87 replies to this topic

[Cisc-O's]

Clever loophole. 

Its not a loophole.  The whole purpose of the concept is so your neighbor can not put a legal contract on your head and make money when you meet your demise.  Third Party payer is people helping out the people that have the interest not themselves.  

[Matt_P]

Its not a loophole.  The whole purpose of the concept is so your neighbor can not put a legal contract on your head and make money when you meet your demise.  Third Party payer is people helping out the people that have the interest not themselves.  

 

You're right. I should have just said clever.

[mweb08]

Thanks again guys for all the info.

[RShack]

So I looked at it a little deeper Weber. You can open an IRA up for a child but if they have no income it falls under you. Depending how old you are, you can put a max amount of 5500 dollars if you are under 50, over is 6500 a year. It will just be included under your IRA totals meaning you could put 5400 dollars in your personal one if need be.

One option I left off the table and completely neglected is a whole life plan on a child that is three years old would only cost 10-11 dollars a month. It grows tax free and will do exactly what you want it to do. Some people will look at that as morbid but it is not the case and it has very good benefits. You will have the premium every month though instead of just putting a lump 100 when you need to.

I did this for my daughters and forgot how cheap the premiums were.

 

Are there any whole life options where you get to pick where the money gets parked and thus can influence the growth?  Or is keeping that to themselves how the insurance company makes money on it?

[Cisc-O's]

Are there any whole life options where you get to pick where the money gets parked and thus can influence the growth? Or is keeping that to themselves how the insurance company makes money on it?

No the whole concept is the insurance company gives you a floor interest rate that is usually 10-30 times higher then bank savings rates .01% and you won't lose your money unless the ins. company goes out of business. Then it gets into fine detail who gets their money back first or at all. If you were able to manipulate the money in a whole life plan the insurance co. would not guarantee you an interest rate return on investment.

[You Play to Win the Game]

It is a loophole by the insurance companies - as that was never the original intention of insurance.

 

However, with the way it's structured, I too would highly recommend whole life.

 

Not for this purpose, but there's also return of premium term life, which presents a great conservative savings vehicle as well.

[RShack]

OK, help me out here... I have not paid attention to what whole life offers since I first looked into insurance years and years ago... back then, the general opinion was the whole life is pretty much a rip... that a person shopping for insurance would do better by buying term life and investing the rest in things that are better investments... that the only persons for whom term life would make sense are very, very conservative folks who don't have a priority on max return, i.e., the kind of person who would always buy bonds and never touch the stock market...

 

Evidently, this has changed... when and how has it changed?   Do you know?

[Cisc-O's]

OK, help me out here... I have not paid attention to what whole life offers since I first looked into insurance years and years ago... back then, the general opinion was the whole life is pretty much a rip... that a person shopping for insurance would do better by buying term life and investing the rest in things that are better investments... that the only persons for whom term life would make sense are very, very conservative folks who don't have a priority on max return, i.e., the kind of person who would always buy bonds and never touch the stock market...

 

Evidently, this has changed... when and how has it changed?   Do you know?

People sometimes buy stocks for dividends.  At the end of the year some pay 3-9%.  The stock market has not had a correction since 2008.  Its coming, it doesn't matter who is in office and what great plans he has all cycles come to an end.  Whole life gives you the opportunity to invest and make money on your money with a floor in case the market collapses. They have grown more popular due to the fact interest rates are so low.  Banks 10 years ago had 3%-8% savings/CD's.  Those days are gone but you could look at whole life then as a waste because you could get the same interest rates from a CD with less commitment and more control.  Think of this too, you can supplement your 401k with whole to manipulate how much money you are making after retirement.  If you have had  a whole life plan since your 20's-30's or single digit ages the premium you put in is not taxable when you take it out.  So in retirement you will be in a lower tax bracket because you are using post tax dollars to supplement your 401k and you may not have to withdrawal as much from your taxable assets. Furthermore the death benefit is not subject to federal taxes.

 

The overall rate of return on the cash values inside traditional whole life contracts has not always been competitive in a before-tax comparison with alternative investments. However, when safety of principal, contractually guaranteed liquidity, and the cost of term insurance if purchased outside the policy are factored into the analysis, whole life often compares favorably to alternative types of policies as well as nonlife insurance investments on an after tax basis.

[BSLMikeLowe]

So looks like this whole Brexit stuff has the markets tanking right now, as some predicted. I'm thinking it's just another one of those politically-induced panics, and that long-term investors should block out the noise. But are there any stocks/funds that now have major fundamental issues as a result of Brexit, or the specter of a whole EU breakup?

[Cisc-O's]

So looks like this whole Brexit stuff has the markets tanking right now, as some predicted. I'm thinking it's just another one of those politically-induced panics, and that long-term investors should block out the noise. But are there any stocks/funds that now have major fundamental issues as a result of Brexit, or the specter of a whole EU breakup?

I would be weary of any international funds until they hit their low.  The best time to invest is when things are tanking keep in mind.  I would wait because I think this will only be the start of it.  Plus being in a election year the stock market never does well.  It stays stagnant this along with the political pressure don't gamble on short term gains right now.  

 

Sorry I can't get into any specifics but others who are not licensed may 

[Matt_P]

I would be weary of any international funds until they hit their low.  The best time to invest is when things are tanking keep in mind.  I would wait because I think this will only be the start of it.  Plus being in a election year the stock market never does well.  It stays stagnant this along with the political pressure don't gamble on short term gains right now.  

 

Sorry I can't get into any specifics but others who are not licensed may 

 

Since the only reason why I'm on this board is to give Cisc-Os a hard time, I'd note the following.

 

The high on June 9th: 18005

The low on June 16th: 17471

 

The high on June 23nd: 18003

The low on June 27th: 17063

Today's close: 17409

 

Look, an thousand point swing isn't fun. But realistically, the Dow had a 530 point swing earlier this month and nobody noticed. And the Dow has made up 340 points from yesterday's low. You probably won't remember this in a week.

[Mackus]

Been thinking about moving a bunch of money that's stupidly been sitting in a low interest savings account into some market-wide mutual funds in an attempt to buy relatively low due to the current little blip. 

[Cisc-O's]

Mr. Dowding cautioned against reading too much into Tuesday’s bounce in sterling, though, warning that the pound could fall as low as $1.20 against the dollar.

“You’ve got an economic crisis, a constitutional crisis, a political crisis. The outlook for the pound looks depressingly bleak,” he said.

http://www.wsj.com/a...rout-1467099488

[RShack]

^^^^^

 

If it hits a buck and a quarter, I'm going to England whether I can afford it or not...

[BSLMikeLowe]

I haven't checked, how is the Euro doing vs the $? I leave exactly 2 weeks from today for my Europe vacation.

[RShack]

I haven't checked, how is the Euro doing vs the $? I leave exactly 2 weeks from today for my Europe vacation.

 

$1.11

[Matt_P]

Been thinking about moving a bunch of money that's stupidly been sitting in a low interest savings account into some market-wide mutual funds in an attempt to buy relatively low due to the current little blip. 

 

So, the market is at roughly 17,800 today. The high over the past 52 weeks has been 18,200. That's about a 2% difference. Not much of a discount.

[RShack]

Been thinking about moving a bunch of money that's stupidly been sitting in a low interest savings account into some market-wide mutual funds in an attempt to buy relatively low due to the current little blip. 

 

Agree that it's dumb to have it just parked for ~zero interest... but how much to move and when?  

 

Answer:  all of it 3 days ago  

 

If you don't wanna bet, then one idea is to just move a fixed $X into something else each month like clockwork... that way, the normal ups and downs won't bite you...

 

You could move it all as cash to a Fidelity account, get the benefit of their resources to kinda study up about what kind of funds or stocks might serve you best, then you can buy on a moment's notice whenever it suits you...  including "limit orders" = you set the price and it automagically acts on your instructions if/when that price occurs...

 

ps.  Motley Fool is a good thing... their recommendations have a good track record of beating the market and beating funds...

[Matt_P]

So, I was reading my 401k benefits summary plan description and I noticed the following section:

 

FELONIOUS ACTS:

 

Any individual who feloniously and intentionally kills a participant or beneficiary under the Plan will be deemed for all purposes of the Plan and all elections and designations made under the Plan to have died before such participant and beneficiary.

 

Does that really happen often enough to require its own section? Is it even legal? 

[RShack]

So, I was reading my 401k benefits summary plan description and I noticed the following section:

 

 

Does that really happen often enough to require its own section? Is it even legal? 

 

You don't wanna sell life insurance on somebody if a beneficiary ecan cash in, just by killing them...  even the screenwriters for Perry Mason knew that...

 

Plus, didn't you ever see the episdoe of Homicide about Aunt Calpurnia? Like most episodes, it was based on things that really happened....