Finance Advice Thread

[Hawker]

Yes, it only pays out upon a death claim. However, since you mentioned savings accounts, that 4% is legit. You can enjoy that cash value from the side pot. Plus, whenever you have a family of your own, you can have piece of mind that they'll never have to come out of pocket to bury you.

Main types of life insurance and their benefits:

Work Insurance/Group Term - Generally less than ten bucks (awesome) for decent coverage, on avg 1 x salary. However, when you leave your job, you lose all those benefits and suddenly, life insurance will be very high when you want to replace it. I recommend side coverage.

Term Insurance- Lower premiums for more coverage. It is designed to portect the things most important in the immediate, should someone die unexpectedly. Things like mortgage protection, income protection and college tuition. HOWEVER, your dollars don't work for you.

If you don't die before expected, the term expires and when you re-enroll, the premiums will be quite a bit higher, esp at retirement age. Plus, if you get sick, there's the possibility you will be uninsurable after considering terms are generally 10, 20, 30 years.

Whole Life Insurance- I basically already went over this but it provides for final expenses and collects the 4%. The advantage is having the same premiums no matter what. The company will always see you in the current age and health as when you enrolled, which is awesome. That's why people should get at least SOME whole life as young as possible

Ah, so the savings aren't liquid at all? That's what I thought you were getting at. The emergency fund is for if I get laid off and need some income to support me while I look for a new one. Or random high expenses.

The emergency fund needs to be liquid and if you think about it - the money you put into life insurance premiums at an early age might be better spent put into a side investment retirement fund getting better than 4%. Sure, the life insurance premiums might be larger whenever you get older and have a family and kids but the returns on your retirement investments would surely make up for it.

[ROCSteady]

Ah, so the savings aren't liquid at all? That's what I thought you were getting at. The emergency fund is for if I get laid off and need some income to support me while I look for a new one. Or random high expenses.

The emergency fund needs to be liquid and if you think about it - the money you put into life insurance premiums at an early age might be better spent put into a side investment retirement fund getting better than 4%. Sure, the life insurance premiums might be larger whenever you get older and have a family and kids but the returns on your retirement investments would surely make up for it.

No, they are. All you do is call whatever insurance company and get your money. Like I said, it acts as a savings account. Nothing needs to be converted or anything. It yields the 4 % compounded interest and when you settle down and have kids, you're locked in.

I was just saying that SOME companies charge a surrender fee if you try to dip into it super early.

I def hear you as far as putting money towards other investment opportunities, retirement, 401 k etc. I was just letting you know about the accrued interest because you mentioned savings accounts.

Funerals are expensive af though. I'd rather just pay a reasonable bill for that long term and invest with other things. Plus, if I croak in a car accident or something, my family doesn't have to worry about expenses and then the resy of the policy face value would just go back to them

[Hawker]

No, they are. All you do is call whatever insurance company and get your money. Like I said, it acts as a savings account. Nothing needs to be converted or anything. It yields the 4 % compounded interest and when you settle down and have kids, you're locked in.

I was just saying that SOME companies charge a surrender fee if you try to dip into it super early.

I def hear you as far as putting money towards other investment opportunities, retirement, 401 k etc. I was just letting you know about the accrued interest because you mentioned savings accounts.

Funerals are expensive af though. I'd rather just pay a reasonable bill for that long term and invest with other things. Plus, if I croak in a car accident or something, my family doesn't have to worry about expenses and then the resy of the policy face value would just go back to them

Sorry I never got back to you on this.

I haven't bothered to look into this but I'll take your word for it. I don't hear much advice on using life insurance for a savings account so not sure if I 100% trust it so I'll just keep it in a savings account or CDs at the moment.

Do you perhaps have an example of a company offering life insurance basically as a savings account option? Or at least explaining it?

Just did some basic google searching - more specific than the last time I researched it:

https://www.investopedia.com/terms/c...-insurance.asp

Is it a cash value life insurance plan?

If I had a wife and kids, I'd buy life insurance so they wouldn't have to pay for the funeral - I get you on that. My mom and dad can afford it at the moment.

Hope you're doing well on your financial journey bro.

[Hawker]

Just wanted to add - if you plan on travelling, check your back for the currency conversion rate and foreign transaction fees. There are checking accounts out there that don't even charge this - like Charles Scwhab Checking account.

Or you can use transferwise - which is what I use. Charles Schwab may still charge you a crappy currency rate though.

I have three bank accounts within transfer wise - USD, AUD and NZD. I have all three currencies on hand since I've worked in all three.

I recently signed up for their borderless bank account and I got a debit card with it. No foreign transaction fees. No transferwise ATM fees up to $350 for one month. Currency conversion fees are the lowest on the market and you get the mid-market rate which is the best out there.

https://transferwise.com


I recently transferred over $1000 NZD to AUD since I was visiting Aus recently. I did a bank wire from my NZD bank to my NZD transferwise account (no fee) and then transferred it to my AUD account within Transferwise. I could then use my debit card in Aus and pay in AUD instead of using my NZD debit card.

It amounts to an $8.16 fee which is 0.8% and gave me the market rate of 0.93 AUD/NZD. In total I got $923.71.

My bank offers 0.91 AUD/NZD so to get the same amount of money it would've cost me $1015 and assuming I spend all the money, another 2.5% or $25 on top. So $1040 on total vs. $1008

May not seem like much for $1000 ($32 dollars saved really is basically two meals though) but I did an even larger transfer recently and really makes a difference.

Anyway, there are legitimate options out there for saving money when travelling. Just takes a bit of effort and research.

[Hawker]

Anybody ever watch any of these millenial money videos? I find them fascinating.

Seems like millenials, based on these videos, aren't doing too bad.

https://www.youtube.com/watch?v=n6S3_Mtr8yQ

A little too much "money is for everyone" type of attitude in a couple videos but they aren't doing too bad.

Millennials do gotta cut down on the uber eats. Cook your own food.

[bladefd]

Thinking it's a good time for folks to change their 401k from stocks to bonds. Thoughts? You can still have like 10% stocks but certainly not 25% or something crazy. Market is being ramped up artificially and probably not a good idea to have 401k be anything more than conservative reliance on stocks at this point. Impeachment is also coming, and it could be a catalyst to a recession.

[Hawker]

Thinking it's a good time for folks to change their 401k from stocks to bonds. Thoughts? You can still have like 10% stocks but certainly not 25% or something crazy. Market is being ramped up artificially and probably not a good idea to have 401k be anything more than conservative reliance on stocks at this point. Impeachment is also coming, and it could be a catalyst to a recession.

Bad idea.

Why would you only buy when stocks are high? Keep it in an index fund and continue to buy - even increasing your monthly contribution - and buy low. Watch the growth happen immediately after. The returns are projected to be much lower over the next ten years by Vanguard and Fidelity but it will still be higher than bonds and cash.

Market has been ramped up artificially since day 1. That's what lowering the interest rate and stimulation packages do.

You're obviously young so downturns are bound to happen. And if impeachment is a catalyst for a recession as you say...then impeachment probably shouldn't happen.

[rufuspaul]

Bad idea.

Why would you only buy when stocks are high? Keep it in an index fund and continue to buy - even increasing your monthly contribution - and buy low. Watch the growth happen immediately after. The returns are projected to be much lower over the next ten years by Vanguard and Fidelity but it will still be higher than bonds and cash.

Market has been ramped up artificially since day 1. That's what lowering the interest rate and stimulation packages do.

You're obviously young so downturns are bound to happen. And if impeachment is a catalyst for a recession as you say...then impeachment probably shouldn't happen.

This. If you're young stay in it for the long haul. Old folks like me can afford to be a little more cautious.

[bladefd]

Bad idea.

Why would you only buy when stocks are high? Keep it in an index fund and continue to buy - even increasing your monthly contribution - and buy low. Watch the growth happen immediately after. The returns are projected to be much lower over the next ten years by Vanguard and Fidelity but it will still be higher than bonds and cash.

Market has been ramped up artificially since day 1. That's what lowering the interest rate and stimulation packages do.

You're obviously young so downturns are bound to happen. And if impeachment is a catalyst for a recession as you say...then impeachment probably shouldn't happen.

Doesn't matter for me since I work part-time at present but it does for my dad who is just 5 years away from retirement. If recession comes, he could lose a huge chunk of his 401k, no? Trying to convince him to switch to high bonds from high stocks. I think it's a good idea especially if you are in your 40s and even older around retirement age.

[Raymone]

Doesn't matter for me since I work part-time at present but it does for my dad who is just 5 years away from retirement. If recession comes, he could lose a huge chunk of his 401k, no? Trying to convince him to switch to high bonds from high stocks. I think it's a good idea especially if you are in your 40s and even older around retirement age.

If he's really 5 years from retirement, then yes he should have a heavier weight towards bonds/FI.

[Bosnian Sajo]

I have a couple of ideas atm of what to do with my money, but at this very second it's all just sitting in the bank...which isn't bad, but my money isn't doing anything for me atm. Talking about $30k atm. I got a couple thousand in my 401k as well, but I like to pretend that doesn't exist as I want it to keep accumulating over time. Company lets me use my excess benefits money in my 401k, so I'm investing about $6k a year without ever dipping into my salary. Pretty dope.


Any advice on making money WITHOUT making it through interest? Interest is strongly forbidden in my religion (making profit from it, that is...can't do much about it when it comes to actually paying it myself).

[sammichoffate]

Tfw interest on a savings account at 2% apy is considered good nowadays

[Manny98]

I really need to start saving i keep blowing my entire paycheck on unnecessary shit

[Hawker]

Tfw interest on a savings account at 2% apy is considered good nowadays

I know right?



It

[Hawker]

I have a couple of ideas atm of what to do with my money, but at this very second it's all just sitting in the bank...which isn't bad, but my money isn't doing anything for me atm. Talking about $30k atm. I got a couple thousand in my 401k as well, but I like to pretend that doesn't exist as I want it to keep accumulating over time. Company lets me use my excess benefits money in my 401k, so I'm investing about $6k a year without ever dipping into my salary. Pretty dope.


Any advice on making money WITHOUT making it through interest? Interest is strongly forbidden in my religion (making profit from it, that is...can't do much about it when it comes to actually paying it myself).

That $30k better be in a high yield savings account. You have sex and do other things against your religion too. Did your parents business require them to borrow any money? Bet they had to pay interest. Just a thought dude. Great amount of savings either way.

Is your company matching your 401k? Are you maxing our your contribution every year?

Also, have you taken a look at how your 401k is invested? Should be high growth for your age. Check your fees too.

While it’s good to pretend it doesn’t exist so you don’t freak out if it dips too much but you need to look into those things.