042 #DaveRamsey
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(Complete Show Notes Below)
In the 42nd episode of the Financial Procast:
Dave Ramsey Gets In a Twitter Fight
Yes, you right that right! It seems that about two weeks ago, some of the Financial Planning community Illumnati called into question some of Dave Ramsey’s “rule of thumb” advice. In response, Dave didn’t take to kindly to what was being said so he lashed out with some inflammatory language himself:
Now, who knows if Dave Ramsey actually writes his own tweets…many public figures and celebrity-types pay other people to do such things. But either way he is responsible for it.
What do we think of the whole exchange?
Well, we turn your attention to an article published over at Forbes where journalist Tim Maurer has written a piece in response to the spat. I tend to agree with the article—mostly. What do I mean by that? Well, I think that part of what all the people involved say is true, however, none of them have all the right answers or advice. Michael Kitces, Carolyn McClanahan, and Carl Richards are all somewhat famous financial gurus in their own right but picking a fight with Dave Ramsey on Twitter isn’t likely to gain you any credibility…is it?
I don’t think so.
Now, Mr. Maurer has come up with a list of “unifying financial planning principles” all on his own and he’s asking other financial planners to “sign on” to these. Hmmmm…..
To save you the trouble of trying to read through each one, listen to the podcast and hear what we have to say about each one.
Why Life Insurance Works so well for Retirement Income
Life Insurance used to generate retirement income is a slightly more advanced subject within the world of life insurance and financial planning. The stock jockeys hate it, and the life insurance agents love it. No surprise there.
But is there something that life insurance brings to the table that is truly special? Or are you better off betting your chips on the market to bring you through a prosperous retirement? The market, and other investments heralded by your broker or investment advisor seem to be the weapon of choice for generating retirement income, or at least that’s what your CFP says. But maybe, just maybe there is something we’ve neglected to think about here. And perhaps it required a little more grey matter flexing than parroting what the compliance approved brochure said about retirement income planning.
Whole Life Insurance Income Distributions 2013 Edition
As we’ve mentioned before, most life insurance agents like to spar about the numbers in a way that seeks to make the particular whole life insurance policy they’re pitching seem like the clear winner. But of course the truth of the matter is that how a product currently performs or is illustrated given a present set of assumptions doesn’t much matter.
Well…that might be a slight misstatement.
Not to say that it shouldn’t be a factor but it isn’t all that difficult to manipulate current assumptions to make your product look better than your competition.
Remember the design of a whole life insurance policy is crucial and unfortunately this is where a great many agents falter. Yes, there are some essential, core features that a policy should contain to make it perform as it should when using it to accumulate cash value as an asset but it’s the application of those features that matters most. Read More…
041 529 College Savings Plans
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(Complete Show Notes Below)
In the 41st episode of the Financial Procast:
Are 529 College Savings Plans a Good Idea?
Generally speaking we’re not in love with the 529 savings plans. They seem like a great idea in theory but in practice they’re a bit less than appealing. Most people who’ve bought into the idea, find that the plans are somewhat restrictive and require too many limitations as to how the money saved within the plan can be spent. Read More…
Top Whole Life Insurance Companies for Building Cash Value
It’s no big secret that we think whole life insurance is pretty awesome, even though we released a podcast last week declaring that it sucked. Hopefully most of you caught onto our general cheekiness and also learned that we’re not fanatical about the product, i.e. we don’t think it’s the answer to all the world’s problems.
Given this, we often receive questions regarding what company’s whole life products are best to buy. We’ve spent some time carefully approaching this subject. Inevitably, though, we knew the time would come for us to lay down our thoughts and make an official list.
040 Why Whole Life Insurance Sucks
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(Complete Show Notes Below)
In the 40th episode of the Financial Procast:
Yes there are times that Whole Life Insurance is NOT the answer
I know many of our regular listeners may be shocked to hear us make that statement. But it’s the truth.
There are times that whole life insurance and all other types of cash value life insurance is not the right answer. We actually recorded this episode in response to an article that we saw published in the last couple weeks that was lamenting the fact that Dave Ramsey, Suze Orman and other financial entertainers are doing a disservice to Americans by leading them down the road to purchase ONLY term life insurance. Read More…
Whole Life Dividend Variation Analysis
Whole life dividends are commonly reviewed and compared among companies. For the most part, all we see are current year rates compared. On the rate occasion, someone might bring up the average dividend interest rate among carriers over a certain time period—most often 20, because the people in marketing vaguely remember something about sufficient sample sizes from the one elementary stats class they took in college, problem is they’ve misapplied the rule.
Stock Ownership Hit’s New Low According to Gallup
Earlier this month, Gallup released data it collects concerning stock ownership in the United States. The data show that stock ownership among Americans is at its lowest point since Gallup began tracking the data in 1998 with just 52% of American’s surveyed claiming to either directly or indirectly own stock in a public company.
Historical data from Gallup shows us that American stock ownership peaked around 2007 at 65% reporting direct or indirect ownership in stocks, and this percentage has been on a consistent decline since. Not surprisingly the sharpest declines in ownership took place during throughout 2008, but somewhat counter-intuitively—or at least that’s what some experts would have you believe, the trend continued in the same direction despite what has become a pretty good market rally since the 2008 fallout.
Is this a sign that it’s time to get back in?
039 When Should You Buy Long Term Care Insurance?
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(Complete Show Notes Below)
In the 39th episode of the Financial Procast:
We Poke the Long Term Care Insurance Beast Right in the Eye
For a while, we’ve had people asking us our opinions on long term care insurance (LTCi), so we decided to dedicate an entire episode to the topic. In the episode, you’ll hear both sides of the LTCi argument. One of us thinks it’s probably not a bad idea and the other is somewhat more skeptical.
We also discuss some of the hybrid products that have “tag along” LTCi benefits (life insurance and annuity based products).
And at what age should someone consider purchasing an LTCi policy? You’ll have to listen to find out what we think about this.
Does Blended Whole Life Really Work? Historical Proof
Blended whole life is a concept we really like. We’ve talked about it a fair amount before, and we maintain that it’s the way to purchase whole life insurance when cash accumulation is the most important goal. We’d also suggest that anyone who has learned that you can use whole life insurance as an asset and income tool should probably take a look at a blended policy. If you’ve been shown a standard whole life policy (i.e. no paid-up additions and no blending used to maximize paid-up additions) we’d invite you to challenge the performance of that policy against what can be done when redesigned to take advantage of this truly unique design.
But what sort of proof do we have to back up our claims that this blending business is truly beneficial? There’s a strong fundamental understanding of life insurance products that initially made me declare blending superior. And it took me a while to realize that it wasn’t something other agents understood (I had assumed they did and ignored it, but that doesn’t appear to be the case). That understanding of product mechanics is all well and good, but I’m not going to be able to impart hat upon anyone who just happens by the Insurance Pro Blog in any sort of efficient fashion. So what to do?
How about we use some historical evidence?
