Hard Dollars vs.Soft Dollars and How it Matters to You! @JayRJonesLM #retirement

Hard Dollars vs. Soft Dollars and How They Matter to You

What are hard dollars? What are soft dollars? One thing is for sure if you don’t know, you better learn. It is really quite simple, although when I first heard of hard dollars vs. soft dollar, I had absolutely no idea. We’ll start with hard dollars.

Think about it this way, if it is “hard” to earn the dollars, they are probably hard dollars. Your paycheck would be considered hard dollars. Cash and currency in your pocket literally and figuratively speaking are considered hard dollars. Not much of a detailed meaning but I think you grasp the idea.

Soft dollars are usually money and value that is created with hard dollars as in growth from an investment, life insurance death benefits that have been bought by paying your premiums in return for a large death benefit which can, by far, outweigh the amount of hard dollars used to pay the premiums.

Now, how do these two types of hard and soft dollars matter to you? I’ll answer that with a question, as I do to avoid tough questions sometimes! Seriously, how do you want to pay for your burial? Would you like to pay with hard or soft dollars? Let me ask that another way. Would you like for your loved ones to use money out of the checking account or would you prefer they use a life insurance policy that you paid $50,000 over your lifetime to receive the $500,000 death benefit in the policy? Hypothetical scenario, of course.

It goes without saying, that if I get, I know you can. So, the moral of the story, get some soft dollars. Maximize the contributions to your 401k your employers is offering, especially if they are matching the contribution. This will help maximize the soft dollars you’ll get in return. Look into a universal life policy and jam some cash into it to get back and combine with the soft dollars you’ll gain in return. 

Thanks for reading!