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Author: albo4u Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 19483  
Subject: annuities Date: 4/10/1999 10:23 PM
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Any opinions about Annuities!!!!!!
I am new at this.
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Author: intercst Big funky green star, 20000 posts Top Favorite Fools Top Recommended Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 504 of 19483
Subject: Re: annuities Date: 4/10/1999 11:29 PM
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albu4u,

Forbes magazine had an excellent article on the subject in February 1998. See,

http://www.forbes.com/forbes/98/0209/6103106a.htm

I looked at these puppies several years ago and decided that the high fees and commissions associated with these schemes make them unsuitable for almost everybody.

intercst

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Author: vargaj Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 509 of 19483
Subject: Re: annuities Date: 4/11/1999 10:08 PM
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I have NEVER figured out why anybody would bother.

Joe Varga

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Author: peppermintpatty Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 510 of 19483
Subject: Re: annuities Date: 4/12/1999 7:27 AM
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Dear albo4u - There are many opinions about annuities. They are very useful for some people & pointless for others... it depends upon many factors, including age, other investments, and financial goals. Why don't you visit the "insurance board" anf post this questions? PP

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Author: peppermintpatty Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 511 of 19483
Subject: Re: annuities Date: 4/12/1999 7:28 AM
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Dear albo4u - There are many opinions about annuities. They are very useful for some people & pointless for others... it depends upon many factors, including age, other investments, and financial goals. Why don't you visit the "insurance board" and post this questions? PP

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Author: peppermintpatty Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 512 of 19483
Subject: Re: annuities Date: 4/12/1999 7:31 AM
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Probably because no one fully explained the benefits, and expenses... There IS a place for annuities (though not necessarily for everyone). "Never say never..." because there are circumstances where annuities are a perfect tool to accomplish a particular financial objective. Keep an open mind! Best wishes, PP

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Author: TwoCybers Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 515 of 19483
Subject: Re: annuities Date: 4/12/1999 3:22 PM
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Annuities are of great benifit to the person collecting the sales commission always. Sort of like Whole life life insurance. Benifit to the person(s) paying the bill are merely coincidental, but they do occur.

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Author: peppermintpatty Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 519 of 19483
Subject: Re: annuities Date: 4/12/1999 10:37 PM
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There's a cynical reply if I ever heard of one!

Perhaps you haven't read a thorough & unbiased description of what annuities are & how they work?

They're not suited for everyone, but for some they are a very useful financial tool. Regards, PP

(p.s. the commissions aren't that great anyway!)

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Author: FoolishLikeaFox Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 520 of 19483
Subject: Re: annuities Date: 4/13/1999 10:23 AM
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Perhaps you haven't read a thorough & unbiased description of what annuities are & how they work?
--PP


Thorough & unbiased? Do you mean like the sales literature you hand your customers? Why don't you provide a link to one of these descriptions?

I'm sorry to be so blunt, but an insurance salesman whose investing style leans towards mutual funds is likely to find few receptive readers at The Motley Fool.

Fox

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Author: dako99 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 521 of 19483
Subject: Re: annuities Date: 4/13/1999 11:32 AM
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One of my best friends used to be my annuity salesman. After becoming a beginning Fool, I canceled my policies. Haven't heard from him since! Gee, I'll miss those Xmas cards, but gain a lot more money from current portfolio.

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Author: peppermintpatty Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 523 of 19483
Subject: Re: annuities Date: 4/13/1999 10:23 PM
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Point well taken, Fox. The majority opinion here ar TMF favors direct investment in stocks, an attitude I can't fault (I have been a stock buyer for nearly 20 years). But, until a potential investor has a lump sum to invest & properly diversify, mutual funds can help accumulate capital. Additionally, there are many people who have no interest or desire to do the research necessary to purchase stocks (just like I have no interest in changing the oil in my car - I know how, but I prefer to pay someone else to do that chore); they prefer to hire someone to manage the money. Sure, they could improve their yield by doing it themselves, but everyone sets priorities!

Providing mutual fund investments allows some folks the opportunity to transition from savings accounts & CD's to participating in the market. If mutual funds were such a bad idea, investors would flee & the funds would close...

Regarding annuities - why don't you discuss them with a disinterested financial planner or tax attorney? The net rates of return can be comparable to mutual funds & so can the expenses. I'm not bashful in stating that annuities are NOT for everyone, but they are appropriate for some.

Regards, PP



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Author: intercst Big funky green star, 20000 posts Top Favorite Fools Top Recommended Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 525 of 19483
Subject: Re: annuities Date: 4/14/1999 9:14 AM
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peppermintpatty wrote,

there are many people who have no interest or desire to do the research
necessary to purchase stocks (just like I have no interest in changing the oil
in my car - I know how, but I prefer to pay someone else to do that chore);
they prefer to hire someone to manage the money. Sure, they could improve
their yield by doing it themselves, but everyone sets priorities!


I agree with your view on oil changes, but an oil change is less than $20. If someone had a $1 million portfolio and invested it in annuities, the 2% annual expense ratio would be $20,000 per year. That's the price of a big, painful "lube job."

One can easily limit the fees and commissions on a $1 million Foolish Four portfolio to less than $100 per year.

intercst

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Author: peppermintpatty Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 526 of 19483
Subject: Re: annuities Date: 4/14/1999 11:42 AM
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intercst said:

"One can easily limit the fees and commissions on a $1 million Foolish Four portfolio to less than $100 per year"

Your point is well made! Under that circumstance the benefit is clear & meaningful. My point, however, pertained more to purchase of mutual funds rather than direct stock purchase - the small/beginning investor lacks sufficient capital to enjoy reduced brokerage fees & diversify holdings.

As for annuities... I haven't run into a client with a $1 million portfolio yet, and I don't think that promoting an annuity would be my first thought!

Thanks for your opinion. Regards, PP

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Author: intercst Big funky green star, 20000 posts Top Favorite Fools Top Recommended Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 527 of 19483
Subject: Re: annuities Date: 4/14/1999 12:04 PM
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PeppermintPatty wrote,

Your point is well made! Under that circumstance the benefit is clear & meaningful. My point,
however, pertained more to purchase of mutual funds rather than direct stock purchase - the
small/beginning investor lacks sufficient capital to enjoy reduced brokerage fees & diversify
holdings.


Excellent point! I agree that mutual funds (low fee index funds, that is) are appropriate for individuals with less than $100,000 to invest. Once you get above $100,000, there are significant commission savings in buying a diversified portfolio of common stocks through a discount broker.

Also, let me compliment you on your courteous discussion of annuities and VUL (variable universal life). While few Fools would have anything to do with these products, we certainly welcome your comments. And, who knows, maybe at some time in the future fees and expenses on these things will be reduced to the point that even a Fool might consider one.

Regards,

intercst

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Author: rjm1 Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 528 of 19483
Subject: Re: annuities Date: 4/14/1999 10:14 PM
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Any opinions about Annuities!!!!!!
I am new at this.


Lets ask the question in a different way.

Under what circumstantes should someone buy an annuity.

I don't think I have seen a good reason yet.

But,

If you do not think you can handle your investments and do not want to run out of money an annuity maybe the answer. However, check on inflation protection.

If you are young and donot have other investments skip the annuity.

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Author: rvbradish Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 1104 of 19483
Subject: Re: annuities Date: 12/24/1999 7:31 PM
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"Any opinions about Annuities!!!!!!
I am new at this."

Yes! Avoid like the plague. Many posters on this board have learned their lessons, the hard way.

Ray

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Author: rvbradish Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 1108 of 19483
Subject: Re: annuities Date: 12/24/1999 7:57 PM
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"Annuities are of great benifit to the person collecting the sales commission always. Sort of like Whole life life insurance. Benifit to the person(s) paying the bill are merely coincidental, but they do occur."

Unfortunately, I can only think of two Insurance Co. products worth paying a dime for: liability insurance which we all need, and term life insurance for a young man with a young family (and that only temporarily). And yes, in my younger and more foolish days (not Foolish) I DID sell insurance (quite successfully) until my conscience started bothering me because I KNEW BETTER!!! The funny thing is that it was the Insurance Company's own training materials (and a little common sense) that taught me the truth.

Ray

Ray

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