The first was from a software engineer that made a great six figure income. He thought he knew what he was doing and used a whole life policy as a retirement vehicle, as advised. He never looked for any help, since he was smart enough to handle this himself. After many years and promised interest, he found he only had about $30,000 accumulated in the cash value portion of the whole life policy. Sure enough, the mortgage on the house was also huge. Who knows what happened to the money, he says.
The second was from a blue collar worker who made about $50,000. He was part of a union. He was rambling off things like trying to save just $5 or $10 a month (saving $5 is better than going in debt). Over time, it was able to become more and more. When it came to his mortgage, he put an extra $100 towards the bill. When he got a raise, he kept living how he was living and applied the raise to go towards his mortgage. When he needed a home equity loan for $20,000, he ended up paying it back in 6 years instead of the 10 years stated in the loan. He said he didn't like dealing with money so he let someone else handle it (luckily he got someone who actually took care of him well). He made a comment jokingly stating that he didn't even have room for an extra beer. All in all, having a 40 year marriage, owning a beautiful home, being debt free and having a great retirement, I think he would say it was all worth it.
Sitting down with both people simultaneously. True story and amazing. Which do you want to be?
This post was reposted from http://finlit.biz/business/2-opposing-stories-you-need-to-hear/, originally written on February 28th, 2013.
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