Investing 102

[Flash68]

Originally Posted by Vortech404

Anybody have any thoughts on cutting down on my retirement to fund
a million dollar life insurance policy on one of my parents?

A life insurance policy is tax free? Anybody do this as part of a retirement
investment?

later
John

Just upped my life insurance recently and did look at the cash value vs term option. Ended up just going with term as I felt the restrictions in the investment options/vehicles were just not wide enough for my liking.

[GregWeld]

Originally Posted by Flash68

Just upped my life insurance recently and did look at the cash value vs term option. Ended up just going with term as I felt the restrictions in the investment options/vehicles were just not wide enough for my liking.

Smart.

Your lovely bride has earnings power... so life insurance should be sufficient to pay off the house (people can also buy a MORTGAGE life insurance that pays off the mortgage upon death), bury your sorry butt, set up college fund for children.

Life insurance is a bet - they're betting you'll not collect - and you don't really want to collect. It's not about leaving your spouse rich. It's about taking the heat off should you meet an untimely demise. And number 1 - it's NEVER a good investment. You'll do far better to invest the "premiums" in dividend paying stocks over the long run.

[Payton King]

I think a level term or a return of premium policy is better to cover a mortgage than "motgage life," which is a decreasing term policy.

There are times when a perment life insurance policy (whole life, universal life, etc) makes perfect sense.

John, not to sound morbid, but I would not want to be sitting around waiting for someone to die so I could collect money. Depending on the age and health, a permanent policy can get pretty expensive.

On the other hand, if you are in an inheritance situation where the estate is cash poor (family land or farm) or large estate where estate taxes are going to be a probem (estate over $5 million), then a permanent policy would work. Normally you would set both of those situations up in an irrevocable insurance trust.

For discussion's sake in this thread, I would be more than happy to run some numbers and post them up here so other people might understand how different types of life insurance works, pros and cons of different policies and how they might fit into a person's financial plan.

Not trying to sell anything here, just trying to educate like our Jedi Master.

[GregWeld]

Good info Payton!!


Estate taxes are something we've personally worked very hard on... With trusts etc. There is a pass thru of the first 5 million... and blah blah blah. It gets very complicated once you surpass 5 million. And of course - anyone with that kind of net worth should certainly have professional help long before they got to that point.

And yes -- mortgage insurance doesn't really work if your mortgage is down next to nothing... which is what happened to my Dad. I think this all came about back in the day with special programs the government had for GI's.

We used to have a couple big policies... but then they become rather useless if you don't really need them to pay off anything or to help your family. They were term policies and we dropped them quite awhile ago. For us personally - it's like having an IRA... we don't really need "retirement funds". YIPPPPEEEEEEE HAHAHAHAHAHAHAHA

Originally Posted by Payton King

I think a level term or a return of premium policy is better to cover a mortgage than "motgage life," which is a decreasing term policy.

There are times when a perment life insurance policy (whole life, universal life, etc) makes perfect sense.

John, not to sound morbid, but I would not want to be sitting around waiting for someone to die so I could collect money. Depending on the age and health, a permanent policy can get pretty expensive.

On the other hand, if you are in an inheritance situation where the estate is cash poor (family land or farm) or large estate where estate taxes are going to be a probem (estate over $5 million), then a permanent policy would work. Normally you would set both of those situations up in an irrevocable insurance trust.

For discussion's sake in this thread, I would be more than happy to run some numbers and post them up here so other people might understand how different types of life insurance works, pros and cons of different policies and how they might fit into a person's financial plan.

Not trying to sell anything here, just trying to educate like our Jedi Master.

[chetly]

I've been pretty happy with my investment of GoPro and Tesla. I bought GoPro at 40.55 and it ended today 63.52. Bought Tesla at 252.66 and closed at 282.11. Both have been a pretty fast mover, good investments and I'm hoping Tesla will explode once they break ground on their mega factory.

[GregWeld]

Originally Posted by chetly

I've been pretty happy with my investment of GoPro and Tesla. I bought GoPro at 40.55 and it ended today 63.52. Bought Tesla at 252.66 and closed at 282.11. Both have been a pretty fast mover, good investments and I'm hoping Tesla will explode once they break ground on their mega factory.

Oh hell yeah!



I should have loaded the boat with them... but no dividend... no investment. I have to live off mine.

Great pics and especially for you young guys!!

[Vegas69]

I'd also be interested in the 500k term life info.

[captainofiron]

Originally Posted by chetly

I've been pretty happy with my investment of GoPro and Tesla. I bought GoPro at 40.55 and it ended today 63.52. Bought Tesla at 252.66 and closed at 282.11. Both have been a pretty fast mover, good investments and I'm hoping Tesla will explode once they break ground on their mega factory.

NICE

when Tesla first was about to go public, I had about 5k in my savings, I wanted to buy so bad, but my wife correctly reminded me that it was all our savings at the time, and it would be stupid to risk it....

I showed her the other day what it was at, this was pretty much her reaction when I explained how much we would have made,

we need to build 1 of 2 things, a device that lets you see in the future, or a time machine that lets you go back, haha

[captainofiron]

WELL I have taken the plunge.

I talked to fidelity and have rolled it over to one of their IRAs (Im familiar with the website and its free if you keep it with them, as well as trades are $7.98 which is the cheapest I have found)

So in 3 business days, I will be able to start pulling my money out of their mutual fund, and buying names.

I have decided to go with 10 picks and start from there.

I did alot of thinking, stuff along the lines of, what does everybody use that will not change during a recession, and certain stuff popped in my head, paper goods, gasoline, medicine, food. So I started looking around the house and when the wife and I go grocery shopping to see what brands go well.

Anyways, Here are my picks and why, please feel free to critique:

1. RDS-B Royal Dutch Shell - $82.11 per share, 4.58% div yield, graph: looks up and a little choppy, sector: Basic Materials, Industry: Major Integrated oil Why: I almost always fill up at Shell, Texaco or Valero, Texaco (Chevron) is expensive, and Valero doesnt offer much of a dividend when compared to the others
2. KO Coca-Cola - $42.17 per share, 2.89% div yield, graph: looks up and somewhat steady, sector: Consumer Goods, Industry: Beverages - Softdrinks Why: I love the stuff, and given the market share and how much Americans consume softdrinks, I dont see this going anywhere
3. UL Unilever - $43.84 per share, 3.4% div yield, graph: looks up and somewhat steady, sector: Consumer Goods, Industry: Food Why: Almost everything in our bathroom is from Unilever, the soap, shampoo, lotion, BUT I am a little worried about having too many consumer goods items
4. MO Altria Group - $43.89 per share, 4.74% div yield, graph: looks up and somewhat smooth, sector: Consumer Goods, Industry: TobaccoWhy: I dont smoke, BUT I also have quite a few friends who are hooked, and see so many people puffing away
5. NNN National Retail Properties - $36.57 per share, 4.60% div yield, graph: looks up and somewhat steady, sector: Financials Industry: Real Estate Why: I rarely see retail space empty
6. PFE Pfizer - $29.47 per share, 3.53% div yield, graph: looks up and somewhat smooth, sector: Healthcare Industry: Drugs Why: Out of the big name pharma companies that I could think of, this one had the highest dividend
7. GE General Electric - $26.02 per share, 3.38% div yield, graph: looks up and somewhat smooth, sector: Industrial Industry: Industrial goods Why: Out of the big name industrial companies that I could think of, this one had the highest dividend
8. TGT Target - $61.99 per share, 3.36% div yield, graph: looks up and choppy, sector: Services Industry: Retail Why: My brother is a pharmacist there, so I get to see usually how busy they are, also I just read that they are increasing their dividend http://seekingalpha.com/news/1975635...idend?uprof=45
9. T AT&T - $34.48 per share, 5.34% div yield, graph: looks up but choppy, sector: Technology Industry: Telecom Services Why: I use ATT and even though they have their problems, I see them as the most stable phone service company and they always seem to snag the exclusive gotta have it phone, as well as almost all the people I know that have company phones are on ATT, also I liked their dividend
10. ED Con Ed - $56.69 per share, 4.3% div yield, graph: looks up and somewhat smooth, sector: Utilities Industry: Electric Utilities Why: Out of the big name Electric companies that I could think of, this one had the highest dividend. Here in Texas its unregulated, so usually I just go with whoever has the lowest rate, but most of those are little companies that are private

What do you guys think

I was hoping my dividend average would be higher, but this is basically all I could think of

Thanks

[Sieg]

Originally Posted by Payton King

For discussion's sake in this thread, I would be more than happy to run some numbers and post them up here so other people might understand how different types of life insurance works, pros and cons of different policies and how they might fit into a person's financial plan.

Not trying to sell anything here, just trying to educate like our Jedi Master.

Personally I would love to hear it from a 'neutral' source.