Old friends saying they would like to get lunch and talk about planning for retirement and savings, what are they trying to sell?

This is the 3rd time that someone has asked me about it, so there is apparently some sort of product or job out there to do this kind of work. It's not just a random thing.

First and most importantly - do not agree to anything, do not provide any personal information (e.g. amount of money you have or have invested, social security number, birth date, address, any of that) during the first meeting if you decide to go. Take information from them, then research later. DO NOT succumb to peer pressure.

Based on this comment, I assume it's some kind of MLM based whole life insurance. The way whole life insurance works is they take big, hefty monthly premiums, and then both give you life insurance, plus allow you to borrow against your own money. It's a terrible deal. It's many, many times more expensive than term life insurance - probably 20x more expensive - if you get a GOOD whole life policy.

The way that MLM schemes work is that they tell you to call every single one of your friends, family, and contacts, to both try to sell them product, and to get them to sell product for you. Then, when you have run through your whole network of friends, you're not worth anything to the MLM company anymore and they stop talking to you. This is probably why you've had so many people reach out to you - someone started it, everyone is falling for it; everyone is reaching out to their contacts (which includes you), and in a year or two the "market" in your friend group will be saturated and people will realize they can't make any money by selling to strangers.

Do yourself a favor and google some more about NorthWestern Mutual whole life insurance scams. There's a lot of data out there.

Lastly - some insurance is absolutely necessary. Much of it is regulated in some way. This stuff is NOT. For example, when you get a regular mortgage from a bank, and the bank will sell that mortgage off to the government, the government says "your loans must conform to THESE terms." Because of that, almost all of the regular 30 year mortgages are exactly identical except for closing costs and interest rate. That's why you can compare these mortgages by comparing closing costs and interest rate, or APR.

When you get into funky structured products, they are DESIGNED to look great on paper, and to make the most money for insurance companies. It's just like most other complicated financial products - not a good deal for you. Whether it's rent to own things (you can pay 2-4x the retail cost to get the item with weekly payments), or payday loan places (pay ~300% APR), it's not a good deal. There's some discussion here.

/r/personalfinance Thread Parent