The topic today is buying the annuity drink. Now, let me explain that. My mom is a great soul. My dad passed away five years ago, and she's pivoted living her life. She has her circle of friends and travels and has fun. She's healthy and walks a lot, and I bought a bunch of Nike shoes, so she's got good shoes to walk in. But she comes from a background where she didn't have much money. Her parents were very hard workers, worked in the textile mills in North Carolina, and had a farm and corner store. The typical 1940s and '50s type approach to life, which is hustling and just trying to make ends meet and provide for the family.
Now, my wife calls these scars the scars of scarcity, which we all have. Even if we've accumulated money, we still have a hard time spending it. And I have a lot of conversations with my clients and potential clients about whether they want to live their life or spend money. And I know it's hard. My mom, when she goes out to eat, has the hardest time buying the drink, like buying a Coke or an iced tea or a cup of coffee, she'll do water. I always say to her, you can buy the drink. Buy the drink. I text her daily to check in on her, and instead of Carpe Diem, seize the day, my saying to her is, buy the drink. Buying the drink to her and me is live for the day. You can afford it. You can afford to get the drink, which leads to a great story which I call the table lemonade story.
When I was growing up and times were tough and tight, my parents would not order the drink. And, of course, we didn't order the drink either because they wouldn't order it. But as they got older, they still did the same thing. I'd go out with them, I'm buying the meal, and they would order water. They'd take Sweet'n Low, put it in the water, and then take the free lemon being brought to the table and squeeze it in the water. They'd make what I call table lemonade, which is insanity. It's crazy. And I kept saying to them, you can afford lemonade. You can afford to buy a drink. Even till about a year ago or two years ago, I'd be at a meal, I'd drive down and see my mom and take her out, and she would make table lemonade. I'm like, stop. I'll buy it. I'll buy the restaurant if you order a normal drink. But to this day, she has a hard time, and always she'll go, "Well, I went out with Betsy, Betty Jean, and Jane the other night," they are all great ladies. And they're hanging out with my mom in that St. Augustine neighborhood. I'm like, "Did you buy the drink or make table lemonade? Because if you made table lemonade, I got to show you the math on what you can spend, and you'll never run out of it." Let me give you that story.
When my dad passed away, bless his heart, he never made a lot of money. Great man. But they didn't have much money at the end of the day. But they did save a lot. And my mom doesn't spend a lot, and she's a CD buyer. No friends or family are ever going to do business with me. Why? Because when I go to family reunions, I don't want to talk business with them, and I don't need clients that bad. My mom's like, "I'd like to buy one of those MYGAs from you Stan, because it gets such a high-interest rate." No, you're going to buy CDs from the bank because that's what you're going to buy. I showed her that with the money she has, and if she gets the interest rate currently off of that, she needs to spend $200 daily for the rest of her life. And if she doesn't spend $200 today, it rolls over the balance. So, if she spends $150 today, she has to spend $250 tomorrow. I showed her that, and for about the first two years after my dad passed, she's like, "I don't believe it. I don't feel like I have that much money." And I'm like, well then, let's do it. And then the quarterly statement, come in the bank, I'm like, "You see this? See that? Yeah, it's more than what it was last time. Please spend the money. Please buy the drink. Please stop making the table lemonade." In the last six months or so, she's realized that she can spend $200 now that rates are up. I said to her the other day, "Rates are up. It's now $250. You can spend $250 a day every day for the rest of your life. You'll never run out of money. I don't care how long you live."
She's finally getting that. She finally understands that she can take those trips. She's getting ready to go to Aruba with her friend, and I went, "That's fantastic!" As I always tell my daughters, I hope my last check will bounce. You can cover it with the life insurance proceeds. Of course, that's not going to happen. I'm leaving them a lot of money, but my point is, my wife and I are going to live life. I'm going to live for the day. I'm going to do all these checkboxes and to-do lists and bucket list stuff. I'm doing it right now. There are all kinds of things happening as my wife's like, "You're crazy. What are you doing?" I'm living my life. We all have had friends that have died prematurely and early, and it's a wake-up call, but it should be a real wake-up call for you to buy the drink and not make the table lemonade.
I'm using this example because it's personal. It's family. It's my mom, that lives in St. Augustine, Florida, and goes out all the time. But I'd still say, I'd bet this if I knew the details that 80% of the time she eats out, I will bet you that she gets water and she probably tries to make table lemonade hoping that I'm not filming it. Please note I don't want that to be you. I really don't, and I don't want that to be her. She has earned the right to live a good life in these final years, however long that will be. She's 83. There's absolutely no reason for her to scrimp and save like that.
I'm talking directly to you right now. I'm serious. You've scrimped. You've saved, you've done without, you've been generous with other people, and you have not been generous with yourself. You know I'm correct. That's you. That's the majority of you watching this. Take baby steps. It's hard to change habits. It's hard to realize that you have a lot of money. I read an article the other day, and you might have read the same article that over 65% of this country's adults are living paycheck to paycheck. Over 60% of senior citizens month to month have less than $10,000 to their name.
That's tough, and that tugs at your heartstrings. But if you're reading this, it's probably not you. If you're reading this or watched any Stan The Annuity Man videos Stan The Annuity Man, you're trying to figure out what to do with your money. Either to contractually guarantee it, to protect the principal or if Lifetime Income works for you. You've heard good and bad things about annuities and want the truth. You probably heard that I'm going to tell the truth. I often talk about annuities and life and how they coincide because annuities enhance your lifestyle by either protecting the principal, creating a Lifetime Income stream, creating a legacy for your loved ones, or protecting you from Long-Term Care or confinement care. I have an acronym that I use for that, which is PILL: Principal Protection, Income for Life, Legacy, and Long-Term Care.
When I say buy the annuity drink, it will be okay. You're not going to run out of money. Run the math on the money you have at current interest rates and multiply it against that total between treasury CDs and Multi-Year Guarantee Annuities, Fixed Rate Annuities. You'll probably live off the interest or get pretty close in combination with the best annuity you already own, called Social Security.
I need you to walk around and think about buying the drink, buying the annuity drink, and not making table lemonade. Are you doing that in your life in whatever form or fashion that is? What I'm saying is it's time to live life. We've already been thrown the Covid curve ball in the last couple of years. Life is fleeting, and not to become Mr. Motivation here, but part of my job is to take that risk away from your portfolio. To take that worry away from the day-to-day tracking of that portfolio and place it in Contractual Guarantees so you can go live your life and seize the day.
Never forget to live in reality, not the dream, with annuities and contractual guarantees! You can use our calculators, get all six of my books for free, and most importantly book a call with me so we can discuss what works best for your specific situation.