for business people of all stripes, and broad, deep reading can make you a better leader. So how can you get started? Here are a few tips:

• Join a reading group. One of my friends meets bimonthly with a group of colleagues to read classics in philosophy, fiction, history, and other areas. Find a group of friends who will do the same with you.


• Vary your reading. If you're a business person who typically only reads business writing, commit to reading one book this year in three areas outside your comfort zone: a novel, a book of poetry, or a nonfiction piece in science, biography, history, or the arts.


• Apply your reading to your work. Are you struggling with a problem at work? Pick up a book on neuroscience or psychology and see if there are ways in which you can apply the lessons from those fields to your profession.


• Encourage others. After working on a project with colleagues, I'll often send them a book that I think they'll enjoy. Try it out; it might encourage discussion, cross-application of important lessons, and a proliferation of readers in your workplace.


• Read for fun. Not all reading has to be developmental. Read to relax, escape, and put your mind at ease.

Reading has many benefits, but it is underappreciated as an essential component of leadership development. So, where have you seen reading benefit your life? What suggestions would you have for others seeking to grow their leadership through reading?

Selamat Hari Raya Aidilfitri 2012

Overlooking disability insurance can be costly

CHICAGO (AP) — Long-term disability insurance is the forgotten insurance.

The importance of auto, health, homeowners and life insurance is well known. But disability coverage, which replaces lost earnings if you can't work, tends to be ignored — until you need it.

Government studies show that a 20-year-old worker has a 30 percent chance of becoming disabled before reaching full retirement age. Yet only about a third of employees in private industry have long-term disability insurance, according to the Bureau of Labor Statistics.

"It could be argued that the disability of a breadwinner is worse than the death of a breadwinner," says James Hunt, insurance actuary for the Consumer Federation of America, "because the disabled person is still soaking up money."

That's why it makes sense to purchase individual coverage if you're self-employed -- or not covered sufficiently or at all by your employer.

A look at what you need to know about disability insurance:

Q: How does disability insurance work?

A: Disability insurance protects from a loss of income resulting from an inability to work due to an accident or illness. You typically receive disability checks starting three to six months after you become unable to work.

There are three sources of this coverage: The Social Security Administration, employers and private insurers.

— Social Security Disability Insurance is the bedrock protection against disability. About 153 million workers are insured by the program through FICA taxes. But it has a very strict definition of disability and it can take two years or more to be approved for benefits.

— Many employers offer disability coverage through a group plan, which pays a specified portion of your salary.

— Private insurance coverage is most often sought out by high-income professionals such as doctors and lawyers who have made a huge investment in their earnings potential; self-employed workers, and executives looking for supplemental coverage.

Q: Do you need to buy coverage if you receive disability insurance through your employer?

A: It depends whether you could get by on the benefit checks. A typical group plan replaces just 40 percent to 60 percent of your salary, up to a maximum $5,000 a month or $60,000 a year. And if the employer pays your premiums, the checks will be taxable.

Benefits can last for either a set number of years or until retirement age. Check your plan's details closely. Company benefits have been steadily shrinking in recent years. Group policies often limit the duration of benefits to only two years if you can't perform your job duties.

If your policy looks insufficient, ask your employer whether you can pay for additional coverage. Otherwise, consider getting extra insurance from a private insurer to extend the duration or bring the coverage up to 70 percent or 80 percent of income.

Q: Why can't you count on Social Security Disability Insurance to cover your needs if you are disabled?

A: The average disability benefit is just $1,111 a month, based on payments by the Social Security Administration this month to 8.8 million beneficiaries. And you only qualify for it if you are unable to work in any capacity, not just at your chosen occupation. A list of conditions that are considered disabling is available by doing a search for "disability evaluation" at the agency's website, www.ssa.gov .

Q: What should you look for in a policy?

A: If you have a highly specialized job or can simply afford to pay the premiums, it's worth paying extra to have an "own occupation" policy. This coverage pays benefits if you are unable to perform the major duties of your own occupation. To trim some of the costs, it may be advisable to obtain "own occupation" coverage for one or two years and "any occupation" coverage after that.

The length of benefits is key, and will affect the cost of premiums significantly. Some policies pay benefits until age 65 or until your full retirement age for Social Security benefits, others for two or five years. Seek out a non-cancellable policy.

You probably also want a policy that will pay "residual" benefits, which will compensate for a decline in income if you are able to work at a new job that pays less.

Q: How much does disability insurance cost?

A: Prices vary based on age, gender, occupation, amount of coverage and health status. Check with a broker to get quotes from at least three different insurers.

For someone who does not have coverage at work, a plan with all the extras including inflation protection costs roughly 2 percent to 2.5 percent of annual salary for a man, and 3 percent to 4 percent for a woman. Women pay more because they file claims more frequently and for a longer duration than men.

If someone has coverage at work but wants earnings to boost benefits to 80 percent salary replacement, the annual cost is typically about 1 percent of the worker's salary.

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Personal Finance Writer Dave Carpenter can be reached at http://www.twitter.com/scribblerdave