Whole Life Insurance vs Stocks?! Which One Will Make You Wealthier?

[@sotoa1]

I wish the mic actually recorded the audio better. But thanks for sharing!

[@LIFE180]

Sorry the audience questions were quiet

[@oiram48]

Hey I read your book and want to become an agent. How would I do so?

[@LIFE180]

Go to agent.LIFE180.com and you can set up a call with Matt. He can answer any questions you have

[@isaiahmartinez8079]

I love everyone is comfy and learning!

[@LIFE180]

It was such an amazing group of people

[@KarenNelson-n8w]

Great analysis, thank you! Just a quick off-topic question: My OKX wallet holds some USDT, and I have the seed phrase. (alarm fetch churn bridge exercise tape speak race clerk couch crater letter). How should I go about transferring them to Binance?

[@LIFE180]

I don't really give crypto advice...

[@Anthony-zw1qb]

Stocks.

[@kshitijgarg6461]

The video made it sound as if the 4% rule would result in declining "real" income over the years due to inflation whereas it allows for annual inflation adjustment. Also, the 4% rule accounts for the worst-case scenario - in >75% of scenarios (using Monte Carlo) you are left with much more money at the end of a 30-year retirement than you started out with using a 4% withdrawal adjusted annually for inflation. In fact, the odds of having your initial investment grow by 800% are the same as the odds of completely depleting your portfolio in 30 years. Bottomline by investing in stock market, over your lifetime you will have much more money than the cash value in your WL (which you can consume at a tax advantaged capital gains rate), not have to pay back any loans, very good chance of being self-insured for long term care and have more cash left over than the death benefit which can be passed on tax free as well due to the step up in basis.

[@LIFE180]

You miss the point. It's not an either or. And it's not about just relying on WL to beat stocks. It's about SAVING money in an account that will mimick and beat bonds long term without giving up liquidity and then leveraging that to invest in real estate, business, yourself, etc....

[@kshitijgarg6461]

@@LIFE180 Why would anyone invest heavily in bonds while they are still accumulating? You would invest much more heavily in stocks over your working life, get the typical market returns of 10% annualized to accumulate a huge balance by the time they retire. In retirement, you would rebalance your portfolio to have maybe 20 -40% of your portfolio in bonds to dampen the effect of market volatility. But by that time your portfolio is 2 - 3x what you would have had accumulated in a WL policy AND all the money accumulated is yours to spend, leverage, leave a legacy, etc., unlike WL where the cash value would be captured by the insurance company in the event you pass away.

[@denko44]

WL is a better way to maintain wealth. Stock market will get you that wealth faster. WL has less volatility & more guarantees so better for keeping / passing down. You need $ to get the most out of LI.

[@LIFE180]

Right....but the point is, you need to save a solid foundation before investing.... otherwise you aren't investing, you are speculating. So start with whole life and then invest in cash flow producing assets

[@willfull1604]

Whole life has NO volatility Stock market MIGHT get you wealth faster. But you also MIGHT lose a lot of wealth.

[@JonathanAguilera-fz3vx]

Respectfully the 4% rule is adjusted for inflation. The 4% rule is used if you were to retire during th worse economic environments and you still didn’t run out of money..

[@LIFE180]

Fair. But what rate of inflation? That's the point I was getting at....sorry if I didn't articulate

[@kshitijgarg6461]

@@LIFE180 It does not matter what rate of inflation. Inflation would cause the earning of companies to rise equally as price increases are passed on to customers by companies. So, the intrinsic value of stocks (calculated as future earning discounted to present) would rise equivalent to inflation. Also bond yields would rise as consumers would demand an interest rate equivalent to inflation. Therefore, the 4% withdrawal could be increased in line with inflation.

[@LIFE180]

@kshitijgarg6461 that is not ALWAYS the case historically

[@kshitijgarg6461]

@@LIFE180 That applies to WL as well - the dividend payout is highly dependent on bond rates is not always the same

[@LIFE180]

@@kshitijgarg6461 Historically, dividends have always followed the fixed market and federal funds rate. That's because there is a direct correlation in how the general fund actually invests. There is not market risk tied to the whole life like there is with investing. If inflation goes up, interest rates follow. When interest rates increase, dividends increase. Sure, there is a lag, but it has ALWAYS happened. When inflation goes up, sure, the market can perform better, but there have been many times that inflation has been high and returns have been negative. Example: 1981 had 8.9% inflation and a -4.9% return. That makes the inflation adjusted return much worse. Once again, I am not saying to put all your money in whole life. But I do believe in having a safe foundation of capital. Whatever you would keep in an emergency fund AT MINIMUM of 6 months of income should be there before you start speculating in investments....because without a solid foundation, you are not investing, you are just speculating. This is basic stuff taught in the CFP courses that nobody seems to like to follow....