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There we go again ....trying to show the poor investor behavior by the people you know to justify not investing or getting poor returns is ridiculous ...repeating the same nonsense over and over does not make your weak argument any stronger.
Advocating buying an annuity before investing and reaching your financial goals is very poor advice and you can’t justify that no how.
Perhaps you need to learn the difference between investing and speculating
No, in fact most people I know are self-employed, do not have 401k, and invest their savings in index funds. Except during bonanza times such as recently, all I seem to ever hear is lamenting that they are losing money even though the index is supposed to be predominantly up. The only two people I know that have made a lot in the stock market actually trade individual stocks by themselves, and are constantly trying to outguess the market (I certainly wouldn't do that because I wouldn't have I clue what I am doing :-). Again, I know nobody, absolutely nobody whose money increased 30-fold in 30 years in an index-tracking fund. When we compare their method of how-long-can-I-withdraw-without-portfolio-failing with my annuities, we often tend to arrive to about the same numbers (ie, what they can safely withdraw and what I will get from the annuities is about the same, with their investment in the portfolio being about the same as the sum of my annuity premiums. Don't forget that annuity withdrawals do not diminish the value of the annuity - the withdrawals are fixed for as long as you live. You may leave a massive portfolio to your beneficiaries - that is obviously a definite advantage of a stock portfolio, but if you need retirement income for yourself only, you don't need to maintain $1M for every $40k that you need per year - you just need to pay around $220k premium when you are 45 in order to get a $40k annuity payout every year starting at 70, and feel free to live however long you want).
I can't comment on your friends as who knows what they have really done. But I am very confident in market return - it has done very well for me. Given your scenario of investing $220k in an annuity for 25 years or investing $220k in the market for 25 years, I would take the latter, and in fact that is pretty much what I did. I end up better on a withdrawal basis and I end up with money to give to my heirs. But that is me.
I can't comment on your friends as who knows what they have really done. But I am very confident in market return - it has done very well for me. Given your scenario of investing $220k in an annuity for 25 years or investing $220k in the market for 25 years, I would take the latter, and in fact that is pretty much what I did. I end up better on a withdrawal basis and I end up with money to give to my heirs. But that is me.
Well, I don't have kids, and all youngsters in the extended family are doing well, not needing my money. So I'd rather (and in fact that is pretty much what I did) give $220k to New York Life, and explore the world for 25 years without thinking about money (except when I drift into it on this forum :-)... and then, if I do live 99 years like one of my grandfathers, collect the total of $1.2M over the last 30 years from New York Life (btw, that is not all I have in annuities - it is less than a quarter, I have them with four other insurance companies).
This is the thing... when I was younger, I realized I would not be able to pay attention to money management, I had an overwhelming, totally absorbing job to do - I did not take anything else seriously, I didn't want to live with anyone or have kids, I didn't care what I drove, where I lived or whether I had furniture (I didn't have any... just a futon on the floor and stacks of books :-). All that mattered was the patient outcomes. Eventually it started grinding me down, mostly the production pressure to squeeze a million procedures into ever smaller blocks of time, and generally an overwhelming administrative intrusion into medicine. I would still enjoy doing what I know how to do, except that I don't enjoy doing it with a stopwatch and the administrative gun to my head... so I started phasing out at 49, which was good because I have a lot of recreational interests that couldn't be pursued while fully working. But even with voluntarily abbreviated career, what I did when I was fully working impacted survival and quality of life extending over a total stretch of at least 500,000 years of human lives. Would I trade the time spent on that for managing money to increase my assets to the level which I don't need? No, I wouldn't. That is where annuities came in. I looked at the inflation calculator to see what I would have historically needed 20 or 40 or 60 years past the point 0 (which for me was the age of 45), bought variously timed annuities to cover that, never thought about the matter again, and went back to the operating room. Then I semi-retired and went to Kathmandu :-). I didn't spend the rest of my life checking indexes, running models, or obsessing how I can squeeze every possible penny out of investments.
What you are doing is fine. There are many roads to Rome as they say and we all have to be comfortable with the road we chose. You like yours, I like mine. That is all that matters in the end.
for most who say " i have no time to deal with my money " i can never understand how they say they have no time or don't want to bother with what is likely one of the most important aspects of their life .
growing the bits and pieces we manage to scrimp and save can be so important . that penny saved from our jobs will always stay a penny unless it gets good compounding .. actually it will be less than a penny as inflation takes its toll .
there is always 3rd party mgmt so one does not not even have to lift a finger . i never found this i have no time excuse to be a valid one because these same people will spend loads of time researching a car or refrigerator or restaurants to eat . in fact most people do devote more time to checking out restaurants and vacation spots then they do on anything pertaining to their financial health.
most of us will never accumulate what we want without the power of compounding .
as they say you can lead a horse to water but you can't make them drink
Last edited by mathjak107; 07-15-2019 at 03:34 AM..
if they don't then it is their own behavior not markets ....
the reason most don't is they are dollar cost averaging in , not lump sum ... if you lump sum then those results are what you would get unless you did something to alter those results yourself by not staying invested ...there is no magic going on ...if you stay in , those are your results less any taxes of course ..
what you are doing is just what is called believing your own bull , which is based on nothing except what you think. then you are coming up with ludicrous reasons for believing this stuff . like comparing the 500 largest companies in the country in market capitalization to bernie madoff .....
I think that comparison is fair in a way. That's the problem today. I'm not so sure this is the proper venue to pursue this line of thinking though.
you think giving money to bernie with those promises of consistent above the norm returns is the same as buying an index fund from fidelity or vanguard ?
i think you would definitely be in the minority with that thought.
especially because they chose madoff as the reference after the fact that he comitted fraud ... that makes no sense , otherwise they would not have picked madoff as the comparison .
to date no long term investor , spanning a typical accumulation stage or retirement stage which runs decades likely lost a penny in the s&p 500 unless they did it themselves .
for most who say " i have no time to deal with my money " i can never understand how they say they have no time or don't want to bother with what is likely one of the most important aspects of their life .
I can only speak for myself. Money is far from the most important thing for me. I have nowhere near 1.7 million but at the end of the year (actually end of January) the wife and I can retire. (her 55, me 58).
Quote:
growing the bits and pieces we manage to scrimp and save can be so important . that penny saved from our jobs will always stay a penny unless it gets good compounding .. actually it will be less than a penny as inflation takes its toll .
there is always 3rd party mgmt so one does not not even have to lift a finger . i never found this i have no time excuse to be a valid one because these same people will spend loads of time researching a car or refrigerator or restaurants to eat . in fact most people do devote more time to checking out restaurants and vacation spots then they do on anything pertaining to their financial health.
most of us will never accumulate what we want without the power of compounding .
as they say you can lead a horse to water but you can't make them drink
I have researched and I understand our economy is not built upon a solid foundation but continued bubbles that ultimately pop. Yes, you can spend a lot of time on this and ride it to your advantage. I have better things to do.
I see a company like Boeing that puts "shareholder value" over safety and gets nearly 350 people killed and while they are down, I could research whether or not it's a good time to get in but the facts are, I want absolutely nothing to do with investing in a company like that just so I can upgrade to a better room on vacation.
betting on the whims of a particular company would be speculating . it has tremendous individual company risk ...we are talking INVESTING in broad based funds and index funds.
they experience mostly just market volatility over the long term .there is no individual company risk ..
whether money is imortant to you or not , most of us are best served by having our money work for us while we work for our money .that is true whether you take the time to do it , or pay for someone to do it .
the question about moral investing is a whole other discussion ...usually yu are better off taking the money from investing in what we call the sin stocks and giving it to the charities and causes that oppose them .
betting on the whims of a particular company would be speculating . it has tremendous individual company risk ...we are talking INVESTING in broad based funds and index funds.
they experience mostly just market volatility over the long term .there is no individual company risk ..
whether money is imortant to you or not , most of us are best served by having our money work for us while we work for our money .that is true whether you take the time to do it , or pay for someone to do it .
the question about moral investing is a whole other discussion ...usually yu are better off taking the money from investing in what we call the sin stocks and giving it to the charities and causes that oppose them .
Fair reply.
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