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 The Inverted Yield Curve

James Alden  |  April 10, 2019

The Inverted Yield Curve

James Alden  |  April 10, 2019

The Inverted Yield Curve

James Alden  |  April 10, 2019

The Inverted Yield Curve of March 22, 2019, is YOUR FRIENDLY REMINDER to purchase your income guarantee sooner rather than later.

The Inverted Yield Curve of March 22, 2019, is YOUR FRIENDLY REMINDER to purchase your income guarantee sooner rather than later.

The Inverted Yield Curve of March 22, 2019, is YOUR FRIENDLY REMINDER to purchase your income guarantee sooner rather than later.

Innuendo in today’s title notwithstanding, on Friday, March 22, 2019, money watchers worldwide made a note of the unique anomaly of the “inverted yield curve” which appeared for the first time since 2007 at the close of business day.


Traditionally, bond yields are higher for investors who hold for longer maturities. This makes sense because an investor is taking a risk that inflation will not have eroded his purchasing power when his bond comes due. Therefore, the bond is only attractive to purchasers if the yield makes it so.


Conversely, shorter-term maturities pay the bond investor less, since the investor is taking less inflation risk so that he/she can recoup funds sooner prior to inflation extending its dark hand.


When increasing numbers of investors are purchasing bonds of shorter maturities, it signals a growing consensus amongst investors that longer-term growth is likely not to materialize. One of the side effects of higher demand for bonds, in general, is that the yields on these instruments must fall. As of the time of this writing, the 10-year Treasury has sunk to 2.43% from 3.20% of last year, a drop of about 23%.


When the long term bond yield actually falls to a threshold below what the short term T bills pay, for example, this represents an “inverted yield curve” – which is a phenomenon that most academics and nerds of the greenback have agreed is a signal that the economy will be slowing in more or less than one year. A slowing economy, of course, is called a recession.


In fact, of the last 7 recessions, every single one of them has been preceded by this inversion phenomena.


See the chart below (courtesy of Bianco Research ):

Innuendo in today’s title notwithstanding, on Friday, March 22, 2019, money watchers worldwide made a note of the unique anomaly of the “inverted yield curve” which appeared for the first time since 2007 at the close of business day.


Traditionally, bond yields are higher for investors who hold for longer maturities. This makes sense because an investor is taking a risk that inflation will not have eroded his purchasing power when his bond comes due. Therefore, the bond is only attractive to purchasers if the yield makes it so.


Conversely, shorter-term maturities pay the bond investor less, since the investor is taking less inflation risk so that he/she can recoup funds sooner prior to inflation extending its dark hand.


When increasing numbers of investors are purchasing bonds of shorter maturities, it signals a growing consensus amongst investors that longer-term growth is likely not to materialize. One of the side effects of higher demand for bonds, in general, is that the yields on these instruments must fall. As of the time of this writing, the 10-year Treasury has sunk to 2.43% from 3.20% of last year, a drop of about 23%.


When the long term bond yield actually falls to a threshold below what the short term T bills pay, for example, this represents an “inverted yield curve” – which is a phenomenon that most academics and nerds of the greenback have agreed is a signal that the economy will be slowing in more or less than one year. A slowing economy, of course, is called a recession.


In fact, of the last 7 recessions, every single one of them has been preceded by this inversion phenomena.


See the chart below (courtesy of Bianco Research ):

Innuendo in today’s title notwithstanding, on Friday, March 22, 2019, money watchers worldwide made a note of the unique anomaly of the “inverted yield curve” which appeared for the first time since 2007 at the close of business day.


Traditionally, bond yields are higher for investors who hold for longer maturities. This makes sense because an investor is taking a risk that inflation will not have eroded his purchasing power when his bond comes due. Therefore, the bond is only attractive to purchasers if the yield makes it so.


Conversely, shorter-term maturities pay the bond investor less, since the investor is taking less inflation risk so that he/she can recoup funds sooner prior to inflation extending its dark hand.


When increasing numbers of investors are purchasing bonds of shorter maturities, it signals a growing consensus amongst investors that longer-term growth is likely not to materialize. One of the side effects of higher demand for bonds, in general, is that the yields on these instruments must fall. As of the time of this writing, the 10-year Treasury has sunk to 2.43% from 3.20% of last year, a drop of about 23%.


When the long term bond yield actually falls to a threshold below what the short term T bills pay, for example, this represents an “inverted yield curve” – which is a phenomenon that most academics and nerds of the greenback have agreed is a signal that the economy will be slowing in more or less than one year. A slowing economy, of course, is called a recession.


In fact, of the last 7 recessions, every single one of them has been preceded by this inversion phenomena.


See the chart below (courtesy of Bianco Research ):

So, it appears as if there may be a recession around the corner. Should you wait till the midnight hour before you buy your annuity income plan, or should you hedge your bets and lock and load while you can? After all, there may still be some growth left till that “midnight hour.”

Of course, there is no predictable answer to the question, but it might be prudent to recognize that “deferral credits” are a part of every insurance company’s calculation of lifetime income benefits.

When you buy a deferred annuity, the insurance company measures the date that you open your account until the date that you start taking lifetime income. The longer that distance is between these two endpoints, the larger your income guarantee will be. And this reality of the insurance world creates an interesting point of decision for the investor.

If you open an annuity today, for example, with the goal of starting income in one year, the insurance company is going to give you what are known in the industry as “longevity credits” for that year of deferral so that your lifetime payment in writing will be higher next year than it will be today.
How Long Until the Next Recession?
So, it appears as if there may be a recession around the corner. Should you wait till the midnight hour before you buy your annuity income plan, or should you hedge your bets and lock and load while you can? After all, there may still be some growth left till that “midnight hour.”

Of course, there is no predictable answer to the question, but it might be prudent to recognize that “deferral credits” are a part of every insurance company’s calculation of lifetime income benefits.
So, it appears as if there may be a recession around the corner. Should you wait till the midnight hour before you buy your annuity income plan, or should you hedge your bets and lock and load while you can? After all, there may still be some growth left till that “midnight hour.”

Of course, there is no predictable answer to the question, but it might be prudent to recognize that “deferral credits” are a part of every insurance company’s calculation of lifetime income benefits.

When you buy a deferred annuity, the insurance company measures the date that you open your account until the date that you start taking lifetime income. The longer that distance is between these two endpoints, the larger your income guarantee will be. And this reality of the insurance world creates an interesting point of decision for the investor.

If you open an annuity today, for example, with the goal of starting income in one year, the insurance company is going to give you what are known in the industry as “longevity credits” for that year of deferral so that your lifetime payment in writing will be higher next year than it will be today.
Longevity credits are essentially written income benefits that increase as you age and hold money with insurance companies. These credits are applied even if there is zero growth (or even a loss in the market for that matter) over the next 12 months while you hold your funds with the insurance company.

In other words, you can “lock in” your pension guarantee, in advance of actually taking it, and it will remain valid even if the market were to disappoint over the time period that you are not using the funds in your annuity.

The parallel reality to this is if you did not buy the annuity today and opted instead to “white knuckle” it with the express purpose of extracting the last vestiges of this bull market economy till that “midnight hour.” You only have a certain chance (let’s say 50%) of depositing more money, from growth, into your annuity policy (this is good) – and a certain chance (let’s say 50%) of depositing less money, from loss, into your annuity contract.

Since you are still starting the income guarantees 12 months from now (whether you fund the annuity now or fund it 12 months from now), then you only have a 50% chance of getting higher income. It is a wager you may not wish to take.

After all, if you were flying on vacation and as you sat in your seat before takeoff the pilot were to announce over the loudspeaker that you only have a 50% chance of arriving at your destination, you might be inclined to exit the plane before it took off.

The conundrum of insurance guarantees – they are always better the earlier you get them.

Longevity credits are essentially written income benefits that increase as you age and hold money with insurance companies. These credits are applied even if there is zero growth (or even a loss in the market for that matter) over the next 12 months while you hold your funds with the insurance company.


In other words, you can “lock in” your pension guarantee, in advance of actually taking it, and it will remain valid even if the market were to disappoint over the time period that you are not using the funds in your annuity.


The parallel reality to this is if you did not buy the annuity today and opted instead to “white knuckle” it with the express purpose of extracting the last vestiges of this bull market economy till that “midnight hour.” You only have a certain chance (let’s say 50%) of depositing more money, from growth, into your annuity policy (this is good) – and a certain chance (let’s say 50%) of depositing less money, from loss, into your annuity contract.


Since you are still starting the income guarantees 12 months from now (whether you fund the annuity now or fund it 12 months from now), then you only have a 50% chance of getting higher income. It is a wager you may not wish to take.


After all, if you were flying on vacation and as you sat in your seat before takeoff the pilot were to announce over the loudspeaker that you only have a 50% chance of arriving at your destination, you might be inclined to exit the plane before it took off.


The conundrum of insurance guarantees – they are always better the earlier you get them.

When you buy a deferred annuity, the insurance company measures the date that you open your account until the date that you start taking lifetime income. The longer that distance is between these two endpoints, the larger your income guarantee will be. And this reality of the insurance world creates an interesting point of decision for the investor.


If you open an annuity today, for example, with the goal of starting income in one year, the insurance company is going to give you what are known in the industry as “longevity credits” for that year of deferral so that your lifetime payment in writing will be higher next year than it will be today.


Longevity credits are essentially written income benefits that increase as you age and hold money with insurance companies. These credits are applied even if there is zero growth (or even a loss in the market for that matter) over the next 12 months while you hold your funds with the insurance company.


In other words, you can “lock in” your pension guarantee, in advance of actually taking it, and it will remain valid even if the market were to disappoint over the time period that you are not using the funds in your annuity.


The parallel reality to this is if you did not buy the annuity today and opted instead to “white knuckle” it with the express purpose of extracting the last vestiges of this bull market economy till that “midnight hour.” You only have a certain chance (let’s say 50%) of depositing more money, from growth, into your annuity policy (this is good) – and a certain chance (let’s say 50%) of depositing less money, from loss, into your annuity contract.


Since you are still starting the income guarantees 12 months from now (whether you fund the annuity now or fund it 12 months from now), then you only have a 50% chance of getting higher income. It is a wager you may not wish to take.


After all, if you were flying on vacation and as you sat in your seat before takeoff the pilot were to announce over the loudspeaker that you only have a 50% chance of arriving at your destination, you might be inclined to exit the plane before it took off.


The conundrum of insurance guarantees – they are always better the earlier you get them.

Related Articles

Asterisk Free Annuities

By Jim Alden • June 18, 2020
It is always useful, in whatever industry employs you, to study the methods, the marketing and the message of your contemporaries, competitors and colleagues. (now that was a twister that was...) I was doing just that the other day, perusing various sites that purport to deliver annuities to consumers, most of which are vapid, cookie cutter sites that contain only a landing page along with the standard "free annuity guide" to download in exchange for your most coveted email address. But I noticed something on even some of the more detailed sites that actually contain videos, articles and other substantive information. In between the doublespeak I noticed a certain subtle keystroke more than once or twice. And it dawned on me that for some of these insurance purveyors, there is a part of the computer keyboard that their copywriters must find extremely useful in the marketing of their message. In fact, without this particular keystroke, the spirit of their message would have to adjust substantially. Surely you know what I am referencing !! Shift 8! The Almighty Asterisk! It's right above the "U" on my keyboard and it surely is one of the most coveted pieces of real estate on a copywriters keypad. With the Magic of "Shift 8", a copywriter can craft a tantalizing message, even promising the sun, the moon and the stars and with full legal immunity, merely by placing this little snowflake (and I am going to enlarge it for dramatic purposes) right here: * and what the big print just gaveth upstairs, the little print doth ripped right out of your hungry hands downstairs.... So, what is my problem with this entirely legal manouever, so commonly used in the marketing of soup to nuts? Well, I guess I just have a small problem with it in the business of annuities - and I am sorry in advance to all you loyal "Shift 8' ers" ! ( hmm, I guess I could be called a "Shift 8 er, Hater". - I like that!) Anyway, here is my beef: 1) Are you physically capable of reading the fine print? I mean, you're an annuity prospect, you are probably 50, or 60, or 70 years of age and your eyesight is not as good as the young chap who put that fine print in the brochure. Surely you are under your own responsibility to read the fine print.... but....can you even physically do it? I mean while you were reading the main message, everything was fine and you were getting the gist of it all, and then the writer suddenly suggested a really sizzling concept like an "8% lifetime return" and there was this little snowflake right beside the concept and... (at this point you could have just pressed "shift and the "+" sign" to enlarge the font in order to read the fine print a few inches below, but you were born before 1955 and you're not that tech savvy.. ) So instead you had to get up and go into the bedroom and get your special reading glasses in order to read the fine print but by the time you got to the bedroom the Mrs. reminded you about your appointment with Dr. McCracken, your chiropractor, to see him at 3:00 pm this afternoon, and since you had forgotten about the appointment you then decided to call Dr. McCracken's fine young secretary to tell her that you are going to be a little late since you had entirely forgotten about the appointment. Then after you get off the phone with Dr. McCracken's secretary (who is very friendly and flirtatious), you now have this lingering feeling that you had something else you were supposed to be doing, but for the life of you, (maybe you had too much coffee this morning) - you simply cannot remember what it was. Except there was this little seed planted, unbeknownst to you, in your cerebellum, about an 8% annuity rate, that is going to sprout - like an alfalfa sprout - at some (in) opportune time. And you may not know if it translates in your mind as true interest - or something else that the writer was talking about. 2) Did you remember to read the fine print? Now, even the most Ambiguous Annuitants amongst us can forget to scroll south from time to time. But, reading, by its very nature, is a linear process, and by that I mean that to fully understand a line of thought you must read from left to right, through the entire paragraph, like going from one end of a line to the other. Now, what often happens for many of us, is that by the time we have finished a certain paragraph, new "juices of thought" have already been stimulated so that we may forget the necessity of going back to the bottom of the page to read the respective * asterisk * that referenced a particular anecdote that was mentioned 3, 6, or 9 sentences earlier. I am sure you know what I am talking about, although I did not consult any social scientists for this piece.* I hope you appreciated the hypocrisy at the end of that last sentence. Anyway...in addition... 3) We are dealing with a pretty important subject here, your $$$, sometimes even the savings that physically represents the fruit of a lifetime of work and service. We are not: a) Selling automobiles and telling you the "miles per gallon" with a curious " * " at the end of the sentence. - or - b) Selling a weight loss formula with a 30 day money back guarantee that you will lose "X" amount of weight by such and such a date.... and then comes the good old " * " at the end of the sentence. etc, etc, etc.. after all this is America, where Capitalism is enshrined in everything we do... But, really, No, no, no..not in my business, please....it just does not seem good. We, us, and by us, I mean us insurance agents, we are offering something much more serious aren't we? I mean you are laying down your life for 40 years as a butcher, baker or candle stick maker, and then you just plop the fruit of all those years of butchering, baking and candlestick making onto the desk of the nicest looking young man with the shiniest of desks who has this beautiful glow about him emanating from above, ......and that wondrous glow is coming from the most glorious of white snowflakes above him, oh, hang on, it's that, oh my goodness, don't tell me, but it's another.... SHIFT 8! * ****************** Eee gads, there it is again! There is simply no escape! or..... I say, is there? Let's digress slightly... Wikipedia has a fascinating discussion on the asterisk and it's history and uses. http://en.wikipedia.org/wiki/Asterisk and it states that one of the labels computer scientists often informally use when referencing an asterisk is the word "splat". To prove my point here all I can say is - "how convenient." Ironically, I too have personally used this word, "splat", when referencing the past tense of "spit" as it rests on a blacktop playground, or sometimes I have used it for the past tense of what a bird may have jettisoned onto my windshield, or, come to think of it, countless other dishonorable functions of existence. And I might suggest you consider thinking about the * in the same manner, especially when it comes to the marketing of annuities (since this is the only industry I can speak on behalf of). In fact, if you follow my advice here, I would first recommend you purchase a spitoon..these fellows sell them: http://www.mudjug.com/ And when you see an * in an advertisement for annuities, promising 8% or 9% something or other, instantly launch away with the best sample you can muster into that shiny new spitoon, because if you don't, someday you're gonna wish you did. In fact, if you don't use the spitoon today, you're gonna use it tomorrow. Hmm, now there's a slogan for a sideways sales practice. So, that's why, I have vowed to make the Safe Money Singer an : "Asterisk - Free Zone" Kind of like those cities you drive into that say "Nuclear - Free Zone" "Yes siree, In these here parts pardner, we are Asterisk-Free, yes, siree! if you dare use one of them round here young city slicker, you're gonna have to leave!" Now if this means I get less annuity business, gosh darn it, I suppose I can live with that. And this should help with my Catholic guilt issue. A lifetime of the stuff can make one pretty nervous in fact. Even today, 40 years later, if my pinky should venture too close to the “shift 8" key, my hand tends to tremble slightly. So I'll just go ahead and make "Shift 8" pure contraband from this point. Now....a Major Caveat here! I am not slamming the efficacy and usefulness of the Annuity per se, OBVIOUSLY, since I make a living offering them to you! But I am commenting on how they are improperly marketed, of course. And, by the way, I could have said - what I just said above - by merely putting an asterisk somewhere.. But I can't! I am in an "Asterisk - Free Zone !" Oh, I have been set free! How liberating! Amazing Grace! Hallelujah ! So, in Conclusion, I am hoping you feel the same way. Signing off, Jim, The "Shift 8'er hater" ! "Asterisk - Free" Annuities - Built on Attraction, not Promotion
I Am Waving the White Flag Cuz I Want My Money Now

I Am Waving the White Flag Cuz I Want My Money Now

By James Alden • May 30, 2020
Demystifying the surrender schedule in your annuity policy is as easy as reading the policy itself — which most people do not do.
Rate the Raters: Is it the Rating Game or the Dating Game?

Rate the Raters: Is it the Rating Game or the Dating Game?

By James Alden • May 28, 2020
This article may shed some light on how the Rating Industry works in the insurance biz here in this country of ours. I know of 5 rating agencies for life insurance and annuity companies in the United States. Ambiguous Annuitants always study the rating services thoroughly.
Financial Dentistry & The Often Uncomfortable Process of Annuity Shopping (Part 2)

Financial Dentistry & The Often Uncomfortable Process of Annuity Shopping (Part 2)

By James Alden • April 25, 2019
As a 20-year annuity agent, I began to recognize several years ago the uncanny parallel that the emotional process of shopping for an annuity, from your perspective as a consumer, is not all that much different than the psychological process of scheduling a trip to the dentist.
Think Like A Tortoise: Comprehend The Real Meaning Behind The Annuity (Part 1)

Think Like A Tortoise: Comprehend The Real Meaning Behind The Annuity (Part 1)

By James Alden • March 22, 2019
We both know that there is an emotional bridge that exists between the scintillating idea of an investment and the more mundane concept of a guarantee through insurance.

Related Articles

Asterisk Free Annuities

By Jim Alden • June 18, 2020
It is always useful, in whatever industry employs you, to study the methods, the marketing and the message of your contemporaries, competitors and colleagues. (now that was a twister that was...) I was doing just that the other day, perusing various sites that purport to deliver annuities to consumers, most of which are vapid, cookie cutter sites that contain only a landing page along with the standard "free annuity guide" to download in exchange for your most coveted email address. But I noticed something on even some of the more detailed sites that actually contain videos, articles and other substantive information. In between the doublespeak I noticed a certain subtle keystroke more than once or twice. And it dawned on me that for some of these insurance purveyors, there is a part of the computer keyboard that their copywriters must find extremely useful in the marketing of their message. In fact, without this particular keystroke, the spirit of their message would have to adjust substantially. Surely you know what I am referencing !! Shift 8! The Almighty Asterisk! It's right above the "U" on my keyboard and it surely is one of the most coveted pieces of real estate on a copywriters keypad. With the Magic of "Shift 8", a copywriter can craft a tantalizing message, even promising the sun, the moon and the stars and with full legal immunity, merely by placing this little snowflake (and I am going to enlarge it for dramatic purposes) right here: * and what the big print just gaveth upstairs, the little print doth ripped right out of your hungry hands downstairs.... So, what is my problem with this entirely legal manouever, so commonly used in the marketing of soup to nuts? Well, I guess I just have a small problem with it in the business of annuities - and I am sorry in advance to all you loyal "Shift 8' ers" ! ( hmm, I guess I could be called a "Shift 8 er, Hater". - I like that!) Anyway, here is my beef: 1) Are you physically capable of reading the fine print? I mean, you're an annuity prospect, you are probably 50, or 60, or 70 years of age and your eyesight is not as good as the young chap who put that fine print in the brochure. Surely you are under your own responsibility to read the fine print.... but....can you even physically do it? I mean while you were reading the main message, everything was fine and you were getting the gist of it all, and then the writer suddenly suggested a really sizzling concept like an "8% lifetime return" and there was this little snowflake right beside the concept and... (at this point you could have just pressed "shift and the "+" sign" to enlarge the font in order to read the fine print a few inches below, but you were born before 1955 and you're not that tech savvy.. ) So instead you had to get up and go into the bedroom and get your special reading glasses in order to read the fine print but by the time you got to the bedroom the Mrs. reminded you about your appointment with Dr. McCracken, your chiropractor, to see him at 3:00 pm this afternoon, and since you had forgotten about the appointment you then decided to call Dr. McCracken's fine young secretary to tell her that you are going to be a little late since you had entirely forgotten about the appointment. Then after you get off the phone with Dr. McCracken's secretary (who is very friendly and flirtatious), you now have this lingering feeling that you had something else you were supposed to be doing, but for the life of you, (maybe you had too much coffee this morning) - you simply cannot remember what it was. Except there was this little seed planted, unbeknownst to you, in your cerebellum, about an 8% annuity rate, that is going to sprout - like an alfalfa sprout - at some (in) opportune time. And you may not know if it translates in your mind as true interest - or something else that the writer was talking about. 2) Did you remember to read the fine print? Now, even the most Ambiguous Annuitants amongst us can forget to scroll south from time to time. But, reading, by its very nature, is a linear process, and by that I mean that to fully understand a line of thought you must read from left to right, through the entire paragraph, like going from one end of a line to the other. Now, what often happens for many of us, is that by the time we have finished a certain paragraph, new "juices of thought" have already been stimulated so that we may forget the necessity of going back to the bottom of the page to read the respective * asterisk * that referenced a particular anecdote that was mentioned 3, 6, or 9 sentences earlier. I am sure you know what I am talking about, although I did not consult any social scientists for this piece.* I hope you appreciated the hypocrisy at the end of that last sentence. Anyway...in addition... 3) We are dealing with a pretty important subject here, your $$$, sometimes even the savings that physically represents the fruit of a lifetime of work and service. We are not: a) Selling automobiles and telling you the "miles per gallon" with a curious " * " at the end of the sentence. - or - b) Selling a weight loss formula with a 30 day money back guarantee that you will lose "X" amount of weight by such and such a date.... and then comes the good old " * " at the end of the sentence. etc, etc, etc.. after all this is America, where Capitalism is enshrined in everything we do... But, really, No, no, no..not in my business, please....it just does not seem good. We, us, and by us, I mean us insurance agents, we are offering something much more serious aren't we? I mean you are laying down your life for 40 years as a butcher, baker or candle stick maker, and then you just plop the fruit of all those years of butchering, baking and candlestick making onto the desk of the nicest looking young man with the shiniest of desks who has this beautiful glow about him emanating from above, ......and that wondrous glow is coming from the most glorious of white snowflakes above him, oh, hang on, it's that, oh my goodness, don't tell me, but it's another.... SHIFT 8! * ****************** Eee gads, there it is again! There is simply no escape! or..... I say, is there? Let's digress slightly... Wikipedia has a fascinating discussion on the asterisk and it's history and uses. http://en.wikipedia.org/wiki/Asterisk and it states that one of the labels computer scientists often informally use when referencing an asterisk is the word "splat". To prove my point here all I can say is - "how convenient." Ironically, I too have personally used this word, "splat", when referencing the past tense of "spit" as it rests on a blacktop playground, or sometimes I have used it for the past tense of what a bird may have jettisoned onto my windshield, or, come to think of it, countless other dishonorable functions of existence. And I might suggest you consider thinking about the * in the same manner, especially when it comes to the marketing of annuities (since this is the only industry I can speak on behalf of). In fact, if you follow my advice here, I would first recommend you purchase a spitoon..these fellows sell them: http://www.mudjug.com/ And when you see an * in an advertisement for annuities, promising 8% or 9% something or other, instantly launch away with the best sample you can muster into that shiny new spitoon, because if you don't, someday you're gonna wish you did. In fact, if you don't use the spitoon today, you're gonna use it tomorrow. Hmm, now there's a slogan for a sideways sales practice. So, that's why, I have vowed to make the Safe Money Singer an : "Asterisk - Free Zone" Kind of like those cities you drive into that say "Nuclear - Free Zone" "Yes siree, In these here parts pardner, we are Asterisk-Free, yes, siree! if you dare use one of them round here young city slicker, you're gonna have to leave!" Now if this means I get less annuity business, gosh darn it, I suppose I can live with that. And this should help with my Catholic guilt issue. A lifetime of the stuff can make one pretty nervous in fact. Even today, 40 years later, if my pinky should venture too close to the “shift 8" key, my hand tends to tremble slightly. So I'll just go ahead and make "Shift 8" pure contraband from this point. Now....a Major Caveat here! I am not slamming the efficacy and usefulness of the Annuity per se, OBVIOUSLY, since I make a living offering them to you! But I am commenting on how they are improperly marketed, of course. And, by the way, I could have said - what I just said above - by merely putting an asterisk somewhere.. But I can't! I am in an "Asterisk - Free Zone !" Oh, I have been set free! How liberating! Amazing Grace! Hallelujah ! So, in Conclusion, I am hoping you feel the same way. Signing off, Jim, The "Shift 8'er hater" ! "Asterisk - Free" Annuities - Built on Attraction, not Promotion
I Am Waving the White Flag Cuz I Want My Money Now

I Am Waving the White Flag Cuz I Want My Money Now

By James Alden • May 30, 2020
Demystifying the surrender schedule in your annuity policy is as easy as reading the policy itself — which most people do not do.
Rate the Raters: Is it the Rating Game or the Dating Game?

Rate the Raters: Is it the Rating Game or the Dating Game?

By James Alden • May 28, 2020
This article may shed some light on how the Rating Industry works in the insurance biz here in this country of ours. I know of 5 rating agencies for life insurance and annuity companies in the United States. Ambiguous Annuitants always study the rating services thoroughly.
Financial Dentistry & The Often Uncomfortable Process of Annuity Shopping (Part 2)

Financial Dentistry & The Often Uncomfortable Process of Annuity Shopping (Part 2)

By James Alden • April 25, 2019
As a 20-year annuity agent, I began to recognize several years ago the uncanny parallel that the emotional process of shopping for an annuity, from your perspective as a consumer, is not all that much different than the psychological process of scheduling a trip to the dentist.
Think Like A Tortoise: Comprehend The Real Meaning Behind The Annuity (Part 1)

Think Like A Tortoise: Comprehend The Real Meaning Behind The Annuity (Part 1)

By James Alden • March 22, 2019
We both know that there is an emotional bridge that exists between the scintillating idea of an investment and the more mundane concept of a guarantee through insurance.

Related Articles

Asterisk Free Annuities

By Jim Alden • June 18, 2020
It is always useful, in whatever industry employs you, to study the methods, the marketing and the message of your contemporaries, competitors and colleagues. (now that was a twister that was...) I was doing just that the other day, perusing various sites that purport to deliver annuities to consumers, most of which are vapid, cookie cutter sites that contain only a landing page along with the standard "free annuity guide" to download in exchange for your most coveted email address. But I noticed something on even some of the more detailed sites that actually contain videos, articles and other substantive information. In between the doublespeak I noticed a certain subtle keystroke more than once or twice. And it dawned on me that for some of these insurance purveyors, there is a part of the computer keyboard that their copywriters must find extremely useful in the marketing of their message. In fact, without this particular keystroke, the spirit of their message would have to adjust substantially. Surely you know what I am referencing !! Shift 8! The Almighty Asterisk! It's right above the "U" on my keyboard and it surely is one of the most coveted pieces of real estate on a copywriters keypad. With the Magic of "Shift 8", a copywriter can craft a tantalizing message, even promising the sun, the moon and the stars and with full legal immunity, merely by placing this little snowflake (and I am going to enlarge it for dramatic purposes) right here: * and what the big print just gaveth upstairs, the little print doth ripped right out of your hungry hands downstairs.... So, what is my problem with this entirely legal manouever, so commonly used in the marketing of soup to nuts? Well, I guess I just have a small problem with it in the business of annuities - and I am sorry in advance to all you loyal "Shift 8' ers" ! ( hmm, I guess I could be called a "Shift 8 er, Hater". - I like that!) Anyway, here is my beef: 1) Are you physically capable of reading the fine print? I mean, you're an annuity prospect, you are probably 50, or 60, or 70 years of age and your eyesight is not as good as the young chap who put that fine print in the brochure. Surely you are under your own responsibility to read the fine print.... but....can you even physically do it? I mean while you were reading the main message, everything was fine and you were getting the gist of it all, and then the writer suddenly suggested a really sizzling concept like an "8% lifetime return" and there was this little snowflake right beside the concept and... (at this point you could have just pressed "shift and the "+" sign" to enlarge the font in order to read the fine print a few inches below, but you were born before 1955 and you're not that tech savvy.. ) So instead you had to get up and go into the bedroom and get your special reading glasses in order to read the fine print but by the time you got to the bedroom the Mrs. reminded you about your appointment with Dr. McCracken, your chiropractor, to see him at 3:00 pm this afternoon, and since you had forgotten about the appointment you then decided to call Dr. McCracken's fine young secretary to tell her that you are going to be a little late since you had entirely forgotten about the appointment. Then after you get off the phone with Dr. McCracken's secretary (who is very friendly and flirtatious), you now have this lingering feeling that you had something else you were supposed to be doing, but for the life of you, (maybe you had too much coffee this morning) - you simply cannot remember what it was. Except there was this little seed planted, unbeknownst to you, in your cerebellum, about an 8% annuity rate, that is going to sprout - like an alfalfa sprout - at some (in) opportune time. And you may not know if it translates in your mind as true interest - or something else that the writer was talking about. 2) Did you remember to read the fine print? Now, even the most Ambiguous Annuitants amongst us can forget to scroll south from time to time. But, reading, by its very nature, is a linear process, and by that I mean that to fully understand a line of thought you must read from left to right, through the entire paragraph, like going from one end of a line to the other. Now, what often happens for many of us, is that by the time we have finished a certain paragraph, new "juices of thought" have already been stimulated so that we may forget the necessity of going back to the bottom of the page to read the respective * asterisk * that referenced a particular anecdote that was mentioned 3, 6, or 9 sentences earlier. I am sure you know what I am talking about, although I did not consult any social scientists for this piece.* I hope you appreciated the hypocrisy at the end of that last sentence. Anyway...in addition... 3) We are dealing with a pretty important subject here, your $$$, sometimes even the savings that physically represents the fruit of a lifetime of work and service. We are not: a) Selling automobiles and telling you the "miles per gallon" with a curious " * " at the end of the sentence. - or - b) Selling a weight loss formula with a 30 day money back guarantee that you will lose "X" amount of weight by such and such a date.... and then comes the good old " * " at the end of the sentence. etc, etc, etc.. after all this is America, where Capitalism is enshrined in everything we do... But, really, No, no, no..not in my business, please....it just does not seem good. We, us, and by us, I mean us insurance agents, we are offering something much more serious aren't we? I mean you are laying down your life for 40 years as a butcher, baker or candle stick maker, and then you just plop the fruit of all those years of butchering, baking and candlestick making onto the desk of the nicest looking young man with the shiniest of desks who has this beautiful glow about him emanating from above, ......and that wondrous glow is coming from the most glorious of white snowflakes above him, oh, hang on, it's that, oh my goodness, don't tell me, but it's another.... SHIFT 8! * ****************** Eee gads, there it is again! There is simply no escape! or..... I say, is there? Let's digress slightly... Wikipedia has a fascinating discussion on the asterisk and it's history and uses. http://en.wikipedia.org/wiki/Asterisk and it states that one of the labels computer scientists often informally use when referencing an asterisk is the word "splat". To prove my point here all I can say is - "how convenient." Ironically, I too have personally used this word, "splat", when referencing the past tense of "spit" as it rests on a blacktop playground, or sometimes I have used it for the past tense of what a bird may have jettisoned onto my windshield, or, come to think of it, countless other dishonorable functions of existence. And I might suggest you consider thinking about the * in the same manner, especially when it comes to the marketing of annuities (since this is the only industry I can speak on behalf of). In fact, if you follow my advice here, I would first recommend you purchase a spitoon..these fellows sell them: http://www.mudjug.com/ And when you see an * in an advertisement for annuities, promising 8% or 9% something or other, instantly launch away with the best sample you can muster into that shiny new spitoon, because if you don't, someday you're gonna wish you did. In fact, if you don't use the spitoon today, you're gonna use it tomorrow. Hmm, now there's a slogan for a sideways sales practice. So, that's why, I have vowed to make the Safe Money Singer an : "Asterisk - Free Zone" Kind of like those cities you drive into that say "Nuclear - Free Zone" "Yes siree, In these here parts pardner, we are Asterisk-Free, yes, siree! if you dare use one of them round here young city slicker, you're gonna have to leave!" Now if this means I get less annuity business, gosh darn it, I suppose I can live with that. And this should help with my Catholic guilt issue. A lifetime of the stuff can make one pretty nervous in fact. Even today, 40 years later, if my pinky should venture too close to the “shift 8" key, my hand tends to tremble slightly. So I'll just go ahead and make "Shift 8" pure contraband from this point. Now....a Major Caveat here! I am not slamming the efficacy and usefulness of the Annuity per se, OBVIOUSLY, since I make a living offering them to you! But I am commenting on how they are improperly marketed, of course. And, by the way, I could have said - what I just said above - by merely putting an asterisk somewhere.. But I can't! I am in an "Asterisk - Free Zone !" Oh, I have been set free! How liberating! Amazing Grace! Hallelujah ! So, in Conclusion, I am hoping you feel the same way. Signing off, Jim, The "Shift 8'er hater" ! "Asterisk - Free" Annuities - Built on Attraction, not Promotion
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