Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
then they are the ones that have to understand low and negative rates are nothing new . they have happened 15 times in the last almost 50 years .
low rates can be a fact of life at different parts of the business cycle and what they are seeing now is the risk you take when you want to have zero interest in where your money is and what it is doing.
with something so important to our life as our money , there is a price to pay for financial ignorance . life has no worry free paths in any stage or aspect and just because you throw all your money in cd's does not mean you are guaranteed a return you can live on or will last as long as you do. never was and never will be..
to wherever life takes you and you do not take control it rarely ends the way you want or thought.
those widows should have and need a good advisor , if they do not want to take an interest.
or better yet , and i only started talking about this recently their husbands if they were knowledgable should have set them up in advance with investments and structure they can live with.
perhaps you or i may start a thread pertaining to structuring for our wives if we are plant food.
Bro, there husbands did structure things and they aren't in forums complaining. Your reality is not what you need to live comfortably on but your personal values on ROI and aggregate net worth. It is a lot easier to plan for a spouse with pensions because you can take SS at seventy and elect spousal pension benefits
well there are lots of smart husbands who did structure things for their wives but there are a whole lot more who do not.
no smart husband would or should leave his wife with a bank full of cd's and expect her to be able to draw 4-5% and inflation adjust . so if all that money is in cd's than shame on them
as I said it all depends on the rate your spouse needs to draw. if it is low enough cd's work. but if not and she needs more to live on then you set her up with a recipe for failure.
some folks may need nothing from savings and social security and pension cover it. heck if I had that situation I would buy all cd's , why not if I didn't need to pull a sizeable safe, secure consistent, income from my savings that has to last longer than I do
all this talk refers to those who have to be able to create their own source of a lifetime income from their own savings and the amounts they need to draw because either their pensions or ss require them to still draw incomes from savings. .
Last edited by mathjak107; 01-31-2015 at 05:41 PM..
well there are lots of smart husbands who did structure things for their wives but there are a whole lot more who do not.
no smart husband would or should leave his wife with a bank full of cd's and expect her to be able to draw 4-5% and inflation adjust . so if all that money is in cd's than shame on them
as I said it all depends on the rate your spouse needs to draw. if it is low enough cd's work. but if not and she needs more to live on then you set her up with a recipe for failure.
some folks may need nothing from savings and social security and pension cover it. heck if I had that situation I would buy all cd's , why not if I didn't need to pull a sizeable safe, secure consistent, income from my savings that has to last longer than I do.
EUREKA, my oh my he finally got it and there are many in that state and not in forums complaining about low rates. Do you remember what our surviving spouse income is?
well again , low rates or negative rates happened 15x before so that is the risk they take by betting the ranch on one asset class and yes ,cash is an asset class .
in their minds they were thinking they are betting on a risk free asset , but history says otherwise. the losses in purchasing power after taxes and inflation are nothing new. it just may be new to them.
do you really think the actions of the world banks and the fed dictate monetary policy based on the fact grandma wants to earn a positive interest rate because she wants all her money in a bank despite what the world economies need ?
so the answer is ,let them complain . if they want returns all the time then let them do what every other person does who wants to grow money , they diversify and at least invest a piece . if they can't do it then seek an adviser . if they don't want to do it then it is what it is and to complain and expect otherwise is just a wish..
Last edited by mathjak107; 01-31-2015 at 05:55 PM..
well again , low rates or negative rates happened 15x before so that is the risk they take by betting the ranch on one asset class and yes ,cash is an asset class .
in their minds only they were thinking they are betting on a risk free asset , but history says otherwise. the losses in purchasing power after taxes and inflation are nothing new. it just may be new to them.
do you really think the actions of the world banks and the fed dictate monetary policy based on the fact grandma wants to earn a positive interest rate because she wants all her money in a bank despite what the world economies need ?
so the answer is ,let them complain . if they want returns all the time then let them do what every other person does who wants to grow money , they diversify and at least invest a piece .
Inflation aside .50 percent is a positive return with minimal risk of principal loss.
you can never really put inflation aside or it is just smoke and mirrors . you need to compare it to your own personal rate of inflation. losing purchasing power is a loss no matter how one tries to sugar coat it.
Inflation aside .50 percent is a positive return with minimal risk of principal loss.
Let me tell you what advisers are telling folks to do, ...Annuities! They are selling those to retired people hand over fist. I know. We are retired and lost a ton during the market crash. We pulled what we had and invested in equities since 2008 and recovered at least 25%. Our friends are still sitting with their money in banks getting nothing. The sharks swam in and convinced them they should put their money in annuities and they all did.
We went to investment advisers, including Fidelity, Oppenheimer, Schwab. All tried to talk us into annuities. Really hard sell.
I knew nothing about the stock market. Started reading, listening to Cramer, CNBC, etc. and moved our money into the market. I'm scared to death but so far, so good. I don't trust any adviser. I don't know who to trust with our money.
anyone who lost money in the downturn did so through their own bad planning not the markets actions.
they were either invested in equities and didn't have the time frame in which they needed the money matched to the fact equities are always a long term investment
they didn't have the pucker factor for equities and either should not have been in them or they were to aggressively invested for their tolerance .
they did not diversify and were playing around with only a handful of stocks some of which never came back.
they tried to time things ,thinking they would get out and buy back in later. usually if someone bails out it is because they are the nervous nelly type. it takes nerve and balls to buy in when markets are beaten to a pulp and poised to turn.
those are two very different personality types that are needed and rarely are they found in one individual.
perhaps if they bailed and don't have the tolerance for risk those advisors were right and a low cost annuity product with guarantees may be the more costly but better choice for those folks than hiding under a rock in cash ..
any investor with a diversified portfolio who rebalanced and even added money never lost a penny doing nothing so it all goes back to human error and you can't blame markets for that.
Let me tell you what advisers are telling folks to do, ...Annuities! They are selling those to retired people hand over fist. I know. We are retired and lost a ton during the market crash. We pulled what we had and invested in equities since 2008 and recovered at least 25%. Our friends are still sitting with their money in banks getting nothing. The sharks swam in and convinced them they should put their money in annuities and they all did.
We went to investment advisers, including Fidelity, Oppenheimer, Schwab. All tried to talk us into annuities. Really hard sell.
I knew nothing about the stock market. Started reading, listening to Cramer, CNBC, etc. and moved our money into the market. I'm scared to death but so far, so good. I don't trust any adviser. I don't know who to trust with our money.
My comments are about folks who were not in the market then and or stayed in and since recovered. There are folks with pensions and SS who are still whole with their nest eggs and have tidy sums set aside as recommended for specific purposes, Example 240-300k for medical overage. Which is the greater current risk inflation or loss of market value. 100k for emergency repairs and unexpected monthly expenses etc. which is the greater current threat? Loss of principle or inflation? Different pools invested differently with different risk reward. A long term pool not needed in equities. There are so,many different types of investors out there.
Food for thought. The current spread between cash under the mattress is approaching zero and with disinflation is below zero. What is the new normal? Seniors in Japan with disinflation needed minimal returns. Europe is reaching that point
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
