jamaicabound
Pelican
Travel Museums said:
Can someone explain what an annuity is as well as the pro's and con's? Whenever I hear Dave Ramsey and the like talk about annuities they always say its a ripoff, however that sounds somewhat attractive
True Passive Income Investments
- Thread starter samsamsam
- Start date
Can someone explain what an annuity is as well as the pro's and con's? Whenever I hear Dave Ramsey and the like talk about annuities they always say its a ripoff, however that sounds somewhat attractive
456
Kingfisher
In theory annuitization is a powerful concept, and helpful when thinking about streams of money in terms of a Value and also about a large sum of money in terms of a Cashflow (stream), according to an appropriate discount rate.
The issue is that, as an actual product, there are lots of rigid terms and conditions, baked-in fees, spreads, and other factors that make it NOT ideal. You also can't get out of it. "I'd DIE before I sell an annuity. It's meant to benefit the seller, and it's impossible to get out of." -- Ken Fisher on a TV commercial pushing some annuity-by-another-name...
One gives up efficiency/spread and in exchange receives "certainty". One could also just manage a safer allocation in their own portfolio without the guarantee or middle-men.
Some people who have a lot of money may annuitize some of it (regardless of extra costs) because at their level, having a certain limited flow is yet another diversified asset (in addition to their other fixed-income or equity / other investments / etc.).
When you do X every week, think about it's value annuitized and what that could grow to over time... nice mental hack.
If someone offers you to debase yourself for $Y, annuitize it and realize what a pittance it is (i.e. "months of no rent, but then what?")... hah, just trying to get it into a more intuitive form.
(It's like a more stretched version of the mental hack of imagining every dollar you waste growing at 6% over decades... instead of thinking of each $5 coffee's growth over decades, think about the annuitized value of 10 years of daily coffees, and grow THAT amount at 6% over decades....).
/rant
The issue is that, as an actual product, there are lots of rigid terms and conditions, baked-in fees, spreads, and other factors that make it NOT ideal. You also can't get out of it. "I'd DIE before I sell an annuity. It's meant to benefit the seller, and it's impossible to get out of." -- Ken Fisher on a TV commercial pushing some annuity-by-another-name...
One gives up efficiency/spread and in exchange receives "certainty". One could also just manage a safer allocation in their own portfolio without the guarantee or middle-men.
Some people who have a lot of money may annuitize some of it (regardless of extra costs) because at their level, having a certain limited flow is yet another diversified asset (in addition to their other fixed-income or equity / other investments / etc.).
When you do X every week, think about it's value annuitized and what that could grow to over time... nice mental hack.
If someone offers you to debase yourself for $Y, annuitize it and realize what a pittance it is (i.e. "months of no rent, but then what?")... hah, just trying to get it into a more intuitive form.
(It's like a more stretched version of the mental hack of imagining every dollar you waste growing at 6% over decades... instead of thinking of each $5 coffee's growth over decades, think about the annuitized value of 10 years of daily coffees, and grow THAT amount at 6% over decades....).
/rant
Annuities reliably pay out a fixed amount monthly. REGARDLESS of market fluctuations. A lot of dead husbands bought them for their wives who never managed finances. It’s a reliable fixed income for life. Usually with a lump sum to the beneficiary upon death. Not a bad deal. Lots of parents buy them for their idiot children too.
To have enough money to live off monthly you need to purchase several hundred thousand dollars of annuity. But even a 150k annuity will kick out a nice monthly bonus for life. You’d do better in the market but you can’t live in a 401k. An annuity can reliablely pay your bills, rent, misc expenses month after month.
To have enough money to live off monthly you need to purchase several hundred thousand dollars of annuity. But even a 150k annuity will kick out a nice monthly bonus for life. You’d do better in the market but you can’t live in a 401k. An annuity can reliablely pay your bills, rent, misc expenses month after month.
I used the RVF criteria but picked lots of DEFG and they went in the shitter so now I only buy ABC, after that lending club has been better. What's a joke is their stock, I got double-fucked there.
Real Estate: Rental Properties & Notes
Equities: Dividend Producing Stocks, REIT's, & Mutual Funds
Businesses: Silent Partnerships, Loans
Capital needed varies per investment, how they are purchased, and your credit. Except in the case of dividend income which ranges from 1% in AMH a residential REIT, up to 19% in MORL a 2x leveraged mortgage REIT. These are just examples of ones I own, but not recommendations.I can advise a good and reliable investor in PM.
Regards Debo
Equities: Dividend Producing Stocks, REIT's, & Mutual Funds
Businesses: Silent Partnerships, Loans
Capital needed varies per investment, how they are purchased, and your credit. Except in the case of dividend income which ranges from 1% in AMH a residential REIT, up to 19% in MORL a 2x leveraged mortgage REIT. These are just examples of ones I own, but not recommendations.I can advise a good and reliable investor in PM.
Regards Debo
Easy_C
Peacock
Don't forget preferred stock. They're a rare product, but...
Keep in mind that the problem with trying to get "passive income" right now is that the artificially depressed interest rate environment means a lot of professional, massive dollar-value investors (e.g. state retirement funds, other pension funds, insurance companies, etc.) are desperate for any kind of yield they an get in order to remain solvent. This demand tends to push yields for "passive investments" down across the board and negatively impacts the risk/reward ratio for that type of investment.
My advice would look at dividend instruments people don't think much about. Preferred stock are rare but somewhat underrated and are designed as a dividend paying instrument. You can also find some extremely high dividend paying stocks (as high as 10% annually) in industries like coal that the NPCs reflexively hate. Not all of that hate is logically based but it suppresses prices, which means you as the buyer get a higher yield (annual return) on dividends.
Keep in mind that the problem with trying to get "passive income" right now is that the artificially depressed interest rate environment means a lot of professional, massive dollar-value investors (e.g. state retirement funds, other pension funds, insurance companies, etc.) are desperate for any kind of yield they an get in order to remain solvent. This demand tends to push yields for "passive investments" down across the board and negatively impacts the risk/reward ratio for that type of investment.
My advice would look at dividend instruments people don't think much about. Preferred stock are rare but somewhat underrated and are designed as a dividend paying instrument. You can also find some extremely high dividend paying stocks (as high as 10% annually) in industries like coal that the NPCs reflexively hate. Not all of that hate is logically based but it suppresses prices, which means you as the buyer get a higher yield (annual return) on dividends.
Easy_C said:
Not enough people talk about this fact. I have discussed it many times in the past.
https://www.rooshvforum.com/thread-32301-post-635794.html?highlight=artificially#pid635794
https://www.rooshvforum.com/thread-35601-post-718397.html?highlight=artificially#pid718397
https://www.rooshvforum.com/thread-33145-post-1652576.html?highlight=artificially#pid1652576
joost
Kingfisher
Robinhood (https://www.robinhood.com) is giving 3% on cash accounts. That's enticing.
Kinda getting the feeling from looking around that low interest rates have made it more or less impossible to find good passive investments.
Is that about right?
Is that about right?
SamuelBRoberts said:
A massive wealth transfer from the middle class to the wealthy. If not for mass ignorance and increased government welfare payments to the middle class, people would riot in the streets if they knew the truth. This will end in tears.
Subtext said:
https://www.sovereignman.com/trends...t-back-taxation-without-representation-19906/
https://mailchi.mp/portfoliowealthglobal/home-run-up-20-in-two-hours-366043?e=816a398028
If you want to study this are in depth, go to the Mises Institute, study the Austrian School of Economics, and read the books listed in their store.
https://mises.org/
bigbadpua said:
If somebody just refuses to pay you on one of these things, do you have any recourse at all?
It sounds just like unsecured loans.