Cash & Bonds The truth about investment bonds

A write up on investment bonds (also known as an insurance bond) here from Passive Investing Australia

The truth about investment bonds

He has links to some other interesting reads I've posted before from The Naked Investor ie. Investing for Kids (The Good, the Bad and the Ugly)

 

have managed to avoid these so far

thanks for the insight

cheers

 

Another great article from Passive Investing Australia.

I made the mistake of engaging a banks financial advisor at one point. For $800 they advised me to
1) Move my Super from an industry fund to a retail fund
2) Purchase Life Insurance
3) Purchase an Investment Bond

I didn’t act of any of it fortunately and wrote off the $800 as a life lesson.

 

i was lucky the bank FP was free

they pointed me at a 'one-size-fits-all ' solution and i declined

and arguably saved some brokerage to boot

the Hayne Royal Commission gave accounts of those who accepted the guidance ,

the bank no longer offers FP services

plenty of traps await sad to say

 

This is a good piece indeed. I had always taken the “CGT and income tax free after 10 years” on face value. Low humans !

 

A new article on these from Pat The Shuffler

Investment Bonds – A diabolically ineffective investment structure

One topic that keeps coming up is investment bonds (AKA Insurance Bonds). They are often touted as “tax efficient” or “great when investing for children” . These claims are then supported by further vague, opaque and purposefully misleading statements like “no capital gains is paid by the individual”.

This nonsense got my spidey senses tingling and I just could not resist looking further into them. That may be an understatement, it was more like bomb raid sirens going off in my mind.

I read through investment bond provider websites, reddit posts, Facebook posts, podcasts, Youtube videos and many of the comments on the above sources to see that this nonsense has been swallowed hook line and sinker. Unfortunately there is a lot of cherry-picking of facts and glossing over many of the reasons that these investment bonds are really ineffective for the vast majority of, if not all, investors. I felt compelled to write a piece laying out why I feel most investors are best to steer clear of them.

I intend to show that the main claim made about investment bond organisations are often covered with undisclosed caveats, that are misleading or just downright false.

Cont..