ALL ??? Did you get an 8% commission ??? I have some JH whole life for estate protection, but I think dollar cost averaging into depressed sectors is far better!
The majority of my clients already had whole life policies, so it's just now advising them to protect their money.
Wasatch - having just read and seen the movie The Big Short - one of the big issues was the guys guessed right on the housing bubble, purchased the swap contracts betting on a housing collapse, and were right ... BUT then they had to deal with the ability of the guy on the other side of the contract being able to pay.
So I've always wondered -- how can these insurance companies "guaranty" a certain rate of return? Aren't they in the market, taking your premium money and hoping to earn more than they have to pay you back? And if there is a complete market meltdown, isn't there the possibility that they won't be able to pay you back (i.e. Bear Stearns and Lehman Bros.)? I'm not doubting the usefulness of insurance. I just wonder how solid that "guaranty" is.
Clob hit the nail on the head, the thing to remember about Insurance companies is that they are highly regulated by the government and are required to keep huge amounts of their holdings liquid. It's one of the reasons banks are so heavily leveraged in life insurance products. They get a much better return than any CD or money market, as much as 26 times more. It can also grow tax free is correctly setup.
During the great depression insurance companies carried a lot of people, by being able to have access to funds, people would put they money in whole life and use it as needed. James Cash Penney kept his clothing business afloat during the Great Depression by using his life insurance. Even Ray Crockett used money from his life policy to help him start McDonalds.
I really believe that Life Insurance companies like New York Life and MetLife are built for times like these.
Soros is calling it a "crisis". If so, I hope we don't print more money to bail out the bailout that bailed out the TBTFs.
I don't see crisis, I see opportunity to buy on the cheap.
well the most disturbing thing I heard this morning was that 2016 so far is mirroring 2008......ugghh....lost a bunch then
I wish I could say no, but we just don't know. I do seminars all the time and I tell people all the time, I don't believe in bad news because if you are prepared this is the perfect time to invest and make a killing. It's all about getting in at the right time and in many cases protecting your position with derivatives.
Good points, but energy always comes back--the question is when? Buying into a dead cat bounce is being too eager. But the worst thing to do in a downturn is sell--it's too late.
If we are looking at another 2008, then it's an opportunity to buy at a discount. Do we think Black Friday is disturbing? No it's a opportunity to buy that big screen smart TV at a cheaper price. In 2008 Ford was going for about 4 bucks a share by 2012 it was back to 18. The opportunity is there, this is just one of those entry points. Also keep in mind, we aren't making more oil so these oil companies aren't going anywhere.
Diadevic- most insurance companies have what's called "reinsurance" in order to cover themselves. Others can join investment pools that are backed by other insurance companies as well as banks (though not commercial banks). Many companies are required to keep cash on the side to leverage things like life insurance and annuities. So you combine all these methods together and that how the insured insure your money.
Now I know what you're thinking...."who's insuring the reinsurer?". Well, nobody. The American tax payer really. Yes, it all could go to hell in a hand basket but if it does, your money, gold, bonds, silver, will all be worthless anyway....... at that point the only hard currency will be seeds and bullets.
Again, no such thing as bad news, if you are prepared all news has an upside. I'm sure of one thing. Our economy will not completely collapse, we are still here, we can still build and work and create. That means economy. Things may not look the same and who knows what our government will do, but never fear, we are going to be okay.
I still think this is just a hiccup and we should still be fine. 2019 is when we are going to get worried. That is when the first of the Baby Boomers turns 65, after that we will be adding as many as 4 million people a year to Social Security and Medicare. This is likely going to overload the system by 2023.
The thing is, if we start creating more debt to our already insurmountable national debt, it' could accelerate the process.
I'm telling my clients the two biggest things to consider is Tax risk and Market Risk. Those two things are going to erode our nest eggs faster than anything else. After that it's going to be inflation risk as we find the only way to keep our government running is to just print more money this will flood the market and cause interest rates to skyrocket. Some economist think we will see cost of living hit as high as 20% and that will be due to out of control interest rates.
Sorry if I scared anyone, but again, keep in mind, if you are prepared you won't have to fear.
