Danmar
Thinks s/he gets paid by the post
I really can't believe that anyone would value a steak dinner this highly? What a hassle!
Well, I've learned a lot about indexed annuities so far. Learning about new things is an important aspect of my ER experience. And, I'm curious to see how far I can push this salesperson before he gives up, or flat out lies to me. I suppose it's a form of entertainment for me.
It's entertaining for me to listen to your encounters with him. I'm looking for the next chapter in the book.
I can appreciate the fact that this exercise is not for everyone. We all have our own diversions in ER. I know many people who watch hours of television each day. That would be mind numbing for me.
I'd like to see what returns are when the S&P P/E ratio is above 20.People don't realize how often the S&P500 annual gain is more than 12%.
Below 0% = 27% of the time
Above 12% = 44% of the time
Between = 29% of the time.
I would rather break rock than engage in this decidedly odd pastime.
Ha
I'd like to see what returns are when the S&P P/E ratio is above 20.
The spreadsheet and a summary of this thread would make a good FIRE site sticky.
If I encounter the subject in the future I would have to search this site to find this thread.
... you can always 'Subscribe' to the thread, which keeps it in your Control Panel.
I can appreciate the fact that this exercise is not for everyone. ...
I really didn't expect him to follow up with me after he left my home, as I made it clear to him that I would thoroughly investigate any product he pitched to me, and I would not purchase it until I fully understood it.
I give the guy credit for having the stamina to keep coming back.
OP,
I think you should just let it go even it is "entertainment". I can just see one of your future posts saying "he gave me a great report with little expenses, etc".
They are salesmen for a reason.
From my spreadsheet (SPX 1950-2015) , a 0% (no loss) floor saves you from a -11.8% (average) loss. For a 12% cap, the average gain when above 12% is 22.7% -- which gets capped at 12%. The average gain when between the floor and cap is 6.6%
People don't realize how often the S&P500 annual gain is more than 12%.
Below 0% = 27% of the time
Above 12% = 44% of the time
Between = 29% of the time.
So.. about 1/4 of the time you avoid losing -12%, about 1/2 the time you get 7%, about 1/2 the time you get 12% when you should have gotten 23%.
Overall, you miss 11% gain twice as many times as you avoid 12% loss. That's a net loss right there.
The average annual gain is 8.8%, the average gain with cap & floor is 7.2%.
AND...you don't get the dividends which is about 3.5%.
AND...they charge you fees in the range of 3%-5%.
Oh, and if they feel like it, they can reduce the cap from 12% to 1%.
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It took me quite awhile to come to the realization of what you said. They hold your money, take a huge skim off the top, and then cover your down years with what's left of your own money.
Experienced salespeople are not like Captain Ahab after Moby Dick. They are looking for an easy, quick sale. It's a game of numbers. This agent must a be a rube, anyone who depends on production to support his family would have been gone weeks ago. There are always potential customers who will buy the product, not reluctant brides who want to tease.This thread continues to be interesting. You are like his big game fish on a line (his product) that might not be strong enough to reel you in, but he has lost nothing if the line breaks and you swim away,
OP,
I think you should just let it go even it is "entertainment". I can just see one of your future posts saying "he gave me a great report with little expenses, etc".
They are salesmen for a reason.