If you haven't listened to episode 38, I encourage you to go back and listen to it before you listen to this one. Not that you have to but I think that listening to both of them will give you a better perspective.
We believe that the need to really understand income planning is so important we've dedicated two weeks to discussing it hear on our podcast.
In this second part of our discussion we're talking more specifically about the “illusion of control”. What do we mean by that?
Well, over the years one of the more difficult conversations I've had with prospective clients is the one where I suggest they convert at least a portion of their savings/investments to an income stream.
This could be using any number of annuity products–it just depends on the situation and what need there is for a particular income.
Time after time, the major objection that comes up is that people just don't like the idea of giving an insurance company a lump sum in exchange for a permanent income stream. It feels nice to see a statement with a large sum.
And exchanging that large sum of money for an income stream means that often times you are relinquishing control of the lump sum. That's scary for many of us. I get it.
But you know what's more scary?
Not having money on a monthly basis to cover your monthly expenses. I'm not talking about money that your gonna spend to cruise the Aegean for two weeks. No, I'm talking about money to pay the utility bill, cable bill, your property taxes etc.
The basics of living in a civilized society.
Having income to meet your basic needs frees up the rest of your money to do other things. And if you've planned correctly, you won't need to use ALL of your money to create your income, just a portion of it.