Tuesday, June 23, 2009

I've liquidated my life insurance. Finally got round to doing this after procrastinating over months/weeks.

I bought this policy for all the wrong reasons 18 years ago. Insurance as a form of investment, ie if you hope to see returns, is really the wrong instrument. The policy had no coverage for critical illness (not that this is a great idea anyway) and I'm no longer so altruistic that I would buy insurance just so that I can leave a tidy sum to my kids when I'm dead and gone. Not as if the death payout for this policy was so great either.

So couple of months ago, I bought a term life plan for higher coverage and lower premiums - my kids will now get more when I die and I pay less while I'm alive. Hm sounds weird but there's logic in that sentence somewhere. Anyways, with the lower premium, I can take the extra bit and add it to a savings plan and grow the money.

Now that I've cashed the policy in, I have a modest five-figure sum from the policy cash-back. Which means I need to invest it. The banks pay crap interest and honestly, there are better ways to grow money. I plan to invest this lump sum, then turn my MSA account (which pays crappy interest) into a regular fixed savings-investment plan.

I don't intend to touch this money in the short to medium term. My only aim is to grow the funds a bit more before I take them out and re-invest again. Slow and steady is the way to go here, so I'll be patient.

Only thing is - which plan and/or which fund to buy into? Mindboggling headache since there are so many funds out there.

Having this teeny nest egg sure makes me feel good. It's not much and in fact, most people would definitely laugh at the amount, but for someone like me, whose never had this much money before in her bank account and who lives from month to month in a mild panic with a near empty bank account, it sure feels good to have a little more padding in the money dept. I mean, to have enough to even consider 'investment', that's something! Me and my money now, feels kinda like Scrat and his acorn.

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