Mr. FIA-X: The Truth About Fixed Index Annuity Returns

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[Music]

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foreign

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[Music]

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with annuities where every single week I

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welcome a celebrity guest expert that

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can help you maximize chapter two of

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your life listen learn laugh and love

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every minute of the most unique

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Financial podcast on the planet let's

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get to it

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[Music]

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welcome to fun with annuities I'm your

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host Stan the annuity man America's

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annuity agent licensed in all 50 states

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try to say that fast three times you

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cannot do it because I practice all day

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long in front of a mirror today's guest

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I didn't want him back on I'll be honest

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with you he is arrogant he's a

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know-it-all he's the indexed annuity

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Guru but I had to bring him on again

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because hey people love him for some

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reason but it's because he's factual but

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the other reason is

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it's officially not Christmas season

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it's indexing annuity Silly Season

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because I'm getting crazy crazy caused

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by well this goes from a good 18 return

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and no dumb sliding blah blah blah now

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we've been through all this before but

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let me let me welcome my illustrious

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great word right guest Mr f i a x hey X

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how are you what's up how are you Stan

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good to see you you know I'm living the

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dream max you know that

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um

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you know I

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I am looking forward to this because I

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called you in a in a fit of rage as

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sometimes I do and you're driving down

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the road and whatever nice sports car

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you're driving

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and I'm like X you've got to come on and

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talk about these index indexes indices

1:48
and how these returns are such garbage

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um I just did another video and I was

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mentioning

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um index annuity returns and of course

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all of the the sociopath agents came out

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of the woodwork

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and I'm like okay I got to get X on so

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well you're gonna ruin their story if

2:07
you tell the truth you ruin the story

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yep it's uh it's one of those things and

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and disclaimer before we get started and

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you know X and I are going to jump off

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the cliff looking for the FIA a

2:17
parachute but we will find it but what

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the disclaimer I want to come come to

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everybody with is

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we love indexed annuities we we both of

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us

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and and Mr X has made his living on

2:31
indexed annuities he's in the big house

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because of indexed annuities but the

2:35
point is we like them for what they do

2:38
and how they are designed and the truth

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about them not the sales pitch

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we both were around in 1995 when they

2:45
were first introduced we both remember

2:46
those times I always say it's Keystone

2:49
life that's a beer it's actually Keyport

2:51
life who who was the first index annuity

2:53
issuer but the point is

2:55
disclaimer and proudly say we we like

2:58
indexed annuities we primarily at the

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annuityman.com use them as a very

3:04
efficient and cost effective delivery

3:06
system for the income Rider but we we

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like some of the accumulation story as

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well but I want people to say you had

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all into the news No No in fact I would

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go on record that between the two of us

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not many more not many people on the

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planet have actually been the

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facilitator of more sales of indexed

3:27
annuities than me and you

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that's a fair uh personally it's a fair

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statement so let's talk about what's

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going on in the accumulation story The

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Market upside with no downside X hit me

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go

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oh it's getting wild remember I think

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our last call we talked about the wild

3:44
west and how I was going to keep getting

3:45
crazier and crazier is the interest rate

3:47
kept going up it was going to kind of

3:49
like we called it the arms race didn't

3:51
we yeah and you warn people it's getting

3:54
great to get crazy so tell me what's

3:56
happening I it was it's getting crazy it

3:58
said every you know what everything I

4:00
said that was gonna happen has happened

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agreed remember we talked about the

4:05
bonuses and how they were going to come

4:06
out with all these huge bonuses and

4:08
these fire sales and then we talked

4:09
about all these participation and we

4:11
said all the stuff was going to get

4:12
crazy and it's gonna be like I get 40 50

4:14
60 oh I'm getting remember we talked

4:16
about all that and it all came true

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so here's the next one and I'll call my

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shot because they're easy to call

4:24
because they're predictable do it X if

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you're gonna start seeing it obviously

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because we have this Rising interest

4:30
rate environment it's bad for our credit

4:32
cards it's bad for our mortgages it's

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bad for our car payments but it's great

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for the annuities

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because they're all predicated around

4:40
that interest rate right

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so as the interest rates go up we're

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going to have an opportunity to get more

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participation rates higher caps uh you

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know lower fees or spreads or whatever

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the is involved in the indexed annuity

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that you buy

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there's the the hard part Stan you're

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going to start seeing two three four

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hundred percent participation rates 500

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participation two to three to four

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hundred to five hundred percent because

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people are already looking for their

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pins to sign the application please walk

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them off the cliff please and I don't

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have a problem with that I I don't

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here's where the problem lies I'm gonna

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get two three four five hundred percent

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of what

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I want someone to explain the index that

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I'm getting offered this two three four

5:31
five hundred percent participation rate

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and I know what the clients are saying

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is well how do I get more than a hundred

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right good question it it's actually

5:40
pretty easy because the bond rates have

5:42
gotten so high and the option rates are

5:43
are reducing but more importantly as

5:46
they're buying options in indices that

5:48
never existed because they created them

5:49
so there is virtually it's the cost is

5:52
so low that they can get these real high

5:55
participation rates but let's say I got

5:58
a 300 percent participation rate but the

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annuity average two and a half percent

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well that's seven and a half

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minus each year of whatever spread fee

6:08
charge you know however it works right

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right okay well

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the illustration shows me like 47

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percent

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but the reality is I made Seven right

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minus the charges so here it is get your

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pens out and write this down because

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here's probably three or four maybe the

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most important things you're going to

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learn right here these are the questions

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that you need to ask

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okay I've got a big sharp I've got a big

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Sharpie I'm going to write it

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permanently on my thigh so go perfect

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number one thing I want to ask is when

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they when I ask what the participation

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rate is I want to know what the

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participation rate is okay and I want to

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know when it can change I think that's

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important

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correct okay because it's going to

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change based off economic conditions I

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can tell you right now the product that

6:57
had 300 participation rate right now did

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not have it eight to twelve months ago

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Fair that's that's fair so what you're

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saying X is that the annuity carrier can

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change the rules

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well yeah they have to have a way to to

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protect themselves okay and that's okay

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but I just want to understand

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right that's number that's number one I

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like that any any more detail on number

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one Mr X well well yeah there's there's

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some Tronics out there that will

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guarantee the rate for 10 years like if

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if your participation rates 200 you get

7:36
it for the life of the contract I think

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that's great but my next question would

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be I'm getting 200 or 300 of what

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I'm gonna tell you right now and I will

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put a bet on the table the majority of

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agents that sell the products they sell

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cannot thoroughly and confidently

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explain the index or what's in it and

7:56
the math behind it well definitely the

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math behind it because there is no

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numbers and it's all letters the way

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they calculate the map on this stuff

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right so my point is this though so I

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get I get 200 percent of the the XYZ

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Elemento P Rockstar superhero named

8:12
index whatever it is right right

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so my third question is and this is the

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fun one and this is where you're going

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to catch the the agent line

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potentially or you'll catch the agent

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dancing around that's that's a better

8:24
way you're gonna catch them dancing

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around okay I would say to you Stan the

8:28
agent

8:29
how long has this index been around

8:33
in existence in existence when did it

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actually go live we did it actually when

8:40
can we actually track it not back test

8:43
it track it well you brought up a big

8:45
word there so I want to get there okay

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no no got it so I want to know when the

8:54
index actually went live and here's why

8:59
I asked that because typically the day

9:02
they've gone live which way do they go

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stand do they go north or south

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typically South South

9:09
everything prior to the go live date is

9:13
BS it's garbage in French we use French

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here

9:18
okay garbage we can use a Latin if you

9:22
like it's basura uh I got a million

9:24
names

9:25
anything prior to that date is garbage

9:29
and here's why

9:31
the next thing you're going to get is an

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illustration oh my favorite if you don't

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own this let me do my Chester uh Chester

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if you own this 10 years ago you'd have

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made this son we would have averaged

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13.95 for the last 10 years if this

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existed well I'm going to tell you what

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no you wouldn't

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no it's those illustrations are the only

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thing real about the illustration is the

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paper and the ink after that it is not I

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can promise you your annuity will not

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function like that illustration it just

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won't

10:09
it won't but it looks so good Mr well it

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does look good and what they do stand is

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they do this they have illustration War

10:16
to where the the the person that can

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illustrate the best illustration yes

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wins

10:24
it has no

10:27
no

10:28
realization of what's actually going to

10:30
happen like you know the old saying past

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performance is not indicative of current

10:34
results

10:35
they didn't even have a past performance

10:38
it was it's a made-up performance

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it is a it is an index that is built and

10:45
it's if you read the disclosures there's

10:47
some real interesting verbiage in their

10:49
disclosures like and I'm paraphrasing

10:53
okay

10:54
some of one of the companies said like

10:56
we know that it's to our advantage to

10:58
make this look good in our back cast

11:01
right because if you didn't you wouldn't

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sell any

11:05
so last and foremost is without last and

11:09
foremost I gotta I got a list I can keep

11:10
going no hold for a second because for

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for all the podcast listeners I wanna I

11:15
wanna he sounds a little muffled maybe

11:16
maybe that's just him but he's wearing a

11:18
mask and I always say that Mr f i x is

11:21
wearing a mask because if you think if

11:23
you think the uh the people that run the

11:25
the voting machines in specific states

11:27
are targeted uh by people that are angry

11:30
Mr f i x a i a x is f-i-a-x he is

11:36
targeted because

11:38
indexed annuity

11:40
groupies cultists do not like what he

11:44
has to say so I get emails I get hate

11:47
emails every time he's on who is that

11:49
guy he doesn't know what he's talking

11:51
about no no he does know what he's

11:53
talking about and that is the issue here

11:55
and people need to know go to a couple

11:58
of more and then I got a a hundred

12:00
thousand dollar question for you well I

12:02
I'd be happy to go toe-to-toe with any

12:04
of those agents because I can explain it

12:06
very easily and simply it's it's facts

12:08
if you look at when the indexes go the

12:11
indices indexes whatever you want to

12:13
call it when they go live

12:15
they haven't returned now I'm going to

12:17
be

12:19
um Fair okay I'll be fair here nothing's

12:23
worked very well the last 12 to 18

12:24
months correct

12:27
we've had a pretty tough some tough

12:28
sledding okay I'm not getting political

12:30
just but inflation's up economy's bad

12:32
gas Society things of the Market's down

12:34
things haven't worked great and that

12:36
that Bitcoin annuity I think is on the

12:38
Shelf what do you think just for a

12:40
little bit we're postponing it for a

12:42
little bit but here's the beautiful part

12:47
the S P 500 Index stand which yeah

12:50
you're familiar I bet a lot of your

12:51
listeners are familiar with their Savvy

12:53
people because Savvy people listen to

12:55
you I know that well I've got an S P 500

12:58
um tattoo as you know right across my

13:00
heart

13:01
and the s p is considered the Benchmark

13:04
of investing yes

13:07
should Diversified top 500

13:09
yeah all that great stuff yeah okay

13:12
I've got a 65-year history in the S P

13:14
500 right

13:17
so after this recession or lull or

13:20
whatever you want to call it

13:22
we we have data that will kind of show

13:24
us okay how things should react right

13:27
not saying it will

13:29
but we have history

13:32
right in our favor of real actual

13:36
historical things

13:38
so my question is for these indices that

13:41
have been created that have been out one

13:42
or two years they haven't experienced

13:46
any of this happening no so how are they

13:49
going to react

13:51
nobody nobody knows period and a lot of

13:54
these indices that are made up out of

13:56
thin air if you read the disclosures

13:57
they can change the internal makeup of

14:00
those indices at any time whereas an s p

14:03
is locked in let me ask you this Mr X

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your favorite indexed annuity option

14:07
revolves around the s p am I right or am

14:11
I wrong no you're 100 right in here and

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I can tell you why why it's the

14:16
Benchmark of investing I have a track

14:18
record on it so I can do it even though

14:21
I know that it's performance past

14:23
performance won't be current you know

14:24
indicative of current results right you

14:26
have history I have longevity and the S

14:30
P 500 is 500 companies so this is my

14:34
favorite line this is part of the sales

14:35
pitch ready go I put you in the XYZ

14:38
superhero index because it's Diversified

14:40
yes

14:42
okay great explain to me that

14:44
diversification Mr agent because I'll

14:45
bet you they can no second part is what

14:50
more diversification do you need than

14:52
the top 500 companies in the the world

14:55
basically and want to explain to explain

14:58
to the listeners and viewers because you

15:00
know this is on the all major podcast

15:01
platforms and the fun with annuities

15:04
YouTube channel and growing by Leaps and

15:06
Bounds Mr X because of people like you

15:08
thank you very much I'd like to take

15:10
credit for that thing yeah well you

15:11
you're you're a big reason because

15:13
people want to hear it because they're

15:15
getting every bit they're eating a lot

15:16
of bad chicken dinner and good steak

15:17
dinner at this point in time yeah but um

15:21
why are carriers choosing to make up

15:25
indices indexes out of midair instead of

15:28
choosing the stodgy old simple s p

15:33
because it's cheaper it's more cost it's

15:36
more cost effective for them to create

15:39
the index than it is to buy the option

15:42
in the s p to buy an option in an index

15:44
that never existed it's way way cheaper

15:46
to buy those options or those Futures

15:47
and those products

15:48
so annuity companies have the big

15:50
buildings for a reason this adds to it

15:52
correct it does and I'm not saying

15:55
they're bad no

15:56
but I'm also not saying they're good and

15:59
here's why because I don't think looking

16:01
back for two years of real return gives

16:05
me a picture big enough to say hey I

16:08
should put my life savings in there

16:10
now I know what the agents on the other

16:13
end that will hear this well they're

16:15
downside zero when they can't lose any

16:17
money

16:17
yeah but I go get a fixed annuity paying

16:19
me five to six percent yes that's

16:22
they're called migas I mean yeah that

16:24
that zero is your hero is crapola That's

16:27
Italian well um I didn't know you spoke

16:31
so many languages yeah I'm fluent I'm

16:33
fluent you're fooling crapola I'm fluent

16:35
I'm fluent man I am fluent baby I speak

16:39
uh Southern

16:40
locker room

16:42
um and and annuity and I don't and I and

16:45
I once again I don't have the problem

16:47
you and I might disagree a little on

16:48
there another problem with the zero is

16:50
your hero part I hate that but I know

16:52
you do but I do have what I do have a

16:54
problem with is when people like an

16:56
illustration down in front of me and it

16:58
says look back last 10 years Stan I

17:00
returned 17 and I go that's awesome when

17:03
the index come out two years ago well

17:06
how in the heck do you get a 17 return

17:09
for 10 years when you've existed too

17:12
well because the other eight are made up

17:14
I do think sometimes that I'm gonna I'm

17:18
just keep in a looped bad dream Mr X

17:20
you're part of it obviously

17:22
um and the reason is

17:25
this could all be solved couldn't it by

17:27
the couldn't couldn't it that's a

17:29
southern but couldn't it

17:32
um if the annuity industry really wanted

17:34
to solve it

17:36
I think so I think in my world perfect

17:39
world I think you do live in a perfect

17:41
world there's no doubt so go ahead I

17:43
think you should only be able to uh

17:45
illustrate your index for as long as

17:47
it's been alive

17:49
so

17:51
no back casting no BS no made up numbers

17:54
no fictitious stuff

17:57
and I believe also too if if a person

18:00
that is famous

18:02
is endorsing the index that's attached

18:05
to the indexed annuity that person's

18:07
compensation should be revealed

18:12
absolutely why are do you have own a

18:15
piece of it you get a piece of every

18:16
sale and you I don't know I don't know

18:18
what these what these guys do and they

18:20
hock their books or they Hawk their

18:22
stuff behind it I mean because because

18:24
I'll guarantee you I get approached all

18:26
the time about what could you Stanley

18:28
nudity man did next annuity there will

18:30
come a time that someone and I run it by

18:33
ux and you say yeah that's actually

18:34
simplistic enough for you to sign off on

18:37
I'll tell people how much I'm getting

18:39
paid but I'm I'm getting tired of well

18:42
this Guru is behind this so I'm like

18:44
that guru's getting paid

18:46
on an index annuity come on don't do it

18:49
for their health let's just call it back

18:51
oh it's like enough for a bonus upfront

18:52
bonuses are candy for the stupid well I

18:55
had a call the other day about well you

18:57
know I made I lost all this money in the

18:59
market but I made it back with an

19:00
upfront bonus I said you're the dumbest

19:02
person I know and I know a lot of dumb

19:04
people and I will tell you here I'm

19:06
going to tell you a true story this

19:07
happened to me three weeks ago I was at

19:09
dinner and I got a phone call I was at

19:12
dinner with with uh some friends I

19:14
stepped out and the the agent the agent

19:17
had a client on the phone and we were

19:18
talking and he said he went to a seminar

19:21
he had a million dollars and this guy

19:23
told him that he would get a 40 bonus

19:26
immediately goes that's forty thousand

19:28
dollars I go you need one more zero yeah

19:31
exactly four hundred thousand dollars

19:33
and he goes what I go They're gonna give

19:35
you 400

19:37
000 he goes well how could they afford

19:40
to do that I go thank you because you're

19:42
not giving you the money right because

19:44
here's what I would do if you give me a

19:46
40 30 percent bonus and let's say my

19:48
penalty was 10 or 12 percent right I'll

19:50
take the money I'll quit I'm 28 ahead of

19:53
the game and I leave

19:55
right

19:56
that doesn't work that way folks they're

19:58
not giving you the bonus it's fictitious

20:00
and here's the other part that they

20:02
don't tell you typically and we can look

20:05
at this very easily your fees your caps

20:10
your participation rates are either

20:12
reduced or elevated for the bonus why

20:15
because they have to recover it over

20:17
time

20:19
this they the insurance companies play

20:21
the long game your lifetime is the game

20:24
they play so when you see a bonus Stan

20:27
puts it best it is candy for the stupid

20:29
you are financing the money and you are

20:32
going to make less to get that here's

20:34
the best deal for you if you do get a

20:36
big bonus like that you better die the

20:39
next day because that's the only way

20:40
that you're gonna see that bonus

20:42
um

20:46
as I've told everybody about death and I

20:49
I can weigh in on this

20:51
death is not a good strategy X because

20:54
you can only use it one time one time

20:57
part is this

21:02
correct bonuses will apply to the hash

21:05
correct bonuses have a vesting schedule

21:08
what's that mean I have to stick around

21:10
for 10 years to get the bonus and you're

21:13
paying for it along the way if they

21:16
screw you for all 10 years did you

21:18
really get a bonus

21:21
you got screwed this is what you got

21:23
yeah no doubt about it it doesn't make

21:26
them bad it just makes you need to

21:28
understand what you're getting into I

21:31
think we need to take a short disclaimer

21:33
break and say once again we're

21:35
proponents of index annuities we like

21:37
index annuities we're trying to

21:39
influence the the industry to make them

21:42
better more transparent more simple more

21:44
easy to understand less complex no

21:48
formulas using math formulas using

21:50
letters only numbers

21:52
but we don't like the environment that's

21:56
being created by people that are just

21:57
selling index annuities and index

21:59
annuities only I always tell agents that

22:01
call me and want to be me Mr X of course

22:03
they do and you can only imagine why

22:06
um it's it's the hype let's give you the

22:09
answer but but I tell them if you're

22:11
selling if your business model is more

22:13
than 50 of annuities sold are indexed

22:16
annuities

22:17
and if you're 75 or 80 all indexed

22:20
annuities you're eventually going to

22:21
lose your license or get sued or maybe

22:23
you can look out of it but you're not

22:24
gonna have a good life because you're

22:25
going to have to explain

22:26
why all of these returns never never

22:29
happened

22:30
right well I I don't disagree with some

22:34
of that I I here's the challenge that I

22:36
have and that I see coming down the

22:37
plane be ready you ready I'm gonna call

22:39
another shot shot called

22:43
you are gonna see class action lawsuits

22:47
filed

22:49
based off of

22:51
these made up fictitious indices

22:56
class action lawsuits filed based off

23:00
the illustrations that are presented to

23:02
the client

23:03
and you're going to see those happen

23:07
I saved under 12 months this I'm going

23:09
to get specific on this one I say way

23:11
under 12 months class action lawsuits on

23:15
index so I'm going to see an ambulance

23:16
Chaser my favorite ambulance Chasers I

23:19
can name their names but anyway

23:21
instead of have you been in a car wreck

23:24
dude have you been injured have you been

23:26
sold an indexed annuity that you serious

23:28
I I totally think so and once again it

23:32
doesn't make the product bad I want to

23:34
understand that and for you guys

23:35
listening the pr it's not the the this

23:38
might sound Politically Incorrect but I

23:40
don't mean it to be it's not the arrow

23:41
it's the Indian

23:42
right the arrow shoots straight the

23:45
product is what the product is

23:47
it's the person aiming it it's like it's

23:49
like here's a better one probably if I

23:51
go by those guaranteed to hit them

23:53
straight golf clubs yes until I get a

23:55
hold of them then they don't go so

23:57
straight

23:58
the product is is static it doesn't

24:01
change it is what it is right it's

24:03
contractual it has the guarantees it has

24:05
all that stuff in it it's the person

24:06
that's explaining what the product is

24:08
that's the challenge and I've always

24:10
said to people if if they if the pitch

24:12
you hear sounds too good to be true

24:14
write it all down in detail sign and

24:16
date it flip the page around and have

24:17
the agent sign and date it you'll never

24:19
he'll never put his name on that they'll

24:21
never sign it and if they do you got

24:22
them but the point is

24:25
um

24:25
you know we keep going back the same

24:27
thing X was struck I know with our

24:29
listeners

24:30
you have shined shoned the light on some

24:34
new things

24:35
but again if it sounds too good to be

24:37
true it is every single time what I get

24:39
upset about is there a lot of these

24:41
people are targeting

24:43
you know you know groups of people that

24:44
are retiring from a certain sector and

24:46
they're not sophisticated and they're

24:48
putting them all in the same index

24:50
annuity every single one of them I run

24:52
into that all the time

24:55
um if your industries are on the index

24:57
annuities how would you solve this or a

25:00
better question

25:02
and I know that you're you're always

25:04
thinking about how to develop the right

25:06
indexed annuity because you want me to

25:08
sell that

25:10
um what would that indexed annuity look

25:12
like X

25:14
I personally think

25:17
here's where the I think my opinion

25:20
which means everything it's not it's all

25:22
that matters yeah they they keep making

25:26
index annuities that need to be sold

25:27
when they need to make indexed annuities

25:29
that should be bought okay now tell me

25:31
what that looks like on my site I think

25:35
it's very very something that first of

25:37
all that you

25:39
especially you yes calculate the return

25:42
I know it must be mine a plus B minus C

25:45
equals for term or whatever that formula

25:47
may look like but I should be able to in

25:50
two to three steps calculate my return

25:54
my second piece of it is and I know what

25:56
the agents will say well I can do that

25:58
my index does this and I minus that and

26:00
that's what I get a b c right now

26:03
explain what's in the index and how it

26:05
works

26:08
Bingo but I got you and I'll give you

26:11
another great story I had a gentleman

26:13
talk to an agent that I know and he was

26:16
telling him that oh this is no good it

26:18
has this and it has that in it and I

26:21
went to the agent and I told him I said

26:22
every one of these indexed annuities has

26:25
this and that in it and I would get

26:27
their

26:28
basically I don't want to say a

26:30
prospectus because it's not but I would

26:32
get their information sheet on the index

26:33
and you say look it holds the same stuff

26:35
that he's saying this annuity is bad for

26:38
but his annuity is good for I go

26:41
so who the people talk to is very very

26:45
important and that's honestly Stan

26:47
that's why you've had the success that

26:48
you have you shoot straight here it is

26:49
yeah we can have an uncomfortable

26:51
conversation but it'll be the truth and

26:54
then you make the best decision for you

26:55
and your family but let's go back to

26:57
simple Stan this is this is a dream

27:00
scenario it's kind of like me thinking I

27:02
have six-pack abs but let's go there

27:04
there's an indexed annuity on the stand

27:06
the annuity Man Site the annuityman.com

27:08
there's an indexed annuity that stand

27:10
the annuity man is saying this is it

27:12
what's it look like internally

27:15
I just personally I like the s p

27:18
because it's the Benchmark of investing

27:21
look if the if if your indexed annuity

27:24
doesn't make any money and you're

27:25
invested in the S P 500 it's pretty easy

27:28
to explain why I didn't make any money

27:29
so our economy is not doing great

27:31
correct okay I have a hard time when the

27:34
s p does okay and then my index annuity

27:37
didn't do well well explain it to me

27:39
well they can't so I think it should be

27:41
the s p I think it'd be it needs to be

27:44
something with a participation rate

27:46
without cap I don't play the the I don't

27:49
want to play a product that limits my

27:51
earnings

27:52
so explain a cat a cap is very easy to

27:55
understand you know if the cap is set is

27:57
is is five and and the market gets seven

27:59
you get five

28:01
yeah that's it no okay and if the market

28:03
explains explain to the nine-year-old

28:07
I'm playing that role right now very

28:09
well by the way explain to the

28:12
nine-year-old participation rate x a

28:15
participation rate is how much of the

28:17
index you're gonna participate in so

28:19
let's say you had a 70 participation

28:21
rate if the s p did 10 which by the way

28:24
30-year historical average of the s p is

28:26
9.89 so we'll just call it 10 right and

28:29
I get 70 of that X right correct so you

28:33
get seven done

28:35
that's easy but the problem is now you

28:37
have some that have participation rates

28:39
with a cap which means you get the

28:41
participation rate but it's capped why

28:43
would you ever want the more

28:45
modifiers you put on it the worse it

28:48
gets correct it's like why would you

28:51
want two Governors on your card

28:53
I want two Governors I don't want two

28:55
governors in my state either by the way

28:57
yeah um

28:59
so

29:01
this design is it a one-year option is

29:06
it a two-year option is it a three-year

29:08
option because we all know that the

29:10
longer the index option the better the

29:13
returns but the the public doesn't have

29:16
the appetite and or

29:19
um patience for that correct I think

29:21
there's I think there's a little of both

29:22
I think you could go one two three pick

29:24
which one you want one two or three some

29:26
people want to know every year lock it

29:29
in call it a day I got it but if I go to

29:32
two years my participation rate would be

29:34
a little higher if I go three years my

29:36
participation be even a little bit

29:38
higher so right are you willing to trade

29:40
some of the ride

29:41
for more of the upside with the downside

29:44
of zero you're very listen to how simple

29:47
this is

29:49
stand the annuity man indexed annuity

29:51
it's on the S P 500 we're only choosing

29:53
participation rates hopefully that

29:55
participation rate is I

29:57
and you can choose either a one-year

30:00
two-year or three year meaning you can

30:02
lock it in in those Point times am I

30:05
missing something x no that's it it's

30:07
that simple because here's why you want

30:10
to build this for accumulation great

30:12
what better way to accumulate Warren

30:14
Buffett has challenged every Guru on

30:17
Wall Street to a 10-year challenge he

30:19
puts 10 he puts a million bucks in the s

30:21
p they put a billion bucks in their

30:22
hedge fund and manage it guess who wins

30:24
at the end of 10 years the S P Warren

30:27
Buffett wins they don't even want to

30:28
play with them anymore that's the reason

30:29
when people call me and say you know

30:31
they got the young kids should they buy

30:33
annuity no just put them in the s p fund

30:35
and never look at it and never look at

30:37
it and keep contributing and when it

30:38
goes down contribute more

30:41
right I'm not giving investment advice

30:43
but that's what they say right no no

30:45
bonus no bonus no fees

30:49
hearing now S P 500 are the index

30:52
options that the carriers buy I know the

30:55
sensor but I'm asking it for the

30:57
consumer are they higher and more

31:00
expensive than made up super duper index

31:03
out of midair 100 that's why you're

31:05
seeing the made up super duper D in the

31:07
air ones because they can hit better

31:09
profit margin with it so the 200

31:11
participation rate super duper probably

31:15
isn't as good as the 70 participation

31:17
rate on the s p

31:18
well I would agree with that because it

31:22
well that's a tough one to answer

31:24
and here's where I see it I have no

31:26
history of their super duper dude to

31:29
give you an answer

31:30
but if I would take it even with their

31:33
back casting even with their made-up

31:35
stuff yep

31:37
the s p still works

31:41
is there a reason that it's not

31:44
people aren't doing that carries aren't

31:46
doing that I know there's a few and we

31:48
can't mention names that are that have

31:49
some simple ones out there but I would

31:52
say wouldn't you say easily 90 of them

31:54
are convoluted and complex and made up

31:56
out of mid-air a lot of them don't you

31:58
think 100 yeah yeah yes I agree with you

32:00
100 I agree with you I I just think

32:02
every day I see this new stuff coming

32:05
out every I have one index that was

32:06
great it came out this year and they

32:10
show these crazy returns

32:13
and the guy's like oh an average acts

32:15
and I'm like

32:17
how it just came out in March I mean how

32:20
do you come up

32:21
I go you're okay you're okay with this

32:24
like you're okay sitting with a client

32:25
oh yeah yeah it's gonna you know all

32:28
right all right and I could be totally

32:30
wrong I could be 100 wrong Stan this

32:32
thing could just rip and just kill it

32:34
yeah okay in in that's fine that's

32:39
that's fine but um and what I would I

32:42
mean

32:43
if if you are expecting real Market type

32:47
rates of return annually

32:50
and you're considering an index annuity

32:52
please don't

32:53
please don't get a better than average

32:55
chance at a better than average return

32:57
that's right but some of those 10 let's

32:59
just say in a 10-year scenario two or

33:02
three of those years are going to be

33:03
zero just it's the way markets work

33:05
right

33:07
and so those zeros are going to

33:10
even out in in even out the flow of

33:12
returns and also the fact that the

33:14
companies can change the rules at their

33:16
discretion I always tell people

33:18
if you're buying a one-year call option

33:20
with a 10-year sales surrender charge

33:22
you're buying a one-year guarantee with

33:24
a 10-year sales surrender charge you

33:26
don't know the nine other nine years of

33:28
guarantees are going to be well that's

33:29
the other part too why why I do

33:31
appreciate the for two reasons I like

33:34
the longer strategy for two reasons one

33:36
is it returns more money over time

33:38
historically it's shown to be a better

33:40
return for the clients number two is

33:42
they can only mess with you if you have

33:44
a two-year reset they can only mess with

33:46
you four times if you have a 10-year

33:47
reset on a one year they can mess with

33:49
you nine times and they meaning the

33:50
annuity company meaning the company and

33:52
you know and there's some good companies

33:54
out there and I yes there's some less

33:56
than reputable

33:59
when it comes to Renewal rate

34:01
I agreed I agree I think some companies

34:04
are much more to their clients than than

34:07
others do you think the coming year

34:10
predicted class action will throttle

34:13
back some of this nonsense nah it'll get

34:16
buried

34:18
not one bit

34:21
well I remember I did a video recently

34:23
on an article that was written I'm not

34:25
going to throw his name out because he's

34:26
got enough heat already but it was on a

34:28
it was in a online retirement Journal

34:31
that talked about the real returns of

34:34
index annuities and he had to pull it

34:35
down he had to pull that article down

34:37
because

34:39
first of all it was factual but second

34:41
of all it tore the scab off of and

34:45
revealed the onion of the whole thing

34:49
but the index annuity people got so mad

34:51
that he just pulled it down he told me

34:54
pull them he just pulled it down and

34:56
that is that is sad when you know I call

34:59
that fake annuity news if we can't have

35:01
real conversations about these products

35:04
and they all have to be Pie in the Sky

35:07
proposals and and you know unicorns

35:10
chasing the butterflies then all of this

35:13
is fake annuity news annuities me like

35:16
you said they need to be purchased not

35:19
sold I totally agree and here's the best

35:21
part you go take that illustration that

35:23
that agent gives you and you've emailed

35:25
it to us

35:26
oh and um we'll show you the line

35:31
hmm I don't even go there you know when

35:34
people start saying well he said it was

35:36
going to just I'm like stop just please

35:37
stop you mean the guy that's gonna make

35:40
a sale and make a whole bunch of money

35:41
oh my God please stop I I don't yeah

35:44
well you know most people that call me

35:46
after an index annuity pitch has been

35:49
made to them they're calling me for a

35:50
reason because their gut says what the

35:53
heck what's going on your guts your

35:55
guardian angel telling you something is

35:57
what that is what's going on new other

35:59
than I mean let's talk good what's good

36:04
and new happening in the index annuity

36:06
world if anything

36:08
well I I think the best thing and this

36:11
is good it's this bittersweet news is

36:13
the interest rate increases are the best

36:15
thing to hit the annuity industry and in

36:17
15 years correct

36:20
because those interest rates go up the

36:22
products get much more attractive

36:24
because you get more you get more

36:27
opportunity but once again I go back to

36:29
you more opportunity of what so I just

36:32
you got to be careful

36:34
you know not to step it and the other

36:36
thing you brought up a good point I want

36:38
to go backwards a little bit because I

36:39
thought you brought up something really

36:40
interesting of course go ahead the guys

36:43
with the bonus and well I've lost money

36:45
in the market well I'm going to give you

36:46
the bonus to make up your loss on the

36:47
market move it over here

36:51
that's honestly oh I hear that quite a

36:54
bit it's Criminal

36:57
person should lose their license

36:58
immediately in my opinion if that's the

37:00
sales pitch made because back in the day

37:03
before the markets went down they would

37:05
say we'll move it here take the

37:07
surrender charge and the bonus will make

37:09
up for that that's criminal but now

37:11
they're saying take the money in the

37:14
markets that you've lost and move over

37:16
here make it all back with the bonus

37:18
that's that's criminal as well in my

37:21
opinion

37:23
um but but that's what's going on it's

37:25
going to continue to go on as

37:27
crypto unwinds and whatever else unwinds

37:30
within the economy

37:32
um and people don't want to lose any

37:33
more money but bonuses there's not a

37:35
philanthropist at an annuity company

37:37
that wakes up in the morning and says

37:38
you know what I want to give away money

37:40
today doesn't work like that they have

37:42
the big billions for the reason the big

37:43
logos on the planes for a reason

37:45
just do common math let's do some simple

37:48
math everybody get a pen out real quick

37:49
here we go let's say you had a hundred

37:51
thousand dollars right say this company

37:53
gives you a

37:55
25 bonus well whatever I don't not

37:58
picking on anybody I don't even know I

38:00
don't even do bonuses I can't even yeah

38:02
who cares he doesn't even register with

38:04
me right so so basically they're going

38:06
to give you 25 Grand so you gave them a

38:08
hundred yes

38:10
they took an extra 25 so really they

38:12
only have 75 000 to invest right

38:15
makes sense math wise okay but I gotta

38:18
pay commissions and they got to pay

38:20
salaries and they've got to pay

38:21
everything else so take out seven or

38:23
eight percent for that so let's call it

38:25
let's go up 35 for easy math

38:29
they you gave him a hundred but they

38:31
paid out 35 gross

38:33
that means I only have 65 000 to deal

38:36
with

38:38
right

38:39
makes sense to me

38:40
well if the insurance companies get say

38:43
six seven percent on their portfolio

38:45
because they invest in bonds right

38:46
standard they take a little scrape off

38:48
the bonds and they pass the rest through

38:49
to the clients right sure

38:52
well do the math everybody if I'm making

38:54
say seven percent on my portfolio

38:56
at 65 000 that's we'll call it five

39:00
grand a year for easy math

39:02
and it's going to take them some time to

39:04
recoup all that stuff they gave out

39:06
isn't it

39:11
but but people don't

39:15
look at that and and we can just look at

39:17
the the recent Bitcoin situation with

39:19
the with the really the chunky kid from

39:22
the Bahamas that never took a bath no

39:25
one really looked into the fact that he

39:27
didn't have a board of directors or CPA

39:29
no one really looked under the hood for

39:31
that one or that the books didn't matter

39:33
or that the stuff didn't make any sense

39:35
or that he was such a large donor to

39:37
everybody and just handing out money

39:38
left and right

39:40
things everywhere just slinging Money

39:43
Every Which Way but Loose and taking

39:45
money back and forth and sending coins

39:48
back and forth and yeah everybody

39:50
listening to this podcast or watching it

39:52
on the YouTube channel are smart enough

39:55
to do slow down and do the due diligence

39:57
needed to ask questions and fully

39:59
understand it and as I always say you

40:02
know if you can't explain it to a nine

40:03
year nine-year-old don't buy it no

40:04
offense to nine-year-olds I I think the

40:06
net the indexed annuity I'm waiting on

40:08
is is going to be called the

40:10
nine-year-old index annuity

40:12
and um and and if

40:16
and there will come a time that

40:17
someone's going to create that

40:21
that I sign off on

40:24
and I'll say okay this is it this is the

40:26
one but I haven't seen it yet no in in

40:30
like I said before I don't know why they

40:32
keep making this stuff so complex when

40:33
they can make it so simple and make

40:35
everybody happy

40:36
they were trying to make it like a Swiss

40:38
army knife it slices it it does it's

40:41
like one of those commercials the slices

40:42
it does it chops no

40:45
it's a place to where you put your money

40:47
that you can't lose or grow safely and

40:49
that you can structure income for the

40:51
rest of your life and if the income will

40:52
last longer than you will that's it no

40:56
agree no agree with that and and um

40:59
I'm just hoping that we get to that

41:00
point I think the more and more

41:02
education that comes out like this I

41:04
mean these these videos and podcasts go

41:06
viral and you know we get the haymelon

41:09
that's fine and but a lot of people say

41:11
you know I watch that podcast or listen

41:13
to that podcast and I pre-looked that

41:14
policy right or I I you know I I cancel

41:18
the applications and we thousands by the

41:21
way and that's great because right now

41:23
at the time of this taping it's a good

41:26
argument that fixed rate annuities migas

41:28
outperform

41:30
index annuities at this point and

41:33
there's not nothing to track I'm not

41:35
saying you should buy migas over index

41:37
annuities I'm just saying you should at

41:38
least think about it

41:40
because one's contractual

41:42
and the other one the contractual is

41:44
you're not gonna lose money once

41:45
contractual yield one of them's well we

41:47
don't know what's going to be but it we

41:48
know it's going to be zero if worst case

41:51
scenario zero or above the other one is

41:53
I know exactly what it'll be but it's I

41:55
it doesn't make it better it doesn't

41:57
make it better it's just that in the

41:59
world that I like to live in I like to

42:01
know what the returns are going to be

42:03
give us your you know let's let's I have

42:07
a question for you I'm going to be the

42:08
consumer six six two fifteen shot 92

42:11
from the free throw line for the

42:13
University of Central Florida and that

42:15
record still stands what are the

42:16
questions do you have X

42:18
my this is my fun question the hate mail

42:21
you get does it come from the consumer

42:24
or from the annuity professional

42:27
financial advisor 99 99 is the annuity

42:31
professional I do get occasional hate

42:33
mail from someone who purchased so

42:36
many indexed annuities they're trying to

42:38
defend their choice

42:40
and I understand you're doing the right

42:42
thing I understand that I'm like okay

42:44
yeah I mean you own it so it is what it

42:49
is but

42:50
um you you've been spot on annuity

42:54
Nostradamus can you give us the future X

42:58
like you typically because you've nailed

43:00
it the last three or four times you've

43:01
been on on future I'll tell you give me

43:05
2023. what's 2023 you've already said be

43:08
on the lookout for a possibility

43:09
possibility keyword

43:12
of some litigation class action coming

43:15
down the pike it's gonna happen but

43:18
that's something you threw out well I

43:20
think that you're going to see interest

43:21
rates increase I think a little bit more

43:23
okay so you're going to see some more

43:25
Wild West uh annuity stuff without

43:28
question yes you'll start seeing some

43:30
new products you're going to start

43:32
seeing

43:33
um this will make you the one I got

43:35
yesterday guy sent me over a thing he

43:37
goes is this any good and it was it was

43:39
a riler annuity yeah

43:42
um I looked at them I said what's the

43:43
number one reason why you sell annuities

43:45
to your clients he goes well I don't

43:47
want them to lose money well on this one

43:48
you get to pick how much they want to

43:49
lose which which would you prefer right

43:51
if I don't want them to lose anything I

43:53
go well then why are you even looking at

43:54
this registered index linked annuity you

43:57
get to pick how much risk the client's

43:59
gonna take the co-pay concept how much

44:02
is the client going to take of the bare

44:04
risk 10 12 15 whatever it is or you can

44:07
go down and but the lower you go down

44:10
the lower my cap went

44:13
so if I want yeah it's a buffer it's a

44:15
buffer annuity uh

44:18
that's just silly I named it a copay

44:20
annuity

44:21
um and you said a long time ago why

44:23
wouldn't you just buy an index annuity

44:26
why would you why would you share in the

44:28
downside when you don't have to when you

44:30
don't have to or if you're okay with the

44:31
downside just go buy whatever stocks you

44:33
want to put a stop loss in

44:35
that's right and then just go rebuy it

44:38
back again

44:39
I don't get the the stuff but

44:42
now so that's what I see I just see I

44:45
see some more of the same that we've

44:47
talked about I really do I think you're

44:48
going to see crazier some crazier uh

44:52
income stuff crazier bonus stuff crazier

44:54
participation rates and you know I like

44:57
the fact that the interest rates are are

44:59
these are probably where the interest

45:01
rates you're a bond expert stand you did

45:03
the bonds for a long time yeah this is

45:04
probably where interest rates should

45:06
have been a long time ago agreed no I

45:07
agree they should have just done it they

45:09
should have just done it in 25 basis

45:11
point hips hiccups every quarter and not

45:14
disrupt yeah a long time ago yeah so it

45:16
wouldn't have been so drastic yeah yeah

45:19
when they when they voted on the FED

45:20
chairman I think I lost it was close but

45:23
I lost

45:24
I was up for it but I lost yeah but my

45:27
point being is that I think that that's

45:28
a good thing and and to some degree I I

45:31
think there's some other things that we

45:33
have to get under control you know as an

45:35
economy but the the high interest rates

45:38
are good for these products is annuity

45:42
bonus silly season going to start again

45:44
in January

45:45
yeah you're because here's why I'll tell

45:47
you why because everyone wants to get

45:49
off to a fast start so I think you're

45:51
going to see some fire sale whatever

45:53
step in the beginning to kind of prime

45:55
the pump and get everybody going I love

45:57
that get your Butters but his hair body

45:59
head head hold on a 20 20 30 35

46:02
one of the worst things ever created oh

46:04
my gosh oh my gosh yeah

46:08
you'll never be able and you know like I

46:11
try to tell people like oh you know when

46:13
you get in these things you

46:15
you better make sure some of these

46:16
things you better make sure you like

46:17
them for the rest of your life because

46:19
you're going to be there

46:21
and if you call me to talk about indexed

46:23
annuities the ones that you purchased my

46:25
first question is always hey that's

46:27
fantastic can you explain to me how it

46:29
works and I just shut up and I feel

46:39
shares your downside you can't lose your

46:41
money yeah I agree no I agree with that

46:44
I mean like I said

46:45
we sell them most of them that we sell

46:48
are attached income Riders we use the

46:50
index annuity as a as a efficient

46:53
delivery system for that income

46:54
guarantee and then we shop all income

46:57
riders for the highest contractual

46:58
guarantee but I'm still waiting on the

47:01
simplistic nine-year-old understanding

47:03
indexed annuity chassis that that I can

47:08
confidently show to my clients in mass

47:12
and say this this one you might want to

47:15
look at I have yet to do that I've been

47:16
doing this a long long time

47:21
[Laughter]

47:28
you know you're gonna call me one day

47:30
and say I've got it because you know

47:31
what I'm looking for you know everybody

47:32
calls me will you sell my index and nude

47:34
I'm like uh explain it to me

47:37
the answer is no but um well that sounds

47:40
good X I'm gonna have to I know this is

47:41
crazy but I'm about to close this out

47:43
and you're probably sweating profusely

47:45
underneath that hoodie that's one of the

47:48
reasons I've linkedined out this

47:49
interview I want to see I want you to

47:50
take that off and be dripping and sweat

47:52
it's freezing where I'm at so this is

47:54
great yeah don't give away your location

47:56
but um you know this is a great story

47:59
and I'll close with this when I first

48:01
approached X and I said X

48:03
we got to do these podcasts because I

48:05
really need someone with your level of

48:06
expertise which is unmatched by the way

48:09
in the index annuity space and he agreed

48:11
but you know it's like he's like and I

48:14
can't give away my and we do filter his

48:15
voice and everything so I bought I found

48:18
this mask and I sent it to him he goes

48:19
perfect so that's how it all happened I

48:23
mean plus I love the if you ever watched

48:25
a TV show called Mr Robot this is the

48:28
this is the mass they all wore on Mr

48:30
Robot it's one of my favorites another

48:31
well thought out plan there you go I

48:33
love Mr Robot Mr if you haven't watched

48:35
Mr Robot and you want to binge a series

48:39
for a weekend and just sit there and eat

48:40
chips and Cheetos which is part of my

48:43
strategy of good clean living then do

48:45
that because I'm telling you Mr Robot is

48:48
nuts that's a great but that's where the

48:50
mask came from Mr the anonymous mask the

48:52
anonymous I enjoy doing it I enjoy the

48:55
people learning and yes they take it in

48:58
I really enjoy upsetting the agents

49:00
because that's actually unlike you

49:01
that's actually part of the fun part

49:02
yeah that's

49:08
as I say the annuity industry has earned

49:11
its bad sales reputation and um that

49:14
needs to be cleaned up and it's amazing

49:15
that the annuity industry who has a

49:18
monopoly a monopoly on Lifetime income

49:21
does not just promote lifetime income I

49:25
don't know why no we have to do

49:26
everything Market here Market there

49:28
upside I have unicorns whatever

49:31
um you know one of these days it'll flip

49:33
itself upside down

49:35
um and I do believe that soon I think I

49:37
think the annuity industry will turn

49:39
into with my leadership X into an Amazon

49:43
type format to where you're going to

49:44
have enough education and product uh

49:46
transparency that you can make your own

49:48
decision and buy on your own terms

49:49
that's kind of what we do but it's going

49:51
to be on a bigger scale because I got

49:52
big plans X for 2023 I can't explain

49:55
them other than I'm going to tell the

49:57
industry

49:58
you better get ready because what we're

50:02
getting ready to do in the industry will

50:04
change the industry forever and I'm not

50:07
saying that in a cliched manner and I'm

50:10
putting my money where my mouth is lots

50:12
of it to prove it and to make this Pro

50:14
customer and pro-consumer and X you're

50:17
going to be right with me I'm going to

50:18
write in your sports car baby I'm

50:21
putting my application in today listen

50:22
man you're a consultant well hey with

50:25
that being said thank you so much

50:26
everybody listening on all major podcast

50:28
platforms and watching us two on the fun

50:32
with annuities YouTube channel

50:35
I'll see you next time

50:42
[Music]