If you have read this blog for any length of time, you can most likely tell which way I lean on most personal finance tips and money related topics. Typically, I do not try to preach too much of my own personal finance tips, philosophies, or credos on Money Q&A.
But, there comes a time when I just cannot stand the poor personal finance advice that permeates throughout the internet. Like many people say, if you do not stand for something, you’ll fall for anything.
I wanted to share with you these few universal truths and personal finance tips that you can see woven throughout this website. These are a list of money and investing philosophies that lead every money decision that I typically make.
These shape my writing on this and other websites. These are convictions that you will not see waver on this site.
Personal Finance Tips, Philosophies, & Convictions
- Term life insurance is the only type of life insurance you need.
- 90% of your investments need to be in index funds.
- It is okay to risk a very small percentage of your overall investing portfolio.
- It is imperative that you spend less than you make.
- You have to have a monthly written budget…period.
- You must have three to six months saved in an emergency fund.
- There are no real ways to get rich quick.
- The American Dream is not dead.
- Fixed rate mortgages are the only way to buy homes.
- You should be very cautious who you accept financial advice from.
Term Life Insurance Is The Only Type You Need
Term life insurance is the only type of life insurance that you need to purchase to protect your family from the premature loss of your income should you die early. The only people who profit from whole life insurance or cash value life insurance policies are those who sell it.
Everyone else is being taken advantage of when people try to sell or promote the product to you. Whole life insurance is an expensive form of life insurance because there is a cash value or investment portion associated with the insurance policy.
The extra cost, almost five times as much in some cases, is used for the mediocre investment returns that are promised to customers. There are many other investments and better financial products on the market to help you save and invest your money instead of having to buy whole life or cash value life insurance.
Life insurance is not an investment and should not be used as such. You can do better than a life insurance company when it comes to investing your money. you can invest that difference between term life insurance and whole life insurance policy.
What would you do with an extra $100 per month? I’m sure that you can think of better uses for that money and better investments than an investment company.
Even investing in an index fund would be a better option than buying a whole life insurance policy. Those who try to tell you different are either uninformed, delusional, biased, profiteers, or all of the above.
