Well! Hi everyone, welcome to another wide money tools video. And I promise we're gonna finish up the six items today. Just to have a little recall here, in our previous three videos we talked about, basically the six items that are pushed by traditional financial advisors, get out of debt, defer all the taxes you can, if you have more than 10 years to invest in by mutual funds. Number four was don't buy individual stocks. And in this video, we're gonna finish up the last two items. And so number five is by term insurance, because that's all you'll ever need. And then the sixth one is kind of an absence of talking about an item. And that is the absence of talking about real estate being an viable option as well. Okay, so when it comes to buying life insurance. Now stick with me on this because I know maybe some of your thing, and I want to talk about this might be, you know, a little more depressing and all that stuff.

But this is critical. And I think you're gonna want to know some of this stuff is gonna face you sooner or later. If it hasn't already. When it comes to buying life insurance, you're gonna find really more opinions, then you probably want. So there's a couple of things. The first thing is Do you want to die with life insurance? Okay, now we don't typically think we like to talk about dying, right? But there's really no way out. Okay, we're not getting out of this thing alive. The fallacy and most financial plans is that they say that if you save in a 401k, you've got plenty of money, that you're gonna be able to drop your life insurance. Well. If that's so true, then why do so many people in their 60s who are doing some estate planning, who have some wealth, one of the first things they do is buy a boatload of life insurance.

You see, it's an amazing asset. It's the only asset that you can pass tax free, probate free, it bypasses wills and trusts and again probate and goes directly to your beneficiaries. It's really kind of the most unique asset there is. To suggest you'll need life insurance until you're about 60 or 65. Well, that's just almost crazy. Because so many people are relying on the fact that the markets have performed well, they got all this dough, their networks so high, and so they won't need life insurance. And as you can see from our last couple videos, that's just not typically, you know, something that happens. And the wealthy understands that more that the more money you have, the more you probably want life insurance as an asset category. Okay, so here's the big problem with term. The big problem is it gets more expensive as you age.

That means when you're in your 60s and 70s, and Heaven forbid your 80s term insurance, when it renews, you're probably going to find premiums way too expensive. And it would literally just drain your finances, if you kept it. That's why it is typically dropped long before people die. In fact, term insurance statistically pays out about 1 to 2% of all their policies, because people drop them before they die. This very typical with her term insurance, they buy it while they're young. While it's cheap, and statistically they're not gonna die. Then they drop the insurance when the costs rise, and they age and it gets really expensive. Yet this stuff is can't say that yet, statistically, they are gonna die. To me It's like having homeowners insurance, and paying premiums for years and years and years.

And then just about the time of hurricanes about to destroy your house, you drop your homeowners insurance. And you're left with nothing but a bunch of canceled checks for the premiums you paid to thousands, even maybe 10s of thousands of dollars that's wasted. Well, this is the same thing that happens with term insurance. If you think about a hurricane being your eventual death, people pay thousands, again, even 10s of thousand dollars in term premiums and drop it before the hurricane or death comes, the families left again with a bunch of canceled premium checks. Look, you're going to exit this earth at some point, why not have insurance and force when you die? I mean, you've paid premise for so many years anyway, it's gonna happen. We could go on to several other discussions with this topic.

But let me end with this. If you use a permanent whole life policy. It becomes an asset, it becomes a storage facility, if you will for your capital, it becomes a place where you can access cash for major expenses, purchases, and better yet for investment opportunities. It's a tax free location. If you do this, right. It can be a tax free supplement to your retirement income. And it doesn't affect your Social Security. And finally, it is the best asset to die with. You won't be throwing away premium because it's coming back to your family at some point. And again, it's what the wealthy have done for generations, you would think after listening to traditional financial advisors pushing term insurance, that the Rockefellers as a example, would have plenty of money and would not need insurance. Right? But just the opposite.

They've been using insurance now as a means to pass on wealth for generations. Hmm. Why don't we follow what the wealthy do instead of what the financial planner tells us to do? They're totally missing the boat. And I know, I was one of them. I was so frustrated with what was taught and sold that I had to find a better way. I didn't realize how easy and simple it was to just copy with the wealthy do. And the wealthy do not buy term insurance. All right, lots more on that topic. But we'll have to leave it at that for now. The last item on our list wasn't so much an item of what to do. It was the absence of what to do. It was so blatantly obvious from this radio advisor that he missed out on a potential investment opportunity. What he did is he left out real estate.

Now real estate comes in many forms. It could be buying a rental property, it could be getting commercial properties, it could be lending money for real estate projects in development, maybe even building real estate or building buildings yourself. And finally, looking for undervalued properties and selling them at market value is a good way to make money. The last one's a little bit more difficult to do right now, especially when we're in a boom cycle. But it's been something that people have done for years. The point is, there are many ways to get money working in real estate. The problem is most advisors can't get fees. If you go buy a rental or lend to a builder as an example, they have to get you into their mutual funds their 401k case.

So real estate's not so often discussed, if and when they do talk about it. It's always using an alternative investment. These are typically partnerships or direct investments, they can be in real estate. But just be extremely careful. The costs and fees on some of these things is just crazy. And it can cut into your profit dramatically. I remember back in the day, seeing partnerships that were offered to us to go sell to our clients, some of the fees just to get in or 25% or higher. So if you put in $10,000, they took $20500, right off the top for fees, that's $20500, that doesn't get invested. Then they had their annual fees and maintenance fees on top of that, in the end, you'd be lucky just to get your money back, let alone have a profit. I saw this time and time and time again.

Real Estate can be a good option, but just make sure it's a fair arrangement. I don't like it when advisors talk about real estate as a viable option, and then put you into expensive partnerships as well and makes no sense. Okay, so that's our list. And appreciate you hanging out with me over these few videos. We talked about getting out of debt. We talked about deferring taxes. We talked about investing, if you have more than 10 years, we talked about not buying individual stocks, we talked about buying term insurance because that's all you're ever gonna need. And then we talked about the absence of real estate as an option. And again, getting out of debt. That is the only one that I really agree with 100%, you should be working on that. A think about it. So much of what they teach makes no sense if you understand economic history, investing and following the wealthy.

It can be frustrating because as I said earlier, if it was working, more people would be retiring with plenty of money. And sadly, financial advisors with all these designations like the CFP does not combat this problem. In fact, it can kind of make it worse. They taken traditional financial planning and even dug in deeper. I know I was studying for my CFP, I finally bailed out because I was so frustrated. It was the same old stuff on steroids. I was hoping for more insight, more understanding of investing, more knowledge of how the wealthy got there. I mean, should this be what we learned from our financial advisors. I was much better off reading books from great investors like Warren Buffett, Monash Bry, Charlie Munger, Guy Spears, just to name a few.

Those books have given me more knowledge about money and investing, then the CFP would ever hope to. But it's so dyed in the wool committed to financial planning that it isn't working. In fact, you even see ads, you should work with a CFP. Well, that's like working with a traditional advisor who's even more dyed in the wool and dug in. Anyway, learn, be educated, empower yourself. That's what's gonna make you a great investor. So that's about it. If you'd ever like to talk further, click on the time trade link below. And we'll set up a time to talk Don't forget to subscribe. If you have any questions shoot me the questions at wise money tools.com just as quick as I can. Until next week. Hope you have a great week. Take care.