While I'm sure many of us would like to have our own tv or radio show, do you really think James Cramer and The Suze give good financial advice? Or are you referring to hacks like Greenspan?
Tell us please, the nationally recognized financial advisor whose kool aid you drink? Is there anyone you follow and parrot? To whom do you confer god-like status? Chances are there is no one you agree with 100%. National Status has as much importance as Charmin vs Ultra Soft.
Hmmmm... so many to choose from! I'll go with Dave Ramsey!
Let me ask two questions. How old are you, and what, for the most part, what is the age-group (demographics) of your client base?
Al
Ok, I'll bite, not sure why this matters, but here goes.......
I am 50 and my clients range in age, across the board. I guess if I had to average their age, it would trend in the 40's. I do a lot of work with closely held corp's and smaller business owners.
I hold a securities license, NAHU Golden Eage, LUTCF, when we had the designation wars I was a Registered Financial Planner (fee based) and a Certified Investment Specialist. Graduate of Perdue University Insurance Mangement Institute. Past DEA agent and FBI negotiator........
I have been trained under Jack/Garry Kinder, LEAP, Larry Wilson and countless others...... started my career in life insurance with Life of Virginia (I was one of the original seller's of UL when it was introduced).
I built the first Medicaid HMO in Georgia, and have built and run 3 HMO's in Georgia, built the largest PPO in Georgia and have had as clients the following: The State of Georgia, Vanderbilt University, Augusta National (opps, wasn't supposed to say that one)..... JC Penny, ConAgra, FEHBP, 12 Hospitals in Georgia and numerous small group clients....
I am debt-free and have a wildly successful mutual fund portfolio and individual stock accounts.... along with numerous savings/money market and checking accounts.
BTW: I use Crest toothpaste in case that has a bearing on this conversation!
So..... where does that information get you? $2.95 and a venti-coffee at Starbucks?
...
Buy term, invest the diff. lol. Do you really expect her to put the difference into a mutual fund? Great stock market. Buy term and invest the difference in classic car? I expect that the likely outcome is the cost savings will go to living expense.
A nice thing about a wl policy is the forced savings plan. ...
Padthaiforlunch,
Thanks for your advices, I'm listening to them.
But... may I say, you underestimate me, just a little bit? If I would be non-thinking, passive type, I probably would not be here, having honor and pleasure to talk to you, all respected professionals, right? I would just go with a flow and do whatever my agent told me to do, without questioning it and without trying to analyze it myself and come up with my own decision.
Yes, as I said I did not max out my 401 k, as I should do, but there is a reason for that too. I am investing certain percent in it, but in addition to that, this year I opened small Roth Ira. Why? Because the way our economy goes, I think in long perspective taxes will increase. In 401k math your future taxes is a variable, X, you don't know today. So it would be nice to have second retirement source, from with you can get your money tax-free. So I think I'm enough responsible and disciplined.
Here is what I'm trying to accomplish... Having only one, limited source - my paycheck - I am trying to build something, that combines, in balance, effectiveness (read: numbers... there is safety in numbers, remember? ) and safety.
Therefore, because I still in the very beginning of building myself financially, I simply cannot afford to spend significant money on something that is not effective, especially via "forced" saving.
I have little, I'm trying to save everywhere, including my daily expences. Therefore I'm trying to be thinking, effective and cover my basics first. And from your discussion I get this feeling thath WL does not belong to "basics", it's for "big numbers" I don't have.
Thank you all, thak you so much. I didn't expect so many thoughtful responces. It helps a lot.
Padthaiforlunch,
Thanks for your advices, I'm listening to them.
But... may I say, you underestimate me, just a little bit? If I would be non-thinking, passive type, I probably would not be here, having honor and pleasure to talk to you, all respected professionals, right? I would just go with a flow and do whatever my agent told me to do, without questioning it and without trying to analyze it myself and come up with my own decision.
Yes, as I said I did not max out my 401 k, as I should do, but there is a reason for that too. I am investing certain percent in it, but in addition to that, this year I opened small Roth Ira. Why? Because the way our economy goes, I think in long perspective taxes will increase. In 401k math your future taxes is a variable, X, you don't know today. So it would be nice to have second retirement source, from with you can get your money tax-free. So I think I'm enough responsible and disciplined.
Here is what I'm trying to accomplish... Having only one, limited source - my paycheck - I am trying to build something, that combines, in balance, effectiveness (read: numbers... there is safety in numbers, remember? ) and safety.
Therefore, because I still in the very beginning of building myself financially, I simply cannot afford to spend significant money on something that is not effective, especially via "forced" saving.
I have little, I'm trying to save everywhere, including my daily expences. Therefore I'm trying to be thinking, effective and cover my basics first. And from your discussion I get this feeling thath WL does not belong to "basics", it's for "big numbers" I don't have.
Thank you all, thak you so much. I didn't expect so many thoughtful responces. It helps a lot.
Good for you, Carol. You, like all single mothers, are heroes to me. You do so much with so little and often and go unappreciated for it.
There are some good sites online to give you tips on cutting expenses and and maximizing your daily purchases. No doubt you have already gotten quite good at that.
Protection is important but it must fit our budget. Most quality term life insurance (stay away from the majors on term, they have very uncompetitive products) has conversion options, so you can always, at a later date, change your position with the term and convert some or all of it to permanent cash value life insurance.
For house savings you should always take a bullet on return and choose stable, lower interest vehicles to store your dollars. Bank CDs, Money Market Mutual Funds and so on will keep your money safe.
Didn't mean to underestimate you. If you buy term and save the difference, you are the outside the norm. Most will buy and not save.
I think Dave's savings ideas are pretty sound. As for your 401(k), consider it maxed when you hit the max contrib. rate by your employer. For your IRA, try to keep your fees down. Use a company like Ameritrade, who won't charge you an annual fee to maintain it. Just make sure that any cash you have in the plan is in a money market account earning interest and not just held in a cash reserve earning 1.5% a year.
Wow NHS - with those creds, arguing with most of these life agents on the board is like a Downs Syndrome kid arguing physics with Stephen Hawking
That's pretty funny HealthAgent.... actually, I'm a member of YOUR association and have learned quit a bit from you. I left the gig as a Consultant working with large clients to take advantage of the individual market and work for.... well.... for me!
I've come to learn that I certainly don't know everything.... far from it... and this forum and organizations like yours are a great pool of information regardless of past experiences/skills.
I appreciate the spirit of "open" architecture that this forum promotes and the "heated" discussions that it often brings.... I have always believed that you should KNOW WHY you believe what you do, and be able to defend it.
Buy enough term to cover your childrens education. Run...do not walk...from the agent that tried to sell you that WL policy. Do not by a term policy from him. He does not deserve any of your hard earned money. If you have any other business with him, i.e. home, auto, etc...shop it. He is not your friend. There are plenty of places to find quotes on cheap term, if you need assitance I'm sure newhealthstrategies will shoot you in the right direction, from the looks of his credentials he's forgotten more about life insurnance that most agents will ever care to learn.
You don't need to sit down with a fee based FP for this decision. If I were you I'd have an application in for my coverage by end of business tomorrow. If you find something later that you think would be of greater benefit/value you can just replace it.
To any of the yo-yo's that recommended WL for Carol:
You should be ashamed of yourselves. It is honestly hard to believe that in 2008 ANYONE let alone more than one of you would recommend WL to a single mom aged 44 with a high schooler and a college student who's dreaming of buying a home. I don't know if you thought it would be funny to argue the points of term vs. WL or what but it wasn't funny at all. I'm really glad more consumers don't come to this site because I know I for one couldn't watch this type of crap very often.
Carol, if you want I can get you a good quote for term life and you will at least know the costs and all. If you are not in CA I can't sell it to you but you can probably find an agent on this board to write it (or I can find one), won't cost you a cent.
Win, I have to agree for two reasons, 1. it was an inappopriate proposal and 2., the majors offer crappy term products. When I was with Northwestern Mutual they only had term to age 70....WTF? And it was only convertible like in the first five years. Junk!
Majors sell whole life, term houses sell term.
Last edited by Dave020 : 05-12-2008 at 12:13 AM.
Reason: addition
New health so what's the story? You rattled off this impressive list of accomplishments and???? did you "really" decide the individual market was where you wanted to be?
Every product out there has a purpose and usefulness for someone. Again, many of you "know" whole life, yet constantly compare it to something else. Or are you saying the Bond Market is a useless thing? Or mortgages are a useless thing? (please don't be stupid and fire up with bad mortgages at this point as they aren't the market anymore than Mega is the healthinsurance market, are they?)
This really is more of a shouting contest than an actual conversation about types of coverages and how they work. Do you honestly feel that if you shout louder, you're right?
Good luck Carol, you can Pm me if you'd like but I don't really think anybody here actually helped you that much. We don't know enough about you and what you actually "want" to have happen. I'm not saying the agent who suggested the WL was right, but I am saying be careful who you listen to as it's the same story I've heard for two decades and I've yet to meet too many actual "I bought term and invested the difference" folk.
Instead what I am finding is people in their 60's seeking to purchase 500k for as long as they can get it at pretty astronomical prices, even from the cheap term companies.
Your life is not an absolute, you didn't plan on being a single mom, did you? Find someone to work through what you want BEFORE they tell you what product you should have... Just about everybody here is selling a product without ANY concern if they are really right or if it's the right fit for you...
Next time you go to the doctor, see if he has a prescription written ahead of time for you BEFORE he asks any questions?
I'm sorry, I do question so many of you experts here as you have fired from the knee jerk rather than actually having a working knowledge of all products. Comparing WL with the S&P tells alot about your actual knowledge...tell me have any of you ever looked to see where an insurance company invests?
The last companies to do what you guys are comparing with was executive life and kentucky central.
New health so what's the story? You rattled off this impressive list of accomplishments and???? did you "really" decide the individual market was where you wanted to be?
Every product out there has a purpose and usefulness for someone. Again, many of you "know" whole life, yet constantly compare it to something else. Or are you saying the Bond Market is a useless thing? Or mortgages are a useless thing? (please don't be stupid and fire up with bad mortgages at this point as they aren't the market anymore than Mega is the healthinsurance market, are they?)
This really is more of a shouting contest than an actual conversation about types of coverages and how they work. Do you honestly feel that if you shout louder, you're right?
Good luck Carol, you can Pm me if you'd like but I don't really think anybody here actually helped you that much. We don't know enough about you and what you actually "want" to have happen. I'm not saying the agent who suggested the WL was right, but I am saying be careful who you listen to as it's the same story I've heard for two decades and I've yet to meet too many actual "I bought term and invested the difference" folk.
Instead what I am finding is people in their 60's seeking to purchase 500k for as long as they can get it at pretty astronomical prices, even from the cheap term companies.
Your life is not an absolute, you didn't plan on being a single mom, did you? Find someone to work through what you want BEFORE they tell you what product you should have... Just about everybody here is selling a product without ANY concern if they are really right or if it's the right fit for you...
Next time you go to the doctor, see if he has a prescription written ahead of time for you BEFORE he asks any questions?
I'm sorry, I do question so many of you experts here as you have fired from the knee jerk rather than actually having a working knowledge of all products. Comparing WL with the S&P tells alot about your actual knowledge...tell me have any of you ever looked to see where an insurance company invests?
The last companies to do what you guys are comparing with was executive life and kentucky central.
Like there is some big mystery here... Single mother of two, one HS and one college, wants to buy a home (so that would mean she is currently renting), and not dripping with discretionary income.
That is all that one needs to know in order to render an opinion, and that is what we are all doing here. It is not exactly deemed "take it to the bank financial advice" on one of these forums. But any moron would know that this person should not be loading up on WL insurance. It couldn't be any clearer.
You make it out as if this is some deep dark calculation that could only be solved by using Chinese Arithmetic. You'll have to find someone else to swallow that one; this answer is pretty darn clear. Fill the ins need completely and the only way to do that with one in her shoes is Term, and lots of it... Probably even laddered policies to account for the age difference and financial demand once the first child grads from college. So that might be an ART (kept for the remainder of college of first child) and a 10 yr term which works for the educ need and expenses of the 2nd child. It isn't a lot more complicated than that for this gal now, except that she needs liquid accumlation in the short term, which is not a function of insurance.
Yeah, sure her intermediary goals could meld into a broarder base of recommendations but she doesn't have the available funds to fullfill a program like that today, based her admissions.
What she really needs more than anything is more income, or a winning lottery ticket. How's that for financial planning. Sadly, that is the best hope for lots of people. (That is not to diminish the job that this single mother is doing, which I think is fantastic, raising two kids and educating them along the way. Congrats Mom, you DO get a Gold Star and I hope your kids show the appreciation you deserve for placing them first and foremost in the equation.
That's pretty funny HealthAgent.... actually, I'm a member of YOUR association and have learned quit a bit from you. I left the gig as a Consultant working with large clients to take advantage of the individual market and work for.... well.... for me!
I've come to learn that I certainly don't know everything.... far from it... and this forum and organizations like yours are a great pool of information regardless of past experiences/skills.
I appreciate the spirit of "open" architecture that this forum promotes and the "heated" discussions that it often brings.... I have always believed that you should KNOW WHY you believe what you do, and be able to defend it.
Thanks for the compliment
Fantantic! Well...now I know who to hit up for life advice from association members.
"It is not exactly deemed "take it to the bank financial advice" on one of these forums"
Bingo.
I guess maybe rather than imply some mystical behind the curtain act.. The first question to Carol should be "what would you like your insurance to do for you and how long do you feel you'll need it?"
I have not said anything about she should have A over B. IN fact, if you go back to my post you should note several times where I mention there are more than "two choices", because there are more than two. Has she been made aware of that?
On a side note if permanent life is such a bad choice, could one of you experts explain the need for the creation of the MEC? If wl was such crap, why did the IRS expend the time and energy and money to create this tax law? Why would they need to put this restriction in place for a bad investment? I mean is that the role of the IRS?
If you've been around a while you'll know it's not what you earn, it's what you get to keep. I own different investments qualified and non qualified, real estate and whole life. Whole life is the only one I don't really worry about. It's not an S&P fund or tech stock. It's simply a AAA bond fund that earns a conservative rate of return and doesn't go "backwards". It's a low risk investment/protection that allows me to invest more aggressively in other areas. It's part of the big picture.
Now I don't know if it is or isn't a solution for Carol as I don't know Carol yet. I may understand her situation, but I need to know more about her and more importantly her understanding of risk to start whipping out "the solution" (as if they're were only one anyway guys... c'mon)
Re: Real price of WL insurance?
I expect that the likely outcome is the cost savings will go to living expense. 
) and safety. 
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