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The Annuity and Alcohol

If I were to write only about the annuity, not many would read any further. Throwing in alcohol to make you curious how I will parallel the two is a way to make it interesting.

It’s akin to being carded for buying ginger beer at the grocery store. Showing an ID seeing how far off they are or trying to explain it isn’t actually alcohol is equally awkward for all involved. Even though it’s displayed in the alcohol section and once was alcohol, it’s equivalent to ginger ale with less sugar.

We now have a dizzying array of ales, stouts, lagers, hard lemonades, twisted teas, punches and zombie dust. It’s completely understandable for someone to be confused who isn’t familiar with these trendy drinks trying keep up with them all. Some even argue these aren’t truly alcohol.

The Annuity

Might be looking pretty good to those who haven’t kept up with the swift market declines and recoveries we’ve had in recent years given the roller coaster ride we’ve experienced the last few weeks.

Selling an annuity to a well-informed investor trying to explain it as an investment offering guaranteed, diversified fixed income is also equally awkward for all involved. Even though it’s displayed in the financial product offerings and some even argue it is an investment with investment-like qualities, it’s equivalent to a long-term policy contract between you and an insurance company with less returns.

For those who can’t or don’t want to keep up with the dizzying array of stocks, funds, gains, losses, not to mention the inundation of absurd headlines, the annuity could be a viable option. Why More Americans Are Buying Annuities for Retirement | Money

Educate yourself on how an annuity works along with the expected returns, fees and requirements before selling anything off and investing in or buying one. Guide to Annuities: What They Are, Types, and How They Work

You can’t control what the market does, but you can control your reaction to it. The more you know and the longer you ride it out, the better you can endure the roller coaster ride of sudden vertical drops along with the slow climbs of market gains that build momentum enabling you to do it all over again. Buckling up may be uncomfortable but it keeps you safe through the bumpy ride on the way to becoming a well-informed investor.

For the times when the market drops, go for a drive, a long, boring drive with no traffic. Like in Iowa, which is a utopia for driving miles on end without seeing another vehicle especially on the back roads. Unlike LA or NY, you don’t have to constantly focus on the actions of the drivers around you. It allows your mind to wander and consider things you normally wouldn’t think of away from the barrage of headlines and phone notifications. You get comfortable with the boring and how you can better react to the uncertainty.

Unless you’re driving on a back road north of Ames and suddenly your heads-up display starts flashing and beeping and Google Maps announces approaching speed cameras. Both were accurate and didn’t stop until I slowed to 55 mph as I passed through the cameras on either side of the road meeting 3 patrol cars along those 20 miles of highly patrolled road. Google Maps has markedly improved since I last wrote about it.

If you can’t go for a boring drive, at least listen to or watch the latest episode of the Animal Spirits podcast before you react to the market volatility. The Tariff Tantrum | Animal Spirits 403

Using the wise words from the traffic engineers of the Iowa DOT electronic message boards today:

Pi is infinite.
Life is not.
Drive (and invest) smart.

Featured Image – Amsterdam, The Netherlands, Photographer Cary Wauters
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