“But my investment guy said I would make a killing on this.” Sterile voice responds, “Well he quit last week sir and there is nothing we can do, did you not read your contract?”

 Who in the (*&^) can read that stuff? If you cannot understand the contract you are supposed to sign don’t sign it, no matter how much money they tell you, you are going to make. There is an investment that is in 70% of homes in North America. It is guaranteed to earn no more than 3% and more than likely a lot less. But it earns an investment industry billions of dollars. It is perfectly legal, certainly not moral but when you have a lobby group with this much money; changing the laws is difficult.

 It is much easier to teach you what to look out for and here it is. First let’s prepare you; in a few more words I am going to tell you what this investment is and most of you will stop reading. Why? Do you what to retire broke? No, it is just this industry has done such a good job of convincing us of two things. One; we need this investment. Two; this investment is so complicated you are lucky they are there to explain it to you.

 When I tell you what it is, fight back the temptation to stop reading and stay focused on the goal of your financial freedom and not making a big companies a lot more money. Okay here it is life insurance. Yep, it is one of the biggest tools people use for investing. You get these really cool “projection sheets” that have huge numbers on them of “cash value”. As you are unlikely to die by 65 you will need money and these “projection sheets” tell you by 65 you will have a million or more. Wow, what a good investment.

 The only problem is at the bottom of these sheets is a little line that says something like. “These are only projections and do not represent a future value. The future value is dependent on market conditions.” What does that mean? It means you have nothing, absolutely nothing. Those sheets are fantasy, they will never come true and they never have.

 The regular insurance industry has always wondered how the life insurance people get us to invest in an insurance policy. Can you imagine having an investment component in your house insurance, or car insurance? Most (over 70%) of life insurance has two parts: a life insurance part and a cash savings part. The second you put them into one contract you are going to lose so much money it should be criminal.  

 I was sold one by a good family friend at age 18. I actually read the contract and did not understand it but hey, she was a friend of my moms for years. Five years later I was at an investment seminar and was shown how these “cash value” and “universal life” policies really work. They work great for the insurance company. Just look at who owns most of the big downtown buildings, and think where do they get all that money.

 It is true that if you have dependants, debts and people that would suffer financially if you died, you then need some life insurance. Just never buy it with an investment component and you will avoid one of the biggest traps to keeping you poor.

 Not everyone is poor because of overspending some got poor by bad investing. Avoid this number one bad investment. Keep your life insurance in a “term” only policy and take your investments somewhere else. Be smart, be wealthy.

Author's Bio:
This article is written by Ward Willison. Debt elimination tips and information to help you eliminate debt and gain control of your life.