• Lesson 1:Baby Step 1 & Budgeting
• Lesson 2:Baby Step 2
• Lesson 3:Baby Step 3
• Lesson 4:Baby Steps 4, 5, 6 & 7
• Lesson 5:Buyer Beware
• Lesson 6:Understanding Insurance NEWThe Role of Insurance
• Lesson 7:Building Wealth NEWRetirement Planning
• Lesson 8:Real Estate & Mortgages
• Lesson 9:Outrageous Generosity NEWThe Great Misunderstanding

What’s an Annuity?

But fixed annuities have high management fees that reduce the growth of your investment. They also have surrender charges on early withdrawals, preventing you from accessing your money if you need it.

You can do better by investing in good growth-stock mutual funds. Let’s say you buy a typical annuity with a guaranteed annual payout of 5% interest and 1.15% in annual fees. To get the same payout with your mutual funds, you’d only need an annual return of 2.85%. Since the stock market’s long-term average annual growth is 12%, you can easily outpace the annuity’s performance with your mutual funds.

Variable annuities are an option for high-income earners who can’t contribute the full 15% of their income to pre-tax or tax-free investments due to income restrictions. They allow you to invest in mutual funds on a tax-deferred basis. Always stick to the four types of mutual funds Dave recommends: growth, growth and income, aggressive growth and international.

Extra features like principal guarantees and life insurance make variable annuities costly, so make sure you understand the options you choose. And never roll a 401(k), IRA or Roth IRA into a variable annuity. They are already tax-deferred or tax-free, so there’s no need to pay high variable annuity fees for special tax treatment.

If you’re still unsure, or if you already have an annuity and want to know your options, talk with an investing professional who can answer your questions. Our SmartVestor Pros will help you build a retirement savings plan you can feel confident about. Talk with a SmartVestor Pro today!

The national debt is nearly $16 trillion. Yes, $16 trillion. You know what you could do with just $1 trillion? You could pay the rent for every renter in the U.S. for three years or the monthly payments on all U.S. mortgages for 14 months. A $1 trillion stack of $1 bills would wrap around the equator 2.72 times!

And $1 trillion is just a fraction of the money the U.S. owes. Since Dave can’t stand debt, including the national debt, he had some tough things to say as he discussed the issue recently on The Dave Ramsey Show. Listen to the clip on our website.What Is National Debt?

The government uses debt to cover its expenses when it spends more than it makes from taxes or other revenue sources. There is no requirement that the country operate on a balanced budget, so, since the country was founded, the national debt has continued to grow.

In 2008, the national debt stood at $9 trillion—the total debt for the entire history of the U.S. Since then, we added $7 trillion to our debt, increasing it by almost 80%!

It is no different than one of us racking up credit card debt on groceries then getting a car loan and a mortgage on top of that. All the money you make goes to keep up your payments. Not smart.The Lines Are About to Cross

While $16 trillion of debt is overwhelming to think about, what’s worse is the breakneck rate of spending. It only took six months to go from $12 trillion to $13 trillion!

Imagine the U.S. debt and revenue as two lines on a chart. The revenue line is pretty flat, if not declining, but the debt line is shooting straight up. The two lines are about to cross, and that means the country’s debt will exceed its ability to pay the payments.A Political Revolution

The majority of people in America want an environment that gives them a shot to make their own money, and they are not happy with the redistribution of wealth that is happening today. The ballooning debt is just one more reason for a political revolution—to fire the politicians who are doing the spending, regardless of their party.

That’s why Dave doesn’t buy into the gloom and doom some political analysts believe. He talks with people all over the country who are angry about the direction the country is headed, and they are not willing to put up with it anymore.

Our debt problem has given our country the opportunity to come up with a solution. With such an impressive problem, the solution it inspires is bound to be great!

For future updates:
Debt tracker:
http://www.usdebtclock.org/index.html
or
http://www.treasurydirect.gov/NP/BPDLogin?application=np