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Joseph's Fat Cow: Investment Strategy

Finishing Well / Hans Scheil
The Cross Radio
May 4, 2019 8:30 am

Joseph's Fat Cow: Investment Strategy

Finishing Well / Hans Scheil

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May 4, 2019 8:30 am

In Genesis 41, Joseph was called to interpret Pharaoh's dream about an oncoming famine that would last 7 years. When the famine hit, everyone was taken care of because Joseph made sure to proactively save. Unlike Joseph, you do not know how many years your famine, or retirement, is going to last. You need years of reserve, or money, to take care of you and your family. A solution to this gap can be an annuity.


Hans tells the story of a recent client who wanted her full income to be replaced before she retired. Social Security was not going to do this by itself. Hans brought up that an annuity might be helpful in this situation, but the client was very firm in her beliefs that annuities were bad, even though she had no idea why. Hans runs into this situation a lot, so he wants to go through all the negatives and positives annuities can bring.  


The most common negative points brought up about annuities is that the fees are too high, they are difficult to understand, and the people who sell them are unqualified and just want to take your money. All these things can be true, but with the right advisor, these things can be understood and avoided.


Annuities can also bring some beautiful benefits to people's lives. They provide a guaranteed lifetime income, even to a couple. The only other program that does this is Social Security.   They also can help play for the long term care bill when that arises.

Don’t forget to get your copy of “The Complete Cardinal Guide to Planning for and Living in Retirement” on Amazon or on for free!


You can contact Hans and Cardinal by emailing or calling 919-535-8261. Learn more at

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Welcome to finishing well brought to you by Cardinal certified financial planner belonged to Schild, best-selling author and financial planner helping families finish well over 40 years of finishing well will examine both biblical and practical knowledge to assist families in finishing well, including discussions on managing Medicare IRA long-term care life insurance and investments and taxes. Now let's get started with finishing well today on finishing well certified financial planner Hans Gile what topic Joseph's fat cow investment strategy. They can rob you what the world well enough to go to the book of Genesis chapter 41 Joseph had been in Egypt and he was called for to interpret this dream and you may recall, the dream of the seven fat cows and skinny cows came up and ate them and they were gone and Joseph interpreted that dream and because of that, God mean Pharaoh thought he had enough wisdom to set a strategy up in the strategy was simply that they would take 1/5 of all this income agreement, Egypt would have over the seven good years, get ready for the seven years of famine and so as they would delve that out and I'll give it back out over the next seven years of famine. Thus you get the word annual or an annuity.

So it's a fascinating thing that the first wooden annuity is mean it's a series of payments over a period of time exactly most likely either a year or a month and so here we are 9 AM Pharaoh even said this man is filled with the wisdom of God and he came up with a strategy and so wow I mean when you look at that you think that you know Franklin Roosevelt came up with Social Security but actually it was Joseph and you know his strategy over the seven famine years when we look at that idea of going into retirement right you got some famine come will you do in you know EE just you know you could call famine that just a need for money or a need for reserves, so it might not be as extreme as of famine, but when you're going into retirement, you're going to have a years. Some years were you going to draw on your supply and you're not really sure how many years said he knew Joseph knew that there were to be seven good years and seven years of famine. So he was an actuary dream, he just knew this was pretty sure the Dave Ramsey the time he was an ongoing was really really upset about is the but the point is you know you could look at that like wow the governments taking our me and I would imagine there's a lot of people are really really upset about that until now. As it turned out to save their lives, and such is the case with many annuities and so you run up a against us all the time that people don't know why they don't like annuities. It is no they don't like what will you in and I think a lot of that has to do with the noise that's out there of the vocal which I think you many times as minority.

It's the people perhaps are the institutions that feel threatened by annuities or they've looked at some of the places where people have abused annuities with her gone in and sold them to people. There were two old war. They had not enough liquid savings, so there's plenty of abuses that could go on, really with any financial product, but this is to shoot the financial product itself over the abuses really it's it's more the abuser that we need to be taken look at. I remember ends seven lights in the snow snow white and the seven dwarfs.

There was one grumpy was confronted with this whole idea of feminine wiles eat these. They said what you think they are running as I don't know but I'm again about my own ignorance that when I heard the word annuity. You know I was about like grumpy.

I don't know but I'm again. Well I had a lady that came in for a meeting just a few weeks ago and she was a referral of just about list or the showdown in Charlotte and Sicily comes in and she is fairly well-off financially.

She's she's thinking about retiring at 70 years old so she not set on retiring.

She had about $700,000 in retirement money. She's just on the IRA, 401(k) thing, her whole career.

She actually works and insurance and she wants more. My help and so she really wanted me to put me on the spot. I want you to replace my my income. Can you take the $700,000 and give me enough income that I'm in to be able to make the same as I make in work that my Social Security and just sitting there listening I said you know not make a recommendation yet but that just speaks to annuity and that were working the numbers and she said oh well, I I've heard annuities are not good. Now I just and this is a lady that was very favorable toward me so that it wasn't she wasn't saying it like go away. Don't bring that up to me and I just said digit. Could you tell me a little bit more about that and she really couldn't. She says I just heard that they're not good to hear that from she could name recall but she was pretty well grounded annual how you deal with that. Then I just kinda set it aside. I said were too early for recommendations on taking in all her information and going over a lot of things and then later in the conversation.

I started talking to her about risk and taking risk and where she is just looking at her statements she brought in and adjust it all look pretty risky did to get to the $700,000 point she's really written the bull market that's been going on for the last 10 years and I just think if you retiring, you probably should reduce the risk. And so when you do that you're gonna lessen your returns and insists that that goes with the territory to go hand in hand and she said that she says why don't want to lose that money and I said well okay will if you don't want to lose that money. You don't really have an invested now like you don't want to lose it because it she's pretty far out in the wrist thing just being in the most aggressive portfolios so I'm you just it brings to mind the dichotomy of this work working on the one hand, she didn't want to lose her money. On the other hand, she didn't like annuities and her there. And I am making up specific note to start talking more favorably about annuities, not to the point of just like annuities are to cure all your ills, but we we sell or we offer to our clients. Just about any investment opportunity that's out there and we can manage an account we can buy and sell just about anything that's out there in the market and bring that to our clients as well as we represent most of the insurance companies that offer life insurance and annuities and were pretty well schooled and I think that they get plenty of bad press with people really don't back it up. They don't give you like this is why it's expensive so I'm in a try to do that a bit today on the show is as I'm in a really try to give you their side of the argument of why they think that annuities might be bad and then I'm also going to give you and perhaps more strongly is I don't really hear anybody speaking up for like if why you would want to use an annuity. What were the benefits of an annuity in the story was Joseph just talks exactly like that is is it's it's actually better than that story because they had seven years of storing his accumulation and seven years of famine or payout and with a lot of these modern annuities they can pay out over his many years of your life cutting and which is an ends known thing we were just talking earlier today, we are looking at your Social Security your following your right and so security of today is an annuity but as I was talking with you. I did not know enough, they they will use them clear back in the 1800s.

This is by no means an on a strategy and an actually people's pensions were annuities a difficult foot in the still are people that have a pensions only if you ever notice when you get a pension check. Like if you work for General Motors. You don't get the pension check from General Motors. You get the pension check for my Prudential and what's behind that is an annuity it's an insured pension and most pensions of been done away with all pensions so you going to love become is a still have pensions and when they do they don't come from the company. The check comes from an insurance company what's behind that is annuity what his what is happened in the modern times as people have money accumulated in IRAs, 401(k).

So instead of a pension. Now they have an accumulation. They have a lump sum of money and many of them just don't know what to do with it, or they're afraid to spend it for good reasons because they don't want to run out there still alive and they run out of money and with a good strategy that could include partier money going annuity we can mitigate right so today show. Just feel no is in a retirement investment is with the seven waste aberrant cargo so if you go to retirement investment there.

If you download that chapter of his book the complete cargo guide to planning for living in retirement. You can get that for free which will go in the lot about what we talked about today. The wrist very specifically a map and then if you want the whole book which we highly recommend the see how beautiful all these things are as you study the myths as as Hans has. You can just email Hans right there you just send me a message on the website still your listener the show and you'd like a copy of the book will send it to you. You can also buy it on Amazon is not very expensive. You can get is a Kindle you get is a paper book.

You also can skip the book if you just like to have a conversation with us.

We got offices in Durham, Greensboro out by the airport in Charlotte and you can find all those locations at our website and if you just like to have a conversation on the phone or you like to come in and meet us. We that I highly recommend the book because it really gives our whole philosophy on just everything were doing and it covers in general sense, all seven worries and seven topical areas that were going to address with either a pre-retiree or some of the just retired. We have many clients come into us that are 80 years old that that really never did any planning the disc and ended up where they ended up but now they want to.

Now they really want to sit down and and conical back and fix some things. Maybe they skipped and we do a lot of work like it's not an assigned heroine hired Hans instead of Josephine on to say this, I'm good with that.

We know, I represent about 50 different companies that sell the we could come up a little different plant whether there's hundreds and hundreds of different plans of fat cow investments that wouldn't talk about when we come back to miss out on this the right to the need to enhance your link Hans and I would love to take our show on the road to your church and Sunday school Christian or civic group.

Here's a chance for you to advance the kingdom through financial resources and leveraging Hans expertise and qualified charitable contributions veterans aid and attendance IRAs so security care and long-term care. Just go to cargo and contact Tom to schedule a live recording of finishing well at your church Christian or civic group contact Tom Cardinal that's Cardinal We hope you are enjoying finishing well brought you by Cardinal visit Cardinal for free downloads of preview shows including episodes about Social Security, Medicare, IRAs, long-term care, life insurance, investments and taxes as well as Hans best-selling book, the complete Cardinal guide to planning for and living in retirement. Plus the accompanying workbook. If you want to follow along with today's topic download free PDF Cardinal by going to the seven worries tab of today's show topic, just scroll down to useful documents once again for free resources shows to get Hans book the complete Cardinal guide to planning for and living in retirement or the work will go to Cardinal you have a question, comment or suggestion for future shows. Click on finishing well radio show and send us a word. Once again that's Cardinal Cardinal now finishing well brought by Cardinal welcome back to finishing well with certified financial financial planner Hans Schild today show is Joseph's fat cow investment strategy which we are finding out it in a dose of had this original idea of the annuity to payout over a period of years. What they'd saved up and you know the beauty of some of these investment strategies that God's given people in a course in all Solomon followed up with this in the Proverbs talk about the amp that he did the same, thing, but enough you cannot out the ant would pay a towel out in the end is part of the deal of how annuities work. Will it is and it's a you know, once people own these things and they understand them and we explained to him the love they love the benefits but just in all fairness here. I want to just clarify for like the lady in Charlotte and possibly you.

So these people are naysayers with annuities what the points are that they're bringing up against Lisa first father to tell you that the fees are high in annuities.

Okay, now I get high relative to what and I really want to get into a lot of going over the points but they're just going to say you're going to be paying a lot inside of these annuities for which you getting so that's one complaint. The next one is that they're difficult to understand okay and that will could be there there there pretty complex just the not difficult for me to understand that there probably pretty difficult for these people that are writing about them in the writing against him and I really don't think that they are going to trust somebody like me when there trying to get me to explain to okay so the complex. That's the second thing they also are sold by a lot of unscrupulous unqualified people so all it takes to sell in annuities and insurance license and really when you're getting your insurance license. It doesn't really teach you about annuities so so you got somebody that selling insurance and going along and then all these insurance companies have annuities and they want to sell and they wanted taken the money and so they can have short training classes that are teaching you more about how to how to sell the annuity to somebody get all the buzzwords probably less than really teaching you about all the ins and outs and how to properly position these into get people in the right one of so I want to give them all three of those points that that that that's really the not in a nutshell, and people write about people repeat that staff and then allow consumers, perhaps plenty you may have drawn the conclusion.

I don't want that and what I want to do is I just want to speak up just giving you the three points. As I see them that they're bringing up I want to speak up on behalf of these things because I see so much good that they do and I really want people to see the beauty in annuities. As we talked about some previous shows I really like my clients to do that and go down that walk with me on everything we do is I want I want to show you the beauty that wanted to spend our time focusing on what's bad about okay so I just got a little list that I can go through quickly here. These are some of the benefits is that you can get a lifetime income is the only product other than socialist. They can guarantee you an income that will not stop until your decease right just didn't have that delay ran out after seven. These barns are going to stay focus is on his people needed for the rest of my life and you can make this lifetime income if you're married last as long as either one of your life so you can make this you know it's paid with the survivor and then it stops when the second one dies but it's guaranteed. Even if the annuity runs out of money.

So that's really it's rewarding to explain that to somebody 10 years after they bought this thing and now were turning on the income I tell him this is how much you can get in there gonna take it out of that cash value that you been watching grow, but if you live long enough, you run out of money then they can keep paying you until you die me I had a lady just looked at me really and I said if you die before you run out of money. You know you die soon there to pay the balance in this thing to your beneficiaries, so they pay you if you fall short, but they got no way to get their money back. That's the reason for the high fees consist insurance company taken a wrestling. Don't worry about the insurance companies they take care of themselves, but it that there's a reason now you got security of principal means your your annuities are backed up the principal and if the stocks go down to the market goes down you know is your money is all backed up and guaranteed by the insurance company behind you got tax-deferred accumulation. So annuities enjoy, you don't pay taxes on the money is accumulating like an IRA. It's like an IRA, but the difference is that you don't have minimum distributions and if you eat this doesn't have to be IRA money. So in other words, you could just have $100,000 in the bank, move it into an annuity and then you start earning interest and that interest or stays in their and they keep track of it. The insurance company and if you pull it out or if you leave it all there till you die. Your heirs are going to have to pay income taxes when somebody falls out there to have to pay the taxes we have ways to advise him of that as well. But let's just remember this is a benefit were in their tax-deferred accumulation, which is really nice.

People get really hard when they're getting 100 the get 1.5%, 2% on their CDs and then they got pay taxes on the little interest that they're getting it leaves him like a net 1% with an annuity. The monies not can be taxed as pulled out consistent investment return. So you're going to be able to balance out so you don't have the highs and the lows of the market sound investment management. So you've got people that are investing the money for the insurance company and you're able to earn a market-based return you're not can earn all the market, but you have very knowledgeable professional fiduciary folks managing the money flexible features of distribution and accumulation. This is the variances that the insurance covers after get all this approved by the insurance so it's not like they have a free hand that they're able with insurance department approval to set up like these are all the different ways that the money accumulates. These are all the different options and investment options time periods. They have a tremendous amount of flexibility and then they have a huge amount of flexibility in how this money gets distributed to, and you don't even make need to make the distribution decisions on the front end. You can wait till the future and then you can look at the circumstance and sit down and get the advice of somebody like me and you can make your distribution decisions based upon your situation at the time, and some of those distributions are about mistaken as they can be long-term healthcare insurance for yeah many get to that in the second you you you absolutely can add that feature.

They didn't have this and that list will just go over that one now so some of these annuities have long-term care enhancements so so that they're primarily there for either accumulation or income, or both. So we were investing money but then they have a whole different much different ways to do this, but they have long-term care insurance on the backend of these so after your money would if you would spend the money you put in on long-term care and after that money would expire then it starts paying you out. Now there's no money left in the annuity, but you're still getting a check for your long-term care as long as it comes on which that can go on for several years. There's also like income enhancements so if somebody is distributing this on an income thing and they have a long-term care rider on their if they need nursing home care they need care in their home and they need to pay for that there's a way that the monthly distribution increases just for the benefit of long-term care. You got low risk with annuities for your your your into CD like risk so you got the safety of putting the money in there and having it guaranteed by the insurance company, but you're not an illusion. Principal in this thing and then went what I want want to just add to this list is you have the ability to transfer the thing after your death by a beneficiary. You just just like a life insurance policy you name a beneficiary. It avoids probate. I have one of these. I'm setting up right now where the sky he's 87 years old he inherited his mother's house house he grew up in about 15 years ago and he just sold it for a nice profit and he wants that money to go to his three children.

He knew he's got other stuff set up for his wife and were to do that with an annuity so he's he wants the money here in case he needs to spend it on his own life for those haven't dealt with that which I'm now dealing with it so it when it goes outside the estate like that it it happens almost immediately after sentencing the death certificate was six couple three weeks, but that point in time you turn in the Dessa ticket. Whatever the money is distributed without having to go sit down with an attorney or go the county like I did do and spend some hours of the wonderful incentive we have a lot of folks that are older that will buy annuities and want to give the money their granddaughter yet okay they need might need so they have it there and they have the liquidity in the annuity but they buy it for that feature because they just know it's their savings account. If they don't use it during their lifetime can go right to their grandchildren. So I just wanted to speak out in general sense and limited do this over several shows where I just want to have some talk favorably about annuities and never is a good idea to throw all your money annuities. That's we just don't recommend that ever, but to put part of your money to achieve some objectives and get the safety and guarantees with its wonderful. I mean, I can see the beauty and annuities address the following is the fifth step up.

What a wonderful investment strategy Joseph Adam and God continues to give people wisdom. If you missed out on the earlier part of the shell you want to know more about the fat cow investment strategy. You just go to your smart phone and say hey Siri I want a list of his finishing well you can go home and tell Alexa I want to listen the finishing well is that simple. Chris you go to Gardener and download the whole chapter on retirement investments or asked for the book from Hans. You could even listen to finishing well radio show there's a tab for that. It's right there, and of course we always want to mention we would love to do this live at your church. We record these things live will come to your church will will will will not only recorded there, but then take answers.

Maybe it's your Sunday school class or something you know you have a 50s+ sisal class you want to do it.

We would love to come to your church and your group. Whatever you got. You can contact me obviously a true broadcasting or go to finishing what I'm go to Cargill and do that, we thank you for was a lot of fun talking fat count on heart, not cats but counts thank you. We hope you enjoyed finishing well with you by Cargill is a cardinal for free downloads of the show previous shows on topics such as Social Security, Medicare and IRAs, long-term care and life insurance, investments and taxes as well as ponds best-selling book, the complete cardinal guide to planning for and living in retirement and the workbook once again for dozens of free resources past shows when you get Hans book go to cardinal if you have a question, comment or suggestion for future shows. Click on the finishing well radio show on the website and send us a word.

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