The carwash guy wrote:

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OK, nobody else bit on this, so I will. Why would an investment in
Senior Life Settlements be better than a low-cost, tax-efficient, index
fund?

-Will

On Sep 24, 1:23 pm, dr_phill...[at]yahoo.com wrote:
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Senior life Settlements.

Best thing going now.

Gary

dr_phill123[at]yahoo.com wrote:
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Not being a big sports fan, I have the bumper stick "don't let the
tax tail wag the investment dog" (as another poster just quoted).
Next to it is one that reads "Friends don't sell friends variable
annuities."

Whole life or any life insurance as investment falls into that category
for me. I think insurance is great. I have two term policies purchased
by a trust on my life on my wife's. We have insurance on each of our
cars, and on our house. Not having any of these five policies would be
irresponsible, I think.

To use this product and tie up your money with one company and lose most
flexibility makes little sense to me.

If next November things change enough, and there are no long term 15%
cap gains or 15% dividends, and you are in the 33% bracket, I might have
another opinion. If the extra fees in the insurance wrapper are 1% total
per year, well, you've blown the whole savings even if no tax at all was
due at withdraw. You know that ain't happening.
Paying small taxes on the cap gain distributions and dividends is
minimal. S&P yield is approx 1.7%. $1700 on $100,000. $255 tax. Not
enough to push you into a bad decision.

JOE

On Tue, 25 Sep 2007 14:59:18 -0500, dr_phill123[at]yahoo.com wrote:

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Do you never expect to marry or have kids? You may delay life
insurance until it's too late. One serious illness can disqualify you
except for the most expensive policy. It's likely that with certain
illness you will find no one to insure you. A life insurance policy
shouldn't cost you much now.
Thumper
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dr_phill123[at]yahoo.com wrote:


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No, it's more salesman's half truths than deceit. The money does grow tax
deferred (not tax free). You end up paying taxes when you withdraw it, although
I understand there are some ways of withdrawing that reduce those taxes.

However, a tax efficient mutual fund can limit your current tax burden and let
you pay capital gains taxes at 15% or less when you withdrawn. Anyway, paying
taxes is not all that bad a thing. It means you are making money. A favorite
line in this group is "Don't let the tax tail wag the investment dog."

Finally, money in taxable accounts is *your* money. You can do anything you
want with it without rules, age limits, or other nonsense. Go to Europe, buy a
house, go back to school, anything.

Insurance can out perform mutual funds, there are some truly awful funds out
there. But insurance as an investment tends to have fairly high costs
associated with it. (Who is paying your friend's salary?) High costs are a
drag on performance that it is difficult or impossible to overcome.

-- Doug

On Sep 25, 12:59 pm, dr_phill...[at]yahoo.com wrote:
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Yes but only if you shop for products with rock bottom expenses.
Otherwise, the amount of money you save from the taxes all go to the
inusrance company.

If you are looking for tax-deferred growth, variable annuity from
Vanguard at 0.30% extra ER would be appopriate for bonds and reits.
The argument for VAs to hold domestic stock is less compelling. The
problem is that a VA would convert capital gains and qualified
dividends to income taxable gains so the tax-deferral edge is so
slight, it's not worth the 59 1/2 lock in. (10% IRS penalty for
withdrawal before this age.)

Variable Universal Life is approprite for a very small subset of
investors. The problem is you don't need life insurance so that's
money thrown away. *IF* you needed life insurance and if you had
another 30K/yr beyond your current investments and if you were in good
health to get good life insurance premiums and if and if and if and
if ... then maybe a low-cost, no commission VUL from TIAA-CREF might
suite your purpose.

Doubtful anything the agent is selling could beat the above two
options.

Douglas Johnson wrote:
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I have no need for life insurance, i.e no wife or kids. But this
agent was talking all about the fact that your investment grows
tax-free and can outperform mutual funds. Is this just plain deceit?

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Thanks, I have just ordered this book used from Amazon.

On Mon, 24 Sep 2007 13:23:59 -0500, dr_phill123[at]yahoo.com <dr_phill123[at]yahoo.com> wrote:
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You can put money in banks, bonds, buy stocks, buy a rental apartment
to rent, etc, there are many choices. These insurance products
typically are overpriced relative to what you can get elsewhere.

Another choice is to work less.

i

dr_phill123[at]yahoo.com writes:

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Other than paying off your house (long real estate), you
don't talk about asset classes at all.

Maxing out a 401k and IRA are account types, not asset
classes - what did you buy in those accounts? Do you
have cash set aside for an emergency fund (and where?)

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That depends. For what *purpose* would you be buying
life insurance? Are you simply looking for an investing
vehicle through which to get, say, equity market exposure?
If so, life insurance is very likely *not* what you want.
Are you looking, say, for your beneficiaries to get
a wad of cash if you die? Then it probably is what you
want.

A bit more in specifics would be helpful, but going on
what you've written above, I can guess that odds are
that you should simply open up a regular, old fashioned
taxable brokerage or mutual fund account.



--
Plain Bread alone for e-mail, thanks. The rest gets trashed.
No HTML in E-Mail! -- http://www.expita.com/nomime.html
Are you posting responses that are easy for others to follow?
http://www.greenend.org.uk/rjk/2000/06/14/quoting

dr_phill123[at]yahoo.com wrote:

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Unless you have a need for life insurance (you need to leave someone lots of
money when you die), almost anything is better.

Buy "Investing for Dummies". Consider buying tax efficient, low cost mutual
funds such as Vanguard's S&P 500 index fund, SPINX in a taxable account.

-- Doug

I am 30 years old, max out my 401k and traditional/Roth IRA's. I just
finished up paying off my house, so have no debts. What is the next
logical thing I should put my money in? A friend of mine sells life
insurance and said I should consider that because earnings grow
tax-free. Is there anything better than that?