Originally posted by @Thomas Rutkowski:
Originally posted by @Brad Taylor:
I do not think it is a good strategy. You are paying higher commissions and fees for funds with less options. Why not just invest in mutual funds and keep the wasted money for yourself?
Unless you are investing in index funds, Mutual funds will cost you far more than life insurance over the long run. And again, its all about the income. If I can get 2-3 times the income from the same amount of money, I don't care if my cash value kept up with a mutual fund dollar for dollar. Stay focused on the prize at the end of the race.
Maybe I am confused and hopefully you can explain it to me: If you and I both invest the same amount into the same funds with the only difference is that I put mine into an IRA and you put yours into a component of a life insurance policy (but the investment component is the identical amount), your fees are ~5% and mine are much less than 1%, how do you earn 2-3x more than I will? Where does that extra income come from? We both have the same investment in the same index funds for the same time period, only my fees are lower and I don't have a growth cap limiting me on terrific years. How is that possible? I haven't even touched the fact that I have actively managed funds that consistently outperform the S&P in addition to investments in index funds.
I am not trying to belabor the point or seem argumentative, I am honestly curious. If you can outperform my same monies in the same funds with higher fees and a growth cap, I would ask that you email me some literature.