The way it was explained to me (by the salesman) is this. They are paid by the insurance company, who is actually the one selling the annuity. The investment, (let’s say $100,000.00 for the sake of this discussion) is committed for a minimum amount of time, generally between 6-16 years. You are allowed to pull back 10% of your investment each year but must pay a 10% penalty on any (non interest) money you pull out over that 10%.
The invested money acts like any other stock market investment, going up/coming back down with the market trends, earning an average of 6%-8% each year. There is a cap or 1.9% monthly (22% yearly) that the company will pay you so if the market were to leap by 75%, you would still only receive 22%. But if the market was to tumble and everyone lose their money, the company guarantees your $100,000.00 investment.
This is a Reader’s Digest definition of how it works (according to the salesperson) and it seems like it has some merit as a low risk, moderate return investment.
Are you just joking around or do you have some info to suggest this is a bad investment? I'm actually finding some reasonably good reports on Annuities.Run. Don't walk. Run.
Are you just joking around or do you have some info to suggest this is a bad investment? I'm actually finding some reasonably good reports on Annuities.
If you feel like loaning money to an insurance company that pays crazy stupid commissions to salespeople, have at it. (That's YOUR money) And then try to get your money back quickly if needed.
It's kinda like a reverse mortgage. You give them your money, all at once, and you'll get some pitance back.
Tired, 17.5% sucks so far this year. A growth mutual would have returned more, you could get all your money back almost immediately, and your load would have been fractions of a percent, instead of whole number percents.
But hey, all of this gambling makes the world go round.
Disclaimer - this is not advice, just my opinion. You do what you feel is necessary to sleep well at night.
I'll be the first to admit I know little (make that nothing) about the stock market but if 17.5% sucks then you must have the inside track on this investment thing. I spoke with Edward Jones not long ago and they were only predicting 6%-8% and that's a long ways from 17.5%. So where am I going wrong?Tired, 17.5% sucks so far this year.
I went to the local precious metal trader today (where I live we only have 1 ) and he had -0- silver and -0- gold for sale. A couple of things were holding up the sale of silver.Precious metals are a bargain right now, all due to Ben Bernanke and the phony stock market run-up.
TheTrumpet.com said:In 1913 the U.S. dollar started down a long, steady road of devaluations. Using the U.S. government’s own figures, to obtain the same amount of purchasing power of $100 in 1913, you would need over $2,000 today.
Interesting article in this week's Sunday rags. Don;t recall the writer, but he's an investment counselor in the paper.
Somebody writes in, and essentially says, he's a dummy, doesn't have a clue how to invest, so for years, been picking stocks starting with the letter "A". He picked "A" because they are usually first on the ticker. They've always been great, beating all the measured indexes, but lately not so much. So he's thinking of changing his go-to letter, maybe a high value scrabble letter.
So the columnist writes, that it's not a bad strategy, since most investors that invest in funds do not perform as well as those that actually pick and buy stocks themselves randomly. I would also guess he meant trading low-cost online without the the use of a broker.
Something to consider. I do believe he is correct.