Caveat emptor

Photo by Guy Kawasaki on

When I was a kid, I watched G.I. Joe, Thundercats, Skyhawks, and played out in the woods behind my house. On weekends, my dad and I would often go on short trips together, sometimes collecting soda cans for the recycling money. During these car rides, my dad would impress upon me two things: don’t use credit cards and don’t buy whole life insurance.

I barely understood what he was talking about, as I didn’t even have a savings account and kept my cash and coins in a M&Ms tin I got one Christmas. My dad was 42 when I was born, older and with more experience than I have now. The terms and concepts he used were so far above my head I couldn’t bridge the knowledge gap. It’s like he was explaining how to calculate the slope of a line in algebra and I was ready for, “Don’t let your cereal sit too long in the milk before you eat it.”

As to his advice, I mostly adhered to what he advised. My first credit card was an American Express card I opened up right after graduating college. I paid off the balance on this card, until I got my next card maybe six months later. I kept a balance on this card for years, until he sold his house and helped me pay down the balance. Now I use cards to pay most of my expenses, utilizing the float to allow me to delay paying for purchases for 30-40 days (that sounds bad after typing it out), and get a few reward points to boot. I’ve also used credit cards to pay for larger purchases over a ~18 month timeframe, such as our honeymoon, king mattress, and a new Prius battery. Some would argue against doing this, but for 0% interest it allows us to not be “cash poor” and dollar cost average invest into our retirement accounts.

I also never bought whole life insurance. I have term life insurance that will support my family in the untimely event of my death while I am still earning an income. I invest in investment vehicles and pay for insurance in insurance vehicles. I have not misguiding ideas about using life insurance as an investment strategy or a way to borrow from myself.

So there you have it: G.I. Joe to life insurance. How is that for a Public Service Announcement?

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