So, judging from Jeff's response, then the IEU Life product is a whole-life type product. (We were posting at the exact same time). Just a note: if you apply a .33% tax rate to $733,990 then you would have $491,773 left over.
I am very interested in spending my money while I am alive, rather than leave an inheritance, though that scenario may be attractive to others.
Some ideas about taxes:
Taxes may or may not be 25% + 8% or close to those amounts, depending on tax structure of your investments.
If you used after tax money and just made regular investments (and never sold the investments during this entire 30 years) and then you sold the investments all at once, you would trigger long-term capital gains tax on your gains (value of the investment less the cost basis).
If you invested the money in a Roth IRA, then you would not owe taxes (yes I realize that you couldn't invest the entire $353 per month but you would avoid some of these taxes).
You might also put the money into a 529 account and not owe taxes in the end so you could perhaps send your grandchildren to college and watch them graduate rather than leaving the inheritance.
If you had invested this money in an IRA or 401(k) you would have received tax benefits at that time, which should be put into the calculations.
There may be some unique features to the IEU Life product that I am not familiar with; if you visit again, perhaps you can leave a link to information about this product.
Before I am too critical of the response I must admit that this is afairly typical response...to throw out numbers that are not accountable or accurate and without must explanation of their basis. Your calculations that the two investment returns of 9.18% on the insurance and 10% on the investment are a concocted comparison because over the course of the 20-30 period of these policies none of them have paid 9.1% especially when you factor in the higher expense costs. If you visit National Underwriter.com you will see the past 20 year rates of return for whole life, universal and variable life policies of the top carriers and none of them achieve this return for the period. That is the fallacy of the presentation. Agents use current rates of return as a projection for the future. This is why so many policies fall apart in future years or require additional payments. The whole life rate of return is actually a negative in manner cases. Additionally the statement..."With Term, Inheritance Zero" is not accurate because the savings which accumulated over the 20 or 30 period from not buying the cash value plan is the inheritance, which is also available throughout the term of the insurance coverage. If you die during with the cash value policy you get only the policy death benefit, not you cash value account, unless you selected an even more expensive death benefit option. The Indexed nature of the policy you are referencing does not change the argument because somehow it has a better rate of return...only if you illustrate it that way.
Fifty years ago, my husband's parents were ready to name their first-born son Ian (not my husband, whose name is Clay, but his older brother). Mom's older brother George, ever the jokester, told her a few weeks before the birth that the name was going to be a curse for the boy, because he'd be taunted and mocked by bullies with the phrase, "Ian's peein'!"
As a result, they reluctantly chose to not go with Ian, but Howard Alexander, and nicknamed him Sandy (which I still haven't figured out why a nickname that is customarily female would be a better choice than Ian). Anyway, fast-forward to 1993. I'm pregnant with my first son, and knew how much my mother-in-law loved the name Ian, so I told my husband, "Hey, I'd like to name him Ian, for your mom's sake." Zowie - he was thrilled, she was thrilled, father-in-law was thrilled, and, for a few weeks, so was I. But THEN, in the dark, wretchedly hormonal recesses of my mind, Uncle George's prediction five decades earlier doomed the name for me. As the day of delivery grew closer, I imagined more and more frequently my beautiful child being the victim of playground abuse and shame.
Meekly, I told my husband that I was chickening out because I couldn't go through with saddling my baby with a name that rhymes with urination. I think I made the right choice, but I still like the name. And we went with the name Chase for him instead, which presents a whole other set of opportunities for teasing (although nowhere near as embarrassing or vulgar as Ian's Peein').
I'm a little obsessed with keeping a supply of food in my freezer. I try to keep at least a week's worth of meals on hand at any one time. Since I live by myself, I usually have food left over, even when I make only a half or quarter of a recipe. Usually, there's enough left both to have leftovers the next day and freeze one serving of the recipe. I figure that if for any reason I'm a little short on money one month, I'll have enough food in my freezer to keep me going for a little while.
I always thought I could use credit for an e-fund - until payroll went through a day late we got an overdraft on our bank account. So your examples really hit home!
Before my son was born, we thought about some possible names; however, we both wanted to *see* him before we gave him his name. It turns out he wasn't the name we were considering! I'm pretty sure my name isn't quite _mine_... it's almost the same as my mom's (which happens to be a common name) so I get called hers regularly, and it's unusual the same way my sister's is so I get called hers infrequently. I've only ever seen one other person with the same name; I wonder if it has any reflection on why I so often feel disconnected with others.
Xavier's parents named him based on who he is. Both of my kids are named based on who they are. They don't need to grow into the name. There is some flexibility too, for when they're examining their lives and want to encourage one aspect or another.
And I'm sorry, but some names put a burden of implication forward. "Timmy" and "Bunny" don't sound as purposeful as "Derek" and "Mary". Which preconceptions are you willing to leave upon your child?
We do pizza all the time at home. Tastes better, and better for you! The secret for good pizza at home is a pizza stone, and the oven cranked to the highest setting for at least a good 20min before you put the pizza in.
We make double-sized batches of dough, cook what we need and freeze the leftover balls for later. Pizza night just means dough to fridge before work, and putting it out on the counter to finish thawing when we get home. The stretching and assembly is the fun part!
Annual rate of return for INSURANCE 9.18%, & INVESTMENT 10%
Results Summary INVESTING AND BUYING TERM INSURANCE
Savings Results Summary
Amount to save per month: $353
Years to save: 30
Annual rate of return: 10%
Federal tax rate: 25.00%
State tax rate: 8.00%
Total savings after 30 years: $733,990
Savings after taxes: $392,799
INVESTMENT OPPORTUNITY LOST ON AMOUNT PAID FOR TERM INSURANCE:
Term cost, LOST INVESTMENT OPPORTUNITY INCOME ($75,667)
Results Summary Money paid for Term Insurance
Savings Results Summary
Amount to save per month: AMOUNT PAID FOR TERM $68
Years to save: 30
Annual rate of return: 10%
Federal tax rate: 25.00%
State tax rate: 8.00%
Total savings after 30 years: $141,392
LOST Savings after taxes: ($75,667)
BUY IEUL OR TERM INSURNACE
After 30 years
IEU Life Buy Term and - Invest the Deference
Surrender Value Death Benefit Investment Value
$525,417.00 $1,025,417 $392,799
With the IEUL product, you could spend $392,799 (the full amount from your investment) and still have $132,618 available. You would still be able to leaving your family an inheritance of $632,618 tax free upon your death. With Term, inheritance ZERO.
ILLUSTRATION PART DETAIL
Premium Cumulative Surrender Death
Age Year Outlay Premium Value Benefit
60 30 5,052 151,560 525,417 1,025,417
61 31 0 151,560 573,713 1,073,713
My parents didn't like having long names in kindergarten (Kathleen and Patrick) so they specifically gave my brother and I short names (Scott and Amy). I thought this list was funny because it was EXACTLY their thought process. My boyfriend and I were picking out hypothetical baby names, and his rules were pretty much the same as your list. We came to a truce on Jeremy.
When I was an employee, I saved about 3 months of my income and quit my job. I ran through that income quickly as I worked on establishing myself as a freelancer, plus a move to a new apartment. 6 months of income is definitely the way to go. It's a terrible feeling when you look in all your empty bank accounts and at all your maxed out credit cards and realize you have nothing to fall back on.
First, you're not a alone. A lot of people are doing just the same thing, and a lot of financial advisors agree that it makes no sense to save money at 5% while borrowing money at 8%.
The reason I don't like depending on credit as as emergency fund is that it depends on the credit system continuing to function smoothly. I haven't heard of any HELOC accounts getting closed during the recent credit squeeze related to the subprime lending--but that's just the sort of thing that can happen in a credit squeeze.
With banks having trouble selling their loans and property values dropping, they could decide to just get out of the HELOC business. Short of that, they might tighten up on their credit standards--and close only the HELOCs of people who might need the money. Either way, it's likely to happen just when you need the money the most.
I speak with 50 years experience. It takes a lot of maturity to accept an unusual first name . Mine is only 5 letters long , but no one ever gets it right the first time. And please I only wish I had a quarter for everytime someone has said "oh like the cookie".
I have a HELOC balance (8+ percent), and put any additional money into paying that down rather than building an emergency fund. The way I see it is that I'm better paying down a higher interest rate (even factoring in tax deductibility) than making 5% interest. If I needed an emergency fund, I could use the HELOC, which has plenty remaining for 5-6 months expenses. Is there any risk that I'm missing in doing this?
We decided on "Andrew" -- not Andy, maybe Drew if it has to be shortened. We like the full version of the name. My thought was if I was going to call him Andy, I'd have named him Andy...
Once your emergency account is funded, it's time to start investing for the long-term, and those long-term investments can be tapped in the event of a major crisis. Having an emergency fund gives you some flexibility in deciding how and when to tap them.
For a planned major transition, planned savings targeted for that particular transition makes good sense.
Personally, I've always thought the 3-6 months thing was a bit short. While it's fine for basic emergencies, it can really fall short for major transitions or family crisis. Good analysis of sub-issues.
As mentioned before, dry beans cook soo much quicker in a pressure cooker.
The tough cuts of meat come out so tender you won't want to buy the more expensive cuts.
A chicken comes out so tender and juicy.
Potatoes cook so quickly. Mashed potatoes in a jiffy :)
Erm, did I mention 'quick'? When cooking vegetables, just remember that they cook much quicker than usual, so the best ones are those that take longer to cook, like the dry beans and potatoes, beets and other root vegetables.
Soups come out tasting delicious - I just remembered my favorite - a simple chicken and leek soup. Mmm
If you have a larger pressure cooker, boiled/steamed turkey is soo juicy.
@Lacey: I hadn't thought of brown rice in the pressure cooker, but I'll give it a try.
Companies go out of business, thats life. If someone was silly enough to have there photos only backed up online, i think $20 is a bargain to get all the photos back. The company could have just gone under and not given any photos back, how would customers feel then?
my son's name is "jackson monster alexander ". we call him jack. he will not know his middle name until he turns 18. then he can do with it what he wants. named him because he is 150th percentile and was natural birth. ouch
Although I honestly haven't tried this on a BBQ, we used to use Preen to degrease our engines. Preen is an Australian(don't know what country your in!) pre-washing aid.
Yea, I work in the "retention" department at comcast, and MOST of our reps can smell wanna be hustlers like you guys through the phone. I know when your just trying to get fish a promo out of me. You think your slick, but your not, what you dont know is, when I do call your bluff and you squirm and ask me stuff like "dont you want to keep me as a customer?" then I know I got you, hook line and sinker, more and more people are figuring out this little game you guys are playing and next time you do it be carefull what you ask for, you just might get it, disconnected baby!!!!!!!!!! NO PROMO FOR YOU and you go to the competition because who wants to deal with a winey customer who cant afford the actual value of the service. Direct TV DISH and dsl can deal with you.
So, judging from Jeff's response, then the IEU Life product is a whole-life type product. (We were posting at the exact same time). Just a note: if you apply a .33% tax rate to $733,990 then you would have $491,773 left over.
I am very interested in spending my money while I am alive, rather than leave an inheritance, though that scenario may be attractive to others.
Some ideas about taxes:
There may be some unique features to the IEU Life product that I am not familiar with; if you visit again, perhaps you can leave a link to information about this product.
Before I am too critical of the response I must admit that this is afairly typical response...to throw out numbers that are not accountable or accurate and without must explanation of their basis. Your calculations that the two investment returns of 9.18% on the insurance and 10% on the investment are a concocted comparison because over the course of the 20-30 period of these policies none of them have paid 9.1% especially when you factor in the higher expense costs. If you visit National Underwriter.com you will see the past 20 year rates of return for whole life, universal and variable life policies of the top carriers and none of them achieve this return for the period. That is the fallacy of the presentation. Agents use current rates of return as a projection for the future. This is why so many policies fall apart in future years or require additional payments. The whole life rate of return is actually a negative in manner cases. Additionally the statement..."With Term, Inheritance Zero" is not accurate because the savings which accumulated over the 20 or 30 period from not buying the cash value plan is the inheritance, which is also available throughout the term of the insurance coverage. If you die during with the cash value policy you get only the policy death benefit, not you cash value account, unless you selected an even more expensive death benefit option. The Indexed nature of the policy you are referencing does not change the argument because somehow it has a better rate of return...only if you illustrate it that way.
I hate buying something I already own. Sure it is shabby, but I'm not naked.
Fifty years ago, my husband's parents were ready to name their first-born son Ian (not my husband, whose name is Clay, but his older brother). Mom's older brother George, ever the jokester, told her a few weeks before the birth that the name was going to be a curse for the boy, because he'd be taunted and mocked by bullies with the phrase, "Ian's peein'!"
As a result, they reluctantly chose to not go with Ian, but Howard Alexander, and nicknamed him Sandy (which I still haven't figured out why a nickname that is customarily female would be a better choice than Ian). Anyway, fast-forward to 1993. I'm pregnant with my first son, and knew how much my mother-in-law loved the name Ian, so I told my husband, "Hey, I'd like to name him Ian, for your mom's sake." Zowie - he was thrilled, she was thrilled, father-in-law was thrilled, and, for a few weeks, so was I. But THEN, in the dark, wretchedly hormonal recesses of my mind, Uncle George's prediction five decades earlier doomed the name for me. As the day of delivery grew closer, I imagined more and more frequently my beautiful child being the victim of playground abuse and shame.
Meekly, I told my husband that I was chickening out because I couldn't go through with saddling my baby with a name that rhymes with urination. I think I made the right choice, but I still like the name. And we went with the name Chase for him instead, which presents a whole other set of opportunities for teasing (although nowhere near as embarrassing or vulgar as Ian's Peein').
I'm a little obsessed with keeping a supply of food in my freezer. I try to keep at least a week's worth of meals on hand at any one time. Since I live by myself, I usually have food left over, even when I make only a half or quarter of a recipe. Usually, there's enough left both to have leftovers the next day and freeze one serving of the recipe. I figure that if for any reason I'm a little short on money one month, I'll have enough food in my freezer to keep me going for a little while.
I always thought I could use credit for an e-fund - until payroll went through a day late we got an overdraft on our bank account. So your examples really hit home!
Before my son was born, we thought about some possible names; however, we both wanted to *see* him before we gave him his name. It turns out he wasn't the name we were considering! I'm pretty sure my name isn't quite _mine_... it's almost the same as my mom's (which happens to be a common name) so I get called hers regularly, and it's unusual the same way my sister's is so I get called hers infrequently. I've only ever seen one other person with the same name; I wonder if it has any reflection on why I so often feel disconnected with others.
Xavier's parents named him based on who he is. Both of my kids are named based on who they are. They don't need to grow into the name. There is some flexibility too, for when they're examining their lives and want to encourage one aspect or another.
And I'm sorry, but some names put a burden of implication forward. "Timmy" and "Bunny" don't sound as purposeful as "Derek" and "Mary". Which preconceptions are you willing to leave upon your child?
We do pizza all the time at home. Tastes better, and better for you! The secret for good pizza at home is a pizza stone, and the oven cranked to the highest setting for at least a good 20min before you put the pizza in.
Annual rate of return for INSURANCE 9.18%, & INVESTMENT 10%
Results Summary INVESTING AND BUYING TERM INSURANCE
Savings Results Summary
Amount to save per month: $353
Years to save: 30
Annual rate of return: 10%
Federal tax rate: 25.00%
State tax rate: 8.00%
Total savings after 30 years: $733,990
Savings after taxes: $392,799
INVESTMENT OPPORTUNITY LOST ON AMOUNT PAID FOR TERM INSURANCE:
Term cost, LOST INVESTMENT OPPORTUNITY INCOME ($75,667)
Results Summary Money paid for Term Insurance
Savings Results Summary
Amount to save per month: AMOUNT PAID FOR TERM $68
Years to save: 30
Annual rate of return: 10%
Federal tax rate: 25.00%
State tax rate: 8.00%
Total savings after 30 years: $141,392
LOST Savings after taxes: ($75,667)
BUY IEUL OR TERM INSURNACE
After 30 years
IEU Life Buy Term and - Invest the Deference
Surrender Value Death Benefit Investment Value
$525,417.00 $1,025,417 $392,799
With the IEUL product, you could spend $392,799 (the full amount from your investment) and still have $132,618 available. You would still be able to leaving your family an inheritance of $632,618 tax free upon your death. With Term, inheritance ZERO.
ILLUSTRATION PART DETAIL
Premium Cumulative Surrender Death
Age Year Outlay Premium Value Benefit
60 30 5,052 151,560 525,417 1,025,417
61 31 0 151,560 573,713 1,073,713
My parents didn't like having long names in kindergarten (Kathleen and Patrick) so they specifically gave my brother and I short names (Scott and Amy). I thought this list was funny because it was EXACTLY their thought process. My boyfriend and I were picking out hypothetical baby names, and his rules were pretty much the same as your list. We came to a truce on Jeremy.
When I was an employee, I saved about 3 months of my income and quit my job. I ran through that income quickly as I worked on establishing myself as a freelancer, plus a move to a new apartment. 6 months of income is definitely the way to go. It's a terrible feeling when you look in all your empty bank accounts and at all your maxed out credit cards and realize you have nothing to fall back on.
First, you're not a alone. A lot of people are doing just the same thing, and a lot of financial advisors agree that it makes no sense to save money at 5% while borrowing money at 8%.
The reason I don't like depending on credit as as emergency fund is that it depends on the credit system continuing to function smoothly. I haven't heard of any HELOC accounts getting closed during the recent credit squeeze related to the subprime lending--but that's just the sort of thing that can happen in a credit squeeze.
With banks having trouble selling their loans and property values dropping, they could decide to just get out of the HELOC business. Short of that, they might tighten up on their credit standards--and close only the HELOCs of people who might need the money. Either way, it's likely to happen just when you need the money the most.
I speak with 50 years experience. It takes a lot of maturity to accept an unusual first name . Mine is only 5 letters long , but no one ever gets it right the first time. And please I only wish I had a quarter for everytime someone has said "oh like the cookie".
I have a HELOC balance (8+ percent), and put any additional money into paying that down rather than building an emergency fund. The way I see it is that I'm better paying down a higher interest rate (even factoring in tax deductibility) than making 5% interest. If I needed an emergency fund, I could use the HELOC, which has plenty remaining for 5-6 months expenses. Is there any risk that I'm missing in doing this?
Someone was looking for a way to try to identify trends in baby names. Go to this link -- it's pretty fun to play with.
http://babynamewizard.com/namevoyager/lnv0105.html
We decided on "Andrew" -- not Andy, maybe Drew if it has to be shortened. We like the full version of the name. My thought was if I was going to call him Andy, I'd have named him Andy...
This is an awesome post - one that will help me re-evaluate the little purse I have.
Once your emergency account is funded, it's time to start investing for the long-term, and those long-term investments can be tapped in the event of a major crisis. Having an emergency fund gives you some flexibility in deciding how and when to tap them.
For a planned major transition, planned savings targeted for that particular transition makes good sense.
Personally, I've always thought the 3-6 months thing was a bit short. While it's fine for basic emergencies, it can really fall short for major transitions or family crisis. Good analysis of sub-issues.
As mentioned before, dry beans cook soo much quicker in a pressure cooker.
The tough cuts of meat come out so tender you won't want to buy the more expensive cuts.
A chicken comes out so tender and juicy.
Potatoes cook so quickly. Mashed potatoes in a jiffy :)
Erm, did I mention 'quick'? When cooking vegetables, just remember that they cook much quicker than usual, so the best ones are those that take longer to cook, like the dry beans and potatoes, beets and other root vegetables.
Soups come out tasting delicious - I just remembered my favorite - a simple chicken and leek soup. Mmm
If you have a larger pressure cooker, boiled/steamed turkey is soo juicy.
@Lacey: I hadn't thought of brown rice in the pressure cooker, but I'll give it a try.
Companies go out of business, thats life. If someone was silly enough to have there photos only backed up online, i think $20 is a bargain to get all the photos back. The company could have just gone under and not given any photos back, how would customers feel then?
my son's name is "jackson monster alexander". we call him jack. he will not know his middle name until he turns 18. then he can do with it what he wants. named him because he is 150th percentile and was natural birth. ouch
Although I honestly haven't tried this on a BBQ, we used to use Preen to degrease our engines. Preen is an Australian(don't know what country your in!) pre-washing aid.
Yea, I work in the "retention" department at comcast, and MOST of our reps can smell wanna be hustlers like you guys through the phone. I know when your just trying to get fish a promo out of me. You think your slick, but your not, what you dont know is, when I do call your bluff and you squirm and ask me stuff like "dont you want to keep me as a customer?" then I know I got you, hook line and sinker, more and more people are figuring out this little game you guys are playing and next time you do it be carefull what you ask for, you just might get it, disconnected baby!!!!!!!!!! NO PROMO FOR YOU and you go to the competition because who wants to deal with a winey customer who cant afford the actual value of the service. Direct TV DISH and dsl can deal with you.
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