MTTM Podcast Episode 446 – Coast FIRE, funeral plans & the little-known ETF drawback

Listen to Episode 446

On this week's show we explain the potential drawbacks of certain types of ETFs. Harvey then joins us to discuss the rising cost of funerals and the various ways you can plan ahead. Finally, we discuss a different approach to the traditional 'FIRE' movement (Financial Independence Retire Early)

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Resources:

• Life insurance or funeral plan: Which is best?
• Fund types explained: Episode 7 of our 'Grow it' investing series
• Money to the Masses Investment Calculator
• Money to the Masses Pension Calculator

Episode Quiz

Here are five multiple-choice questions to test yourself after listening to this week's episode:

Question 1

What are the three types of ETF referred to in this episode?
a) Fully replicated, partially replicated and non-replicated ETFs
b) Fully replicated, sampled and non-replicated ETFs
c) Fully replicated, sampled and synthetic ETFs
d) Partially replicated, sampled and synthetic ETFs

Question 2 
Which type of ETF tracker would you expect to have the smallest tracking error?
a) Sampled ETF
b) Full replicated ETF
c) Synthetic ETF
d) Partially replicated ETF

Question 3
What are the three types of insurance that could be used for funeral expenses?
a) Terminal illness insurance, Over 50s life insurance and Whole of Life insurance
b) Level term assurance, Over 50s life insurance and Terminal illness insurance
c) Level term assurance, Over 50s life insurance and Whole of Life insurance
d) Terminal illness insurance, Level term assurance and Whole of Life insurance

Question 4

What does 'FIRE' stand for?
a) Full income retained earnings
b) Financial independence, retire early
c) Financial investment rewards earnings
d) Financial investment, retirement earnings

Question 5
What are the three different 'FIRE' strategies mentioned in the podcast?
a) Fat, thin and coast
b) Fat, lean and cruise
c) Big, lean and coast
d) Fat, lean and coast

Answers

• Answer 1: c) Fully replicated, sampled and synthetic ETFs
• Answer 2: c) Synthetic ETF
• Answer 3: c) Level term assurance, Over 50s life insurance and Whole of Life insurance
• Answer 4: b) Financial independence, retire early
• Answer 5: d) Fat, lean and coast