whole life insurance policy.
tax deferred growth, tax free distributions, earns dividends, etc. Might take a couple years to build cash value but it's a great tool, especially for kids.
It's very similar to a roth ira, but it doesn't have the same contribution limits or age restrictions.
^^^ Worth looking into.
Don’t always follow the popular wisdom on finances & investing.
I am a good example of this thinking.
All my life I have heard (as most of you), when it comes to life insurance
“NEVER buy universal or whole life (investment insurance), but always
buy term insurance.”
This is what almost every financial guru has preached for the last 40
years (including Dave Ramsey). I am so happy I didn’t listen to all those
experts. They said it then & they are still saying it today.
Well I bought an investment life insurance policy (whole / universal
life) at the time (about 12 years ago) the guaranteed interest rate was
about what you could get at most banks, so I pulled the trigger and bought
the policy & fully funded the account.
The way it works is, my pot of cash is sitting in an account with the insurance
company. They pay me interest, that interest dividend is not taxed, it grows.
The cost of my life insurance is deducted from the account.
The down side is, the insurance cost more than term insurance – BUT, the up
side is remember that “guaranteed interest rate” I mentioned above? My
rate started at 6 ½ %, but of course it doesn’t pay that today. I’m earning
the account minimum, 5% on this very safe & secure account, with no tax liability.
The cost of the life insurance is a fraction of the amount of “high cost life
insurance” I pay monthly. In other words, I get free life insurance, my account
grows by thousands every year and I making about 5 times more than any bank
would pay me.
When it comes to financial investing, research and do your due diligence………..
………and pray.
