With the stock exchange in steep decline, people are trying to find safe places to take a position their savings. Many banks and investment companies are pushing annuities. Annuities offer a better rate of interest than CD's, but are they safe?

You could view an annuity as a tax deferred CD. you do not pay taxes on the interest until you begin drawing from the annuity. But there are some important differences between an annuity and a CD. 

An annuity may be a product offered by an insurance firm . With giant corporations like Enron, Kmart, Worldcom, and United Airlines going bankrupt, are you able to guarantee that the insurance firm won't fold, leaving you with nothing? Insurance companies are insured by re-insurers, like General Re. But it seems regardless of how large a corporation is, you cannot make certain it won't fold. The bankruptcy of an outsized insurance firm might cause the re-insurer to collapse along side it. 

Bank CD's are insured by the Federal Deposit Insurance Corporation (FDIC) for up to $100,000 per bank. The FDIC may be a branch of the U.S. Government, who, as you recognize , are the people that print the cash . If they are going bankrupt, we'll have more to stress about than simply losing our savings! 

A new sort of annuity called a charitable gift annuity has come on the market recently. These are issued by charity organizations. You give your money to the charity, you receive a tax break , and in exchange the charity promises you a hard and fast payment for all times . Unfortunately, this scheme has become a mode of operation for con artists. 

The charitable gift annuity has been added to top ten scam list of the North American Securities Administrators Association. They explain that charitable gift annuities are subject to virtually no federal regulation. Here in Arizona, 430 investors lost their savings during a ponzi scheme travel by the Mid-America Foundation Inc. 

Banks and investment companies hawking annuities promote the upper than CD interest rates, but they fail to reveal the hidden fees and high early withdrawal penalties. If you would like to access your annuity before age 59½, you'll be subject to a ten percent penalty. 

With the recent bankruptcies, and discovery that a lot of giant corporations are cooking their books for years, I feel it is best to play it safe. If you're keen on the joys of risk, or if you've got already purchased an annuity, I wish you luck. As Rogers said, "I am not as concerned about the return ON my money as i'm about the return OF my money".

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HR Lady stared at me across the desk. She was trying to size me up, to know what makes me tick. I had explained that I wanted to figure for MegaCorp, which i used to be the right person to fill an edge that had not even been advertised.

"Tell me again why you'd wish to be the official MegaCorp scapegoat," she demanded.

I thought I had explained it tolerably . Every company needs a scapegoat, someone that others can bring forward when the warmth gets hot.

When the Board of Directors grumbles because all the graphs look the wrong way up , the President can call ScapeGoat into the space . Gentlemen, I even have identified our problem. it's all ScapeGoat's fault. He reversed the gravitational equilibrium, and therefore the graphs are not any longer ready to forge their customary ant-gravitational upward paths.

The Board of Directors gets tons less grouchy and that they are ready to enjoy their six course luncheon. That solves the matter of the the wrong way up graphs. a minimum of for an additional month.

When angry shareholders notice that their graphs also are the wrong way up , the President can call ScapeGoat into the space another time . it's all ScapeGoat's fault. it's all ScapeGoat's fault. He reversed the gravitational equilibrium again, and nobody's graph can forge its customary ant-gravitational upward path.

That solves the matter of the the wrong way up graphs for everybody except ScapeGoat's social insurance provider.

When employees want to understand why there's no bonus in their envelopes, the President can launch a full investigation. "We will find where ScapeGoat hid your bonus checks, if it is the last item "> last item we ever do!" and thus the investigation will last long enough that it will be the last item he ever does.

When creditors come calling... It's ScapeGoat's fault.

When the media wants to understand why there are not any women on the Board ... It's ScapeGoat's fault.

When the fish within the creek all float just like the graphs (upside down)... It's ScapeGoat's fault.

When the wind blows too strong on company property and knocks over a can , spilling an employee's drink and making him very thirsty... It's ScapeGoat's fault.

MegaCorp needs a scapegoat.

HR Lady asked another question. "What have you ever ever been doing these past thirty years."

The fact is that I had been freelancing. There are many people that need scapegoats. Drivers, for instance:

"What?!? My fresh car!"

"ScapeGoat crashed it."

"But...but, there's hardly anything left of it!"

"ScapeGoat is extremely thorough."

Parents need scapegoats, too.

"Where's little Cindy? Didn't you choose her up from the babysitter again?"

"Oops. Uh, I forgot. ScapeGoat distracted me."

"I hope you are doing not plan to get distracted tomorrow. If this keeps up, I'll forget what she seems like ."

HR Lady seemed amused. "If you were doing so well as a freelancer, why are you applying for employment here?"

I had to admit that freelancing was getting tough. Too many of us were losing faith.

"ScapeGoat distracted you again?!? that creates , uh...let me see, 6,342 days during a row. Little Cindy isn't that tiny anymore. Just who is that this ScapeGoat person anyway, the Tooth Fairy?"

HR Lady laid her hands on her desk. "MegaCorp has always done quite well without knowledgeable scapegoat. once we need somebody responsible , we will always find someone to play the role."

She wasn't cluing in. i used to be offering MegaCorp the prospect to use knowledgeable scapegoat, rather than constantly counting on amateurs, a number of whom weren't even willing players.

I looked HR Lady straight within the eye. "What will you tell your boss when he finds out that HumongaCorp features knowledgeable scapegoat, and you passed up the prospect to rent one, too? Who will you point the finger at then, an amateur?"

In all contributing circumstances, we will be gone up against with both hazard and prize. I can't think about any speculations that offer no hazard with enormous prize. The most widely recognized speculation opportunity I have seen is generally safe - low prize, okay high prize, enormous hazard - huge prize, large hazard - low prize. 

Huge hazard - low prize open doors are all over the place. Purchasing a stock at any cost will establish a major hazard - low prize venture openings. The odd is much more dreadful than betting where the house has a 55-60% possibility of winning. 

You may be thinking about how you can measure chance. Prize is simpler to evaluate. In the event that you purchase stock An at X cost and it has ascended to Y, at that point your prize is the distinction between your selling cost and price tag. Some hazard can be evaluate while others aren't. 

How about we utilize a model for explanation reason. What is the danger of purchasing Merck Co and Inc. (MRK)? The hazard is very much advertised. Speculators' hazard would be the potential Vioxx obligation that originates from claims. What amount does MRK needs to pay? No one knows without a doubt. We can just gauge. A few says $ 5 Billion. Another says $ 50 Billion. This is vulnerability and this is chance. You can diminish this hazard by understanding more and afterward make a traditionalist gauge with respect to this issue. 

Are there different dangers related with Merck? Sure. Patent lapse is one. Its top of the line sedate, Zocor, is scheduled to lose patent security in 2006. No one comprehends what different medications can supplant Zocor's income. Rivalry is likewise one type of hazard. Contenders can generally outmaneuver an organization and make an item out of date. These are for the most part vulnerabilities. These are dangers. Since what's to come is consistently questionable, the hazard is consistently there. What we can do as financial specialists is simply to diminish the hazard by improving estimation and knowing as much as possible.

I'm idealistic that the present circumstance is a transient one, and that drawn out possibilities are for development and great occasions. In any case, that doesn't imply that there won't be plunges, in some cases profound, en route. The inquiry is: Are you situated to exploit the great occasions and explore the awful? 

1. Escape obligation. The faster the better. You can't make the most of chances when you're buried under water. Furthermore, there are openings in both great occasions and in awful. In both, obligation shields you from benefitting from the open doors that current themselves. In terrible, it amplifies the negative, as the expense of cash increments and obligation administration turns into an ever-expanding segment of your costs. 

2. Think all around. No longer would we be able to bear to think and act locally. We should have a more extensive 

vision. We should consider how our employment, our business and our industry will work in a worldwide economy - in light of the fact that it as of now does. 

3. Be enterprising. This is the age of the free operator. Regardless of whether we are and plan to keep working in a bigger organization or association, we should in any event think like a business person. We should be "in-trepreneurs." Seniority and experience doesn't have the worth that it did. Creating results - and benefits - is what makes a difference. 

4. Become an entrepreneur. The rich own advantages, the rest own liabilities - things that cost cash to possess and keep up. Free enterprise is anything but a filthy word. An entrepreneur, by definition, is somebody who claims resources - resources that produce pay. Stock, gear and organizations are resources that produce salary. In America, 80 percent of all tycoons are independent. Be one of them. 

5. Be adaptable. Things are moving at a fast pace. This requests flexibility. Things won't continue as before, nor will they return to the manner in which they used to be. We should be happy to change bearings rapidly. It's evade and weave time. The time has come to grasp change. Move occurs!