RIA says, "Why do you hate your wife"

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Puakinekine
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RIA says, "Why do you hate your wife"

Postby Puakinekine » Thu Mar 29, 2012 2:08 pm

I found this through the Abnormal Returns blog.

http://rpseawright.wordpress.com/2012/0 ... cceptable/

The topic of male vs female investing styles have been discussed previously. But I found this article to be interesting as it concludes with the idea that the women who, against their better judgment, acquiesce to their male partners overly aggressive portfolio plans, will end up, as widows, suffering the consequences. The reason this interests me is that I have several female friends who are not comfortable with their husband's portfolio choices, but yet do not force the issue. It baffles me, as they are generally strong and competent women, who do not hesitate to speak their mind, and who know very well (but for this instance) how to take care of themselves. The article concludes with:

A long-time financial advisor I know recounts meeting with a couple about retirement planning and encountering (typical) resistance to obtaining guaranteed income and long-term care insurance from the husband. The advisor looked him straight in the eyes and asked a question he often asks in such situations: “Why do you hate your wife?” That may seem like a shocking and perhaps offensive question, but it ought to be asked with regularity. Husbands who love their wives should take much greater care to consider their wives’ feelings and likely future circumstances and, as a consequence, take on far less risk in retirement planning. Doing so is the socially and personally responsible thing to do



There are two questions I have right off the bat. Do the financial professionals see this sort of couple dynamic often?

Women are far more likely to protect themselves with the purchase of long-term care insurance and income annuities (which provide guaranteed income for life). Yet despite their obvious value, these products are by no means hot commodities and it isn’t hard to comprehend why. Nearly every experienced financial advisor can recount multiple instances of nervous and worried wives going along with their husbands’ aggressive and often overly aggressive investment plans despite serious misgivings (one such story is offered by Wharton Prof. David Babbel here).


The second question involves the whether there is an agenda behind this article. I get a whiff of the hard sell of costly insurance products here, even though for the most part I agree with the article.

Caveat: I know that there are decent SPIA's out there, so we don't need to go into the annuity discussion. :happy
I also know that the aggressive/less aggressive dynamic is not necessarily gender specific in female/male marriages and obviously not gender specific in same sex marriages.

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Re: "Why do you hate your wife"

Postby VictoriaF » Thu Mar 29, 2012 2:16 pm

Puakinekine wrote:The second question involves the whether there is an agenda behind this article. I get a whiff of the hard sell of costly insurance products here, even though for the most part I agree with the article.


I vote for this interpretation. The article has swiftly turned from the male-style aggressive investing to equating not buying long-term insurance with hating one's wife.

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Re: "Why do you hate your wife"

Postby HomerJ » Thu Mar 29, 2012 2:19 pm

Puakinekine wrote:The second question involves the whether there is an agenda behind this article.


This.

I would walk out if a FA ever asked me such a question.

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Re: "Why do you hate your wife"

Postby Grt2bOutdoors » Thu Mar 29, 2012 2:26 pm

rrosenkoetter wrote:
Puakinekine wrote:The second question involves the whether there is an agenda behind this article.


This.

I would walk out if a FA ever asked me such a question.



My response would be a rhetorical "Why do people hate FA's? Followed by a choice word or two.
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Re: "Why do you hate your wife"

Postby HardKnocker » Thu Mar 29, 2012 2:29 pm

That's a good sales line for a life insurance agent!

The correct comeback to that is the following: "I don't care what happens to her after I'm dead. She can marry someone else."

:wink:
Last edited by HardKnocker on Thu Mar 29, 2012 2:30 pm, edited 1 time in total.
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Re: "Why do you hate your wife"

Postby yobria » Thu Mar 29, 2012 2:29 pm

The advisor looked him straight in the eyes and asked a question he often asks in such situations: “Why do you hate your wife?”


These guys never run out of wacky sales comebacks. That's right out of Glenngary Glenn Ross.

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Re: "Why do you hate your wife"

Postby VictoriaF » Thu Mar 29, 2012 2:43 pm

Puakinekine wrote:The reason this interests me is that I have several female friends who are not comfortable with their husband's portfolio choices, but yet do not force the issue. It baffles me, as they are generally strong and competent women, who do not hesitate to speak their mind, and who know very well (but for this instance) how to take care of themselves.


Leaving alone the article and the underhanded pushing of insurance products, I will try to answer your bafflement. Married women have many domains for which they take responsibility. If the family home is tastelessly decorated or not clean, the blame usually falls on the woman of the house, even if theoretically the blame should be divided equally. If the wife is poorly dressed, her husband is rarely faulted; if the husband's socks do not match his tie, the wife will blush. These cultural conventions and cultural pressures cause women to be strong in the areas of their responsibility. A strong woman would force her husband to have a haircut, visit doctors, limit his drinking, and pick up towels from the bathroom floor. But she would have no social pressure to interfere with her husband's investing.

But why would not a strong prudent woman monitor family investments even without social pressure? One reason is that she may not know that investing is fundamentally simple, and that her husband is unnecessarily confusing her by using acronyms for stocks and funds and referring to derivative instruments. Husbands have a tendency to act defensively when the wife is interfering with his domain and his fun.

Victoria
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Re: "Why do you hate your wife"

Postby MathWizard » Thu Mar 29, 2012 2:43 pm

rrosenkoetter wrote:
Puakinekine wrote:The second question involves the whether there is an agenda behind this article.


This.

I would walk out if a FA ever asked me such a question.


Agree. Pitting one member of a couple against another is an obvious tactic.
We didn't let our kids do it, why would we let a saleman do it?

If the article has any merit, it probably does not apply to the males (or females)
in this forum. The most aggressive moves I see in this forum regarding investing are
1) saving very aggressively
2) more tilt to equities, especially when young, but still within low cost index funds


#2 certainly is not going to make the spouse poor in retirement
#1 is debated often in this forum, and does make the outcome more uncertain, but over
long periods of time (40-50 years for a young person) has provided better average results.
Engaging in #2 is a calculated risk, certainly not worthy of "You hate your wife."

Recklessly aggressive is betting it all in Vegas or at the track or jumping from one hot
stock pick to another from "A guy I know".

In my case, though my wife and I are in general agreement,

1) I prefer to save more than my wife does, and
2) in our respective retirment funds, I am 80% equities, but my wife is 100% equities.

So though I am the male, I'd consider myself less aggressive than my spouse.

I suspect that I am not alone among members of this forum.

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Re: "Why do you hate your wife"

Postby MathWizard » Thu Mar 29, 2012 2:49 pm

VictoriaF wrote:
Puakinekine wrote:The reason this interests me is that I have several female friends who are not comfortable with their husband's portfolio choices, but yet do not force the issue. It baffles me, as they are generally strong and competent women, who do not hesitate to speak their mind, and who know very well (but for this instance) how to take care of themselves.


Leaving alone the article and the underhanded pushing of insurance products, I will try to answer your bafflement. Married women have many domains for which they take responsibility. If the family home is tastelessly decorated or not clean, the blame usually falls on the woman of the house, even if theoretically the blame should be divided equally. If the wife is poorly dressed, her husband is rarely faulted; if the husband's socks do not match his tie, the wife will blush. These cultural conventions and cultural pressures cause women to be strong in the areas of their responsibility. A strong woman would force her husband to have a haircut, visit doctors, limit his drinking, and pick up towels from the bathroom floor. But she would have no social pressure to interfere with her husband's investing.

But why would not a strong prudent woman monitor family investments even without social pressure? One reason is that she may not know that investing is fundamentally simple, and that her husband is unnecessarily confusing her by using acronyms for stocks and funds and referring to derivative instruments. Husbands have a tendency to act defensively when the wife is interfering with his domain and his fun.

Victoria


Thank you for your insights.

I'll keep it in mind when talking to my wife about our investments.

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Re: "Why do you hate your wife"

Postby Swamproot » Thu Mar 29, 2012 2:51 pm

yobria wrote:
The advisor looked him straight in the eyes and asked a question he often asks in such situations: “Why do you hate your wife?”


These guys never run out of wacky sales comebacks. That's right out of Glenngary Glenn Ross.


I was asked the something similar from a car salesman when I went to buy a cheap used car and he wanted to sell me a new one. "You want your wife to be safe, don't you?"

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Re: "Why do you hate your wife"

Postby Rodc » Thu Mar 29, 2012 3:50 pm

Swamproot wrote:
yobria wrote:
The advisor looked him straight in the eyes and asked a question he often asks in such situations: “Why do you hate your wife?”


These guys never run out of wacky sales comebacks. That's right out of Glenngary Glenn Ross.


I was asked the something similar from a car salesman when I went to buy a cheap used car and he wanted to sell me a new one. "You want your wife to be safe, don't you?"



Safe from you, yes. :)
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Re: "Why do you hate your wife"

Postby pjstack » Thu Mar 29, 2012 4:42 pm

I always enjoy Victoria's responses! She ranks right up there with Nisiprius in my opinion!
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Re: "Why do you hate your wife"

Postby chaz » Thu Mar 29, 2012 5:05 pm

pjstack wrote:I always enjoy Victoria's responses! She ranks right up there with Nisiprius in my opinion!

I agree - she has a great sense of humor.
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Re: "Why do you hate your wife"

Postby nisiprius » Thu Mar 29, 2012 5:45 pm

“Why do you hate your wife?” That may seem like a shocking and perhaps offensive question...
It is a shocking and offensive question.
...but it ought to be asked with regularity.
No, it shouldn't. Twisted, manipulative, loaded rhetorical questions ought not be asked at all.
Husbands who love their wives should take much greater care to consider their wives’ feelings and likely future circumstances and, as a consequence, take on far less risk in retirement planning. Doing so is the socially and personally responsible thing to do.
I am as petty-minded, inconsiderate, and selfish as the next guy, but that does not translate into "hate," and it does not translate into "lack of love," either.

What set of people can appropriately express an opinion about the emotional relationship between me and my life partner?

"Have you given adequate consideration to your wife's life expectancy in your financial planning" is an appropriate question. "Do you hate your wife" is not. "Why do you hate your wife" is worse. I can think of no reason to phrase the question that way except to evoke a visceral response in the hope of obscuring thought rather than clarifying it.
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Re: "Why do you hate your wife"

Postby cb474 » Thu Mar 29, 2012 7:45 pm

I agree that the statement, "Why do you hate your wife?," is most likely a manipulative sales tactic. But I'm surprised that people are taking it so literally. I think the financial advisor isn't suggesting that the putative husband literally hates his wife. The financial advisor is ostensibly trying to shock the husband, who's being defensive about his aggressive investment plans, into considering that these investments plans are not really taking into mind the impact they will have on his wife, who is statistically likely to outlive him (and run out of money, if the husband sticks to his plan). The tactic may be overly blunt and manipulative, by the underlying question does not seem without merit.

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Re: "Why do you hate your wife"

Postby dhodson » Thu Mar 29, 2012 8:07 pm

The problem is that the insurance products typically mean even less money for both. One bad strategy only being replaced by an equally if not worse strategy.

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Re: "Why do you hate your wife"

Postby madbrain » Thu Mar 29, 2012 8:15 pm

I am anxiously awaiting to hear which tactic those insurance salespeople will come up with when trying to market their products to same-sex couples.

If you really want to throw them off, do what I do - tell them you have HIV (even if you don't). Then they will really struggle to find any products to sell to you.

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Re: "Why do you hate your wife"

Postby epilnk » Thu Mar 29, 2012 8:15 pm

cb474 wrote:I agree that the statement, "Why do you hate your wife?," is most likely a manipulative sales tactic. But I'm surprised that people are taking it so literally. I think the financial advisor isn't suggesting that the putative husband literally hates his wife. The financial advisor is ostensibly trying to shock the husband, who's being defensive about his aggressive investment plans, into considering that these investments plans are not really taking into mind the impact they will have on his wife, who is statistically likely to outlive him (and run out of money, if the husband sticks to his plan). The tactic may be overly blunt and manipulative, by the underlying question does not seem without merit.

Yes it does. I would look him straight in the eye, thank him for his time, and walk out. And I am the wife. My poor husband would have to catch up with me in the hall.

To me this question ranks up there with, "oh, so you're not interested in saving money?" It slams the door shut on any possibility I would ever consider another syllable out of the a-hole's mouth.

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Re: "Why do you hate your wife"

Postby Bob Seawright » Thu Mar 29, 2012 10:58 pm

Puakinekine wrote:There are two questions I have right off the bat. Do the financial professionals see this sort of couple dynamic often?

Yes.

Puakinekine wrote:The second question involves the whether there is an agenda behind this article. I get a whiff of the hard sell of costly insurance products here, even though for the most part I agree with the article.

No. I tried to select (relatively) non-controversial solutions to avoid that charge (unsuccessfully here, it would seem). "More conservative" can and should mean more and better diversification, lower costs, less trading and more passive management. Switching to a lazy portfolio with a 60:40 or 50:50 allocation would be a huge improvement in the vast majority of cases and would be much more conservative than what I see regularly.

I mentioned income annuities (SPIAs) because they are 25-40% cheaper than any DIY alternative on account of risk pooling. Very few are sold, in large measure because they pay the advisor so little and the advisor loses control of the money. Allocating a piece of one's portfolio to guarantee base income needs via a low-cost SPIA improves the overall portfolio (assuming it doesn't require too high a percentage overall). It shouldn't be controversial at all. LTC is a bit more controversial because it isn't cheap, but having seen how frequently it is needed and how devastating the problem can be on the uninsured has moved me to become a believer.

With respect to those who are offended by the "Why do you hate your wife?" question, the man who used it did so with clients he knew well. He has the ability to ask such a question and not come off as heavy handed. In any event, the point I was getting at relates to the data. Men tend to control the money most of the time and then tend to die first -- leaving their wives to live with their errors and the consequences thereof.

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Re: "Why do you hate your wife"

Postby 555 » Fri Mar 30, 2012 12:23 am

Bob Seawright wrote:With respect to those who are offended by the "Why do you hate your wife?" question, the man who used it did so with clients he knew well. He has the ability to ask such a question and not come off as heavy handed. In any event, the point I was getting at relates to the data. Men tend to control the money most of the time and then tend to die first -- leaving their wives to live with their errors and the consequences thereof.
Okay getting to the point you wanted to make. If people are in poverty in old age, is it really due to investing too aggresively of too conservatively? Or is it due to spending too much and saving too little?

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Re: "Why do you hate your wife"

Postby Alex Frakt » Fri Mar 30, 2012 12:26 am

I should really edit this thread's title, but I can't seem to think of a proper alternative.

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Re: "Why do you hate your wife"

Postby Bob Seawright » Fri Mar 30, 2012 12:40 am

555 wrote:Okay getting to the point you wanted to make. If people are in poverty in old age, is it really due to investing too aggresively of too conservatively? Or is it due to spending too much and saving too little?

In my experience -- all of the above. For example, some people save too little (and spend too much) because of unrealistic expectations and investing that is too aggressive. Or they overestimate how "safe" their withdrawal rate is. While I do think that one's rate of savings is more important than one's rate of return, that doesn't mean that overly aggressive men don't do great damage to their wives' financial well-being. Daniel Kahneman calls our overly optimistic expectations about the future and our unrealistic expectations about our ability to control or influence the future the "planning fallacy." The problems you ask about all fall under that rubric, I think.

\

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Re: "Why do you hate your wife"

Postby Bob Seawright » Fri Mar 30, 2012 12:44 am

Alex Frakt wrote:I should really edit this thread's title, but I can't seem to think of a proper alternative.

Real Clear Markets used that exact title, even if I did not.

http://www.realclearmarkets.com/2012/03/29/

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Re: "Why do you hate your wife"

Postby riskonoff » Fri Mar 30, 2012 6:38 am

My wife is much smarter than me (U of Chicago MBA), however, she has absolutely NO interest in our investments. I gave her my Vanguard log-in information and told her to occasionally review our portfolio. She said no thanks, I trust you.

I grew up with absolutely no money and really have worried about money everday of my life. My wife grew up rather affluent and has not thought about money one day of her life. Her Father was not around much when she was growing up and almost worked himself to death. She saw firsthand the destructive force of chasing the almighty dollar. Hence, this could explain her lack of interest in our portfolio and money in general.

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Re: "Why do you hate your wife"

Postby CrowTRobot » Fri Mar 30, 2012 7:54 am

What I can't fathom is that, apparently, these types of lines actually "shame" some men into buying a product.

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Re: "Why do you hate your wife"

Postby dhodson » Fri Mar 30, 2012 8:14 am

a better title would have been why you should hate some insurance agents.

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Re: Insurance agent says, "Why do you hate your wife"

Postby Alex Frakt » Fri Mar 30, 2012 9:20 am

Got it. Title changed from "Why do you hate your wife" to Insurance agent says, "Why do you hate your wife"

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Re: "Why do you hate your wife"

Postby edge » Fri Mar 30, 2012 10:49 am

Really? My wife doesn't care about our investments no matter how many times I try to get her to understand it.

VictoriaF wrote:
Puakinekine wrote:The reason this interests me is that I have several female friends who are not comfortable with their husband's portfolio choices, but yet do not force the issue. It baffles me, as they are generally strong and competent women, who do not hesitate to speak their mind, and who know very well (but for this instance) how to take care of themselves.


Leaving alone the article and the underhanded pushing of insurance products, I will try to answer your bafflement. Married women have many domains for which they take responsibility. If the family home is tastelessly decorated or not clean, the blame usually falls on the woman of the house, even if theoretically the blame should be divided equally. If the wife is poorly dressed, her husband is rarely faulted; if the husband's socks do not match his tie, the wife will blush. These cultural conventions and cultural pressures cause women to be strong in the areas of their responsibility. A strong woman would force her husband to have a haircut, visit doctors, limit his drinking, and pick up towels from the bathroom floor. But she would have no social pressure to interfere with her husband's investing.

But why would not a strong prudent woman monitor family investments even without social pressure? One reason is that she may not know that investing is fundamentally simple, and that her husband is unnecessarily confusing her by using acronyms for stocks and funds and referring to derivative instruments. Husbands have a tendency to act defensively when the wife is interfering with his domain and his fun.

Victoria

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Re: Insurance agent says, "Why do you hate your wife"

Postby gwrvmd » Fri Mar 30, 2012 7:18 pm

I am a persn who usually says that your investment horizon is not when you retire, or start getting SS, it is the day you die.
When discussing this with a man whose wife is 2 years younger I may say " Y' know women usually live to be 2 years older than their husbands so you should consider in your investment planning that your investment horizon is 4 years after you die". That really gets people thinking and no one is insulted.........Gordon
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Re: Insurance agent says, "Why do you hate your wife"

Postby mephistophles » Fri Mar 30, 2012 7:59 pm

Less than 5% of life insurance agents survive in the business for a full career. 85% of new life insurance agents with the top 100 life insurance companies fail within the first three years These numbers are approximate, but are in the ball park. I would assume that any agent who asks the question: "why do you hate your wife" would be among those who don't last very long in this business.

During my four decades in the life insurance business, I have never heard such a sales line as the one in this article. If someone said those words to me, they would be on their way out the door in an instant. IMHO this article is fishy, has nothing whatsoever to do about insurance, and that the real agenda is for women to stand up for themselves as full equals in decision making of all kinds. I am all for that, but the article is a poor vehicle to deliver that message.
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Re: Insurance agent says, "Why do you hate your wife"

Postby dhodson » Fri Mar 30, 2012 8:07 pm

the insurance companies are fine with most agents failing. frankly it helps them out since they dont have to defend agent smith who pushed whole life or whatever insurance product just to make a sale. If they wanted to create a better environment where more agents were better trained, they easily could. You know first hand how many agents push permanent insurance for instance on those who it really isnt appropriate for. Can you honestly say that the companies want something different?

While the line typically isnt you must hate your wife. What they actually say is something to make you think that bc you love your wife/kids/etc that you will buy permanent insurance for instance. The truth is love has nothing to do with buying that product. People who dont buy those things love their family just as much. Its about making smart decisions which is hard to do when you dont have the knowledge necessary and an "Expert" is leading you the wrong way.

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Re: Insurance agent says, "Why do you hate your wife"

Postby mephistophles » Fri Mar 30, 2012 11:56 pm

dhodson wrote:the insurance companies are fine with most agents failing. frankly it helps them out since they dont have to defend agent smith who pushed whole life or whatever insurance product just to make a sale. If they wanted to create a better environment where more agents were better trained, they easily could. You know first hand how many agents push permanent insurance for instance on those who it really isnt appropriate for. Can you honestly say that the companies want something different?

While the line typically isnt you must hate your wife. What they actually say is something to make you think that bc you love your wife/kids/etc that you will buy permanent insurance for instance. The truth is love has nothing to do with buying that product. People who dont buy those things love their family just as much. Its about making smart decisions which is hard to do when you dont have the knowledge necessary and an "Expert" is leading you the wrong way.


I am uncertain if your post is addressing a previous post by me :? Are you an agent or industry insider? Where do you get your knowledge on agent failure rates, the role of love in motivating insurance purchases and your other statements?

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Re: Insurance agent says, "Why do you hate your wife"

Postby baw703916 » Sat Mar 31, 2012 12:28 am

Is it OK to hate your wife if she's an insurance agent who sells equity indexed variable annuities? :wink:
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Re: Insurance agent says, "Why do you hate your wife"

Postby dhodson » Sat Mar 31, 2012 6:03 am

I am a physician. I have tons of experience with agents and their tactics. Sadly I wasn't always so knowledgeable about the problems. Most senior agents quote failure rates similar to what you posted in my experience.

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Re: Insurance agent says, "Why do you hate your wife"

Postby nisiprius » Sat Mar 31, 2012 6:59 am

gwrvmd wrote:When discussing this with a man whose wife is 2 years younger I may say " Y' know women usually live to be 2 years older than their husbands so you should consider in your investment planning that your investment horizon is 4 years after you die". That really gets people thinking and no one is insulted.........Gordon
The chart below shows the comparative percentages of people surviving to various ages, and I feel it would be more accurate to say that women usually live about 6 years older then men. This can be stated in various ways, some perhaps tendentiously.
  • Ever visited a nursing home?
  • About twice as many women as men survive to age 90. About 1/4 of all women reach 90. Only about 1/8 of all men do.
  • As of 2006, a 65-year-old man had a life expectancy of 17.0 years. In 1970, a 65-year-old woman had a life expectancy of 17.0 years. Thus, with respect to longevity, being a woman is worth 36 years of medical progress.
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Re: Insurance agent says, "Why do you hate your wife"

Postby HongKonger » Sat Mar 31, 2012 7:33 am

Smart women have a secret stash of cash taken regularly from the household budget that their partners don't know about.

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Re: Insurance agent says, "Why do you hate your wife"

Postby Noobvestor » Sat Mar 31, 2012 7:37 am

My SO has a life insurance policy which I did not even remotely hint that she should get. As she puts it: "it's enough for you to drown your sorrows in world travel and drink for a year". I have a life insurance policy in the form of substantial nest egg. As far as I'm concerned, neither seems *fully* necessary - i.e. the egg is probably larger than most policies, and the policy is more of a gesture than anything. For that matter, at what point (assuming any) does a life insurance policy become redundant in the face of net worth? Interesting question, I have no idea of the answer beyond my intuition at this point.
"In the absence of clarity, diversification is the only logical strategy" -= Larry Swedroe

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Re: Insurance agent says, "Why do you hate your wife"

Postby VictoriaF » Sat Mar 31, 2012 8:04 am

HongKonger wrote:Smart women have a secret stash of cash taken regularly from the household budget that their partners don't know about.


The women who do this are insecure and conniving.

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Re: Insurance agent says, "Why do you hate your wife"

Postby VictoriaF » Sat Mar 31, 2012 8:12 am

nisiprius wrote:
  • Ever visited a nursing home?
  • About twice as many women as men survive to age 90. About 1/4 of all women reach 90. Only about 1/8 of all men do.


Apart from physiological gender differences, men abhor the indignities of a nursing home more so than women. Older men who commit suicide probably skew these statistics. The current data represent older generations. As more independent women reach old age, the mortality rates may get closer.

Victoria
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Re: "Why do you hate your wife"

Postby Bob Seawright » Sat Mar 31, 2012 9:11 am

mephistophles wrote:I would assume that any agent who asks the question: "why do you hate your wife" would be among those who don't last very long in this business.

The thread title is now deceptive (it was changed administratively). The person who asked the question was and is a principal in an RIA firm who has been in the financial planning business for decades. He was speaking to long-time clients with whom he had and still has a fiduciary relationship.

mephistophles wrote:[T]he real agenda is for women to stand up for themselves as full equals in decision making of all kinds. I am all for that, but the article is a poor vehicle to deliver that message.

I would like wives to stand up for themselves and for husbands to include them in the financial planning process more readily and more fully. You're entitled to you opinion as to its quality, of course, but the responses to the article I have received so far have been overwhelmingly positive, especially from women. I spoke with a woman in the home healthcare industry just last night who said she wishes every husband got advice like that because she sees wives suffer the tragic consequences of their husbands' bad financial decisions every single day. She sees a particular problem with wives spending way too much money caring for their husbands (since they typically don't have LTC) and being left in very difficult straights thereafter.

I never imagined that anyone would see the article as an insurance pitch (and, to my knowledge, nobody has except for some commenters here). I picked what I thought were uncontroversial financial vehicles (more conservative portfolios, SPIAs and long-term care) to try to illustrate a broader point. But confirmation bias is a powerful thing.

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Re: Insurance agent says, "Why do you hate your wife"

Postby Bob Seawright » Sat Mar 31, 2012 9:14 am

nisiprius wrote:The chart below shows the comparative percentages of people surviving to various ages, and I feel it would be more accurate to say that women usually live about 6 years older then men.

And because, on average, men marry women about three years younger than they are, wives tend to outlive their husbands by a lot. That's why the problem is so acute.

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Re: Insurance agent says, "Why do you hate your wife"

Postby Bob Seawright » Sat Mar 31, 2012 9:28 am

gwrvmd wrote:When discussing this with a man whose wife is 2 years younger I may say " Y' know women usually live to be 2 years older than their husbands so you should consider in your investment planning that your investment horizon is 4 years after you die".

Planning for an investment horizon consistent with expected lifespan is a recipe for disaster since about half of the pool will live longer than that and some will live much longer than that. An investor planning to take income needs from his or her portfolio has to plan not for expected lifespan, but rather for possible lifespan, unless a high failure rate is acceptable.

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Re: Insurance agent says, "Why do you hate your wife"

Postby btenny » Sat Mar 31, 2012 1:05 pm

This is a really funny thing about people. Some men are just agressive investors and sometimes they are good at it. Some women just want security...... This can be OK in some instances and not so good in others.... I am also sure there are couples where the women are the more agressive investors as well..

My good friend and his wife got a divorce at 45ish over this topic along with other issues. He wanted to go whole hog into some major real estate investments, she wanted to buy CDs and bonds.... They split the money and property and went their own ways. Fast forward 25 years. She is still single and happy as a clam in her small surbuban house with her small pension and SS and some income from her CDs. He is quite rich. He owns two big homes on fancy golf courses and drives big cars and takes big vacations. He still invests agressively. He still owns investment real estate and has lots of other investments. Maybe he is happy but he lost his second wife to divorce and the third to cancer so maybe not so much. So things sometimes sort of work out for the best for all parties....

Bill

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Re: "Why do you hate your wife"

Postby mephistophles » Sat Mar 31, 2012 6:08 pm

Bob Seawright wrote:
mephistophles wrote:I would assume that any agent who asks the question: "why do you hate your wife" would be among those who don't last very long in this business.

The thread title is now deceptive (it was changed administratively). The person who asked the question was and is a principal in an RIA firm who has been in the financial planning business for decades. He was speaking to long-time clients with whom he had and still has a fiduciary relationship.

mephistophles wrote:[T]he real agenda is for women to stand up for themselves as full equals in decision making of all kinds. I am all for that, but the article is a poor vehicle to deliver that message.

I would like wives to stand up for themselves and for husbands to include them in the financial planning process more readily and more fully. You're entitled to you opinion as to its quality, of course, but the responses to the article I have received so far have been overwhelmingly positive, especially from women. I spoke with a woman in the home healthcare industry just last night who said she wishes every husband got advice like that because she sees wives suffer the tragic consequences of their husbands' bad financial decisions every single day. She sees a particular problem with wives spending way too much money caring for their husbands (since they typically don't have LTC) and being left in very difficult straights thereafter.

I never imagined that anyone would see the article as an insurance pitch (and, to my knowledge, nobody has except for some commenters here). I picked what I thought were uncontroversial financial vehicles (more conservative portfolios, SPIAs and long-term care) to try to illustrate a broader point. But confirmation bias is a powerful thing.


You are correct. The administrative changing of the title to this post effectively changed its meaning--thus my post. I did not pick up on that until you pointed it out. I vote for the title being changed back to what it originally was so that it no longer appears to be just another insurance agent bashing thread. It should be an RIA bashing thread instead, or and admnin-changing-the-title bashing thread, or a thread that bashes the opinions of incorrect opinions by people misreading what was never intended to be clear in the first place.

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Re: Insurance agent says, "Why do you hate your wife"

Postby dhodson » Sat Mar 31, 2012 6:42 pm

That article has a very heavy insurance bias. The comments on ltci and annuities are ridiculous. Avoiding those products doesn't make one overly aggressive or even mildly aggressive.

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Re: "Why do you hate your wife"

Postby nisiprius » Sat Mar 31, 2012 7:11 pm

Bob Seawright wrote:The thread title is now deceptive (it was changed administratively).
So fix it.

As far as I know, the original poster can always change the thread title himself (unless the thread is locked). There's the possibility of getting into an edit war with an admin and having them lock the thread, I suppose, but I don't believe if will happen if you make a straight factual correction, such changing it to

Investment advisor says "Why do you hate your wife?"
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

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Re: "Why do you hate your wife"

Postby Bob Seawright » Sat Mar 31, 2012 7:42 pm

nisiprius wrote:
Bob Seawright wrote:The thread title is now deceptive (it was changed administratively).
So fix it.

I can't. I am not the thread-starter and, even if I were, I don't think I could (or should) override a site administrator.

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Re: Insurance agent says, "Why do you hate your wife"

Postby Bob Seawright » Sat Mar 31, 2012 8:25 pm

dhodson wrote:The comments on ltci and annuities are ridiculous. Avoiding those products doesn't make one overly aggressive or even mildly aggressive.

What is actually ridiculous is your willigness to let ideology trump facts, research and data. The level of support you have for that claim rivals that of anti-vaxers. On the other hand, the litterature supporting SPIAs generally is voluminous and non-controversial. For example....

Bogleheads: http://www.amazon.com/The-Bogleheads-Gu ... 921&sr=1-1

Vanguard: https://personal.vanguard.com/pdf/icruia.pdf

Larry Swedroe: http://www.amazon.com/Only-Guide-Altern ... 049&sr=8-1

Some of the greatest economists in the world today; for example: http://www.nytimes.com/2011/06/05/busin ... 5view.html

Even Nobel laureates. From Franco Modigliani’s Nobel acceptance speech: “It is a well-known fact that annuity contracts, other than in the form of group insurance through pension systems, are extremely rare. Why this should be so is a subject of considerable current interest. It is still ill-understood.” In a 2003 paper entitled "Annuities and Individual Welfare," 2010 Nobel-winner Peter Diamond and co-authors Thomas Davidoff of the University of California Berkeley and Jeffrey Brown of the University of Illinois wrote the following.

“The near absence of voluntary annuitization and the absence of annuitization early in life are puzzling in the face of theoretical results suggesting large benefits to annuitization. Our analysis extends the puzzle by demonstrating that annuitization of all financial assets is optimal more generally than previously thought.”

Do you have any peer-reviewed support for the idea that SPIAs (which are not deferred annuities -- those are problematic) are bad things?

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Re: "Why do you hate your wife"

Postby nisiprius » Sat Mar 31, 2012 8:34 pm

Bob Seawright wrote:
nisiprius wrote:
Bob Seawright wrote:The thread title is now deceptive (it was changed administratively).
So fix it.

I can't. I am not the thread-starter and, even if I were, I don't think I could (or should) override a site administrator.
Well, then, ask a site administrator. Try PM-ing Alex Frakt, for example. Point out that you are the author of the article and that the article identifies him as a "A long-time financial advisor." And state plainly that the "advisor" is an RIA and does not sell insurance.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

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Re: Insurance agent says, "Why do you hate your wife"

Postby VictoriaF » Sat Mar 31, 2012 8:36 pm

Bob Seawright wrote:Do you have any peer-reviewed support for the idea that SPIAs (which are not deferred annuities -- those are problematic) are bad things?


The article linked in the OP refers to "income annuities." Are you using "income annuities" synonymously with Single Premium Immediate Annuities (SPIA)? While SPIAs do provide income, and are in fact recommended by the Bogleheads, most other types of annuities are not.

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