So, let's say you came into $100K...

[illone]

Further, annuities typically have very high commisions, expenses, and fees, which is why agents push them so hard.

Of course, they do provide some insurance against a down-turn in the market, but at a very high cost, and historically, if you're investing for the long term, you'll be fine (which is why the annuities are willing to take your money and guarantee your return).

What commissions, expenses, and fees are you speaking of, techboy?

My equity gold product had NONE of those things. For all intents and purpose, it's free. You just can't touch the money for a period of time. Like I said above, some products even offer an immediate premium. 10% on the 16 year.

I'm not sure who told you they were expensive, but the last place I'm going to look for investment advice would be the USA Today:laugh:

[illone]

Actually, if you're not careful, you can go very wrong with annuities.

Please explain how you can go wrong with a product that has NO risk, yet gains when the market does? I didn't advise mboyd to put all his money there, nor would I advise anyone to do that. But it is wise to protect a portion of your money in annuities.

You can certainly go wrong with money in a mutual fund, or in different stocks, especially if you don't know what you are doing. A guy like mboyd, who may not want to pay the EXPENSIVE commissions to have a broker watch the market for him everyday, would be better suited having a PORTION of his money protected in a ZERO FEE Annuity, where he knows for a fact there is no chance to lose any of the money, and a great chance to make a significant amount over time.

[squatch66]

pffft. I believe the answer is obvious. Vegas is the only way to go.

amen brother. 100k on roulette is the only way to go.

now what i would do is import one of these.

[Westbrook36]

Holy ****, you will not make any ****ing money on a ****ing Fox Body Mustang. Shoot yourself. You don't deserve the money if your first thought of investing was a goddamn Fox Body Mustang. :laugh:

[Siven]

In a perfect world, I would purchase a smart Asian boy, preferably Japanese or Chinese, to steal my identity, and work his way through the rest of college, and then med School for me.

If not, I would probably buy a BMW E39, M5, 2001, or possibly, purchase a BMW Z3 M coupe 2001, then put the money in savings, and save up for a down payment for a house.

[Siven]

If I couldn't do the two above. I'd blow my 100 grand on 4 beers at Fedex. Delicious!

[TradeTheBeal!]

Please explain how you can go wrong with a product that has NO risk, yet gains when the market does? I didn't advise mboyd to put all his money there, nor would I advise anyone to do that. But it is wise to protect a portion of your money in annuities.

You can certainly go wrong with money in a mutual fund, or in different stocks, especially if you don't know what you are doing. A guy like mboyd, who may not want to pay the EXPENSIVE commissions to have a broker watch the market for him everyday, would be better suited having a PORTION of his money protected in a ZERO FEE Annuity, where he knows for a fact there is no chance to lose any of the money, and a great chance to make a significant amount over time.

Nice pitch. Thank you for the solid financial advice. But, that is not really what I'm looking for.

My bases are covered. This 100K is a "fun 100K". I have my real estate, my business, my season tix, my 2006 Mustang GT Convertible...

Disclaimer: Not my actual car, but identical cosmetically...5-speed, triple black, loaded and stock. I recently installed the factory-approved SVO intake/exhaust. I went factory because I have a "hookup" at a local Lincoln-Mercury dealer.

For $500 and a handle of Crown, a 25 year Ford tech gently massaged my 4.6 from 300hp to 325hp, easy. I'm also getting an extra 1.2 - 1.8 mpg...I have the stock CPU and I do the math. So, in a way, the stang is an investment...everything is an investment, in fact.

Anyway, back to the REAL reason I ask for opinions.

I know I'm not the only TG member with "vision", my intellectual/monetary flexibility aside. There has to be at least 3 or 4 here who have the talent.

What talent, you ask? The talent to buy a car/guitar/boat for 50% of what it it really worth, use it sweetly(6 mos or 6 yrs) and sell it for 125% of it's "worth".

Ex: In 1984, as an accelerated HS sophmore...just begininning to learn the depth of my game...I offered my 3.5 GPA and my devotion to my wealthy, commanding and ill-equipped step-father in exchange for 2 things:

1) A $1200, in 84, USA neck-thru BC Rich Mockingbird...full options, quilted, USA Kahler bridge, kinda like this...

http://cgi.ebay.com/VINTAGE-1980-B-C-RICH-MOCKINGBIRD-GUITAR-W-HARDCASE_W0QQitemZ160112298663QQcmdZViewItem

My rig would have gone for $6-7K these days. I got an ESP Mirage, instead - A great guitar which I still have - but lacks collector value.

2) And, at that same time, 1969-1970 Boss 302.

Back in the mid/late 80s, There were a ton of these race cars going for $15G...firm.

And now?

http://cgi.ebay.com/ebaymotors/Ford-Mustang-1970-Mustang-Boss-302_W0QQitemZ260121252864QQihZ016QQcategoryZ6236QQrdZ1QQcmdZViewItem

Anyway, the point is this: When I was 16, I was ahead of the curve and I am still ahead of the curve...ask anyone. But, there are some really sharp posters here on ES and so, I wonder again...

What car/boat/guitar/bike/etc. is invisible now and will be irresistable in the near future...think $20K into $50K in ten years, with a lot of fun in between.

[techboy]

Well, illone, I selected the USA Today article because it was fairly balanced in that it wasn't 100% negative towards annuities, and made a case that they can sometimes be good. Frankly, all of what I've read and heard from independent financial advisors (i.e. not the ones financing the payments on their Porsches with fees from annuities) and experts is much more negative.

First, annuities do have a lot of expenses and fees. This excerpt is from an Securities and Exchange Commision article on the subject (again, I'm trying to stick with neutral sources):

You will pay several charges when you invest in a variable annuity. Be sure you understand all the charges before you invest. These charges will reduce the value of your account and the return on your investment. Often, they will include the following:

Surrender charges – If you withdraw money from a variable annuity within a certain period after a purchase payment (typically within six to eight years, but sometimes as long as ten years), the insurance company usually will assess a "surrender" charge, which is a type of sales charge. This charge is used to pay your financial professional a commission for selling the variable annuity to you. Generally, the surrender charge is a percentage of the amount withdrawn, and declines gradually over a period of several years, known as the "surrender period." For example, a 7% charge might apply in the first year after a purchase payment, 6% in the second year, 5% in the third year, and so on until the eighth year, when the surrender charge no longer applies. Often, contracts will allow you to withdraw part of your account value each year – 10% or 15% of your account value, for example – without paying a surrender charge.

Example: You purchase a variable annuity contract with a $10,000 purchase payment. The contract has a schedule of surrender charges, beginning with a 7% charge in the first year, and declining by 1% each year. In addition, you are allowed to withdraw 10% of your contract value each year free of surrender charges. In the first year, you decide to withdraw $5,000, or one-half of your contract value of $10,000 (assuming that your contract value has not increased or decreased because of investment performance). In this case, you could withdraw $1,000 (10% of contract value) free of surrender charges, but you would pay a surrender charge of 7%, or $280, on the other $4,000 withdrawn.

Mortality and expense risk charge – This charge is equal to a certain percentage of your account value, typically in the range of 1.25% per year. This charge compensates the insurance company for insurance risks it assumes under the annuity contract. Profit from the mortality and expense risk charge is sometimes used to pay the insurer's costs of selling the variable annuity, such as a commission paid to your financial professional for selling the variable annuity to you.

Example: Your variable annuity has a mortality and expense risk charge at an annual rate of 1.25% of account value. Your average account value during the year is $20,000, so you will pay $250 in mortality and expense risk charges that year.

Administrative fees – The insurer may deduct charges to cover record-keeping and other administrative expenses. This may be charged as a flat account maintenance fee (perhaps $25 or $30 per year) or as a percentage of your account value (typically in the range of 0.15% per year).

Example: Your variable annuity charges administrative fees at an annual rate of 0.15% of account value. Your average account value during the year is $50,000. You will pay $75 in administrative fees.

Underlying Fund Expenses – You will also indirectly pay the fees and expenses imposed by the mutual funds that are the underlying investment options for your variable annuity.

Fees and Charges for Other Features – Special features offered by some variable annuities, such as a stepped-up death benefit, a guaranteed minimum income benefit, or long-term care insurance, often carry additional fees and charges.

Other charges, such as initial sales loads, or fees for transferring part of your account from one investment option to another, may also apply. You should ask your financial professional to explain to you all charges that may apply. You can also find a description of the charges in the prospectus for any variable annuity that you are considering.

Sometimes the fees and expenses are easy to see, sometimes they're hidden, but as far as I know, they're always there. This is why the sales people push them so hard.

As to risk, there are all kinds of risk. With stocks, there is the risk of the market going down. However, there is an equally important risk that many people overlook, and that is the risk that with a more conservative investment, you are giving up returns, to the point that inflation can actually wipe them out.

For example, with 4% inflation (a normal figure), a 6% return is suddenly cut to 2%, and a 3% return is actually cut to -1%. You're losing money, in real terms, in this case.

Frankly, apart from the fees and expenses, annuities rub me the wrong way personally because the insurance company is investing your money, and giving you part of the return. I'd prefer to invest it myself, and get all of the return.

If I want a portion of my portfolio to be safer, I'll invest in a bond ladder, treasury certificates, or inflation protected securities. A properly structured bond ladder in particular, I have read, can provide better returns than an annuity with similar minimization of risk.

In any case, I'm not arguing that for some people annuities don't make sense, because any investment must be analyzed with a view towards one's personal situation.

What I do take issue with, though, is the idea that "you can't go wrong" with annuities, because for many people, they are an exceptionally bad idea.