Personal Finance 101 for Young Lawyers

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bk1
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Re: Personal Finance 101 for Young Lawyers

Postby bk1 » Mon Feb 13, 2017 12:44 pm

Dump the adviser.

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Danger Zone
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Re: Personal Finance 101 for Young Lawyers

Postby Danger Zone » Mon Feb 13, 2017 12:53 pm

Aaand this is why the fiduciary rule is important

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star fox
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Re: Personal Finance 101 for Young Lawyers

Postby star fox » Mon Feb 13, 2017 12:55 pm

People ought to just buy 30 year term life insurance.

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bk1
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Re: Personal Finance 101 for Young Lawyers

Postby bk1 » Mon Feb 13, 2017 1:50 pm

star fox wrote:People ought to just buy 30 year term life insurance.

Additionally: people who don't have dependents shouldn't buy life insurance.

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bk1
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Re: Personal Finance 101 for Young Lawyers

Postby bk1 » Mon Feb 13, 2017 2:01 pm

Anonymous User wrote:Currently the total investment value of the policy is ~$4600, but I pay a ~$3k "surrender charge" if I try to get out now.

I started with an initial investment of $2k. I've been paying $200/month for the last year or so, of which $67/month is for insurance costs. I've expressed my concerns to the financial adviser regarding what appears to be just a very large fee in the form of insurance costs, and he has assured me that the tax benefits of this policy will far outweigh the insurance costs in the long run. I think I've been had.

The real question is what to do about it. I don't think throwing good money after bad is worth it. First, stop investing the $133 additional dollars each month. Second, I think it's worth eating the surrender fee. I don't know the details of your policy but generally the surrender fee doesn't go away for a number of years. At this point, you will pay 3k in costs in under 4 years anyways so it seems better to eat it. But it really is contingent on the details of your policy. I would not trust your adviser to get you out of it with the least expense. Get the details of your policy and figure it out yourself or have someone you trust figure it out for you.

And some general follow up advice:
  • Don't get an adviser unless you are very wealthy (even then, I think it's questionable). If you do get one, make sure they are fiduciary.
  • Decide the purpose of your investment and then choose the vehicle based on that purpose.
  • Do you have dependents and want to make sure they are okay if you die? Get term life insurance (you don't need whole life because once the dependent is no longer financially dependent on you, you no longer need life insurance).
  • Do you want to save for retirement? 401k/IRA invested in index funds.
  • Do you want to save for a non-retirement goal on a long time horizon (5+ years)? Regular brokerage account invested in index funds.
  • Do you want to save for a non-retirement goal on a short time horizon (<5 years)? Savings account/CDs/etc, just find a safe account that gives you the best return.

Wipfelder
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Re: Personal Finance 101 for Young Lawyers

Postby Wipfelder » Mon Feb 13, 2017 2:25 pm

Anonymous User wrote:
Wipfelder wrote:
Anonymous User wrote:Does anyone have experience with variable life insurance? Is this a reasonable investment vehicle for someone starting out in biglaw? I ask because I have a policy that I purchased when I was just starting in biglaw. Though it sounded great at the time, I'm now having serious second thoughts, and the articles I've found on the subject are not quieting my anxiety.

The policy currently has a surrender value of less than half of the value I've paid into it. (The policy has a 10-year surrender term - something I didn't appreciate at the time of purchase.) I've voiced my concerns to the financial adviser who sold me this thing, and he has assured me that the tax savings over a long period of time will more than make up for the substantial cost of insurance. I am unconvinced.

I'm not quite sure what my next move should be, so I figured I'd put it to the group. Any advice would be appreciated. The current cost of insurance is $67/month, and I'm a little over a year into the 10-year surrender period. If I surrender now, I lose ~$3,000.


Variable life insurance is more or less a scam. It makes sense to purchase only if your unable to get regular life insurance. Assuming you are under 30, and healthy, you could get a decent term policy for like, 15-30 dollars a month.

What do you mean you lose 3000? Did you invest 3000 into the policy?

Anyways, if you buy term LI and invest the difference, you'll have a better insurance plan and a better investment plan. The returns in life insurance policies are really, really cruddy.


Currently the total investment value of the policy is ~$4600, but I pay a ~$3k "surrender charge" if I try to get out now.

I started with an initial investment of $2k. I've been paying $200/month for the last year or so, of which $67/month is for insurance costs. I've expressed my concerns to the financial adviser regarding what appears to be just a very large fee in the form of insurance costs, and he has assured me that the tax benefits of this policy will far outweigh the insurance costs in the long run. I think I've been had.


What tax benefit?

At any rate, look at the 200 a month, and add up how much goes into "fees" (the 67 may just be insurance and the 133 left over may also be subject to investment fees). Project how much you'd have in 10 years with the insurance plan (assume maybe 5-8% growth? On investments) then add up how much you'd have if you cancelled the plan and invested like, 180/mo in another vehicle, and bought a 10 yr term policy.

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AVBucks4239
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Re: Personal Finance 101 for Young Lawyers

Postby AVBucks4239 » Mon Feb 13, 2017 5:52 pm

Anonymous User wrote:Currently the total investment value of the policy is ~$4600, but I pay a ~$3k "surrender charge" if I try to get out now.

I started with an initial investment of $2k. I've been paying $200/month for the last year or so, of which $67/month is for insurance costs. I've expressed my concerns to the financial adviser regarding what appears to be just a very large fee in the form of insurance costs, and he has assured me that the tax benefits of this policy will far outweigh the insurance costs in the long run. I think I've been had.


Life insurance is there to replace your income and support your dependents if you die. If you don't have dependents, you shouldn't have life insurance. And if anyone is ever marketing insurance to you as an "investment," then you need to summon Karl Pilkington to call bullshit. https://www.youtube.com/watch?v=1lRIQGU2RRk

Wipfelder
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Re: Personal Finance 101 for Young Lawyers

Postby Wipfelder » Mon Feb 13, 2017 6:13 pm

AVBucks4239 wrote:
Anonymous User wrote:Currently the total investment value of the policy is ~$4600, but I pay a ~$3k "surrender charge" if I try to get out now.

I started with an initial investment of $2k. I've been paying $200/month for the last year or so, of which $67/month is for insurance costs. I've expressed my concerns to the financial adviser regarding what appears to be just a very large fee in the form of insurance costs, and he has assured me that the tax benefits of this policy will far outweigh the insurance costs in the long run. I think I've been had.


Life insurance is there to replace your income and support your dependents if you die. If you don't have dependents, you shouldn't have life insurance. And if anyone is ever marketing insurance to you as an "investment," then you need to summon Karl Pilkington to call bullshit. https://www.youtube.com/watch?v=1lRIQGU2RRk


You should have a burial policy and a solid will. Screwing your parents over with burial and funeral costs is a total dick move.

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nealric
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Re: Personal Finance 101 for Young Lawyers

Postby nealric » Mon Feb 20, 2017 9:47 am

Wipfelder wrote:
AVBucks4239 wrote:
Anonymous User wrote:Currently the total investment value of the policy is ~$4600, but I pay a ~$3k "surrender charge" if I try to get out now.

I started with an initial investment of $2k. I've been paying $200/month for the last year or so, of which $67/month is for insurance costs. I've expressed my concerns to the financial adviser regarding what appears to be just a very large fee in the form of insurance costs, and he has assured me that the tax benefits of this policy will far outweigh the insurance costs in the long run. I think I've been had.


Life insurance is there to replace your income and support your dependents if you die. If you don't have dependents, you shouldn't have life insurance. And if anyone is ever marketing insurance to you as an "investment," then you need to summon Karl Pilkington to call bullshit. https://www.youtube.com/watch?v=1lRIQGU2RRk


You should have a burial policy and a solid will. Screwing your parents over with burial and funeral costs is a total dick move.


If both you and your parents have reasonable savings, a burial policy isn't needed. They will inherit enough from you to cover the costs in the extremely unlikely event of your early demise.

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nealric
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Re: Personal Finance 101 for Young Lawyers

Postby nealric » Mon Feb 20, 2017 9:56 am

Anonymous User wrote:
Wipfelder wrote:
Anonymous User wrote:Does anyone have experience with variable life insurance? Is this a reasonable investment vehicle for someone starting out in biglaw? I ask because I have a policy that I purchased when I was just starting in biglaw. Though it sounded great at the time, I'm now having serious second thoughts, and the articles I've found on the subject are not quieting my anxiety.

The policy currently has a surrender value of less than half of the value I've paid into it. (The policy has a 10-year surrender term - something I didn't appreciate at the time of purchase.) I've voiced my concerns to the financial adviser who sold me this thing, and he has assured me that the tax savings over a long period of time will more than make up for the substantial cost of insurance. I am unconvinced.

I'm not quite sure what my next move should be, so I figured I'd put it to the group. Any advice would be appreciated. The current cost of insurance is $67/month, and I'm a little over a year into the 10-year surrender period. If I surrender now, I lose ~$3,000.


Variable life insurance is more or less a scam. It makes sense to purchase only if your unable to get regular life insurance. Assuming you are under 30, and healthy, you could get a decent term policy for like, 15-30 dollars a month.

What do you mean you lose 3000? Did you invest 3000 into the policy?

Anyways, if you buy term LI and invest the difference, you'll have a better insurance plan and a better investment plan. The returns in life insurance policies are really, really cruddy.


Currently the total investment value of the policy is ~$4600, but I pay a ~$3k "surrender charge" if I try to get out now.

I started with an initial investment of $2k. I've been paying $200/month for the last year or so, of which $67/month is for insurance costs. I've expressed my concerns to the financial adviser regarding what appears to be just a very large fee in the form of insurance costs, and he has assured me that the tax benefits of this policy will far outweigh the insurance costs in the long run. I think I've been had.


Unfortunately, yes- you've been had. Life insurance does have some tax advantages when used as an investment vehicle, but they aren't likely to be very relevant at a biglaw associate's income level (especially if you aren't maxing out your 401k, doing a backdoor roth, and 529 if you have kids), and even then almost never compensate for the horrible fees and commissions baked into these products. Whole and variable life policies are basically a scam to generate commissions for salespeople. By the way, if you aren't writing a check to them up front for an agreed-upon fee, you do not have a "financial adviser"- you have simply met with a salesperson.

Wipfelder
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Re: Personal Finance 101 for Young Lawyers

Postby Wipfelder » Mon Feb 20, 2017 10:33 am

nealric wrote:
Wipfelder wrote:
AVBucks4239 wrote:
Anonymous User wrote:Currently the total investment value of the policy is ~$4600, but I pay a ~$3k "surrender charge" if I try to get out now.

I started with an initial investment of $2k. I've been paying $200/month for the last year or so, of which $67/month is for insurance costs. I've expressed my concerns to the financial adviser regarding what appears to be just a very large fee in the form of insurance costs, and he has assured me that the tax benefits of this policy will far outweigh the insurance costs in the long run. I think I've been had.


Life insurance is there to replace your income and support your dependents if you die. If you don't have dependents, you shouldn't have life insurance. And if anyone is ever marketing insurance to you as an "investment," then you need to summon Karl Pilkington to call bullshit. https://www.youtube.com/watch?v=1lRIQGU2RRk


You should have a burial policy and a solid will. Screwing your parents over with burial and funeral costs is a total dick move.


If both you and your parents have reasonable savings, a burial policy isn't needed. They will inherit enough from you to cover the costs in the extremely unlikely event of your early demise.


Unless like, you've got student loans and stuff. A funeral can easily cost 30k or so. Small change, but if your from a middle class family, that is a huge hit on your parents.

RaceJudicata
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Re: Personal Finance 101 for Young Lawyers

Postby RaceJudicata » Mon Feb 20, 2017 10:58 am

Wipfelder wrote:
nealric wrote:
Wipfelder wrote:
AVBucks4239 wrote:
Anonymous User wrote:Currently the total investment value of the policy is ~$4600, but I pay a ~$3k "surrender charge" if I try to get out now.

I started with an initial investment of $2k. I've been paying $200/month for the last year or so, of which $67/month is for insurance costs. I've expressed my concerns to the financial adviser regarding what appears to be just a very large fee in the form of insurance costs, and he has assured me that the tax benefits of this policy will far outweigh the insurance costs in the long run. I think I've been had.


Life insurance is there to replace your income and support your dependents if you die. If you don't have dependents, you shouldn't have life insurance. And if anyone is ever marketing insurance to you as an "investment," then you need to summon Karl Pilkington to call bullshit. https://www.youtube.com/watch?v=1lRIQGU2RRk


You should have a burial policy and a solid will. Screwing your parents over with burial and funeral costs is a total dick move.


If both you and your parents have reasonable savings, a burial policy isn't needed. They will inherit enough from you to cover the costs in the extremely unlikely event of your early demise.


Unless like, you've got student loans and stuff. A funeral can easily cost 30k or so. Small change, but if your from a middle class family, that is a huge hit on your parents.


I get it, lawyers are risk adverse. But jeez ... I'm guessing you - and the vast majority of folks on this board -- are under what, 35 years old? I get the idea of not sticking your parents with your funeral bill, but realistically, what are the odds that you (or anyone else here) dies in the next 20 years? Pretty low.

Granted, some folks are not in good health (smokers, overweight, etc, etc.), but for the "average" person out there, i really don't see preparing for your death to be imminently necessary so your parents don't get stuck with the bill.

dabigchina
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Re: Personal Finance 101 for Young Lawyers

Postby dabigchina » Mon Feb 20, 2017 11:33 am

Wipfelder wrote:
Unless like, you've got student loans and stuff. A funeral can easily cost 30k or so. Small change, but if your from a middle class family, that is a huge hit on your parents.

no thanks. it's a pauper's grave for me.

seriously tho, 30k seems wildly inaccurate.

Wipfelder
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Re: Personal Finance 101 for Young Lawyers

Postby Wipfelder » Mon Feb 20, 2017 11:44 am

dabigchina wrote:
Wipfelder wrote:
Unless like, you've got student loans and stuff. A funeral can easily cost 30k or so. Small change, but if your from a middle class family, that is a huge hit on your parents.

no thanks. it's a pauper's grave for me.

seriously tho, 30k seems wildly inaccurate.


Flying a body is actually pretty expensive. Also, plot, funeral service, whatever religious things you do, costs associated with "clean-up" and sorting affairs, etc etc.

If you live like, right next to your kin and have a clear burial plan and all that, it's about 10k all told. If you don't live close to your near family, it gets really expensive. Creamation is a pretty solid option, just make sure it's clearly articulated in your will. (Everyone should also have a valid will, no matter their age)

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nealric
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Re: Personal Finance 101 for Young Lawyers

Postby nealric » Mon Feb 20, 2017 12:00 pm

Wipfelder wrote:
nealric wrote:
Wipfelder wrote:
AVBucks4239 wrote:
Anonymous User wrote:Currently the total investment value of the policy is ~$4600, but I pay a ~$3k "surrender charge" if I try to get out now.

I started with an initial investment of $2k. I've been paying $200/month for the last year or so, of which $67/month is for insurance costs. I've expressed my concerns to the financial adviser regarding what appears to be just a very large fee in the form of insurance costs, and he has assured me that the tax benefits of this policy will far outweigh the insurance costs in the long run. I think I've been had.


Life insurance is there to replace your income and support your dependents if you die. If you don't have dependents, you shouldn't have life insurance. And if anyone is ever marketing insurance to you as an "investment," then you need to summon Karl Pilkington to call bullshit. https://www.youtube.com/watch?v=1lRIQGU2RRk


You should have a burial policy and a solid will. Screwing your parents over with burial and funeral costs is a total dick move.


If both you and your parents have reasonable savings, a burial policy isn't needed. They will inherit enough from you to cover the costs in the extremely unlikely event of your early demise.


Unless like, you've got student loans and stuff. A funeral can easily cost 30k or so. Small change, but if your from a middle class family, that is a huge hit on your parents.


A funeral CAN cost 30k if they want to go nuts or just agree to the deluxe package at the funeral home. But a basic cremation and simple service won't cost anywhere near that. And a biglaw associate SHOULD have at least 20k as an emergency fund. Student loans are irrelevant as they will be discharged at death if they are federal loans and the parent hasn't co-signed.

Wipfelder
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Re: Personal Finance 101 for Young Lawyers

Postby Wipfelder » Mon Feb 20, 2017 12:06 pm

nealric wrote:
Wipfelder wrote:
nealric wrote:
Wipfelder wrote:
AVBucks4239 wrote:
Anonymous User wrote:Currently the total investment value of the policy is ~$4600, but I pay a ~$3k "surrender charge" if I try to get out now.

I started with an initial investment of $2k. I've been paying $200/month for the last year or so, of which $67/month is for insurance costs. I've expressed my concerns to the financial adviser regarding what appears to be just a very large fee in the form of insurance costs, and he has assured me that the tax benefits of this policy will far outweigh the insurance costs in the long run. I think I've been had.


Life insurance is there to replace your income and support your dependents if you die. If you don't have dependents, you shouldn't have life insurance. And if anyone is ever marketing insurance to you as an "investment," then you need to summon Karl Pilkington to call bullshit. https://www.youtube.com/watch?v=1lRIQGU2RRk


You should have a burial policy and a solid will. Screwing your parents over with burial and funeral costs is a total dick move.


If both you and your parents have reasonable savings, a burial policy isn't needed. They will inherit enough from you to cover the costs in the extremely unlikely event of your early demise.


Unless like, you've got student loans and stuff. A funeral can easily cost 30k or so. Small change, but if your from a middle class family, that is a huge hit on your parents.


A funeral CAN cost 30k if they want to go nuts or just agree to the deluxe package at the funeral home. But a basic cremation and simple service won't cost anywhere near that. And a biglaw associate SHOULD have at least 20k as an emergency fund. Student loans are irrelevant as they will be discharged at death if they are federal loans and the parent hasn't co-signed.


The 30k is the total cost to your family, so funeral cost is like 10k, the rest is all the extraneous crap that goes with dealing with dead people and all their stuff. But yea, if you have the protected savings, your self-insured, so you don't need to purchase any.

Speaking from lots of personal experience, the cheap and dirty funeral sounds great, but even when that's what the person wanted, human emotions and shit come into play...especially when the dead person is intestate, or their will is really crappy.

Anonymous User
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Re: Personal Finance 101 for Young Lawyers

Postby Anonymous User » Wed Feb 22, 2017 12:46 am

nealric wrote:
Anonymous User wrote:
Wipfelder wrote:
Anonymous User wrote:Does anyone have experience with variable life insurance? Is this a reasonable investment vehicle for someone starting out in biglaw? I ask because I have a policy that I purchased when I was just starting in biglaw. Though it sounded great at the time, I'm now having serious second thoughts, and the articles I've found on the subject are not quieting my anxiety.

The policy currently has a surrender value of less than half of the value I've paid into it. (The policy has a 10-year surrender term - something I didn't appreciate at the time of purchase.) I've voiced my concerns to the financial adviser who sold me this thing, and he has assured me that the tax savings over a long period of time will more than make up for the substantial cost of insurance. I am unconvinced.

I'm not quite sure what my next move should be, so I figured I'd put it to the group. Any advice would be appreciated. The current cost of insurance is $67/month, and I'm a little over a year into the 10-year surrender period. If I surrender now, I lose ~$3,000.


Variable life insurance is more or less a scam. It makes sense to purchase only if your unable to get regular life insurance. Assuming you are under 30, and healthy, you could get a decent term policy for like, 15-30 dollars a month.

What do you mean you lose 3000? Did you invest 3000 into the policy?

Anyways, if you buy term LI and invest the difference, you'll have a better insurance plan and a better investment plan. The returns in life insurance policies are really, really cruddy.


Currently the total investment value of the policy is ~$4600, but I pay a ~$3k "surrender charge" if I try to get out now.

I started with an initial investment of $2k. I've been paying $200/month for the last year or so, of which $67/month is for insurance costs. I've expressed my concerns to the financial adviser regarding what appears to be just a very large fee in the form of insurance costs, and he has assured me that the tax benefits of this policy will far outweigh the insurance costs in the long run. I think I've been had.


Unfortunately, yes- you've been had. Life insurance does have some tax advantages when used as an investment vehicle, but they aren't likely to be very relevant at a biglaw associate's income level (especially if you aren't maxing out your 401k, doing a backdoor roth, and 529 if you have kids), and even then almost never compensate for the horrible fees and commissions baked into these products. Whole and variable life policies are basically a scam to generate commissions for salespeople. By the way, if you aren't writing a check to them up front for an agreed-upon fee, you do not have a "financial adviser"- you have simply met with a salesperson.


(Anon from above)

After continuing to read up on these things, and after reviewing my own plan documents (and again speaking with my financial adviser/snake oil salesman), I've come to the same conclusion. So I've decided to terminate the policy and take the $3k hit, rather than throw good money after bad. It's an expensive lesson learned, but I guess I'm glad I'm learning it now. Thanks to all for your help and advice.

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zot1
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Re: Personal Finance 101 for Young Lawyers

Postby zot1 » Wed Feb 22, 2017 10:42 am

Does anyone know if one's credit score improves after one single late payment gets deleted from credit history? Thanks.

Wipfelder
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Re: Personal Finance 101 for Young Lawyers

Postby Wipfelder » Wed Feb 22, 2017 11:20 am

Anonymous User wrote:
nealric wrote:
Anonymous User wrote:
Wipfelder wrote:
Anonymous User wrote:Does anyone have experience with variable life insurance? Is this a reasonable investment vehicle for someone starting out in biglaw? I ask because I have a policy that I purchased when I was just starting in biglaw. Though it sounded great at the time, I'm now having serious second thoughts, and the articles I've found on the subject are not quieting my anxiety.

The policy currently has a surrender value of less than half of the value I've paid into it. (The policy has a 10-year surrender term - something I didn't appreciate at the time of purchase.) I've voiced my concerns to the financial adviser who sold me this thing, and he has assured me that the tax savings over a long period of time will more than make up for the substantial cost of insurance. I am unconvinced.

I'm not quite sure what my next move should be, so I figured I'd put it to the group. Any advice would be appreciated. The current cost of insurance is $67/month, and I'm a little over a year into the 10-year surrender period. If I surrender now, I lose ~$3,000.


Variable life insurance is more or less a scam. It makes sense to purchase only if your unable to get regular life insurance. Assuming you are under 30, and healthy, you could get a decent term policy for like, 15-30 dollars a month.

What do you mean you lose 3000? Did you invest 3000 into the policy?

Anyways, if you buy term LI and invest the difference, you'll have a better insurance plan and a better investment plan. The returns in life insurance policies are really, really cruddy.


Currently the total investment value of the policy is ~$4600, but I pay a ~$3k "surrender charge" if I try to get out now.

I started with an initial investment of $2k. I've been paying $200/month for the last year or so, of which $67/month is for insurance costs. I've expressed my concerns to the financial adviser regarding what appears to be just a very large fee in the form of insurance costs, and he has assured me that the tax benefits of this policy will far outweigh the insurance costs in the long run. I think I've been had.


Unfortunately, yes- you've been had. Life insurance does have some tax advantages when used as an investment vehicle, but they aren't likely to be very relevant at a biglaw associate's income level (especially if you aren't maxing out your 401k, doing a backdoor roth, and 529 if you have kids), and even then almost never compensate for the horrible fees and commissions baked into these products. Whole and variable life policies are basically a scam to generate commissions for salespeople. By the way, if you aren't writing a check to them up front for an agreed-upon fee, you do not have a "financial adviser"- you have simply met with a salesperson.


(Anon from above)

After continuing to read up on these things, and after reviewing my own plan documents (and again speaking with my financial adviser/snake oil salesman), I've come to the same conclusion. So I've decided to terminate the policy and take the $3k hit, rather than throw good money after bad. It's an expensive lesson learned, but I guess I'm glad I'm learning it now. Thanks to all for your help and advice.


Great job man! The main lesson, I'd guess, is to take control of your own education when it comes to money.

Wipfelder
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Re: Personal Finance 101 for Young Lawyers

Postby Wipfelder » Wed Feb 22, 2017 11:21 am

zot1 wrote:Does anyone know if one's credit score improves after one single late payment gets deleted from credit history? Thanks.



It should, but remember there are lots of things that go into a credit score, so it's not a necessary and sufficient condition...

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zot1
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Re: Personal Finance 101 for Young Lawyers

Postby zot1 » Wed Feb 22, 2017 11:22 am

Wipfelder wrote:
zot1 wrote:Does anyone know if one's credit score improves after one single late payment gets deleted from credit history? Thanks.



It should, but remember there are lots of things that go into a credit score, so it's not a necessary and sufficient condition...


Right. That's cool. Thanks!

RaceJudicata
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Re: Personal Finance 101 for Young Lawyers

Postby RaceJudicata » Wed Feb 22, 2017 11:50 am

zot1 wrote:
Wipfelder wrote:
zot1 wrote:Does anyone know if one's credit score improves after one single late payment gets deleted from credit history? Thanks.



It should, but remember there are lots of things that go into a credit score, so it's not a necessary and sufficient condition...


Right. That's cool. Thanks!


Idk if you have a CreditKarma account (i highly suggest it if you don't), but they have a tool that simulates different scenarios and the impact on your current credit score (i.e. opening a new card, paying off a balance, etc.). I'm not positive that eliminating a late payment is one of the options, but it very well may be.

Also, no idea if the simulator is accurate, but it certainly is as good of a guess as any of us could give.

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zot1
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Re: Personal Finance 101 for Young Lawyers

Postby zot1 » Wed Feb 22, 2017 11:55 am

RaceJudicata wrote:
zot1 wrote:
Wipfelder wrote:
zot1 wrote:Does anyone know if one's credit score improves after one single late payment gets deleted from credit history? Thanks.



It should, but remember there are lots of things that go into a credit score, so it's not a necessary and sufficient condition...


Right. That's cool. Thanks!


Idk if you have a CreditKarma account (i highly suggest it if you don't), but they have a tool that simulates different scenarios and the impact on your current credit score (i.e. opening a new card, paying off a balance, etc.). I'm not positive that eliminating a late payment is one of the options, but it very well may be.

Also, no idea if the simulator is accurate, but it certainly is as good of a guess as any of us could give.


That's a nice tip, thank you! Yeah, it would be nice if it improves my score, but I'm mostly excited for it to be gone. I didn't make the payment (I was in college) because it was residual interest after I thought I had paid the card off (like two dollars?) and the company never told me about it until a month later they called me. Conveniently, they couldn't call me before the 30 days were up. I never challenged it because I didn't know any better.

Anyway, so far it's never affected my ability to use my credit, but it's soon to be gone and it would be nice if it also bumps my score a bit.

Again, thanks for the suggestion.

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AVBucks4239
Posts: 918
Joined: Wed Feb 10, 2010 11:37 pm

Re: Personal Finance 101 for Young Lawyers

Postby AVBucks4239 » Wed Feb 22, 2017 4:49 pm

zot1 wrote:That's a nice tip, thank you! Yeah, it would be nice if it improves my score, but I'm mostly excited for it to be gone. I didn't make the payment (I was in college) because it was residual interest after I thought I had paid the card off (like two dollars?) and the company never told me about it until a month later they called me. Conveniently, they couldn't call me before the 30 days were up. I never challenged it because I didn't know any better.

Anyway, so far it's never affected my ability to use my credit, but it's soon to be gone and it would be nice if it also bumps my score a bit.

Again, thanks for the suggestion.


My advice would be to not get too hot and bothered about minimal differences in your credit score unless you think you are going to borrow soon.

Steps to achieving a good credit score:

(1) Pay your bills on time;
(2) Pay your credit card balance in full every month;
(3) Don't close old accounts; and
(4) Do an annual check on your credit at annualcreditreport.com to make sure there's no fraud on your report.

Make a habit of the above and your credit score will be in the 700s or 800s and you won't even really care about it anymore.

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kellyfrost
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Joined: Mon Nov 09, 2015 3:58 pm

Re: Personal Finance 101 for Young Lawyers

Postby kellyfrost » Wed Feb 22, 2017 5:18 pm

My 401k is up 8.15% YTD. This is awesome because I have had stretches of time where it was only up 1-2% sometimes less.
This is due to the performance of the market, but does anyone have any suggestions on changes or make to my spread of funds?
60% - Large U.S. Equity - Vanguard Institutional Index Plus
20% - Mid cap U.S. Equity - T Rowe Price Midcap Growth
20% Small Cap. U.S. Equity - T Rowe Price New Horizons
10% International - T Rowe Price International Growth




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