[RyanNicholson]

So I've been meeting with this financial planner from Mass Mutual for a while now...I haven't bought into anything but hes a cool guy and we've been meeting once a month or so for the past 6 months. I know there are a number of you guys on here that know a thing or two about investing and stuff so I thought I'd see what opinions might be on here about it.

Basically the idea I want to accomplish is to have some long term savings plans in place so that 10-15-20yrs down the road I'll be in a really good place. I started looking into this because I figure the sooner I start, the better off I'll be down the road. Now that I'm making enough money (in a steady job) I think I'm gunna do something about it.

We've talked a lot and the plan is to start with a kind of life insurance policy that over the long term ends up growing substantially from the amount I put into it (as like a savings that I can cash in eventually)....in fact after I looked at the charts I noticed that in like 15 years it pays for itself and continues to grow from there. Of course it doesn't add up to crap for like 5yrs though. I dont have the paperwork in front of me right now but after like 25 years its value is up to like $60k if I stay with the premium I start out with but there will be a rider involved that will let me upgrade and invest more into it when I want.

The second prong of this plan is going to be investing in the market and mutual funds I think as a more "offensive" deal. We haven't talked much about that yet though.

I haven't signed or started anything for sure yet. I filled out the application recently but it doesn't lock me into anything. Its a pretty exciting concept and I'm learning a ton (both through my own research and the guy from Mass Mutual).

Do you guys have anything like this in place? or thoughts/comments/advice?

[Honclfibr]

Originally Posted by RyanNicholson

We've talked a lot and the plan is to start with a kind of life insurance policy that over the long term ends up growing substantially from the amount I put into it (as like a savings that I can cash in eventually)....in fact after I looked at the charts I noticed that in like 15 years it pays for itself and continues to grow from there. Of course it doesn't add up to crap for like 5yrs though. I dont have the paperwork in front of me right now but after like 25 years its value is up to like $60k if I stay with the premium I start out with but there will be a rider involved that will let me upgrade and invest more into it when I want.

Sounds like a VUL. I never understood the point. It's basically the same thing as a retirement fund except that you only get it if you die, and there are more fees. Why not just put the money you would be putting into your policy into retirement savings?

[RyanNicholson]

Originally Posted by Honclfibr

Sounds like a VUL. I never understood the point. It's basically the same thing as a retirement fund except that you only get it if you die, and there are more fees. Why not just put the money you would be putting into your policy into retirement savings?

well it essentially is...since I can cash it in eventually. Basically if I die the beneficiary gets $XXX,XXX, but if I live it will eventually grow to a pretty large sum as long as I never touch it (thats the key). I'm still planning on having a more liquid or short term savings in place as well.

But this is why I was asking, it sounds pretty good from what I've learned as long as its a definite long term investment. But I'm not 100% on it yet.

[naked-daytrader]

I'm not a money manager but I do know a bit about investing/trading. First off, never treat any kind of life insurance policy as an "Investment" because it's not. Don't let a Life insurance salesman tell you otherwise. That's the worst investment you can make. I don't know what your personal needs are but I can give you two pieces of advice.


1). Any financial planner trying to steer you in the direction of life insurance as an investment (even if it's part of other investments) should be dropped. Tell him thanks but no thanks and find another financial planner.


2). Here's a great place to start https://www.fidelity.com/?bar=p

[Honclfibr]

Originally Posted by RyanNicholson

well it essentially is...since I can cash it in eventually. Basically if I die the beneficiary gets $XXX,XXX, but if I live it will eventually grow to a pretty large sum as long as I never touch it (thats the key).

Right, my understanding is that you take your premiums and select mutual funds which invest them. It's basically investing, with similar tax advantages to most retirement funds (i.e. your money can grow in the fund without being subject to taxes).

What I don't get about them is what advantage they would hold over a standard 401k/IRA, assuming that you're eligible for one and haven't maxed it out?

[Manny]

If it is whole life insurance then I asked a similar question a few months back. I have not bought one for various reasons, but if you have money around to invest I think its a good option once you have maxed out some of the other options. Those would include ret funds, college funds for your girlfriends kid, some more agressive investments like MF's, stocks etc. Also, to really take advantage of it I think you need to buy a nice amount.

Thinking about it as a death benefit only is completely wrong. It has a lot of uses and benefits (most of which I dont fully understand and cannot explain) but you can certainly use the money for retierment because it can taken as a loan that never needs to be paid back if you dont want to at 1%.

[ku996r]

max out 401k, then IRA (both have tax-advantage)
then mutual funds and stock.

you are correct, start early and they rollup quick.

see this for quick breakdown

[Pittenger5]

The first thing I was told by my parents financial advisor is figure out EXACTLY what you want your money to do. Do you want to get some out of your checking account so you dont spend it, but want access to it at any time? (Like I did) I went for a money market account, they were up around 5% a year, and I can get money or put it in as I please. Or do you want money to have for retirement? Then something LONG term with higher rates would be best, but you cant touch it. You need to clearly define what you want your money to do, and then go accordingly.

[RyanNicholson]

Originally Posted by Honclfibr

What I don't get about them is what advantage they would hold over a standard 401k/IRA, assuming that you're eligible for one and haven't maxed it out?

thats essentially what I'm trying to learn from this thread haha. I have to look into the 401k policies at my new job more before I make a decision.

[Manny]

Whole life creates a dividend....just need to invest in it early enough that when you need it it is a large dividend. Its possibly a good investment if you really have extra cash around that you want in a secure and protected place.

[SSearchVT]

First things first - you can't make any money if you have debt...

The only acceptable debt - a reasonable mortgage on a house in a growing area, or minor student loans in a field with a future. Leave the credit cards at home - and if you don't have the cash to pay for it, don't buy it. If you can finance it - you can afford to pay cash for it - you may just have to wait a few months.

Sock money away in an IRA - max out what your employer is willing to do. It's free money. Take 1/2 of every raise and throw it here. I split the investments right down the middle between High growth/high risk and low growth/low risk. As a result - I've seen growth even over the last few months. At 22 - you might want to go 75% high risk - if you lose it all (on paper) there's still 40+ years to recover.

I prefer CD's - they're easy to flip around, have them mature on a rotating scale, and shop for the best rate. Right now the rates are crap, so I'm going to throw some at my car loan.

[Crash Dummy Denno]

you don't want whole life.

[Bhavesh]

Originally Posted by ku996r

max out 401k, then IRA (both have tax-advantage)
then mutual funds and stock.

you are correct, start early and they rollup quick.

see this for quick breakdown

+1

the stock market sucks right now...if you get a high interest CD, use it...otherwise put your unspent money into a high interest MMA/Savings account (ie. etrade, hsbc direct, ing direct) for a sissy (but secure) 1-4%

whatever you have left over, spend on bikes, booze, and bitches (in that order)

[RyanNicholson]

this is actually really helpful. thanks guys.

I do have some debt from student loans and a personal loan that i used to consolidate credit....neither are really a big deal. The credit care debt kinda hurt my credit score which sucks, but thats why I consolidated it before it got out of hand. The balance isn't to bad though.

The aggressive high risk investing is something that I originally was thinking...not only would I have time to recover from any losses but if I were to do fairly well over the next say 10 years then take a safer route it might have a larger amount to grow in the low growth/low risk?

I do like the idea of an MMA for a more liquid/accessible savings

[Honclfibr]

Originally Posted by RyanNicholson

I do have some debt from student loans and a personal loan that i used to consolidate credit....neither are really a big deal. The credit care debt kinda hurt my credit score which sucks, but thats why I consolidated it before it got out of hand. The balance isn't to bad though.

First rule of investing: pay off your debt before you start investing. If your that's not the first thing your investment planner said to you, he's looking out for his own interests not yours (those life insurance plans == nice hefty fees).

The only exception is some student loans, as they tend to be subsidized, and mortgages if you get a good rate. Otherwise, you're going to end up investing in things that have a lower expected rate of return than the interest your paying on your existing loans. That's just foolish. Pay down your debt and save the investing for after you've done that, with the exception of any matching 401k your employer would offer (I mean hey, free money).

[mzdagrl]

Originally Posted by Honclfibr

First rule of investing: pay off your debt before you start investing. If your that's not the first thing your investment planner said to you, he's looking out for his own interests not yours (those life insurance plans == nice hefty fees).

Yup. If you invest, say $100 a month in a 5% return (insert chosen investment here), you could put that $100 to better use paying off a 7% (or even higher...) loan. Student loans and mortgages are good debt. Car loans aren't bad debt, (cause let's be honest, how many of us young'uns can save $20K in a few months?), but they should be paid down faster than the others. An extra $100 a month will reduce interest paid and length of loan faster than it will build a liveable retirement fund.

[Crash Dummy Denno]

Originally Posted by Honclfibr

First rule of investing: pay off your debt before you start investing. If your that's not the first thing your investment planner said to you, he's looking out for his own interests not yours (those life insurance plans == nice hefty fees).

The only exception is some student loans, as they tend to be subsidized, and mortgages if you get a good rate. Otherwise, you're going to end up investing in things that have a lower expected rate of return than the interest your paying on your existing loans. That's just foolish. Pay down your debt and save the investing for after you've done that, with the exception of any matching 401k your employer would offer (I mean hey, free money).

my boy's wicked smart

[BMFR6]

hey ryan, i'll try to send you a PM this weekend when i have some time. if you don't hear from me, remind me.

a lot of what people have said here is good info, but there are a couple other things you can consider.











... and yes there are a couple reasons i cant just post on a public forum, all legal of course. sorry.

[l3uddha]

i dunno what the heck that health insurance thing is all about, but I recently started contributing from my paycheck to my fidelity 401k that my work set up and also contributes to. they contribute some amount each year outside of my pay (cant remember what), but what i started doing was taking 4% out of my paycheck before taxes each week, because they also match that 4%. I've still got other loans to pay off, but really the sooner you start contributing at least something to the 401k the better. my dad went over it with me and helped me set it up. he's a total wiz at the stuff. and i think with the 401k you're able to take money out without any penalties once, to put it down on a house or something. and really, something like 4% before taxes is something that won't be missed outta my pay. i'll tweak it more as i go along, adding more to it as i pay off other loans, but for now i've got a 85%stocks and 15%bonds split. fidelity has a freedom fund that is a pretty good start and has decent returns, but they have a 1% management fee, so i ended up picking my own stock and bond funds. the market is doing pretty poorly right now, but because i've got 15% in bonds i'm still earning a little money rather than losing it. i think it'd be a really wise choice to get going on it at your age, because when i talk to a lot of people about it, they say their biggest regret was not contributing to it sooner. that stock & bond split is a good place to start too, and get your nose wet. that's where i'm starting, but my boss said at one point he sat down with a fidelity guy who went over it in much more detail, such as a certain %in foreign markets, large cap, med cap, etc. the way i look at it, is that this is a retirement fund. i'd like something that shows stability and a positive gain over a long-term, and I can just sort of not have to worry about it too much. at some point i'm going to take a few thousand and play with some stocks short-term, but investing is more of a long term thing and it seems kind of silly to have my retirement split 10 different ways and have to constantly keep and eye on both domestic and foreign markets to switch things around at a moment's notice. if you're doing that, you're trying to stay ahead of the market, rather than understand what it's doing. just what i think anyway.

[CMG241]

get a second opinion from a professional

[naked-daytrader]

[quote=l3uddha;465929] QUOTE]


Uddha, I don't know who's running your money but kudo's to him/her. 85/15 stock bond split is a good mix right now. I agree with the management fees at big institutions and that's why I run my own money except my work retirement plan (i have to put something in this because the Post Office matches my contributions up to 7 or 8 percent(I forgot the actual amount could be more or less) I never pass up free money. I never understood going to a money management company to have someone invest/watch my money, maybe it's a trust thing but my thinking is "It's my fucking money, I'll take care of it myself".

As I said back in late January, I think the market bottomed then. I also said the true test of a bottom is when the market bounces and then it will retest the lows of that bounce, which is what we're doing right now in the market I.E. heading back down to test the lows. If we break below those lows 11500 on the dow, then it really wasn't a bottom afterall and we'll go lower. Hopefully we can retest them this week (maybe Monday if we open down over 300-400 points again like last Jan 22nd-23rd).
Buying a couple foreign market funds is a good idea right now especially Brazil, India and China. There's a bull market developing in those countries especially Brazil. I think an Oil fund is also a good investment but I would wait till oil pulled back to the $85-$88 a barrel area before I pulled the triggerand bought one..USO is a good etf to buy. Gold is another option. It's sitting at $975 an ounce right now. It's going to hit $1000 an ounce and then get sold off like there's no tomorrow...probably down to 700-750 maybe a bit lower. That's the time to buy a little. I've never been a fan of gold because unlike oil, there's never going to be a shortage of it. We don't consume it. Once it's out of the ground it's always going to be here so the supply never goes down much (remember, making money in the markets is all about supply and demand), having said that, it's a good idea to have some in your portfolio as a hedge against inflation......GLD is a good etf to buy. Finally, you've got investing in good ole USA. By far the best bet of all, regardless if we go into a recession or not. Bar none, the best time to buy stocks is when no one else wants them. Some people buy and hold for the long term. That used to be a great strategy ...you know...buy the S and P and hold it for 20 30 years. That's like going out and buying an outdated used jaloppy if you ask me. You've got to constantly research your investments and keep up to date with changing market trends so you can take full advantage of market opportunities. Or you can be like your grandparents (not yours in-particular)buy the S and P or some safe investments and live off of a small retirement fund in an average home, living an average life style.
The market is at such a cheap multiple right now that I think anyone not buying for the long haul right here is crazy. This time next year people will look back at some of these stock prices and say "Wow, I can't beleive how low stock were last year". If you have patience and money you don't need for at least a year, stocks are a no brainer right now.

That's my advice.

[RandyO]

nothing wrong with a small whole life policy, just enuf to pay your butial costs can come in handy if you need some quick cash down the road, but don't even think of it as retirement investment

the majority of my IRAs is invested in GwthA, it's done very well for me

[ChrisNoF4i]

Where can I get me some of this "free money"?

[SSearchVT]

Originally Posted by ChrisNoF4i

Where can I get me some of this "free money"?

It's free, but you have to wait to get it - check out your employers 401k matching program. In some instances - you can invest enough pre-tax dollars to drop you down one tax bracket. Yes, you take home a little less money - but you don't pay the taxes on it. You will have a tax liability when it matures, but when compaired to the long term growth from all of the compound interest - it's a smart investment.

[scootertrash]

If you don't currently own a house, think about investing in one. It beats paying rent.
The time is great to buy. Low prices and low interest rates.
Interest is tax deductable.
If you keep the house as your primary residence for at least 2 years, you don't pay capital gains tax on the profit when you sell.
Buy for the location, not the house, to maximize resale.
I'm no expert in investing, but I've always made out well buying and selling houses as a longer-term investment. (maybe I have just been lucky?)