Monte Carlo or Stanicarlo Simulation: Shootin' It Straight With Stan
The topic of the day is Monte Carlo or Stanicarlo Simulation. And you're like, "Wait a minute. What? Monte Carlo?" "Let me tell you something, son, Monte Carlo. I used to have a Monte Carlo, and I loved that car. It was a two-seater, and the women loved it." Now I'm not talking about that, Chester. I'm not talking about when you had a mullet and were riding near the high school with no shirt on in your Monte Carlo with an eight-track player playing the Bass City Rollers. I'm not talking about that kind of Monte Carlo. But you know what I'm talking about, and you know that guy. You know that guy that was like five years older. He had left high school five years ago but was still dating high school chicks, driving the Monte Carlo with the mullet. It's like Uncle Rico. Like, give me a break, dude, grow up. But I love Monte Carlos. My dad had a Monte Carlo, but he sold it. I loved that car. And he loved that car. He almost waxed the paint off that car.
Monte Carlo Simulations
Monte Carlo simulations have been used in the securities industry for a long, long, long time as a way to project returns. And it's this software thing. "Listen, we're going to run a Monte Carlo simulation to show you that you have enough money to live forever and just take money from the portfolio that will continue to grow under our management. We're going to show a thousand simulations that show you it will work." "Question, Mr. Advisor. Is that guaranteed?" "Well, no, not technically. It's not guaranteed. But with a thousand Monte Carlo simulations running at the same time. The probability, sir, of this not working, I can't see it. And that's why you need to pay us this annual fee every year to manage your money. And yes, we charge it if it goes up or down." But, you have this Monte Carlo simulation. And for years and years and years and years and when I was at Dean Witter, Paine Webber, Morgan Stanley, and UBS. When I was with all those firms, "Use the Monte Carlo to show that for the clients who invest their money in the markets, Stan, and show them that it's all going to work out." Which coincided with the 4% rule, which my friend Wade Pfau destroyed factually. P-F-A-U. Pull it up.
The 4% Rule
Wade Pfau was on my podcast, Fun With Annuities; you should check it out. But Wade just destroyed the 4% rule. And what's the 4% rule that coincides with Monte Carlo's simulation? Good question. Glad you asked. The 4% rule is when your advisor sits there, and he's charging a fee—master of the universe, wealth architect. I call them professional dart throwers. And I used to be a professional dart thrower, but I knew I was throwing darts. And that's why I'm not doing it anymore: I sell contractual guarantees. But I digress. So, you're sitting there. "Well, sir, you really don't need to buy that contractually guaranteed annuity payment that's going to pay you for as long as you're breathing and has no annual fees, no market attachments.
And it's so simple a nine-year-old could understand. You don't need that because we can peel off 4% of the gains, the 4% rule is proven with the Monte Carlo simulation that I just ran for you, and the misses, it is really good. And we put it in this really nice binder so you can see it and track it." What are you tracking? Good question. Not much. You're tracking hypotheticals and unicorns and butterflies. That's what you're tracking. But if you do this Monte Carlo and just take off 4%, and you don't buy the annuity guarantee from that baseball-wearing crazy man from North Carolina, licensed in all 50 states, that keeps talking about contractual guarantee, you don't need that. Turn him off. Stop watching these videos; stop listening to the podcast. Stop it, stop it, stop it, stop because this Monte Carlo simulation and this 4% rule will be the winner. "I have a question, Mr. Advisor, professional dart thrower. What if the market goes down? Do we still take 4%?" "Well, yeah, but long term, if you stay in the markets, it's all going to work out long term." "Mr. Advisor, I'm 75. What do you consider long-term?" "Well, long term, to me, it depends on the markets." BS meter! That's a Monte Carlo simulation. It's played out. It's been used. Kudos to the people that came up with the software program. Kudos to the people that licensed it to every brokerage firm in RIA and the planet, and they're on some boat in Tahiti laughing about it. But Monte Carlo is getting ready to be replaced by Stanicarlo, and Stanicarlo is me.
Stanicarlo simulations are contractual. Stanicarlo doesn't need to run a thousand 'what-ifs,' hypothetical, theoretical back-tested, and projected. And, of course, chasing the butterflies, and I don't have to do that. Stanicarlo simulations aren't simulations, and Stanicarlo simulations are contractual guarantees. Why is that important? Because Annuities are contractual guarantees. You're on them for what they will do, not what they might do. Period. End of story. It's contractually guaranteed. Why is that important? Because you don't have to think about it. Why is that important? Because you're in chapter two of your life. Why is that important? Because you don't need to track the markets like you've been tracking. You don't need a thousand proposals and simulations on what-if scenarios. What if the market goes down? What if bombs go off? What if there's inflation forever? What if there's just crap happening in the streets? Don't you want contractual guarantees? Wouldn't you rather have a Stanicarlo run for you? You can run Stanicarlos all day on our site. We have a SPIA Stanicarlo, a DIA Stanicarlo, a QLAC Stanicarlo, an Income Rider Stanicarlo. And then the MYGAs are all Stanicarlos. And I like that because we really could play off of that and have a car like a Monte Carlo, but it's called a Stanicarlo. And instead of a mullet, it's you and the misses going down the road in Maui, looking for that vegan restaurant. That's what's happening and or looking for the boat.
You don't need to do hypotheticals. Now with a portion of your money, if you want to put it at risk, that's your call, player. You can do what you want to do. But at the end of the day, at chapter two of your life with 11,000 baby boomers hitting 66 daily, this Monte Carlo market stuff is a little much. You've been there, done the accumulation thing, and done the buy and hold. You've bought the dips, you've hung in there, you've weathered the storm, you've done it. Nod your head. Monte Carlo? No, no, no. Next time someone says, "I'm going to run a Monte Carlo," I need you to say, "You know what? That's okay because I think we're going to go with the Stanicarlo." And that dart thrower will go, "What's a Stanicarlo?" And you'll say, "It's contractual guarantees, Mr. Dart thrower. It's contractual guarantees because me and the misses have earned the right to have contractual guarantees. We have earned the right to have an income floor that's going to be there, period." We don't have to watch Jim Kramer explain why it's not going to be there, explain why markets are down, or explain what the FEDs are doing. No, we will have contractual guarantees in place to see the kids and the grandkids and then hold the grandkids. And when we get tired of them, and they puke on us, we hand them back and fly home. We will have guarantees in place to fly first class, so our kids won't. We will have guarantees and Stanicarlos in place because that's what we want. Forget what everyone tells you you need. You want guarantees. Every single person out there wants a guarantee. Even people that want market returns.
I had a guy on the phone today. I asked, "Well, what's a good market return you'd be happy with?" "Well, if I could see a guaranteed 10% yearly." I said, "Stop, you're delusional." I'm going to check you into the funny farm. If you can get 10% every single year, they'd build a statue beside the bull in New York City. Give me a break, player! 10? Come on. If you're thinking that, you're delusional, period. It makes no sense at all. I'd rather you go to Vegas during the final four weekend and bet on the 1 in 16 matchup. You got a better shot. So, what I'm trying to say is, and I've said it well, the Monte Carlo stuff is played out. It really is. The 4% rule? Dead. Dead in the water. We're going to replace Monte Carlo with Stanicarlo. Same sound, Monte Carlo, Stanicarlo. It's easy to remember. But the Stanicarlo from here on in means contractual guarantees. Now, do you need contractual guarantees? You're the only one who can answer that. But you already have one, Social Security. That's a contractually guaranteed lifetime income stream that will increase, making it the best inflation annuity on the planet. So you already have one, but many types of Stanicarlo contractual guarantees are out there. I encourage you to visit my annuity calculators and run quotes. Go to the MYGA page and view the live MYGA feed. Watch the videos. Educate yourself, entertain yourself, and learn. Take your time. But remember, there is no more Monte Carlo.
The Only Monte Carlo You Need
There are two Monte Carlos I want you to be interested in. Number one is Monte Carlo, the place. You fly in there, you see the car race, they're doing the formula one thing, you're hanging out, you're drinking the wine, and you say, "Hey." You know? And you got the collar up. You got the polo, but you got the collar up. Right? And you're sitting there going, "This is a great race. I really like racing here in Monte Carlo." That's the first one, and the second one is to be on the lookout for that classic 1975 Monte Carlo. I need you to buy it, and I need you to put an eight-track player in it. And I need you to buy a Fleetwood Mac eight-track because you can still get them and put it in there and drive around with the windows down, no shirt on. I know you should be wearing a shirt. In fact, there should be a law for all men over 50. All men, no exceptions, all men over 50. Actually, we could go down into the forties, but let's just say 50 would be nice. All men over 50 should never go in public without a shirt ever. But I'd want you to buy the Monte Carlo, windows down, shirt off, eight-track player, and drive up and down the street. You know that type of thing. And if you're in a small town, we used to call it cutting town. You're just going to cut town. You cut town with your Monte Carlo and no shirt on. You need a little Mountain Dew, little peanuts, you know. "Hey, I'm drinking a Mountain Dew; I'm just rolling through, baby." That's the Monte Carlo I want you to get. The Monte Carlo I want you to see is where the racing is going on. But Monte Carlo simulations for your portfolio are wrong. Done, played out, old, out of here. It now is the Stanicarlo. And with that, my name is Stan The Annuity Man. This is Shootin' It Straight with Stan, and I have been shooting it straight this whole time. I'll see you next time.
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.