Part I: How I Learned about Annuities

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My wife and I don’t agree on politics, so we don’t talk about it.  I’ve always been up for a good argument or debate but she doesn’t like confrontation.  Whenever the topic comes up it’s unintentional.  She asked me how I became such a conspiracy theorist.  Well that makes me sound like a bit of a whack job.  Since when has questioning the popular narrative been such a bad thing?

I explained to her that my current belief system really started to develop around the time I was 20.  Initial inspiration and ideas certainly came from other people but my opinions are my own.  To get to where I am today, I read just as much information that would prove my beliefs wrong as I did information that would strengthen my position.

My career is no different.  Popular thought supports one course of action but I’ve always challenged mainstream ideas.  Some I have been able to verify and others I have proven to be completely wrong and inadequate.  The basic reason is that circumstances and opportunities are always changing so solutions to age-old problems need to be able to change with the times.  For 18 years the inquisitive mind has never failed me.

I got into the financial services business because I had a successful uncle that we all looked up to as kids.  He had beautiful homes, several businesses and waterfront on Flathead Lake.  Plus he was a really nice guy.  I asked him once how he made it all happen.  He basically told me it takes a combination of knowledge and imagination along with the courage to take action at the right time.  It wasn’t exactly the concrete answer I was looking for and we didn’t talk about it again for several years.  I thought he forgot I ever asked the question but he didn’t.

When I graduated from college with a finance degree he took me aside one day and reminded me that I had once asked how he became successful.  Again he didn’t give me the exact recipe but said meeting his financial advisor, Andy, might give me a better idea of how to get started.  So he made an appointment for us to meet and in a few days I was sitting in a conference room with Andy, a guy who had become pretty successful in his own right.

Rather than learn the secret path to success, Andy taught me the common building blocks successful people put in place.  He told me that if I could provide value to others then I myself would become valuable and indispensable.  It was more of a job offer than anything but the opportunity would allow me to build my own structure based on the path of business leaders that came before me.  In 30 years, I would be sitting where he is and my friends and clients would be just like my uncle.

So I started my career in financial services and spent most of my time selling life insurance and setting up IRAs for people my age.  At the time I was used to living off $2000 per semester so it didn’t take much to increase my standard of living.  Sometime in the first year a family friend called me and said his mom’s 2nd husband just passed away and she had some money laying around that she wanted to protect.  He asked, “do you sell annuities?”  Knowing better than to turn down a good opportunity, I confirmed it could be taken care of and my friend set an appointment with his mom for a few days later.

I had heard of annuities and knew that the older guys in the office sold them regularly.  I brought one of the experienced agents into the deal because I didn’t have time to become confident enough to present the right solution.  Needless to say it was a pretty easy sale of a fixed annuity and I ended up getting a commission check for about 3000 dollars.  Wow!  That was more money than I had ever seen at one time before.  Obviously my interest was piqued but I didn’t have a whole lot of other friends with widowed moms and money in the bank.

But I had to learn more about the asset so I could handle the next opportunity on my own.  At the time I literally had to go to the library to learn about annuities.  Immediate or deferred, fixed or variable, so many options that it required volumes of notes to organize all the product choices and that’s before we start on strategies for using annuities.  In many ways it was the gestation period for this website.

Many of you know that I was a fishing guide in Montana and Alaska during my college years and on a part-time basis for several years after that.  Most of the people who can afford to take an expensive fishing trip are successful and I got lots of advice as well as several long-term friendships from the experience.  Long days floating down a remote river was excellent training for keeping conversations going with people of retirement age.

Some of those guys did business with me and a few of them were just throwing me a bone because they liked me.  It gave me the opportunity to learn what’s good and bad about annuities.  I made sure they all got something simple and effective, without the catchy stuff that complicates the contract and restricts movement of the money.

In the beginning it was simple.  Fixed annuities had it all.  Variable annuities only worked in some very specific scenarios that didn’t apply to most of the people I knew.  When index annuities and guaranteed income riders became popular, it threw a wrench into everything.  Without the base of knowledge I already had, it would have been much more difficult to make sense of it all.  Like everything else in my life, I didn’t believe the new products could match the value of the older, simpler contracts.  No matter what the institutions, wholesalers and senior agents said, my gut told me there was a better way.

It took some time to figure it out but when it hit me, I knew I was on to something.  It’s not hard to understand.  Make more money, avoid fees and have control over your money.  The standard approach may be popular but you have to decide what level of flexibility you want as times change.  Do you want to be able to change as well?  Next week I’ll get into the second part of my evolution.

Have a great weekend…

bryan

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