Buying used cars 3 years old has changed to buy used cards 5-7 years old because of the increasing quality of cars.

Only replace a car when either a) the body falls apart b) you have to replace an engine c) you have to replace the (an entire) transmission (as opposed to just the clutch) or d) you total the car.

One needs at least a tri-level emergency fund for 3 different needs: http://frugaldad.com/2009/07/20/the-tri-level-emergency-fund/

And yes, because you can withdraw contributions from a Roth-IRA at any time without penalty, a Roth-IRA as a “Level III Mega Emergency Fund” makes sense as long as the Roth is not your only retirement fund (e.g. you are also funding your 401(k) to the max at the same time).

Don’t depend on Social Security. It will only be available as a “safety net”.

Don’t depend on a pension. The PBIC is dead broke. If you are lucky you may get 10% of the amount you were promised.

Missing a couple months in a retirement account can be a several thousand/hundred thousand dollar mistake.

None of us have ever suggested one starve before tapping ones retirement account for money.

I would actually suggest you get between 6 and 12 months emergency fund into either a savings account or a money market mutual fund account.

Annuities are tools. When used properly, they are great. They got their bad rap from agents who used them improperly.

I have a client that is about to retire, they have annuities from another company. If they were to move them over, they would lose between 10 and 20% of their retirement. They retire next year. Those annuities also have a cap on what they can earn. The underlying investments have been doing 10/15% growth the last few months. They only got 2% and lost the rest. Not from fees, but because of the guaranties.

As for the fees, having little to no fees can be more detrimental than having moderate fees. Just as having too many fees will kill the return. There has to be a balance. WIthout that balance, it’s a bad product. With it, they are great products for specific tasks.

To each their own.

If those multi-millionaire clients knew of other options that are available, they probably wouldn’t put money into a WL type policy. The ones I deal with, get those options. When they deal with other advisors that mention cash value policies, they kick them out and move on.

On that post, 1 of those situations is better covered using lower cost key-man term insurance. The other 5 can be take care of using trusts and annuities. Both allow the protection they seek as well as greater growth potential with lower fees.

Whole Life is a sham and was created to increase profits. When those profits started dropping, the insurance companies started creating other cash value policies (UL, VUL, VL) to fit different times of the market so they can keep profits higher. UL was actually created as the answer to BTID.

Not one agent gets paid 200% not one, not even the top agent in the office (who is the in the top 5 of the Fortune 100 Company I work for). Most get 45 to 50% of First Year Premiums, but fade down QUICKLY. The Payout % is very similar to term, but as you have mentioned term costs less so the net payout is less.

I have been involved with the implementation of whole life (as my role in the office, but not as salesmen) for many many multimillionaires who wanted whole life for various reasons (not everything is about income replacement) here is a guest post:

http://cashmoneylife.com/2009/05/15/reasons-to-buy-whole-life-insurance/

We can go back and forth, and I am alright with that because you are obviously intelligent…but in the end If the product sucked that much and didn’t help at all it wouldn’t exist. LI Salesman, Financial Planners aren’t playing Jedi Mind tricks (a lot of them are quite the opposite as I am sure you’ll agree) some people are into it, some people aren’t.

The problem with whole life, when you pass on, all that cash you built up, you lose if you don’t get to it before you pass on. Then, unless you put it into a qualified account or the growth is below your tax basis, your heirs might have to pay income and estate taxes on it.

Whole life is only a great deal for the agent due to the average of 80 to 200% commissions on it. Why else would you have a -100% growth on your money the first few years.

And frankly, I don’t watch TV except for Nick & Disney with my kid and NCIS, SyFy, and Food Network. No news stations.

However, the millionaires’ I do socialize with, NONE of them touch cash value policies of any kind. They are just bad all around.