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Swimming through a flash flood of debt with ease

Originally posted: September 14, 2018 Updated on: September 13, 2018 by David Lewis

Whelp, it’s official. Florence has made its way to the coast of North Carolina.

But, we live so far inland than we’re not really seeing any of the effects… at least not yet. The hurricane is projected to move west or southwest, and so we’re expecting some wind gusts and some rain. And there is a flood watch but… I suspect there won’t be any catastrophic flooding.

Which reminds me…

One of the best lessons I ever learnt about finance happened when I was just 18 years old and dove into a pile of debt and nearly drowned.

Seems today that a lot of financial planners try to convince their young clients to never do this. And, really, I can see their argument. Getting out of debt is tough.

Here’s my take on it:

I learned a lot of very valuable lessons. When I was 18, almost a month after my birthday, I started receiving a bunch of offers in the mail for credit cards.

And then I had my eye on a brand new Honda sports coup. And then, and then, and then.

I chewed threw $20,000 of credit, but a car loan and a few other interesting credit sources.

When I was in over my head, I didn’t even realize it. I was basically blinded by the monthly payments, which were more than affordable at the time.

And then… I lost my job.

Everything came tumbling down around me.

I couldnt’ afford my credit card payments. I couldn’t afford my car payment. I had to go to the doctor but… I had lost my health insurance.

I had no savings because… who needs savings when you’re 20?

I needed a plan to get out of debt, and fast. And… I thought I had found the way: plow as much money against my debts as humanly possible… once I had another job, that is.

So… when I finally landed a decent-paying job, I started to put everything I could toward my debts. I was actually doing very well… for a while.

And then… an emergency. Great! I have so much less debt now, so I’ll just use some of my savings…

Oh. Wait.

I STILL didn’t have any because I was busy paying off debt, so… I had to go BACK into debt. Problem was, I couldn’t really do that either.

I had voluntarily surrendered my car to the bank, and even though I was paying off my credit cards, I still had a lot of 90+ day late marks on my credit report.

And so… I learned something.

I learned the value of saving money AND paying off debt at the same time.

It wasn’t until much, much, later that I was able to verify (mathematically) that this often worked out much MUCH better over the long-run.

Anywho, if you want more details on how this works, then start reading the whole life insurance section of my life insurance guide, here:

https://www.monegenix.com/whole-life-insurance/

Filed Under: Financial Planning, Life Insurance, Saving Money Tagged With: debt and savings, debt payoff, debt payoff and saving money, debt payoff vs saving money, save money and pay off debt, saving money while paying off debt

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Want To Pay Down Debt Quickly, Save More Money, And Have Real Financial Security?

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David Lewis
Life Insurance Specialist | Registered Financial Consultant | Author

Reader Comments

Over the years, I’ve somehow managed to attract the attention of professionals, business owners, as well as insurance agents and financial planners.

Some of these folks have become regular readers and some… some have become loyal clients and even friends.

Here is a small sample of the comments I’ve received from some of my readers and clients:

*****

“I found your comments about the ‘be…own bank’ stuff straight to the point and (maybe) helpful.” — Joe

 

***

“I have known David for many years now and can say that he is a very honest and knowledgeable person and a great financial advisor. His insights are always backed up by tedious research and he has a real passion for helping people with their most important financial decisions. My gut tells me that after working with David you will likely feel like every stone has been uncovered and you will be confident that your financial well being is in good hands and you will be on your way to feeling financially secure. I do not regularly endorse other advisors in my field but I feel comfortable giving a strong thumbs up for David.”— Antonio Filippone, Registered Financial Consultant

***

“Keep up the good work..I like reading your emails..” — Kelechi

***

“Just read through your term v whole life blog from 2015, found it very well done and emailed it around the office here (I’m a CFP with [company name removed] ).” — Doug, CFP

***

“I read your very thorough discussion of the IBC on on nuwireinvestor. I wanted to thank you for providing such relevant content on the subject.

I found your piece very well done and I found your explanations very analytical. Thank you for that service to readers.

…Content creators like you inspire me and I’m so thankful that we live in an age where so much knowledge is available to us.” — Wayne, Dentist

***

“Watched your video on time value of money and whole life compared to other investments. Very interesting.” — Alex, property and casualty agent

***

“You are a breath of fresh air. Thanks.” — Bob

***

“After speaking with several brokers, I decided to work with you because you were the most informed across numerous life insurance companies and the nuances of their policies. You helped me select a policy with twice the internal rate of return than the first quote I had received from another broker. Life insurance is now a significant part of my estate, and I look forward to working with you for many years to come.” — Keith, Public Relations

***

“Life insurance as it exists today is undoubtedly a pale imitation of what it could be in a free market, but in terms of safety (and other utility), it’s the best option I’ve discovered so far.

There’s still a lot I need to understand about how life insurance works as a long-term savings vehicle, but for now I’m at least satisfied that some of my money is a little safer from theft and wildly arbitrary taxation.

It’s too early to tell, but I’m cautiously optimistic. I’m currently putting about 20% of my savings into life insurance, with the rest split between precious metals, investments, and traditional retirement accounts.

I wish life insurance could offer a better rate of return, but with an out-of-control pirate state sailing the financial seas, pillaging with impunity, I’m happy to have some measure of safety, even if it means giving up a lot of potential profit.”

Tim, Self-Employed

***

“At first, I was a bit shocked at your extremely informal writing style, but it has grown on me. I actually look forward to your emails and the intriguing stories. The style breaks up the monotony of the other emails. Your emails have gotten my butt in gear to create my long and short-term financial plans.

Your writing and book recommendations have been an immense aid in teaching myself better finance principles and proved to me that it is very important to save money for all of those opportunities and curve balls that life throws at you.

I am now the happy owner of two life insurance policies, and I am armed with the knowledge to use them effectively. Thanks!” — Tom, Nuclear Engineer

***

“Once the concept of whole life started to click, I was very sure this was the direction I wanted to go. You showed me how to get there and tailored my policy to meet my particular needs and comfort level- well, we pushed that a bit, but I’m glad we did.

My only question is, where were you 30 years ago to take me down this road?” — Shari, Grant writer

***

“Your meticulous attention to detail assures me that I know exactly what to expect. You’ve given me a different perspective about making my money work for me. I actually feel I have control.” — Marilyn, Legal Assistant

*****

 

Not all comments are positive, though…

Occasionally, I receive hate mail (or random comments on social media) from folks who are not clients (and never will be). 

Here’s what “the other side” has to say about me (in case you were wondering):

*****

“Whole life is what scam-based insurance people like David Lewis use to make a lot of money in commission at your expense. Get term life insurance. Never mix investing and insurance.” — L.C.G., self-proclaimed financial expert and forum moderator; [location withheld]

***

“You ‘talk people into’ buying whole life insurance policies, which I personally think are not just a bad investment, but verging on a scam.” — R.F., Real estate investor and developer; [location withheld]

***

“According to David, most advisors are ideologues, spewing the failed practices of the companies who control the financial service industry. Only his way of doing things puts the client first.” — Joe, Financial Advisor [location withheld]

***

“David, I understand that you’re using Ayn Rand’s premise…

Well, you’re entitled to your viewpoint. But, I consider a flat dismissal of the codes that professionals have, for centuries, developed, refined, and attempted to live by to be absurd — and, frankly, rather silly.” — J.O., Financial Planner [location withheld]

***

“I couldn’t disagree more with your view of the financial services industry.” — C.G., Certified Financial Planner [location withheld]

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