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

[Crabcake Johnny]

I
So the DRP is okay, a cheap way of buying stocks and using the dividend to your favor. I didn't buy into it at the seminar last year (yes there is several groups known as "Transfer Agents") circling the country giving seminars selling this concept. By the way it isn't all that new, the idea of using dividend reinvestment has been around a long long time.
y.

And thank you for the DRIP class. I see you know all about them from the seminar you went to. Maybe you can call me and I'll actually tell you about them since I've been actively investing in them for over 16 years. But then again, I'm sure your seminar was all the training you need on them. Shit, what do I know.

And it's statements like these where I take you to task:

5-8% return will suffice nicely if one actively saves.

Really? So if you're 35 and start investing I'l split your 5% to 8% and we'll settle on 6.5%. At 6.5% annual return you'd need to put in 2 grand a month to end up with 2 mill after 30 years. That 2 mill at 4% will get you $80,000 or $40,000 in today dollars. Barely enough if you're self-employed plus social security when you retire.

Anyone here saving $2,000 a month? Didn't think so. Shoot for 15% returns and now you're only investing $350 a month. So no James - it's not about how much you invest. It's about the return and that's investing 101.

Reply anyway you want. You can't "math" yourself out the fact that less then 8% will require massive savings for a comfortable retirement. And heaven forbid you're starting at age 40. With under 8% you have zero change at any retirement with your strategy.

 

[NHB_MMA]

I finished the Series 6 manual most most of the 63 and I don't recall reading about the DRIP. What is it you're talking about in this discussion?

 

[J.R.]

http://beginnersinvest.about.com/od/dividendsdrips1/Dividends_DRIPs.htm

 

[James]

Reply anyway you want. You can't "math" yourself out the fact that less then 8% will require massive savings for a comfortable retirement. And heaven forbid you're starting at age 40. With under 8% you have zero change at any retirement with your strategy.

LOL, yea it sucks when math gets in the way of one gibberish isn't it!

I punched into a fund I've had since the early 90's in an attemp to show people "high risk" small cap returns. Imagine getting in at year 2000 and getting out after 2003. You would have returned -2.7 + -3.0 + -26.1 for a whopping loss of 31.8. What a beating huh.

Not for me. That investor missed gains of 30.9 in 1999, 48.9, 17.7 and 11.8. So what's the net gain taking losses into account? 11.07% average return over 7 years. Actually, since I've been in it I'm over 16% average return. Go grab 16% with your perm life vehicles. And this is also why no one will ever scare me into an annuity.



Performance History


1999 2000 2001 2002 2003 2004 2005
Investor Return % 30.9 -2.7 -3.0 -26.1 48.9 17.7 11.8
Total Return % 32.5 -1.9 -2.8 -26.6 49.3 17.9 11.9
+/- Category * -37.1 5.3 4.8 2.6 3.7 5.2 5.7
% Rank in Category * 70 35 34 41 29 23 15

I can only respond to the years you posted,in fact it would equal a 8.6% yearly gain. LOL, even the simple rule of 72 would indicate that your numbers are fairly low, as I suggest do the math! These numbers if used on say 10 grand would grow it to $17,767.50. Now 8.6% return from any fund is good, most haven't performed this well, yet you are in the riskier side of the offerings, and I wouldn't advice no one to put all their savings on the highest risk, in fact at age 30 it would be 70/30 split if I remember my basic allocation rules correctly, that would be 70% in moderate/aggressive and 30% in safe allocation. Now before you start you pitiful ranting that is a Merrill rule of allocation that they suggest.

 

[James]

My investment rule #1 for those that are seeking to build wealth, make enough to save! Wow what a concept! I don't deal or try not to deal with people that fall under the 8hr a day for xx amount per hour or XX per month and then expect that to take care of all of ones needs. It simply isn't possible, the guy or gal that makes 25-50 grand thinking that within this structure they can retire in comfort is smoking crack or they might as well.

One investment this year that'll create a real return on my money is renting out the "Rug Doctor". Okay, I have 20 grand I can start this with. Now a new Heavy Duty Wide Rug Dr, better then the ones you can rent at the grocery store (they tend to be the normal size residential model cost is $795 these Wides come in at $995) and I need ten to start or $9950.00 if I pay full price. Yet I can pick up 10 down in Atlanta next week for half that, used all within 2 years old and in good shape. Now I have to find a outlet, no problem stop in on a local vacumn store recently and couldn't land a sale of insurance but after some discussion he seem to like the idea I presented.

Idea starts with this, I place 10 rug dr's at his location and offer a weekly rental program of $100 plus all chemicals needed for a average house which includes one bottle of soap, small bottle of spot treatment and a small bottle of pet (urine removal) treatment. Plus they have the vacumn guy to give them instructions on how to properly spot treat and use the machine effectively.

Now I have to advertise this along with advertising his location so its a split on marketing cost which I place 10 grand and he places 10 grand which is simply nothing more then me giving him a extra 10 grand to his marketing money he would normally spend. Plus we have agreed on a marketing plan that I think will work great! Now he recieves 25% of the gross, plus he can since he has a location go into selling Rug Dr's.

Now if I can rent on average 6 machines every week for a year, giving the location $25, $10 (weekly breakdown of machine which is really lower than that) plus $10 for chemicals which is more than actual cost the total being $45 and figuring I hand out a lot of $25 coupons so lets bring it down to $75 dollars weekly (for half of the business, cost leaving me with a profit of $30-$55 (or 42.50 per machine) per machine times by 6 per week or $180- dollars a week or $12,750 a year.

Now yet I own 10 machines, so I'm figuring I have two to play with to add value too my investment. So I'm now in the process of working with a group that does office cleaning services. I have this in mind, time of cleaning an average office is about 4 hours. I offer the rug cleaning service to offices via the small group that does other cleaning and don't offer rug service. Average charge will be $350 or $250 if they go under contract for a year. Cost of labor is $10-$15 dollars but lets throw in some health coverage and even an investment tool, lets just call it $25 dollars per hour. So the average cost is $100 for an average office, so if I average 2 jobs per day that is 500 dollars a day times by 5 equals $2,500. Minus $1,600 to employees (two employees) and $50 (two machines) to the original Vacumn guy since I'm taking the machines from his location leaves me with about $850.00 per week. So yearly that is $42,500 yearly.

So lets add $42,500 plus $12,750 for a grand total of $55,250 for little bit of work on my part. So what is my cost? 20 grand, a loan from my insurance policy at 6% interest. So my payments would be $386.66 or yearly a cost of $4,639.92. So my yearly invest is 4,639.92 and I make $55,250, now show me your investment stategy again John. Now let me add this, lets minus say 10 grand a year to the accountant that will handle most of the financial aspects to this plan. So I'm down to 45,250, okay I might miss some projections but I'll be close.

Moral of this story? It is just too easy to make money, and it isn't that hard to show others and that is where a lot of money is! My employees hopefully in 5 years will buy me out!

My original mentor, well not really. He was Bruce Williams, use be on talk radio back in the seventies and early eighties. His stick was "show me a person that can work and has a pickup and I'll show you how to make 40 grand plus easily!" Now in todays dollars that would be higher but the idea is as true today as it has ever been! I just don't see the sense on wasting my time chasing 8-15% in the stock market? Which is unlikely and nothing more then a pipe dream.

 

[Crabcake Johnny]

[

1999 2000 2001 2002 2003 2004 2005
Investor Return % 30.9 -2.7 -3.0 -26.1 48.9 17.7 11.8
Total Return % 32.5 -1.9 -2.8 -26.6 49.3 17.9 11.9
+/- Category * -37.1 5.3 4.8 2.6 3.7 5.2 5.7
% Rank in Category * 70 35 34 41 29 23 15

I can only respond to the years you posted,in fact it would equal a 8.6% yearly gain. rule of allocation that they suggest.[/quote]

8.6 yearly gain?

30.9 - 2.7 - 3.0 -26.1 + 48.9 + 17.7 + 11.8 = 77.5/7 years = 11.07% average annual return. Who taught you math?

 

[Crabcake Johnny]

My investment rule #1 for those that are seeking to build wealth, make enough to save! Wow what a concept! I don't deal or try not to deal with people that fall under the 8hr a day for xx amount per hour or XX per month and then expect that to take care of all of ones needs. It simply isn't possible, the guy or gal that makes 25-50 grand thinking that within this structure they can retire in comfort is smoking crack or they might as well..

Listen, I might be misunderstanding you and you might be misunderstanding me. You're sitting down with one your friends who's 35 years old and self-employed and to date has saved and invested zero. He also has no life insurance a wife and three kids. He's doing quite well and tells you that he has $500 per month to play with. He'd also actually like to retire before age 70 and live a decent life.

Your advice would be?

 

[Crabcake Johnny]

My I just don't see the sense on wasting my time chasing 8-15% in the stock market? Which is unlikely and nothing more then a pipe dream.

You've become a victim of the main stream media and the broker community. What happens if people can average 15%? They stay put. What happens if everyone invests and stayes put? The financial industry loses money. Don't fall for the bull**** James.

Remember that negativity sells. People want to hear about what crashed, who died, and who's at war. People don't want to hear about people chilling making 22% returns. That's not newsworthy. Also don't forget about dividend income. My father gets a lot of dividend income obviously without cashing out the stock with means no captial gains. You can build a stong enough stock portfolio over time where just the dividends are significant. No one wants to talk about that because it's boring. I'm telling you that with modest research anyone can average 15% in the market.

Heck, we're in this industry so let's talk about Assurant stock (AIZ.) Feb of '04 was at $25 per share. Last traded at $56 per share. That's just over 100% growth in 2 years or just over 50% per year. Not only that, it's paying dividends. Now - was that hard?

http://finance.yahoo.com/q/hp?s=AIZ&a=01&b=5&c=2002&d=00&e=7&f=2007&g=m

 

[Crabcake Johnny]

My case in point:

http://www.marketwatch.com/news/sto...x?guid={7B8DDAEA-1BFB-47EC-A9F6-3D913E590C1B}

Sometimes you just have to laugh at the media's spin:

The average domestic diversified mutual fund was up nearly 12.5% in 2006

Yet....the entire article is negative!!!! Lol.

 

[Guest]

James,

You don't need to pay anyone for any info on DRIPS from any seminar. I assure you, you can learn it all for free on the internet.

Here is a list of stock you can buy directly from the company you wish to invest in without using a broker.

http://www.dripinvestor.com/subscriber_area/Keeping Tabs.pdf