Financial Pitfalls Often Called Investments

Good Investments
Money Traps

ANY KIND OF LIFE INSURANCE BESIDES TERM- The amount of premiums you will pay for Whole Life, Universal Life, Variable Life, or Variable Universal Life Insurance are far too high in commissions to be worth the value of the Life Insurance Benefit. Life Insurance is insurance, not an investment. Do not buy a Life policy in the hope of using it as a savings account or investment vehicle. A Term Policy will be much cheaper, and protect you against risk- which is what insurance is for. Use the leftover money to invest in a real investment.

CANCER INSURANCE- sounds important, but it is going to cost you way too much to be worth it. There are many other priorities for your money that will give you much more bang for your buck.

TIME-SHARE CONDO- new time-share condos are always sold through high-pressure, well-planned sales presentations where they give you free stuff to entice you to come. If you insist on buying a time-share condo: get a better deal by buying a used one on the internet (there are lots of websites designed to help owners sell their time-share condos once they realize their mistake in buying one).

HYBRID CAR- it takes a good deal, and a good deal of driving, to make a hybrid purchase financially sensible (even if gas prices go back up to $4/gallon). So…I would discourage you from buying one unless you drive a lot, and find a good deal.

CAR LEASE- When the lease ends, you have no car to show for all those payments. Like furniture, when it comes to cars, ownership is always better than renting.

CREDIT CARD INSURANCE- Your credit card is always sending you these offers of insurance with your monthly bills…completely ignore them—you’ll be better off using the extra money to pay down the debt.

ACCIDENT OR DISMEMBERMENT INSURANCE- This type of insurance is unnecessary because your term life insurance already covers you if you die in an accident; your long-term disability insurance already covers you if you become disabled in an accident; and your emergency fund already covers you if you become injured in an accident.

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