January 10, 2009

The 100th Post!

(Feb 2012 update: If you think 100 posts is worth noting, how about 5 years | 500 posts | 250,000 words?)

You don't write because you want to say something, you write because you've got something to say.
--- F. Scott Fitzgerald

This is the 100th post on Riscario Insider! That's nearly two years of writing, one article at a time.

Did you read the very first post: What's In A Name?

We've stayed close to the topic of helping Canadians learn about financial risks and how to reduce them. For variety, we've also looked at ways to improve ourselves --- which indirectly helps us quash our financial risks.

The Lie
We're supposed to write about what we know. I intended to write to help typical Canadians: stagnant family incomes create major financial risks. But how? I primarily help the small sliver of the wealthy. They have different issues. I slowly shifted the focus to wealthy Canadians.

What If You're Not Among The Wealthiest?

Study well what the billionaire does. It may make you a millionaire.
--- John Emmerling
We can learn from those who have what we want. This gets us ready for when we join them, Wealth is more than money. The wealthy think differently. They act differently --- in ways that may not make sense to others.

Want an example? Most of us can use more life insurance and more investments. Street wisdom says buy cheap term insurance and invest separately. Instead, the wealthy pick permanent life insurance because melding protecting with investing releases many tax advantages and saves money. Chocolate and peanut butter are fine apart but wonderful together.

The Future
Thanks for reading. We're getting older and better. As always, your input is welcome and welcomed.



Anonymous said...

How many wealthy people do buy term life insurance, or choose not to get life insurance? (presumably if they are already wealthy no one depends on their ability to work)

Promod said...

Thanks for your comment, Silicon Praire Blog.

We are talking in generalities and about populations. Individual behaviour is unpredictable.

The wealthy generally still work even if they have millions. They might get term insurance if they have a need for a limited period (e.g., to cover debt). Here the goal is to create an estate.

Since self-made wealth takes time to accumulate (e.g., small business owners, professionals), we are talking about people in their 50s, 60s and 70s. They are now starting to look at their legacy (family, charity) and preserving their estate.

Biases against insurance may persist and may last until the point the person becomes insurable :(

You can get more details on Canadian Life Insurance Sales in 2007

Anonymous said...

Hey Promod,
Congrats on the 100th Post!

Promod said...

Thanks Monty. It'll take a while to get to 1,000!

Anonymous said...

Promod: Thanks for the feedback.

Insurance may be a good investment for people who are already wealthy but that doesn't mean it's always good to imitate them to become wealthy. Just like buying a $40M house it may be more appropriate after building up wealth through something else.

In general any investment that's chosen mostly because of a tax advantage has a low priority for me, and having additional punitive costs due to age would only make it worse.

I can see that there might be some value in using insurance for estate planning, but only if it fits with the individual's larger goals.

James Morgan - Puritan Financial Advisor said...

The wealthy think differently. They act differently --- in ways that may not make sense to others.

Jason the life insurance marketing guru said...

permanent life insurance is by far the best vehicle for accumulating assets as it combines tax free growth (and distributions) with the death benefit and guaranteed returns.

If you look at the typical mutual fund of the last 20 years compared to the standard 4% interest paid on a permanent life policy, you'd have more in the life insurance...

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