VUL

[James]

The studies also show and proove that the average insurance agent makes $35,000 a year. So based on that fact I should have never entered this business. After all, I can't live on $35,000. But I knew that if I applied myself I could beat that average.

Just like mutual funds. The average return, as you pointed out, sucks. Ok, so don't pick funds with average returns. Do some research, which is daunting but the difference between 5% and 15% is well worth it. Just like the difference between the average agent at $35,000 and the effort I put in to make over $200,000 is well worth it.

There is no reward without effort. If you want zero effort just go grab yourself a EIA. But then you'll see there's also no reward. I put in a great deal of effort into my invesment portfolio. But then again I'll be literally millions ahead of anyone who puts their money in life vehicles.

And by the way James, when your investment window is 30 or so years like mine I drool over the down years. Those are the years when I can't buy enough stock. Bull markets do nothing for me - it's just a gain on paper since I'm not cashing anthing out. But the bear markets - well that's when a solid company's $75 a share stock tumbles to $55 do to the lemming effect and I feel like selling my car to buy more shares.

Geez, you still don't get it do you?

 

[NHB_MMA]

I'm a strong believer that in the end, all things consider WL is always cheaper! In fact the cheapest of all, sure they may seem high at first but I guarantee you, if you run a UL or VUL and it shows cheaper that is only temporary.

Well, with the VUL, it's not like the software is going to lie. The question comes down to how realistic is the rate of return you're using? That is up to the agent and client to decide on. With the UL, I suppose it comes down to how realistic is it that the insurance company's general account will prosper, unless I'm missing something. And if that is the case, WL should run some parallel risk, as dividends aren't guaranteed. The difference is the cost of insurance and extra premium charged initially are all merged, so you won't possibly take a big hit on the cash value later in life. Again, all the products are stuff I'm just learning about, but moreso with ULs and VULs, so I apologize if I'm missing something here.

Believe what you want but more and more studies are showing on average MF's don't return 5% much or less 10%. Sure you hae a few conservative funds that have ran 8-10% on average but that is few and far between, plus they are not herolded since they don't go high like others in good years but on the other hand they don't loose like others in the bad years.

I read somewhere once that about 1/3 of aggressive funds go broke eventually. I have no idea if that is true, so take it for what it's worth and I have no idea how they determined the "aggressive" growth funds. If there is any truth to that, then 1/3 of those investors losing EVERYTHING would skew the numbers. Those aren't appropriate long-term investments.

Just a quick Google (I don't have much time tonight, or for the next week) gave me the following:

http://www.finfacts.ie/stockperf.htm

About halfway down, it summarizes the return of the overall stock market from 1926-1999 as an 11% return. With today's selection of various indexes available in funds, I don't see how you cannot get a 9% or 10% return over the long-haul. Even if the management fees eat 1% of this, which I believe is higher than allowed, you're still talking an 8% or 9% return, which blows your 5% return out of the water. I know you have posted links to studies in the past, but I would truly be interested if you have some goods ones you could post in one post here so I could review them sometime. I'm not disputing that maybe the average investor only does get a 5% return, because there are *** investors out there like my father that holds on to things for too long. Since we were talking about VUL policies originally, let me say only an *** would put his VUL in a sector fund like a tech stock fund. If you do, you will be smiling from ear to ear...or broke. And if you leave it there for 50 years, I'm betting on broke. The real issue is not what the average investor gets from his fund, but how realistic is a 10% return? Again, based on the index funds available I don't see how it's pie in the sky.

Where am I going wrong?

 

[NHB_MMA]

-If you are interested, a person can open an IRA at www.aarpfunds.com
for $100.00 (lump sum-no further contributions required). Subsequent optional contributions can be made for $25.

First, it's good that there ARE plans like that out there. As someone recently said to me in a conversation, there are enough companies out there with low requirements for investing that it has really taken the social class aspect out of it.

Second, I just have to rant a little bit. If I had Bill Gate's money 10x over, I wouldn't give two nickels to anything associated with the AARP. My first gripe is that I am a firearms owner/enthusiast and an NRA member and the AARP gives money to anti-gun groups. Some here might have an opposing view on this political issue, but I am simply stating my beef with them. I fail to see how seniors are more likely to get shot in criminal acts than anyone else. In fact, with they're more likely to have physical limitations and a firearm might be their only realistic self-defense against. The AARP is stepping outside its bounds by getting into a political issue that really has nothing to do with the well-being of its members...using member dues to fund it.

Also, the AARP has lobbied for increasing the FICA taxes on the working population. Yeah, because the gray-headed population just didn't listen when even FDR called Social Security "supplemental" retirement income and take responsibility for planning their retirement, just go ahead and call for increasing the payroll taxes that already break the backs on the working population. That's right...let someone else pay for the irresponsibility of others. My response to the AARP: **** YOU!!! That whole organization can rot in hell.

Sorry to hijack the thread with my AARP hatred. I'm sure there are people that benefit from the financial services available through that site.

 

[NHB_MMA]

http://www.sharebuilder.com/sharebuilder/Default.aspx

No minimum, can schedule EFTs for any amount of money.

Again, it is a good thing that these programs are out there. But what I don't like is that too many investors are too stupid with their choices. There is a segment of the society that is savy enough to go online and make these choices, but there is another group of society that needs someone sitting down with them at their kitchen table explaining everything and holding their hand. John, that is obviously not you, but it is a large number of folks out there. If a person is confident about what he's doing, I would say go ahead and set it up online, but if not he needs to find a registered representative and their broker/dealers will likely have higher requirements.

I am not yet securities licensed and I am not sure what the minimum requirements are to set up an account with my broker/dealer and what exactly the commissions are for a small transaction, but I do know it ain't much. So, the reality is I'm not driving 20 miles to set up a $25 monthly contribution in a fund if it's not going to lead to something else or referrals, but some people need advice.

 

[Crabcake Johnny]

Who's ahead at the end of the year:

A: Steve who doesn't know crap about investing. He literally printed off a chart of stocks, threw 4 darts at it and those were he 4 investments. He put in $100 a month and stopped spending that $25 a week on stupid stuff.

B: Bill kept spending that $25 a week on stupid stuff and didn't invest anything. After all, it's just too confusing and he didn't want to lose his money.

Well, who's ahead? A lot of people here are talking about whether or not the batter's gonna hit the ball, his correct stance and correct grip. I'm talking about actually getting in the game so you can walk up to the plate.

Case in point - Sharebuilder has a feature called "what if I had invested" where to can plug in the symbol and amounts and see where you'd be now if you had already bought it.

So let's have fun and choose 3 stocks at complete random - how 'bout the 1st three alphabetically on the NYSE:

1) A. O. Smith
2) A. G. Edwards
3) AAG Holding Company.

Ok, those are your picks and you put $50 a month into each stock over the last 5 years:

1) Total invested: $3,850. Market Value: $5,5119. 43.4% gain
2) Total invested: $3,850. Market Value: $6,929. 80% gain
3) Total invested: $2,050. Market Value: $2,347. 14.5% gain (only on the market for 3 years.)

Ok, there's are completely ramdom list. You invested a total of $9,750 over 5 years and returned $14,795 for a net gain of 35%.

Point 1: This obilterates any life insurance returns
Point 2: I didn't do any research
Point 3: At least start investing instead of doing nothing.

 

[James]

I'm a strong believer that in the end, all things consider WL is always cheaper! In fact the cheapest of all, sure they may seem high at first but I guarantee you, if you run a UL or VUL and it shows cheaper that is only temporary.

Well, with the VUL, it's not like the software is going to lie. The question comes down to how realistic is the rate of return you're using? That is up to the agent and client to decide on. With the UL, I suppose it comes down to how realistic is it that the insurance company's general account will prosper, unless I'm missing something. And if that is the case, WL should run some parallel risk, as dividends aren't guaranteed. The difference is the cost of insurance and extra premium charged initially are all merged, so you won't possibly take a big hit on the cash value later in life. Again, all the products are stuff I'm just learning about, but moreso with ULs and VULs, so I apologize if I'm missing something here.

Believe what you want but more and more studies are showing on average MF's don't return 5% much or less 10%. Sure you hae a few conservative funds that have ran 8-10% on average but that is few and far between, plus they are not herolded since they don't go high like others in good years but on the other hand they don't loose like others in the bad years.

I read somewhere once that about 1/3 of aggressive funds go broke eventually. I have no idea if that is true, so take it for what it's worth and I have no idea how they determined the "aggressive" growth funds. If there is any truth to that, then 1/3 of those investors losing EVERYTHING would skew the numbers. Those aren't appropriate long-term investments.

Just a quick Google (I don't have much time tonight, or for the next week) gave me the following:

http://www.finfacts.ie/stockperf.htm

About halfway down, it summarizes the return of the overall stock market from 1926-1999 as an 11% return. With today's selection of various indexes available in funds, I don't see how you cannot get a 9% or 10% return over the long-haul. Even if the management fees eat 1% of this, which I believe is higher than allowed, you're still talking an 8% or 9% return, which blows your 5% return out of the water. I know you have posted links to studies in the past, but I would truly be interested if you have some goods ones you could post in one post here so I could review them sometime. I'm not disputing that maybe the average investor only does get a 5% return, because there are *** investors out there like my father that holds on to things for too long. Since we were talking about VUL policies originally, let me say only an *** would put his VUL in a sector fund like a tech stock fund. If you do, you will be smiling from ear to ear...or broke. And if you leave it there for 50 years, I'm betting on broke. The real issue is not what the average investor gets from his fund, but how realistic is a 10% return? Again, based on the index funds available I don't see how it's pie in the sky.

Where am I going wrong?

I'm not talking about averages but actual returns. The studies I've linked and others are "Actual Return" studies, not averages of the market over XX number of years, that really has nothing to do with nothing. Nor is anyones so called gains real untill one actually cashes in and takes their profits.

 

[Crabcake Johnny]

There's also no loss unless you cash it out either.

 

[James]

Who's ahead at the end of the year:

A: Steve who doesn't know crap about investing. He literally printed off a chart of stocks, threw 4 darts at it and those were he 4 investments. He put in $100 a month and stopped spending that $25 a week on stupid stuff.

B: Bill kept spending that $25 a week on stupid stuff and didn't invest anything. After all, it's just too confusing and he didn't want to lose his money.

Well, who's ahead? A lot of people here are talking about whether or not the batter's gonna hit the ball, his correct stance and correct grip. I'm talking about actually getting in the game so you can walk up to the plate.

Case in point - Sharebuilder has a feature called "what if I had invested" where to can plug in the symbol and amounts and see where you'd be now if you had already bought it.

So let's have fun and choose 3 stocks at complete random - how 'bout the 1st three alphabetically on the NYSE:

1) A. O. Smith
2) A. G. Edwards
3) AAG Holding Company.

Ok, those are your picks and you put $50 a month into each stock over the last 5 years:

1) Total invested: $3,850. Market Value: $5,5119. 43.4% gain
2) Total invested: $3,850. Market Value: $6,929. 80% gain
3) Total invested: $2,050. Market Value: $2,347. 14.5% gain (only on the market for 3 years.)

Ok, there's are completely ramdom list. You invested a total of $9,750 over 5 years and returned $14,795 for a net gain of 35%.

Point 1: This obilterates any life insurance returns
Point 2: I didn't do any research
Point 3: At least start investing instead of doing nothing.

You could do that and roll the dice. Or you could just as easily go out and get a 10 grand loan, lets say a HE line of credit. Go out to a good Auto Auction and pick up on 5 cars for $2,000 apiece and resell them for $3,500-$5,000 each easily. You could easily turn them over in a months time and see a $5,000 return in 30 days or so.

The moral of the story? This is America and its just do easy to make money. Now I take my $5,000 profit and place it in a Annuity with 5% bonus and %5 return for the next five years and I'll have a lot more than you! Plus I can do that every month if I desire. Remember my $5,000 is pure profit that I include in my profit at the end of the five years. More than likely I'll triple your gains! I usually sell cars that I pick up on for more than double what I pay for them, and that is cash money. I'll happily fill out a loan form for them or send them down the block and let the dealer finance but that cuts into my profits.

I've done that a few times in the recent past, should do it again it is such easy money.

 

[James]

There's also no loss unless you cash it out either.

LOL, yes that is true, you trying to make me laugh?

 

[James]

Well I don't live in Maryland, while we have some laws obviously none as strict as MD. Yet I have done that 15 times last year. I don't actively seek such out aggressively but I get a few here and there. Plus outside of that I have already brought the Rug Cleaners and they have been delivered to the Vacumn Store. Plus you been all over the board, lets see first it was all those MF investments, then you came up with all your Drips and then several others? Just don't know what do expect next? Plus in TN we don't have inspection stickers, dealt with that in TX and that is a load of crap. Yet though, I do agree if you live in a Goose Stepping State it would make the idea of trade for the individual more difficult.

Yet though, let me ask you'll this one. Who has more control of the markets today? No matter what you invest in if the big Firms make a move against your play you loose. Let take Petroleum last year and the beginning of this year. A sure bet uh? Down 33% so far and many Funds and Investors will take the lost on the chin. Plus you claim no lost till you cash in? Just how long will it take to break even with this lost? Plus that was the other day, I'm sure it has fallen more today. Lets face it, it wasn't such a sure bet after all.