Why Annuities Give MUCH MORE Income Than Treasury Bonds

Why annuities are better than treasury bonds. This really isn't debatable, but we'll get into it with the PVC pipe. The PVC pipe of knowledge. The authentic PVC pipe of knowledge. Don't take cheaters who are trying to steal my PVC pipe of knowledge. They're fake. They're fraud. They're like anti-fraud-chi. Anti-fraud-chi. Is Trump going to go after him? Probably not, but I wish he would either way. All right, so let's check this out. So I did my video earlier today on, uh, right now is a, I can't remember what it's called. What's the video called? Right now is a great time to lock in guaranteed lock in cap. My video was right now is a great time to lock in gains with a guaranteed income annuity. All right. That's what I said. Um, and some of you guys say had a couple of comments on here. This is a good comment right here. My man blue blood. He says, to be honest, annuities are only good when you need income as opposed to growth. Eventually most of us will want income unless we want to die rich and leave it to our heirs. In my case, I'd rather keep the 200,000 invested long-term and see it grow until the time comes when growth is irrelevant and income is everything. I have no issue with that at all. 100%. In fact, in my video, I talked about that. I said, I'm not going to do an income annuity because I'm only 54. I'm still trying to get growth for sure. I think it was a great comment. Here's the, uh, right here. This is my man, Chris juice. I don't know what that is, but anyway, Chris, this guy says, let's see if you live to be, let's see what I'm going to show you his comment. Cause he makes a classic mistake here. Uh, if you live to be 95, the IRR works up to 5.85% on the guaranteed income annuity lift to a hundred years, but for people that average life expectancy, they'd be better off buying a 20 year treasury bond paying 4.8%. Absolutely not true. Absolutely no. You're comparing an income product and annuity to an interest product. Treasury bonds, the annuity beats treasury bonds, hands down for income. Um, we get this comment a couple of times here and Ron Marosi or something that says, why not just buy a 20 year T-bill and get a 4.8% guarantee? Exactly. Um, and my man, North Texas is that that gives you monthly income. And, uh, that's what I want to talk about here. So let's talk about it. So we got, we got a couple of people talk about 20 year treasury. So we're going to draw this right here. All right. So we got 200,000 bucks. All right. And we're going to do a couple of things. We've got a 4.8 treasury bond, 4.8%. And we're just, we have a 20 year period, certain guaranteed income annuity, which is paying 1180 a month. All right. Or that's my calculator there. Oh boy. What's 1180 a month times 12. I can tell you my friends, let me pause it real quick. I'm about to sneeze anyway. That's 14,160 a year. All right. At the end of the 20 years, this will have zero left. This will have 200,000 left. All right. This is not, no one would say that's, I shouldn't say at the end of the 20 years. We, if you live beyond 20 years, this will still pay you 14,160. I'm saying the residual income at the end of 20 years, if it's a 20 year period, certain, and you die in year 20, there is nothing left. If you live till you're a year 30, it's still going to pay you this right here. Just keep that in mind. I'm just saying you, in this case, you're going to die in year 20 and then it's gone. All right. So a life 20 year period, certain annuity is what we're talking about. Hope that makes sense. In this case, we know for a fact, you put, you get, you put $200,000 in, you get 200,000 bucks back. Plus you get 4.8% interest. All right. This, you put $200,000 in, you get $14,160 a year for as long as you're a living or, or for 20 years, whichever is longer. All right. And then when you're dead or 20 years are up, if you're dead and then 20 years are up, there's no residual. All right. Now the drawback here is what does this actually pay us for an income stream? Well, it's 4.8 on a $200,000. What's that? $9,600 a year. And that's what? 800 bucks a month. Is that what that is? Let's take our trusty calculator on my phone. I don't know what it did. My real trusty calculator, but $9,600 a year divided by 12, that's 800 bucks a month. All right. No more, no less. I mean, this is literally what you're getting. You're getting $800 a month. So you're getting $380 less per month than you're getting on the income annuity. And the reason you're getting that is because you'll get your value back at the end of 20 years. I mean, that's what I'm saying. There's just no two ways around this. By the way, you can't sell. That's what a lot of people don't understand. And if you haven't taken my investment course, you should. It's in the doobly-doo down there. I can't remember what I called it. I got two courses. Both are good. I like them both. But anyway, you can't just take fractional shares of a treasury bond. It's not a mutual fund. You buy a bond, you're buying a bond. You're buying a complete bond. You can't just say, I want to sell $5,000 off this bond. It doesn't work like that. Now, you're not going to get a whole $200,000 bond. So you probably get $20,000, $10,000 bond. So theoretically you could sell a bond at 10,000 bucks, but you don't know what the principal is going to be. It could be lower if the interest rates go up. That's the thing about buying a bond for income. The only guarantee is that you're going to get this right here, this 4.8%. That's it. You're not guaranteed any principal that you can sell it anytime soon because it hasn't matured. The only way you get your principal back is maturity. So the bond, the price of the bond can fluctuate up and down. Just look at what happened in 2022. I mean, if the interest rates go up again, your price of your bond will drop. That will always go back up to maturity. We know that. But from an income perspective, this dominates that. It's not even close. In fact, what is it? 380 divided by, we'll take a look at this. Hold on a second. 380 divided by 800. So this guy pays 47% more income than this. And the reason for that is because you get your principal back and you don't get anything back here. So don't be fooled. You can't just take, I cannot stress this enough. You can't take just income off of it. You can't just say, sell $5,000. I want to put a, I want to go buy a Frisbee. It doesn't work like that in a treasury bond. You can't do it. It's what a mutual fund's for. But a mutual fund, you're not going to be guaranteed 4.8%. It's not. And there's fluctuation in the price. So when it comes from income, you can't beat the guaranteed income annuity. You just can't. Now when it comes from interest, sure. Because you're getting 4.8% here. We know that for a fact. But you can't reinvest this either into this. It doesn't work like that. You don't reinvest your interest into your bond. A bond is a fixed income. It pays a fixed amount at that maturity. You don't reinvest to buy more shares. It doesn't work like that. The 4.8% you get, you got to do something else with it. You can go freaking sniff it up your nose. You can go give it to Sniffy Joe so he can sniff little girls. You can do whatever you want. But this right here, once it's locked in, it's locked in. There's nothing you can do about it. I mean, you can sell it, but you don't know what the price will be because it varies depending on interest rates. This is just facts. So you're losing 47% a year on income. Fact. And you don't know what the price you're going to get when you sell it. Could be more, could be less. Fact. We do know we're going to have our mature, when it matures, we'll get a par value, 200,000. That's a fact. And you also can't just sell fractional shares. It doesn't work like that. This, you say 200,000 bucks, I'm getting this a year, each and every year, done. From an income perspective, you can't be a guarantee of an income annuity. You just can't. It's just, it's just that, I guess you could say, well, what if some guy says, well, if the interest service company goes back, no, I get it. Some other guy says something else in here too, which I thought was kind of funny. Look at my man here. Whoever the go-to gym, my man says, you would need 295,000 in a 4.8% T bond to yield the equal yearly annuity payment that we're talking about here. 100%. Yep. That 14,000 payment ends after 40 years. Yes. You'd get your 295,000 returned you to do something else with 100%. Yeah, I do. That's a great comment there, guy. Check this out. This guy says, Ron Mako, buying annuities is wrong. Buy some insurance and keep your lump sum. I said, because annuities aren't insurance. Okay. If the insurance company goes bankrupt, is a annuity guaranteed by the federal government? No, there are some state guarantees, but I'm not going to get into those, but no, absolutely not guaranteed by the federal government. Jody Larson says, you have to keep the money in the annuity and often for years, you're going to pay a penalty. Sometimes this penalty can wipe out any gains. Plus the annuity company is investing your money and they face risks just as you would. Jody's talking about a deferred annuity. I'm talking about an income annuity. So Jody's missing out. There is no six surrender charges or anything like that. You're just, you're literally, it's an irrevocable contract. You're saying here, the insurance company is 200,000 bucks. Pay me $14,000. It's just literally just that simple. I want to see more T-bill versus annuities. It's just, it's not debatable. This guy says T-bills are not guaranteed. T-bills are absolutely guaranteed. Stop comparing annuities from, again, it's an income thing. Treasuries are not going to beat annuities. It's just not. It's basically impossible for them to do that. I hate to say impossible because they'll say, how about a 1982? If we go back to 1982, you're going to get 15% interest rates on a 30 year long bond. Yeah. Okay. But right now it's impossible for treasury bills to beat or treasury bonds to beat annuities from an income perspective. It's just that simple. I want to go back to right here. Keeping money. Exactly, John. Keeping money in the market at least guarantees beating inflation over the longterm. Andrew Williamson, you must be new to my channel because I've done videos on this before. There's a professor out of Iowa. Maybe I'll do another video on that tomorrow. He showed us that stocks are not a hedge against inflation that you might think they are. They're just not. Do people really make terrible decisions like this? No annuity for this guy. Never, ever. Okay. Stop market always recovers. See, I don't like that thinking. The stop market always recovers. It always had recovered. Doesn't mean it always will. Just keep that in mind, man. I'm not looking. Again, we're talking about income here. You don't have to do it. We're talking about income. We're taking in gains to lock in some income that you cannot outlive. That's what we're talking about. If you want growth, go for markets. I've got no problem with that, but let's make sure we're talking about the same things here. There's something else this guy said. My man here, he really likes me, put six comments on the same one. I agree with his comment. Create an income for the fixed index annuity. I'm not talking about fixed index annuity. I'm just talking about SPIA, an income annuity. You can do a fixed index annuity. I don't care. I literally don't. I'm just talking about a guaranteed income annuity. It's called SPIA, a single premium insurance, a single premium immediate annuity, but he's got six comments. I appreciate the comments, man. For the algo, I appreciate it. I'm sure he just hit this thing a couple of times. I'm not sure it's a comment, but I get this comment all the time. I'm like, oh, the insurance company can go bankrupt. I'm like, okay. That's true. It could. Show me any evidence of insurance companies going bankrupt where the insured lost their shirts. There just isn't any. Even going back to the Great Depression, it did not happen. So I'm like, it could. I don't know. I mean, then part two of this too is like, I get you trust the stock market more than the annuities. I get that. But that's for growth. That's for growth. If we want income, you're just not going to beat the income annuity. You're just not. And by the way, who do you think insurance companies invest? Where do you think they invest their money? They invest their money in high quality government bonds, high quality corporate bonds. There's probably a couple of real estates in there, some stocks too. But generally speaking, insurance companies are conservative investors because they have to, to cover their obligations. They can't be five by nights. They just can't do that. And if they are and they go bankrupt, all the insurance, other companies bail them out because insurance knows if company A goes bankrupt and people start getting negative worries about insurance, the whole freaking thing falls. Because the whole point about insurance is I'm buying this product. I'm using my cashflow to buy a product that will protect me against catastrophic losses. If I feel those catastrophic losses are still going to be on me, even if I buy that product, well, I might as well just keep, I'll just basically self-insure. Why would I need an insurance company? Anyway, hope this helps. Love your thoughts. God bless. 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