$125/month investment for potential $2,000,000 gains?

by r98986

Last night, I was taking a hot shower and had some shower thoughts, and got this breakthrough idea which might be able to help me offset -$56k losses that have occurred to me in the past few years since 2012. (Not my fault. You know that the market has been difficult for past 7 years).

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Right after the shower, I started looking at the term-life insurance products and their rates and learned that life insurances are surprisingly cheap. Did you know that it only costs around $50~60/month to get a 30-year term life insurance of $1 million? Yes, you heard it right. $1,000,000 for only $50/month.

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I didn’t stop my research there, and I adjusted a few input criteria to increase my potential profit, and I was able to get the rate of $125/month for 30-year term life insurance for $2 million. I suspect that the rate is probably very good because I am not a tobacco user, I don’t drink, and am very healthy.

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So, using $125/month and $2,000,000 return as a basis, I decided to calculate a few exit options to get potential profit %.

For example, if I die right after I pay for the first-month payment of $125, I will get $2,000,000 in return. That would be whooping 16000+ times (aka 1600000%) return on investments.

If I die after 20 years of investment, ($30000 payments total over 20 years), I will get $2,000,000 and that is still 60+ times return on investment.

Below is the table for those of you who are data-oriented investors&strategists.

So, in terms of profit %, dying after 25 years of payment is not that bad and is still great… but dying as soon as possible, preferably only after a month of payment will maximize the profit %.

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Once I get $2M in return, I can pay off my car loans & CC debts, subscribe to Netflix/HBO/Hulu at the same time, and most importantly, I don’t have to deal with banks rejecting my mortgage applications any more due to my low income. I will be able to buy a house with 100% offer.

I am thinking of owning one in southern California and one in Asia, so I have already shifted my research time more on learning good house interiors & DIY home improvements, and less on stock markets.

Also, I will no longer need to pay rents after I buy the house which is just a free side benefit that comes with becoming a homeowner.

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There might be some tax implications for $2M earnings which I haven’t researched yet, but I think it won’t be a problem so much since I will have so much money in my hand.

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I am thinking of closing my brokerage account soon, and start investing using this strategy. I usually spend around $2000+ dollars on executing trades alone per year (My brokerage charges you ~$5 per trade). So I should not have a problem paying for $125/month if I use this strategy. I still have plenty of credits left in my CCs and can probably ask my family members to co-sign loans for monthly insurance payments, although I don’t think that will be necessary.

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This strategy is kinda fail-proof and you can’t go tits up, because life insurance companies that I researched for the quote above have ratings above A+, (for those of you who don’t know, company ratings are very important factor in life insurance domain, and companies with A or higher ratings don’t usually go south, and have been there for more than 50~100+ years), so I don’t have to worry about them going down, where typical biotech companies disappear overnight, and many companies have short lifespan.

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Thoughts? Questions? If you want to follow my strategy and have questions, let me know!

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P.S. By the way, I am talking about term-life insurance here, not the whole-life insurance which is way too expensive and nonsense. (They cost like $1000~$1200/month), so I don’t think they are worth it. I don’t even see much difference between those two either.

Disclaimer: This content does not necessarily represent the views of IWB.