S
Sir Ivor
Guest
<!--EZCODE BOLD START--> <!--EZCODE ITALIC START--> Mithrandir<!--EZCODE ITALIC END--><!--EZCODE BOLD END--> says (in another Forum):
<!--EZCODE QUOTE START--><blockquote>Quote:<hr> <!--EZCODE ITALIC START-->
The Endowment method only makes sense if there is risk premium, some 3%pa above the net cost of borrowing. Merely paying off the loan is an abject failure, and a huge waste of money.
Over 70% of sales were unit linked, why? Because of 90% first year commission, typically half again more than the with profit stuff you chose . Windfalls are paid out of lower future bonus'es, you know the old TINSTAAFL Theory.
<!--EZCODE ITALIC END--><hr></blockquote><!--EZCODE QUOTE END-->
I want to nail this one.
a) Originally much touted in the <!--EZCODE BOLD START--> <!--EZCODE ITALIC START--> Endowment Mortgage War<!--EZCODE ITALIC END--><!--EZCODE BOLD END--> of the early 1990s, this is really quite an arbitrary criterion and should have been challenged during that War. However, for the purpose of this thread let us take that premise as reasonable in the context of <!--EZCODE UNDERLINE START-->advising to take out an Endowment Mortgage.<!--EZCODE UNDERLINE END-->
b) Its use with hindsight, as in the context of the above quote, must be wrong. If with hindsight an <!--EZCODE BOLD START--> EM<!--EZCODE BOLD END--> has worked out only a Euro Cent better than an <!--EZCODE BOLD START--> AM<!--EZCODE BOLD END-->, surely that is still better!
c) I have also noticed this 3% thing popping up in the SSIA debate. Surely a totally different and <!--EZCODE UNDERLINE START-->much lesser<!--EZCODE UNDERLINE END--> hurdle should be applied to investing Charlie's <!--EZCODE ITALIC START--> gimme<!--EZCODE ITALIC END--> than to paying off a Mortgage!
:smokin
<!--EZCODE QUOTE START--><blockquote>Quote:<hr> <!--EZCODE ITALIC START-->
The Endowment method only makes sense if there is risk premium, some 3%pa above the net cost of borrowing. Merely paying off the loan is an abject failure, and a huge waste of money.
Over 70% of sales were unit linked, why? Because of 90% first year commission, typically half again more than the with profit stuff you chose . Windfalls are paid out of lower future bonus'es, you know the old TINSTAAFL Theory.
<!--EZCODE ITALIC END--><hr></blockquote><!--EZCODE QUOTE END-->
I want to nail this one.
a) Originally much touted in the <!--EZCODE BOLD START--> <!--EZCODE ITALIC START--> Endowment Mortgage War<!--EZCODE ITALIC END--><!--EZCODE BOLD END--> of the early 1990s, this is really quite an arbitrary criterion and should have been challenged during that War. However, for the purpose of this thread let us take that premise as reasonable in the context of <!--EZCODE UNDERLINE START-->advising to take out an Endowment Mortgage.<!--EZCODE UNDERLINE END-->
b) Its use with hindsight, as in the context of the above quote, must be wrong. If with hindsight an <!--EZCODE BOLD START--> EM<!--EZCODE BOLD END--> has worked out only a Euro Cent better than an <!--EZCODE BOLD START--> AM<!--EZCODE BOLD END-->, surely that is still better!
c) I have also noticed this 3% thing popping up in the SSIA debate. Surely a totally different and <!--EZCODE UNDERLINE START-->much lesser<!--EZCODE UNDERLINE END--> hurdle should be applied to investing Charlie's <!--EZCODE ITALIC START--> gimme<!--EZCODE ITALIC END--> than to paying off a Mortgage!
:smokin