Keep INVESTING Simple and Safe (KISS)
****Investment Philosophy, Strategy and various Valuation Methods****
The same forces that bring risk into investing in the stock market also make possible the large gains many investors enjoy. It’s true that the fluctuations in the market make for losses as well as gains but if you have a proven strategy and stick with it over the long term you will be a winner!****Warren Buffett: Rule No. 1 - Never lose money. Rule No. 2 - Never forget Rule No. 1.
I just returned from a harrowing experience at this local insurance company and a morning of blank faces and passive responses to my torrent of questions.
Why have I been paying S$7,000 per year and getting all these optimistic updates on fund performance, and after 10 years I end up losing more than 40 percent of my premiums?
You see, I had blindly signed the papers when my mom suggested I buy a bunch of investment-linked products over a decade ago, and had paid scant attention to it until urged by an insurance adviser recently.
The realisation that I have been paying very, very expensive premiums over 10 years does not sit well with me and some introspection was required.
That amount that I had paid could have well gone into a life policy such as a universal life option, buying me the same coverage for a fixed payment with loan of 70 percent.
If we assume that an annual universal life premium of S$120,000 buys S$1 million cover for someone aged 30, my paid premiums could have gone to buying whole life coverage until I was 110 instead! (Note: This is probably for international insurance firms and not the local companies that insist on ripping folks off with their simply exorbitant premiums that they force some local banks to fund)
The blank faced staff gave me a scornful look and said if I continued paying I would reap the rewards from it too! Yes, if I had an IQ of 50 maybe.
If I continue paying another 10 years, I would perhaps break even.
Why don’t the rich folks buy these products? Why don’t the private banks sell unit trusts?
Because these are the black box priced deals that the public has no chance of fighting against. No transparency and no restitution (don’t even think of going to court).
Private bankers themselves only ever buy term life and medical policies leaving the investment bit out. Investments are separate. And all these articles in the papers telling people that insurance is the way to go for retirement. I just recently discovered that “financial planner” is just another word for insurance agent.