Today’s Mission:

There are plenty of proverbs that aren’t meant to be about money, but we can easily learn a financial lesson from them anyway. We’ll show you the hidden money meanings behind some of these popular sayings and answer a question from the mailbag about changing annuities.

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(Click the featured times below to jump forward in the episode)

Strategy Points:

In The News

1:51 Investing in IPOs

  • Several tech companies have gone public (or they will be) including Uber, Peloton, Pinterest, and Zoom. Do you recommend people invest in IPOs?
  • J’Neanne says generally no because there are a lot of unknowns. If you look at Facebook and Amazon, they are not really profitable, but they have high revenue.
  • Unless you are working in the company and have company stock, you are gambling and speculating and that’s not usually the prudent choice to make with your retirement dollars.

Financial Proverbs

8:00 “A bird in the hand is worth two in the bush.”

  • The idea of this proverb is that sometimes it’s best to focus on what you already have instead of worrying about trying to get more.
  • And at some point in your financial life, you should be more focused on not losing your savings instead of trying to maximize the return on your investments. You cannot maximize a return without taking risk. Are you taking risks without compensating?

10:06 “A rising tide lifts all boats.”

  • Everyone is a genius if the market is going up and you’re invested in the market. But the reverse is also true.

11:47 “Don’t put all your eggs in one basket.”

  • We saw what happened in 2008 — most people got burned when they were all in one side of the market. This is why it’s so important to diversify in the financial world.
  • A lot of people still make the mistake of putting too much stock in a company for which you’re also working. J’Neanne shares a story of someone who worked at Fannie Mae and put thousands into company stock.

15:23 “One man’s trash, another man’s treasure.”

  • People passing around stock tips is a great example of this. Remember that your situation is unique, and your expectations are different from everyone else.
  • Just because someone is recommending something to you doesn’t necessarily mean it’s going to be a good fit and a successful venture.
  • For example, if you have a pension, you may not need an annuity. Whereas for someone else, an annuity might make sense.


21:22 Martin: Changing annuities

  • Martin says he has money in an annuity but isn’t very happy with it and wants to move it to a different annuity. Will there be a big penalty to take the money out of the current one to move it?
  • This is called the surrender charge and every annuity has one depending on how it is set up. An annuity company is an insurance company and people will buy the annuity for the guarantee, so it’s important to know what you bought.
  • Because of the guarantees, the money is expected to stay there for a while.
  • If you are not happy, it’s important to figure out why. There are advisors who use annuities as part of the planning process and then there are just annuity salespeople. So, if you move to a new product you need to make sure you don’t move to the same thing. Remember, there needs to be a motivating reason to move from one annuity to another.
  • J’Neanne’s office has an annuity analyzer to help people understand how it works and provide options. Annuities, when appropriate, need to be part of an overall plan. They shouldn’t be implemented as one-time purchases disconnected from a big-picture plan.

The Grand Plan:

[spp-tweet tweet=”A bird in the hand means–I have a portfolio that works. Not getting the last juice at the top, but also not getting crushed at the bottom. Have to stay somewhere in the middle. – Your Financial Mission”]

The Spy Kit:

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More Intel:

The host: J’Neanne TheusContact – Call: (443) 718-6310

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