The good Doc's summation is completely consistent with my philosophy, adopted 57 some years ago after reading a short pamphlet given to me by my father's partner when I went to work in their law firm, called "The Richest Man in Babylon." My wife and I followed it religiously, tithing 10 % of every dollar we earned to our reserve saving/investing account, from the gross income before paying tax, charity, food, clothing, anything else, avoiding debt and when debt was necessarily incurred paying it off at the maximum speed, saving money at every reasonable opportunity, avoiding insurance and warranties that were demonstratively wasteful given careful risk/reward analysis, etc... until that reserve was great enough so that we could in effect live off the earnings, which we've done now for some 40 years, with no one paying us to work for them, but rather giving our services and gifts where ever we feel they're best needed and used, and enjoying each other's company, and our families and friends and this good life. It's a good pamphlet, if you can find it. Dr. Hunt's advise goes along the same lines:
"Insuring things you don’t need to insure means handing your capital to insurance companies to invest in their portfolios instead of you investing it in yours. Keep the premium and make the profit yourself.
"Before the next crisis is the time to assure your emergency cash reserve is fully stocked, and then to accumulate dry powder. To do so doesn’t mean you have to sell stocks you like or get a second job. Just stop wasting money on stuff you don’t need. Like most insurance and warranties.
"And when you’ve got enough liquidity put aside, start sticking the continued monthly savings in your portfolio."
That's the best advice I've ever seen about insurance. It expresses views I have long held. Dr. Hunt's article should be a required document to be presented to a policy buyer before any insurance can be purchased.
The same pattern shows up in my Indian clients: endowment policies and small-ticket covers for everything, while the real catastrophes—critical illness, disability—stay under-insured.
Term insurance for income replacement, health cover with a high deductible, and self-insuring the small stuff is the framework I push. The premium saved on a dozen useless policies funds the SIP that actually builds the corpus.
Very timely advice, at a time when people just seem to need more money constantly. Medical insurance is the worst, especially when you are on Medicare! It is a sin what the insurance companies have done to seniors.
Brand new subscriber. Good philosophy on insurance. I adopted it many years ago and have saved tens of thousands over the years. Had catastrophic health coverage until Obama care came along. It worked just fine and came through when I developed cancer. Keep the cards and letters coming. I’m liking my subscription so far.
The good Doc's summation is completely consistent with my philosophy, adopted 57 some years ago after reading a short pamphlet given to me by my father's partner when I went to work in their law firm, called "The Richest Man in Babylon." My wife and I followed it religiously, tithing 10 % of every dollar we earned to our reserve saving/investing account, from the gross income before paying tax, charity, food, clothing, anything else, avoiding debt and when debt was necessarily incurred paying it off at the maximum speed, saving money at every reasonable opportunity, avoiding insurance and warranties that were demonstratively wasteful given careful risk/reward analysis, etc... until that reserve was great enough so that we could in effect live off the earnings, which we've done now for some 40 years, with no one paying us to work for them, but rather giving our services and gifts where ever we feel they're best needed and used, and enjoying each other's company, and our families and friends and this good life. It's a good pamphlet, if you can find it. Dr. Hunt's advise goes along the same lines:
"Insuring things you don’t need to insure means handing your capital to insurance companies to invest in their portfolios instead of you investing it in yours. Keep the premium and make the profit yourself.
"Before the next crisis is the time to assure your emergency cash reserve is fully stocked, and then to accumulate dry powder. To do so doesn’t mean you have to sell stocks you like or get a second job. Just stop wasting money on stuff you don’t need. Like most insurance and warranties.
"And when you’ve got enough liquidity put aside, start sticking the continued monthly savings in your portfolio."
That's the best advice I've ever seen about insurance. It expresses views I have long held. Dr. Hunt's article should be a required document to be presented to a policy buyer before any insurance can be purchased.
The same pattern shows up in my Indian clients: endowment policies and small-ticket covers for everything, while the real catastrophes—critical illness, disability—stay under-insured.
Term insurance for income replacement, health cover with a high deductible, and self-insuring the small stuff is the framework I push. The premium saved on a dozen useless policies funds the SIP that actually builds the corpus.
Very timely advice, at a time when people just seem to need more money constantly. Medical insurance is the worst, especially when you are on Medicare! It is a sin what the insurance companies have done to seniors.
Brand new subscriber. Good philosophy on insurance. I adopted it many years ago and have saved tens of thousands over the years. Had catastrophic health coverage until Obama care came along. It worked just fine and came through when I developed cancer. Keep the cards and letters coming. I’m liking my subscription so far.
Great points, John. Linking you once again today @https://nothingnewunderthesun2016.com/
too much common sense
doubt the populace inclined to absorb it