Hello Viewer,
Thanks for dropping by. Probably you've been approached by some financial advisor, who told you about some interesting long term financial product that just suits you according to him. You could be of any age group, just concerned about your retirement, future, kids' education, health care etc etc etc.
You received a call from XYZ financial advisor or you approached some agency or may be a bank, commonly you might be asked about your goals, whether you've any insurance, whether you want to contribute monthly or at one go. My post is specifically for monthly contribution long term savings cum investment plan. Typically such plan providers invest in either directly financial products like bonds, stocks or they have tie up with big companies (I wont use names for sanity).
These big firms have or can claim to have access to numerous huge funds which are generally not available to household investors like me for example. they might say that these funds require large minimum investment which a normal salaried person may not able to afford and that these funds fair well compared to a benchmark fund e.g. MSCI funds. As per my knowledge these are closed ended funds, you don't know what instruments etc these funds consist of.
So the financial advisor will go through your background, salary, savings, monthly contribution, job security, plans about family, kids, buying property, vehicle and so on.... . He'll ask you time to come up with some numbers and suggestion that this is the plan he thinks is good for you, he'll say there are many investors like you and him/her who are benefiting, he might even show some portfolio of existing customer and claim that customer's portfolio has grown by say 10% or so in 3 months etc (All marketing stuff) . He'll ask if you want aggressive investment or safe etc based on that your $ are put either in Stocks (higher risk/return) or in government bonds (less returns but generally safe e.g. Singapore, US Gov bonds)
Typically an educated person with less knowledge of financial world, and about how fund management works
, who is ready to invest will be excited that yes this is what I want, finally I've found one good advisor who is really careful about my plans etc. Basically brainwashed about why the product suggested by advisor is good.
Read on my case, you could be in my shoes, which I don't wish if you're not sure what you want to do from your money.
I'm not here to say all financial advisor, fund managers, insurance/saving scheme providers are bad , just out there to do make money at stake of some misguided investor's hard earned money.
I HAVE BEEN CHEATED, MISINFORMED BY ONE SUCH ADVISOR WHO SOLD ME TOTALLY BAD PRODUCT OF A BIG SAVINGS CUM INVESTMENT SCHEME PROVIDER, DUE TO WHICH I LOST 2 YEARS WORTH OF SAVING OF MY HARD EARNED MONEY, I NEEDED THAT MONEY BADLY, AND WHEN I NEEDED, I FOUND OUT THAT THE SCHEME I CHOSE BASICALLY SUCKED IT ALL. PARTIALLY ITS MY MISTAKE, I DID NOT CONSULT ANYONE BEFORE DECIDING. BUT THE AGENT DIDN'T TELL ME EVERYTHING, ALL HIDDEN CLAUSES, FORMULAS ETC TO GET THE VALUE YOU CAN GET BACK. Explanation below.
Agent gave me a monthly savings cum investment plan (minus insurance as I already had one insurance plan), stating that there is lock down period of 18 months, I'd to chose a convenient monthly amount that I could contribute from given choices of amounts required for investment. This is decided by the end company that manages the funds, this agent of mine and other similar agents fish customers like me and then money from their clients is pooled in to the managed funds provided by the source company e.g. MyCompany has access to 500 global funds, it created some bright plan for investors like me and then hired agent companies to sell these plans to suck the money. The company in my case plays in billions of $ , I'm sure they don't have things left for me to sue and eventually I'll end up losing.
Agent explained me that since you're under 30, go for long term plan of 25 years, with 1/4th of my salary going for monthly contribution. I'll have 18 months lock period, till that I cant withdraw a single penny, if I miss my premiums, policy might be in trouble and may collapse. So 18 months I have to pay that amount regardless of how job market is, whether I can afford to pay or not. He said this plan is for long term savings, so plan provider company discourages withdrawing money and there will be penalty.
He didn't explain me how much the penalty is, neither the brochure he gave me contains the formula devised to really suck out your money if you withdraw money even after 19 months in my case. I was stupid enough not to find this formula at early stage otherwise I wouldn't have invested at first instance. My plan is for 25 years, so eventually I won't get much out of it if I don't pay till end of the policy and its all hidden in that formula for calculating SURRENDER VALUE , it plays with months pending till maturity e.g. down
***Just an example formula - if you think its objectionable let me know I'll cook up another just like you do.
Surrender value = (your policy's market value - bonus) / ( 1.05) ^ ((months to maturity)/12) + premiums after 18th month
you can use excel to get figures. Basically longer the plan, longer you've to pay, lesser you'll get if you surrender early.
Now if you're in situation where you really want money in earlier years of your policy and you don't have other means, you would definitely want to get cash from your policy right? Its your money after all, but no you're in a shitty product which will rip your hard earned money. I know its long term policy but what should my family do, I'm their only earning member. If I can't get 80% of my money at 19th month of what I've paid then whats the point of continuing this shitty policy. The firm may be worth billions of $ but for me my hard earned money is more than billions for me and my family but I'm sad to say I got ripped by these investment banking cheats. I am educated fool to not ask for details, signed documents without understanding fully.
So in short if you're planning to invest money, put it in fixed deposits, government bonds or play with stocks/fx if you've time. Don't just blindly sign any document, read thoroughly any calculations involved. These funds have different types of management fees that will apply even if market is headed down, and you'll be paying that fees. Its your money, you'll be better managing it , rather chose some wrong firm / person to do it for you.
Ask if the agent has signed himself for same product that he is offering to you? Chances are if he thinks product is wrong he wont have it ... excuses can always be cooked up.
Record your conversation with end product managing firm as well as agent, because you might need proof at later stage. Get things written and signed by authoritative person of agent's firm, agent as well as end firm wherever possible. You'll badly need proofs if you end up in my situation.
always look for other advisor to go through brochures you've got he might give you one or two bad reasons not to chose the product but generally he'll bother you with other advisor.
we're in Internet age, search engines are GOD, and I'm atheist not to bow to this GOD when I signed for policy, had I read negative reviews about the product I would NEVER NEVER NEVER have gone for this product. Yes I found negative reviews dated prior to my signing date. Moral - do search on Internet before you buy the shit.
Often we get little greedy, too much concerned about our, our parent's , kids' future etc, but if you're getting little less from secured source like fixed deposits go for it. I have learnt lesson very hard, I'm from OK to do family but with big responsibilities and still I ended up losing because I chose wrong product, didn't consult but the agent also didn't give me proper information. I hope someone out there will read this blog, and be careful about taking investment decision. Never mix up investment with insurance. If you want insurance just go for a well known, government regulated and national level companies.
Please think before you decide.
GOD bless you.
Thanks for dropping by. Probably you've been approached by some financial advisor, who told you about some interesting long term financial product that just suits you according to him. You could be of any age group, just concerned about your retirement, future, kids' education, health care etc etc etc.
You received a call from XYZ financial advisor or you approached some agency or may be a bank, commonly you might be asked about your goals, whether you've any insurance, whether you want to contribute monthly or at one go. My post is specifically for monthly contribution long term savings cum investment plan. Typically such plan providers invest in either directly financial products like bonds, stocks or they have tie up with big companies (I wont use names for sanity).
These big firms have or can claim to have access to numerous huge funds which are generally not available to household investors like me for example. they might say that these funds require large minimum investment which a normal salaried person may not able to afford and that these funds fair well compared to a benchmark fund e.g. MSCI funds. As per my knowledge these are closed ended funds, you don't know what instruments etc these funds consist of.
So the financial advisor will go through your background, salary, savings, monthly contribution, job security, plans about family, kids, buying property, vehicle and so on.... . He'll ask you time to come up with some numbers and suggestion that this is the plan he thinks is good for you, he'll say there are many investors like you and him/her who are benefiting, he might even show some portfolio of existing customer and claim that customer's portfolio has grown by say 10% or so in 3 months etc (All marketing stuff) . He'll ask if you want aggressive investment or safe etc based on that your $ are put either in Stocks (higher risk/return) or in government bonds (less returns but generally safe e.g. Singapore, US Gov bonds)
Typically an educated person with less knowledge of financial world, and about how fund management works
, who is ready to invest will be excited that yes this is what I want, finally I've found one good advisor who is really careful about my plans etc. Basically brainwashed about why the product suggested by advisor is good.
Read on my case, you could be in my shoes, which I don't wish if you're not sure what you want to do from your money.
I'm not here to say all financial advisor, fund managers, insurance/saving scheme providers are bad , just out there to do make money at stake of some misguided investor's hard earned money.
I HAVE BEEN CHEATED, MISINFORMED BY ONE SUCH ADVISOR WHO SOLD ME TOTALLY BAD PRODUCT OF A BIG SAVINGS CUM INVESTMENT SCHEME PROVIDER, DUE TO WHICH I LOST 2 YEARS WORTH OF SAVING OF MY HARD EARNED MONEY, I NEEDED THAT MONEY BADLY, AND WHEN I NEEDED, I FOUND OUT THAT THE SCHEME I CHOSE BASICALLY SUCKED IT ALL. PARTIALLY ITS MY MISTAKE, I DID NOT CONSULT ANYONE BEFORE DECIDING. BUT THE AGENT DIDN'T TELL ME EVERYTHING, ALL HIDDEN CLAUSES, FORMULAS ETC TO GET THE VALUE YOU CAN GET BACK. Explanation below.
Agent gave me a monthly savings cum investment plan (minus insurance as I already had one insurance plan), stating that there is lock down period of 18 months, I'd to chose a convenient monthly amount that I could contribute from given choices of amounts required for investment. This is decided by the end company that manages the funds, this agent of mine and other similar agents fish customers like me and then money from their clients is pooled in to the managed funds provided by the source company e.g. MyCompany has access to 500 global funds, it created some bright plan for investors like me and then hired agent companies to sell these plans to suck the money. The company in my case plays in billions of $ , I'm sure they don't have things left for me to sue and eventually I'll end up losing.
Agent explained me that since you're under 30, go for long term plan of 25 years, with 1/4th of my salary going for monthly contribution. I'll have 18 months lock period, till that I cant withdraw a single penny, if I miss my premiums, policy might be in trouble and may collapse. So 18 months I have to pay that amount regardless of how job market is, whether I can afford to pay or not. He said this plan is for long term savings, so plan provider company discourages withdrawing money and there will be penalty.
He didn't explain me how much the penalty is, neither the brochure he gave me contains the formula devised to really suck out your money if you withdraw money even after 19 months in my case. I was stupid enough not to find this formula at early stage otherwise I wouldn't have invested at first instance. My plan is for 25 years, so eventually I won't get much out of it if I don't pay till end of the policy and its all hidden in that formula for calculating SURRENDER VALUE , it plays with months pending till maturity e.g. down
***Just an example formula - if you think its objectionable let me know I'll cook up another just like you do.
Surrender value = (your policy's market value - bonus) / ( 1.05) ^ ((months to maturity)/12) + premiums after 18th month
you can use excel to get figures. Basically longer the plan, longer you've to pay, lesser you'll get if you surrender early.
Now if you're in situation where you really want money in earlier years of your policy and you don't have other means, you would definitely want to get cash from your policy right? Its your money after all, but no you're in a shitty product which will rip your hard earned money. I know its long term policy but what should my family do, I'm their only earning member. If I can't get 80% of my money at 19th month of what I've paid then whats the point of continuing this shitty policy. The firm may be worth billions of $ but for me my hard earned money is more than billions for me and my family but I'm sad to say I got ripped by these investment banking cheats. I am educated fool to not ask for details, signed documents without understanding fully.
So in short if you're planning to invest money, put it in fixed deposits, government bonds or play with stocks/fx if you've time. Don't just blindly sign any document, read thoroughly any calculations involved. These funds have different types of management fees that will apply even if market is headed down, and you'll be paying that fees. Its your money, you'll be better managing it , rather chose some wrong firm / person to do it for you.
Ask if the agent has signed himself for same product that he is offering to you? Chances are if he thinks product is wrong he wont have it ... excuses can always be cooked up.
Record your conversation with end product managing firm as well as agent, because you might need proof at later stage. Get things written and signed by authoritative person of agent's firm, agent as well as end firm wherever possible. You'll badly need proofs if you end up in my situation.
always look for other advisor to go through brochures you've got he might give you one or two bad reasons not to chose the product but generally he'll bother you with other advisor.
we're in Internet age, search engines are GOD, and I'm atheist not to bow to this GOD when I signed for policy, had I read negative reviews about the product I would NEVER NEVER NEVER have gone for this product. Yes I found negative reviews dated prior to my signing date. Moral - do search on Internet before you buy the shit.
Often we get little greedy, too much concerned about our, our parent's , kids' future etc, but if you're getting little less from secured source like fixed deposits go for it. I have learnt lesson very hard, I'm from OK to do family but with big responsibilities and still I ended up losing because I chose wrong product, didn't consult but the agent also didn't give me proper information. I hope someone out there will read this blog, and be careful about taking investment decision. Never mix up investment with insurance. If you want insurance just go for a well known, government regulated and national level companies.
Please think before you decide.
GOD bless you.
