Have you ever heard of the "infinite banking" concept?

[cute fuzzy bunny]

Well there you are and the hard part this dclewis fellow will have is convincing financially savvy people that non core insurance products are valuable.

Certainly where there is good chance of a loss as in a car accident, potential for major unrecoverable losses as in a house fire, or where you have dependents that would suffer greatly due to your demise an insurance product makes sense.

When it comes to a product that the company is counting on taking more money from you than paying you back, on the average, and the likelihood of the holder gaining a probable benefit is low...then its a tough row to hoe for a salesman unless they find an unsophisticated buyer who weighs emotion higher than the numbers.

The insurance companies dont have those big buildings downtown full of expensive furniture for nothing ya know...

[cute fuzzy bunny]

Quote:

Originally Posted by dclewis You should too being that you are all so smart and sophisticated in this forum.

Uh oh, I sense a MMND implosion is imminent.

[dclewis]

Quote:

Originally Posted by bigwonderfulwyoming The only BAD (and I mean really BAD) financial investment I ever made was a "flexible whole life insurance policy " I got into on advice of an "Estate and Financial Planner" affiliated with Lamar Life about 10 years ago. They were subsequently purchased by Conseco, and in the changeover, Conseco conveniently quit taking my direct deposit premiums on the policy, which I had authorized when the policy was opened and never changed. After several missed payments (I was in the midst of a divorce, commuting between the US and Europe on business, and wasn't paying close enough attention to what I thought was automated banking- and I never received an overdue premium notice from them...) they declared the policy in default and informed me that I had forfeited the "guaranteed cash value" and the insurance coverage.. Their customer service was disgraceful;it was obvious to me they had deliberately defaulted the policy and raided the cash value. Cost me several thousand bucks, so I am absolutely gun-shy about any kind of "insurance" with prefixes of any kind. NEVER AGAIN !

I'm really sorry that you had such a bad experience. I can understand that something like that probably does leave a bad taste in your mouth. It's too bad your adviser never checked the company's comdex score and didn't steer you away from that company.

As a general rule whole life is not "flexible" in terms of premium payments, never has been, probably never will be. It's just not designed that way.

[Sarah in SC]

Again, dclewis, you could do well to answer TexasProud's questions instead of starting fights, or you could just take this nonsense somewhere else.

[dclewis]

Quote:

Originally Posted by Marquette The mantra of the board is there's no free lunch... followed closely by annuities are bad, FA's are bad, and you can do it yourself. The last three aren't shared by everyone and most of us even like some FA's as long as their moderators and some of us own annuities. Most people are more interested in getting their asset allocation right and shaving a tenth of a percent off of their expense fees. And enough people come through trying to sell stuff that there's a bit of a hesitency when someone does come through claiming to not want to sell anything.

I understand. The industry has a bad rep. Some of my close and personal friends and family are "do it yourself-ers". The biggest frustration is seeing them make errors in judgment over tax issues, mortgage planning, investing, etc.

Too much time spend chasing the highest investment return, not enough time spent on efficiency-planning, etc.

[dclewis]

Quote:

Originally Posted by cute fuzzy bunny Well there you are and the hard part this dclewis fellow will have is convincing financially savvy people that non core insurance products are valuable. Certainly where there is good chance of a loss as in a car accident, potential for major unrecoverable losses as in a house fire, or where you have dependents that would suffer greatly due to your demise an insurance product makes sense. When it comes to a product that the company is counting on taking more money from you than paying you back, on the average, and the likelihood of the holder gaining a probable benefit is low...then its a tough row to hoe for a salesman unless they find an unsophisticated buyer who weighs emotion higher than the numbers. The insurance companies dont have those big buildings downtown full of expensive furniture for nothing ya know...

I've never had a client lose money with me that did exactly what I told them to do. In fact, they always make more money than me on the financial products I sell. Which is fine, as long as I have the opp to be referred to their friends and fam.

[dclewis]

Quote:

Originally Posted by Texas Proud I hope you have a flame retardent suit.... because you will need it is you think that almost anybody on this board needs some advice from you... most are very successful and 'rich'... and do not have financial advisors... in fact, a few here ARE financial advisors but are not here to sell 'snake oil'... IIRC, I asked a few questions in this thread that were never answered by the previous spammer.... why don't you give it a shot and let's see what you come up with.... But, if you keep trying to sell something... you will be gone by month end...

Sure. Be happy to. This is the beginning of the thread?

http://www.early-retirement.org/foru...ept-27184.html

Where are the questions?

[Texas Proud]

Quote:

Originally Posted by cute fuzzy bunny Uh oh, I sense a MMND implosion is imminent.

ROFLMAO..... He will not get this, but it is funny.... thanks CFB...

[dclewis]

Quote:

Originally Posted by Sarah in SC Again, dclewis, you could do well to answer TexasProud's questions instead of starting fights, or you could just take this nonsense somewhere else.

What nonsense? I see what I think is the beginning of the thread, and I see no Q's, just a reference to another thread.

Secondly, I didn't start any "fights". I didn't threaten anyone in my first post, nor did I insult anyone.

I was told to have a "flame retardant suit". I guess that's a nice way of telling me to "put 'em up".

You were saying?

[ERD50]

Quote:

Originally Posted by Sarah in SC Again, dclewis, you could do well to answer TexasProud's questions instead of starting fights, or you could just take this nonsense somewhere else.

Where are TexasProud's questions? I think they must be in a separate thread - I don't see them here. Can someone point to that thread?

I've got my comfy chair, popcorn, and adult beverage, so I'm interested in seeing this thing get started.

Quote:

Originally Posted by dclewis Some of my close and personal friends and family are "do it yourself-ers". The biggest frustration is seeing them make errors in judgment over tax issues, mortgage planning, investing, etc. Too much time spend chasing the highest investment return, ...

Look around the forum, you won't see too much chasing of high returns. If anything, you will see ridicule of that approach. Mostly boring, old, (rich) , index investors here.

-ERD50

[dclewis]

Quote:

Originally Posted by FinanceDude Insurance companies exist to make profit for THEM, not YOU............

That's funny, mutual fund companies are positioned to do that...weird

Actually, your statement is a little misleading. A mutual insurance company has as its goal to maximize profits for policyholders because they are the "shareholders" - hence the dividend-paying insurance. A stock company's goal is the same as any other stock company - to maximize profits for it's shareholders. Coincidentally, some of the best stock companies are heavier on their UL products than whole life.

If an insurance company isn't maximizing profits for stockholders or policyholders (depending on how the company is set up), that just means that it's poorly run. Eventually, it'll be absorbed by a company that "gets it".

[dclewis]

Quote:

Originally Posted by ERD50 Where are TexasProud's questions? I think they must be in a separate thread - I don't see them here. Can someone point to that thread? I've got my comfy chair, popcorn, and adult beverage, so I'm interested in seeing this thing get started. Look around the forum, you won't see too much chasing of high returns. If anything, you will see ridicule of that approach. Mostly boring, old, (rich) , index investors here. -ERD50

No value investors? No fundamental analysis gurus? That's too bad. I could pitch my investment software. Index investors are the ONE group that won't buy anything but index funds.

[Westernskies]

[quote=dclewis;685834] It's too bad your adviser never checked the company's comdex score and didn't steer you away from that company.
quote]

Would it have really mattered? Conseco bought the company and raided the policy. Another great piece of insurance advice ! Wow, I feel all warm and fuzzy about life insurance company ethics now, thanks!

[ERD50]

Quote:

Originally Posted by dclewis That's funny, mutual fund companies are positioned to do that...weird

that = 'make a profit' (really bugs me that these posts don't embed the quoted quotes...)

No one should expect a company to provide a service for free. But, if company X is going to charge more than company Y, many of us would like evidence that company X will provide a better value.

I'd gladly pay a 100% fee, to get 200% returns with Beta =1

Quote:

Originally Posted by dclewis No value investors? No fundamental analysis gurus? That's too bad. I could pitch my investment software. Index investors are the ONE group that won't buy anything but index funds.

A few - I wonder why they have not convinced too many index people to join them?

-ERD50

[ERD50]

Quote:

Originally Posted by dclewis That's too bad. I could pitch my investment software.

Ahh, that must be the amazing investment software that the mega-billion buck mutual fund companies have not discovered yet. If they had, they would be offering mutual funds with consistent above-market returns with consistent below-market volatility. And many on the board here would be investing in them.

-ERD50

[Texas Proud]

Quote:

Originally Posted by Sarah in SC Again, dclewis, you could do well to answer TexasProud's questions instead of starting fights, or you could just take this nonsense somewhere else.

SORRY... my questions are in one of the other threads we got from the last guy.... so I guess he can not answer them....

Since I don't want to waste my time looking for them... I will just say...

IF YOU ARE NOT TRYING TO SELL ANYTHING OR GET CLIENTS.... Then why are you here? It is NOT to educate us... all we have to do is read the book to get educated (again, along with being rich, most of us are smart)... PS.. rich for this discussion is over $1 mill....

[dclewis]

[quote=bigwonderfulwyoming;685860]

Quote:

Originally Posted by dclewis It's too bad your adviser never checked the company's comdex score and didn't steer you away from that company. quote] Would it have really mattered? Conseco bought the company and raided the policy. Another great piece of insurance advice ! Wow, I feel all warm and fuzzy about life insurance company ethics now, thanks!

Life insurance companies don't "raid" cash values, they can't. It's not like a pension fund. The money is being held for the benefit of a 3rd party (the beneficiary). As the policyowner, you outrank everyone else in connection with that policy.

There wouldn't be a reason for them to not give you the cash value unless the surrender charges prevented you from having a positive balance, there was fraud on your part in connection with setting up the policy, or you borrowed all of the available funds from your policy.

Comdex scores give a good idea of how a company has behaved in the past. If you are good at valuing a company (a reason to study value investing, not just index investing), you have a better opportunity to see what lies ahead.

I'm not blaming you for what happened, but you are making unfair sweeping generalizations about ALL insurance companies that simply aren't true. I'm sorry that you had an unpleasant experience with a life insurance company. Not sure what the exact blow-by blow details are though...you stated earlier:

"After several missed payments (I was in the midst of a divorce, commuting between the US and Europe on business, and wasn't paying close enough attention to what I thought was automated banking- and I never received an overdue premium notice from them...) they declared the policy in default and informed me that I had forfeited the "guaranteed cash value" and the insurance coverage"

Not paying premiums on the whole life should trigger a red flag. Several missed payments - they are going to assume you are surrendering the contract. They can't refuse premium payments as life insurance is a unilateral contract and governed by the principle of "utmost good faith". Did you contact the insurance company? Your State Insurance Commissioner? Generally, if you had net cash value available, it should be yours when you surrender it.

[Khan]

Quote:

No. I read a lot. Perhaps there is something I should know about the folks that frequent this board? Is everyone bloodthirsty?

We'll grind your bones to make our bread.

[dclewis]

Quote:

Originally Posted by ERD50 Ahh, that must be the amazing investment software that the mega-billion buck mutual fund companies have not discovered yet. If they had, they would be offering mutual funds with consistent above-market returns with consistent below-market volatility. And many on the board here would be investing in them. -ERD50

haha...no. Very cynical by the way.

The software gathers information from the SEC and does all of the calculations involved in analyzing 7 different fundamentals of a company. It's completely transparent so there's no "?" as to how the software determines value. So far it seems to be working quite well. Since 2000, our top tier stocks (which are diversified across different sectors) have averaged a little over 11% without figuring in dividends.

Actually mutual fund managers use something very similar, provided they use fundamental analysis. The problem with mutual funds is, well...among other things government regulation. The "5% rule", the liquidity issues, the fact that they are paid based on assets under management, not performance of the fund, good funds grow too big and the excessive cash dampens returns because of limited investment options, etc. etc. etc.

[Khan]

Quote:

Originally Posted by dclewis haha...no. Very cynical by the way. The software gathers information from the SEC and does all of the calculations involved in analyzing 7 different fundamentals of a company. It's completely transparent so there's no "?" as to how the software determines value. So far it seems to be working quite well. Since 2000, our top tier stocks (which are diversified across different sectors) have averaged a little over 11% without figuring in dividends. Actually mutual fund managers use something very similar, provided they use fundamental analysis. The problem with mutual funds is, well...among other things government regulation. The "5% rule", the liquidity issues, the fact that they are paid based on assets under management, not performance of the fund, good funds grow too big and the excessive cash dampens returns because of limited investment options, etc. etc. etc.

I spend less than my small pension, are you salivating concerning my TSP?