How to Form a Trust That Will Provide for All the Parties You Care About

When you think about how to wisely set up your family, friends, and/or organizations for financial success in the future, whether you are living during that time or not, it can be overwhelming to know what all your options are, how you should even begin to divvy up the money you’ve set aside to pass on, or who to trust in helping you with this process.  Don’t let the fear of the unknown in this case drag you down.  That fear always lead people to one place, and that place is called inaction.

This kind of fear that leads you to inaction leaves you paralyzed, worrying, stressed, frightened, belittled, all of which will not help you in providing for your loved ones.  So, in this blog, I want to share the following:

  1. A few ways to overcome this debilitating fear and
  2. A few options you can use to protect your estate for others’ use.

Overcoming Debilitating Fear

This topic could be a book all of its own, let alone a blog.  Because of this, I do not want to minimize the importance of learning how to overcome fear by trying to cover it all here.  However, I will share a few key insights into how to start to address this monster that is fear and help you move forward to accomplish the work you wish to get done.

  1. Label your fear. Call it what it is. If you don’t know what it is your are specifically afraid of, you will not be able to overcome it.  Without this crucial step, you will doom yourself to failure before you even start.  It’s like solving for “X” in a math problem without the rest of the equation.

  2. Assess your risks.  Make a list of the pros and cons of what could happen if you listen to your fears.  Make a list of the pros and cons of what could happen if you do not listen to your fears.

  3. Act. Based on the risks you assessed in step two, make a plan of action.  Once you do so, you can rest assured that the situation will take care of itself and, therefore, there is literally no need to worry, as worrying will not help you handle the situation better.  If anything, it will actually make you less able to handle the situation moving forward due to increased Cortisol levels in your body.

Protecting One’s Estate

One great option for protecting your estate is to set up a trust.  The great parts about trusts is that you can set one up for anybody you’d like.  You can delegate your estate out numerous people or organizations (such as a charity) or just set up one if you desire.  You can label various people as beneficiaries of the trust, and also determine how they can use the funds and assets in the trust to make sure they do not use the things set aside for them impulsively or recklessly.  Furthermore, you can make your trust span multiple generations if you want to set up your family for, say, a long time.  You can also make the trust accessible during your lifetime, after your lifetime, or both.  Here are a few different types of trusts, provided by CNN Money–a leader in the financial industry and worldwide news coverage:

  • “Revocable Trusts,
  • “Irrevocable trusts,
  • “Credit shelter trusts,
  • “Generation-skipping trusts,
  • “Qualified personal residence trusts,
  • “Irrevocable life insurance trusts, [and]
  • “Qualified terminable interest property trusts.”

Something to note is that with some, if not all, trusts make all the items in the trust will officially not be yours any longer once you establish them.  So:

  1. Choose wisely that which you decide to place in them, leaving impulsivity at the door,
  2. Run all your decisions by trusted counsel and appropriate love ones before solidifying the deal, and
  3. Take time to think about all the stipulations of your trust to make sure you are absolutely sure you want to make the trust a reality.

For more wealth management tips, follow me on Twitter @EricaHill_KW!

Life Insurance: What is it and Why You Financially Need It

“Be grateful for today, because we aren’t guaranteed tomorrow.”  Though this quote can be quite saddening, this statement speaks great truth.  This is such a great piece of advice to follow, because your future death not only affects you; it affects everyone who knows you.  It’ll affect your high school classmates from your youth.  It will affect your college roommates and co-workers, your mentors and friends.  Most of all, your death will deeply impact your family.

Because of this, it’s important to financially plan for not only your future, but your family’s future.  If you were gone tomorrow, what would happen to them? Would they be able to afford living expenses? Would they have enough money to pay for your funeral, which costs, on average, around $11,000.00+?  After the week or two time frame that people usually bring meals to help them through the up front chaos that is losing a loved one, they are left to fend for themselves financially, which could compound their grief if they are not well prepared for this time.

This is where
life insurance
comes to the rescue.

As a woman who is passionate about helping people manage their wealth wisely, I feel as though it would be a disservice to you if I did not show you the difference between various types of life insurances and the benefits of purchasing life insurance even as a young adult.

In order to purchase the right life insurance for you, let’s break them down.

Different Types of Life Insurance

Term Life Insurance

This type of insurance, Farmer’s Insurance says, is usually good for, “temporary needs or if your funds are limited because it provides coverage for a specific period of time.  [It] is generally [(1)] less expensive than permanent life insurance, [(2)] often provides the greatest amount of coverage for the lowest initial cost, [and (3)] has premiums that stay level for a set amount of time, usually 10, 20, or 30 years.”

Permanent Life Insurance

Under the umbrella that is Permanent Life Insurance, there are two subtypes, which include Whole Life Insurance and Universal Life Insurance.  Farmer’s goes on to share what these two subtypes are about:

Whole life insurance… is one of the most common types of permanent life insurance. Premiums on whole life policies are guaranteed never to increase as long as the policy remains in force; policies offer guaranteed cash value accumulation, and the policy owner may borrow against the cash value of the policy.

Universal life insurance… allows you to tailor your insurance to meet your changing needs with flexible premiums and benefits with potential for building cash value. The policy owner may also borrow against the cash value of the policy.” (emphasis mine)

Benefits of Purchasing Life Insurance

According to the Insurance Information Institute, there are numerous benefits to purchasing life insurance, including that you can do the following:

  • “Replace [your] income for [your] dependents,…
  • “[Help your loved ones] pay [your] final expenses,…
  • “Create an inheritance for your heirs,…
  • “[Help your loved ones] pay federal ‘death’ taxes and state ‘death’ taxes [when you’re gone],…
  • “Make significant charitable contributions [with your remaining or left over assets, and]…
  • “Create a source of savings, [because] some types of life insurance create a cash value that, if not paid out as a death benefit, can be borrowed or withdrawn on the owner’s request.”

There are numerous reasons why you should purchase life insurance.  Sometimes, life insurance can cost a simple few dollars per month.  Sometimes it can be more.  Regardless, it can more than help you and your loved ones when planning for the future.  It can have you and your loved ones rest assured that everyone involved will be financially taken care of when you’re gone.

What drives you to purchase life insurance? Tweet me @EricaHill_KW to continue the conversation!

These 2 factors impact your credit scores. Yes, there’s more than 1 score.

When considering how to improve one’s credit score, it is important to understand what exactly a credit score is and why you need a good one.

Source: Credit Karma

Now that we know what a credit score is and why you need a good one, let’s turn our focus to the various types of credit scores there are and the multiple factors that make up each score.

There are Multiple Types of Credit Scores

Amongst the numerous types of credit scores, the most renowned scores come from TransUnion, Experian, and Equifax.  However, there are numerous others, such like EMPIRICA, NextGen, Beacon, and VantageScore.  The thought of consistently checking all of these scores can be quite overwhelming, especially because the scores might be different for each credit bureau you check.  So, here are a few reasons submitted by the editorial team at Credit Karma as to why credit scores might vary between the various credit bureaus out there:

  • “The scores are from different dates. Since your score can change at any time, it’s important to compare credit scores from the same date.
  • “The scores were calculated using different scoring models. We’ll get into this in the next section, but it’s important to know that there are many scoring models out there. When you compare scores among bureaus, make sure they are calculated using the same model. Even with the same model, your scores could vary because each bureau may store information or calculate the score a little differently.
  • “The information in your credit reports varies among credit bureaus. This actually isn’t uncommon. Some lenders report to all three credit bureaus, but others report to just two or one or none at all. The information in your credit reports may also be updated at different times at each bureau. In other words, one credit bureau may be missing an account or other information that either helps or hinders your score.”

Multiple Factors Influence a Credit Score

According to Amy Fontinelle of Investopedia, “Your credit score is roughly based on five factors, some of which are weighted more heavily than others:

  • “Types of credit in use: 10%
  • “New credit: 10%
  • “Length of credit history: 15%
  • “Amounts owed: 30%
  • “Payment history: 35%”

In order to understand how to make sure your credit score as high as it can be, it’s important to implement a handful of strategic tactics to sway credit bureaus to give you a higher score.  These tactics are rather easy and can be tracked by various apps that help you track your finances.  In order to learn how to improve your credit score, read my blog, titled, “5 Strategic Steps to Take to Substantially Raise Your Credit Score.”

5 Strategic Steps to Take to Substantially Raise Your Credit Score

As we can see in the below video, credit scores are essential to ensuring you can get loans in the future.  Without a good credit score, there is no way that banks will trust you to give you a loan of any kind.  You can tell them you’ll pay them back, just like a school student can say they are a straight-A-student, but without looking at the student’s grades, there is no substance to his/her claim.  A credit score gives banks the hard facts they need to say they can trust you with a loan.

Source: Credit Karma

Keeping a high credit score is paramount to a healthy and stable financial future.  Here are some ways you can improve that credit score, because every effort to this end counts!

Step 1

Before opening new credit card accounts, make sure to consider the below pros and cons of doing so and make sure your credit score is at a good enough place to handle opening a new line of credit.

Erica Hill Keller Williams Improve Credit Score

Source: John S Kiernan of WalletHub

Step 2

Sign up for and use about four credit cards throughout any given month.  John S Kiernan, Senior Writer & Editor and WalletHub, shares, “The average credit card user had 3.7 cards in 2014, according to Gallup, and WalletHub’s editors believe that around four cards is indeed the number that provides the most benefit without making life overly-complex.”

Step 3

Reduce spending beyond the recommended 30% of your line of credit each month by capitalizing on your credit cards’ rewards programs.  To capitalize off of your diverse credit card portfolio and further reduce the amount of spending you do on each credit card, meet with or talk to someone at the company that each credit card belongs to in order to figure out what rewards each card offers.  These rewards can change, depending on the type of purchase or time of the week, month, or year.  Keep a record of when various rewards come into play for each rewards card, and use that card when it is most financially beneficial for you.

Step 4

Get each of your credit card companies to send you an alert when you’ve almost used 30% of your line of credit each month.  Then, switch to the next credit card until you reach 30% of usage on that card, and so on and so forth.

Step 5

Pay off your credit card balance multiple times throughout a month.  One way to do this is to set a calendar reminder on your phone, tablet, laptop, or desktop to go off at the same time each week.  Oftentimes, this day of the week can be Sunday, when some people take time to prepare for the work week ahead.  For example, set a calendar event called, “Pay Credit Card Balances,” with two email reminders–one that sends you an email one day before the calendar event and one that sends you an email one hour before you scheduled yourself to pay your credit card balances.  This will keep this task on your mind each week without forcing you to remember it on your own.  Use this article to help you determine when to pay off your balances in a way that best affects your credit score.

Do you want to learn more about wealth management? Follow my blog at!

The Beginner’s Guide to Investing: Kinds of Investments

Erica Hill

There are a variety of different types of investments you can put your money towards in the world today–from alternative investments, such as gold and real estate, to stocks and bonds. Today, I am just going to get your feet wet with describing the basics of three major types of investments: stocks, bonds, and mutual funds.


Stocks, also known as shares or equity, represent your partial ownership in a company. This gives you rights to give your say on who is hired to the board of directors, for example. It also gives you the right to reap the rewards of a company earning profit and have partial ownership of all their assets. The profits that are paid out are given under the name “dividend.” So, you will earn dividends if a company is profitable. Unfortunately, however, not all companies pay out dividends, so the only way you could earn money from a stock is if it increases in value over time. This might seem like it is too good to be true, but keep in mind that one is not guaranteed any money after purchasing a share in a company. The stocks could decrease in value and you would lose money. The stocks could increase in value and you would earn money. The company could make a profit and you could earn dividends. The company could go bankrupt and you could earn nothing. Stocks are quite risky but offer the potential of great rewards.

Today, brokers have a hold of your stock certificates, or documents that verify your ownership of a share in a company, so that it can be easily traded or sold at any time. In the past, someone would have to physically hand his/her stock certificate to a broker in order to start the process or trading or selling his/her stock.

Debt-financing is when an entity takes on debt and promises to pay back exactly what they loaned plus an interest rate. An example of this is a bond. Equity-financing is when an entity gives partial ownership to numerous people so that they can use their money to operate their company. Financing is essential for businesses who are looking for finances to operate their company. By issuing stocks and bonds, companies offer an array of options for people who are looking to invest their money in their companies.


Bonds are safe investments, compared to stocks, as they guarantee a certain amount of money will be paid back to you by a certain date. These are low-risk, because the ROI (return on investment) is usually quite low. A bond is a type of security which provides a fixed-income, or agreed upon specific amount, in return. If you invest $100 into a bond, which can either be issued by governments or companies, with a coupon (interest rate) of 6%, for example, you will earn $6.00 annually over the course of, let’s say, 10 years until the bond reaches its maturity date, or when the initial amount invested is given back to the investor by the issuer (the government or company that you purchased debt from).

Mutual Funds

Mutual funds were created with the idea in mind that not all investors are created alike. A majority of investors on the market do not have the financial know-how to invest in the absolute lowest risk and highest reward entity. Because people often have little time to invest in digging through financial literature and market trends, mutual funds come in to save the day. Mutual funds are a collection of stocks and bonds, managed by financial professionals so that the investor does not need to do as much work themselves. This seems like a foolproof way to invest and earn money, but as with all investments, there are costs. If a mutual fund depreciates in value over time, there is no guaranteeing you will get that money back. There are also annual fees incurred by using this professional service to manage a portfolio of stocks and bonds for you.

Come back in a couple of weeks for the next part of my series on the basics of investing money!

The Beginner’s Guide to Investing: Understanding Your Risk Tolerance

Erica HIll

When looking to invest for the first time, it is important to understand what you want to invest, where you need to invest it, when to invest it, and why you are investing it. The first subject you want to consider when assessing your risk tolerance is what goals you have in mind for your investments. The second subject you want to consider is your risk personality to help determine the level of comfort you have with varying degrees of risk.

Creating Your Goals

An eighty year-old person looking to stabilize his/her investments versus a twenty-two year-old who is just starting his/her career will certainly have different levels of risk they are willing to take. The eighty year-old is looking to make low-risk investments that will probably earn a much lower interest rate, say of one or two percent, while the twenty-two year old is earning his/her full living from the job he/she has. The twenty-two year old may be willing to invest a large chunk of his/her savings with a higher interest rate that is more risky, because he/she does not need the principal nor the interest for a long time.

Knowing your financial position will help you to make a sound financial strategy and list of investment goals. If you are a billionaire, who makes $5 billion annually, you may choose to invest $3 million in the blink of an eye without much thought to it. This objective is vastly different than, let’s say, newlyweds who are looking to save for their first house. The billionaire might decide to invest in a risky real estate investment, while the newlyweds might decide to invest in bonds or CDs. Identifying your goals will become clearer for you once you understand your investment personality.

Assessing Your Risk Personality

One’s investment personality is defined by two specific character traits. One is simply how daring and risky are you, while the other is about how much time and effort you’re willing to invest into researching before deciding on a particular investment.

Risk is defined by the possibility of loss on your investments. The rewards you might receive are defined by the possibility of earning greater returns than you invested. If you are the kind of person who likes to live life on the edge, experience new adventures constantly, and have great confidence in your decisions and thoughts, then you might be willing to take on higher-risk investments. If you, on the contrary, are the kind of person who likes to make sure you are stable, secure, and have low worry/stress, then you may want to make an investment that is lower risk, which unfortunately has lower immediate rewards. This decision is extremely personal and can only be determined by you. Here are a handful of risk factors you should take into consideration:

  • “Market risk,…
  • “Business risk,…
  • “Political risk,…
  • “Currency risk,… [and]
  • “Concentration risk.”

If you are unsure as to how risky you are, take this risk tolerance quiz.

Are you afraid of getting your hands dirty just yet? Try this free investment simulator, provided by Investopedia, to see how you would do if you had $100,000 to invest!

Come back in a few weeks to see the next installation of “The Beginner’s Guide to Investing!”

The Beginner’s Guide to Investing: Compounding

Erica HIll

Compounding, also known as compound interest, is the process of taking what you earn from an investment and reinvesting that money back into the investment, earning you exponentially more money as time passes.

For example, if you invest $5,000 and have an interest rate of 4% each year, you will end up with $5,200 ($5,000 x 1.04) at end of year one. Instead of taking that $200 at the end of the year and using it for something else, you would reinvest that $200 with the addition of your original investment, or principal, being $5,000. So, by end of year two, you would end up with $5,408 ($5,200 x 1.04). See how this can grow exponentially? Compounding interest is a gold mine for those who invest in it.

As you can see, the interest you earned the first year was $200. The interest you earned the second year was $208. You didn’t have to do anything additional to earn that extra $8.00. By the end of the next year, you would result in $5,624.32, leaving you with an earning of $216.32. That $16.32 more than the interest you earned in year one and $8.32 more than you earned in year two.

The principal is the initial amount of money you choose to invest. Let’s say you choose to invest $10,000 now and you plan to reap the rewards 50 years from now. Each month, let’s say you choose to add $200 to the principal as you earn more money, and your annual compound interest rate is 5%. Your investment would be worth $617,109.19 at the end of 50 years!

Erica Hill

Visit for a compound interest calculator.

Now let’s say you invested the same amount of money with the same, annual compound interest rate but only invested it for forty years. You would only have $360,319.35 by the end of the term! That is $256,789.84 less!

Erica Hill

Visit for a compound interest calculator.

As you can see, the concept of compounding makes a massive difference in the amount of money you earn on an investment. In taking the first steps towards investing, it is important to not only notice the compound interest rate, but also to decide on a lengthy amount of time to allow your principal and interest to compound.

Interested in learning more about investing? Come back in a few weeks to see more of “A Beginner’s Guide to Investing.” In the meantime, follow me on Twitter for wealth management updates, news, and trends @EricaHill_KW!

The Beginner’s Guide to Investing: A Definition

Anyone who has mastered a new language knows what it’s like to reassign thoughts and ideas to match new words and sounds, to bend your brain around brand new meaning and reconfigure existing knowledge to move in patterns which may redefine or even defy previous experience.

Becoming a knowledgeable investor is a similar process, as it involves mastering the dialect of finance. The input of financial knowledge causes symbols which you thought you understood take on alternative context; to incorporate this new investing information requires rewiring what you know about monetary value (namely how it’s spent), how it’s produced, and how you can increase yours.

Investing may seem rather complex, but that complexity is largely an illusion. Financial advisors earn a fabulous living by capitalizing on the average individual’s economic ignorance. Adding a few basic and quickly mastered investing concepts to your knowledge base can be endlessly beneficial for anyone looking to boost their financial status. Information is strength, and financial information is financial strength. I believe in being as empowered as possible, so I’m building this beginner’s guide to investing for anyone craving control of their own economic state. If you want to avoid getting fleeced by financial advisors and improve your overall quality of life, this guide is for you.

What does it mean to invest?

Some people equate investing with high stakes gambling. To the cynical and uniformed, investing money might resemble finding which way the wind blows by standing on a cliff during a thunderstorm, and waving around handfuls of cash. Both of these viewpoints are a caricature of what investing actually is.

Simply put, to invest means to make money with money. Our world operates on money, and any financial endeavor requires funds to function. We acquire these funds by presenting the option to “invest,” or give money to their venture in exchange for a type of offering or mutual agreement. These offerings include stock (bite-size portions of company ownership), bonds (a kind of interest-earning IOU), real estate, or mutual funds, among other things.

The value of a stock, bond, or similar offering is contingent upon the economic strength of the venture which issued it. Since the future of all economic ventures are uncertain, placing your financial faith in any of them might seem like a shaky prospect, hence the financial market’s stigmatic reputation as no more than a glorified roulette wheel. This might be true, were it not for the fact that roulette is random, and a good investment is anything but. Making a wise investment involves analyzing market trends, determining how certain financial interests are performing, predicting how they will perform in the future, and investing in a manner which accounts for the best and worst possible performance scenarios.

Defining investing is only the beginning to a safe and profitable financial future. Check back soon for “A Beginner’s Guide to Investing: Compounding.” Do you want more financial tips, tricks, and news in the meantime? Follow me on Twitter @EricaHill_KW!

5 Fun Apps that Teach Children Wealth Management Principles

There are numerous apps that teach children how to manage money and investment portfolios. Here are five best apps I found that I believe are worthwhile for your children to play.

Green$treets: Unleash the Loot!

Green$treets: Unleash the Loot! is a game based in the city of Green$treets. Kids rescue animals, feed and play with the animals they rescue, and then give them back to their owners. Children can earn money by growing gardens or by catapulting items they find into their very own tree house. There is a monster in the game who tries to stop them from what they are doing, but kids can escape him with proper planning and strategy. Kids can buy decor for their tree house or attire for their animals. This game teaches children how to earn and spend money, escape pitfalls in the search for more money, and treat other living creatures with care.


SavingSpree shows kids, ages seven and up, how saving money every day or long term affects their ability to buy things they want or need, such as a new bike or college education. They have a certain amount of money and are able to save, spend, donate, or invest the money. It also shows them how work can earn them money and how there are certain things out of their realm of control that costs money. So, it teaches children that saving extra money just in case is a smart thing to do. They get rewarded for each smart choice they make. Their skills are developed through a game show that is run by a money-saving pig character. They are tested on their financial knowledge and rewarded with skills when they answer the questions correctly.

Kids Money

Kids Money is like a budgeting tracker, such like Mint is for adults. It helps kids keep track of the money they earn/are given and helps them to see when they will have the money to purchase things they want in real life. It allows for them to input numbers and receive information and graphics about their money. It’s fun and useful to teach older children how to save and use money and change wisely.

Motion Math: Cupcake!

Motion Math: Cupcake! is a game that allows children to own their own cupcake business and evaluate the costs and rewards of doing so. They get to create cupcakes individually and see how much each topping and ingredient costs to make the cupcake. They get to set a price for the cupcake and then either sell them out of the shop or deliver them around town. Children get to accumulate points/money by selling the cupcakes. It’s a great game to teach children that creating and selling products costs money up front but rewards them in the end. It is a great way to teach them about basic business principles, as well.

Renegade Buggies

Renegade Buggies give you a character with a shopping cart and you have to race around the streets of the town to collect as much money, gifts, and prizes as possible. Once you earn enough rewards, you make purchases at the grocery store and can purchase racing gear for your “buggy.” This is a great way to teach children that money can be fun to earn, but it is important to save in order to get the things they need to move forward.

These apps are user-friendly and provide an experience for your children to learn the basics of wealth management. They are fun and highly interactive. Some of the games are better for younger children, such as Green$treets: Unleash the Loot!, while other games are better for older children, such as Kids Money. Introduce your children to these games, and they will have a blast learning to be financially responsible!

6 Free Budgeting-Made-Easy Apps That Connect to Your Bank Accounts

Each of these budgeting apps bring a unique strategy to the table and allow you to accomplish different financial goals with their help. Some allow you to pay for a premium/professional tier service for more features, but they are free otherwise. Here is my review of each of these six powerful budgeting apps from Apple or Android.

Mint allows users to create budget categories and keep track of their spending. It connects with your bank accounts if you let it and allows you to see where you are spending your money, as well. You can re-categorize the what you spent, too. It also provides free access to your credit score. Mint comes from the people who made TurboTax and Quicken, and it puts high priority on securing your information.

Level Money
Level Money creates a digital version of looking into your wallet. It helps organize your income and expenses so that you can see what is left over for you to spend each day, week, and month. It’ll send you consistent reminders about your spending habits and tell you how much you have left in each category. This app helps you to figure out how to reduce debt and save for larger expenses.

Mvelopes is a digital version of budgeting your money in envelopes. You can pay bills from this app, see information about where you spend money and ratings, and get updates in real-time. It helps you to know which envelopes you use more often and how much you spend from each of them. It helps you to know how much money you have left before spending too much.

Personal Capital
Personal Capital is a budgeting tool, but it helps you plan for larger, significant life events, such as college and retirement. It allows you to see your net worth, work on your investment portfolio, and strategize for large, future expenses. You can come up with a retirement plan or even meet with someone in person to work on your investment strategy.

Penny has a comical kick to it. It sends you gregarious text messages with graphs and charts about your spending habits. Penny is a “she” who tells you about your income and expenses, informs you when a bill needs to be paid, and forecasts for next month. You can even cancel some of your services through this app. Penny puts fun back into finances so that it is not as stressful, while also providing powerful, organized, and simple information about your spending habits.

LearnVest allows you to categorize expenses and make goals for yourself. It gives you a financial planner, who can be accessed via email any day of the week, a financial plan, and blogs and classes about how to manage your finances better. It also has a calculator on it to determine your net worth.

Whether you choose Mint or LearnVest, Penny or Personal Capital, Mvelopes or Level Money, or some combination of the six, you are sure to be well on your way to a successful, organized, secure, and safe financial future.