Safe Alternatives to the Stock Market & Bank CD's
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A comparison of:
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Tax Liens
- Guaranteed Products (Principal & Interest) with additional interest Indexed (i.e. Linked) to any increase in Stock Market Indexes
with more traditional options like CD's, Stocks, & Bonds.
1. Tax Lien Certificates - The perfect investment? You Decide.
TLC's offer the ultimate in security through collateralized loans secured as legal liens over asset-based property. They offer excellent interest earned returns and even better returns on any properties that you acquire if the lien is not paid off.
In simple terms, if the homeowner doesn't pay his or her property tax on time, the county puts a tax lien on that property. If you buy that lien from the county, you will get the penalties and interest that the homeowner has to pay to the government. If the homeowner doesn't pay, you as the lienholder, get the property, free and clear.
Most will pay off the lien. Some won't. You have a secure investment of a few thousand dollars with a guaranteed minimum return and the possibility of owning a $100,000 or more property.
If you use your Traditional IRA money and a property does go to deed. You can roll that lien into a Roth IRA and pay tax on the value of that lien in that year, then when you sell the property for say $100,000, you will have that gain in the Roth IRA. Under the rules of the Roth IRA. If you keep it in the Roth IRA for 5 years or more, you will own no taxes on that money that you take out after you retire. (another fluke of the tax law).
You can go to the various counties yourself, research the properties, bid on the liens and pay for them right there; or you can contract with a professional that will do all that work for you.
There is a reasonable upfront cost and you will split any gain that results from the sale of any property acquired after you receive any cost you have paid out (your upfront cost) and any cost of selling the property. You get 100% of any penalty and interest and 50% of the profit on any sale of acquired property. The ultimate leverage of your investment dollar.
For more information, please send me an email and ask about TLC's and I will send you a link to a Flash Presentation that will further explain TLC's and the process.
2. Guaranteed Rate Indexed Annuities - Sold by Insurance Agents. These act similar to CD's unless you take an action, Annuitizing. This is when you, in effect, turn them in for a income stream over a period of time, which could be Lifetime Income. They have a start date and a end date where you are guaranteed a contracted rate of interest and at the end of that time you can get your money or roll it into another financial product.
You can also get additional interest added based on what happens to an Index (i.e. the S & P 500, the Dow, etc.). These are guaranteed by "A" rated or better insurance companies. No one has ever lost any money in an annuity.
They are tax deferred (no phantom 1099 interest income at the end of each year). If the index decreases three years in a row, you don't get the extra interest, but you always have your guarantee that by the end of the period you will get the minimum interest guaranteed or more.
On the other hand, you know that if your stock or mutual fund declines, you have a loss. You also know that when it recovers to the price you bought it, you break even.
An Indexed Annuity it is different. When it declines, you just don't get the extra interest. But when it goes up to the price it was when you started the annuity, you get extra interest from that rise from the lower level to the higher level (this is called Retracing Your Gains). In other words, you only see the results from Gains in the index and you are not affected by any losses in the index, except that it is now possible for you to participate in gains from that lower level.
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For more information send me an email and ask about Indexed Annuities.
What makes up "A Perfect Investment"?
CD's - Certificates of deposits offer safety up to $100,000, a guaranteed annual return for a contracted period of time. They have an early withdrawal penalty and no obvious tax advantages. They are sold by Banks.
Bonds - Tax-Free Municipal Bonds have a tax advantage. They have a lower return than taxable bonds. They are secured by the full faith and credit of the Municipality issuing the Bond. Treasury Bonds have a rate that is usually lower than Corporate Bonds and are backed by the full faith and credit of the US Government. Corporate bonds are backed by the full faith and credit of the Corporation issuing the Bonds. These have the most risk.
Stocks and Mutual or Indexed Funds - As former Enron, Global Crossing, and fill in the blank.Com shareholders can attest, there is no safety in Stocks, even stocks touted by the most prestigious stock brokerages. The more diversified the stock portfolio, the lesser the losses and the lesser the gains.
A Mutual Fund diversifies the portfolio to the strategy of the fund manager. 95% of the Mutual Funds do not beat the averages and the ones that do are different every year.
Investing in an Indexed Fund will match the index or the average. This method has proven over the years to have the least risk, but those averages (S & P 500 and Dow for example) have decrease over the last three years. This is the first time in history we have had three back to back losses in these averages. This may be the time for them to go up. One thing we do know, if the United States is going to grow then these indexes will go up, reflecting that growth. The only tax advantage to stocks, bonds, mutual funds, and indexed funds is that if you hold them you may, if you have a capital gain, be taxed at a lower rate. With Mutual Funds you may actually be taxed on a Capital Gain while losing money in the fund (a fluke of the tax system). All of these are sold by Stock Brokers.
Indexed Annuities - Guarantees Return of Your Principal as well as the Return on Your Principal.
Tax Lien Certificates - The perfect investment? You Decide.
Annuities Could be a Great Vehicle for your Investment Portfolio
Annuities are tax deferred savings vehicles that are produced by life insurance carriers. They come in three basic forms.
Single Premium Deferred Annuities, which allows the annuity holder to deposit a single lump sum amount. Then the dollars accumulate in a tax free environment.
Flexible Premium Annuities, allow the annuity holder to deposit an initial premium and subsequent deposits on various deposit modes. The monies also grow tax deferred.
Single Premium Immediate Annuity, is use to create an immediate payout, whether it be, monthly, quarterly, or yearly. There are many payout options which can be reviewed at the FAQ section.
Individuals invest billions of dollars yearly into annuities.
When most annuities mature they are like any other fixed maturity financial instrument. You get your money. It is only at that time (the end of the accumulation phase) or sooner that you can decide to annuitize, or in other words; to have your money disbursed to you over a period of time including an option for a continuous flow of money for your entire lifetime no matter how long you may live..
Annuities provide a wide spectrum of risk tolerances for investors; from fixed interest annuities to equity indexed annuities with principle guarantees.
Tax deferred annuities should be part of your overall investment portfolio. They provide better gains than traditional CD's and with equity indexed annuities you can participate in any gains in the market without any market risk and with a guaranteed minimum interest rate plus any bonus from increases in the particular equity index.with superior security. Click on the link for equity indexed annuities for more information.
Benefits of Fixed Annuities
Tax Deferred Growth
In an annuity, your money grows tax-deferred. This allows all your deposits plus the interest earned to grow without being taxed. The compounding effect of this is one of the most powerful financial tools you have at your disposal.
You will get no "Phantom" income 1099's as you do from CD's and most Mutual Funds.
Tax Reduction
With respect to the recent tax revisions on social security tax, reduction is made possible by realignment of muni bonds and other investments into annuities. With qualified plans, i.e., IRA's, SEP's, Keogh's, you're reducing your pre-taxed income by contributing to the plans in the form of flexible (FPDA) annuities.
Earn Competitive Interest Rates.
Typically your return will be 1%-2% higher than with certificates of deposit (CD's) with the opportunity to participate in any market increase if you choose an equity indexed annuity
Liquidity.
Most annuity products allow you to withdraw 10% of your present balance each year with no penalties or fees attached. You may request to access your money on any given business day, keeping in mind that the funds will take a few days to obtain.
Safety and Security.
Your principal and earnings are always guaranteed in a fixed annuity. There is little risk involved. Insurance consumers are protected from financial loss in most cases due to the insolvency of an insurance company through their state guaranty fund. The majority of state guaranty funds cover 100% of your account up to $300,000.
Estate Advantages.
Annuities avoid probate.
No Loads or Sales Charges
With fixed annuities, 100% of your money is being invested. Only a handful of companies charge an administration fee, if so, usually around $30 per year
Welcome to the FAQ Section for Fixed Annuities!
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How do the various annuity bonuses work?
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What is the impact of surrender charges on your choice of annuities?
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When do you have to choose a payout option?
How do the various annuity bonuses work?
Generally, the interest rate given an annuity is guaranteed for a minimum of one year, or calendar year. Most companies have several annuity products with a guaranteed first year bonus, usually the bonus ranges from 1%-3%. This bonus gives the annuity added value the first year, then the rate comes back down to the base rate the following year. Some companies also give annuitization bonuses. They range from 3%-5%. These bonuses are given, provided certain conditions are met, during the annuitization payout phase. Generally, to receive this particular bonus your annuity must be in force for a minimum of five years and your payout must be spread out over a minimum of five years.
What is the impact of surrender charges on your choice of annuities?
The actual length of the surrender charges are vital in planning out the time frame in which you may desire to start receiving your benefits without penalties. For example: An individual whose age is presently 55, and who would like to retire and start collecting the annuity benefits at 62, would maximize earnings and at the same time avoid any penalties by selecting a 7-year annuity. However, if this same individual purchased an annuity that had a 12-year surrender period, he would incur a significant surrender charge.
When do you have to choose a payout option?
It is not necessary to establish which payout option you may choose until you are reaching the point when you would like to receive your annuity benefits. Only with an immediate annuity do you need to establish your payout options in the initial contract.
The various payout options are defined in the glossary. The annuity payout options are:
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Annuity Certain (Period Certain)
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Lump Sum Distribution
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Cash Refund Option
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Joint and Survivor Option
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Installment Refund Option
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Life or Straight Life Option
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Life with Period Certain
An Independent Agent performs two main functions:
1) We will search out the top five performing fixed annuities in each category based upon your financial requests. This is achieved through an elaborate comparative system of hundreds of annuity products. Insurance companies used are rated by A.M. Best, and are "A" rated or better. These companies represent the STRONGEST and most financially secure in the industry.
2) Once you have made your annuity selection, you may purchase it directly by email, fax, and U.S. Mail. Also, if you require further assistance in making a decision, we will assist you with any concerns or questions.
To receive your Free Annuity Quote without obligation, click here. When you fill out the questionnaire, your information will appear on the screen. You can print out the information. We will then do the research and send you the analysis. After deciding which annuity you want to purchase, just fill out the information form and a representative will contact you directly.