A couple of weeks ago, I ran across a story of a semi-famous radio host who had passed away. I didn’t know him, and I had never heard of him, even though many seem to know him. I’m not going to mention his name, because I won’t be pointing out very kind observations about him and his life.

The reason he jumped out at me was because of how many people have talked about the impact he had on their lives. He evidently spoke a lot about small business and entrepreneurship.

What others said about him…

I highly respected [person], listened to him every morning when he was on [radio station]. I spoke to him both on the radio and in person more than once. 

[Person] taught me a ton! Will be greatly missed…

Your heart toward small business and entrepreneurs was incredible. Someone should start a [The Person] Foundation, whose sole purpose is to help, encourage, and support small business and entrepreneurs.

What does this have to do with GoFundMe and Financial Planning?

He apparently had no net worth and no life insurance in place.

Yes, you read that correctly.

You see, he was in his early 50’s, he had a wife, and he had 3 young children. No net worth. No life insurance. How do I know this? Because a close friend started a GoFundMe for him. It reads:

It comes with a heavy heart, that we announce the passing of our good friend [First Name, Nickname, Last Name]. [Nickname] loved his job as a radio talk show host, and he was a great husband and father.  This page is to raise funds for expenses and the needs of the family.  [Nickname] leaves behind his wife, [Wife’s Name], and his three children [Child 1], [Child 2], and [Child 3]. 

GoFundMe is not a financial plan.

This guy should not have been giving advice to anyone. He was an utter failure. He was NOT a great husband and father (good maybe… but not great). He was living a lie of success over the radio about being a successful entrepreneur. Successful entrepreneurs don’t need a GoFundMe to take care of the family after dying. And even an unsuccessful entrepreneur could have a cheap life insurance plan in place to take care of his family. Instead, his family now apparently has no savings and is dependent on GoFundMe in the short term just to get by. Understand, this guy was famous enough that his GoFundMe has raised over $130,000 in just a week.

Term life insurance is not expensive.

A $500,000, 30 year, term life insurance policy, might cost ~$25/30 per month for a healthy 30 year old. I had a $2,000,000 term life insurance policy for many years while I was building my net worth. It was only ~$150/month.

Bloggers who say you shouldn’t waste money on term life insurance are foolish.

I won’t name names, but there are a number of financial bloggers who reason term life insurance is a waste of money… that the likelihood of dying is too minimal to waste the money. This is utter foolishness. Super wreckless. Dumb. Am I making myself clear?

Term life insurance is a super cheap for the peace of mind you get in return. $30/month over 10 to 20 years while you are saving to become financially independent is not going to slow down your savings rate that much. $30/month, over 20 years, compounded at 7% totals $15,000. You’re trading the “wasting” of $15,000 for $500,000 of financial peace for your family. It’s nothing.

I would recommend getting enough life insurance to cover your eventual FI number.

The idea being your wife/family could live forever off your “FI” life insurance amount “forever” with a ~4% withdrawal rate. And once you reach FI, you could remove this term life insurance completely, or reduce it to simply cover funeral expenses.

Why am I being so hard on [Person]?

I’m speaking strongly about this situation, because I too lived wrecklessly for a number of years. I was divorced in my early 30’s and had a 9 year old son. I was early on in my entrepreneurial struggles. I had a good 10 year window from roughly age 30-40 where I didn’t have any life insurance, and had I died, my son would have been in really bad shape. Really bad. I used to get on plane flights and think… if this thing wrecks, I’m leaving my son in such a terrible situation.

PLEASE get a term life insurance policy for your family. Please. I don’t sell life insurance. I don’t have anyone in my family who does. I don’t have any friends in the business. I’m not trying to convince you of it so I can make money from it somehow.

Note: I am recommending TERM life insurance, NOT whole life insurance. I am 99.9% against whole life. I am leaving a .1% option for some rare case where it might make sense in the future.

Don’t be this guy. Don’t be me (in this way) in my 30’s. You owe it to your loved ones to consider what things might look like financially if you weren’t here. It’s selfish and wreckless to do otherwise.