EDIT: not scammed- bad choice of words. Is my mom being led to make a very poor financial decision?
My mother has been won over by a method of investing focused on cash flow. There's a specific company she follows- I can't find it now, but it's very buzzword heavy and, in the few instances she's shared it with me, I've been unimpressed (I work in Corporate Finance).
Example: they talk about paying down debt and how you can take the money you would have used to pay those debts and invest it. However, it doesn't even attempt to explain where the money to pay those debts comes from, and how investing that money and keeping the debt might be a more prudent decision.
Lately she's been focused on whole life. She keeps talking about investing all of her money into whole life so that she can borrow money against her own investments. Now she's planning to take all of my children's (her grandchildrens) 529 investments and move them out of a Vanguard Index fund and into a whole life policy.
With this background, help me understand why this is a good (or bad) idea. My mom is very bright, but has really only started to take an interest in personal finance in the past couple years, since my dad (also a career finance guy) has become too old to do it for them.
I don't know much about this stuff, but the resources she keeps sending me scream "Sucker", and I've heard bad things about whole life my entire life (I'm firmly a term life guy). I don't want my mom getting bilked, but I need evidence that this isn't the way to go to convince her not to do it.
She wants to come over later today to talk about it. What resources should I read and share with her?
Please help!
Submitted July 13, 2017 at 11:57AM by Deely_Boppers http://ift.tt/2tMXKm3
