All Forum Posts by: Marcus Johnson

I guess you missed my point:

The only thing that auto and home insurance policies have in common with life insurance is the word insurance.

I stated that if you never file a claim on your home or car insurance then all of those premiums go up in smoke just like Term Life Insurance.

Sorry you mentioned Whole Life as a type of Insurance, but your were speaking about Universal Life which is just as bad, they contain cash values which isn't something I'm for.

This is what you said:

(I would probably buy both a term policy and a Variable Universal Life policy)

@Kevin Yeats

When you say "I have a lot to learn" you couldn't be more wrong. My ways have helped me to succeed in life and develop a very good networth based on my income and age. My methods don't have to be your way, but when you suggest a product as bad as whole life, I'm not going to sit and be quiet. I'm not the only person on this thread that have stated the exact same thing. Keep doing what your doing, but I'm not going to follow. I love your nasty statements, so please keep them coming.

You stated

Term insurance is transferring the risks of someone's death during a fixed period of time. 97% of term insurance policies expire without a claim.

Exactly!!! :) The same as home insurance, car insurance, an Umbrella policy, all types of insurance.

@Kevin Yeats IMO, the only ship that doesn't sail is a Partnership. I wouldn't do something along those lines. Again, term insurance is purchasing the the transfer of risk should something happen. It assures that my family is taken care of until we have a large networth and then insurance is worthless when you can pay for any situation that may arise. Let's leave investing to investors not insurance agencies. My fees are so low with Vanguard that no whole life insurance agent could ever match it. Not to repeat myself, but insurance premiums aren't returned if you never have a car accident or a house fire, so why is life insurance any different???? The cost of life insurance is so cheap with Term life insurance that it's worth it. I can use the money I save to invest in the S&P 500 in index funds that have averaged 11 to 12% before inflation and I continue to watch my money grow over the long term. We max out our Roth IRA's and when we retire we will be able to withdrawl all of our money tax free. How can ya beat that.

In addition as other posters have stated, if you plan for retirement and invest, then you should easily have a networth high enough to provide for you family after the term expires. Plus after a 20 year term policy, I expect my children to be out on their own and aren't living off my income anymore. If that scares you then just get a 30 year term. I sure hope your kids aren't living off your income at age 30. I'd kick their butts to the curb. :)

@Kevin Yeats

If that is your theory then why don't you expect something from your car insurance or Home insurance if you never file a claim and you lose all of the premium. Life insurance isn't an investment tools, it's simply to provide for you family should you die. As for Whole Life insurance products, don't waste your time. The fees and comissions are high and anyone of us can beat the returns simply by investing in S&P 500 index funds that average 11% before inflation with fees as low as .018%. You can't tell me that Whole life could charge that low of a fee, they would never be able to pay those hefty comissions.

Personally I don't think it makes good financial advice to risk going even deeper into debt to start a career in real estate. You have 120k in debt and no extra money. I don't think that is a wise decision to have no security blanket should things go bad. You have two choices in order to pay down that debt. Either to reduce spending or to find higher paying jobs. Student loans aren't bankruptavle so to me those are the most important thing to get rid of before you invest in real estate. Patience will reward you ten fold.

To me it sounds like you cannot afford a home right now. You don't have enough money between the two of you. Houses aren't blessings when your broke. Bi would wait and save up 20% for a down payment. Also I wouldn't by a home until your married because if something should happen and it doesn't work out then your both stuck on the note. Good luck and be patient. There is always another house to buy.

I live in Minnesota and right now there isn't much that ready to be rented that would give you high cash flow or come close to the 2% rule unless you go into poorer neigborhoods.

@Susan Gillespie

To give some background on the property. Back in November I submitted an offer of 105k on a short sale in Richfield to Wells Fargo and the listing agent. The comps around it suggested I should offer 118k to 125k. After my inspection, due to some of the fixes involved which I figured would be around 12k, we submitted an addendum to the offer for a new offer price of 100k as is. The city did their own inspection which I hired a GC to take that inspection and submit a bid to the lender and the listing agent to confirm that the property would require 10k. Wells Fargo on February accepted my offer.

I then turned to my bank and asked if the amount of repairs needed to be done would cause any problems with getting a conventional loan and they assured me no. So we ordered an appraisal and it came in at 119k and the ARV's in the neigborhood were selling for 150k to 170k so I stood to gain after repairs around $30k to 40k profit on the property after expenses.

The problem came when the underwriter waited until the financing deadline day to review the appraisal and the inspection that they denied the loan due to 10k worth of repairs needed to be done. This left me with no recourse to try other lenders. After the fact I tried Bell Mortgage and they looked at the appraisal and also determined that because the property was a C5 classification that conventional lending would be impossible. At least I know for future reference that you have to pay cash or find someone else to finance the deal.