The biggest problem I see with Dave right now, is he recommends that even elderly people keep all of their money in the market. If one of us did that, it would be an E&O claim waiting to happen.
The sooner everyone realizes that there is no difference between Suzie Orman, Dave Ramsey, Jim Cramer, Al Franken, and Rush Limbaugh, they happier they will be. They are entertainers at heart. They've picked an issue and will ride it as long as they can to make as much money as they can. They will all say whatever it takes to sell the next book, the next CD, keep the show on the air, and book the next speaking appearance.
Every once in a while they will be right on an issue. But to take everything one of them says at face value is asking for disappointment. They are no different than politicians, they are just more obvious in their whoring for money.
The sooner everyone realizes that there is no difference between Suzie Orman, Dave Ramsey, Jim Cramer, Al Franken, and Rush Limbaugh, they happier they will be. They are entertainers at heart. They've picked an issue and will ride it as long as they can to make as much money as they can. They will all say whatever it takes to sell the next book, the next CD, keep the show on the air, and book the next speaking appearance.
Every once in a while they will be right on an issue. But to take everything one of them says at face value is asking for disappointment. They are no different than politicians, they are just more obvious in their whoring for money.
How's that old saying go
The pot calling the kettle black.
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Originally Posted by xrac
While most is correct not all is correct. Sure the majority of people they help but some they actually hurt.
The big picture for me is Dave's 16 million dollar house in Tennessee. Dave didn't build that house by savings he built it on the back of all of his followers. That is the way I look at it.
If a man is 50 years old and follows the strategy of buying term and investing the difference will he have enough time and will the market cooperate to the point that this will work out for him. Those are the big ifs they do not address.
If a man dies at age 60 with no insurance he will leave his widow savings of only a few thousand and then what will she do. Live on social security and work at Walmart? The reason he won't have any term coverage is it gets too expensive as he gets older. Currently the average balance of 401k's in the US is $32,000.
So because dave ramsey has made a lot of money, his advice must be wrong? i guess you don't listen to warren buffet or bill gates or donald trump or the kawasaki guy.
Talk about bass-ackwards.
I cant believe people are still arguing against buy term and invest the rest. whole life is good for a very small percentage of society.
Most of the people who watch dave and suze still have credit card debt for pete's sake. you want them to buy hwole life ins. when they still have credit card deebt. gimmeabreka.
Last edited by GonnaFlyNow : 09-08-2009 at 09:41 AM.
Reason: Posts merged
i cant believe people are still arguing against buy term and invest the rest. whole life is good for a very small percentage of society.
Most of the people who watch dave and suze still have credit card debt for pete's sake. you want them to buy hwole life ins. when they still have credit card deebt. gimmeabreka.
So what you are saying is, Dave and Suze's advice really don't work? If the majority of the people who follow them still have massive debt, then it must not be working.
I think Dave (based on the audience of heavily indebted people) is probably doing right by saying to buy term and invest the difference. I don't necessarily think he should say cash value life insurance is ALWAYS a bad idea. Also, most of the guaranteed UL products now are basically set up as a "permanent term" with no cash value. I wonder how he feels about those policies?
Besides the above mentioned (in my last post), one other thing I've noted is that he's really not up to date on a lot of issues I feel like he should be up to date on. It's almost like he's too busy promoting to research current information.
Common sense. You can't save at 4% or so while you're being charged at 19%. Makes zero sense. Anything you put into perm should have gone to pay down the high interest credit cards.
------------------------------------ Health Insurance Agents: Training, Support, Discounts, E&O for $440 www.ihiaa.com
i cant believe people are still arguing against buy term and invest the rest. whole life is good for a very small percentage of society.
Most of the people who watch dave and suze still have credit card debt for pete's sake. you want them to buy hwole life ins. when they still have credit card deebt. gimmeabreka.
1. You think like a salesperson instead of a problem solver. I use insurance products as tools to help people solve problems, not to sell them a policy.
2. Whole life is good for everyone. The question is - in what size? A small policy for $25,000 with plenty of term on top of it is a good enough taste of what whole life can do.
3. Until you understand how whole life can benefit you while you're alive, you won't ever sell it and offer it as a possible solution to problems your clients may have.
For healthagent's comment about paying 19% while trying to save at 4%... MATHEMATICALLY, you are correct. However, when some people have absolutely ZERO savings, it makes sense for them to put money away so they have some. But that money goes into a BANK, not whole life or any other permanent insurance until they have a savings cushion. It's amazing how much better you feel about life when you have some financial reserves - even if you paid more interest over time to get those reserves.
Suzy and Dave are clueless when it comes to investing. It's the same old same old read Morningstar, pick good funds etc etc. If they got a little fancy they mumbled something about modern portfolio theory (MPT) like Rick Edelman.
This did not work very well in 2008 and it blew up people's retirement plans. This is not a commercial for EIA's but they sure worked better than the market, 99% of mutual funds, tactical asset allocation, managed money, etc.
Common sense. You can't save at 4% or so while you're being charged at 19%. Makes zero sense. Anything you put into perm should have gone to pay down the high interest credit cards.
Thank you healthagent for stating my point in better words than i can.
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Originally Posted by VolAgent
So what you are saying is, Dave and Suze's advice really don't work? If the majority of the people who follow them still have massive debt, then it must not be working.
thats not what i'm saying volagent. what i'm saying is that most people have credit card debt and therefore should not purchase wl or ul.
People who do follow suze and dave's advice get out of debt.
The more people who are out of debt the bigger the market is for you to sell ul and wl to. so you should be encouragiing dave adn suze. they are craeting prospects for you.
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Originally Posted by DHK
1. You think like a salesperson instead of a problem solver. I use insurance products as tools to help people solve problems, not to sell them a policy.
2. Whole life is good for everyone. The question is - in what size? A small policy for $25,000 with plenty of term on top of it is a good enough taste of what whole life can do.
3. Until you understand how whole life can benefit you while you're alive, you won't ever sell it and offer it as a possible solution to problems your clients may have.
For healthagent's comment about paying 19% while trying to save at 4%... MATHEMATICALLY, you are correct. However, when some people have absolutely ZERO savings, it makes sense for them to put money away so they have some. But that money goes into a BANK, not whole life or any other permanent insurance until they have a savings cushion. It's amazing how much better you feel about life when you have some financial reserves - even if you paid more interest over time to get those reserves.
Whole life can benefit you while you're alive?
That's a good one.
Run the numbers.
Take the same money and put it any conservative investment and they'd be a lot better off.
Last edited by GonnaFlyNow : 09-08-2009 at 11:57 AM.
Reason: Posts merged
Nope. You're wrong, but I don't think I can properly explain it in writing, but I'll try.
With whole life, as long as you can pay the premiums over time, you have a guaranteed death benefit.
What can you do if you have a contractually guaranteed amount of money that will be paid to your estate?
1. you can spend down your 401k sooner and enjoy greater retirement income
2. you can take out a reverse mortgage and have tax-free income knowing that you have enough life insurance to repay the reverse mortgage
3. you can sell low-basis stock to a charitable remainder trust to enjoy the income from the stock and avoid the capital gains treatment (and have the life insurance replace the value back to your estate).
4. you can take single-life payouts on your pension versus joint-life because your life insurance can replace the value of your pension
5. even if all those values are used up sooner, you still have access to growing cash values to take for income via loans
6. During economic recessions and extreme portfolio volatility, you have other resources you can tap into for your retirement so you can leave your investments alone and ride it out.
So, having enough of a WHOLE LIFE DEATH BENEFIT can create a host of living benefits.
How do you pay for it? Maximum financial efficiency within one's financial affairs.
Why whole life? Because it has better benefits and less "if's" than universal life or any other product where you can build such a financial foundation. Otherwise, you're building this kind of foundation on sand... and it quickly turns into quicksand.
1. you can spend down your 401k sooner and enjoy greater retirement income
2. you can take out a reverse mortgage and have tax-free income knowing that you have enough life insurance to repay the reverse mortgage
3. you can sell low-basis stock to a charitable remainder trust to enjoy the income from the stock and avoid the capital gains treatment (and have the life insurance replace the value back to your estate).
4. you can take single-life payouts on your pension versus joint-life because your life insurance can replace the value of your pension
5. even if all those values are used up sooner, you still have access to growing cash values to take for income via loans
6. During economic recessions and extreme portfolio volatility, you have other resources you can tap into for your retirement so you can leave your investments alone and ride it out.
DHk
I'm just curious. which of those six things could not be acoomplished by having the cash in the bank (instead of in your expenses ridden wl policy?)
most of what suze and dave say is correct.
You don't get it because you see your products through the eyes of a salesperson. they c the big picture. you dont'
Ask someone who's been withdrawing 10% off their account that DR has said should return 12% how it's going.
Ask them why Suze Orman doesn't recommend whole life insurance to her callers yet owns a ton of it. Better yet, ask her why she insists on her callers invest in the stock market while she has roughly 1% of her wealth there.
Ask a DR fan if they knew he was on the verge of bankruptcy AGAIN due to bad real estate deals. Does getting financial advice from a TWICE FAILED real estate mogul concern them at all?
I could go on and on, but I've got a life to live and there's not enough hours left to point out where SO and DR have been wrong.
DHk
I'm just curious. which of those six things could not be acoomplished by having the cash in the bank (instead of in your expenses ridden wl policy?)
Almost none.
Why?
Life insurance is purchased for PENNIES on the dollar.
Cash in the bank is DOLLAR FOR DOLLAR.
To make these strategies work, you need to leverage a permanent death benefit.
Let's look at the alternative: In retirement, you cannot spend all your money because you need to leave it for your surviving spouse, use it in case of long-term illness and you need a constant income stream.
So, if you have $1 million dollars in cash, and you can reasonably get 7%, you can only spend the interest or $70,000/year.
If that 7% is constant, you can only spend $70,000 per year. It won't grow. (Yes, you can spend less, but I'm more of a proponent to enjoy your wealth while you're here and while you're healthy.)
Now, if you wanted to take a cruise around the world? You can't do it without tapping into your principal. You don't tap into your principal because you need these funds to go to your surviving spouse. Get it?
But if you have a permanent insurance benefit, you can use your other resources more efficiently.
Cash in the bank helps to offset market volatility - but you can't access the equity in your house unless it was your absolute last resort. In my scenario, it becomes a strategic option for income, NOT a last resort.
So, with life insurance, you can have up to 30% or more in retirement income and have it increase over your retirement years... or you can NOT have life insurance and be stuck at a level income.
Dhk,
How's that kool aid tasting.
You need to crunch those numbers again.
What's better $1.5 million in the bank without whole life ins. or 1.0 million in the bank with your wl insurance.
What the h*ll is a LEAP.
I think it takes big leap of faiith to believe the scenarios you're coming up with here.
Never mind.
I googled leap.
A friend of mind is now a LEAP agent. LEAP stands for "Lifetime Economic Acceleration Process" (http://www.leapsystems.com). He tried to explain how it works, but it is still pretty unclear to me. The basic idea (I believe) is to use whole life insurance to 1) protect yourself; 2) save for the future; and 3) increase your cash flow (by paying as little as possible on your mortgage or borrowing equity from your home and from the cash life value of the insurance).
I'm sure this would work for some people (everything works for some people), but what concerns me is the almost "religious" faith he seems to have in this system. I'm also concerned that he may not understand that this system is not appropriate for many people. It encourages people to stop contributing to other forms of retirement savings, 401(k)s, IRA's, etc. so they can divert the $$ into the premiums for the expensive whole life insurance.
dhk,
How's that kool aid tasting.
You need to crunch those numbers again.
What's better $1.5 million in the bank without whole life ins. or 1.0 million in the bank with your wl insurance.
What the h*ll is a LEAP.
I think it takes big leap of faiith to believe the scenarios you're coming up with here.
If I can spend the $1mm like it's $2mm or $3mm, I'll take that over $1.5mm without the permanent DB.
LEAP = Lifetime Economic Accleration Process. You may not like it because it goes against some of SO's and DR's teachings, but it will be good education for yourself when you go out and fight the good fight.
Last edited by Death Cab For Tootie : 09-08-2009 at 02:11 PM.
Reason: Defined LEAP
Life insurance is purchased for PENNIES on the dollar.
Cash in the bank is DOLLAR FOR DOLLAR.
Dhk,
If you start with a false premise all conclusions derived from that premise are false.
A life insurance death benefit is purchased for 'pennies on the dollar' in the first few years.
But when you add up all the premiums to pay for the expense ridden wl policy over one's lifetime and the opportunity cost of those dollars, wl is NOT leveraging anything.
Life insurance makes a lousy investment vehicle.
I can't believe that peopel still believe this stuff.
dhk,
If you start with a false premise all conclusions derived from that premise are false.
A life insurance death benefit is purchased for 'pennies on the dollar' in the first few years.
But when you add up all the premiums to pay for the expense ridden wl policy over one's lifetime and the opportunity cost of those dollars, wl is NOT leveraging anything.
Life insurance makes a lousy investment vehicle.
I can't believe that peopel still believe this stuff.
What century are we living in here?
This is why one uses the dollars that normally would go to their savings account to purchase WL. The opportunity costs over a lifetime of money sitting in a CD or savings are far greater than the same dollars purchasing WL insurance. Plus you get additional benefits like a permanent death benefit, creditor protection, and tax benefits (among others).
And for the record, any life insurance product is purchased for pennies on the dollar. Over time, however, this leverage is reduced to the point where, at age 121, there is no leverage. At that point, the guaranteed column equals the death benefit.
While we're on the topic, what is the lost opportunity cost of paying for a 30 year term policy that doesn't pay out (either due to living past the term or stopping payment during the term)? It becomes all lost opportunity cost! At least with WL, there are non-forfeiture options if you decide to stop paying on the policy.
Last edited by Death Cab For Tootie : 09-08-2009 at 02:26 PM.
Reason: more LOC's
You know what? I know we've had our differences GFN. I've tried to be civil throughout this particular conversation. I've even tried to be helpful and explained how you can find out more information on LEAP and given you more info than I would normally. But there's no reason for childish taunts and accusations. For the record, I do show my clients their lost opportunity costs of utilizing WL vs. leaving money in savings. It goes to show EVERY SINGLE TIME that there are less LOC's in my strategy than what they currently do.
If you want to stay willfully ignorant, that's your choice. But if you want to contend that what I say is hocus-pocus and I'm lying, well, you better be able to back it up. Otherwise, prepare to be professionally bitch-slapped with this message board as witness.
Re: Suze Orman
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