# index annuity



## squerly

Anyone here every heard of Ty J. Young?  His (investment) company advertises you will make money and will NEVER lose your money.


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## BigAl RIP

The only thing you can be sure of is that "he will" make money rather he loses yours or not....


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## Melensdad

Generally speaking 'annuities' are not great investments.  They can serve some people well, but Allen hit the nail on the head with his comment.  The salespeople make a big commission on the sale of these annuities.

Check the track record of the company offering these (the folks who actually get the money) and make sure they are fiscally sound.  Also find out where they are investing, often times the annuities invest in sub-par investments to get better returns.  

Be cautious, but if its part of a diversified plan, it may not always be a bad idea to have a portion of your money in an annuity.  That said, it may not always be a good idea either.


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## squerly

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.


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## jimbo

squerly said:


> 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.



I would have trouble with being locked into any investment for 10 years.  

I don't know anything personally about the Mutual Fund Store, but I would talk to them if I were in your position.   As I understand them, at least their sales pitch, they are paid a fixed amount of your investment, and take no commissions, but do negotiate no load funds on your behalf, and  deal only in no load funds.


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## waybomb

Run. Don't walk. Run.


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## squerly

waybomb said:


> 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.


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## tiredretired

Here's a good one. 

Variable Annuities have been working for me since I retired.  Hartford & MetLife.  I draw off the interest and the principle stays invested. Grown every year since 2010 and is up 17.5% so far this year.  I have no complaints.  So far. YMMV.


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## waybomb

squerly said:


> 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.


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## REDDOGTWO

FGP  MSB


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## 300 H and H

waybomb said:


> 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 agree...To many hands to feed between you and the market. The only good thing I see here is that if the market falls you will still get your original investment back. Other wise it is not a very efficient way to invest your money. 

Regards, Kirk


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## tiredretired

It's not just the original investment that is guaranteed.  Every year on the anniversary date of the annuity it will lock in to the new number on that date.  Never less.

For example, on the anniversary date if one make 17.5% on the original 100K than the new lock in number is now 117.5K.  Can never go less.  Can always go more.  

Very well suited for those of us in our mid 60's who are looking for a measure of a safety net while still making a little more money than what the mattress or money market will afford. Should all be part of a diversified portfolio where an annuity plays a part. 

Anyway, who gives a shit.  Get one if you like it, don't get one if you don't.


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## squerly

waybomb said:


> Tired, 17.5% sucks so far this year.


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?


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## Kane

Precious metals are a bargain right now, all due to Ben Bernanke and the phony stock market run-up.  

But once Ol' Ben stops monetizing our debt (something he said he would _never_ do) to the tune of $85B a month, the swing back to commodities is a given ...  never to return.    Not even George Soros will be able to manipulate the trends.

So if you're going to put money into an equities gig, be sure it is liquid enough to get out.


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## waybomb

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.


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## squerly

Kane said:


> Precious metals are a bargain right now, all due to Ben Bernanke and the phony stock market run-up.


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. 


The price of silver has dropped and nobody wants to sell what they have and take the hit, and
people are buying all the available silver as soon as he gets it in the store.
 His quote was "nobody believes the dollar will be around much longer..."  

I think he's right. 

Just take a trip to the grocery store, it's nuts!  Everything has gotten so expensive that I refuse to purchase some of the things that I really like and have always made exception for. 

The young people just think prices are high, but it's the fact that the dollar has lost 94% of its value that is causing companies to raise the cost of their wares.  



			
				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.



As long as our debt remains out of control and the excessive printing of money continues, the value of our dollar will decline.  By comparison to years gone by, it's almost worthless today.  I don't know (exactly) what we should expect, but I'm guessing it won't be good.  I for one will not be putting my faith in the value of the good ol dollar.  Just about anything will be more valuable.  Gold, silver, toilet paper, bullets, etc...


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## 300 H and H

waybomb said:


> 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.


 
I totally agree with staying away from mutual funds. The only  thing they provide is that you take 100% of the risk for 30% of the profits. Fric'in managers of the funds make out like you don't, with your money. IF you loose they don't participate in that, but they still get their fee's. You get 100% of the loss.

Regards, Kirk


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