Today's topic is a good one and one that will make you think. The title is The Scars of Scarcity: Fear of Running Out. Not fear of missing out, fear of running out. Now, I have to give full credit to "The scars of scarcity" to my lovely wife, Christine, who came up with it. We talked about clients worried about running out of money and whether they have enough. One of the issues my team solves for every single day is ensuring the Contractual Guarantees are in place so that there's enough income coming in or that there's enough money there so that regardless of how long you live, you're going to be okay.
That's truly what annuities do. That's the benefit proposition that only annuities and the category provide, which is Lifetime Income, and as long as you're breathing, you will get paid by the annuity company. I don't care if there's any money left in the account, they're on the hook to pay. That's the benefit proposition. It's the only product on the planet that does that, only strategy, only industry. You would think that with that type of monopoly, the annuity industry would come off of this nonsense growth thing they're on and promote the transfer of risk Lifetime Income that annuities provide because that's a monopoly. In the world of financial products, that is a monopoly.
People say, "What's the return on investment on a Lifetime Income Annuity, Stan?" Well, first of all, there are four different types. Immediate Annuities, Deferred Income Annuities, Qualified Longevity Annuity Contracts, and Income Riders attached to Deferred Annuities. I always tell people, "Ask yourself two questions. What do you want the money to contractually do, and when do you want those contractual guarantees to start?" And then, from those answers, we can run quotes with the right strategy and product to get you the highest contractual guarantee.
We live in a world of FOMO, fear of missing out, and people suffer from that in the stock market. You always wish you'd buy XYZ at five instead of 50, right? Hindsight's 20/20, fear of missing out. But when you hit age 65, and there's 11,000 of you every single day that's doing that, or you're in retirement years, it's not FOMO. I hope it's not, because when you retire, you need to retire from your work and the markets, in my opinion. It's fear of running out. That's FORO. FORO is real; fear of running out. Fear of having enough money, fear of paying the bills.
Scars of scarcity come from those. Most of us grew up not rich at all. Our parents did their best, but many of us did without and didn't have much. And you look at yourself now, and you still bring those scars to the table.
You could have a million dollars, and a lot of you do, or you could have $500,000, $200,000, and all that's a lot of money. But you might still feel poor, and you might still act poor, and you might still feel like you don't have enough money, and you might still worry every single day about it, which is understandable. Understand that over 60% of adults in the United States don't have $400 in their checking accounts. So, congratulations to you for reading this because if you're reading this, you're trying to figure out how not to run out. You saw the title Fear of Running Out, FORO, not FOMO. FORO, and the Scars of Scarcity.
The scars of scarcity are a bigger issue, and I deal with them every day. We have been fortunate, and I tell people I'm a 10 or 15-year overnight sensation. Think about it. We've worked hard seven days a week to build this up, and we have been very fortunate and, like you, have more money than we ever dreamed of. I'm not some master's degree from Harvard, I'm a guy that could shoot the basketball well and put myself through school shooting a basketball. I got my degree and everything, and then I came out here and worked hard, but I still act like I still have those scars of scarcity. I still penny-pinch when I probably shouldn't. I still don't order what I want to order when I should. Does that ring a bell?
One of the reasons that I love what I do and that I do these videos is that I'm you. I grew up like you, had parents like you, and I get to live everyone's life listening to you on the phone over the past three decades, listening to the struggles, and listening to the scars of scarcity. There are a lot of times that I talk to my clients, and they have a lot of money, and money's relative. $75,000 could be a lot to you and enough, $750,000 could be a lot to you and enough, $7.5 million could be a lot to you and enough. It's relative, it doesn't matter, and levels don't mean anything to me. It's about what you're trying to achieve and what you feel comfortable with. But at whatever level, I'm always asking people, "If you had more money, would it make you happier? Would you be different? Would you act differently? Would you dress differently? Would you eat differently?"
After good counseling sessions with my wife, a clinical psychologist by trade, I'm now coming to terms. I'm working through things, and I feel comfortable now at 58 years old. I know you're saying to yourself, "There's no way, Stan, you look 27, baby, you look good, you sound good." I feel good. But I'm just now coming to terms with the fact that there won't be any scarcity, and it will be okay. I can buy the dessert even though I don't need it. It's going to be okay. I should not bring the scars of scarcity to the table. I should not look at the fear of running out because we have annuities in place for Principal Protection and Lifetime Income, and I have huge amounts of life insurance. I love life insurance. I don't sell it, but it's the best return on investment you'll never see because you're dead, hello. So, I'm coming to terms with, I don't have the scars of scarcity anymore. I want you to start thinking like that.
I know where you came from, we all came from that. My wife tells a great story, she goes, "I'll give you an example of scars of scarcity, and it applies to you." She tells a story where we struggled early in our marriage, and my wife says, "Remember the time that you came home from work, and I was crying because we didn't have any baby formula?" We didn't have any of those little jars of baby formula, and we didn't have any money, and we're just scraping, we're just hustling, trying to make it happen. She goes, "Do you remember what you did? You went to the grocery store and used a credit card and bought 100-plus jars of baby formula, some of which went bad down the road because we had it too long." That's the scars of scarcity. Just talking about that brings tears to my eyes because as a provider, man, that was hard. It's still hard to think about 26 years later that my baby wasn't eating. I mean, that's a real story. You have that story, but that story is not now. There's no scarcity now. There was then, but I bring that up because I'm still dealing with it now and I'm still emotionally drawn to that story.
The fear of running out can be solved with annuities, in combination with the best annuity on the planet, Social Security, Principal Protection products, and Contractual Guarantees. We can solve the scars of scarcity. That doesn't mean you have to put all your money into annuities. That could also mean CDs, guarantees, treasuries, guarantees, and money markets. It doesn't have to be annuities, and it shouldn't, and it won't with me, but the fear of running out can be solved with annuities for Lifetime Income. You'll never run out of money, period.
Are there limitations to that? Yes, FORO is Lifetime Income, leading to FOMO, fear of missing out, because "My money's not in the market; it's not growing." Yes, but you solved for FORO. FORO is more important than FOMO. Solving for fear of running out is more important than the fear of missing out, especially in chapter two of your life. If you're 40, then forget FORO, you're too young. If you're 50, you're a little bit too young. But for people looking at retirement, it's FORO, fear of running out. That's the reason annuities, and they're not perfect, for Lifetime Income are fantastic. And the pricing is primarily based on life expectancy, or life expectancies, when you take the income, with interest rates playing a secondary role in the pricing.
Remember, most of the time with FORO, we're solving for either Lifetime Income or protecting the principal and just peeling off the interest for the income. But the scars of scarcity are real. And what I want you to think about is where you've been, where you've come from, and where you are now. Are you still bringing those scars with you to the table even though you have a lot of money, even though you have enough money, even though if you structure it properly, you'll never run out of money, you'll always live your life? Are you still doing that? Are you still bringing those scars of scarcity with you to the table? Is that the reason you're still in the markets? Is that the reason you're still putting your money at risk? Is that the reason you still worry about it? Should you be worried about it? Probably not if you run the math.
I always love talking to clients, and I'll close with this. I speak with clients all the time, and I'll say, "Okay, I understand your concern, but can we just do some basic math?" And we do basic math because annuities are math. They're contracts, and they're not hypothetical, theoretical, pie-in-the-sky, unicorn- chased-a-butterfly nonsense, they're math. You're buying contracts. Lifetime Income is a contract, and MYGA interest contracts. Most of the time when I do the math with people and I show them that mathematically they're already there, they've won the game, it's still hard for them to get there mentally because of the scars of scarcity.
Hopefully, that'll make you think, and that's what these blogs are for. I'm in the war every day. What I do and bring to the table nationally to everyone here is that I've been doing this for so long, and I'm listening to everybody. I'm interested in people's struggles, and then I can address them so that you know you're not alone and can work through them and make some good decisions for your retirement so you can enjoy it. You need to enjoy your life. We all do. I'm talking to myself here too.
As you can see, I still have some emotion with the scars of scarcity and that story my wife brought up. But together, we can get through it, and I'm going to talk to you about things that I think are important going forward in your life.
Never forget to live in reality, not the dream, with annuities and contractual guarantees! You can use our calculators, get all six of my books for free, and most importantly book a call with me so we can discuss what works best for your specific situation.