Inheritance question.

FLmxer
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4/23/2015 7:23pm
CR250Rider wrote:
Buy houses in markets that are coming back and rent them out. Gain value from appreciation and generates monthly income. Me personally, I avoid the market...
Buy houses in markets that are coming back and rent them out. Gain value from appreciation and generates monthly income.

Me personally, I avoid the market as I am convinced it's a racket and fixed.
We have a duplex, lake house and a few beach house rentals on Sanibel. The money originally came from the sale of motel and rental houses. Lol
500guy
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4/23/2015 8:37pm
I think on a real estate investment Industrial property is the best, renting to people who own businesses is better then your typical jackass house or apartment renter.

The only thing I don't like about Rental property or just Property in general is all the taxes and upkeep.
ToolMaker
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4/23/2015 10:21pm
Real estate is your best bet. It will generate income but you have to be good at screening tenants. Also,
there are write offs that you won't get with stocks. If you don't feel comfortable with owning actual real estate,
you can purchase a REIT, real estate investment trust. A real good one is Realty Income Corp, trades under the
ticker "O" on NYSE. I believe they are the largest REIT now. They pay dividends and have never failed on that.
In fact they increase their dividend over time and have never decreased the dividend. The CEO was explaining
their business model to me one time and it's no wonder they are such a great company.
mxknowitall
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4/24/2015 8:20am
I have a masters degree in finance and have been in the wealth planning field for 10 years. The best advice I can give you is do not listen to 90% of the comments in this thread!! Find a qualified advisor - CFP's are a good starting point - and go from there.

The Shop

bana0401
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4/24/2015 8:38am Edited Date/Time 4/24/2015 8:38am
I have a masters degree in finance and have been in the wealth planning field for 10 years. The best advice I can give you is...
I have a masters degree in finance and have been in the wealth planning field for 10 years. The best advice I can give you is do not listen to 90% of the comments in this thread!! Find a qualified advisor - CFP's are a good starting point - and go from there.
I don't work in Finance, but I have an MBA. You can get just as much bad advice from a CFP as you can on here. When I was in business school most of the finance majors were failing accounting majors. Finance is pretty simple, the only real way to do it is to do your homework and educate yourself, then you don't have to worry about getting bad advice.
ToolMaker
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4/24/2015 8:56am
I have a masters degree in finance and have been in the wealth planning field for 10 years. The best advice I can give you is...
I have a masters degree in finance and have been in the wealth planning field for 10 years. The best advice I can give you is do not listen to 90% of the comments in this thread!! Find a qualified advisor - CFP's are a good starting point - and go from there.
The key word is "qualified". And how do you define "qualified"?
Because being a "financial advisor" in and of itself does not make them worth their fees.
I know a lot of wealthy folks who wouldn't give 5 min to so call CFPs that most of us have
access to.
TM
A. DLeary
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4/24/2015 9:15am
I have a masters degree in finance and have been in the wealth planning field for 10 years. The best advice I can give you is...
I have a masters degree in finance and have been in the wealth planning field for 10 years. The best advice I can give you is do not listen to 90% of the comments in this thread!! Find a qualified advisor - CFP's are a good starting point - and go from there.
bana0401 wrote:
I don't work in Finance, but I have an MBA. You can get just as much bad advice from a CFP as you can on here...
I don't work in Finance, but I have an MBA. You can get just as much bad advice from a CFP as you can on here. When I was in business school most of the finance majors were failing accounting majors. Finance is pretty simple, the only real way to do it is to do your homework and educate yourself, then you don't have to worry about getting bad advice.
You typically get what you pay for.
mxknowitall
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4/24/2015 9:55am
Like I said, it's a starting point. Not all CFP's know what they are talking about but it's a decent prequalifier. Ask how they are compensated, how long have they been in the business, and how often they plan to meet with you, etc. Advisors are similar to doctors, lawyers and mechanics - some are good, some aren't - ask questions, interview different ones, and seek referrals from people you trust.
A. DLeary
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4/24/2015 10:14am
Like I said, it's a starting point. Not all CFP's know what they are talking about but it's a decent prequalifier. Ask how they are compensated...
Like I said, it's a starting point. Not all CFP's know what they are talking about but it's a decent prequalifier. Ask how they are compensated, how long have they been in the business, and how often they plan to meet with you, etc. Advisors are similar to doctors, lawyers and mechanics - some are good, some aren't - ask questions, interview different ones, and seek referrals from people you trust.
This.
I'll also add, make sure they have the same goals as you do for your money.
CR250Rider
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4/24/2015 10:50am
The dotcom crash, housing market crash from institutions lending money to unqualified people, AIG bailout.

Wall Street is full of crooks, liars and cheats. I'll never put 1 cent more than I have to into that ponzi scheme.

It's at 18,000 right now? Expecting it to go higher or are you betting on a crash? Maybe the power players can manufacture another crash. fuckers.
At least if the world's markets kill themselves again you'll still own property. Property is a limited commodity.


SweetDaddy
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4/24/2015 12:35pm
There are fee-based Certified Financial Planners that do not sell you anything, they just give you investment advice for a fee. This is the only CFP that I would consider. The others that actually invest your money for you will sell you what will earn them the highest commission, especially life insurance and mutual funds with the highest sales load.
Steiny
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4/24/2015 7:29pm
After reading the replies, a few things are obvious:
1, not one of you read his second post, real estate is out of the question.
2 none of you truly understand annuities.
3 CFP is a worthless title thats helps a client feel better about the adviser they hire.

I have lic in Fl, call me I'll give you all the free advise you need.
Steiny
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4/24/2015 7:52pm
500guy wrote:
I think on a real estate investment Industrial property is the best, renting to people who own businesses is better then your typical jackass house or...
I think on a real estate investment Industrial property is the best, renting to people who own businesses is better then your typical jackass house or apartment renter.

The only thing I don't like about Rental property or just Property in general is all the taxes and upkeep.
Ok, I'm not trying to be a dick, but this is why people don't understand my job but think they do.

If you walked into my office after inheriting 2 mill nd told me you wanted to rent it out, I'd ask why? Don get me wrong, I have rental units, but its a partnership deal I do with 3 other guys.

I would say, why wouldn't you take that 2 million and let it work for you instead of you working on rentals? wouldn't you rather put 1 million in a income growth annuity and pull 60k a year off it and put the rest in an aggressive fund and let it grow for 10 years and retire without a care instead of dealing with rentals?
ToolMaker
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4/24/2015 8:17pm
Steiny wrote:
Ok, I'm not trying to be a dick, but this is why people don't understand my job but think they do. If you walked into my...
Ok, I'm not trying to be a dick, but this is why people don't understand my job but think they do.

If you walked into my office after inheriting 2 mill nd told me you wanted to rent it out, I'd ask why? Don get me wrong, I have rental units, but its a partnership deal I do with 3 other guys.

I would say, why wouldn't you take that 2 million and let it work for you instead of you working on rentals? wouldn't you rather put 1 million in a income growth annuity and pull 60k a year off it and put the rest in an aggressive fund and let it grow for 10 years and retire without a care instead of dealing with rentals?
Or you could buy a 10,000 sq. ft. commercial building for 1 million, rent it out for 70 cents a square ft triple net. Have $84K per year income. And depreciate the building against your income to reduce your taxes? And the building's value grows. Point being there are other options as well. Or if you had the right financial guy, you could invest in companies before they are public and have huge margins when they go IPO. Or you could buy a business that you want to run. There are endless possibilities, just depends on what you want to do, pull income with no effort? Put in time and grow your money faster, safe, risky. Endless possibilities!!
APLMAN99
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4/24/2015 9:25pm
Steiny wrote:
After reading the replies, a few things are obvious: 1, not one of you read his second post, real estate is out of the question. 2...
After reading the replies, a few things are obvious:
1, not one of you read his second post, real estate is out of the question.
2 none of you truly understand annuities.
3 CFP is a worthless title thats helps a client feel better about the adviser they hire.

I have lic in Fl, call me I'll give you all the free advise you need.
1. False
2. False
3. False
SPYGUY
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4/24/2015 9:28pm Edited Date/Time 4/24/2015 9:29pm
500guy wrote:
I think on a real estate investment Industrial property is the best, renting to people who own businesses is better then your typical jackass house or...
I think on a real estate investment Industrial property is the best, renting to people who own businesses is better then your typical jackass house or apartment renter.

The only thing I don't like about Rental property or just Property in general is all the taxes and upkeep.
Steiny wrote:
Ok, I'm not trying to be a dick, but this is why people don't understand my job but think they do. If you walked into my...
Ok, I'm not trying to be a dick, but this is why people don't understand my job but think they do.

If you walked into my office after inheriting 2 mill nd told me you wanted to rent it out, I'd ask why? Don get me wrong, I have rental units, but its a partnership deal I do with 3 other guys.

I would say, why wouldn't you take that 2 million and let it work for you instead of you working on rentals? wouldn't you rather put 1 million in a income growth annuity and pull 60k a year off it and put the rest in an aggressive fund and let it grow for 10 years and retire without a care instead of dealing with rentals?
Annuities are great...for the guy selling them earning the big commission.

Some downsides for the investor:

- Generally much higher fees than comparable mutual funds and especially ETF's.
- Gains are taxed at ordinary income rates rather than capital gains rates.
- No step up in cost basis upon death meaning a potentially huge difference in tax burden that your heirs will assume

If you want to talk about the great safety net that the guarantees provide, please also show me a specific time period where someone with a few million wouldn't have come out better by simply staying in stocks and riding out the downturn.


mxknowitall
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4/25/2015 5:29am
Steiny wrote:
Ok, I'm not trying to be a dick, but this is why people don't understand my job but think they do. If you walked into my...
Ok, I'm not trying to be a dick, but this is why people don't understand my job but think they do.

If you walked into my office after inheriting 2 mill nd told me you wanted to rent it out, I'd ask why? Don get me wrong, I have rental units, but its a partnership deal I do with 3 other guys.

I would say, why wouldn't you take that 2 million and let it work for you instead of you working on rentals? wouldn't you rather put 1 million in a income growth annuity and pull 60k a year off it and put the rest in an aggressive fund and let it grow for 10 years and retire without a care instead of dealing with rentals?
^ These are the guys you avoid. Doesn't know your situation, objectives, tax bracket, etc. and he's already trying to shove an annuity down your throat. If an advisor is even mentioning a product in the first two to three times meeting with you - RUN! This is a perfect example of why advisors get a bad reputation.
mxknowitall
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4/25/2015 5:33am
500guy wrote:
I think on a real estate investment Industrial property is the best, renting to people who own businesses is better then your typical jackass house or...
I think on a real estate investment Industrial property is the best, renting to people who own businesses is better then your typical jackass house or apartment renter.

The only thing I don't like about Rental property or just Property in general is all the taxes and upkeep.
Steiny wrote:
Ok, I'm not trying to be a dick, but this is why people don't understand my job but think they do. If you walked into my...
Ok, I'm not trying to be a dick, but this is why people don't understand my job but think they do.

If you walked into my office after inheriting 2 mill nd told me you wanted to rent it out, I'd ask why? Don get me wrong, I have rental units, but its a partnership deal I do with 3 other guys.

I would say, why wouldn't you take that 2 million and let it work for you instead of you working on rentals? wouldn't you rather put 1 million in a income growth annuity and pull 60k a year off it and put the rest in an aggressive fund and let it grow for 10 years and retire without a care instead of dealing with rentals?
SPYGUY wrote:
Annuities are great...for the guy selling them earning the big commission. Some downsides for the investor: - Generally much higher fees than comparable mutual funds and...
Annuities are great...for the guy selling them earning the big commission.

Some downsides for the investor:

- Generally much higher fees than comparable mutual funds and especially ETF's.
- Gains are taxed at ordinary income rates rather than capital gains rates.
- No step up in cost basis upon death meaning a potentially huge difference in tax burden that your heirs will assume

If you want to talk about the great safety net that the guarantees provide, please also show me a specific time period where someone with a few million wouldn't have come out better by simply staying in stocks and riding out the downturn.


Exactly. About the only time annuities are appropriate is when a client is worried sick about volatility but still needs income. Probably about 90% of the annuities we analyze for potential clients were not the appropriate choice.
Steiny
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4/25/2015 7:10am
Ok, since you guys clearly know more than I do, than most of you know that he is pretty limited on what he can do with it and considering its not his money and the bulk of it needs to go towards caring for his mother in law who has dementia, you guys know that it throws real estate out the door.

He needs to receive a monthly check to pay for the care of her, don't know if any of you have any idea of what a decent home cost for a person in her shape, but it isn't cheap. He needs the money to continually grow, depending on his mother in laws age, a home will burn through that amount in 8 to 10 years. If the money is gone from a bad investment, and they are unable to pay for a home, but the state requires her to have full time care, the state will come after his personal estate to pay for it.

So what do you do?
Steiny
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4/25/2015 7:21am
500guy wrote:
I think on a real estate investment Industrial property is the best, renting to people who own businesses is better then your typical jackass house or...
I think on a real estate investment Industrial property is the best, renting to people who own businesses is better then your typical jackass house or apartment renter.

The only thing I don't like about Rental property or just Property in general is all the taxes and upkeep.
Steiny wrote:
Ok, I'm not trying to be a dick, but this is why people don't understand my job but think they do. If you walked into my...
Ok, I'm not trying to be a dick, but this is why people don't understand my job but think they do.

If you walked into my office after inheriting 2 mill nd told me you wanted to rent it out, I'd ask why? Don get me wrong, I have rental units, but its a partnership deal I do with 3 other guys.

I would say, why wouldn't you take that 2 million and let it work for you instead of you working on rentals? wouldn't you rather put 1 million in a income growth annuity and pull 60k a year off it and put the rest in an aggressive fund and let it grow for 10 years and retire without a care instead of dealing with rentals?
SPYGUY wrote:
Annuities are great...for the guy selling them earning the big commission. Some downsides for the investor: - Generally much higher fees than comparable mutual funds and...
Annuities are great...for the guy selling them earning the big commission.

Some downsides for the investor:

- Generally much higher fees than comparable mutual funds and especially ETF's.
- Gains are taxed at ordinary income rates rather than capital gains rates.
- No step up in cost basis upon death meaning a potentially huge difference in tax burden that your heirs will assume

If you want to talk about the great safety net that the guarantees provide, please also show me a specific time period where someone with a few million wouldn't have come out better by simply staying in stocks and riding out the downturn.


1. I would make more money managing his 2.5 million in the long run then getting him into an annuity that provides income.
2. False, its qualified money, he will pay regular dividends rates.
3. its under 5.5 million, his heirs wont pay a dime.

Again, he needs an income to pay for the care of his mother in law,.
Steiny
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4/25/2015 7:26am
Steiny wrote:
After reading the replies, a few things are obvious: 1, not one of you read his second post, real estate is out of the question. 2...
After reading the replies, a few things are obvious:
1, not one of you read his second post, real estate is out of the question.
2 none of you truly understand annuities.
3 CFP is a worthless title thats helps a client feel better about the adviser they hire.

I have lic in Fl, call me I'll give you all the free advise you need.
APLMAN99 wrote:
1. False
2. False
3. False
I have a CFP designation and no, you don't need it to be good at your job.
Steiny
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4/25/2015 7:30am
Steiny wrote:
Ok, I'm not trying to be a dick, but this is why people don't understand my job but think they do. If you walked into my...
Ok, I'm not trying to be a dick, but this is why people don't understand my job but think they do.

If you walked into my office after inheriting 2 mill nd told me you wanted to rent it out, I'd ask why? Don get me wrong, I have rental units, but its a partnership deal I do with 3 other guys.

I would say, why wouldn't you take that 2 million and let it work for you instead of you working on rentals? wouldn't you rather put 1 million in a income growth annuity and pull 60k a year off it and put the rest in an aggressive fund and let it grow for 10 years and retire without a care instead of dealing with rentals?
^ These are the guys you avoid. Doesn't know your situation, objectives, tax bracket, etc. and he's already trying to shove an annuity down your throat...
^ These are the guys you avoid. Doesn't know your situation, objectives, tax bracket, etc. and he's already trying to shove an annuity down your throat. If an advisor is even mentioning a product in the first two to three times meeting with you - RUN! This is a perfect example of why advisors get a bad reputation.
I know his objectives, he pointed it out in his second post, that's why I suggest he look at a growth income annuity.

And I'll stick to my opinion that most of you have no idea about annuity outside of what insurance guys sell.
mxknowitall
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4/25/2015 8:40am
Steiny wrote:
Ok, I'm not trying to be a dick, but this is why people don't understand my job but think they do. If you walked into my...
Ok, I'm not trying to be a dick, but this is why people don't understand my job but think they do.

If you walked into my office after inheriting 2 mill nd told me you wanted to rent it out, I'd ask why? Don get me wrong, I have rental units, but its a partnership deal I do with 3 other guys.

I would say, why wouldn't you take that 2 million and let it work for you instead of you working on rentals? wouldn't you rather put 1 million in a income growth annuity and pull 60k a year off it and put the rest in an aggressive fund and let it grow for 10 years and retire without a care instead of dealing with rentals?
SPYGUY wrote:
Annuities are great...for the guy selling them earning the big commission. Some downsides for the investor: - Generally much higher fees than comparable mutual funds and...
Annuities are great...for the guy selling them earning the big commission.

Some downsides for the investor:

- Generally much higher fees than comparable mutual funds and especially ETF's.
- Gains are taxed at ordinary income rates rather than capital gains rates.
- No step up in cost basis upon death meaning a potentially huge difference in tax burden that your heirs will assume

If you want to talk about the great safety net that the guarantees provide, please also show me a specific time period where someone with a few million wouldn't have come out better by simply staying in stocks and riding out the downturn.


Steiny wrote:
1. I would make more money managing his 2.5 million in the long run then getting him into an annuity that provides income. 2. False, its...
1. I would make more money managing his 2.5 million in the long run then getting him into an annuity that provides income.
2. False, its qualified money, he will pay regular dividends rates.
3. its under 5.5 million, his heirs wont pay a dime.

Again, he needs an income to pay for the care of his mother in law,.
Might want to double check the taxation of qualified money there bud.
SPYGUY
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4/25/2015 9:48am
1. The amount you, as an adviser, are compensated has nothing to do with my point that annuity fees are much higher than other investment options. Just because the high fees don't all go directly to you doesn't mean they don't exist.

2. Either I'm confused or you are, so to make things clearer, can you please show me an annuity where withdrawals are taxed at capital gains rates rather than income tax rates?

3. You're talking estate taxes which have zero to do with what I'm referring to. When you inherit an annuity you inherit the original cost basis rather than the stepped up amount you would receive with stocks, mutual funds, real estate, etc, meaning it will be much costlier when it comes time to sell.
Steiny
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4/25/2015 10:39am
SPYGUY wrote:
Annuities are great...for the guy selling them earning the big commission. Some downsides for the investor: - Generally much higher fees than comparable mutual funds and...
Annuities are great...for the guy selling them earning the big commission.

Some downsides for the investor:

- Generally much higher fees than comparable mutual funds and especially ETF's.
- Gains are taxed at ordinary income rates rather than capital gains rates.
- No step up in cost basis upon death meaning a potentially huge difference in tax burden that your heirs will assume

If you want to talk about the great safety net that the guarantees provide, please also show me a specific time period where someone with a few million wouldn't have come out better by simply staying in stocks and riding out the downturn.


Steiny wrote:
1. I would make more money managing his 2.5 million in the long run then getting him into an annuity that provides income. 2. False, its...
1. I would make more money managing his 2.5 million in the long run then getting him into an annuity that provides income.
2. False, its qualified money, he will pay regular dividends rates.
3. its under 5.5 million, his heirs wont pay a dime.

Again, he needs an income to pay for the care of his mother in law,.
Might want to double check the taxation of qualified money there bud.
You're right, I meant no qualified money, meaning its after tax dollars.
Steiny
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4/25/2015 10:50am
SPYGUY wrote:
1. The amount you, as an adviser, are compensated has nothing to do with my point that annuity fees are much higher than other investment options...
1. The amount you, as an adviser, are compensated has nothing to do with my point that annuity fees are much higher than other investment options. Just because the high fees don't all go directly to you doesn't mean they don't exist.

2. Either I'm confused or you are, so to make things clearer, can you please show me an annuity where withdrawals are taxed at capital gains rates rather than income tax rates?

3. You're talking estate taxes which have zero to do with what I'm referring to. When you inherit an annuity you inherit the original cost basis rather than the stepped up amount you would receive with stocks, mutual funds, real estate, etc, meaning it will be much costlier when it comes time to sell.
1. Not true at all, you're going to get charged a fee no matter where you put the money, whether it be mutual funds, single stocks or an annuity. Front load, back load, or no load all pay a fee plus, depending on the amount you invest, the same as annuities.

2.In his case, he is using after tax dollars, it will be taxed as capital gains. You're thinking of a tax deferred annuity. There is a lot more to the annuity word then what an insurance guy can sell you.

3. No, again, it depends on the annuity product you invest in. Again, there is a lot more to the annuity world then what some guy selling insurance can get.
A. DLeary
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4/25/2015 12:48pm
You guys realize their are financial advisors, investors etc that charge a flat, once a year rate, without any other fees right? I'd look at Ronald Blue and Co. They fly out 4 times a year to see me, have been way above the market average, and have blown away what any annuities could do for me.
500guy
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4/25/2015 5:54pm
Steiny wrote:
Ok, I'm not trying to be a dick, but this is why people don't understand my job but think they do. If you walked into my...
Ok, I'm not trying to be a dick, but this is why people don't understand my job but think they do.

If you walked into my office after inheriting 2 mill nd told me you wanted to rent it out, I'd ask why? Don get me wrong, I have rental units, but its a partnership deal I do with 3 other guys.

I would say, why wouldn't you take that 2 million and let it work for you instead of you working on rentals? wouldn't you rather put 1 million in a income growth annuity and pull 60k a year off it and put the rest in an aggressive fund and let it grow for 10 years and retire without a care instead of dealing with rentals?
I think your big problem was reading comprehension , I was simply pointing out some of the down falls of real estate investments.
APLMAN99
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4/25/2015 5:58pm
Steiny wrote:
After reading the replies, a few things are obvious: 1, not one of you read his second post, real estate is out of the question. 2...
After reading the replies, a few things are obvious:
1, not one of you read his second post, real estate is out of the question.
2 none of you truly understand annuities.
3 CFP is a worthless title thats helps a client feel better about the adviser they hire.

I have lic in Fl, call me I'll give you all the free advise you need.
APLMAN99 wrote:
1. False
2. False
3. False
Steiny wrote:
I have a CFP designation and no, you don't need it to be good at your job.
That's a completely different issue. No one said you "need" it, but if you claim to have it without recognizing the educational benefit, it makes all your claims rather questionable. Perhaps it's just that you're trying too hard to convince folks (and maybe yourself? ) that you have some sort of unique knowledge that leads you to make some of the silly statements that you have.
APLMAN99
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4/25/2015 10:16pm
SPYGUY wrote:
1. The amount you, as an adviser, are compensated has nothing to do with my point that annuity fees are much higher than other investment options...
1. The amount you, as an adviser, are compensated has nothing to do with my point that annuity fees are much higher than other investment options. Just because the high fees don't all go directly to you doesn't mean they don't exist.

2. Either I'm confused or you are, so to make things clearer, can you please show me an annuity where withdrawals are taxed at capital gains rates rather than income tax rates?

3. You're talking estate taxes which have zero to do with what I'm referring to. When you inherit an annuity you inherit the original cost basis rather than the stepped up amount you would receive with stocks, mutual funds, real estate, etc, meaning it will be much costlier when it comes time to sell.
Steiny wrote:
1. Not true at all, you're going to get charged a fee no matter where you put the money, whether it be mutual funds, single stocks...
1. Not true at all, you're going to get charged a fee no matter where you put the money, whether it be mutual funds, single stocks or an annuity. Front load, back load, or no load all pay a fee plus, depending on the amount you invest, the same as annuities.

2.In his case, he is using after tax dollars, it will be taxed as capital gains. You're thinking of a tax deferred annuity. There is a lot more to the annuity word then what an insurance guy can sell you.

3. No, again, it depends on the annuity product you invest in. Again, there is a lot more to the annuity world then what some guy selling insurance can get.
All annuities are tax deferred. The only difference in taxation between an annuity using pre tax or after tax dollars is what percentage of annuity payments are taxable income if you decide to annuitize the contract or if you make your own withdrawals. If you have invested pretax dollars, it's all considered ordinary income for taxation purposes. If it's after tax dollars, it's only the percentage of the payment equal to the total value minus the cost basis of the contract that is taxed. Either way, they are taxed as ordinary income.

If you don't annuitize and you simply begin withdrawing money, you are able to withdraw up to your cost basis without incurring taxable income issues. After that, ordinary income, which means every dollar withdrawn from a pretax contract is taxed.

Post a reply to: Inheritance question.

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