Invest To Financial Freedom - Ways To Invest when you have $100,000? Conservative Way Part 1
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This is the chapter 1 for my series Ways to Invest when you have $100,000 In chapter 1, I will share with you the conservative ways to invest your $100,000. This is the part 1 for this Chapter.
Suggestion 1: Cash Bonus Life Insurance + Money Market Fund
Before we start, why don’t we have a closer look and understand what bonus based life insurance and money market fund is.
Cash Bonus life insurance is a kind of life insurance where you will get a certain amount of bonus from the Insurance Company at certain period. After the fiscal year, the insurance company will divide the last year bonus, according to certain rate, to the bonus based life insurance holder in the method of cash or increment of policy.
Where the insurance companies collect those bonuses from? \r\n\r\nThe main resources for this bonus is from
1. Differential of Death - the actual death of policy holders different from the expectation.
2. Differential of investment return - unexpected of higher return from the investment that insurance company invests.
3. Differential of Management fee - profit that company gains when the management fee is lower than budget.
Every year, insurance company will budget and destine 3 factors - death compensation, expected investments returns and management fee. The decision of the allocation is firm and once the allocation is fixed, it is not easy to be changed. Maybe it is the different for first few years is not that much, however what happen in another 10 years or more? The difference will be big in this in after 10 years. Once this happen, insurance companies will pay the bonus, according to certain rate, to their customers. This is how cash bonus life insurance works.
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[…] 55 - Invest To Financial Freedom - Ways To Invest when you have $100,000? Conservative Way Part 2 December 30, 2005 | Invest To Financial Freedom, Ways To Invest when you have $100,000? | Financial Freedom, Insurance, Investing, Invest To Financial Freedom, Money Market Fund, Personal Finance, Ways To Invest when you have $100,000?This is the chapter 1 for my series Ways to Invest when you have $100,000 In chapter 1, I will share with you the conservative ways to invest your $100,000. This is the part 2 for this Chapter. Check my part 1 here. […]
[…] 57 - Invest To Financial Freedom - Ways To Invest when you have $100,000? Conservative Way Part 3 January 3, 2006 | Invest To Financial Freedom, Ways To Invest when you have $100,000? | Fund, Invest, Invest To Financial Freedom, Life Insurance, Ways To Invest when you have $100,000?This is the chapter 1 for my series Ways to Invest when you have $100,000 In chapter 1, I will share with you the conservative ways to invest your $100,000. This is the part 3 for this Chapter. Check my part 1 and part 2 here. […]
[…] Do you want to know what is cash bonus life insurance? I have a short description in my post Invest To Financial Freedom - Ways To Invest when you have $100,000? Conservative Way Part 1. You can read it to know more about cash bonus life insurance. […]