MyMoneyBlog.com

Syndicate content
Personal Finance and Investing Blog
Updated: 18 hours 17 min ago

Do NOT Buy List: Equity Indexed Universal Life Insurance

Mon, 01/27/2020 - 03:05

Financial noise is everywhere. I try to be selective and only write about a limited amount of unique, profitable, and actionable information. If I see a bad product, I usually just ignore it and move on. Angry rants are not my thing.

However, I do worry that if something happens to me, my surviving loved ones may not know what to avoid. Therefore, I am adding a DO NOT BUY list as part of my estate planning documents. Simply avoiding the worst things is often a better (and easier) strategy than searching for the absolute best thing.

This WSJ article (paywall?) profiles one of the items on my DNB list: It’s the Hottest Thing in Life Insurance. Are Buyers Aware of the Risks?. I was unaware that indexed universal life (IUL) had grown so much in popularity, now making up 25% of new individual life insurance policies as measured by premium:

A universal life insurance policy combines a death benefit with the ability to build up a policy cash value. An indexed universal life policy is a universal life policy that increases the cash value at a rate tied to the performance of an index, often the S&P 500.

Briefly, here are reasons why I avoid Indexed Universal life insurance products:

  • High fees. In fact, probably multiple layers of fees. They might sound simple, but are actually amazingly complex. Per the WSJ – “We joke that it takes an actuary, an attorney and sometimes an engineer to understand the calculations,” said Billie Resnick, co-author of an American Bar Association book on life insurance.
  • No guaranteed return. You are unlikely to get near the long-term S&P 500 returns. Most IULs have floors which protect you from losses in down years, but return caps which cuts off your return on big up years. Stock market returns are lumpy, but with more big up years than big down years. Historically, protecting against the downside does not help enough to offset missing out on the upside. In addition, they almost always exclude dividends, which means you are guaranteed to miss a significant part of total return. So even if you did magically track the S&P 500 perfectly, you’d still be behind by ~2% due to losing the dividend. You’ll get a smoother ride, but at what cost?
  • Life insurance is better when it is simple and transparent. Ideally, the payout should be a guaranteed amount in exchange (i.e. $1 million cash) for a clearly defined event (i.e. death). When something is simple and transparent, you can easily comparison shop and let market competition create a fair price. IUL policies are again highly complex and nearly impossible to compare side-by-side. Maybe one day this will change, but for now it’s buyer beware.
  • More fine print: Insurers can change the rules after purchase?! Per the WSJ: “Insurers generally retain the contractual right to change these percentages, subject to regulator-approved limits. They also typically can raise the cost of the death benefit, per contractual provisions.” What? Even the floors and cap percentages are subject to change and not guaranteed?
  • In my experience, the loudest supporters of this product tend to be the people who sell them. Why are some things pressured upon you initially as the best thing since sliced bread, but immediately after purchase they become nearly impossible to sell again? The second you buy it, it has lost a huge part of its value. Reminds me of timeshares. Look out for big surrender charges for 10+ years because they have to recover the big upfront commission paid to the salesperson.

I can see how the idea of “stock market-linked returns with less risk” can be attractive, and I would be intrigued if there became some sort of commodity product where multiple companies sold essentially the same thing and competed to drive down prices. However, the current way of selling IULs is too vague and hard to understand for the average customer.

I’m a relatively conservative investor myself, but UILs have all sorts of risks. Side-by-comparisons are hard, so you risk buying a bad version of the product. There is no fixed return, like a fixed annuity. If the stock market tanks, you still risk getting a lousy return. There is a risk the issuer will change the growth rules on you. As with all insurance, the issuer could become insolvent somewhere in there. I prefer my term life insurance policy, as it gives my family a guaranteed fixed payout at a low fixed price after comparing prices side-by-side with several issuers that all offered the exact same product.

My recommendation is simply to steer clear of them all. If you are my loved one and are reading this, my advice is not to buy an indexed universal life policy. Definitely don’t use my hard-earned money to buy one!


“The editorial content here is not provided by any of the companies mentioned, and has not been reviewed, approved or otherwise endorsed by any of these entities. Opinions expressed here are the author's alone. This email may contain links through which we are compensated when you click on or are approved for offers.”

Do NOT Buy List: Equity Indexed Universal Life Insurance from My Money Blog.

Copyright © 2019 MyMoneyBlog.com. All Rights Reserved. Do not re-syndicate without permission.

Categories: Finance

Top 10 Best Credit Card Bonus Offers – January 2020 (Updated)

Thu, 01/23/2020 - 19:44

Updated mid-January 2020. That space in your wallet or purse is more valuable than you think. Credit card companies are fighting it out, offering strong perks and $500+ value for a single card during the first year to encourage you to apply and try it out. These are the top 10 credit card offers that I would personally apply for right now, if I didn’t already have most of them. Notable changes:

  • IHG Hotels 140k – limited-time offer.
  • Marriott 100k – limited-time offer.
  • Southwest 75k – limited-time offer.
  • Delta 60k – limited-time offer.
  • United 60k – limited-time offer.

If you pay off your balances every month, then you can join me and many others in funding a huge chunk of your annual travel budget with cash credits, points, and miles. You don’t need to be a “I only fly business class” world traveler. I mostly use my rewards points on domestic economy flights, mid-class hotels, and cheap car rentals. If you have credit card debt, you should focus on paying that off first as the interest charges could offset most of the perks.

This is a companion post to my Top 10 Best Business Card Offers. Small business bonuses are on average even higher than those on consumer cards.

Note: Certain Chase cards have a “5/24 rule” which is an unofficial rule that they will automatically deny approval on new credit cards if you have 5 or more new credit cards from any issuer on your credit report within the past 2 years. This rule applies on a per-person basis, so if you are new, you might want to start with those Chase cards.

IHG Rewards Club Premier Card

  • 140,000 IHG Rewards club points after $3,000 in purchases within the first 3 months. Limited-time offer. See link for details.
  • Free Night after each account anniversary year (valued up to 40,000 IHG points).
  • $89 annual fee.
  • Subject to 5/24 rule.

Chase Sapphire Preferred Card

  • 60,000 Ultimate Rewards points (worth $750 towards travel) after $4,000 in purchases within the first 3 months. See link for details.
  • 2X points on Travel and Dining at restaurants worldwide.
  • $95 annual fee.
  • Subject to 5/24 rule.
  • Alternative: Chase Sapphire Reserve Card. 3X on Travel and Dining, Priority Pass airport lounge access, $550 annual fee, $300 annual travel credit, 1-year Lyft Pink membership.

Chase United Explorer Card

  • 60,000 bonus United miles. after $3,000 in purchases within 3 months. Limited-time offer. See link for details.
  • Free first checked bag for both you and a companion (a savings of up to $120 per roundtrip) when you use your Card to purchase your United ticket.
  • Expanded award availability. Having this card makes it easier to find that saver award economy ticket.
  • $0 annual fee for the first year, then $95.
  • Subject to 5/24 rule.

Southwest Rapid Rewards Plus Card

  • Up to 75,000 Rapid Rewards points. Earn 40,000 points after you spend $1,000 on purchases in the first 3 months. Earn an additional 35,000 points after you spend $5,000 on purchases in the first 6 months your account is open.
  • Southwest still gives everyone two free checked bags.
  • More than halfway to Companion Pass. If you can sign up for this one and also the small business version, you can qualify for a Companion Pass in 2020/2021.
  • $69 annual fee.
  • Subject to 5/24 rule.

Marriott Bonvoy Boundless Card

  • 100,000 Marriott Bonvoy points after $5,000 in purchases within the first 3 months. Limited-time offer. See link for details.
  • Free Night after each account anniversary year (valued up to 35,000 Marriott points).
  • $95 annual fee.
  • Subject to 5/24 rule.

Gold Delta Skymiles Card from American Express

  • 60,000 Delta Skymiles after $2,000 in purchases within the first 3 months + $50 statement credit after a Delta purchase within your first 3 months. Special referral offer expires 1/29/20. See link for details.
  • 60,000 Skymiles are worth at least $600 in Delta airfare with “Pay with Miles” option.
  • First checked bag free on Delta flights ($60 value per roundtrip, per person).
  • $0 annual fee for the first year, then $95.

Citi / AAdvantage Platinum Mastercard

  • 60,000 American Airlines miles after $3,000 in purchases in the first 3 months. See link for details.
  • First checked bag free on domestic AA flights ($60 value per roundtrip, per person).
  • $0 annual fee for the first year, then $99.

Barclays AAdvantage Aviator Red World Elite Mastercard

  • 60,000 American Airlines miles after any purchase in the first 90 days and paying the $99 annual fee. See link for details.
  • $99 Companion certificate offer. Earn a certificate good for 1 guest at $99 (plus taxes and fees) after making your first purchase and paying the $99 annual fee in the first 90 days.
  • First checked bag free on domestic AA flights ($60 value per roundtrip, per person).
  • $99 annual fee.

Citi Premier Card

  • 60,000 points (worth $750 towards travel booked at ThankYou.com) after $4,000 in purchases in the first 3 months. See link for details.
  • 3X points for every $1 spent on travel including gas stations.
  • Must not have gotten bonus from or closed a Citi Rewards+, ThankYou Preferred, Premier, or Prestige card in the past 24 months.
  • $95 annual fee.

Bank of America Premium Rewards Card

  • 50,000 points (worth $500 towards travel) after $3,000 in purchases within the first 90 days. See link for details.
  • 2 points for every $1 spent on travel and dining purchases and 1.5 points for every $1 spent on all other purchases.
  • $100 annual Airline Incidental Statement Credit.
  • Up to $100 credit towards TSA PreCheck or Global Entry application fee.
  • $95 annual fee.

Capital One Venture Rewards Card

  • 50,000 miles (worth $500 towards travel) after $3,000 in purchases within the first 3 months. See link for details.
  • 2% cash back on ALL purchases. Plus earn 10X miles at Hotels.com through January 2020.
  • Up to $100 credit towards TSA PreCheck or Global Entry application fee.
  • $0 annual fee for the first year, then $95.

Hawaiian Airlines World Elite MasterCard

  • 60,000 Hawaiian miles after $2,000 in purchases within 90 days. See link for details.
  • Free first checked bag for primary cardmember when using your card to purchase eligible tickets directly from Hawaiian Airlines.
  • Receive a one-time 50% off companion discount for roundtrip coach travel between Hawaii and The Mainland on Hawaiian Airlines.
  • $99 annual fee.

Chase World of Hyatt Card

  • Up to 50,000 Hyatt points. 25,000 Bonus Points after $3,000 in purchases in the first 3 months. Plus an additional 25,000 Bonus Points after a total of $6,000 in purchases within the first 6 months. See link for details and rough valuation of points.
  • $95 annual fee, free night award upon card anniversary.
  • Subject to 5/24 rule.

“The editorial content here is not provided by any of the companies mentioned, and has not been reviewed, approved or otherwise endorsed by any of these entities. Opinions expressed here are the author's alone. This email may contain links through which we are compensated when you click on or are approved for offers.”

Top 10 Best Credit Card Bonus Offers – January 2020 (Updated) from My Money Blog.

Copyright © 2019 MyMoneyBlog.com. All Rights Reserved. Do not re-syndicate without permission.

Categories: Finance

Marcus Bank $100 Bonus on $10,000 Deposit (New for 2020)

Wed, 01/22/2020 - 18:26

Marcus by Goldman Sachs is offering a $100 bonus if you deposit $10,000+ in new funds into their online savings account within 10 days of enrollment at this special offer page. You must enroll by 11:59pm EST on 2/11/20 and maintain the new $10,000+ deposit for 60 days.

Both new and existing customers are eligible. Marcus had a very similar offer last year, but having done it in 2019 does not exclude you from doing it again in 2020 (looking at you, CIT Bank, ha). This offer is actually a bit better because their 2019 offer had a 90-day minimum holding period and this is only 60 days.

After enrollment, you must deposit $10,000 or more in new funds (internal transfers won’t count) into a Marcus Online Savings Account within 10 days of enrollment and maintain at least $10,000 of those new funds in your account in addition to your account balance at the time of enrollment for 60 consecutive days from the date of reaching the required dollar amount. Multiple deposits are allowed to reach the required dollar amount and can be made by joint owners for a joint account.

Offer available to new and existing customers. Each customer is limited to one bonus offer, which can only be applied to a single account. For eligibility purposes, each joint owner will be treated as a separate customer. For example, if you apply the bonus offer to a joint account, the remaining joint owner(s) may apply this offer to another account they own if they have not done so already. […] The bonus will be treated as interest for tax reporting purposes.

Basically a 1% bonus on $10,000 if you keep it there for 60 days, which makes the bonus itself the equivalent of ~6% APY annualized. They will deposit $100 into your account within 14 days after that 60-day period. (I usually like to wait until the bonus shows up before taking out any money.) The bonus is on top of the standard interest rate, currently 1.70% APY as of 1/22/20. This combination makes it a great short-term rate at that balance size when compared to my last monthly update of best interest rates.


“The editorial content here is not provided by any of the companies mentioned, and has not been reviewed, approved or otherwise endorsed by any of these entities. Opinions expressed here are the author's alone. This email may contain links through which we are compensated when you click on or are approved for offers.”

Marcus Bank $100 Bonus on $10,000 Deposit (New for 2020) from My Money Blog.

Copyright © 2019 MyMoneyBlog.com. All Rights Reserved. Do not re-syndicate without permission.

Categories: Finance

Better Future: Free Background Check Powered by Checkr

Wed, 01/22/2020 - 03:05

While updating my posts on free Consumer Reports, I noticed that Checkr offered a free background check via the BetterFuture.com website. No credit card required, no trials. Checkr is a legitimate company that provides background checks for Uber, Lyft, Postmates, and Instacart, so I valued their results more than most other “free lookup” sites.

The benefit of knowing what is on your background check is that you can fix any inaccuracies before applying for employment. In return, Checkr makes money by trying to connect you with relevant job opportunities based on your unique information.

Better Future takes your basic information (name, address, SSN) and pulls data from federal databases and public records from over 3,200 local counties. The sections of the background check report are:

  • Address History
  • SSN Trace
  • Sex Offender Search
  • Global Watchlist Search (International crime databases)
  • National Criminal Search
  • County Criminal Searches

I decided to run a free background check on myself, and it only took about an hour even though it said it might take up to 3 days. The information shown was all correct to my knowledge. Here’s a redacted screenshot of my report:

The background check does not include Employment History, Driving Records, or Civil Records. Here is the disclaimer that comes with the report:

This background check is for the named individual only. Better Future searched the sources listed below based on the information you provided. Failure to provide accurate or complete information may affect results. Third parties, such as potential employers, may search other databases for information about you. This is not a “consumer report” as defined by the Fair Credit Reporting Act (FCRA) and may not be used for determining any person’s eligibility for credit, insurance, employment, housing, or for any other purposes covered under the FCRA.

Bottom line. Checkr offers a free background check via BetterFuture.com. No credit cards, no trials. In return, they can match you up with job opportunities (optional). I signed up for a free report and I found no errors in the information.


“The editorial content here is not provided by any of the companies mentioned, and has not been reviewed, approved or otherwise endorsed by any of these entities. Opinions expressed here are the author's alone. This email may contain links through which we are compensated when you click on or are approved for offers.”

Better Future: Free Background Check Powered by Checkr from My Money Blog.

Copyright © 2019 MyMoneyBlog.com. All Rights Reserved. Do not re-syndicate without permission.

Categories: Finance

How Your Portfolio Accumulation and Withdrawal Years Are Different

Tue, 01/21/2020 - 03:05

The last 10 years of stock market returns have been pretty remarkable. If you invested $100,000 in the S&P 500 in the year 2000 and held it though the dot-com crash and financial crisis, you would be closing in on $300,000 today. However, if you retired in 2000 with a portfolio invested in the S&P 500 and used a 4% withdrawal rate (increasing each year by 3% for inflation), your nest egg would less than $50,000 and on a path to zero!

This stark difference between accumulation and withdrawal modes is illustrated by the chart above, taken from the Blackrock Blog post How to avoid “dollar cost ravaging” in retirement. “Dollar-cost ravaging” is also known as “sequence of return risk”, as explained in the this quote:

Investors have probably heard the term “dollar-cost-averaging,” where you make regularly timed investments to smooth out the risk of “buying high.” Retirees tend to do the opposite. Instead of putting money into their portfolio, they take it out with a regular cadence in the form of income. “Dollar-cost-ravaging” occurs when the market loses value while you’re taking withdrawals, especially in the early years of retirement. Because money is coming out rather than going in, it’s harder for the retiree to recover their losses when markets rebound. We even saw this during one of the most successful bull markets in our history over the past decade. The sequence of returns matters, and the biggest challenge is a bear market early in your retirement.

Unfortunately, there is no easy solution to this problem. This is what the article offers: “Striking the right balance to limit your losses in a declining market is just as important as capturing growth when the market is strong.” In other words, don’t hold too much in stocks, but also not too little. You can more easily weather a recession when you are still working and saving then when you are spending it down. I think more important advice is that you should be ready to withdraw less money out of your portfolio if the market tanks early on in your retirement withdrawal phase. Don’t follow a rigid withdrawal rule from some academic study into oblivion!


“The editorial content here is not provided by any of the companies mentioned, and has not been reviewed, approved or otherwise endorsed by any of these entities. Opinions expressed here are the author's alone. This email may contain links through which we are compensated when you click on or are approved for offers.”

How Your Portfolio Accumulation and Withdrawal Years Are Different from My Money Blog.

Copyright © 2019 MyMoneyBlog.com. All Rights Reserved. Do not re-syndicate without permission.

Categories: Finance

Comment