How do you call a man who join the insurance industry not to sell but just to get hands-on experience on insurance products itself? Dumb. But when when that man is Lai Seng Choy, you’ll be dumb not to listen to this man who retired way before the normal retirement age. He’s only 41 only, and it is possible because of 2 critical things he realized while he was in the early 30’s. Insurance and investment. Realized and fully “milked” it to the max.
Lai Seng Choy realized the utmost importance of protection in case of unforeseen circumstances, which would impact his family greatly. But like many of us who bought our first policy, we are sold by newbie insurance agents who feed us what we always want to hear – “What can I get by the age of 55 or 90?”
If you encounter someone like Lai Seng Choy, then it is really a hard sell. Because he is a man who does his own diligence, and he didn’t believe bulat-bulat in what any insurance man said. Through a short stint in the insurance industry, he leant about the characteristics and difference between insurance products, and is well aware of the techniques used by insurance agents to close sales.
And out of a sudden, he mentioned the big word – “Cheated”. I respectfully corrected him by rephrasing it “When you realized what you bought is actually not what you need, there’s this unpleasant feeling brewing inside“. That would put someone in dilemma when their insurance agents are long time buddies.
When it comes to unit trust, Lai is also concerned about its initial charges and fine-print charges like MER which eats into investors’ return. He admitted that he is actually not an aggresive investor, he is not looking for return but is fond of stable returns instead. So for him, downside risks come first. Not fast-and furious. He doubt he’ll be able to achieve what he had today if not for this.
Learn from Lai Seng Choy on his proven, time-tested, 10 minutes/day stock investment process in the Invest Bursa course. Enter your name & email below to get an exclusive, full length 60 minutes video recording with Lai showing you this..
With the correct home work done, Lai Seng Choy believes that not every unit trust fund manager is much better than himself, and finding a suitable stock market to invest isn’t exactly rocket science.
He debunked the misconception that stock market is risky – and that you lose your money anytime. But isn’t equity unit trust fund comprises of stocks as well? Hence, the logic. He dare not say his stock investment method is the best, but if that gives you good return (might be relative from person to person), and allow you to sleep peacefully at night, then isn’t that sufficient already?
LCF note: His first book is called Infinite Wealth, focusing on stock market.
Back to the topic of insurance, Lai Seng Choy agreed with my point that insurance should be bought considering the coverage you need today, not depending on how much premium one can afford to pay.
For him, premiums are just like your other expenses; you ain’t looking for returns right? The layman are confused and are lead into thinking about how much they will get at the end of the policy duration. Wrong! If you are reading this, then please don’t be a layman and explain this point to anyone around you who had this mindset. Lai further adds – “Who cares? At the end of the day, that money is still your money – in case bad stuff happens to you. “
The right concept is, pay minimum amount, to maximize the coverage. It is not to be used an investment vehicle. But if you are standing from the insurance company view, then yes, this is true. Insurance companies need your premiums into its investment pool to roll and invest, and then pay part of it back to you. That’s no difference from giving money to people who invest for you, but of course, for their service, you got to pay them.
As while talking about that, just to let you know that the phrase – “Buy term (insurance) and invest the rest” is NOT applicable in Malaysia. The saying exists because in many countries, term insurance is the cheapest (lowest premium). Investment linked policy, instead, is the cheapest to get maximum coverage in Malaysia
Stay tuned for Episode 3!