Friday, July 18, 2008

A low cost investment fund

You are not familiar with investing your money. You appoint a trusted person to handle your money and take care of investing it.

Thirty years later, you found whom you have trusted had taken away 65% of the investment gains, and left you with only 35% of the gain. Do you feel that you have been cheated?

If you invest $200,000 over 30 years and your total gain is $600,000, your trusted friend has taken away $400,000 and leave you with a gain of only $200,000.

What type of product is this? It is a high-charge investment linked policy.

Would you prefer to have chosen a more trusted person who takes away 20% of your gains (to cover his expenses and earnings) and leave you with 80% of the gains? This person took away $120,000 and return your savings of $200,000 plus a gain of $480,000.

What type of product is this? It is a low cost investment fund.

Read this FAQ:

1 comment:

mfonet said...

In the case of ILP, if we have already bought this last year, would it be a better option to stop the policy? How do we determine if we should cut our losses and move on to better investments?

Should ILPs be bought for kids' funds?

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