Today's topic is, Are You Surfing Beside a Cruise Ship? I want you to think about that. Have you ever been on a cruise and you're like, "Man, that is a big boat." I always wondered how does that boat float with all that weight? I don't get it. No one ever really explained cruise ships and how they float to me. Because if I built a cruise ship, it would sink because it'd be too big and heavy, right? But when I say, are you surfing beside a cruise ship? I'm talking about the markets. I'm talking about investments that can go down, and I'm talking about risk. I always say, "If you're in the markets," you know that the stock market, "Is like surfing beside a cruise ship." Sometimes you will catch a wave, and you'll surf, and it'll be fantastic. But there are a lot of times that you're going to get sucked under the boat, and we all agree with that.
So, surfing beside a cruise ship. I'm not saying it's bad, and I'm not saying you shouldn't be there; that's your call. What I'm saying is to be logical about this. Now I have the pedigree because I used to work for Morgan Stanley, Dean Witter, Paine Webber, and UBS. I used to wear the suits, and I used to be in New York, and I used to be in the marble offices. I used to be there. I was there, saw it, and did it for decades. I was there with some of the smartest people I've ever met. And here's what I understand. Big money wins, in my opinion, and I know everyone's going to say, "You're wrong, Stan. Historically, if you stay in the markets and you don't get out, and you don't sell or panic, there are five or seven days that you're going to make money with..." I know the stuff. I know the history. I know the S&P 500 if you'd held it. "Since this is out there, the average rate of return is..." I get it. I understand it. But in chapter two of your life, it’s all about you. Do you really want to do that? I know I will get a lot of hate for this one because when I did a video called Retire from Your Job and the Markets, I'm talking about surfing beside a cruise ship.
Big money institutions trade 24/7, 365. They're never off. They are at a point now where they're trying to get close enough to the trading floor because they're trading so fast. Some of the books that are out there are crazy. They're talking about firms with real estate beside these exchanges, going for unbelievable amounts because of the micro-trading, the trading within seconds. I read something the other day where in some cases when you put in a trade through E-Trade or Schwab, and I'm not saying if you're doing that, that's wrong. I'm just giving you some history. When you hit send, what you want to buy, it's traded over a hundred times. I don't know if that's true, but let's say I'm 10% right. It is traded 10 times between the time you hit send, and it gets to the computer it's going to. That's insanity. If the institutions, the big money, the family offices, and the hedge funds are trading 24/7, 365, and they're letting us peons in from 9:30 to four, please someone, Jim Kramer, whoever. I Love Jim Kramer; he's crazy like me. He's happy going at it, trying to do his best. I'm just taller than him, and I can see the market better. But someone tell me how that's fair.
Institutions trade 24/7, 365, and then the rest of us from 9:30 to 4 Monday through Friday. Who agreed to that? How's that fair? I love turning on CNBC in the afternoon. Sometimes it's to catch up with things because I used to be there, and they're saying, "Well, after-market trading is X," well, international overnight trading X. Wait a minute, what if I want to get in on that? "Well, Stan, you're going to have to have about a hundred million dollars to do that." And maybe that's true. Maybe that's not true. But the point is, it is stacked against the little guy. Yes, if you write it out, yes, if you throw the dart correctly, yes, if you have a good advisor, yes, if there's a fiduciary involved, yes, if there's a fee-only planner, I get it. I get it. But do you really want to keep doing that? Do you have enough money to put guarantees in place, so you don't have to do that? Do you have enough money to put an income floor where you don't have to do the stupid, outdated, numb skullish 4% rule and just take money out of the portfolio based on a Monte Carlo simulation? Give me a break. It's 2023. That's crap. That's 1984 crap. "Well, if you look at the Monte Carlo simulations, we ran that, and yeah, it works out any of the 4%. You don't need a guarantee because the 4% rule's the guarantee." Yeah, it's a guarantee. What happens when the markets go down? How old are you? Do you still want to ride that wave surf beside the cruise ship? You know you're surfing beside the cruise ship from 9:30 to 4, but the cruise ship's rolling from 24/7, 365. It's food for thought.
I'm not saying get out of the markets, that's your call. I'm saying to stop listening to talking heads saying, "Well, you have to, you really have to." No, you don't have to do anything. You have to worry about yourself, not listen to anyone else, and put guarantees in place if that feels right. Annuities and there are many different types, can provide that. They can provide principal protection, and they can provide income for life. They can provide coverage for long-term care or coverage for legacy. But I love what my friend John Olson says. He says, "Anytime anyone starts the sentence with, annuities are, anything past the A-R-E, is a joke because there are so many different types of annuities. You can't just say that all annuities are expensive or complex because that's a joke and wrong. Most of them you can explain it to a nine-year-old, no offense to the nine-year-olds. What I'm telling you to do is I want you to think of a cruise ship. I want you to think you're at the bottom of that huge cruise ship, and your spouse is looking down on you, going, "What are you doing down there, Stanley? Why are you trying to surf beside a cruise ship like that? That's crazy." And you say, "Because I'm trying to get market returns. I'm trying to beat the market. That's what I'm trying to do. I'm surfing beside a cruise ship." And the spouse goes, "Oh, well, you be careful because you might get sucked under the boat," Then, you get sucked under the boat. And you know what that feels like? It makes you want to vomit, right?
Do you really want to surf beside the cruise ship? Let's say you do. Let's say, "Yes, I do Stan, The Annuity Man, thank you very much. I want risk. I want growth. I want potential. I want back-tested numbers. I want to dream Stan The Annuity Man." Then fine. What do we do to enhance that dream? We put an income floor in place with your social security, the best annuity on the planet. All you haters out there, you already own one. If you're fortunate to have a pension, which is also an annuity, you put in that income floor, so you don't have to fret. In the south, that means sweat, about your investments. There's no need to roll the dice with a running start and throw them overhand. There's no reason for that. You don't have to do that anymore. You need to focus on yourself. You need to take some risk off the table. You need to schedule a call with me, Stan The Annuity Man, so I can talk with you about that.
I've been on the other side of the table, and I know how that game is played, and it's being played at a very high level. I always say that individual investors are just providing liquidity for the big guys. Or you have firms that are unnamed, starting with a B, that try to offload bad bonds on you, bad investments, or green investments. I always say that if a person really knows the markets and they know how to manage money, you'll never talk to them. You'll never have access to them, ever. Trust me. I love when people say, "Well, I'm with this guy here. He's just got this foolproof system that makes X, Y, Z percentage on the markets." I'm like, "That's a lie." Because if he did that, if he had that, he'd lock himself in a closet, trade, and never talk to anybody, period. No one's that big of a philanthropist, period. Everyone in the market's professionally throwing darts, end of story. And you know that. So do you want to throw a dart, or do you want to have contractual guarantees? I'm not saying you go all in on either, but wouldn't a combination make sense? Of course, it would. So be careful out there. Be careful surfing beside that cruise ship. You might catch a wave, but eventually, you will get sucked under the boat.
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.