Posted by : Ruby Escalona Tuesday, December 4, 2012
My flat when I was living in Central London
Apologies, I know I have become a bad blogger recently. I have gone on a few trips here and there which took up a lot of my time, and watching a lot of shows in the middle. Thought I could make it up with a brand-new semi-travel and personal post! Hopefully the wait is worth it.
So two weeks ago, I was contacted by a previous next-door neighbor asking if he could meet with me to discuss some investment products that his company was offering. Out of courtesy, I agreed, and well, I am curious enough to know what investment product it was, but was just hoping it was not insurance-related as I definitely won't buy it.
Just my luck. It was an insurance-backed product. Ugh. I really hate those things: you save aside x amount of your money every month or year, and the company invests it in so and so and after x amount of years, you get a huge percentage of your money back as interest + your principal (that is, if the economy is up). Oh, what's more is that it is insurance-backed. Meaning if something happens to you (ie if your life conks out say, at this minute or so) - your beneficiaries get x amount of money as well. To be polite, I said I would think about it (but in reality, I already set my mind on saying no. I just needed another way to decline in a more polite way).
The sales pitch went like this: "You get x amount of money back as your savings/investment for the future, and your dependants will also get the money without bureaucracies if something does happen to you. I know you're still young, but if you invest while you are young, your premium is smaller compared to when you are comparitively older. Plus, shouldn't be saving up for your future family?"
Uhmm yeah, not interested. My reasons?
1) By the time that I do get my money back, its value would have been really depreciated. We all know about the time value of money right? Your $1 now is not worth $1 in say, 6 months time. So if I invest my money today and I get it back in say, 40 years time, my investment is basically worth half of it, I guess.
2) As traveler, I find that life is too short. Why would I want to invest a considerable amount of money for the future right now when I could use it to travel? I could go out and see the world instead of worrying about what I would leave my (future) kids and/or husband? I will cross that bridge when I get there. I love my life and the way I am living it now, so I'm sorry, you chose the wrong person to sell this product to.
3) I don't even have kids! The only family member I would want to take care of and/or leave money to is my mum! Not my cousins, nothing. Why would I pay for someone else's happiness? Other retirees out there forego their children's future inheritances, why can't I?
4) I am more interested in liquid assets. I need my cash now for my impromptu trips. I want to spend my hard earned cash the way I want to, which is travel (and books - and occasionally clothes and bags & shoes & concerts)
And so, when the time for me to decide was nearly up, I got a multitude of phone calls: I literally just arrived that morning from another out of town trip (Coron, Palawan) and was just warming up for another few days of work before another holiday (to Brunei). So yeah, forgive me if I did not have the extra time answering those calls. I got an email, which I then replied back to a few days after saying I would decline to take this offer.
I think he was a bit persistent because he was missing his quota for the year. Sorry, but still no.
Worked out the math and it went something like this:
*Save $1200 for a year for 20 years
That is $24000 for 20 years.
With that money, I could have gone around the world for a year (or more) if I saved that amount within a few years.
* I could invest that money in a fixed income account (ie bonds or savings accounts) and get a fixed rate of interest every month which I could also use on my incidentals or on travel.
* I could still be happy knowing that I had that amount of money ready to spend.
So sorry, but those are my two cents worth about Life insurance & variable life insurance.
I do not believe in it (at the moment) - I want to spend it more on my travels and trying to see what the world has to offer.
Then again, if you are selling me more time on planet earth and I am not going to age (which is impossible) then I might just consider your offer...