Shocking: A 16-Year Life Insurance Policy Returned Only 0.64%

Hello James,

I am from Taiwan. I started investing in stocks in Year 100 of the ROC calendar, when I was still in university. I tried day trading and individual stocks, and of course it ended in failure.

Then on May 25 this year, I was chatting with my aunt. She told me that if I wanted to invest in stocks, I should buy 00662, and she also recommended the CLEC channel to me. I listened to your lessons starting from 00451 and 00398. Everything you said not to do was something I had once done, and it all proved what you said.

You said not to buy individual stocks. I once bought individual stocks, and they really fell until only 20% was left. I once started a business with friends; it really lost money and the friendship broke apart.

What shocked me most was life insurance. After hearing you say not to use insurance for financial planning, I immediately surrendered my own life insurance policy the next day. My husband also surrendered the life insurance policy he had been paying into for 16 years. After receiving the surrender value, we immediately bought 00662, and mentally we are following your spirit of buying whenever we have money and never selling no matter what.

I also want to share something with you about life insurance. My husband paid NT$120,000 per year for 16 years. We thought that since we had paid so much every year, and since it had supposedly been compounding for 16 years, there should have been a decent amount accumulated.

Only after we looked into it did we realize how shocking it was. I asked the insurance agent, and the agent did not want us to surrender the policy. He even told me that calculated with simple interest, 4.5% was high and quite good. I directly challenged him: how can you calculate it with simple interest when this is supposed to be compound interest? The percentage must be much lower. The agent became a bit angry and said it was only a little lower.

Later I calculated it myself. The interest was only 0.64%. My husband was shocked that a life insurance policy he had paid into for 16 years had earned less than a regular savings account. We really did not know what we had been saving for all these years.

This is a living example that proves what you said: insurance salespeople are scammers. Fortunately, I met you and listened to your advice, so I immediately surrendered the policy.

I also have a few questions for you. After surrendering the insurance and adding our savings, I have about NT$2.5 million in total. I heard you say that people who are working only need to keep about six months of expenses as emergency cash, and the rest can be invested.

Our family's monthly living expenses are about NT$70,000, so six months is NT$420,000. I rounded it to NT$500,000 in cash and put the remaining NT$2 million directly into the market.

I heard your suggested allocation. For that NT$2 million, should I put 30%, or NT$600,000, into 00631L, the 2x leveraged fund, and 70%, or NT$1.4 million, into 00662? Is this allocation correct? Is this what you mean when you say part of the portfolio should use leverage?

Also, should the NT$500,000 in cash just stay in the bank account as emergency money, or should I buy 00865B with it?

Thank you for helping with these questions. I also truly want to thank you for your selfless teaching. I am very happy that at age 34 I heard your lessons and met you. You gave me confidence in stocks again and helped me see a future for my retirement.

I agree with what you say and believe what you say. After listening to your class on May 25, I surrendered the insurance the next day. As soon as the money came in, I invested it immediately without any delay.

I am truly grateful that heaven let me discover CLEC. In thousands of words, what I still most want to say to you is: thank you.

James's Reply

Hello,

I am very glad to hear that my channel has helped you. Congratulations to you as well for seeing through the trap of insurance-based financial planning in time and taking back control of your finances.

For the asset allocation questions you raised, my suggestions are as follows:

1. Emergency fund: For the NT$500,000 in cash you plan to reserve, you can directly buy 00865B as part of the allocation.

2. Asset ratio: I suggest putting 80% of the funds into 00662 and the remaining 20% into 00865B.

3. Leveraged products: As for 2x leveraged ETFs such as 00631L, they are not necessary for your current situation. I suggest starting with a more stable allocation.

Investing is a marathon. Keep the right mindset and continue executing. Keep going.

Wishing you successful investing,

James CLEC Investment and Wealth Management Channel