investing

6 personal tales of bad financial decisions

An annuity that's not all that
An annuity that's not all that © Tkemot/Shutterstock.com

Joe Hewitt of Hewitt and Hewitt Mediators in Dallas has experienced investment losses, but one of his bad financial decisions was investing in an annuity that wound up being a scam.

At the time, he had a $50,000 annuity policy that he had borrowed $7,000 against. "A sweet young lady representing a major insurance company visited my office and told me she could sell me the same policy. It would cost the same per month, and I wouldn't have to pay back the loan because her greater amount of interest would cover it," he remembers.

On the appointed date, Hewitt would be able to collect the $50,000 in cash or roll it over as an annuity and get a monthly lifetime income.

Fast forward 20 years, and the insurance company indicated there would be nothing near $50,000 in value by the maturity date. It was not an annuity at all but a life insurance policy. While a class-action suit had been brought against the company, Hewitt was told he had received notice of it and didn't opt in.

"I learned a $30,000 lesson. Or was it $23,000? Anyway, it hurt. That young lady wasn't really sweet after all," Hewitt says.

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