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In Reply to: Re: Re: Re: Whole Life? What the hell?!!! posted by Andy on June 29, 2001 at 08:53:25:
: Let me first start by asking, do you receive 100% of that 12%? My answer would be, NO. Most people can see why, right? First off, you have to pay some sort of management fee or loading fee on the management of your money, be it a mutual fund or guided portfolio management. Now, maybe you invest your own money, but regardless, there's always some sort of fees cutting into your gains. The average is 1.27%, but for simplicity I will use 1%.
: Next, Uncle Sam. He wants his piece, right? Just like everything else. So, say for the average wage-earner their tax bracket is 28%, you're talking about losing around 25 on that gain.
: Finally, inflation. Do you know what the 40-yr average gas been? 4.50%! But to be fair, and following most current reports, I'll use 2.5%.
: You lost 5.5%, and that is a guarantee everytime you walk out to invest. No obviously taxes will affect cash value accumulation when you annuitize it, but the power of tax deferred growth is much greater at a rate of 5 or 8% than taxable gains at 12%, and that's a fact. Plus, you're not worrying about losses, which will set progress back.
: You know that a 20% drop require a 40% gain right? Say you had a $20 stock. Well, if it dropped 50% to $10, how much of a gain would need to get back to $20, say maybe where you bought it? 100%, Got me?
: Now as far as IRA's, 401k's and other tax deferred vehicles are concerned, I do not deter from their use. You should be maxing out on those. However, $2000 a year into an IRA might sound like a lot, but come 40 years, inflation will erode that so much that you will need supplementary income. The fact is, those vehicles are good, but they're not enough. You have to consider what inflation will do to your money.
: If you're saving to retire on $100,000 a year, 20 or even 40 years from now, that $100,000 won't be the same amount as it is today. In fact, that $100,000 will be equivalent to somewhere near $300,000 40 years from now. I'm sure you never thought possible right? Well, consider the stamp. Yes a stamp! It hasn't changed, just the price of a stamp. What was it 40 years ago, 2 cents maybe? What is it today? 35 cents? Wow, some growth in price I'd say.
: What makes me different than your brainwashing is that its education, not brainwashing that has taught me what I know retirement. We use math and finance principles to determine what will be needed than plan accordingly with insurance investments, not the other way around. We're here to educate people on what they will need, because most people will get to the end of that long road called work and find out they don't have enough.
: I could go on about the seminars I attend, and you know what, for one of the best products in the world, we have the worst image?! For pennies on the dollar you can guarantee your family's safety and protection, or even retirement. But because people are not properly educated about all the underlying facts, a dark shadow is cast on insurance.
: Now, what does your personal life have to do with my comments? I don't particularly care what the opportunity means because if you scour the net, you'll find thousands offering the same thing, and opportunity to achieve the American dream. Why not consider a career with New York Life? They offer a broad array of financial services with a better reputation. Just a suggestion, because you don't have to wait until they contact you.
: Oh, one more thing, if you don't annuitize by a particular age, you'll get penalized, that's tax law. (70 1/2, earlier than 59 1/2 and you get a 10% penalty in addition to income taxation).
you didn't tell me anything new, i appreciate it though. when i referred to investments, i actually also referred to tax deferred vehicles. i apologize for not making that clear. you're right about the fees. but also, please consider the powerful track record Smith Barney has in many of their funds.Please take a look at the Wall Street Journal:
Smith Barney is number one when it comes to stock picking and projections.
A gain of 27% offsets 5% guaranteed, even after fees, right?
insurance in my opinion is great. i just know more people being devastated by WL, CV etc than by term.
New York Life, i'm sure, has great products as well. but if you look at the overall track record we have more stability and (i'm sorry to say that) less law suits than NYL.
This kind of conversation will never lead anywhere because we are bashing eachother due to the nature of our business. i will always fight whole life because that's what i'm taught to do and learned to believe in. you will always bash Primerica and what we stand for because that is, naturally, what you are trained in and what you believe.
This will not change I believe.
PFS has great products that even sceptics have to agree are tremendous. among term we offer investments and retirement help through Salomon Smith Barney, and Travelers'Primelite, (a variable annuity which takes the best and eliminates the rest), we offer refinancing with simple interest and equity builder programs helping thousands of families save literally thousands of dollars and own their homes sooner, we offer prepaid legal services (which in my opinion is one of the best products ever) and so forth.
i know you guys have great programs too. but let's face it, it's a war. it's competition. i just hope we could find common ground for it all so that the client finally will ALWAYS get what's best for him without us arguing about it first.
until next time.