I-Bond No Brainer: Shootin' It Straight with Stan (TAM Classic)

Welcome to Shooting It Straight With Stan. I’m your host, Stan The Annuity Man, America’s Annuity Agent, licensed in all 50 states. I’m so glad you joined me for today’s topic. By the way, I forget to mention this sometimes, but we do have a YouTube channel, the Stan The Annuity Man YouTube channel. I also have a podcast called Fun With Annuities on all major podcast platforms. Please check that out.

I Bond No Brainer

Today’s topic is “I Bond No Brainer.” Now, yes, I’m Stan The Annuity Man. Yes, I only sell annuities. Yes, I only sell annuities for their contractual guarantees. You own an annuity for what it will do, not what it might do—not the hypothetical, theoretical, projected backtest, and unicorn-chasing proposals you see all the time.

“Well, if you owned it 10 years ago, you’d make this, and we give you an upfront bonus.” Don’t be the stupid person. I told someone the other day, “Don’t take this the wrong way, but net worth does not equate to IQ.” He laughed. He didn’t take it wrong. But you know what I’m saying? A lot of people want to hear what they want to hear. A lot of people want to hear they’re skinny, but they’re not. I have nothing against the gravitationally challenged; I’m 240 pounds myself. But the point is, if you want to hear something too good to be true, someone’s eventually going to tell you, and you’ll fall for it and buy it. But a lot of calls I get are, “Hey, Stan, tell me about this product,” and so on.

A Disclaimer of My Background

Now, disclaimer: I was with Dean Witter, Morgan Stanley, UBS, and Paine Webber. I used to be licensed in securities, Series 7 licensed, wealth architect, master of the universe, stockbroker—whatever you want to call it. I did all that. I've done it and forgotten more than most people ever know. But when I became Stan The Annuity Man, America’s Annuity Agent, I didn’t need the securities license anymore. So, I don’t give financial advice on mutual funds and ETFs. I will never tell you which one to buy, because even if I was licensed securities, no one knows. Everyone’s just throwing a darn dart at it. Nod your head, high five. But people are calling me a lot about these I Bonds.

The I Bond Opportunity

“Hey, Stan. These I Bonds are getting 9%, 9 point blah blah” (at the time of this blog). And I’m like, “Yeah, those are cool.” I ran it by the lawyers, and they sat in their big building, drinking really good coffee, and conferenced me in. I asked, “Can I talk about I Bonds in my video?” They said, “Yeah, yeah, because you’re pointing them to a direct site to the government where they can buy it.” Good. So, this isn’t financial advice. This is more of a no-brainer, slap-your-head kind of thing. So, the topic of this rant is I Bonds. You can go to http://treasurydirect.gov and buy I Bonds directly from the U.S. Treasury.

The Limitations of I Bonds

The downside to I Bonds is that they don’t let you put in as much money. “I really like these I Bonds. What do you think?” they ask. I’m like, “I do too.” “Is there any way to get a couple hundred thousand into them?” I say, “No, I can’t.” The rules are limiting, but why wouldn’t you do it? Why wouldn’t you lock in that percentage?

Treasuries: Safe and Secure

Now, conspiracy theorists, listen up—Treasuries are as safe as it gets because they can tax us and confiscate our money to pay them off. And guess what? That would happen if needed. So, yes, they are safe. Don’t go down the conspiratorial rabbit hole. If that’s you, then move to Montana or Idaho and live in Ted Kaczynski’s old cabin. Treasuries are safe.

Safe Money Options

With all the safe money options out there, there are only five legitimate places, in my opinion, to put your money where it’s protected, and you won’t lose a dime. These five are: money markets, CDs, Fixed Rate Annuities (MYGAs), Treasuries, and (AAA) insured municipal bonds. Those are the five safe places to go. Now, I don’t have insight into the best municipal bonds right now. Back in the day, there were some really good options for buying them directly, but institutional money has swiped up a lot of the good paper.

If you have a wealth architect or advisor, municipal bonds are great because they offer tax-free income. AAA insured means they’re insured and rated.

Principal Protection with Safe Money

Money markets, CDs, and annuities (MYGAs) can either be FDIC-insured or SIPC-insured through a brokerage. The full faith and credit of the U.S. government backs Treasuries. Fixed Rate Annuities (MYGAs) are a great option for principal protection. You can also throw in Indexed Annuities, but right now, MYGAs are more attractive since you can buy short-term durations. Even though I sell Indexed Annuities, they’re essentially CD products.

Should You Buy Treasuries?

People often ask, “Should we buy Treasuries? Should we look at Treasuries?” And my answer is yes. You can buy them directly through http://treasurydirect.gov. To me, that’s an absolute no-brainer. The only downside is the limitation. But why not do it every year? Put it on your calendar and buy them every year. It just makes sense.

Planning for Retirement

As you approach retirement, you need to think about your lifestyle. Can you live off the interest, or do you need to create a lifetime income stream to complement your other lifetime income sources like Social Security or Required Minimum Distributions (RMDs) from your IRA? For all you baby boomers out there turning 65 every day, the big question is: “What’s my income floor? What’s that amount I need every day to live my life?”

The I Bond and Inflation

One thing about I Bonds attracting people is the word “inflation” and the interest derived from them. You can read more about I Bonds on http://treasurydirect.gov. I won’t go into the details here, but I had a conversation today with someone who had a significant amount of money and brought up inflation. They asked, “How are we going to solve inflation, Stan The Annuity Man?” I looked at them virtually on the phone and said, “It doesn’t matter. Solving for inflation is like solving for me dancing in the Bolshoi Ballet. It’s not going to happen.”

Inflation and Personal Impact

Inflation is personal. Turn off cable TV, please. It’s driving both you and me crazy. Yes, I watch it because it’s comedy, and I need to see what they’re saying. But don’t get caught up in inflation hysteria. Yes, gas prices are up, food’s up, travel’s up. Does it affect me? No. Does it affect you? Ask yourself, “Are you really affected, or are you just over-planning and stressing about it?”

Conclusion

The key here is http://treasurydirect.gov. I’m not a pound-the-table government person, but if it’s a no-brainer, it’s a no-brainer. I Bonds are the ultimate no-brainer. Do it every year. Put it on your calendar and make it a habit.

When you schedule a call with The Annuity Man at The Annuity Man, sometimes you get me; sometimes you get my team. They’re smarter than me and better looking, of course. But we’re going to tell you the truth. We won’t give you investment advice but will be brutally factual.

And with I Bonds, I don’t get paid. I don’t get a referral fee, commission, or anything. I get the satisfaction of telling you the truth. As my grandfather always said, “Hey Stan, if you tell the truth, you don’t have to remember anything.” He also said, “Life comes down to two things: show up on time and tell the truth.”

The Annuity Man Business Model

The business model of The Annuity Man? We’re licensed in all 50 states with thousands of great clients, growing every month. When you schedule a call, we’ll be right on time, no excuses. And we’ll tell you the truth. See you next time!