Day 4

For the first 31 days of this new decade, I am passing on some Dutch Uncle Advice I have picked up over the years. Some of the information I picked up just reading and listening to other people and some I learned the hard way. Here is another pile, er blogs worth.

LIFE INSURANCE is legal gambling with your money. It is something I recommend you do when you are younger. Later on, not so much. The cost of insurance is cheap if you buy term insurance. It is not a source of saving and should not be considered as such. I would advise young people to look at what they have in the way of debts and the fixed cost for survivors and to buy accordingly. A quick cremation funeral should cost less than $2,000 and a full bore cemetery burial about $10,000. Most of us don't have that just sitting around so that is not a bad thing. Most funeral homes have policies that can be bought that set the cost as of today and you can prepay. A cheap term policy for $10,000 is cheap and easy. This is what i recommend for single people. If you have a car loan, ask the bank what they charge for a policy that covers the cost of the car for the length of the loan. Cheap and easy in a lot of cases. The real advantage of insurance is that it is not considered as income to your family when you die. I recommend that you consider that it will cost your family about 2/3rds of what you take home to live you should have four or five years of term insurance to cover the cost. If a young man makes about $50,000 a year, his take home is probably about $30,000 a year. It would take about $120,000 to $150,000 for his wife to live for four or five years (Add the cost of your home into that amount) Later on, when the kids are grown, and the house paid for you can almost eliminate the insurance. Put the money in investments and don't touch it. Get some insurance, but not too much.

Today I was reminded to never go grocery shopping in an empty stomach. or with an empty wallet.



  1. Excellent, Mud. Great tip. Universal Life is a rip-off and I had to learn that the hard way twenty years ago.

  2. Like a fool, I listened to an insurance agent tell me that for $12 per month I could retire a millionaire. I think that after paying on that policy for over 20 years, it had a cash value of less than $5,000. Lots of money for a lesson the hard way. He projected an interest rate of 8.8% and my growing the policy by 20X. Sure glad I didn't listen.

  3. The first and last time that I tried to take what was allegedly MY money out of my while life policy, they gave me repayment terms, too. I knew THEN and only THEN that it was a scam.

    Tough lesson to learn, I wish Mud's 31 Day Life Lesson Learning School was open for business then. Thanks for being late by about twenty years going into this teaching, though. Maybe a young person will learn and apply these and not have to wade through the crap I did.