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Thread: Annuities that pay 8% “guaranteed”?

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    Default Annuities that pay 8% “guaranteed”?

    I saw an ad in the Atlanta paper for a financial firm that is selling annuity products via American Equities. They claim you will get a 10% signing bonus along with the guaranteed 8%, that's 18% in the first year! Then you will get a guaranteed 8% for the next 14 years.
    How can they claim that?

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    Default Re: Annuities that pay 8% “guaranteed”?

    Quote Originally Posted by Carrion Crow View Post
    How can they claim that?
    Because you will never see your money again.

    High return = high risk

    Unbelievable return = unbelievable risk

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    Default Re: Annuities that pay 8% “guaranteed”?

    Quote Originally Posted by Not Sure View Post
    Because you will never see your money again.
    Aint that the truth, You'll get your interest for a little while.....

    It's return OF principal you want, not ON principal.

    Call up and ask what the commission is on such a product..
    It's better to burn out than fade away...........

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    Default Re: Annuities that pay 8% “guaranteed”?

    the annuity must be invested in gold/silver
    The liberties of a people never were, nor ever will be, secure, when the transactions of their rulers may be concealed from them. - Patrick Henry

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    Default Re: Annuities that pay 8% “guaranteed”?

    Quote Originally Posted by budfox View Post

    Call up and ask what the commission is on such a product..
    I did.
    They pay the sales agent 5%. Between the 18% signing bonus and the 5% commission they are out 23%, in the first year...

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    Default Re: Annuities that pay 8% “guaranteed”?

    I got the same offer, but it sounded much cooler coming from a Nigerian princess

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    Default Re: Annuities that pay 8% “guaranteed”?

    Just like a bank offering 3 or 4 % more than anyone else in the area. The next time you go by the bank there are 5 or 10 black SUV's in the parking lot. And maybe they find a buyer for the insolvent bank, maybe not. If not then you have to wait for the FDIC to get your money back, interest free of course.
    - If everything seems to be going well, you have obviously overlooked something.

  9. 09-02-2011, 06:58 PM


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    Default Re: Annuities that pay 8% “guaranteed”?

    8% "Guarantee" from a corporation that can dissolve in an instant...

    Sounds like a great deal compared to 20% per year from PM's buried in the ground.

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    Default Re: Annuities that pay 8% “guaranteed”?

    Quote Originally Posted by Gray View Post
    I got the same offer, but it sounded much cooler coming from a Nigerian princess
    .................
    Click image for larger version. 

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    Default Re: Annuities that pay 8% “guaranteed”?

    I got a call from an acquaintance about 6 weeks or so ago seeking advice.

    He had been approached on this exact deal. He was unable to explain to me how the company would generate 8% return guaranteed.

    Obviously he did not understand the product and we were both aware the claims would be hard/impossible to accomplish in the current ZIRP environment.

    I issued the appropriate warnings and he dove in and bought $100k worth.

    I hope it works out for him.
    Last edited by elroy; 09-03-2011 at 11:15 AM.
    *Disclosure: long physical gold, silver and mining shares

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    Default Re: Annuities that pay 8% “guaranteed”?

    Quote Originally Posted by Carrion Crow View Post
    I saw an ad in the Atlanta paper for a financial firm that is selling annuity products via American Equities. They claim you will get a 10% signing bonus along with the guaranteed 8%, that's 18% in the first year! Then you will get a guaranteed 8% for the next 14 years.
    How can they claim that?
    Uh, I may not be the most financialy inept person in the world. But doesn't a signing bonus mean they match 10% in your stake?

    So, you invest 100K, they add 10K, total 110K

    One year later, you get 8% of 110K = $8800 NOT $18000

    Am I mathing this right?

    And then, is the 8% a return, or a payment plan?

    in other words, do you still have your initial 100K at the end?

    if not, you are getting a return of 32% after 15 years....which is ****....oh, provided they survive and it is not a 419

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    Default Re: Annuities that pay 8% “guaranteed”?

    Quote Originally Posted by Gray View Post
    Uh, I may not be the most financialy inept person in the world. But doesn't a signing bonus mean they match 10% in your stake?

    So, you invest 100K, they add 10K, total 110K

    One year later, you get 8% of 110K = $8800 NOT $18000

    Am I mathing this right?

    And then, is the 8% a return, or a payment plan?

    in other words, do you still have your initial 100K at the end?

    if not, you are getting a return of 32% after 15 years....which is ****....oh, provided they survive and it is not a 419

    This is what I was told.
    Say you start with $100K. They pay you a 10% bonus for signing up.
    So, now you are at $110K.
    You would be paid 8% of the $110K ($8,800) each year for 15 years. That’s not deducted from the $110K, that’s still there. After the 15 initial years (this is my favorite part) it (the $110K ) is put in some sort of structured note that goes up relative to the dow average. But doesn’t go down if the dow drops.
    I’m with the consensus here that it sounds fishy.
    Last edited by Carrion Crow; 09-02-2011 at 09:52 PM. Reason: math error

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    Default Re: Annuities that pay 8% “guaranteed”?

    They are probably buying PMs with your money

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    Default Re: Annuities that pay 8% “guaranteed”?

    Quote Originally Posted by ttazzman View Post
    They are probably buying PMs with your money
    More likely houses in the Hamptons and fake boobs for their wives.

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    Default Re: Annuities that pay 8% “guaranteed”?

    The way these things usually work is : you dump in money into the annuity, say 100k. After 10 years (or however long), you start drawing down the balance at a rate of 8%. Say that 100k increases to 130k after 10 years. That means you can draw down $10,400 until the policy is depleted.

    They're paying you 8% "guaranteed"... but the payment includes your original principal as well as whatever capital gains or losses on that amount. If the policy generates no return, then they're paying you 8k/year of your own $100k back.

    Quote Originally Posted by Carrion Crow View Post
    I saw an ad in the Atlanta paper for a financial firm that is selling annuity products via American Equities. They claim you will get a 10% signing bonus along with the guaranteed 8%, that's 18% in the first year! Then you will get a guaranteed 8% for the next 14 years.
    How can they claim that?
    Not exactly sure how the math works out, but I doubt you'll be able to start collecting immediately. Probably a stipulation that the money has to be in there for 10-20 years. Possibly the return is based on the principal amount and not including any returns. If that's the case, then the return amount can be stretched over a longer period. A straight 8% drawdown should last 12 years, but if you tack on returns, it'll last longer. And you know your balance will be $0 after the 14 years right?

    Example:

    year 0 100,000 balance
    year 1 82,000 balance /18,000 return (100,000*.82)
    year 2 78,000 balance / 8,000 return (82,000* (1-.08+.04) They pay you 8% of the principal, but figure they can make 4% on your money


    Using this calc, your money lasts 21 years assuming a 4% return. But most of the payments you're getting is your own money. Are they going to let you draw down the entire amount? I dont know. Will there be high fees for this structured savings plan? Probably.
    Last edited by ~BS; 09-02-2011 at 11:14 PM.

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    Default Re: Annuities that pay 8% “guaranteed”?

    Is Bernie Madoff doing dealings from his cell?

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    Default Re: Annuities that pay 8% “guaranteed”?

    Quote Originally Posted by Carrion Crow View Post

    Then you will get a guaranteed 8% for the next 14 years.
    How can they claim that?


    Make sure that guarantee has an official authentic gold sticker.


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    Default Re: Annuities that pay 8% “guaranteed”?

    Quote Originally Posted by elroy
    I issued the appropriate warnings and he dove in and bought $100k worth.

    I hope it works out for him.
    There's a first time for everything.
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