Can You Explain Your Annuity to a 9-Year-Old?

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Welcome to Shooting Straight with Stan.

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I am your host, the lovable Stan the

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Annuity Man, America's annuity agent,

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licensed in all 50 states because I like

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paying all of those fees to each

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specific state.

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Not really, but

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I do. Today's topic is a very good one.

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It's called annuities for a 9-year-old.

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Now, I made my PR team leave that topic

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and leave that title in place because I

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know there's like grandfathers and

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people out there go, "Well, I got a

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nine-year-old. I'm gonna buy I'm gonna

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check that out that's standing in me.

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See see if there's something for my

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nineyear-old son, JRod, right? Grandson,

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excuse me, my it's not my son. My son's

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called Jay. My grandson's name JRod."

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Anyway,

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but it's not about that. It can be about

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that and we can talk about in a future

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podcast um buying annuities for

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youngsters as a legacy, but that's not

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what we're talking about here. What

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we're talking about here is the annuity

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industry is

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suffocating people with complex

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products. And they aren't explaining the

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complex products. They're just giving

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the 30,000 foot view at a really good

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food seminar. that they serve really

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nice food to at and you can go eat for

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free and then all of the sudden they're

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going to be on top of you setting an

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appointment talking about the greatest

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thing ever. And as I've always said, if

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it sounds too good to be true, it is

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every single time without exception with

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annuities.

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But there's two or three different types

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of annuities out there that are so

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complex and so convoluted

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and have so many rules and so many

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mathematical formulas you literally have

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to go to MIT or Caltech to understand

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them with a lot of them. And there's no

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way some of the agents on those

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postcards that I'm getting in the mail

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that that you know come, you know, come

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talk about the economy and and interest

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rates and inflation and then all of a

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sudden they're going to slam an annuity

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and jam an annuity down your throat.

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That's complex.

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That needs to stop. It would stop

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immediately if all annuity product

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types, and yes, there's more than just

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one annuity out there. I hate all

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newies. I also hate all trucks and I

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hate I hate all record stores and I hate

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all restaurants. I hate all socks and

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shoes and I hate all coats. That's I

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mean it's that stupid. I hate all

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annuities. Give me a break. And if

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you're going to put your foot in the

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ground on that one, Chester, and just

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say, "Let me tell you something, Stan.

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I'll defend that till I die and I'll

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punch you in your hat and your throat

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and write on the annuity man logo if you

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don't stop it. Then my my answer to you

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is then call the social security

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department and cancel social security

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because that's the best inflation

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annuity on the planet.

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Period.

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But I want the annuity if this all would

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be solved if the annuity industry all

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product types would have the same level

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of commission. If all product types had

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a low commission built in, it would I'm

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not say would force, but it would almost

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force most agents and advisors to

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recommend what's actually right for the

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client, what actually is in their best

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interest and suitable and appropriate.

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Instead of one-sizefits-all, I'm going

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to learn one product. If I sell enough

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on it of it, I'm going to go to Bora

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Bora for free with my wife, girlfriend,

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and or boyfriend, whatever applies or

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all of them. I'm gonna go if I sell

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enough of this one sizefits-all square

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peg in a round hole. That's how I'm

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going to sell. And that's a lot of

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what's going on out there.

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And if that's been pitched to you,

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you know what I'm talking about. It's

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like chuming the water, man. It's it's

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it's throwing blood bloody fish in the

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water and all of a sudden the sharks

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show up.

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And what drives me crazy, and I don't

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want this to be you ever, but if if it's

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happened, call me. We'll look at what

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you bought. But a lot of people say,

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"Stan, I bought this. I really don't

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know what I own." What? Excu

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I bought this. I was kind of pressured.

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It sounded good on the surface, you

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know, upfront bonuses and and these

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great returns if you'd owned it, you

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know, 10 years ago or whatever. And I

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bought it. Can he explain it to me? Not

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really. That's all I know about it

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really.

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That's the reason I say if you can't

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explain it to a 9-year-old,

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don't buy it. No offense to

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nine-year-olds.

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Every single annuity type that you're

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considering, you should be able to walk

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into is nine-year-old second grade? I

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think it's second grade, third grade.

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Let's just say it's second grade. I

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don't know. You walk into the second

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grade class and the teacher goes, "Uh,

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uh, uh, boys and girls, um, and and

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whoever identifies as that,

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we have a special guest today. It's Mr.

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Johnson. He wants to he wants to run

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something by you before he buys

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something from an investment standpoint.

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It's an annuity

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and he wants to explain it to see if you

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understand it." And then after that,

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he's going to buy everyone cookies.

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And Mr. Johnson gets up there and

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explains it. And if Mr. Johnson or you

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can't explain it to that second grade

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class and them nod their heads and get

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it, then you shouldn't buy it.

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It's I mean, it's really that simple.

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You should be able to say to them, I'm

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buying a lifetime income stream, meaning

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that the annuity company, this annuity

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company is going to pay me a for life,

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like a like a salary for life. You're

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talking to the nine-year-old.

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And it's going to pay me as long as I'm

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alive, as long as I'm breathing. little

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kid raising a even if you're in the

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hospital. Yes. Even if I'm in the

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hospital and kid, you know, the kid in

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the back goes, "How about if you're on a

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respirator?" You know that that kid?

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Yes. Even then, and vulner

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Yes. And then the the smart little girl

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in the front goes, "But how is you know,

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how do they determine what they're going

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to pay you, sir?" Good question. And

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you're going to be a leader someday, as

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Mr. Johnson says to her. And you say,

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"Well, it's it's the older I am, the

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more they're going to pay me because

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they don't think I'm going to live that

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long." If I mean, the second grade class

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in unison will be like, "Got it. Where's

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our cookies?" Seriously,

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that's lifetime income to second

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graders. That's lifetime income to a

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nine-year-old or a group of

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nine-year-olds.

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And then you go to them and say, "Well,

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I'm considering this this fixed rate

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annuity. It's called a multi-year

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guarantee annuity. But here's how it

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works, kids. I give the money to the

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annuity company. And because they're

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holding on to that money, they're going

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to reward me and give me back a little

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bit more money. So if I give them, you

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know, you got to you can say 100,000

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kids like, huh? But they're going to pay

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me a percentage. And then the teacher

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goes, this is a good time for us to all

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learn, girls and boys. So, she goes on

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the board and talks about, "Remember

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when we were talking about percentages

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the other day in math in our math class

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that we're only allowed to do one time

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per year? Remember that?" And so, she

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goes through that and shows them and

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every kid in there, all second graders

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would be like, "Yeah, I understand that

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you're getting a percentage

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on that money." Like Mrs. um, that's her

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name. The I don't know where that came

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from. The the teacher, Miss Percan, she

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taught us that. and they're going to pay

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that. And then the little girl in the

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front goes, "But how long are they going

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to do that for, sir? How long? I mean,

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they can't do that forever. That's a

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very good point." And you're hired and

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you're going to be an intern even you're

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a second grader. And and and you go,

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"That's that's a good point, Eloise, but

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um I love Eloise." Right. Anyway, that's

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a good point, but they're only going to

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do that for a specific period of time.

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You can lock it in for a year or two

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years or five years or seven years. She

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goes, "Oh, okay. I I understand that,

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but but and then of course her friend

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Eloise has a friend named Phoebe and

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Phoebe says, "But but what if you know

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what if rates go up after you bought

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it?" And and and then Mr. Jones Johnson

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says, "Well, you're right. You know that

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that could happen, but I've locked in

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for that specific period of time." At

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that point in time, the whole second

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grade class goes, "Yay, we got it. We

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don't want cookies this time. We want

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ice cream."

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You have to be able to understand what

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you're buying and you have to be able to

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go into a second grade class and explain

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it to them.

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Period.

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End of story.

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Now, think about some of the pitches

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you've heard, which is upfront bonuses

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and market upside with no downside and

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all that stuff. Try explaining that. Try

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explaining that formula. Just I mean

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just try explaining upfront bonuses to a

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group of second graders. They'd be the

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most skeptical kids. You'd say, "Okay,

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I'm going to buy this, but but for

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buying it, they're going to give me a

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20%. They're just going to give me 20%

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of what I put in." Well, Eloise and

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Phoebe at the same time will raise their

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hands and goes, "That doesn't make any

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sense. How can they do that as a

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company? How is that real? That's what

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And then the kid in the back kind of

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jerk that raised his hand, you know, the

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last time he'd be like, "Well, they just

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can. That's just what they're doing."

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No, wrong answer. Kid in the back start

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exercising, lose some weight because

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Phoebe and Eloise know what they're

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talking about. How do they do that?

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Well, they do that because there's 100

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pennies in the dollar. They got to take

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something else away to make up for it,

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and it's not real money of which you can

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walk away with.

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So the the next time you hear a sales

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pitch,

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say, "Can I go into a second grade class

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and explain it to them?"

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Or better yet, don't let your spouse

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watch this. Can I explain it to my

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spouse or my family or my friends?

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If you cannot do that, if you're at the

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30,000 foot level trying to talk about

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all these shiny things that's been

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presented to you, but you can't really

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explain the shiny things and you can't

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explain how those shiny things work and

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how they actually, you know, within the

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policy make sense, then do not buy it.

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It's really that simple.

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So, annuities for a nine-year-old? Nah,

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not really. There are some specific

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situations that you can do a, you know,

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a joint lifetime income stream. I call

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this the legacy income monster where the

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grandfather buys a joint lifetime income

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policy with his 5-year-old great

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grandson. We've done those, but that's

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not what I'm talking about. What I'm

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talking about annuities for

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nine-year-old, you better be able to

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explain it to a nine-year-old. And

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you're gonna have Eloise and Phoebe in

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the front. those two girls and nine uh

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that are nine years old that are sharp

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and they're not gonna they're not gonna

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buy BS. They're not gonna buy it. They

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want to know how it works, why it works,

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when it works, should it work, can it

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work? Is it a lie or is it the truth?

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And that's exactly how you should be as

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well. Now, wasn't that fun? And that was

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all off the cuff. I still can't I can't

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remember the teacher's name that I came

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up, but it was pretty good. But Phoebe

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and Eloise that you know those two those

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two girls were in class with you when

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you were in school. You know exactly who

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they were. I mean they were in my class.

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I was in the back. I was that kid. No,

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it wasn't. Yeah, I was actually.

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Listen, that was fun. That was shooting

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straight with Stan. I am Stan the

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annuity man. I'll see you next time.