- 11,280
How is that even close to sounding like that guy? I'm not lying.
Candid Camera
- Thread starter Mr. Bill
- Start date
Okay, sounds like we have some good guys on here. Two questions:
If a bank goes under and FDIC comes in, how long does it take to get your money?
Each account is only insured up to $100K and the only part insured is the original deposit, not the deposit plus the gains, is that correct?
Too lazy this morning to look it up!!
I've been to a couple of these trainings as well and they like to play loose with the language they use.
If a bank goes under and FDIC comes in, how long does it take to get your money?
Each account is only insured up to $100K and the only part insured is the original deposit, not the deposit plus the gains, is that correct?
Too lazy this morning to look it up!!
I've been to a couple of these trainings as well and they like to play loose with the language they use.
- Thread starter
- #33
But ole Bill tried to close em, even after he learned of the Dateline crew filming, etc. I think that he felt like his boss was going to now see the tape, so he better be asking for the order again, and again... Too funny.
Most self respecting individuals would have simply shut their mouth when they realized that the TV crew was there, but not ole Bill. He is a salesmans, salesman.
SN
- 1,704
Hey, how many threads do we have going posting about this story?
My third eye is getting tired.
My third eye is getting tired.
Very rare?
Please elaborate on when it would meet a need. Since 1983 I've been in this field of insurance and spent 15 years as a Series 7 guy. My wife says I am ethical to a fault. I consider myself well read and rather an intelligent person. I don't find an FIA to be such a rare fit. Please elaborate on your position.
Maybe you would like the telephone number of my 77 year old father in law that lost $450,000 in this last market down turn. He's not my client but was the client of a closed end mutual fund that was involved in the mortgage market. Things were fine and dandy for him while he was getting a 10% income off the fund, it was good for many years. Now that the mortgage market is ka-put, the fund manager says, I hope to have your principal back in two years but there will not be any returns on the money. Hope is the key word, there is no guarantee. He has several million sitting in other places but still that $450,000 has to hurt. Ouch!
I am still a believer in the stock market but there is also a place for safety. It is a lesson the current generation has never envisioned. With personal debt at an all time high, foreclosures running rampant, another stock market bubble is bursting and I think it is time for people to learn the lesson of prudence.
I am in that senior range. Hey AARP stop sending me membership requests!!! I understand the needs of retirement. How liquid is a fund when the NAV has dropped 15%? You can sell, it is liquid, you'll take a paper loss but in your head it doesn't feel very liquid.
So let me see if I have it. As a senior I do want to make something on my money so.......
Do an FIA, you do have a surrender charge, market risk is minimal.
Do a mutual fund, no surrender charge, market risk is not minimal.
Do a CD, it has a early withdraw penalty, inflation risk is not minimal.
Do general securities, buy sell commissions, market risk.
For a while the mortgage market type funds were considered by the "experts" to be a safe place to put your money. Hey how's that going for you in April 2008?
Hey I know...I was a Series 3 guy at one time. Let's do some commodity trading! NOT!!!!
So which do you choose? They all have pros and cons. Perhaps it should be left up to the individual to make that decision. Seniors are not as stupid as Dateline would have you believe. In many ways because of the experience of the depression, the seniors are more savvy and make better financial decisions than the general public of 2008.
A penalty is a penalty...call it what you may.
Clearly you haven't sat for some of the tests like a Series 7 general securities or a CPA test. Such a mixing of definitions could get your license yanked! It still costs you money.
Principal protection is important but so is making money. Go to bankrate.com and see what CD's were paying in 2002. Then talk to me about principal. Inflation was higher than the CD rate. Ever study the term inflation risk?
Clearly you haven't sat for some of the tests like a Series 7 general securities or a CPA test. Such a mixing of definitions could get your license yanked! It still costs you money.
Principal protection is important but so is making money. Go to bankrate.com and see what CD's were paying in 2002. Then talk to me about principal. Inflation was higher than the CD rate. Ever study the term inflation risk?
- Thread starter
- #38
URDRWHO,
I won't speak for John but.....
You've really got to understand the demographics of the market - your father in law was a rare individual with more than $100k in savings. That is simply NOT the vast majority of seniors out there. Many of the current seniors have pensions and SS and less than $100k. Those are the people whom I have seen unscrupulous agents go after. Even the FMOs promoting tax seminars (USA Tax Advisors, etc) - get a look at the tax return and replace a CD with an annuity. Even Allianz produced a plastic overlay to a tax return to instruct the agent how to read it so they would know there's money to replace.
By the way, I bet you weren't the broker of record, either. Do tell - was it Merrill, Smith Barney, or UBS that lost his money???
I won't speak for John but.....
You've really got to understand the demographics of the market - your father in law was a rare individual with more than $100k in savings. That is simply NOT the vast majority of seniors out there. Many of the current seniors have pensions and SS and less than $100k. Those are the people whom I have seen unscrupulous agents go after. Even the FMOs promoting tax seminars (USA Tax Advisors, etc) - get a look at the tax return and replace a CD with an annuity. Even Allianz produced a plastic overlay to a tax return to instruct the agent how to read it so they would know there's money to replace.
By the way, I bet you weren't the broker of record, either. Do tell - was it Merrill, Smith Barney, or UBS that lost his money???
Emotions are running high, so both sides are starting to sound a little slanted. I have an MBA with an emphasis in economics, series 7 and 66, as well as an insurance license. That shouldn't mean much, but it should be telling that I put some of my own Mom's money in an EIA. She is a widow and for a portion of her savings it made sense. To say they are never good is as ignorant as saying they are always good.
Two funny things about last nights show.
1. Several times Chris Hansen called them "So called Equity Indexed Annuities" as though the name it's self was under question.
2. As you can see from her Bio, Suze Orman is a financial expert and has a show on the same network as Dateline.
Two-time Emmy Award winner, Suze Orman, has been called "a force in the world of personal finance" and "a one-woman financial advice powerhouse" by USA TODAY. Orman is the author of six consecutive New York Times bestsellers and has written, co-produced, and hosted six PBS specials. Orman hosts the award-winning Suze Orman Show Saturday nights on CNBC. She is contributing finance editor to O: The Oprah Magazine, Yahoo Money Matters and the Costco Connection. Suze Orman is one of the most recognized personal financial experts in America today
The following is the EIA section of Suze Orman's - Truth About Annuities, as you can see, their own financial expert is pretty positive on EIA's.
INDEX ANNUITY
In their struggle to keep up with mutual funds, around 1994 the insurance industry introduced another new kind of annuity, the Index Annuity. The reason for this new product was their desire to capture some money that was pouring into mutual funds that simply tracked the indexes, known as index funds, such as the Standard and Poor's 500 index. The Standard and Poor's 500 index is made up of 500 stocks that are actually more a gauge of what the entire stock market is doing than the traditional Dow Jones Industrial Average that we hear about every day. The reason this is true is that the Dow Jones Average is calculated from only 30 stocks, realistically not an overview. To participate in this index trend, the insurance companies created an index annuity. Even I have to admit that when this investment first came out that I liked the concept a lot--for the right investors. Today they are not as attractive as they once were but still worthy of knowing about.
Here's how they work. Like all annuities, an index annuity is a contract with an insurance company for a specific period of time. The surrender period on an index annuity is usually about 7 to 10 years. The index annuity tracks an index such as the Standard and Poor's 500 index, and your return on your money will usually be a percentage of what that particular index did for your corresponding investment year. For instance, let's say your index annuity happens to track the S&P 500 index. If the S&P 500 index goes up, you would get a set percentage of what the yearly return of the index was from the time you deposited the money in this annuity until one year from that date, up to a pre-set maximum. In this case, let's say that your index annuity will give you 50% of what the S& P index returned, up to a maximum of 10%. You invest $20,000 on March 15th. March 15th one year later the S&P index has increased 30% since you opened the account. According to the terms of your annuity, they have to give you 50% of that increase up to a maximum of 10%. Since 50% of 30% is 15% which is 5% higher than the pre-set yearly maximum of 10% you will get credited with 10% of your original deposit or in this case $2,000. If the S&P index had only gone up 15% for the year, you would be entitled to 7.5% on your investment- (50% of 15%=7.5%).
Why, you might be asking, do you only get a percentage of what the index does up to a maximum ? Why wouldn't it be better simply to invest in a mutual fund that buys the entire index and get 100% of the return? For some people, it would be better, but for others who do not want to take any risk at all this index annuity might be better. Here's why. When you invest in a regular index mutual fund, you get to participate 100% in all the upside--and any downward swerves as well. For instance, if the market went up 10% one year and the next year it went down 20%, you would participate in that downward movement as well. So lets say that you invested $20,000 in a good no load S&P index fund. The first year it went up 10%, now you would have $22,000. The next year it went down 20% now you would have only $17,600 or $2,400 under what you started with. That may make you too nervous. In many index annuities, you do not participate in any downside risk. To follow the same example, in a particular index annuity if you invested $20,000 and the market went up 10% you would end up with $21,000 for that year.(50% of 10% is 5% or $1,000) But the next year when the market went down 20%, you would not participate in that downside activity and you would still have $21,000 in your account. Within this particular index annuity, for example, your money can only go up; it cannot go down. In the long run I would rather have $21,000 after two years in my index annuity than just $17,600 in my S&P index fund. That is why the index annuity does not credit you with 100% of the return. It is set in reserve to protect you from the downside. Consider, too, one last safety feature. If you invest in an index annuity and the market goes down every single year, it still won't matter to you. Because it is an index annuity, the insurance company usually guarantees you that, after your surrender period is over, you will get at least 110% of what you originally put in. If you put in $20,000, the worst-cast scenario would leave you, after seven years, with $22,000, or about a 1.5% minimum guaranteed yearly return on your investment no matter what happens in the market.
Bottom line: if you are willing to give up some upside potential, you can also protect yourself totally against downside risk with an index annuity
Two funny things about last nights show.
1. Several times Chris Hansen called them "So called Equity Indexed Annuities" as though the name it's self was under question.
2. As you can see from her Bio, Suze Orman is a financial expert and has a show on the same network as Dateline.
Two-time Emmy Award winner, Suze Orman, has been called "a force in the world of personal finance" and "a one-woman financial advice powerhouse" by USA TODAY. Orman is the author of six consecutive New York Times bestsellers and has written, co-produced, and hosted six PBS specials. Orman hosts the award-winning Suze Orman Show Saturday nights on CNBC. She is contributing finance editor to O: The Oprah Magazine, Yahoo Money Matters and the Costco Connection. Suze Orman is one of the most recognized personal financial experts in America today
The following is the EIA section of Suze Orman's - Truth About Annuities, as you can see, their own financial expert is pretty positive on EIA's.
INDEX ANNUITY
In their struggle to keep up with mutual funds, around 1994 the insurance industry introduced another new kind of annuity, the Index Annuity. The reason for this new product was their desire to capture some money that was pouring into mutual funds that simply tracked the indexes, known as index funds, such as the Standard and Poor's 500 index. The Standard and Poor's 500 index is made up of 500 stocks that are actually more a gauge of what the entire stock market is doing than the traditional Dow Jones Industrial Average that we hear about every day. The reason this is true is that the Dow Jones Average is calculated from only 30 stocks, realistically not an overview. To participate in this index trend, the insurance companies created an index annuity. Even I have to admit that when this investment first came out that I liked the concept a lot--for the right investors. Today they are not as attractive as they once were but still worthy of knowing about.
Here's how they work. Like all annuities, an index annuity is a contract with an insurance company for a specific period of time. The surrender period on an index annuity is usually about 7 to 10 years. The index annuity tracks an index such as the Standard and Poor's 500 index, and your return on your money will usually be a percentage of what that particular index did for your corresponding investment year. For instance, let's say your index annuity happens to track the S&P 500 index. If the S&P 500 index goes up, you would get a set percentage of what the yearly return of the index was from the time you deposited the money in this annuity until one year from that date, up to a pre-set maximum. In this case, let's say that your index annuity will give you 50% of what the S& P index returned, up to a maximum of 10%. You invest $20,000 on March 15th. March 15th one year later the S&P index has increased 30% since you opened the account. According to the terms of your annuity, they have to give you 50% of that increase up to a maximum of 10%. Since 50% of 30% is 15% which is 5% higher than the pre-set yearly maximum of 10% you will get credited with 10% of your original deposit or in this case $2,000. If the S&P index had only gone up 15% for the year, you would be entitled to 7.5% on your investment- (50% of 15%=7.5%).
Why, you might be asking, do you only get a percentage of what the index does up to a maximum ? Why wouldn't it be better simply to invest in a mutual fund that buys the entire index and get 100% of the return? For some people, it would be better, but for others who do not want to take any risk at all this index annuity might be better. Here's why. When you invest in a regular index mutual fund, you get to participate 100% in all the upside--and any downward swerves as well. For instance, if the market went up 10% one year and the next year it went down 20%, you would participate in that downward movement as well. So lets say that you invested $20,000 in a good no load S&P index fund. The first year it went up 10%, now you would have $22,000. The next year it went down 20% now you would have only $17,600 or $2,400 under what you started with. That may make you too nervous. In many index annuities, you do not participate in any downside risk. To follow the same example, in a particular index annuity if you invested $20,000 and the market went up 10% you would end up with $21,000 for that year.(50% of 10% is 5% or $1,000) But the next year when the market went down 20%, you would not participate in that downside activity and you would still have $21,000 in your account. Within this particular index annuity, for example, your money can only go up; it cannot go down. In the long run I would rather have $21,000 after two years in my index annuity than just $17,600 in my S&P index fund. That is why the index annuity does not credit you with 100% of the return. It is set in reserve to protect you from the downside. Consider, too, one last safety feature. If you invest in an index annuity and the market goes down every single year, it still won't matter to you. Because it is an index annuity, the insurance company usually guarantees you that, after your surrender period is over, you will get at least 110% of what you originally put in. If you put in $20,000, the worst-cast scenario would leave you, after seven years, with $22,000, or about a 1.5% minimum guaranteed yearly return on your investment no matter what happens in the market.
Bottom line: if you are willing to give up some upside potential, you can also protect yourself totally against downside risk with an index annuity
Does anybody even understand why surrender charges exist? They are actually one of the features of long-term indexed annuities.
"Liquidity is the enemy of long-term financial success"
If someone needs money tomorrow, an FIA is not the place to put money. A coffee can under the bed would be much more appropriate.
But if you hope to have that money keep up with or surpass inflation the coffee can is deep dark hole.
If you need money for retirement in 10, 20, 30 years, you really can't go wrong with an FIA.
The higher and the longer the surrender charge the longer term the insurance company can work with your money the higher the rate of return the insurance company can offer.
Do you ever wonder why FIUL can have caps of 14, 15, 16% or more or participation rates that exceed 100% of the S&P 500? It is because those are considered extremely long term. I have a life insurance policy I plan to keep in force for 70 more years.
If I could find an FI annuity with a 30 year surrender charge I'd dump a pile of my retirement money in it today because I guarentee the caps and participation rates would far exceed anything I see in the market today.
In fact look at the olden days or company pensions. How liquid were those accounts? How easily could your grandfather get his hands on his pension prior to retirement?
20% seems like a lot. But if someone give me $100,000 to put into an FIA, I can guarentee that from day 1 the least they will ever get out of this product is $80,000. How much can they get out of a rental house they paid $100,000 for? How about the hot stock their broker convinced them to put $100,000 into?
If someone is setting aside money for a certain goal, X amount of years into the future, liquidity is the enemy.
"Liquidity is the enemy of long-term financial success"
If someone needs money tomorrow, an FIA is not the place to put money. A coffee can under the bed would be much more appropriate.
But if you hope to have that money keep up with or surpass inflation the coffee can is deep dark hole.
If you need money for retirement in 10, 20, 30 years, you really can't go wrong with an FIA.
The higher and the longer the surrender charge the longer term the insurance company can work with your money the higher the rate of return the insurance company can offer.
Do you ever wonder why FIUL can have caps of 14, 15, 16% or more or participation rates that exceed 100% of the S&P 500? It is because those are considered extremely long term. I have a life insurance policy I plan to keep in force for 70 more years.
If I could find an FI annuity with a 30 year surrender charge I'd dump a pile of my retirement money in it today because I guarentee the caps and participation rates would far exceed anything I see in the market today.
In fact look at the olden days or company pensions. How liquid were those accounts? How easily could your grandfather get his hands on his pension prior to retirement?
20% seems like a lot. But if someone give me $100,000 to put into an FIA, I can guarentee that from day 1 the least they will ever get out of this product is $80,000. How much can they get out of a rental house they paid $100,000 for? How about the hot stock their broker convinced them to put $100,000 into?
If someone is setting aside money for a certain goal, X amount of years into the future, liquidity is the enemy.
