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The Ideal Investment | My Money Track


The Ideal Investment

This is the form of investment utilized by some of the most successful and influential people in America.

Would you have guessed that one of the most powerful money people in the world invests his own personal money in these exact types of investment vehicles that are completely available to you as well? That’s correct, Ben Bernanke past Federal Bank Reserve Chairman invested his own money into at least two types of annuities. Big “ben” worked for Goldman Sachs and has connections throughout the World to some of the best money managers and best investment ideas money can buy… yet he chose to buy annuities for himself… who else seems to like annuities?

Suzy Orman advises about annuities in her #1 Best Selling book “the Road to Wealth.” In it she writes…

“if you are approaching retirement age and you want to invest in the stock market but are afraid of losing your principal… if you are willing to take a smaller potential profit in exchange for a guarantee against any losses… you might consider an index annuity, which lets you participate in stock-market gains on a limited basis while completely protecting you against losses. This strategy can make sense either inside or outside and IRA.”

Yes, the Suzy Orman who rose to fame on her Public Broadcasting Special (PBS) actually condones the viability of index annuities for conservative minded investors.

One of the most popular financial guru’s today is Dave Ramsey. He is broadcast on hundreds of media channels into millions of homes all across America. He has suffered financial setbacks in his life, filing for bankruptcy protection against his creditors back in the early 1990’s. He is more particular about what type of annuity he would buy; but make no mistake about it, Dave has invested his own money into an annuity.


TonyThe most recent convert to the savvy strategy of index annuities is world renowned motivational speaker Tony Robbins. He has preached contentment and success to millions and fully understands how money worries prohibit one from achieving their own nirvana. The perfect simplicity of the index annuity let’s you put your retirement plan on “auto-pilot.”  Tony has counseled world leaders such as Mikhail Gorbachev and President Ronald Reagan plus numerous Fortune 500 CEO’s.  One must ask yourself,

If these intelligent successful people, who could afford to retain the investment advice of anyone or any firm in the World, are they putting their own hard-earned money into annuities, why aren’t you?

We at My Money Track understand that there are unethical, scruple-less sales people out there that push the old obsolete out-dated type of annuities that lock your money up for ten to fifteen years.  As with any product you purchase, do your due diligence and ferret out the good and the bad annuities and local advisors.  Still not convinced about annuities…?

Kenneth_lay_EnronEven the infamous and extremely wealthy pour millions into annuities for the bullet-proof creditor protection they provide to local Texans. Ken Lay, invested enough of his own money in February 2000, to provide for himself and/or his spouse that in 2007 began paying out about $900,000.00 per year, contractually guaranteed for the rest of their lives!

Ken and his hired guns were epitomized in the book and popular major motion picture titled; “The Smartest Guys in The Room.” The Enron group created sophisticated and elaborate accounting schemes that successfully hid billions of dollars in losses from everyone, including their auditors Arthur Andersen.

113576We would never recommend you coat-tail a convicted felons investment choices; however, the point is that properly implementing and structuring annuities could make your money and retirement iron clad protected from many types of losses and setbacks. Many years ago, investing in boring, conservative annuities were thought to be the choice of simpletons. You may have different feelings and emotions for or against the celebrates mentioned here… but they certainly are sophisticated, educated and extremely knowledgeable when it comes to investing money.

What the Wealthy and Wise Know…

The single trait that separates the great investor from the foolish one is the wise person learned and understands that to make real money, one must never lose money.

Never, ever go backwards in your investments.

This seems like an easy thing to accomplish; but it is one of the toughest to achieve. Our emotions tend to control our investment strategy. To be über successful in investing, one must take all emotion out of the equation. Making money is primarily a skill that requires discipline… an annuity takes out the guesswork and replaces emotion with elegant mechanical simplicity.

Money Safety NetIf the market goes up, you earn interest credits, if the market goes down or sideways… you stay even! Plus, many annuities now offer cool income features that will credit the income account in your annuity with a guaranteed annual increase amount whereby your income account increases even when the stock market doesn’t. We can help you locate these lucrative annuities with income riders that will pay your income account anywhere between 5% – 8% every year! Yes, you read that correctly…

Following is a chart of a real life, actual index annuity contract with an annual reset and how it had worked going back to September 1998. We do not recommend or suggest you purchase this type of product or even one similar to it… but use this illustration to learn how an index annuity could work in a volatile stock market. Note the actual returns this particular index annuity using the “annual monthly average” interest crediting method yielded.

Red Line = S&P 500 Index / Green Line = Annuity Value

EIA Illustration HypotheticalThe above chart illustrates a real life example of an equity-indexed annuity and how its value is locked in each year (annual reset). In years when the S&P 500 index either lost value or “broke even,” in this example your account value was safe and secure… locked in against current and future stock market losses.

What is the downside of an “ideal investment” such as the index annuity? Since your potential losses are limited to zero; your potential market gains are also limited. Investing into an index annuity such as the one used for illustration purposes, allows you to earn a reasonable “safe” and pretty much riskless return in exchange for a “no-loss of principal guarantee.”

During certain economic cycles when there is much tumult and uncertainty both in the USA and worldwide, a riskless investment with an added feature of an ever-increasing and a contractually guaranteed lifetime income stream by a financial institution is a powerful addition to your portfolio. Just ask Ben Bernanke! 

The equity-indexed annuity is a fairly simple concept to grasp, once you are provided the key inter-working parts of the investment. You are also given multiple options as to how and when you earn index tied interest credits. While it’s simplicity is one of the key benefits of the index annuity, you should seek the help and advice of a local Dallas or Fort Worth advisor or financial professional to explain all of its features, benefits and potential detriments.Happy money saving couple

Even if it is the “Ideal Investment” for you, it will not always be the most appropriate choice for everyone. That’s why My Money Track was formed to help guide you to determine if investing like the wealthy and financial experts is also the right choice for you. We use sophisticated technology to build the best combination of several different annuities that collectively will best meet your specific and personal needs. Ideally, we want to ensure you will have plenty of cash liquidity in case of an emergency and a contractually guaranteed lifelong monthly income stream.

Prepare for the best but expect the worst, when setting up your retirement plan.  

To avoid making investment mistakes, one must take the emotion out of the investment process. Greed and fear often cause a sane Baby Boomer or Generation X -er to make the wrong decisions. Removing the risk of market loss from the equation makes it much easier to stay on track and keep dangerous human emotions at bay.

My Money Track provides you with all of the financial tools to help you assess your personal investment risk level, cash flow needs, liquidity and we will even set you up a personal budget! Best of all, we are able to provide these services nearly free of charge to you. Our hybrid cutting edge annuity solutions do not charge you with a commission or hidden management fees.


The quickest way to double your money is to fold it in half and put it back in your pocket.

– Will Rogers

How do we get paid?

Obviously, we cannot and do not work for “free.” We are compensated by and from the financial institutions we partner with and not a single dollar of our compensation comes from “your” money or funds you invest. Just as there are “no fees” or commissions charged to you when you purchase a certificate of deposit (CD), there are no charges subtracted from your account when you purchase an annuity.

A certificate of deposit is to a bank, what an annuity is to an insurance financial institution.

When you purchase longer term CD’s, you will lock in higher interest rates. The same is true for annuities. If you cash in your CD prior to its maturity date, there is often a penalty; and the same is true for an annuity. But just like CD’s that have no early withdrawal penalties, there are also index annuities that have zero early surrender penalties. You have 100% penalty free access to your principal anytime you wish. man-with-a-pile-of-money

Why aren’t these penalty free annuities marketed as much as other annuities?

Generally the amount of compensation the financial institution offers on these are much lower than the longer term “lock-up” annuities. And the same is also true for CD’s offered through a partner of a bank.

Interestingly, both Certificates of deposits and index annuities are not considered a security (such as a stock or Treasury Bond) because by definition one cannot lose money, other than an early withdrawal related penalty. The FDIC backs up the safe return of your money used to purchase a CD and in Texas, the full faith and credit of our sovereign state backs up the return of your money used to purchase an annuity. Currently, the maximum amount of coverage per annuity with a single insurance company is $250,000, which is the same amount of coverage the FDIC provides per depositor, per bank. You are invited to learn more about the Texas Guaranty Association by clicking here.

No TaxesOne of the most important and beneficial features of annuities is that they are 100% income-tax advantaged.  Unlike any other type of investment that is not held inside an IRA or Qualified plan, you control and decide when you will take a distribution from your annuity and thus you control when you’ll pay income taxes on any gains in your annuity contract.  Few if any other investments offer this invaluable feature. Not even CD’s nor mutual funds allow you to defer payment of income taxes on annual increases, even if you didn’t take a distribution! This is called “phantom income tax.”


If it all “sounds too good to be true…”

With annuities it isn’t all “peaches and cream.”  There are significant potential tax disadvantages that could arise, just as there are with an IRA. Unlike an IRA, you may defer taking withdrawals from your non-IRA annuity and thus defer income taxes to age ninety or longer! With a tax deferred IRA, you are required by law to begin taking distributions out of your IRA beginning at age 70 1/2. And failure to withdraw your Required Minimum Distribution (RMD) will trigger an onerous and costly 50% penalty tax!

One should seek the guidance and advice of an income tax professional such as a CPA prior to purchasing an annuity.

We work with CPA partners and connect you to a qualified CPA if needed but My Money Track does not offer or provide tax advice or information.

Safe PlaceIndex annuities are contractually guaranteed by some of the highest credit rated institutions in America, against losses from market declines. In addition, each and every State in the USA has an insurance commission that monitors the stability and solvency of all insurance carriers in their state. In the extremely rare case an insurance company fails, the State (Texas for example) has a “guaranty fund” that insures investors in annuities up to $250,000 per person per carrier, as mentioned above. Even with the states financial backstop, we will only recommend institutions with the highest stellar credit quality and rating.

It is very Important to realize that index annuities are NOT a replacement for a stock market investment. They are more akin to conservative fixed income investments such as a Certificate of Deposit, (CD). In fact, their proper name is actually “fixed indexed annuity.” In a volatile stock market, the index annuity with an annual reset feature could be your best option for making more money than CD’s and with no principle risk.

Care must still be taken when designing the ideal mix of guaranteed protected growth investments and lifetime income streams. Many old school high-pressure insurance sales people will ask you…

“Don’t you want to protect or insure all of your money?”

The correct answer is, not necessarily. Other factors such as how much money you have set aside for emergencies and future free cash flow needs are paramount in creating a mix of ideal annuity investments.

Creative ThinkingThe sure-fire way to lose money in an annuity, is to cash it out earlier than originally agreed. With careful planning, even early surrender penalty losses can be easily mitigated by simply taking the time in the beginning to fully assess all of your cash flow needs and expenses. My Money Track specializes in helping create your personal budget. There are many more different types of liquidity features with annuities than discussed here; we work with you to select the ideal mix of hybrid investment vehicles best suited for you.

For more information on this particular product, call or email us today… we will promise to help educate you without any sales pressure to make a hasty decision.

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