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re: OT - DNC Imploding
Posted on 7/30/16 at 7:52 pm to DawgHolliday
Posted on 7/30/16 at 7:52 pm to DawgHolliday
We're and independent brokerage firm.
10 of us in the back offices do wealth management. We got about $300 million AUM plus another $4 million in life insurance premiums.
2 of my guys specialize in 401k's and 3 of my girls are TPA's for about 150 corporate 401k accounts (~140,000 employees). We're also a licensed fiduciary.
I do financial plans for about 250 families/individuals/executive groups and manage everyone in the back, pretty much. Plus about 30 of the 401k's are mine.
The front of our office is 18 folks who do corporate benefits and TPA for them.
10 of us in the back offices do wealth management. We got about $300 million AUM plus another $4 million in life insurance premiums.
2 of my guys specialize in 401k's and 3 of my girls are TPA's for about 150 corporate 401k accounts (~140,000 employees). We're also a licensed fiduciary.
I do financial plans for about 250 families/individuals/executive groups and manage everyone in the back, pretty much. Plus about 30 of the 401k's are mine.
The front of our office is 18 folks who do corporate benefits and TPA for them.
0
Posted on 7/30/16 at 8:08 pm to SquatchDawg
I don't really want to give stock tips over the internet. The SEC and FINRA kinda frown upon that.
But I will say that I'm shifting my clients out of being majority correlated to the market.
Non-traded REIT's, non-traded BDC's, and cash value life insurance, plus annuities with GMWB accounts now make up about 60% of my client's portfolios while the other 40% are blended in the market between equities and bonds based on their risk levels.
This is a stark contrast from the past where it use to be 70-90% in the market.
Cash value life insurance, if you're healthy and able to qualify for a top rating, is great right now.
You get an indexed UL policy that has a 0% floor (can't lose your principle) and 17% cap, that you pay into for 15-20 years and it spits out a nice tax-free income for the rest of your life.
Point is, these things don't correlate to the market. The market can tank and these things just keep plugging along with minimal effects. They may not hit it out of the park, but they won't get killed in a volatile market.
Being 100% in the market is awful risky right now. The S&P loses 20%, your entire nut loses 20%. My clients, on the other hand, would still be up and running smooth.
But I will say that I'm shifting my clients out of being majority correlated to the market.
Non-traded REIT's, non-traded BDC's, and cash value life insurance, plus annuities with GMWB accounts now make up about 60% of my client's portfolios while the other 40% are blended in the market between equities and bonds based on their risk levels.
This is a stark contrast from the past where it use to be 70-90% in the market.
Cash value life insurance, if you're healthy and able to qualify for a top rating, is great right now.
You get an indexed UL policy that has a 0% floor (can't lose your principle) and 17% cap, that you pay into for 15-20 years and it spits out a nice tax-free income for the rest of your life.
Point is, these things don't correlate to the market. The market can tank and these things just keep plugging along with minimal effects. They may not hit it out of the park, but they won't get killed in a volatile market.
Being 100% in the market is awful risky right now. The S&P loses 20%, your entire nut loses 20%. My clients, on the other hand, would still be up and running smooth.
This post was edited on 7/30/16 at 8:09 pm
Posted on 7/30/16 at 8:46 pm to BeefDawg
quote:
I don't really want to give stock tips over the internet. The SEC and FINRA kinda frown upon that.
I wouldn't expect that...just looking for a 25,000 ft version.
I've always been leary about insurance based products used as investments due to the commission and various loads off the top. It always seemed the math didn't work and it took a lot of capital in to get any useful amount out the other end. But I'll admit I haven't looked at it in a while and I don't know what I don't know. I need to do some more research into annuitities and other similar products to supplement our other investments.
I give you this... I think the trend that supports the Bogleheads buy and hold index funds theory is going to be tested over the next 20 years. Diversification between bond and equity funds alone won't be enough when all of this sorts itself out.
Shitty thing is the Medicare debt crouch will peak right when we're trying to retire. I hear Belize is nice....
Posted on 7/31/16 at 12:35 pm to SquatchDawg
Buy and hold works when you start bear-to-bull market. It's horrible when you begin it in a bull-to-bear market that could possibly turn into a recession or worse.
It's called time-money sequencing or value.
If you buy when the market's at 18,000, and 2 years later it's below 9,000, you'll never reach your goals, even if it returns to 18,000 by your time horizon.
Right now, the best maneuver is to guard against volatility and loss. Trying to make decent gains or hit home runs is foolish. I'd much rather make 4-9% compounding each year over the next 20 years than lose 30%, gain 20%, lose 20%, gain 30%, etc etc. and spend 10 years trying to recover once the insane volatility stops.
And with the bubble we're sitting in, being fully in the market and not having non-correlated assets is crazy risk.
As for cash value life insurance, annuities, and non-traded REIT's and BDC's, yes they are all non-liquid with penalties and high fees IF you liquidate them early. But if you have a 10, 15, or 20 year time horizon, who cares. The end result is all that matters on those.
As I said, the market can tank and those things will just keep plugging along and the income will be there for sure when you eventually need it. And that's what matters most.
It's called time-money sequencing or value.
If you buy when the market's at 18,000, and 2 years later it's below 9,000, you'll never reach your goals, even if it returns to 18,000 by your time horizon.
Right now, the best maneuver is to guard against volatility and loss. Trying to make decent gains or hit home runs is foolish. I'd much rather make 4-9% compounding each year over the next 20 years than lose 30%, gain 20%, lose 20%, gain 30%, etc etc. and spend 10 years trying to recover once the insane volatility stops.
And with the bubble we're sitting in, being fully in the market and not having non-correlated assets is crazy risk.
As for cash value life insurance, annuities, and non-traded REIT's and BDC's, yes they are all non-liquid with penalties and high fees IF you liquidate them early. But if you have a 10, 15, or 20 year time horizon, who cares. The end result is all that matters on those.
As I said, the market can tank and those things will just keep plugging along and the income will be there for sure when you eventually need it. And that's what matters most.
Posted on 7/31/16 at 4:25 pm to BeefDawg
Beefdawg, you sell annuities?
Posted on 7/31/16 at 5:52 pm to deeprig9
Yep. One of many investment vehicles I use.
Posted on 7/31/16 at 7:07 pm to BeefDawg
In your best annuity, if I put in $1000/m for the next 20 yrs, how much can I get a check for each month for the following 30 years?
Posted on 7/31/16 at 7:13 pm to deeprig9
As an aside, what bubble are we sitting in?
Posted on 7/31/16 at 8:26 pm to deeprig9
If income in retirement is what you're going after, you can do an over-funded cash value indexed universal life policy and beat every annuity out there. That's if you're healthy enough for a good rating class.
For instance, I put $2,000 a month into a 20-pay IUL. I started it at age 35. I'll be done paying into it at age 55. I'll let it cook an extra 5 years and not start drawing from it until age 60. But at age 60, with a 7% illustrated average compounded return per year, I'll be able to withdraw around $140,000/year TAX FREE for the rest of my life.
The best annuity out there is similar to these numbers, except the gains are taxed as income. This is why if you're healthy enough for cash value life insurance, it's the better option since you get all the income tax free.
For instance, I put $2,000 a month into a 20-pay IUL. I started it at age 35. I'll be done paying into it at age 55. I'll let it cook an extra 5 years and not start drawing from it until age 60. But at age 60, with a 7% illustrated average compounded return per year, I'll be able to withdraw around $140,000/year TAX FREE for the rest of my life.
The best annuity out there is similar to these numbers, except the gains are taxed as income. This is why if you're healthy enough for cash value life insurance, it's the better option since you get all the income tax free.
Posted on 7/31/16 at 8:27 pm to deeprig9
I explained the bubble we're in pretty detailed in a couple previous posts just a page back.
Posted on 8/1/16 at 8:13 am to BeefDawg
quote:
You get an indexed UL policy that has a 0% floor
Can the premiums increase on these over time?
Posted on 8/1/16 at 8:21 am to Walkthedawg
No.
Posted on 8/1/16 at 5:01 pm to BeefDawg
Back to the original topic - Trump has again shown a unique ability to blow an opportunity with this whole Khan debacle. You don't get into a pissing match with this guy....you give him your respect ....
...and then say that victims of Islamic terrorists had parents too...along with those killed by illegal immigrants....and they also deserve to be given respect. You do that by making sure that bad people don't get into our country unchecked. That's it..move on. Suck it Stephanopolis.
These types of dumb moves will lead us to President Hillary.
...and then say that victims of Islamic terrorists had parents too...along with those killed by illegal immigrants....and they also deserve to be given respect. You do that by making sure that bad people don't get into our country unchecked. That's it..move on. Suck it Stephanopolis.
These types of dumb moves will lead us to President Hillary.
Posted on 8/1/16 at 5:37 pm to SquatchDawg
The Sunday talk shows featured both major party candidates spouting obvious lies even though they were confronted by proof that contradicted those lies. I guess it's "that's my story and I'm sticking to it" all day every day.
It should be obvious to everyone who isn't brain dead that nothing either candidate says can be relied upon.
It should be obvious to everyone who isn't brain dead that nothing either candidate says can be relied upon.
Posted on 8/1/16 at 5:38 pm to BeefDawg
What is the catch? 7% compounded doesnt need salesmen.
Posted on 8/1/16 at 6:40 pm to deeprig9
It's simply an illustration based on the 60 year average of the S&P. It's not a guarantee.
The UL policy comes with a 0% floor and 17% cap.
You design it as a 20-pay with level premium and minimal insurance face amount, just enough to prevent it becoming a modified endowment.
If you design it wrong, you end up with too much insurance and not enough over-funding, or you risk it becoming a modified endowment and now all your income is taxed instead of tax free.
It takes someone who knows what they're doing.
The UL policy comes with a 0% floor and 17% cap.
You design it as a 20-pay with level premium and minimal insurance face amount, just enough to prevent it becoming a modified endowment.
If you design it wrong, you end up with too much insurance and not enough over-funding, or you risk it becoming a modified endowment and now all your income is taxed instead of tax free.
It takes someone who knows what they're doing.
Posted on 8/1/16 at 7:21 pm to BeefDawg
quote:
market can tank and those things will just keep plugging along and the income will be there for sure when you eventually need it.
quote:
It's simply an illustration based on the 60 year average of the S&P. It's not a guarantee.
I'm so confused.
Posted on 8/1/16 at 7:28 pm to deeprig9
quote:
I'm so confused.
That's the goal. Of black magic rocket science fraud economics.
Posted on 8/1/16 at 7:36 pm to deeprig9
I can put in $1000 a month to income funds at 5% div yield with div reinvestment and in 20 years the balance is $414,000 (with no equity gain calculated... just quarterly compounded).
Let it bake 5 years, it's $530k.
On the 5% alone, I'm at over $2000 a month in distributions without touching the principle. It's also tax free because $1000/m contribution is within Roth limits to an IRA (for a couple).
But if I calculate a 7% average rate of return on equity based on the 60 year average of the S&P like your annuity is, with my 5% compounded quarterly as described above...my God.... I'd have millions of dollars.
But not a whole lot of commission to an insurance broker. And no contracts to sign. And no penalties if I need to draw on principal at some point in the next 20 years. And no penalties if I have to skip a few contributions if I fall on hard times.
And I can get term life for $14 a month.
Let it bake 5 years, it's $530k.
On the 5% alone, I'm at over $2000 a month in distributions without touching the principle. It's also tax free because $1000/m contribution is within Roth limits to an IRA (for a couple).
But if I calculate a 7% average rate of return on equity based on the 60 year average of the S&P like your annuity is, with my 5% compounded quarterly as described above...my God.... I'd have millions of dollars.
But not a whole lot of commission to an insurance broker. And no contracts to sign. And no penalties if I need to draw on principal at some point in the next 20 years. And no penalties if I have to skip a few contributions if I fall on hard times.
And I can get term life for $14 a month.
Posted on 8/1/16 at 7:47 pm to deeprig9
The difference is when the market tanks...and it will....the return in the UL policy is stopped at 0%. Ie you don't lose half your shite. This is the trade off for the extra commissions and money off the top for the death benefit. Just pumping it into a fund doesn't protect you from the downside risk.
A piece of the premium goes to insurance - the rest goes to the cash value that is invested. This grows tax free and is guaranteed not to take a loss. As beef said though you have to get the numbers right for it to work....and the market on average still has to give you the 7% or better average return.
A piece of the premium goes to insurance - the rest goes to the cash value that is invested. This grows tax free and is guaranteed not to take a loss. As beef said though you have to get the numbers right for it to work....and the market on average still has to give you the 7% or better average return.
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