Eric Dostal

J.D., CFP®
Personal Finance, Retirement, Taxes
94%
Helpful
88
Answers
8
Articles
39
Followers
“Eric Dostal is an Advisor at Sontag Advisory an independent registered investment advisory firm that serves clients in over 30 states and acts as a wealth manager, investment adviser, consultant, and fiduciary.”
Firm:

Sontag Advisory

Job Title:

Advisor

Biography:

A believer in continuing professional development, Eric Dostal obtained the CERTIFIED FINANCIAL PLANNER™ Professional (CFP®) designation, and graduated with a JD from St. John’s University School of Law. Eric recognizes the challenges investors face when planning their retirement and therefore he helps clients retire when and how they would like. Eric focuses primarily on providing affluent and high net worth individuals with expert, comprehensive and impartial financial planning advice to help those individuals achieve their unique life goals.

After joining Sontag Advisory in 2013, Eric has worked extensively with clients over the past 4+ years to create and implement their unique financial plans. Eric has demonstrated a high degree of skill developing and overseeing the investment, insurance, retirement, tax and estate planning strategies of his clients.

Eric currently lives in Merrick, New York with his wife Jamie and daughter Madeline. When not in the office, you can often find him spending time with family and friends. He also recharges by sitting down with a good book and honing his culinary skills.

Education:

JD, St. John's University School of Law
B.A. - History, SUNY Geneseo

Fee Structure:

Fee only

Videos
  • Eric Dostal
All Articles
Sort By:
Most Helpful
last month
July 2017
    Investing, Personal Finance, Starting Out
May 2017
April 2017
    Debt, Real Estate, Tax Deductions / Credits
April 2017
    Estate Planning

All Answers
Sort By:
Most Helpful
    Investing, Life Insurance
Is life insurance a good investment for leaving money to your child?
90% of people found this answer helpful

You are missing the time value of money. Let’s assume you purchase the UL policy when you are 40 years old for $50,000. You have an outflow in year one of $50,000. If you were to pass away the next year, at age 41, the internal rate of return (IRR) of the policy would be 276% – a great rate of return!

However, it is highly unlikely that you will die at age 41 and the insurance company knows this. What’s more likely to happen is that you will live until you are ~93 years old. If you do, the IRR for the policy drops from 276% to 3%. All the insurance company needs to do to make money is out-earn a 3% annualized return on your dollars.

Additionally, $188,000 in today’s dollars adjusted for an annualized inflation rate of 2.1% would have the purchasing power of ~$59,000 fifty-three years from now. In essence you would be paying $50,000 today to give your kids $59,000 in inflation-adjusted dollars about fifty years from now – an IRR of 0.31%. That is the time value of money.

Instead of buying the insurance policy, let’s assume you invested the $50,000 in a moderately aggressive portfolio comprised of 60% equities and 40% bonds, earning an annualized 5% return. In the same 53 years, the initial $50,000 you contributed would have grown to ~$660,000 or $215,000 adjusted for 2.1% annual inflation. So, would you rather leave your kids $59,000 or $215,000?

The same analysis applies to the $20,000 initial outlay policy with the $1,056 annual premiums, except that it’s worse. If you were to live to age 93, the IRR of the policy, unadjusted for inflation, would be 0.83%, and the $100,000 would have the purchasing power of ~$32,000 today.

Life insurance policies should rarely, if ever, be viewed as investments. They are a way to transfer the risk of your untimely death away from your loved ones by providing a means for their support and well-being. A well-diversified portfolio will serve you much better in the search to leave behind a legacy for your children.

June 2016
    Personal Finance, Starting Out
If you had to give a young adult one piece of financial advice, what would it be?
81% of people found this answer helpful
April 2017
    Personal Finance, Choosing an Advisor, Starting Out
I just graduated college. What should be my next step?
60% of people found this answer helpful
July 2016
    Retirement, Bonds / Fixed Income, Stocks
Should I be buying bond funds in a rising interest rate environment?
60% of people found this answer helpful
August 2016
    IRAs, Taxes
How is a conversion to a Roth IRA taxed?
60% of people found this answer helpful
October 2016