Investment Question

[Gilbert Scales2]

You guys have answered every other question I have asked, so I will try this one.

I am thinking about an annunity account. A finincial advisor wants me to invest in Midland National Insurance company. Anyone hear anything good bad about this company?? I am not a risk taker, so no stock market. I realize everything has some risk, want to keep risk low. Any other ideas?



Thanks,

Bubby

 

[cq]

Shop around......, you can find pros and cons about everything.

I like Vanguard.

cq

 

[Bob G.]

Gilbert,



I just did a quick search about annuities and didn't realize that they are offered by insurance companies. I don't like to use insurance companies for financial investments. Annuities are also a long term investment instrument. I'm not sure how young or old you are.



If you have a 401k plan available through work, max it out or at least invest in the minimum to capitalize on company matching. The company matching is FREE money. Your tax liability will be reduced because it is a pre-tax investment. You'll pay tax on your withdrawals later in retirement.



Mutual funds come in different risk levels. If you want to play it safe, go with Money Market and Bond funds. You'll have to up the risk level to make any real money. Your age should determine the risk level. Medium to high risk level if you are young, low risk if you are approaching retirement age.



Another way to go is investing in a Roth IRA. Post-tax money is invested in mutual funds and if certain conditions are met, you will not pay tax on it when you withdraw at retirement age. I saw this on Wiki:



"A Roth IRA can also be an individual retirement annuity, which is an annuity contract or an endowment contract purchased from a life insurance company".



That might be right up your alley.



FYI: I am not a financial investment person. Please consult with a real financial person before spending your gas money for fishing in the stock market. I don't want to see anyone posting here that they lost their boat due to bad advice!! :blink:

 

[Dan J.]

If you're looking for dividend or investment return, the one you mention and thousands of others are worth investigation. If you are looking to offset your tax burden, you should consider a Conservation Easement. The CE's have been able to increase my tax offset by 1/3 to 1/2 of initial easement investment each year, per CE. My annuities are with Great-West Life, American Funds, and Prudential, but the recomended Vanguard and many others should be equally considered. Good luck!

 

[Bob G.]

Dan,



I never heard of a Conservation Easement, now I gotta look that up!

 

[Dan J.]

Here's a good explanation:
http://landtrust.org/ProtectingLand/EasementInfo.htm

 

[FLsportsman]

Since you asked, an idea would be to keep your insurance separate from your investments. You could stick with basic term insurance and invest (cost average) in a simple index mutual fund from Vanguard or Fidelity or maybe even Janus. Either of those can be filed under a traditional or Roth IRA. Cost averaging is the best way cash in on a changing stock market. Kind of a

 

[Steve Johansen]

Here's one for you.



When I was younger and started thinking about investing I was directed to buy mutual funds and keep buying the on a regular basis to take advantage of the market swings. The bank had charts to show me that over a period of regular investing as opposed to lump-sum investing (at tax time) over the long haul I would come out ahead. Of course there is risk involved and they wouldn't stand behind that claim. Anyways I took their advice and have been investing $60 a week for the past 15-20 years now. Want to know how much I've made? Squat. I bet that if I had the money I've invested over those years under a pillow it would be worth what my monthly statements tell me my portfolio is worth today. So in otherwords, whatever I've made I've also lost and the only one that gained was the seller of the funds.



On another note, I bought my house in July of 1999 for $180,000 and today it's market value is $500,000.



If you have a mortgage concentrate on paying it off and maybe you'll be able to buy another before you wish to retire. Mutual funds will never do that for you with a 'laymans salary'. I am stopping my mutual fund weekly purchases and getting my mortgae paid off ASAP so I can look at some rental property down the road.



Just my opinion...

 

[Gilbert Scales2]

I am 58, own my own business. I was looking to get better interest on a few dollars I have in CD's. I been in my house for 35 years, no bills. Thanks, for the replies.



Bubby

 

[FLsportsman]

You are right about a fixed sum investment over the course of 15-20 years, but I think there are a few factors to consider. First $60 has a different net present value than when you started out twenty years ago. The performance and fees of the fund you chose is another factor. Lastly, you have to deduct the inflationary rate to realize true gains. That

 

[Eric Aasen]

I just opened a Fidelity Roth IRA in the 4 in 1 index fund. Index funds are great because you pay very low fees. A computer does the trading and the only goal is to track an established index (like S&P 500). The risk is less because you are highly diversified but the gains are usually less because you don't have a money manager making trades. Unless the whole market tanks, you are protected because of the diversification. You can open a standard fund for 10K or a Roth for $2500. You fund it with after tax dollars and don't pay tax upon withdrawl, assuming certain conditions are met. With the way taxes are going up now, it makes sense to lock in today's rate on some of your investments.



NoCAL

 

[brantley moats]

I researched annuties for my Mom and found them to be a very poor investment, if you want to call it an investment. Do the math. Annuties are great for the companies selling them!You can get a much better return with very little risk in bond index funds. The financial advisor that wants you to invest in the annunity will make the most money in an annunity. He or she will get their money upfront and you will be left with a poor return for years to come.The fees and other expenses charged by an annunity are exorbitant to say the least.If you dont feel confident doing the math at the very least get advice from an independent "registered investment advisor". RIA's can be hired on a fee only basis so their advice will be free of a conflict of interest. I.E.They are less likely to steer you toward an investment that they will profit from at your expense.There are many low expense ratio bond and stock index funds to choose from.By the way financial advisor is another term for "salesman". I am not a finacial advisor but I can do the math.

 

[Dan J.]

Annuities come in various forms and schedules throughout the marketplace, so I would not rule them out carte blanche, particularly when considering our fluctuating economic environment over the last five years. The more money you need strategically structured, the more an annuity can offer secure, structured advantages over the long term. (I also am not a salesman, but I have lived off my annuities and investments for almost 20 years since retiring in 1995 at the ripe old age of 26. ) Definitely consult a CFA (certified financial advisor) in addition to your trusted CPA (many are one in the same) before any sizable investment. DO NOT base any judgement off internet advice, including mine and our wonderfully caring group here. Take your time and weigh the pros and cons of every plan considered before entering into the funding you and your trusted personal financial advisor find safest and comfortable for you and the goals you have intended. Good luck.

 

[Texas Transplant]

Interesting discussion. I'd comment, but given that I now work for a Financial Firm once again - I can't really make any comment. Best thing I could say is know the differences in the basic products; understand the various risk factors (big ones); and pick an investment that seems to meet your needs.



I just finished moving most of my investments into a new area; and I had to go through the research steps once again. Always do a review at a minimum once a year.



Best of luck.



Tex