by GarySpicuzza » Wed Feb 10, 2010 04:20 pm
The Primary Agent at www.GarySpicuzza.com sold a Fixed Indexed Annuity a couple of years ago to a 70 year old widow.
As a result of pulling her $130,000 dollars out of the stock market her current Account Value is $145,917 and she will be getting approximately 9.6% interest this year.
This will cause her Account Value to grow to $159,925 and exceed her Income Account Value of $155,943 which will result in her receiving a higher Lifetime Guaranteed Income check every month.
Agent pleads guilty to this proper use and application of a Fixed Indexed Annuity.
As a result of pulling her $130,000 dollars out of the stock market her current Account Value is $145,917 and she will be getting approximately 9.6% interest this year.
This will cause her Account Value to grow to $159,925 and exceed her Income Account Value of $155,943 which will result in her receiving a higher Lifetime Guaranteed Income check every month.
Agent pleads guilty to this proper use and application of a Fixed Indexed Annuity.
Posted: Wed Feb 10, 2010 04:30 pm Post Subject:
Amen!!! If BNTRS would have invested the money for this lady, she would have less than her original investment.
Posted: Wed Feb 10, 2010 06:16 pm Post Subject:
Thank you,
Fan of Gary....Guest
Hey, by the way,...got any pics?
Posted: Thu Feb 11, 2010 03:44 am Post Subject:
Haaa, make a few posts questioning just how super perfect equity indexed annuities are and now I'm the evil securities broker.
We could all pull up one example where one insurance or investment product has done a good job relative to other options, doesn't mean it's the 100% solution.
I could post all the fixed annuity business I've done in the past year and talk about how there's no market exposure.
Or I could post the VA's I've put money in in the past year, none of which have negative returns at the moment, and many of which are up around 30%. Doesn't mean people should run out and buy them--I could make a big deal out of how that's better than 9.6%.
I still haven't been given an answer about where all the money you guys are giving the insurance company via EIA's is going.
Posted: Thu Feb 11, 2010 01:50 pm Post Subject:
"...none of which have negative returns at the moment,..."
:shock: Yes, with "at the moment" being the operative phase that doesn't pay and MOMENT being the operative word! :roll:
Posted: Thu Feb 11, 2010 02:18 pm Post Subject:
...and many of which are up around 30%. Doesn't mean people should run out and buy them--I could make a big deal out of how that's better than 9.6%.
It's time for a www.GarySpicuzza.com Internet math lesson:
A 25% loss of principal requires a 47% gain the following year just to break even with a Fixed Indexed Annuity that's just limping along at 5% per year.
To get the 47% gain one must continue to RISK their principal with the Stock Broker day traders playing stocks like a flea market swap meet.
Do the math for yourself, take $100,000 minus 25% and you get $75,000.
$75,000 plus 47% equals $110,250.
$100,000 plus 5% for two years equals $110,250.
Registered Representatives, AKA, Stock Brokers can never seem to separate FINANCIAL FACTS from SALES TALK.
They are always chasing that elusive 30% gain while risking 50% of your principal.
Posted: Thu Feb 11, 2010 03:31 pm Post Subject:
Yup, I have that conversation with people all the time. Some care, other's don't.
What if it doesn't go down? We are talking about looking into the crystal ball and seeing something we're never going to know.
Speaking of facts and sales speak, your math in a vacuum seems somewhat skewed to the level of sales speak found on that dateline expose of insurance agents pushing EIA's. While the math is correct, let's now ask the question of likelihood from a historical point of view. How many times has the S&P 500 had a negative return of 25% or greater since it became the broad based benchmark of the U.S. stock market in 1926?
I'll give you the answer: 4
Now, how many times in that same period was the return better than 25? 22
If your keeping score, it's also yielded enough to break even with those 4 negative returns 5 times. So one more than necessary plus there are 41 other years of positive growth that where higher than that 5% you needed in the equity indexed annuity. Maybe you just like to take the Mark Twain approach. After all why let the facts get in the way of a perfectly good story?
Perhaps I should have labeled this a GarySpicuzza history lesson.
Now to address this:
Yes, with "at the moment" being the operative phase that doesn't pay and MOMENT being the operative word!
Incorrect, many VAs have GMWB riders that allow great performance in the market to become part of an income stream and/or death benefit guaranteed by the insurance company. Actually, the gaurantees on an income basis are much better than anything you'll find in an equity indexed annuity.
Look, this isn't an us vs. them conversation because I don't have the cultish love affair with investment products that you appear to have with equity indexed annuities. I ask what makes them so great and so far the only thing I heard from you is crap about how princicple can go down in an investment account (what a break through concept) and one example about how some client used an equity indexed annuity and it's up from where they were when they put the money in the contract, something one could accomplish with fixed annuities, life insurance, cds, and their savings account at a bank. I've yet to see where the real magic is for these products is especially given their low guarantees and huge surrender charges. I'm truly trying to be convinced, but so far your childish ranting isn't helping your cause.
And your fan's (probably an associate of yours) running around this forum taking pot shots at me any moment he/she gets whenver there is a discussion about investments and annuities isn't exactly convincing me either.
So, are we going to have a real conversation, or are you going to continue blowing hot air? If so I'd implore you to take a trip to D.C. or NYC where they need the help with melting some snow. If you want to talk real facts, and get into products and what the real benefits are, we can continue. Ball is in your court, you can be a professional or a child your choice.
Posted: Fri Feb 12, 2010 01:06 pm Post Subject:
Gary, why didn't you just put her in a CD for 2008 and then have her invest in the market for 2009? She would have over $175,000 now and she could walk away with no surrender charges.
An FIA is not an appropriate replacement for money that should be invested. Investments are not an appropriate replacement for money that should be put away in a conservative manner.
If the market does poorly, an FIA will do better. If the market does well, an FIA will do worse. So what?
Posted: Fri Feb 12, 2010 02:47 pm Post Subject:
Gary, why didn't you just put her in a CD for 2008 and then have her invest in the market for 2009?
I'm taking your question as sincere and not rhetoric.
First off... YOU... are using hind sight of what one "could" have done in 2008 and 2009 to claim YOUR method after the fact ...in 2010... would have out performed the Fixed Indexed Annuity.
This is typical STOCK BROKER sales talk!
Secondly, and more importantly, CDs and stocks, bonds and mutual funds ARE NOT a protected asset class under Florida Law 222.14. (click on linky to the left)
Further, CDs and stocks, bonds and mutual funds can't GUARANTEE a Lifetime Income....ONLY an annuity contract with a Life Insurance Company can GUARANTEE you'll never run out of money.
The "registered representative" mind set is to look back and see what worked real good then attempt to duplicate that strategy going foward AFTER the profit taking "Professional Investors" have long since moved on.
Your strategy in your post IS,... and always will be,... a sucker's bet chasing that elusive 30% gain while risking 50% of your client's principal.
This concludes this Internet Rant by www.GarySpicuzza.com
Best regards,
Posted: Fri Feb 12, 2010 03:24 pm Post Subject:
Gary, it appears as if you did exactly what I am accused of doing. Your accusation of my post is 100% correct. My post was definitely not sincere. I was absolutely using hind sight. I did it to point out that your example was using hind sight to point out the benefit of the FIA. If you would have used an example of one of your clients using an FIA starting in the beginning of 2009, you would have to show how much less money they would have now.
Gary, you so desperately want FIAs to be the best thing since sliced bread that you can't see all sides of the issue. The argument between equities and FIAs is just a stupid argument. They serve different purposes.
To say that one needs an annuity to guarantee that they will never run out of money is disingenuos at best and plain old wrong at worst. It's disingenous because it ignores the fact that one can always annuitize their money once they are ready for a guaranteed income stream and it is wrong because there are ways to guarantee that one will never run out of money. Here are two of those ways:
1) Only spend the interest earned. Ex. Jim puts his money into a CD. He only spends the interest. He'll never run out of money.
2) Only spend X% of your networth every year. Ex. Jim spends 3% of his networth every year. He'll never run out of money.
Posted: Fri Feb 12, 2010 04:38 pm Post Subject:
So called Insurance Expert who is "afraid" to state its real name on the Internet for all to see just how clueless he IS.
:P Okay,.... it's time for some fun...once again...this is so easy for me I have to type with one hand just to make it fair.... :idea: :arrow:
I was absolutely using hind sight.
:twisted: I know. That's what you people always do. :roll: :evil:
If you would have used an example of one of your clients using an FIA starting in the beginning of 2009, you would have to show how much less money they would have now.
This statement shows your ignorance.
The statement posted on this thread is from FEB 2009 to FEB 2010...that's pretty much close to the beginning of 2009.
Further, a client wouldn't have less money in a Fixed Indexed Annuity,... if the market was flat or went down....they simply would not have had any interest credits THAT year, however, ALL PRINCIPAL WOULD BE SAFE AND SOUND.
Please keep posting more of your non-sense statements,....it makes my business grow and causes yours to shrink.
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