Retirement, Plan B: Pension Paychecks

By Travis Johnson, Stock Gumshoe, February 18, 2009

Here we have another teaser email promising a rescue for those of us who’ve seen their 401k accounts fall by 50% (or more) … more proof that you don’t have to be sexy to get attention with a teaser ad today, you just have to imply that you can help to save the kind of retirement that probably too many people took for granted just a year ago … thus, the “Plan B Pension.”

By the way, I was at Costco the other day and they were giving out samples of … SPAM. There’s an economic indicator for you. It must take a pretty severe recession to make Spam popular outside its historic hotbeds of Guam and Hawaii.

So what’s the promise of today’s ad?

First of all, this is a service I’ve never looked at before — I think it’s new, but I’m not certain, it’s from the folks at Agora and it’s called the Lifetime Income Report, edited by Jim Nelson, who I’ve also never heard of. It’ll cost you $99 to sign up as a guinea pig for this service.

On to the hyperbole!

“Without doing a single moment’s work, now you can legally sneak onto the “payroll” of over 1,000 of America’s best companies…

* “And collect a regular ‘Plan B Pension’ check as often as every 12 days…

* “At any age and for as long as you like, even after you’ve already retired…

* “With nonstop annual incomes running as high as $120,000 or more…”

Well, even on a day like this when panic about layoffs is circulating most communities, I must say that there’s a certain appeal to the “without doing a single moment’s work” bit … at least for a lazy man like your friendly neighborhood Stock Gumshoe.

Some other clues about what they’re touting:

“What’s more, you can even pass this steady stream of annual cash that I’ll introduce you to… to your spouse, to your children, even to your grandchildren.”

Insert lots of chatter about their proven track record, how much better they are than fixed income investments, why they’re better than defined benefit pensions or 401ks, etc. etc.

“You can get into some of these ‘Plan B Pension’ programs with as little as $10.”

“In some of these ‘plans,’ you even get the chance to own shares in the stocks you’ve chosen at a fat discount to what others pay on the open market. That’s like getting an instant gain, the day you buy shares. It’s also a special ‘perk’ reserved only for members of these ‘plans.'”

“There are over 1,020 of these ‘Plan B Pension’ plans in America. You can enroll in as many of them as you like.”

So that sounds pretty nice — they call this discount the “Matching Bonus,” perhaps just to make it sound appealing for folks who get an employer match in their 401k.

“When it works, it’s a great benefit. But right now, cash-strapped companies have started slashing those ‘matching’ benefits too. Again, a benefit you don’t get… is no benefit at all.

“The thing is, ‘Plan B Pensions’ also offer your own kind of ‘matching.’ Because many of the 1,020 ‘plans’ you can choose from ‘match’ your gains by as much as 10%… with each regular payout.”

So why do they call this the “Ultimate Retirement Recovery Plan?”

As with so many ads of this ilk, there’s a “Special Report” — “The 10-Minute Retirement Recovery Plan: Six Easy Ways To Lock In Steady Income Checks For the Rest of Your Life. ”

And there’s a “library” of information that you’ll get access to with your subscription — “This is just one of the three reports you’ll find in the full ‘Plan B Retirement Library’ I want to send you. The whole set is yours right now, at no charge. I’m offering it to you free.”

(as long as you sign up for a subscription, of course)

And there’s a claim that now’s the best time to get in:

“… Horrible market offers you and me the best investment window in nearly 20 years for the kind of “Plan B Pension” strategy.”

They also get in a few “endorsements” of this strategy — a quote from Ned Davis Research, the famous value stock folks, that tells us that dividends and dividend growth stocks have done dramatically better than non-dividend-payers over the last 25 years or so. Probably not a surprise to most.

And we get a blurb about everyone’s favorite Penn Prophet, too:

“It’s this special combination of income growth and compounding — a step beyond just collecting stock, bond, or fund income — that famous Wharton Professor Dr. Jeremy Siegel credits with producing a whopping 97% of all the real money made on the S&P 500.”

So … no surprises here, except perhaps from the folks at Stansberry & Associates who’ve been heavily marketing this same strategy for years. I wonder if Porter Stansberry and Tom Dyson are grumpy that Jim Nelson and their colleagues down the road at Agora are trying to steal their marketing thunder — I guess it wouldn’t be the first time, once you see a marketing idea that works for a newsletter, get used to it, you’ll be seeing it again soon from someone else, wearing a slightly different hat.

Oh, wait — I didn’t tell you what it is: The “Plan B Retirement” is yet another teaser for the idea of investing in Dividend Reinvestment Plans and Direct Stock Purchase Plans (DRIPs and DSPPs, respectively).

If you’ve been stranded out here on Gumshoe Island for any time at all, you’ve heard from me on this before — essentially, many big companies let you buy stock directly from the company. It’s true, some of them offer a discount on these purchases, or on reinvested dividends (that’s the “match”), though certainly not all of them do.

The big benefit that gets the attention of Ned Davis Research and Jeremy Siegel (and many others) is dividend compounding, which has indeed accounted for a significant portion of the long term returns of the S&P 500. Of course, you don’t have to invest directly with a company to reinvest dividends, most brokers will do that for you, too, often for free — though you don’t generally get any of that potential “match/discount” on the reinvestment. On the flip side, many of these programs have fees and minimums, and they have their own pros and cons, even apart from the stability of the stocks you’re buying.

And that is, of course, part of the challenge — and the promise of any newsletter that focuses on this strategy: finding the right stocks. Generally the focus of all of these kinds of strategies is on dividends that are good but not too good, payout ratios that leave room for dividend increases in the future, historic dividend growth, stable businesses (with “no banks” being a more recent addition to these kinds of screens), understandable businesses, etc. You can look through the holdings of any dividend growth mutual fund to see the kinds of stocks you’re going to see recommended for these kinds of services, but you’ll probably see names like Wal Mart, Johnson and Johnson, McDonald’s, Microsoft, Procter and Gamble, Exxon Mobil and their peers … and a couple years ago you would have probably seen Bank of America, General Electric and many more.

I won’t just copy and paste over all the information I’ve shared about these programs before, so if you’d like more information about the various ways that you can buy stock directly from a company for one of these “Plan B Pensions” … or see the ways that other folks have teased this same strategy, check out these other recent articles:

Be a “One Share Millionaire” with the US Postal Service.

and the 424 Dividend Boost.

So … a cynic might say that almost every ad that promises a “saved retirement” thanks to some sort of “secret” income plan is either going to refer to dividend reinvestment, or to selling covered calls … this one is the former, I wouldn’t be surprised to also see plenty more of the latter. If anyone has tried this Lifetime Income Report, click here to let us know what you thought of it — or if you’ve other thoughts about DRIP investing that you’d like to share, feel free to comment below.

Enjoy your day, everyone!

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41 Comments on "Retirement, Plan B: Pension Paychecks"

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Pat V
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Pat V
February 18, 2009 11:17 am

Thanks for all your good work. Don’t these newsletter guys realize that this kind of hype diminishes any credibility they could have if they ever really do have a hot tip.

PV

Gravity Switch
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February 18, 2009 11:22 am

I have spoken to many newsletter editors who hate this kind of hype, but also believe that they are forced to market like crazy since that’s what works to bring in subscribers.

And truth be told, much of the time the editor probably doesn’t have all that much to do with the promotion of the newsletter, at least for some of the bigger publishers.

James
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James
February 18, 2009 11:39 am

Thanks StockGumShoe! I got that ad and really wanted to know what it was.

peik van waveren
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peik van waveren
February 18, 2009 11:48 am

Greatly appreciated Gumshoe -as always.

jeff
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February 18, 2009 11:50 am

Always nice to get a little information (like the cost, for instance) concerning any “free lunch.”

It’s usually along the lines of Steve Martin’s classic routine of how to make a million dollars and not pay ANY taxes! (First, get a million dollars.)

Mark
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Mark
February 18, 2009 11:53 am

I’ve recently been offered a free 25 dollars in a micro-forex account from fxcm. Is this a fishing scam to get a social security number or something like that??

JT
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JT
February 18, 2009 12:11 pm

Gumshoe is the Greatest! Now he just has to put on his Think-o-Lator and come up with some teaser ads to promote his services! 🙂 +

res
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res
February 18, 2009 12:23 pm

I have just discovered your newsletter and it is very informative. I have wasted a lot of time reading these guys spams, fortunately I have not been taken in. Those letters aren’t cheap. If I bought these services I would have no money to invest, or throw at the stock market pretending to invest.
You are a breath of fresh air on the web.

Steven Martin
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Steven Martin
February 18, 2009 3:38 pm
Get past the hype,we all know the Agora folks. You can subscribe, if you don’t like it, you’ll get a refund. I’m a long term (35+ years) DRP investor, really enjoying the divvies in retirement. In the first issue, the info looks sound and solid. Conservative even. Their initial portfolio has some I already own, ex O, PG but one which I meant to own, PNY. Another pick, CPL, I had never heard of but will definitely look into it. This looks like a very solid newsletter. And its not expensive. One or two ideas a year make it well… Read more »
john
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February 18, 2009 3:45 pm

as with the rest of the above THANKS YOU are a breath of fresh air in the investment???? letter writers. I have come to believe all of them are scam artists attempting to sell little or no information for 99 dollars.

Jim Morris
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Jim Morris
February 18, 2009 7:01 pm

Seems to me this investment idea teeters on the edge of fraud. Maybe they should be reported?

Jim Morris

farley 5
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farley 5
February 18, 2009 7:19 pm
john sloan
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February 18, 2009 9:27 pm

Thanks again Travis
I have been getting these ‘plan b’ ads over and over in each of the Agora newsletters – I invested in DRIP companies many years ago – There was a company that helped one set up these accounts – but in general help is not needed .As for finding companies that pay big dividends – and also that will increase these over time – simple go to Value Line at the local library

res
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res
February 18, 2009 9:43 pm
11 Surprising Investment Predictions for 2009 Another come on to order a service. Wednesday, February 18, 2009 Dear Investor, The StreetAuthority Market Advisor letter, whose annual year-end stock predictions have gained twice as much as the S&P 500, is once again going out on a limb with a series of startling new forecasts, including… Oil prices will keep sliding in the early months of 2009, forcing the price of gas at the pump to as low as $1.15 per gallon. Oil-exploration stocks will tumble. But shrewd investors will sift for bargains in the rubble, because after this massive shakeout oil… Read more »
Bill G
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Bill G
February 19, 2009 2:51 am

Re: DRIPs.

A.G. Edwards used to have a dividend reinvestment feature that allowed you to reinvest dividends in almost any US listed stock for no commission charge. Now that they are Wachovia, I’m not sure if this policy will continue. And of course they will soon become Well Fargo …

Henry Chakoian
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February 19, 2009 6:58 am

For many years, the Dolans advised the public on the value of DRIPS. They offered a list of the best available. Great for IRAs to compound holdings. Covered calls are great in declining markets–if you want to keep your holdings long term. Selling puts is the converse of that.Select a stock you want to buy at a bargain price. Sell the put at that price. Collect the premium and buy if the put is excersized. If not repeat until excersized. Consult your financial advisor. Herach.

norma schonwetter
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norma schonwetter
February 24, 2009 9:12 pm

What do you know about the Oxford Club report(?) on How to claim your first “Gas Rebate” check on Maarch 16?.

eugene
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eugene
March 11, 2009 4:18 am

plan b pay check – tried several times in vain to get information hilighting whether non American citizens can utilize this plan.

denim
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denim
April 10, 2009 4:24 pm

I subscribed based upon his “My Triple-Pronged No-Risk Guarantee”. I have not started to invest in the plan. But knowledge is power and I already have learned enough while using the knowledge gained from his publications to feel that the modest $99 fee has already been earned. He has some interesting stock finds that I would have missed, at least for awhile. He, of course, does not advise individual investments and neither do I. Do your own due diligence first! Second, risk not your whole wad!

Jenn
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Jenn
April 21, 2009 11:11 am
Great info so far but here is my dilemma … My interest in the “plan B idea” stems from the word PENSION. My husband and I are considering spending several of our retired years abroad and some countries such as Panama have very nice benefits for retirees that have a steady “pension” of only $500/ month. But that’s the kicker, it has to be PENSION, not dividend income, or interest earned from significant savings…it HAS to be identified as PENSION. Is investing via Plan B directly through the company the answer? Is there a way to invest that the money… Read more »
Tensor
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Tensor
August 13, 2009 1:38 pm

You are a tool.

William Hicks
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September 25, 2009 6:52 am
I used to contribute small monthly amounts to Dividend Re-Investment Plans; I owned shares in Walt Disney, Procter & Gamble, General Electric, Johnson & Johnson, and Microsoft. G.E., Disney & P& G’s monthly fees became exorbitant and the stacks of paper I was forced to keep and headaches at tax time just became unendurable. I invest in most of these companies now and am able to buy fractional shares via Foliofn.com; they provide me with complete tax records at the end of the year, re-invest my dividends, and easily allow me to see my positions/gains any time I want all… Read more »
Jan
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Jan
January 31, 2010 5:13 pm
i trust nothing in the way of investment news letters whether email or snail mail . as one of the ” main street ” brood , i don’t even trust wall street ; especially since the housing market bust and bank failures . fortunately before and now in retirement i’m not in a position to have to hussle to recoupe any losses to my retirement accounts because i manage them myself . the scam artists know whom to target if you are sitting on any amount of cash that’s worth it to them to seperate from their victims . as… Read more »
B.Yoganand Patnaik
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B.Yoganand Patnaik
February 27, 2010 8:18 am

Sir,

Greetings from India!

Please let me determine whether Plan B Pensions are genuine one ?

If so, please help me How to procedure to follow?

Thanks a ton and I remain,Sirs

Yours Faithfully,
B.Yoganand patnaik

Paul
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Paul
March 9, 2010 1:18 pm
This past year I got into one of the “plan b” type programs and bought a bunch of dividend producing stocks. With all the DRIP purchases I found that my income tax preparation too many, many more hours to match up the multiple purchases with sales.It seemed like a lot of work for tiny dividends. Then I started worrying about the 60 day repurchase rules when selling stocks. The Drip ended up adding small amounts of stock during the 60 day period and I still haven’t figured out if I’m handling all these issues correctly. I turned off DRIP on… Read more »
Ben
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Ben
April 17, 2010 9:49 pm

If plan b pensions were such a good idea wouldn't the newsletter writer just invest in all of them and retire himself? Why work anymore?

David Payne
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David Payne
April 22, 2010 9:40 pm
Thanks for confirmating what I thought all along about this hype. About 30 years ago I bought a book on the bargain table for about $3 called Buying Stock Without a Broker. It was a good listing of DRIP and DSPP's. I picked about 10 and sent requests for info. I joined 3. One was bought a few years later and the plan payed off in cash for about a 20% gain. I am still in XOM and JCI. I put a total of $800 up 30 years ago and have about $6500 now. Not spectacular but completely no hassle… Read more »
Retirement
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May 7, 2010 6:46 pm

Thank you gumshoe. These email come-ons are too good to be true. Don't people get that yet. What it the expression: 'there's one born every minute'.

Phil Johnson
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June 8, 2010 11:55 pm

Nice… I just got this one in the mail and I figured it was a DRiP thing, but thought I'd check around. And sure enough your site gave me the right answer on the first try. 🙂

Chick
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Chick
September 10, 2010 1:44 pm
For those frustrated by DRIP tax accounting and paperwork, my personal view (for that what's worth) is that DRIPs used to make sense for the retail investor when the commissions to buy stocks could be hundreds of dollars per trade. Nowadays you can buy stocks through a discount broker at less than $10 a trade, so the value of formal DRIP plans has eroded. I can create your own DRIP-style investment plan simply by using dividend distributions to buy more of the stocks you like on days when the market is down. Fidelity tracks my basis for me, and sends… Read more »
jeff
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jeff
November 7, 2010 1:28 pm

Those annoying "audio videos" (the text is the only visual) inevitably drone on for a half hour or so… which gives you the time to open another tab with google or bing after you've got a couple of good search terms, eg, the Greenland uranium mines or the Tupi oilfiends (petrobras). This works… and at least you know the stock is being pumped by someone!

Otis Hughley
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Otis Hughley
December 28, 2013 9:22 am

Honestly, stock and other investments has history of on any given day. However, we evaluate the pros and cons and make our individual decisions based on advise and info obtained. …WHO KNOWS??

Otis Hughley
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Otis Hughley
December 28, 2013 9:39 am

HOW CAN THEY GUARANTEE SO MANY CHECKS PER MONTH? IS IT ACCORDING TO THE SIZE OF INVESTMENT?

Gravity Switch
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February 18, 2009 7:41 pm

Thanks Farley — sounds like they hit both the “teaser” income strategies if they’re also going to be selling calls. Wonder if they’ll be any better at it than anyone else …

Gravity Switch
Admin
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February 18, 2009 7:45 pm

That sounds about right — some typical high yielders and dividend growers, particularly O (Realty Income) which has been a favorite of dividend growth income investors for years.

Justin
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Justin
May 9, 2011 12:03 pm

I got one of those in the mail.Glad to see something positive

Gravity Switch
Admin
11
February 24, 2009 9:33 pm

That’s a teaser for CanRoys — the full writeup is here:

http://www.stockgumshoe.com/2008/12/claim-your-gas-rebate-check-oxford-club.html

Kathy
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Kathy
March 17, 2009 3:07 pm
John, I couldn’t agree more. I can’t tell you how many of these newsletters I have been suckered into subscribing to. Initially, you get hooked with some promise of “secret” tricks to making huge gains. Then, when you subscribe, you get a lot of good information, but no direct way to get “in” unless you subscribe to yet another newsletter. And on and on it goes. Granted, I have gotten some very good information regarding what’s going on in the markets, currencies, politics, etc., but there is ALWAYS a hook at the end of the article: SUBSCRIBE NOW! I’ve gotten… Read more »
Gravity Switch
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April 21, 2009 11:57 am

I have no idea what the Panamanian policies might be (perhaps someone else has a thought on that?), but you’re right, it would be a long stretch to call dividend-paying stocks a “pension.”

The only vehicle that I know of that would be close to a “pension” in terms of guaranteed regular payouts for life (if that’s the kind of pension they mean) is an annuity contract, of which there are so many types (and a fair share of unethical peddlers) that I would hesitate to wander into the details here.

Naresh
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Naresh
April 24, 2010 4:54 am

Dear Yoganand: Since you are Indian Citizen you cannot trade American Stocks. Plan B pension ( It is Just Marketing Name for Dividend Plan )is nothing but owning Shares that pays dividend and reinvest that dividend to further buy shares. Try dividend paying Stocks In India . They offer superior returns now a days. Good Luck Naresh

Chick
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Chick
September 10, 2010 1:45 pm

I can create –> You can create

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