Money Money Money

All investments are designed to either one or both of two things - build or hold wealth. Eventually you are going to need to create income from your vast investment empire!

Annuities are a fantastic way to create that income. In fact, there more money you have the more you should be using annuities to create that income. Think of it this way. Would you rather keep your $3,000,000 you have saved for retirement or risk losing 30% of it in one year in a fluctuating investment? In other words, are you willing to risk losing $900,000 in one year? If not then annuities should be your primary safety net.

But how do you earn income in annuities? Good question. Basically there are two ways which are a fixed interest rate and a variable interest rate. A fixed rate speaks for itself but a variable rate has a few aspects that are not immediately clear.

You can lose money in an annuity if you do not pay attention to the differences!

Variable rates come in two forms with a lot of details attached. There is a variable annuity and a fixed indexed annuity. Although there are ways to make sure you do not lose money, the variable annuity fluctuates in value and in interest. In other words you can lose money in a variable annuity due to market fluctuation.

In a fixed indexed annuity only the interest paid each year is variable. In other words it does not fluctuate with the market. If you want to learn more about how you get paid in a fixed indexed annuity then be sure to check out the article that I posted called - How You Get Paid In A Fixed Indexed Annuity.

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