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Well, the insurance companies pay me, but yes. Not all my customers are poor. Some are pretty well off, some middle of the middle class. I don't really sell to dirt poor people unless they already have something worse and I can replace it with something cheaper to save them money.
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Lots of people are in nursing homes without being on Medicaid. However, if they're on Medicaid, they have to file an annual report on life insurance cash value, which would be considered an asset. It takes two years for any cash value to accumulate from the start of a whole life policy. So, if they're already on Medicaid, the way around that is to have the beneficiary also be the owner. Then, once the cash value starts to accumulate, it belongs to someone else right away.
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https://www.bankrate.com/calculators/savings/simple-savings-calculator.aspx
Put $100 away initially and $100/month for 30 years, you end up $42,000+ Sure $100/month is a hurdle, its a pack of butts a day. Or a Starbucks coffee/day, actually less for both. |
Hugh, you remind me of my dad, who still can't fathom why anyone cares what a credit card APR is, since no one should ever carry a balance. We're not talking about investment strategery here.
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Yep...make the same payments to yourself...and you don't need life insurance. I have none.
The same with collision insurance on my cars. Self insured. I only have liability as I am willing to bet my car that I will not cause an accident. After all these years...I have saved many times what a new car would cost. |
When someone gives me the objection that they'd be better off just putting the money in a savings account, I always ask them if they're doing that. Never. "Oh, well, when were you gonna get that started? You can't live long enough to save up $25k at $X per month, and one emergency can wipe that out in an instant." It's not really an issue with this crowd. They live SS check to SS check.
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I have Honda shoes that have lasted a decade with regular use. If your shoes only last one year, you need walking lessons. |
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Any program where making a few more dollars results in losing "free money" taken from someone else teaches those near the bottom to quickly reduce hours/effort as not to exceed levels that would cause loss of that benefit. The earned income tax credit is a good example as it grew a whole class of seasonal workers who previously would have worked the entire year (like those that lifeguard n the summer or are ski instructors in the winter)...as well as many that cut heir hours late in the year (when demand for retail Christmas workers are the highest). Most folks start work before 20 and live past 60. That is 40 years. If stupid enough to only get just 1% return, $42.38 a month would get them $25K. At 5%, just $16.38 a month. They could get to the same point even easier by dropping their income tax return (as many poor get back more than they pay) or buying a home for the same payment as their rent or less) as it would be long paid off and would quickly gain them $25K in equity. That is how I started. I took a second job to buy a home that I could not afford otherwise. Not only was that a great investment, but doing so and making my payments on time resulted in a high credit rating which made any purchase with credit (like another house or a car) much cheaper. |
poor comparison, Hondas are same level reliability then Porsches, after all Porsche uses Japanese QC and production methods now (Toyota system)
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If you allow access to your account when it’s fluctuating around zero you can guarantee that $ will be pulled at the worse possible time and you’ll go negative it’ll be declined and you’ll get hit with a bunch of fees. Better to pay a bit more and be able to control paying it when you know the $ is available. It may seem like it costs more but in the end you sleep better knowing you aren’t paying a ton of unexpected fees. |
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I have found the same was true for a nice suit. Not only does it look a lot nice from day one, but a really nice one will last forever if you take good care of it (it is wise to buy extra trousers). The cheap ones look like a cheap suit their entre life...and generally do not last. I also think you could make the case that a better quality car is indeed a good investment. It seems to me that most folks keep that nicer car a lot longer and amortize the cost over many more years. I am sure there are super high mileage KIAs and Chevy Citations out there...but I suspect fewer than their sales/popularity (in comparison to higher end cars) might make one expect. |
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I've done budget management for people in debt. one way they will often work to manage payments is the envelope way paycheck comes in on that day put all the money in enveloppes rent in 1 envelope water bill in another electricity dept payments etc etc A lot of poor people do this, because to some extent it works for them to visualize their finances, and decide priorities. With money in an account, they'll often loose track of things that suddenly get jacked off the account. It's all nice if you are computer savy and got an XLS sheet with planned payments, and that way keep track of the forecast. but for a lot of poorer people they either don't have the computer to begin with, or don't have the ability to use it for this purpose. |
All true below in Svan's post.
I have mentioned my financial counseling for Navy folks but I have also worked with others. We lived on a really neat little island called Cobb Island before we bought the farm. I was workng in DC and my wife at Pax so it was a good middle commute for us both. The house next to us was owned by a wealthy couple from DC that rented it to Section 8 folks. We met and got to know three families in the two years we owned the house on the Island. I enjoyed working on cars in those days and helped with a bunch of Caprices, Monte Carlos, etc. Sounds cliche but trust me. My favorite was a guy named Moose who I helped get a job driving a tow truck. I knew a guy, who knew a guy... This was in 1995 and my wife and I together are doing well since we both had a good salary. Moose is on the tow truck gig doing well and gets ahead financially. He decides about four months in that he needs a vacation and takes the whole Moose family to Disney World, for a week. He comes back broke, lost the job and started all over again being poor. He did manage to get a job in his hometown in Michigan since he evidentially was a good tow truck driver. I had my Mom's old 1976/77 320i with 250K on it I was looking to get rid of so I gave it to him. Last I heard, 20 years ago, they were doing ok. Amazing stuff. F'ing Disney World. Quote:
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There are uses for life insurance. The partners buying my company have life insurance and I am the beneficiary. It’s in the purchase contract. If one of them croaks their remaining payments to me are covered.
I don’t have it myself, but I can self insure. This is one of the reasons life is more expensive when you’re poor. You need to spend money on insurance just to stay out of a pauper’s grave. |
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I have had folks at work whine that they couldn't pay their bills but just paid for a fancy vacation or some very expensive clothes. |
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I don't even understand why anybody poor would spend money in life, for the grave. It's not like you'll be dead more comfortably in a fancy grave then in a paupers grave. hell, put me in a cardboard box and straight into an incinerator , I really don't care. I have better uses for my money : To Live. |
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Young families usually need some inexpensive term life insurance...but usually the sooner that you have enough net worth/savings to cancel, the better. Most people should be able to grow significant net worth once their kids are gone and they are in their peak earning years...and rapidly should be able to reduce their need for it (just as the costs go up due to age/health). Especially if you live within your means and pay off your home and have no real debt.
Most people get too much life insurance to enable their family to live much better than before if they die. I think that is silly. I never want to be worth more dead than alive. One should look at replacing their net income (minus their own expenses)...and use the additional money they would have spent for a huge policy...to save/invest so they will need less insurance in the future. |
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