What is the best guaranteed return you can for a steady stream of income? Edward Jones is saying 9%,possible?

Question

$250,000 severence pay, wants to receive income as interest payments only. Edward Jones says she can guarantee $1700 a month. I am wondering if this is possible or not. I'm concerned.

Answer 1

Its possible, but its not guaranteed. In fact, you can take out as much as $1875/month with a 9% interest and you won't even affect the $250,000 balance.

There is no place on earth where you can find something that can guarantee you a return on your savings. If you want higher returns, you need to invest and take on risks. The highest interest rate I ever see and is FDIC insured are online savings banks that give 5.05% interest. This rate is not guaranteed because the bank can constantly change it any time. At one point, it was high as 5.15%, then it drop to 5.05% and its been holding steady for the past couple years.

In the late 1980s, I used to get 4% interest on my savings account at my local bank. Now its less than 1%. So I moved all my savings into one of those online savings bank like HSBC or EmigrantDirect or Citi e-savings.

I guess the only that guarantees the interest rate is the rate you get on your credit cards. But when it comes to saving money, there's no guaranteed about interest rates. Banks can change their rates at anytime. If you invest, you know there's no guarantee you will make a return, but its the risk you should be willing to take since the history of the stock market been going up in the long run.

Answer 2

It's not hard to earn 9% but you have to take some kind of risk--you're not going to get that in US Treasury bills or FDIC-insured bank accounts. Many corporate bonds pay 9% or more. They are legally guaranteed to pay as long as the company exists, but there is no protection of capital if the company dissolves. I think you might have misunderstood the nature of the guarantee because I can't believe a broker at a reputable company would lie that blatantly.

If "guaranteed" includes investments backed by any government entity, the best I know of is 3-month CD's in Iceland, which are earning 12%. The catch is that you have to buy these in Iceland's currency, so there is a risk that the currency exchange rate will move against you and reduce the value of your principal. Check it out at this site, which is legitimate:

http://www.everbank.com/001WorldCurrencyCD.aspx

Answer 3

my Edward Jones rep never guaranteed anything like that. There is an outfit in Florida, Georgia and I think Louisiana called the Money Tree. They offer 9.09% but the catch is the business they are in deals with very high risk personal loans. The money collected is for that purpose (at leats that is what I interperted through their prospectus) too scary for me. But a guarantee income from a broker is very very fishy.

Shame tioo Edward Jones is one of the better ones too. I would report the broker to the home office in St Louis.

Answer 4

If you invest the money and collected 8 % you would yield $80,000 per year ($6,667 per month ) . Over the years, inflation would weaken your spending power. I would use the $1m as a down payment to buy a $3 million dollar basket weaving business . A business of this type should yield a profit of around $800,00 per year and the yearly payments on a $2m dollar 10 yr loan are around $300,000 . In this case you would collect around $500,000 per year and after 10 years you could sell the business and retire with a cigar in your mouth just like the banker in the Monopoly game .

Answer 5

I got 8.5 % from John Hancock