There are a few things you need to know to make sure you’re investing your money safely. First, the stock market is not a very safe place to put all your eggs in one basket. You really need to diversify your portfolio to make sure you keep up with inflation.
Have you heard of institutions or advisors that invest your money and control your finances, such as Bernie Madoff or The Stanford Financial Group. Many people simply opened accounts and let these types of financial institutions invest all their money. The problem is, whether these guys made money or lost money, they still got high commissions on your money. They also had complete control over your money, so these institutions or individuals were running illegal Ponzi schemes using your money, and as long as they kept getting new money from investors, it seemed like they were investing your money the right way. They guaranteed returns of 10% and above.
The problem I have with not being in control of your own finances is that you never know what’s going on with your money. Investors became creditors of these institutions, and many never returned the invested money.
As an investment advisor, I always make sure that my clients can log in and manage their money and check the performance of their investments.
The stock market is very unpredictable and at the time of this writing is down a lot, and I focus on not having any losses when you invest your money and being as tax efficient as possible. I have invested millions of dollars and made sure that losses are not part of my philosophy. You still need to invest in a 401k plan if your job offers one, but diversify your 401k investments and be sure to allocate some to the money market sector to limit your exposure.
I use annuities and insurance as a way to invest large sums of money and still get excellent returns of 7% and above without the risk of losing principal even in a market downturn. If you invest exclusively in a fixed annuity, you are not keeping up with inflation. When you invest in a variable annuity, you will be exposed to fund risk, which can lead to large losses. I am an expert in indexed annuities and I have sold millions of dollars in them and they continue to grow due to the preservation of principal as well as the ability to keep up with inflation and the important tax deferral.
When you invest large amounts in indexed annuities, you also have low management fees, unlike variable annuities, which, like the stock market, need someone to manage the funds, which increases fees. Indexed products are compared to a benchmark, such as the S&P 500 or another index, and therefore lower performance fees. Purchasing an indexed annuity comes with some serious due diligence to make sure this type of investment is right for you. First, I need to make sure that since your money is locked up for a certain period, this investment is suitable for the investor. The company will also make sure that this investment is suitable for the buyer and then the investor will have a free period to make sure that the investment is suitable. Most of the time, an annuity is not suitable for someone in their late 70s or 80s, but eligibility will determine that depending on the situation. If the client is closer to age 80, we look at indexed life insurance policies to see if we can solve the problem for them. I do my due diligence to make sure my clients are getting the right product that solves their money problems.