Why Keep A VUL Whose CV is More Than The Original Coverage.

[James]

No argument here, yet the fund managers seem to need more training also! http://cisdm.som.umass.edu/research/pdffiles/performancepersistence.pdf

Do we have to wonder why so many are becoming disillussioned with MF's and other managed funds, and participation rates last I look are falling? Yet though some here would suggest with some education anyone can achieve 10-15% or better in the market, well go tell that to these Bozoo's! LOL

The two main conclusions is this that I see, first there is not persistency or otherwords its a grab your ass and go blind folded in picking stocks. Then you have the inability to perform the tricky part of any investment and that is timing! Plus as a whole none seem to be able to beat the Benchmarks set by the Market in general and most can't beat Treasury Bonds.

Since it is January, lets talk about how much these Bozoo's are going to make this year as Contracts are being renewed and Bonuses are being paid out. One Fund Manager of a large Group (forget which one) is now rumored to be recieving a contract in the area of around 20-30 million? What the hell do these guys think they are, Rush or Welch are maybe Tiger Woods or something??? I wonder how many Insurance CEO's or Presidents take in that kind of money? Plus I wouldn't even dare guess at some of those bonuses that'll come out soon. Yes your investment dollars hard at work!

Ps I was going to use the guy Raines (check spelling) but afraid most wouldn't get the connection.

 

[Crabcake Johnny]

Agreed, and there are many problems with the financial industry in general. And what good does it do to research a company properly when they're cooking the books.

Still, you have a lot of people in my shoes - self-employed and quite literally my entire retirement will be social security and what I save/invest.

Math doesn't lie. I need two million in the next 30 years and since money loses half its value every 30 years that leaves me with 1 mill in today's dollars. 1 mill at 4% is $40,000 a year in income and that combined with social security gets me and my wife some type of life.

I'm 39 so run the investment calculator for yourself: http://www.moneychimp.com/calculator/compound_interest_calculator.htm

2 MILL IN 30 YEARS OR IT'S RAMEN NOODLES FOR DINNER

5% - $2,500 a month needed
7% - $1,600 a month
10% - $1,000 a month
12% - $580 a month
15% - $330 a month

So if you're self-employed, reading this board and are around age 40 with little to no retirement savings you can go buy all the life products you want which average 5% annual growth. Hope you have $2,500 a month to plug into them. I'm more for $300 to $500 a month and do some homework and stock portfolios. 12% to 15% is actually very easy to attain.

 

[Guest]

James and John Petrowski,

I sure hope this link works, I think you both might find it interesting.

http://www.fpanet.org/journal/BetweenTheIssues/Contributions/110103.cfm

 

[Crabcake Johnny]

Interesting article. Also, someone told me once that annuities were impervious to lawsuits? Is this true, because if it is they could offer some protection to small business owners.

 

[James]

The Annuity while it can be cracked is quite difficult to do. My Brother in Law used Annuities to hold his assets safe from my sister, a marriage of over 20 years, the judge can't address Annuities. The rat bastard is a health insurance agent for the past 30 years, didn't think he had those kind of Kuhanas! I wasn't expecting that since it can be easily proven he brought them during the marriage? Then again I do believe Simpson, OJ used a combination of W/L and Annuities, none could be touch in his legal battles against the families sueing him for wrongful death of their daughter.

I keep hearing about these inflation protected annuities, sounds good to me, yet I thought there were already a few offering them? Could be wrong about that, yet I know I've seen publications discussing these issues. I really don't think most, even FP'ers understand the significance of the equity-index power, remember the guys that came up with this theory did win a Nobel Peace Prize for Financial Achievement. The whole idea of dividing investments and the ability to seperate the High Risk and Low Risk of the same investment and then the power to sell them to different investors is quite significant.

Ps, hot investment tip for this generation coming, nano tech and textiles. A technology promising to restart America's Textile Industry, several companies in this area are now actively opening or starting to retool old textile mills and starting short runs. One actually has a outlet in the Oak Ridge TN area and attempting to pioneer the marketing of these fabrics, as of now concentrating in sports attire.

 

[Crabcake Johnny]

Index funds are not talked about enough. The problem with asset allocation is say you have half your money in safe investments - say money markets returning 4% and the other half in capital investment returning 10%. That's great but your portfolio is only returning 7%.

But go grab yourself some index funds (many indexes to choose from) and you're instantly diversified. Other benefits:

1) Low management fees since fund managers don't have to do insane research.

2) Low portfolion turn-over ratios which is important for capital gains. Remember that it's possible to lose money in a mutual fund one year and actually owe capital gains.

 

[Guest]

John Petrowski:

1. Here is a link to a site (reply No. 26) which has many links for you to quickly learn about annuities.

http://socialize.morningstar.com/Ne...0000015&convId=187877&minReplySeq=21#replyTop

2. Annuities, life insurance, IRA's and other retirement plans (401(k), 403(b), etc.) are genereally both exempt in bankruptcy and court judgements.

That said, if you buy a single premium WL policy a week before you file bankruptcy, it will not fly.

HOWEVER: It varies by state law. So before you do anything, find out about Maryland.

 

[Guest]

John Petrowski:

The problem with asset allocation is say you have half your money in safe investments - say money markets returning 4% and the other half in capital investment returning 10%

I am sure you are aware that for interest income there is more than just money market funds right? There are Inflation adjusted bond funds, short,intermediate, and long term treasury bond funds, corporate funds, ets.

However, let me ask you. I know you are well versed in equity investing. Have you looked into withdrawals from a portfolio to sustain retirement?

I ask because once one has made their nest egg, then they have to shift a percentage to bonds to reduce overall portfolio volatillity (another good use of annuities - say you put 10 or 20 % of your portfolio into an annuity) Anyway, to consistently and "predictably" be able to withdraw from a portfolio, one needs bonds for the income aspect. The equities (stock) prorvides the capital appreciation.

You should Google "SWR retirement withdrawal rates studies". SWR stands for safe withdrawal rates. Also Google Trinity Retirement Study.

The problem with asset allocation is say you have half your money in safe investments - say money markets returning 4% and the other half in capital investment returning 10%

It will show that to have a fairly stable portfolio, one needs about 40 to 50% in bonds (the rest in stock).

 

[Guest]

Try this link:

http://www.retirement-financial-advisor.com/run_out.htm

It is a summary of the Trinity Study (for those that have not seen it)

 

[James]

Agreed, and there are many problems with the financial industry in general. And what good does it do to research a company properly when they're cooking the books.

Still, you have a lot of people in my shoes - self-employed and quite literally my entire retirement will be social security and what I save/invest.

Math doesn't lie. I need two million in the next 30 years and since money loses half its value every 30 years that leaves me with 1 mill in today's dollars. 1 mill at 4% is $40,000 a year in income and that combined with social security gets me and my wife some type of life.

I'm 39 so run the investment calculator for yourself: http://www.moneychimp.com/calculator/compound_interest_calculator.htm

2 MILL IN 30 YEARS OR IT'S RAMEN NOODLES FOR DINNER

5% - $2,500 a month needed
7% - $1,600 a month
10% - $1,000 a month
12% - $580 a month
15% - $330 a month

So if you're self-employed, reading this board and are around age 40 with little to no retirement savings you can go buy all the life products you want which average 5% annual growth. Hope you have $2,500 a month to plug into them. I'm more for $300 to $500 a month and do some homework and stock portfolios. 12% to 15% is actually very easy to attain.

You know I don't agree with most of your assumptions, yet I'm confident most individuals know the likely hood of achieving 12-15% in securities is more unlikely than having $1,600 or more to save monthy. Yet I would assume that a 40 year old (esp. self employed) has some assets that could easily be manipulated to increase their savings or jump start it. Plus one also has to take the position that the phrase "Fix Income" is a misnomer if you have savings from whatever investment to transfer to income. Plus I don't even agree with the idea of retirement (as being used by you and others) being feasible for the most part for the vast majority of people. Generally speaking there are more than 1 way of skinning a cat.