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Fear and Greed Loses to Simple and Contractual: Shootin' It Straight with Stan®

Stan Haithcock
August 10, 2022
Fear and Greed Loses to Simple and Contractual

Today's topic, fear and greed loses to contractual and simple. I always tell people, if it sounds too good to be true, it is every single time. And if you're looking for the perfect product, eventually you will find a person that will tell you that they have it and they'll try to sell it to you. Then what happens is you've bought the dream, but you own the contractual realities. You're going to find out that all of that sales pitch nonsense, doesn't exist.

When you're in the sales business, I've been doing this my whole life, it's easy to sell fear. And it's easy to sell greed because everybody has that knee-jerk reaction and wants to have more or to not lose any. That's the fear and greed pitch. Michael Douglas in the movie Wall Street stands up there and goes, "Greed, for lack of a better word, is good." I understand it was a movie, but a lot of people grasp onto that. A lot of people don't know that they don't need to keep chasing the ball when the game's over. The clock's run out, cheerleaders have left the gym, the band's putting up the drums and the tubas, and you're still out there dribbling around and playing. I don't know why. Is it greed? I don't know.

The Current Environment

Now in the current environment, we're in we're going through some volatility in the markets. Understatement. Things are pretty volatile. And people are saying, "Oh, I wish I'd have got out." Or, "I wish I'd remembered 2008. I wish I wasn't in such risk." And I understand for the people out there that are yelling at the screen and the speakers going, "It's going to come back because it always comes back because historically it comes back." My comment to that is for the people that are getting older, the coming back is a little bit shaky because we don't know how many good years we have.

I was on the phone the other day with a good friend of mine. I told my friend, "Ron, listen, man, I'm 58. I probably have 12 good years ahead of me, based upon the mileage I put on my body." I don't have time to recover from all the gyrations. And maybe you don't either. Does that mean you take all your money out of the market? No, you do what you want to do with your risk tolerance, but don't be scared into a product from a fear standpoint. And don't go into a product because of greed. Who knows where Bitcoin's going to end up? It's going to end up between a zero price or a million. So I'm going to hedge my bet there. But there are a lot of people that's gotten hurt with that because they got into the greed. They saw the celebrities on TV talking about cryptocurrency and they didn't want to miss the boat. Let the boat go.

I was around in the days of the dot com era, where there were companies coming public that had no business model, they had no money. They had no revenue. They barely had a sign on the door. And their stock was doubling in five hours. And you're like, "Well, that doesn't make sense." Well, this doesn't make sense either. It's some good lessons and it's always good to be learning.

Sold on Fear and Greed

I can tell you this, the older I get, I admit to the less that I know, even though I know a ton. But I never am going to comment on something I don't know about. I don't really understand crypto. I missed that boat and I'm probably going to miss it again because I still don't understand it. It is what it is. But when you get to the greed side, when in a fear and greed moment, that's where people are scared, they don't know what to do. Markets are rebounding up and down and all over the place.  But with that, they know that there's opportunity. So, there's a fear and greed combination sell in some cases. A lot of annuities are sold like that. They're sold as fear and greed. Principal protection with market upside. Come on, you got to be smarter than that. I mean, these buffer annuities or Indexed Annuities, I have nothing against them. I have nothing against them at all, sell a bunch of Indexed Annuities when they're appropriate and suitable and people understand what the realistic return expectations are from a historical data standpoint, not back-tested juice numbers, but if it sounds too good to be true, it is every single time.

I was on the phone with someone today, and they had been pitched everything. We started breaking down everything they had. Roth IRAs, IRAs, non-qualified accounts, all of the things that they had and all the things they've been pitched. And when you talk to us, when you go to and you book a call, there's a 5% chance you get me. But when I'm available, I want to talk to you. But a lot of times you're going to get my associates and they're smart as heck too because they've been trained by me. But we're going to give you simplistic solutions. We're not going to give you anything that's complicated. We always say, if you can't explain it to a nine-year-old, you shouldn't buy it, no offense to nine-year-olds.

Keeping It Simple

So, we're going to be simple with what we recommend. But the person kept saying, “It's too good to be that simple, or can simple really be that good?” And the answer is yes. When you're buying things for the contractual guarantees, which is what we do. I'm confused why all annuities aren't sold like this because you're buying a contract. So, wouldn't we base our decision on the contractual guarantees of the contract also called a policy? You don't buy for what it might do. You buy for what it will do®. So if you're looking at annuities, the fear and the greed really shouldn't play into it. And you're saying, "Well, wait a minute. I've given up on the market. I'm kind of scared of the market. And I'm going to go into a Fixed Rate Annuity or a lifetime income stream. Doesn't that play into the fear part?" Maybe. But to me, it plays into the lifestyle part.

What I want you to focus on is not the fear and the greed, what you're missing out on, or what's happened to your portfolio. I want you to look at chapter two of your life and say, "What am I doing? What are me and the spouse doing? What is our goal? What is our plan? What do we really want to do? How do we want to live the last chapter of our life?" 5, 10, 15, 20 years, whatever that is. “How do we want to maximize that?” Does that involve watching the markets? Does that involve being in the markets? Does that involve volatility? Does that involve risk? I don't know. It's customizable to you.

There Is No Urgency

What I'm saying is don't be pushed or swayed into a decision by fear or greed. There's never an urgency to buy an annuity of any type, period. The urgency is for you to fully understand the contractual guarantees of the policy and the good and the bad, the limitations and the benefits of what's being presented to you. Don't buy the potential upside of anything. Buy the contractual guarantees of that product. If you do that, you're going to be fine. If you set an appointment and you talk to one of us, I mean, we're never going to say, "Well, you ready to go? You ready to do it? You ready?" No. We're going to give you enough information that you can make your own decision on your terms and on your timeframe. And I back that up.

I've written seven books on this subject, published. There are tens and tens and thousands of copies out there. If you go to my site currently, we give away the books for free and send them to you in gold, Willy Wonka gold foil mailer. You'll be the talk of the town when it comes. But I want people to be educated. And I'm writing my eighth book on annuities at this time. Hopefully, by the time you read this, you have it in your hands. That will be my eighth and final annuity book. I mean, I've covered a lot of ground here. But that's the reason I've done Stan the Annuity Man® YouTube channel with over 600 videos, all educational, informative, non-salesy, to the point, factual annuity videos. And also the reason I do the Fun with Annuities podcast that comes out every Tuesday is because I want to educate people.

I want to educate people on everything that's not an annuity. A lot of my guests that come on, they're talking about their stock market portfolios or how they go about investing people's money. Or if they're a fee-based plan or a Long Term Care specialist. I'm here to educate and edutain. (Edutain = entertain + education.) And I'm hoping I'm doing that. I'm hoping that this is fun to watch. You don't know where I'm headed. By the way, if you haven't caught this yet, there's no script. This is just me taking a topic, and with my 30-plus years of experience, just riffing it. But with annuities, it comes down to fear and greed always loses to contractual and simple.

If you just keep it contractual and simple when you're looking at annuities, you're going to win and you're going to be happy and you're going to be ecstatic with what you get. But always ask yourself two questions. What do you want the money to contractually do? When do you want those contractual guarantees to start? And use the acronym PILL that I came up with. P stands for Principal Protection. I stands for Income for Life. L stands for Legacy and the other L stands for Long Term Care or confinement care. P-I-L-L. If you don't need to contractually solve for one or more of those items in the PILL, then you do not need an annuity. And the PILL acronym completely wipes out the fear and greed. Maybe fear a little bit on the long-term care, but that's just covering the base. You're just checking the box to make sure that you're covered there. That's not really a fear thing.

So, the way that you should look at annuities, the way the annuity industry should look at annuities, and the way that we look at annuities and are leading the way in the industry is contractual guarantees only. Don't fall for the fear and greed pitch. Fall or accept the contractual and simple presentation, not pitch, because pitch means we're going to try to close you. You're going to make your decision on your timeframe. Do we want you as a client? Absolutely. But we want you as a client on your terms when you feel it's time to make the decision.

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.

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