You should avoid investing in fixed and variable rate annuities, because they produce high commissions for the salesperson. If you want to invest your hard-earned money, Vanguard is the place to go!
You pretty much have this right, Katherine. Here is how the annuity business works.
The salesperson offers you a teaser rate. This rate is higher than you can get elsewhere so you like it, but there is a catch. You must lock up your money for long periods of time. Why? He will receive a big fat commission from you buying the annuity. In turn, the life insurance company will charge you very high yearly fees on that annuity to pay for that big fat commission. If you leave early, they whack you with a surrender penalty. This works for everyone except the hapless investor. AVOID ANNUITIES!
Go to Vanguard.com and buy no-load index mutual funds that have very low fees and no commissions. Try to place them in a Roth IRA if you can. Try to buy index funds in your retirement fund at work if you can. Finally, keep feeding them on a monthly basis and hold them for long periods of time. Financial freedom will follow (get rid of your debt in the meantime).
You can learn more by hitting on the investing and insurance tabs on this website. You can also learn more by reading my book, Financial Happine$$.
You should avoid investing in fixed and variable rate annuities, because they produce high commissions for the salesperson. If you want to invest your hard-earned money, Vanguard is the place to go!
You pretty much have this right, Katherine. Here is how the annuity business works.
The salesperson offers you a teaser rate. This rate is higher than you can get elsewhere so you like it, but there is a catch. You must lock up your money for long periods of time. Why? He will receive a big fat commission from you buying the annuity. In turn, the life insurance company will charge you very high yearly fees on that annuity to pay for that big fat commission. If you leave early, they whack you with a surrender penalty. This works for everyone except the hapless investor. AVOID ANNUITIES!
Go to Vanguard.com and buy no-load index mutual funds that have very low fees and no commissions. Try to place them in a Roth IRA if you can. Try to buy index funds in your retirement fund at work if you can. Finally, keep feeding them on a monthly basis and hold them for long periods of time. Financial freedom will follow (get rid of your debt in the meantime).
You can learn more by hitting on the investing and insurance tabs on this website. You can also learn more by reading my book, Financial Happine$$.