Hi graywings, I started reading this thread without noting the dates the posts were written. Dave, I don't want to put you on the spot, but I am wondering how the accounts you spoke of in 2007, the 72c Guaranteed Savings accounts (equity-indexed fixed life contract, or annuity contract) have weathered over the last three years. Heh... you can "put me on the spot" in this regard *ANY* time ;~) Both the equity indexed life & annuity products have *VERY* strongly outperformed the unprotected stock index markets over the same periods of time (since 2007. In fact, going back from today to almost as far as you'd like.) Their design is that they capture & credit any annual upside (to a maximum gain,) and lock that amount permanently to your credit. On any years with a downside, your account sits tight with no losses at all (guaranteed by the insured backings of the company reserves and the state's guarantee association (each state's equivalent of a regional "FDIC" in essence.) If you put $100,000 in the S&P 500 for the last decade, you'd actually be holding a bit LESS than $100,000 today (not deducting the tax or management fees that may also be applied.) The same $100,000 in an insured indexing account would be approximately $211,768, net of everything (taxes & fees,) *OR* about an average annual tax-free rate of return of 7.06% Alternatively, those folks who decided to take their working capital OUT of growth, and put it into their real estate equity, have been double-stung; Not only have they gained nothing toward retirement, their equity values have decayed from 10-30% (depending on the area.) The clients who've been with us the last 3-5 years have been rather relieved, ecstatic, and pleasantly bored, all at the same time. Its a very nice financial reality to provide. Cheers, Dave Donhoff Leverage Planner (PS. to re-paraphrase celticmoon; When everyone else's retirement nest-egg is drowning deep underwater... its kinda nice to be riding on the back of a "duck" ;~)

>>The recent run up in the market has put me in a mind to move money around, but attempting to time the market has always proven to be a losing proposition for me!!! Every time I have tried to time the market, I have lost money.... if I would have just stayed put, I'd be much better off today. Exactly. You are following (what it sounds like to me, so apologies if this isn't correct) the "herd" mentality and buying when it is popular (high) and then panic selling when the market falls. It's no different than buying a house at the top of the RE runup and then watching the RE 'bubble' burst on you (yeah, it happened to us in 1989, so I know how it feels!). Steady, reasoned investing with a diversified portfolio - which you are NOT doing by having only 2 funds in mind - gives better results over time. You will not gain hugely in hot stock years, but you will also not lose hugely in bad ones, such as the 27% drop in the S&P 500 from 2000-2002 and the dot-com implosion. Our retirement portfolio was 85% invested in the S&P 500 in 2000. Lost my job in the dot-com implosion and watched my husband's retirement savings lose a quarter of their value. My husband asked me what we should do. I told him the fundamentals were still in our favor, we're investing for the long term, and that the big stocks would recover first which is the historical norm. Within 18 months we had regained the losses and the portfolio has gained 11-22% annually since, BUT we are currently more aggressively diversified into international stocks on the advice of my ex-boss. He's an independent Certified Financial Planner who can pick and choose his customers because he's semi-retired and only takes referrals, no hard advertising for years now. What I learned from him that was a lot more important than any stock tip was to get my legal and financial house in order! This meant a customized Revocable Trust (we learned what NOT to have while trying to update my widowed MIL's outdated Trust!), new wills, power of attorney docs, durable healthcare POA updates (including the crucial HIPAA release which nobody ever tells you about, but legally a doctor can't even tell your spouse what's wrong with you, emergency or no, without it). I also finally consolidated all my previous employer 401k's into one IRA at a low-cost brokerage. I'd been meaning to do it for years, but kept putting it off. I finally got a first-hand lesson just before I left the CFP's employ - a widow signed on as a new client and her husband had left half a dozen 401k's scattered around at various tech companies. It was a paperwork NIGHTMARE to get them consolidated under the widow's name! So that was on my to-do list before I could start looking for work, LOL. You cannot "time" the market. Free advice is usually worth what you have paid for it. Heck, even a lot of paid advice often isn't worth it! As my ex-boss would tell people, "Hey, if I knew what the next hot stock would be, do you think I'd still be doing the CFP thing??!??" Mind you, he makes a very comfortable living; nothing outrageous and nouveau riche, just a good solid six-figure income plus he loves what he does, working with people and helping them secure a good financial future. Set up a regular investment program and diversify through mutual funds at a low-cost brokerage. At least 3 funds in different markets, preferably 5 as your portfolio grows. Check the 10 yr average returns because the 5 yr averages are now skewed - the 'dog years' of 2000-2001 have now fallen off the 5 yr average. For those who are saving for college, 529 plans are not counted in most college aid plans because the adult retains ownership, a child is merely the beneficiary and it can be changed at any time. However, 529 plans are only useful if your investment horizon is at least 10-15 years. A UTMA account can be transferred to a 529 plan but you will need to talk to your financial advisor or brokerage for full details.

Greetings rufus doofus, There are two rats that eat your cheese. There's an agency, the partner in many of your financial affairs, that asks you a question each year, and makes a statement. The question from the income tax people: "How much did you make, last year"? The statement: "We want part of it". You can keep only that part of your income that remains after you've paid that income tax to your financial partner, the income tax people. I wasn't sure from your message whether the interest on your mortgage is deductible, or not. If not, another reason not to pay off most or all of the amount owing. The other rat that eats your cheese? When you put money into a CD, you have that guarantee that you referred to - that the guys using your money will pay back every dollar that they got from you, in addition to the rent on the money. There's another guarantee that they never mention - they won't pay one dollar more than you gave them, either. BUT - the value of each one of those dollars shrank, every year since the early 30s. When you put your money into a bank account, a money market fund, a bond or a CD ... you're not keeping the full after-tax amount of interest that the borrowing agency's paying you. You must put part of the earnings with the amount invested, in order to maintain purchasing power of those dollars. Your actual earnings are what's left. And, don't forget ... the rats eat first. Good wishes for making increasingly wise use of your income and assets. ole joyful

I have such a love hate relationship with the sorts of articles such as "Never pay off your Mortgage" etc. The benefit is that it gets people thinking, the bad thing is that it paints a narrow, ill conceived, rosy picture that doesn't hold up too well under scrutiny. Life is never so black or white. Several potential fallacies: #1. The assumption that everyone will have other debt in their life. #2. I'd like to find a bank that will give you a 95% 30FRM (as per his example) with out requiring an 80/15, or PMI, etc., all costs which he neglects to account for. #3. If his rosy fellow Ed is out of a job, he'll have no earned income. It's tough to make a deduction from that, so his "after taxes payment" will be readjusted back to original, meaning his $40K will last a much shorter time than this article (which also fails to account for basic costs of living beyond housing) accounts for. Fact is that if either of them are out of work for any amount of time, they're screwed. I'm not sure yet if we'll pay our mortgage of early or not. As per the article's example, our income has increased so that it's not the drain on us that it was 2 years ago. If we do prepay, we'll do it in a lump sum capacity after the point at which it is not longer a beneficial tax deduction to us. Right now we're investing the money that would go to extra payments. -meg