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Anne-Lyse Wealth: This is The Dreamers Podcast, episode 129. Today is December 12th, 2023.
don't let exterior signs of riches fool you, distract you, Just because you see someone in a fancy car, just because you see the lavish lifestyle doesn't mean that these people actually have wealth. I'm I'm not saying that, everyone out there is faking for the gram or for social media, but as someone who's seen multiple times that there are people who are portraying Something online, but they can't even really pay their bills.
They're trying to teach you how to build wealth, but they can't manage their own finances. I'm wanting you to just really be mindful of who you choose to learn from,
Hello, I'm Annelies wealth. Welcome to my channel. And today I'm going to talk about three wealth building myths that the modern day financial gurus don't want you to know. And the reason why I wanted to do this Video is because sometimes I see some of the financial advice online and it makes me cringe a little bit.
And I recently came across a video that essentially discouraged people from investing in their 401k to get life insurance instead. I'm not going to get into the details of the video, but, that's really what inspired, this video today. And so the first myth that I want to discuss is Newsflash.
life insurance is not a great wealth building strategy. or it's a great strategy to preserve wealth, but not so much to build it. And I know like sometimes the gurus use examples like the Rockefellers and Vanderbilt and how they use life insurance to build their wealth.
But I always find that quite funny because, for instance, Rockefeller, mostly built wealth through the oil industry, right? So they leveraged life insurance at some point, but they had already built some type of wealth. Because when you look at the returns that you get from Investing in life insurance as opposed to actually investing in the stock market or investing in real estate.
It doesn't really make sense. But if you're looking to preserve wealth, if you're looking to pass down wealth, that's when you should look into life insurance, right? So life insurance as a strategy. To build a legacy is indeed something that is very valid, but I think that sometimes when life insurance it's pushed on you.
One thing that they forget to mention is you have to work on building the wealth first You should. Always have life insurance. You should have life insurance, but investing in other, products beyond term when you don't have wealth is not the best use of your dollar.
And sometimes you have to look at the messenger who is telling you that you should get whole life insurance when you barely have any money, invested. Are they getting anything from it? simple fact, someone who's a life insurance agent will get paid considerably more if you were to sign up for whole life insurance, whole life insurance is Four or five times more expensive than term insurance. I guess there's multiple types of life insurance, but in case you're not familiar, today I'm talking specifically about term and whole life because those are the most common and the Most talked about, but term life insurance basically will cover your loved ones for a specific, period of time.
So it could be 15 years, 20 years, years. because it's only, for a specific time period. It would be significantly less than having or life insurance. So, for instance, like, if you're healthy, you're in your 20s 30s getting life insurance, you can easily get life insurance, a million dollar policy for
Well under, $50 a month. Right? but sometimes they want to sell you whole life insurance as a wealth building tool, it'll cost you a few hundred dollars $400, $300 a month. But the difference is they tell you, well,
not only will you be able to get a benefit later on, so you'll have a payoff later on guaranteed. But in addition to that, you will be able to borrow against your life insurance. So you can be your own bank. That's what they're pushing.
Well, newsflash, there are other ways for you to be your own bank, but you can, for instance, borrow against your stocks that you are invested in and if you build relationships, the interest rate can be close to none. Depending again on the economy and things like that, But yeah, so that's the first myth that, you should really think about if you're in the wealth building stage, you should get life insurance so that your loved ones are covered and look into possibly term.
once you start building wealth and once you have wealth that you need to protect, then you can start looking into these other tools, but it's more so to preserve wealth as opposed to, building wealth. Right, because when know, you look at the returns or what you would get by simply investing in the total stock market, it will be significantly higher than whatever return a whole life insurance policy will give you.
Another truth that. New Age financial gurus don't want you to know over leveraging debt is just too dangerous and is not the best way for you to build wealth unless you're willing to lose everything. let's just look at 2007, 2008, where people were over leverage, and, you've heard the stories of people losing their homes, losing their investment. People who are millionaires now, all of a sudden going down to broke. whatever money you borrow, you expect it to pay back. So you need to be very careful. I'm not someone who's against, leveraging debt.
I I actually believe that debt Credit is a great tool as long as you use it responsively. So when you hear the things like, oh, yeah, I can help you get 50, 000, 000, a million dollars in credit, just, follow my steps. Just make sure that you have a plan, make sure that you can actually afford to borrow that much, that you are not over leveraging.
Because if things were to change in the economy, you should be able to continue to pay off that debt so that you don't lose. That asset that you were looking to purchase. And also don't use that to buy things that depreciate in value. The purpose of it is so that you can build wealth, right? So invest in things that grow in value.
and so for instance, this is something that I've seen on social media one too many times, you know, Hey, I'll teach you how to get whatever car you want with credit, and you can just write it off with your business. So go ahead and buy it. Just be very mindful. If your business isn't profitable, if your business doesn't really have a reason for you to spend all that money on a car, you can also not buy the car, and work on building your business, right?
So same thing when you hear, hey, I can help you buy whatever car you want under your business name.
And don't worry, it's a tax write off. So don't worry. No, you need to worry. Yes, you can buy a car under your business, but your business has to be profitable. It has to make money. Sense, right? Just because something is a tax write off doesn't mean that you should go for it because sometimes it actually makes sense to pay that percent in taxes and save the difference.
rather than being stuck with car payments that you can't afford or just loans that you can't afford. All right, another. Truth here that the modern age financial groups don't want you to know is that wealth is not built overnight. Yes, I love the stories of people who overcame adversity to build wealth, and I love the step by step, but when you really look into those stories, know, one thing that you will see is that it takes years,
yes, you can make a lot of money. You can earn a lot of money fast, but that doesn't mean that you build wealth because wealth comes with habits that are going to help you invest that money that is going to help you grow the wealth, preserve the wealth,
Pass down the wealth. And so there's a big difference between making a lot of money and building wealth. So if you're interested in building wealth, you have to invest in your education. You have to learn and you have to apply what you learn. You have to continuously invest. And, you have to be consistent when it comes to investing and, not just follow the get rich quick, scams. Because that's just not how wealth is built. Just look at time tested ways of building wealth and you're guaranteed if you stick with it, little by little, you will build wealth.
And I just want to say here, don't let exterior signs of riches fool you, distract you, Just because you see someone in a fancy car, just because you see the lavish lifestyle doesn't mean that these people actually have wealth. I'm I'm not saying that, everyone out there is faking for the gram or for social media, but as someone who's seen multiple times that there are people who are portraying Something online, but they can't even really pay their bills.
They're trying to teach you how to build wealth, but they can't manage their own finances. I'm wanting you to just really be mindful of who you choose to learn from, but also you need to do your own research. Don't just believe someone because you like them, do your research, whatever you hear, don't believe it until you can, double check that for yourself.
And that's how you're going to be able to build wealth.
and this is my disclaimer. This is not financial advice. PleasePlease take the time to do your research consult with a finance professional, if you want advice that is tailored to your specific situation.
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