Comments on: Check Out Guarding Your Wealth http://allfinancialmatters.com/2007/09/05/check-out-guarding-your-wealth/ A personal finance blog dedicated to discussing such topics as budgeting, asset allocation, 401K, IRA, cash flow, insurance, financial planning, portfolio management, and other areas in personal finance. Fri, 25 May 2012 02:50:51 +0000 hourly 1 http://wordpress.org/?v= By: muddlehead http://allfinancialmatters.com/2007/09/05/check-out-guarding-your-wealth/comment-page-1/#comment-137347 muddlehead Thu, 06 Sep 2007 15:07:04 +0000 http://allfinancialmatters.com/2007/09/05/check-out-guarding-your-wealth/#comment-137347 hello friends. it seems from where i sit the same people who were selling whole/universal life insurance have now moved into annuities. that is not a good sign. term life insurance is 100% awesome. all anybody ever needs. period. the whole/universal life insurance product is the biggest scam ever. people used to debate me on that point by saying for a few, for example, those who couldn't get medical insurance, whole/universal provided for that... blah blah. my answer. great. for 1% of the population whole/universal might work. same for this now ubiquitous annuity thing. "investing" in any insurance product is bad for your financial health. you're saying annuities can work for some - and even then go to a vanguard for it. i love vanguard for no load index funds. i would like to see some specifics of how a vanguard annuity has a place in anyone's portfolio. hello friends. it seems from where i sit the same people who were selling whole/universal life insurance have now moved into annuities. that is not a good sign. term life insurance is 100% awesome. all anybody ever needs. period. the whole/universal life insurance product is the biggest scam ever. people used to debate me on that point by saying for a few, for example, those who couldn’t get medical insurance, whole/universal provided for that… blah blah. my answer. great. for 1% of the population whole/universal might work. same for this now ubiquitous annuity thing. “investing” in any insurance product is bad for your financial health. you’re saying annuities can work for some – and even then go to a vanguard for it. i love vanguard for no load index funds. i would like to see some specifics of how a vanguard annuity has a place in anyone’s portfolio.

]]> By: JLP http://allfinancialmatters.com/2007/09/05/check-out-guarding-your-wealth/comment-page-1/#comment-137146 JLP Thu, 06 Sep 2007 02:14:13 +0000 http://allfinancialmatters.com/2007/09/05/check-out-guarding-your-wealth/#comment-137146 muddlehead, I'm not going to say that ALL annuities are bad because they aren't. Yes, A LOT of them are crap but there are annuities that are good. 1. As lorax said, you don't have to buy a high-cost annuity. Vanguard offers some great annuities at a fraction of the cost of some of the broker-sold products. 2. Vanguard even offers riders (for a fee) that will grow the income at a specified interest rate (called an inflation rider). 3. Part of the appeal of annuities is the fact that your annuity payment consists of two parts: 1. Income and 2. a return of principal. If you choose a lifetime benefit, you receive the payment for as long as you live. Yes, it's a gamble but for some people, the product fits. Finally, I don't sell annuities. muddlehead,

I’m not going to say that ALL annuities are bad because they aren’t. Yes, A LOT of them are crap but there are annuities that are good.

1. As lorax said, you don’t have to buy a high-cost annuity. Vanguard offers some great annuities at a fraction of the cost of some of the broker-sold products.

2. Vanguard even offers riders (for a fee) that will grow the income at a specified interest rate (called an inflation rider).

3. Part of the appeal of annuities is the fact that your annuity payment consists of two parts: 1. Income and 2. a return of principal. If you choose a lifetime benefit, you receive the payment for as long as you live. Yes, it’s a gamble but for some people, the product fits.

Finally, I don’t sell annuities.

]]> By: lorax http://allfinancialmatters.com/2007/09/05/check-out-guarding-your-wealth/comment-page-1/#comment-137143 lorax Thu, 06 Sep 2007 02:00:44 +0000 http://allfinancialmatters.com/2007/09/05/check-out-guarding-your-wealth/#comment-137143 Vanguard annuities aren't all that expensive. I wouldn't suggest sticking all your dough in an annuity, but annuitizing a small portion (perhaps 1/4 to 1/3) for folks that are risk adverse might be worthwhile. The key is keeping the costs down and use them appropriately. So, I agree that you should hang up on the sales calls, but look into buying them from a discount broker, if they appeal to you. Vanguard annuities aren’t all that expensive.

I wouldn’t suggest sticking all your dough in an annuity, but annuitizing a small portion (perhaps 1/4 to 1/3) for folks that are risk adverse might be worthwhile. The key is keeping the costs down and use them appropriately.

So, I agree that you should hang up on the sales calls, but look into buying them from a discount broker, if they appeal to you.

]]> By: muddlehead http://allfinancialmatters.com/2007/09/05/check-out-guarding-your-wealth/comment-page-1/#comment-137071 muddlehead Wed, 05 Sep 2007 21:03:21 +0000 http://allfinancialmatters.com/2007/09/05/check-out-guarding-your-wealth/#comment-137071 jlp, we'll have to agree to disagree. and i would like you to respond so we can educate about annuities in a friendly manner. here's my complaint. please don't take it personally. when you in your position of reverence on this board say "not all annuities are bad", you are misleading the readers. i think they are all bad due to - 1. high hidden fees 2. the incredible idea a buyer is giving up all rights to the money in exchange for an annual return 3. the fact you could invest with a similar return in cd's and keep the money in your control once the cd's mature. 4. any human being who would sell another an annuity in an ira account format is a bad, bad person. jlp, we’ll have to agree to disagree. and i would like you to respond so we can educate about annuities in a friendly manner. here’s my complaint. please don’t take it personally. when you in your position of reverence on this board say “not all annuities are bad”, you are misleading the readers. i think they are all bad due to – 1. high hidden fees 2. the incredible idea a buyer is giving up all rights to the money in exchange for an annual return 3. the fact you could invest with a similar return in cd’s and keep the money in your control once the cd’s mature. 4. any human being who would sell another an annuity in an ira account format is a bad, bad person.

]]> By: Dylan http://allfinancialmatters.com/2007/09/05/check-out-guarding-your-wealth/comment-page-1/#comment-137058 Dylan Wed, 05 Sep 2007 19:49:38 +0000 http://allfinancialmatters.com/2007/09/05/check-out-guarding-your-wealth/#comment-137058 A general rule-of-thumb regarding sales commissions: The tougher the sale, the greater the commission. In other words, the less something makes sense, logically and financially, the more you have to pay someone to push it over more sensible products. A general rule-of-thumb regarding sales commissions: The tougher the sale, the greater the commission. In other words, the less something makes sense, logically and financially, the more you have to pay someone to push it over more sensible products.

]]> By: JLP http://allfinancialmatters.com/2007/09/05/check-out-guarding-your-wealth/comment-page-1/#comment-136970 JLP Wed, 05 Sep 2007 15:37:18 +0000 http://allfinancialmatters.com/2007/09/05/check-out-guarding-your-wealth/#comment-136970 muddlehead, Aside from equity-indexed annuities, not all annuities are bad. The problem is finding a reputable source to explain the ins and outs of annuities, whose pay is not dependent upon which annuity you purchase. Also, it really bugs me that there is such a huge disparity in the commissions that annuities pay. It makes it very difficult for people to decide which is best. Of course the insurance industry loves it this way. They must, or they would outlaw a lot of the crap that's out there. I say if annuities are that great for the investor, then why not give them the same commission structure as mutual funds. muddlehead,

Aside from equity-indexed annuities, not all annuities are bad. The problem is finding a reputable source to explain the ins and outs of annuities, whose pay is not dependent upon which annuity you purchase.

Also, it really bugs me that there is such a huge disparity in the commissions that annuities pay. It makes it very difficult for people to decide which is best. Of course the insurance industry loves it this way. They must, or they would outlaw a lot of the crap that’s out there.

I say if annuities are that great for the investor, then why not give them the same commission structure as mutual funds.

]]> By: muddlehead http://allfinancialmatters.com/2007/09/05/check-out-guarding-your-wealth/comment-page-1/#comment-136966 muddlehead Wed, 05 Sep 2007 15:29:50 +0000 http://allfinancialmatters.com/2007/09/05/check-out-guarding-your-wealth/#comment-136966 how great it would be if every day a new prospective sucker reads of the horrors of annuities on this board and politely tells salesman , "not interested, thanks." how great it would be if every day a new prospective sucker reads of the horrors of annuities on this board and politely tells salesman , “not interested, thanks.”

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