ERD50
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
RockOn - start a new thread - this one is about MM, not annuities. -ERD50
Saying I am doing it wrong or using the wrong methods doesn't change the fact that I can show you that annuities have the same investment outcome as any other 6% annualized investment.
When Nords refused to stop you from insulting me
I would think that demonstrating that you're using the wrong methodology to produce a comparison, and giving you a handful of links to well respected financial documents confirming that assertion would somewhat change the 'facts'.
Internal rate of return is a poor measure of an investment. Most non-lazy financial people use NPV to compare similar proposed capital investment projects.
IRR has no facility to handle reinvestments in a 'project'.
It is not applicable to apply a rate of return produced by an IRR calculation to unrelated and dissimilar investments.
Annuity sales people like to use IRR because it produces juicy numbers that sound better than they are.
The actual return for most people from an annuity will be around or about and usually less than 4%. Worse when you factor in the loss of principal.
You may not do an IRR unless you have an exact duration. Guessing at an 'end' of 86 is speculation, and in defiance of the well accepted mortality tables that say you'll be dead in the 81-82 range.
My issue with this is that at best you are poorly informed and dont listen very well. At worst, you're just banging on this drum to amuse youself.
Either way, I dont find the pollution appreciable. Far too much noise and not enough signal.
Perhaps you could explain why Nords would have anything to do with what I do or dont say although I do respect his opinion. And for the record I never insulted you. I made a general comment about idiots and you decided that it applied to you and you went off like a roman candle.
Do continue with your "entertainment" in your own thread. Let me know how that works out for you.
Nobody is responding to you because a lot of people put you on ignore yesterday when your head spontaneously exploded.
Awhile back Nords admitted I was correct on the 6% calculation, now he allows you to once again bash me about it. Hard for me to understand. In any case, I shouldn't have gone all out in my response.
Or months ago. Man, I hate being trendy.
You're probably not aware, but Nords is neither a moderator nor is he CFB's grouchy older brother (nor yours for that matter). As such, Nords no more allows CFB to do or not do something than he allows the wind to blow.
One should compare IRR and NPV of an annuity against, for example, the Vanguard Payout Distribution Focus fund (VPDFX... 7.5% payout based on current share price).
I'm not interested in annuities simply based on carrier longevity... and that's not including the staff all dying off from legionnaires disease: Fears for workers at office as pair get legionnaires' disease - Latest News, Health - Independent.ie
On the ignore list, open-minded are we not?
Nords got on me, acting like he was a mod, for breaking a minor rule awhile ago, I thought he was a mod. He seemed to hold himself up as such, sorry for not knowing that. He is listed as "Moderator Emeritus".
I don't agree on what you can compare an annuity to, it can be compared to "any" investment, not just your selected fund. I don't know where you get that idea from. We could have a discussion about that if I wasn't being ignored.
Obviously, since I'm typing here, one can still view posts of those on their ignore list. However, it does cut down on the chaff while reading.
And surely you know what emeritus means?
Well, feel free to compare away. What's the NPV and IRR of whatever annuity mix you choose with whichever riders you like? How does it compare to whichever other funds you'd like to compare it to? Feel free to start a new thread on the subject, I believe it's been suggested to pursue that a few times. Or, dig up one of the other annuity thread and start the discussion there.
I'm only suggesting that including a fund such as the managed payout funds would be a fair comparison. As opposed, for instance, to hatian penny stocks.
My only contribution is that I know what the inside of an annuity company looks like and I wouldn't trust one with my money over what I reasonably expect my investment horizon to be... and I'd get a better deal on an annuity than just about anyone here. You can discount that as familiarity bias, though.
Thanks Want2retire
I looked at Vanguards explanation of each MM fund and it looks like both the Federal and Treasury are all AAA rated government so I'm not sure what the real difference is saftey wise ...maybe none?
Jim
Jim, in evaluating Vanguard MM funds it helps to check out the information on each fund's Vanguard webpage. The page for the Vanguard Federal MM fund is at https://personal.vanguard.com/us/funds/snapshot?FundId=0033&FundIntExt=INT . The page for Vanguard's Treasury MM fund is at https://personal.vanguard.com/us/funds/snapshot?FundId=0050&FundIntExt=INT
Then, click on "holdings" to get an overall idea of what the fund invests in. Click on "Who should invest", too, to find out some more hints about whether that particular MM fund is suited to you. Then, go to "Prospectus and Reports" and browse to find out more specific information.
It's not likely that any Vanguard MM fund would "break the buck" (and thanks, Rogersteciak for the terminology!). But in uncertain economic times such as we have been having, I believe it's something to at least view as a remote possibility.
By the way, according to their February 29, 2008 semi-annual report, it appears that the percentages of VMMXX holdings in Freddie Mac and Fannie Mae decreased quite a bit since 2007. So, VMMXX fund management is probably way ahead of us on thinking about such things.
Thanks want2retire
I understand it better now.
One of the big questions I have now is if a MM fund ever did "break the buck"?
Jim
I understand it better now.
One of the big questions I have now is if a MM fund ever did "break the buck"?