Re: Primerica Financial Services: best finance school? - Posted by John(TX)
Posted by John(TX) on April 18, 1999 at 23:41:27:
Several years ago I attended a meeting, probably just like the one you plan to attend on Tuesday. I was impressed with what the speaker had to say. It seemed to make sense. Ultimately, it did not work out for me. But, I’m not saying it can’t work. Here’s my story and what I know about the company:
As I said, I attended one meeting as “a favor” to a friend. I had no intention of getting involved. But, the information presented sounded good so I started going to meetings on a regular basis. But what are the meetings all about, you ask? Well, quite simply Primerica Financial Services or PFS, as it’s called, is a multi-level marketing (MLM) company whose products are insurance and securities.
Now, most people’s reaction to MLM is negative. They’ll have flash backs to some Amway salesman cornering them for an hour and trying to sell them soap or perhaps some other MLM company trying to get them to join.
That was my first reaction to MLM as well. I liked the financial concepts I was hearing at the PFS meetings but I didn’t like the idea of recruiting others. I also didn’t really want to sell. Eventually that’s what it all boils down to. PFS “agents” recruit others who then become “employees” of the “recruiter”. They teach you to sell insurance and much later (after obtaining a license) to sell mutual funds. This is where it started to fall apart for me. It’s true that if you are good at selling and recruiting you can make money, and eventually have an organization under you that earns you money. But it takes lots of time and hard work. At that time in my life I was simply not willing to invest neither the time nor the effort it would have taken to make it work. As I said, I was simply turned off by the MLM concept.
However, if you’ve been around CRE Online for very long you have no doubt seen many recommendations of Robert Kiyosaki’s books, “Rich Dad Poor Dad” and most recently “Cashflow Quadrant.” His first book, which hasn’t gotten as much mention, is entitled, “If you Want to be Rich and Happy Don’t Go to School.” I highly recommend them all. After reading these books I learned that MLM is a great way to build a business when you have no money. All you need to invest is time and work. It’s hard in the beginning but it provides residual income for years. This is greatly simplified but it addresses the point well enough.
The bottom line is this. PFS is a reputable company. They can provide you an opportunity. It’s hard work and it’s MLM. If you don’t like that idea, don’t bother going to the meeting. On the other hand, if MLM doesn’t bother you and you think you would be good at recruiting and selling then go for it. To borrow Robert’s metaphor, it will allow you to build a pipeline rather than carry buckets of water. But don’t let it completely distract you from your real estate investing. Remember that Robert says he does two things, build companies and buy real estate.
Having said all that, I still have a problem with PFS. The company is based on ideas that I’ve learned are for the middle class. Such as, “Buy term life insurance and invest the difference.” The difference referred to is the difference in premiums of a whole life or other cash value type insurance and cheap term life insurance. If you spend say $150/mth on whole life and can get the same dollar amount of coverage in a term policy for $20/mth. That frees up $130/mth you could invest. Invest in what you ask, why PFS’s mutual funds of course.
Once you’ve bought the term insurance, they show you that you could save money on auto and homeowner’s policies by switching all of your policies to their companies. Having multiple policies with them will result in lower premiums. Lower premiums means more money to invest. Same coverage, lower price, the difference going to the investment.
Also, they encourage you to eliminate debt. That’s a great idea, but they want you to do it by getting a debt consolidation loan at 18% from one of their companies (see below). They then point out that the combined payments on your revolving debt was higher than the new payment will be on the consolidation loan. Presto, more “found money” to put towards that mutual fund.
Once they’ve spent 2 hours at your kitchen table explaining all this they recap by saying, “When I first got here you said you didn’t have any money to invest with. Just look at what we’ve done. We lowered your life insurance premiums, with the same amount of coverage mind you, by $130. We’ve decreased your other insurance premiums by $50 and we’re reduced your revolving debt payments by $275 dollars. You now have $455 dollars you can use to buy into this mutual fund.” The problem with all this is that it’s middle class thinking. Even so, I must say in defense of all these ideas that most people ARE middle class (or lower). If they are going to be middle class anyway, then at least you got them to invest something and showed them a way to eliminate their revolving debt.
One final thought, I think one of the reasons I was turned off by the MLM concept, is that I felt like I had to be tricked into going to that first meeting. Then, the MLM stuff was brushed aside for quite a while to keep you interested in coming to meetings. It was explained, even in the first meeting but you were not encouraged to do it. Later, after they felt you were sufficiently interested they would begin to push harder to get you to recruit and sell. If you go to this meeting knowing all this it may greatly enhance your chance of succeeding. You won’t feel tricked. You will know up front you must recruit and sell.
Boy, after re-reading this post it sure sounds like a rambling, unorganized rant. So, I’ll stop now and close with a little bit of general information about the company. BTW, they have a web page at http://www.pfsnet.com
Primerica Financial Services is a subsidiary of Citigroup.
Citigroup is the parent company of all of the following:
Travelers Bank & Trust
Travelers Life & Annuity
Travelers Property Casualty
Salomon Smith Barney Asset
Salomon Smith Barney
And of course: Primerica Financial Services
PFS offers many products and services through these subsidiaries such as:
Debt consolidation loans (Commercial Credit)
Auto, life and homeowners Insurance (The Travelers companies.)
Mutual Fund Investments (Salomon Smith Barney)
Retirement Planning (Multiple Companies)