Friday, July 12, 2013

Is your variable annuity broken?

Is your variable annuity broken?
Insurers have been cutting future benefits or raising the price of these expensive products. The popular minimum withdrawal benefit now costs an average 1.25%, up from under 1%. That lifts the average base price to 3.7% you are charged EVERY year, no matter how well your investments do. And you may be restricted in how much your account can earn. Some insurers are now limiting stock exposure to 60% of your account. Thus “peace of mind” may cost more than you paid. Your alternatives are not good: transfer to another insurer or pay surrender charges. Better: annuitize now—putting the payments into a tax-advantaged account. Alternatives:

Customize Your Insurance  -Save $3,000 every year

  • Buy only what you need and save $3,000 every year.
  • Accumulate $1,000,000 free of fees and taxes.
  • Avoid the Wealth Killers.

The best guarantee of lifelong security is having money. Accumulating $1 million requires that we avoid high product and advisor fees, commissions, loads and … taxes—the Wealth Killers.
Since we need to buy protection—auto, home, health, life insurance—why not skip the “bells and whistles” and save $3,000 every year? We avoid fees by buying ONLY the financial services we need at a discount. We avoid taxes by using an IRS-approved tax-FREE account. We invest ALL our savings. We accumulate $1 million by leveraging the Miracle of Compounding over time.

Insurers against gun-toting teachers
As more states enact laws allowing teachers or administrators to carry guns in schools, insurance carriers are threatening to raise their premiums or revoke coverage entirely. Guns in schools made no sense in the Wild West either. Remember, Dodge City banned gun-carrying within town limits (and schools). People kill with whatever is at hand. While the United States has overall rates of violent crime in line with rates in other developed nations; our homicide rate is, relatively speaking, off the charts. Data:
Who really benefits from all these gun sales?

The top 1 percent of households took 23.5% of all U.S income.
Q: Why do the rich get richer? A: Compounding of high investment earnings. Income includes dividends from shares of stock, rent, and profits from selling something for more than you paid for it. Once you have $1 million, you can let it compound in stocks etc at 10-12% and have $2 million in about 10 years, $4 in 20 and $8 in 30. You don’t even have to use a broker to make money. In fact, Wall Street usually takes more than it gives.

Big brother Data saves life (sentence)
An insurance company monitoring device that records when a car is started and stopped has helped clear a northeastern Ohio man in the suffocation death of his 7-month-old daughter. Twenty-eight-year-old Michael Beard was acquitted by a jury in Cleveland of murder and other charges. He was facing life in prison in the May 2011 death of Lynniah Beard. The prosecutors contended Beard suffocated the baby at 4:45 a.m.
But his attorney noted that the Progressive Snapshot device in his car showed he arrived and turned off the car at 4:44 a.m., and turned it back on three minutes later.
His attorney said that in those three minutes, Beard discovered the baby wasn't breathing and returned to the car to rush her to the hospital.

Brokers are against “best advice” rule for customers
A leading Wall Street trade organization told the Securities and Exchange Commission last week thatraising investment advice standards for brokers would force individual firms to spend millions of dollars to upgrade their compliance systems. You don’t want to wait for the government to force brokers to do the right thing. Use unbiased advisors at the major mutual fund firms for free and earn more.

America becoming a “banana” republic?
Hiring is exploding in the one corner of the U.S. economy where few want to be hired: Temporary work. From Wal-Mart to General Motors to PepsiCo, companies are increasingly turning to temps and to a much larger universe of freelancers, contract workers and consultants. Combined, these workers number nearly 17 million people who have only tenuous ties to the companies that pay them — about 12 percent of everyone with a job. The rise in temp and contract work shows that many employers aren't willing to hire for the long run. The number of temps has jumped more than 50 percent since the recession ended four years ago to nearly 2.7 million — the most on government records dating to 1990. In no other sector has hiring come close. 
The top 1 percent's share of national income is over 23 percent. The average inflation-adjusted hourly wage declined by more than 7 percent from 1976 to 2007.
A “banana” republic has 1% elites and 99% in near poverty conditions, like Honduras was.

ObamaCare health insurance exchange
First state to go live is Oregon. Looks like they are ready to cover uninsured. Many GOP states have said they won’t cover uninsured. Will everyone move to Oregon?

SCAMS           “Deficits don’t matter” Republican godfather, Dick Cheney, 2002

Buckets of Money advisor has his buckets revoked
Ray Lucia, host of a nationally syndicated daily radio program and famed for his Buckets of Money investment strategy, was fined $50,000 and had his adviser registration revoked by an administrative-law judge yesterday. Mr. Lucia's firm was fined $250,000 and its registration was revoked, the Securities and Exchange Commission said.

AIG, GE, Prudential leveraging again a threat to us
U.S. regulators have labeled American International Group and General Electric's finance arm as potentialthreats to the financial system, designations that bring stricter government oversight.

Regulators allow disaster to strike small investors
Hedge funds and other firms that seek private investments will be allowed to advertise publicly for the first time. SEC killed an 80-year old ban on advertising intended to safeguard small investors from taking on potentially dangerous risk. The “snake oil” salesmen are exempt from requirements to report public financial statements. Hedge fund owners, with bank loans, are exempt from paying income tax on their gains already. WOW! Wild Wild West again.

What is wrong with American military-industrial complex?
It was commissioned by the Army in February 2010 to be the Command and Control Facility for Regional Command Southwest during the surge. How could the U.S. military spend $34 million constructing a building in Afghanistan that has never been used - and may now be demolished? In May 2010, even before construction began, the Marine commander cancelled the project. Despite that request, the Air Force told British-based AMEC to construct the facility and, in November 2012, the U.S. government took over the facility. Afgans don’t want it. Private equity firms own British AMEC and got the $34 million. We got the bill.
Is anyone at the Pentagon in charge? Can the Taliban buy it? They are funded by donations from Britain and the Persian Gulf.

Farm bill pays corporations extra money for poor results but $0 for poor
Even conservatives voted against it since it was still "loaded down with market-distorting giveaways to special interests with no path established to remove the government's involvement in the agriculture industry." GOP cut all food stamps and nutrition for the poor: Let them starve, is the message.

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