2022

Episode 158: Climbing Down The Financial Mountain With David Rosell

July 28, 2022 2022, David Rosell, Podcast, Retirement No comments

The proverb that it’s harder to climb down a mountain than go up is true in every sense of the word. Here’s a gruesome stat – between 1921 and 2006, 56% of deaths above 8,000 meters occurred on the return trip and 17% died turning back. Just 15% died on the way up. The rest died of other causes. Similarly in financial planning, as hard as asset accumulation proves, planning for retirement is much more complex. Today, we talk with David Rosell who happens to be both an experienced climber and financial planner.

Links mentioned on the show:

https://www.davidrosell.com/purchase/

https://www.davidrosell.com/podcast/

https://www.davidrosell.com/purchase/

https://www.rosellwealthmanagement.com/

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Episode Transcript

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[paul_tyler]: hi this is paul tyler and welcome
to another episode of that annuity show ramsey

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[paul_tyler]: how are you this morning

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[paul_tyler]: good coming to us from atlanta actually
in hartford connecticut today and listen we’ve got

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[paul_tyler]: a great guest somebody who is m
has written books has podcast show has a

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[paul_tyler]: podcast and is a has a very
successful financial planning practice out in the west

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[paul_tyler]: david rozelle david author speaker wealth manager
and world traveller welcome they ad annuity

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[david_rosell]: thank

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[paul_tyler]: show

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[david_rosell]: you paul and ramsey a pleasure to
be on your show today

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[paul_tyler]: yeah well listen i thought this was
i thought would be great to have you

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[paul_tyler]: on the show for for a number
of reasons one is you know just to

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[paul_tyler]: start out you’ve got a really interesting
practice you know from what i understand and

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[paul_tyler]: and have read and seen in oregon
maybe you can tell people about your business

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[paul_tyler]: like who are you and you know
what do you do how do you describe

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[paul_tyler]: people when they say oh and you
wrote this book and you do what else

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[paul_tyler]: do you do

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[david_rosell]: yeah well we we set up a
practice here in beautiful bendoregain in the center

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[david_rosell]: of the state big resort town twenty
two years ago and like most people in

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[david_rosell]: our line of

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[paul_tyler]: oh

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[david_rosell]: work we were all things to all
people in the beginning if you could fog

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[david_rosell]: a mirror we’d work with them and
as you gain more and more

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[paul_tyler]: oh

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[david_rosell]: expert tease you usually have an affinity
towards a certain part our business and so

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[david_rosell]: today the focus of our practice is
helping people in the second half of our

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[david_rosell]: financial journey so all of our clients
are at or near retirement they know how

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[david_rosell]: much money they have but they don’t
really have a clear idea before they meet

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[david_rosell]: us of what their money can or
can’t do for them for the rest of

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[david_rosell]: their lives

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[paul_tyler]: ah now i talked to a lot
of adviser and say i’m working on a

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[paul_tyler]: book i’m thinking about a podcast i’d
like to do speaking you’re doing that kind

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[paul_tyler]: of tell us how did ow did
you evolve how did your whole business evolve

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[paul_tyler]: from you know what i’m a really
good financial planner to i’m really going to

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[paul_tyler]: take my practice and clients hell up
to the next level

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[david_rosell]: yeah well regarding the book you know
my intention behind our third book is coming

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[david_rosell]: out later this month

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[paul_tyler]: oh

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[david_rosell]: but having never

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[paul_tyler]: yes

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[david_rosell]: written a book before i realized is
that financial planning retirement planning is such a

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[david_rosell]: mondaine heavy topic for so many people
and

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[paul_tyler]: yeah

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[david_rosell]: our goal was to make it actually
fun

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[paul_tyler]: yeah

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[david_rosell]: in the way that i was able
to accomplish

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[paul_tyler]: oh

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[david_rosell]: this was mixing my two unique abilities

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[paul_tyler]: yeah

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[david_rosell]: or my two two passions in life
and one is for international adventure travel ve

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[david_rosell]: had an opportunity to spend a month

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[paul_tyler]: ye

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[david_rosell]: any five different countries around the world
which is a whole nother story um and

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[david_rosell]: then every chapter would start with one
of these stories and

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[paul_tyler]: oh

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[david_rosell]: then link into a financial lesson right
when there was one or two many charts

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[david_rosell]: at the end of that chapter it
would go right into another financial story another

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[david_rosell]: travel story and so our goal is
to add some levity

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[paul_tyler]: yeah

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[david_rosell]: into financial planning interestingly enough

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[paul_tyler]: yeah

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[david_rosell]: the books went on to get

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[paul_tyler]: yeah

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[david_rosell]: endorsed by icons and are in the
world of motivation and finance and sports and

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[david_rosell]: now we get most of our new
clients are coming in from the books

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[paul_tyler]: interesting interesting um and i mean at
what point i’ve read the books and i

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[paul_tyler]: want to come back to your adventure
travel and and some of the stories and

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[paul_tyler]: and i read you know i’ve actually
listened to a couple of these podcasts talking

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[paul_tyler]: about your the use of coaches and
stuff very tempting when you’re successful okay in

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[paul_tyler]: a practice to say i know it
all okay sometimes very hard to say i

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[paul_tyler]: need a coach at what point did
you seek out coaching at what point did

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[paul_tyler]: you say you know what this is
actually really kind of changing how i’m approaching

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[paul_tyler]: life ye

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[david_rosell]: i mean i think seeking out a
coach in business or seeking out a life

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[david_rosell]: coach is coming from a plain place
of strength rather than weakness and i always

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[david_rosell]: want to a student

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[paul_tyler]: oh

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[david_rosell]: and the more that i learn the
more i realize there’s so much more to

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[david_rosell]: learn the more that i travel the
world the more i realize i haven’t seen

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[paul_tyler]: oh

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[david_rosell]: so much

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[paul_tyler]: oh

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[david_rosell]: in so you know tiger woods

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[paul_tyler]: what

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[david_rosell]: the best golfer in the world

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[paul_tyler]: oh

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[david_rosell]: and he had two coaches so for
crying out

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[paul_tyler]: oh

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[david_rosell]: loud it’s important to continue learning and
bettering ourselves i’ve had coaches in my

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[paul_tyler]: oh

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[david_rosell]: life for a long time started out

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[paul_tyler]: oh

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[david_rosell]: with people like wan dire in napoleon
hill and reading books and always you know

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[david_rosell]: nightingale cont tapes

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[paul_tyler]: yeah

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[david_rosell]: but then when i started my business
i really start out with a life coach

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[david_rosell]: because i think as much as we
have our some of us like to think

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[david_rosell]: we have our our stars are lined

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[paul_tyler]: oh

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[david_rosell]: and we know what we’re doing it
really helps just get through the stresses of

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[david_rosell]: life as having someone guide you and
then and then over the years i’ve had

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[david_rosell]: coaches like dan sullivan who still might
coach twelve years later with strategic coach which

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[david_rosell]: i’m sure a lot of the listeners
are either partaking strategic

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[paul_tyler]: m

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[david_rosell]: coach or or ware of him

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[paul_tyler]: yeah

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[paul_tyler]: yeah

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[david_rosell]: so this is from a client perspective
yeah you know i think most people most

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[david_rosell]: very successful people even out there in
the world know very little about money

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[paul_tyler]: oh

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[david_rosell]: because

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[paul_tyler]: i

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[david_rosell]: they didn’t teach us in school didn’t
teach us things like the law of seventy

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[david_rosell]: two or the power

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[paul_tyler]: oh

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[david_rosell]: of compound interest which einstein said was
the

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[paul_tyler]: yah

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[david_rosell]: eighth wonder of the world and many
of us learned about money from our parents

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[david_rosell]: and what did our parents the most
part know about money very little and their

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[david_rosell]: parents learned about

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[paul_tyler]: oh

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[david_rosell]: money lessons from their parents who live
through the great depression so there’s a lot

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[david_rosell]: of fear around money so i think
one of the most powerful important investments that

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[david_rosell]: most people out there can make is
finding a true financial coach which is what

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[david_rosell]: all of us are to our clients

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[paul_tyler]: oh

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[david_rosell]: so so important to get that guidance

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[paul_tyler]: yeah well i listen thought i thought
your stories of going to packasstan and capi

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[paul_tyler]: i love them you know part part
of this is you know i’ve seen how

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[paul_tyler]: climbing has transformed a lot of lives
one of the charity i’m involved with we

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[paul_tyler]: actually do work with disabled athletes and
climing actually has been important element of the

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[paul_tyler]: program fact you know i was i
was not part of this particular trip but

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[paul_tyler]: we took some disabled athletes challenged you
know we don’t say challenge that but it’s

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[paul_tyler]: a exceptional athletes to the top of
mount kilmanjaron back down and you know we’ve

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[paul_tyler]: kind of all heard a lot and
use the nail you know it’s much harder

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[paul_tyler]: to come down the mountain than it
is up but it’s it’s true right david

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[paul_tyler]: and i and it sounds like you’re
very been very active in the mountain climbing

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[paul_tyler]: field what are the challenges you know
coming down that that that hill today i

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[paul_tyler]: think they’re more treacherous than ever you
know what are your clients saying what’s their

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[paul_tyler]: state of mind today m

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[david_rosell]: ah well to pick you back on
that whole analogy that many

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[paul_tyler]: oh

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[david_rosell]: of us have heard with the mountains
in failure is not an option creating certainty

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[paul_tyler]: yeah

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[david_rosell]: and the uncertainty of retirement which is
that first book that you’re alluding to do

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[david_rosell]: share a twenty one day track through
the himalayas of napoule but then years later

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[paul_tyler]: oh

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[david_rosell]: i had an opportunity to meet one
of my heroes a gentleman named ed feasters

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[david_rosell]: and ed is the best mountaineer that
probably has ever walked the planet earth he

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[david_rosell]: summited mount evers seven times

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[paul_tyler]: oh

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[david_rosell]: successfully but did so each time without
supplemental oxygen it’s really possible feat for most

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[david_rosell]: of us and i’ll never forget when
ed shared with me that

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[paul_tyler]: oh

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[david_rosell]: most people think his goal is to
get to the top of evers every time

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[david_rosell]: and he said that’s the last goal
that any experience

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[paul_tyler]: oh

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[david_rosell]: mountaineer would have and i said what
do you mean and he said eighty percent

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[david_rosell]: of the accidents and eighty per cent
of the deaths happen on the descent he

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[david_rosell]: said so our goals to get to
the summit but make sure we get back

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[david_rosell]: down alive to our friends and family
and when he said it’s the second half

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[david_rosell]: of his journey that takes the most
amount of risk and needs the most amount

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[david_rosell]: of planning

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[paul_tyler]: yeah

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[david_rosell]: that was my a moment to relate
it to the work we do with our

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[david_rosell]: clients because when they reach their financial
summit which is the last day that they’re

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[david_rosell]: adding to their four o one case
and iras and now they’re

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[paul_tyler]: no

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[david_rosell]: opening up that income valve they’re going
to need that income

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[paul_tyler]: no

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[david_rosell]: for two three and sometimes four plus
decades and i believe it’s the second half

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[david_rosell]: of the distribution

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[paul_tyler]: m

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[david_rosell]: phase of their lives that also takes

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[paul_tyler]: oh

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[david_rosell]: on the most amount of risk needs
the most amount of planning

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[paul_tyler]: yeah yeah i think maybe maybe was
one of your i listen to a few

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[paul_tyler]: of your podcasts the i think you
told one story about repelling off a cliff

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[paul_tyler]: and i did that once we we
we took a bunch of athletes out to

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[paul_tyler]: the edge of right on the border
of utah and colorado and here was an

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[paul_tyler]: adventure race you didn’t really know what
you were going to do till the next

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[david_rosell]: yeah

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[paul_tyler]: day and you know i was helping
ramsey would have laughed at me i was

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[paul_tyler]: helping a guy who is who worked
in the air force worked in one of

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[paul_tyler]: these missiles silos and had lost a
lot of his vision he was bound a

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[paul_tyler]: determined david to repel off this two
under fifty foot cliff and i was just

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[paul_tyler]: pretending okay please back out of this

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[david_rosell]: m

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[paul_tyler]: please

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[david_rosell]: hm

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[paul_tyler]: please back

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[david_rosell]: m

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[paul_tyler]: out he’s like i’m i thought i
couldn’t back out ramsey so i came up

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[paul_tyler]: and dave that was scared for some
reason i have not been scared of heights

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[paul_tyler]: until for some reason later age it’s
hit me and i got up there scariest

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[paul_tyler]: thing on the planet and you talked
about repelling off that stuff and the trust

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[paul_tyler]: you know you have to trust your
gear you have to trust the people on

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[paul_tyler]: top of you um take us that
step on the planning side i mean what

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[paul_tyler]: are the emotions how do you coach
some you know ramsey ask you about coaching

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[paul_tyler]: how do you coach your clients through
that process oh my god i’m quitting my

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[paul_tyler]: job i got to are taking some
money out or i got to take my

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[paul_tyler]: arm these you know what’s that what’s

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[david_rosell]: yeah

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[paul_tyler]: the first thing they start to sweat
about

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[david_rosell]: well right now i think it’s about
getting their emotions in check and

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[paul_tyler]: yeah

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[david_rosell]: using another you know mountain analogy is
you visualize

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[paul_tyler]: a

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[david_rosell]: a boy climbing up

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[paul_tyler]: oh

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[david_rosell]: that same mountain with a yo yo
and the yo yo represents the stock market

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[david_rosell]: and when the yo yo goes down
they lose sleep it goes back up they’re

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[david_rosell]: elated it goes back down and their
stomachs turning and i think as advice there’s

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[david_rosell]: what we how we could really help
benefit our clients s by overtime teaching and

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[david_rosell]: training our clients to focus on the
boy carrying the yo yo because the boy

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[david_rosell]: in the yo yo get to the
top of the peak at exactly the same

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[david_rosell]: time and if you focus on the
boy rather than the undulating yo yo going

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[david_rosell]: up and down it’s going to be
a much

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[paul_tyler]: what

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[david_rosell]: more pleasant experience

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[paul_tyler]: m

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[david_rosell]: for everybody

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[paul_tyler]: my

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[paul_tyler]: oh oh oh

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[paul_tyler]: m

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[david_rosell]: i think it’s shifting people’s mindset who
are in the accumulation phase because if the

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[david_rosell]: markets are down say hovering around twenty
percent year to date you’re funding your four

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[david_rosell]: o

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[paul_tyler]: oh

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[david_rosell]: n k each in every pay period
and alive this could be a blessing because

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[david_rosell]: every pay period

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[paul_tyler]: oh

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[david_rosell]: when you fund that dollar you’re getting
twenty percent more shares every time you’re contributing

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[david_rosell]: right now so rather than look at
it as a negative it is a positive

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[david_rosell]: um and people are doing the exact
opposite of what they should be for the

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[david_rosell]: most at um if you’re building a
house and lumber goes on sale you stack

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[david_rosell]: up on that lumber right now when
the stock market goes on sale rather than

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[paul_tyler]: ah

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[david_rosell]: stock up we get rid of it
which is it’s counter intuitive um so fear

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[david_rosell]: f e a r false evidence appearing

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[paul_tyler]: m

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[david_rosell]: real is how a lot of people
seem to make their their decisions when it

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[david_rosell]: comes to their finances and that again
comes back to where having that so that

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[david_rosell]: adviser to hold their hand really educate
them inform them with the facts like there’s

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[david_rosell]: never been a down market in real
estate or the stock market that hasn’t rebound

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[david_rosell]: to hit in all time high now
where the challenge or one of the many

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[david_rosell]: challenges comes on the descent is when
you’re taking with jaws every month to live

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[david_rosell]: in retirement

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00:15:00,039 –> 00:15:00,060
[paul_tyler]: m

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[david_rosell]: in the markets or down twenty percent
un to sell twenty percent more shares to

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00:15:05,464 –> 00:15:10,601
[david_rosell]: get the same ten thousand dollars that
month and that’s where some real planning planning

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[david_rosell]: for these recessions which we average one
every eight point eight years really

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[paul_tyler]: ah

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[david_rosell]: comes into play

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00:15:18,431 –> 00:15:18,572
[paul_tyler]: wow

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[paul_tyler]: yeah

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[david_rosell]: really not

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[paul_tyler]: yeah so so

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[david_rosell]: it’s

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[paul_tyler]: when

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[david_rosell]: one

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00:15:45,086 –> 00:15:45,326
[paul_tyler]: flit

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[david_rosell]: client at a time

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[paul_tyler]: yeah well ll let me ask you
so today’s today’s climate okay record inflation i

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[paul_tyler]: could i could go through the whole
scenario here uh interesting time do you get

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[paul_tyler]: different questions or are you dealing with
any different emotions today than you were say

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[paul_tyler]: you know you know four years ago
in the emotional reaction to the volatile changing

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[paul_tyler]: marketplace

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00:16:13,539 –> 00:16:16,704
[david_rosell]: yeah i mean you’re hitting upon one
of the most important topics right now that’s

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00:16:16,884 –> 00:16:19,509
[david_rosell]: front of mind awareness for everybody i
mean all you have to do is go

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[david_rosell]: to

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[paul_tyler]: my

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[david_rosell]: the grocery store or to the gas
station

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[paul_tyler]: oh

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[david_rosell]: and it’s smack dab right in front
of our face is i think it comes

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[david_rosell]: back to education yes we’re at a
forty year high hovering

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[paul_tyler]: oh

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00:16:31,826 –> 00:16:37,316
[david_rosell]: around nine percent a lot of people
don’t remember that inflation was eighteen per cent

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00:16:37,416 –> 00:16:44,117
[david_rosell]: in nineteen eighty but it really comes
back to the law of averages and we

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00:16:44,217 –> 00:16:50,207
[david_rosell]: know that inflation is always averaged between
three and four percent so if something is

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00:16:50,728 –> 00:16:54,454
[david_rosell]: hundreds lee’s this year on average next
year it’s going to be a hundred and

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00:16:54,554 –> 00:17:00,084
[david_rosell]: three dollars and fifty cents not a
big big deal but over time like a

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00:17:00,164 –> 00:17:03,876
[david_rosell]: twenty year time period even at three
and a half per cent ation the cost

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00:17:03,956 –> 00:17:09,121
[david_rosell]: of living doubles so that’s what really
needs to be playing for if for example

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[david_rosell]: you have a forty year old client

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00:17:10,535 –> 00:17:10,556
[paul_tyler]: i

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00:17:11,363 –> 00:17:14,386
[david_rosell]: who says i want to retire by
the time i’m sixty and live on a

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00:17:14,486 –> 00:17:16,388
[david_rosell]: hundred thousand dollars and edit taxes

288
00:17:16,380 –> 00:17:16,400
[paul_tyler]: m

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00:17:17,059 –> 00:17:20,969
[david_rosell]: as planners we need to make sure
that they’re putting enough money away to take

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00:17:21,050 –> 00:17:25,721
[david_rosell]: out two hundred thousand dollars by the
time they’re sixty and by the time they’re

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00:17:25,761 –> 00:17:30,689
[david_rosell]: eighty years young and they’re only twenty
years into retirement because graying means playing these

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00:17:30,749 –> 00:17:38,645
[david_rosell]: days um that doubles again to four
hundred thousand dollars so i think by educating

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00:17:38,745 –> 00:17:45,957
[david_rosell]: people it’s not focusing on this nine
percent inflation rate as much as it is

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00:17:46,057 –> 00:17:50,285
[david_rosell]: the damaging effects of the three and
a half per cent that it will always

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00:17:50,485 –> 00:17:51,527
[david_rosell]: average over time

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00:17:56,731 –> 00:18:07,749
[paul_tyler]: so i guess it’s a challenge environment
ramsey i i seem to be getting raged

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00:18:07,809 –> 00:18:14,761
[paul_tyler]: by my friends with different opinions as
to why the numbers are changing and why

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00:18:14,861 –> 00:18:19,549
[paul_tyler]: the numbers are going the wrong direction
when they’re going to change the answer those

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00:18:19,669 –> 00:18:27,462
[paul_tyler]: not simple one so i’m not sure
you know dave to ramsey’s question you know

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00:18:28,363 –> 00:18:34,534
[paul_tyler]: how much can people comprehend you know
inflation it is global at the moment you

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00:18:34,594 –> 00:18:35,215
[paul_tyler]: know i don’t think

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00:18:35,196 –> 00:18:35,689
[david_rosell]: hm

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00:18:35,535 –> 00:18:39,602
[paul_tyler]: when you’re looking at the gas when
you’re you’re filling your tank it feels like

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00:18:39,682 –> 00:18:45,812
[paul_tyler]: it’s very local um m i think
we’re i think we’re headed for a very

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00:18:46,013 –> 00:18:56,029
[paul_tyler]: interesting year or so as uh uh
any kind of emotional reaction that people may

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00:18:56,130 –> 00:18:59,593
[paul_tyler]: want to take will manifest self david
i think there’s i think people are going

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00:18:59,653 –> 00:19:04,598
[paul_tyler]: man a lot of coaching in the
next year to avoid making some really terrible

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00:19:04,638 –> 00:19:05,078
[paul_tyler]: mistakes

309
00:19:17,529 –> 00:19:17,610
[paul_tyler]: yeah

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00:19:32,550 –> 00:19:32,791
[paul_tyler]: oh

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00:19:45,892 –> 00:19:51,402
[paul_tyler]: david you writing your book about you
know waking up and having a experience in

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00:19:52,243 –> 00:19:56,029
[paul_tyler]: cool and paccusind i was supposed to
be going a trip to peru with my

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00:19:56,190 –> 00:20:00,917
[paul_tyler]: wife here about two months ago she
called me up and said you won’t believe

314
00:20:00,958 –> 00:20:07,949
[paul_tyler]: this we’re quarantine because of riots over
the cost of food escalading in peru so

315
00:20:08,399 –> 00:20:08,561
[david_rosell]: yeah

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00:20:08,530 –> 00:20:12,335
[paul_tyler]: as bad as it is here wow
we’ve got lot of global issues that are

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00:20:12,555 –> 00:20:15,258
[paul_tyler]: going to keep this thing cooking for
a while

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00:20:16,339 –> 00:20:20,726
[david_rosell]: yeah we should really count our blessings
for how fortunate we are because even when

319
00:20:20,786 –> 00:20:24,412
[david_rosell]: we are going through tough times like
you’re both sharing compared to the rest of

320
00:20:24,452 –> 00:20:28,900
[david_rosell]: the world when you want to put
it in perspective countries like zimbabwe is wala

321
00:20:29,380 –> 00:20:31,584
[david_rosell]: who have had over a thousand percent

322
00:20:31,740 –> 00:20:31,760
[paul_tyler]: m

323
00:20:31,744 –> 00:20:38,355
[david_rosell]: inflation on the anualized basis last several
years so in many ways you know what

324
00:20:38,395 –> 00:20:42,302
[david_rosell]: we think about expands and rather than
come from a place of fear or lack

325
00:20:42,803 –> 00:20:45,407
[david_rosell]: and i don’t mean to just kind
of say oh it’s no big deal that

326
00:20:45,447 –> 00:20:49,854
[david_rosell]: inflations nine per cent but it’s only
half of what it was in nineteen eighty

327
00:20:50,375 –> 00:20:54,642
[david_rosell]: and we’ve come back from that and
we come back from whatever in ran right

328
00:20:54,703 –> 00:20:59,771
[david_rosell]: now we’ve had a string of incredible
bowl markets and real estate in the stock

329
00:20:59,851 –> 00:21:05,801
[david_rosell]: market and non sophisticated investors who have
an experien down markets in the past think

330
00:21:05,841 –> 00:21:09,147
[david_rosell]: that this is the only way it’s
going to be and it’s like a pressure

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00:21:09,227 –> 00:21:13,113
[david_rosell]: cooker when you’re cooking with a pressure
cooker that steam is being released on the

332
00:21:13,193 –> 00:21:17,821
[david_rosell]: top and if that steam couldn’t be
released that pressure cooker is going to blow

333
00:21:18,001 –> 00:21:18,102
[david_rosell]: up

334
00:21:18,060 –> 00:21:18,424
[paul_tyler]: oh

335
00:21:18,422 –> 00:21:22,869
[david_rosell]: and go right through your ceiling and
right now we need some steam being released

336
00:21:22,990 –> 00:21:26,756
[david_rosell]: in the hot real estate market and
the stock market this is not

337
00:21:26,760 –> 00:21:27,002
[paul_tyler]: oh

338
00:21:26,976 –> 00:21:29,220
[david_rosell]: a bad thing what’s happening now this
is

339
00:21:29,180 –> 00:21:29,360
[paul_tyler]: yeah

340
00:21:29,300 –> 00:21:34,589
[david_rosell]: a normal market it’s not even a
major market down market

341
00:21:34,603 –> 00:21:34,623
[paul_tyler]: a

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00:21:34,649 –> 00:21:38,676
[david_rosell]: i mean twenty eight months ago the
market dropped thirty four per cent and just

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00:21:38,796 –> 00:21:43,071
[david_rosell]: over a week when covid became reality
and we go back to o eight and

344
00:21:43,131 –> 00:21:46,057
[david_rosell]: early o nine the s and p
at one point was down to fifty seven

345
00:21:46,177 –> 00:21:47,449
[david_rosell]: per cent and

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00:21:47,571 –> 00:21:47,754
[paul_tyler]: yeah

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00:21:47,629 –> 00:21:52,297
[david_rosell]: dot com crash it was down forty
nine percent so it’s really important to just

348
00:21:52,373 –> 00:21:52,393
[paul_tyler]: i

349
00:21:52,397 –> 00:21:58,727
[david_rosell]: put the facts into perspective for clients
so that they realized the world is not

350
00:21:58,848 –> 00:22:02,057
[david_rosell]: caving in and although by watching the
news we might think it is

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00:22:02,380 –> 00:22:06,066
[paul_tyler]: yeah ramsey on that note perspective to
add

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00:22:11,919 –> 00:22:11,940
[paul_tyler]: m

353
00:22:25,983 –> 00:22:34,190
[paul_tyler]: at oh yeah oh m

354
00:22:38,379 –> 00:22:40,634
[paul_tyler]: m yeah

355
00:22:45,232 –> 00:22:48,690
[paul_tyler]: oh yeah

356
00:22:56,850 –> 00:23:01,396
[paul_tyler]: yeah oh oh oh

357
00:23:09,009 –> 00:23:09,191
[david_rosell]: yeah

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00:23:10,964 –> 00:23:17,735
[paul_tyler]: yeah all right well david roselle author
of failure is not an option creating certainty

359
00:23:17,936 –> 00:23:22,926
[paul_tyler]: in the uncertainty of retirement david is
book one of three what’s the best way

360
00:23:23,006 –> 00:23:27,416
[paul_tyler]: for people to find more about you
follow you listen to you on your podcast

361
00:23:27,877 –> 00:23:29,366
[paul_tyler]: where should they go yeah

362
00:23:29,559 –> 00:23:32,925
[david_rosell]: yeah well if they enjoyed podcasts which
your listeners do

363
00:23:32,880 –> 00:23:33,204
[paul_tyler]: oh

364
00:23:33,646 –> 00:23:35,549
[david_rosell]: my podcast is called recession proof

365
00:23:35,610 –> 00:23:35,811
[paul_tyler]: oh

366
00:23:35,629 –> 00:23:42,280
[david_rosell]: your retirement with david roselle and we
talk about different things to do pep prepare

367
00:23:42,381 –> 00:23:46,588
[david_rosell]: for having a successful retirement in the
descent and we’re also at

368
00:23:46,659 –> 00:23:46,680
[paul_tyler]: m

369
00:23:47,088 –> 00:23:51,656
[david_rosell]: roselle wealth management dot com and that’s
r o s e l l wealth

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00:23:51,690 –> 00:23:51,913
[paul_tyler]: oh

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00:23:51,756 –> 00:23:52,678
[david_rosell]: management dot com

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00:23:53,400 –> 00:23:56,565
[paul_tyler]: all right we listen thank you very
much thank you ramsey and thank all of

373
00:23:56,605 –> 00:24:01,253
[paul_tyler]: our listeners and listen give us feedback
give us suggestions for who we should have

374
00:24:01,293 –> 00:24:06,364
[paul_tyler]: on our show and join us again
next week for another episode of that annuity

375
00:24:06,424 –> 00:24:07,087
[paul_tyler]: show thanks

The discussion is not meant to provide any legal, tax, or investment advice with respect to the purchase of an insurance product. A comprehensive evaluation of a consumer’s needs and financial situation should always occur in order to help determine if an insurance product may be appropriate for each unique situation.

Insurance Agents Are Unknowingly Breaking DOL Rules, Attorney Says

July 25, 2022 2022, Media No comments

A number of insurance agents may be violating U.S. Department of Labor rules by accepting “conflicted compensation” from annuities sales for rollovers from retirement assets because their insurance companies haven’t educated them, according to Fred Reish, a partner in the law firm of Faegre Drinker.

While insurance companies have their choice of following one of two DOL rules, both require agents to be fiduciaries if they want to qualify for exceptions for annuities and insurance transactions, especially those involving commissions, revenue sharing or 12b-1 fees where there is a perceived conflict of interest, said Reish, who specializes in regulatory issues.

While broker-dealers and registered investment advisors are required to use Prohibited Transaction Exemption (PTE) 2020-02 to qualify for an exception to “fiduciary prohibited transactions,” where sales of life insurance and annuities are involved, there is an option of using another rule, PTE 84-24.

Instead of mandating a “best-interest” requirement, PTE 84-24 requires insurers and agents to ensure that each transaction be on terms “at least as favorable” to the participant as an arm’s length transaction.

The rule also requires that the combined total of all fees, commissions and other consideration received by the insurance company or agent must be “reasonable.”

“I am concerned that there may be widespread noncompliance in the recommendations of rollovers to annuities by insurance agents and brokers. That is not due to any purposeful intent. Instead, my observation is that many insurance agents, and particularly independent insurance agents, are not aware of the DOL’s expanded fiduciary interpretation and do not know about the existence of PTE 84-24 and the need to satisfy its conditions,” Reish said.

Since PTE 84-24 is much easier to satisfy and does not place a compliance requirement on the insurance company, many insurers have opted to use it, Reish said.

It’s also attractive to insurers because PTE 84-24 does not require that the insurance company be a co-fiduciary with the agent, Reish said.

As a result, insurers have avoided using PTE 2020-02 and instead used PTE 84-24 to handle annuity and life insurance sales, but in many cases without the independent agent or broker being alerted to DOL requirements, he said.

Reish said that insurance agents and brokers appear to have the greatest challenges meeting the “reasonable” fees requirement since there is little publicly available data about customary commissions and trails on annuity products.

“The burden of proof of compliance … is on the person claiming the exemption. Agents should have information about customary and ordinary commissions in a range of scenarios, that is, for different types of annuities of different amounts,” Reish warned.

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Using a Holistic Approach to Retirement Planning by Taking Risk off the Table

July 25, 2022 2022, Media, Paul Tyler No comments

Welcome to episode #39 of Social Security: Answers from The Experts with Martha Shedden: Using a Holistic Approach to Retirement Planning by Taking Risk off the Table with Paul Tyler

Paul Tyler serves as Chief Marketing Officer for Nassau Financial Group where he leads the marketing strategy, direct-to-consumer channel and innovation activity. Paul drives the branding of the insurance companies and affiliated asset management companies. He built a direct-to-consumer channel for Nassau Financial Group. In addition, he launched Nassau Re/Imagine, an Insurtech-focused incubator based in Hartford. Prior to his role at Nassau Financial Group, he worked at Fidelity & Guaranty Life, MetLife in a variety of roles in strategy, marketing, operations, technology, sales, and compliance. He earned his A.B. from Princeton University and his J.D. from Cornell Law School.

Here is what to expect on this week’s show:

The intersection of disciplines in the retirement planning space.

A generational look at investments and ROIs.

Smart claiming decisions when factoring social security into your retirement plan.

Learning about retirement savings early and getting smart about the process; or, finding someone to help you sooner than you think.

The future of public policy on retirement planning.

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As inflation hits 40-year high of 8.6%, experts look ahead

July 25, 2022 2022, Media, Paul Tyler No comments

By Doug Bailey

The US said Friday the Consumer Price Index, the measure of the average change over time in prices paid by urban consumers for a market basket of goods and services, rose to 8.6%, a level not seen since Ronald Regan was president and Michael Jackson was singing “Billie Jean.”

The CPI ballooned to 8.6% from a year ago, showing that price pressures have become ingrained in the economy and might be for some time. The inflation rate was up a whole percentage point from a month ago, an amount that well exceeded estimates and sent the stock markets spiraling. The core CPI, which takes out the more volatile food and energy components, rose just 0.6% from May but was nevertheless up 6% from a year ago, which also outpaced expectations.

Energy, food, housing costs cited

Energy prices, particularly record-breaking gas costs, as well as food and housing expenses were the main culprits, leading most economists to believe the Federal Reserve will move even more aggressively to try and tame the trend. Some say the results portend a looming recession, something that also happened 40 years ago when the inflation rate was this high.

“I do still think it’s reasonable to say that the base effects of inflation are near the peak,” said Eric Merlis, co-head of global markets at Citizens Bank. “Now, whether it’s June, July, or August, I can’t tell you. But if I’m trying to pick up the big, broader picture, three months won’t change the trajectory of a [Fed] policy.”

Fed rate increase possible next week

The Federal Open Market Committee (FOMC) has already indicated it may raise rates another half-point when it meets next week. The Fed is also plans to update its Summary of Economic Projections, which will show where policymakers see inflation, unemployment, growth and borrowing costs heading over the next two years. Another half-point rise could come next month and after that is anybody’s guessed.

“It’s possible we’ll see a more aggressive move in the September meeting, but it’s hard to tell right now,” he said.

Merlis tends to look closely at an economic factor called “owners’ equivalent rent,” (OER) which measures how much money a property owner would have to pay in rent to be equivalent to their cost of ownership. With home prices appreciating year after year, it applied upward pressure on prices. He believes it may begin to subside.

Home prices may be bellwether

“I would look and see if home price acceleration slows down in the coming months,” Merlis said. “Then you would most likely see other components slow down, as it would have a downward pressure on prices.”

Still, energy prices are spiraling, and those costs also feed through to the prices of all goods and services, he said.

“Something I like to point out to clients is that inflation, from some perspectives, is good,” said Andrew Gold, a financial advisor and educator who helps run investment strategy for Prestige Wealth Management, in Dallas. “It means we have a growing economy, increasing wages, and good access to everything we need. That said, when it increases at a rate faster than wages it does have an increased negative effect especially on the lower and middle class who pay the brunt of it, which is why it is a major concern right now.”

Until we see a relaxation in housing, food, and energy prices, few consumers would agree inflation is as good thing.

“There’s little respite from four-decade high inflation until energy and food costs simmer down and excess demand pressures abate in response to tighter monetary policy,” said Sal Guatieri, senior economist with BMO Capital Markets.

Facing ‘big structural issues’

“Unfortunately, the ugly inflation won’t pass over us like a summer storm. We’re facing some big structural issues that may take time to fix,” said Paul Tyler, CMO at Nassau Financial Group, an insurance company headquartered in Hartford, Conn.

“First, understand that it’s a global, not just an American issue,” Tyler said. “Central banks around the world kept businesses working during COVID by pumping enormous amounts of cash in the economy. The banks now need to slowly take it out by cautiously raising interest rates before inflation runs out of control. This hasn’t been easy task, so far.”

“Second, we benefitted from deflationary trends because China produced more goods at lower prices for us each year,” he said. “That engine is now grinding to a halt.”

“Finally, the war in Ukraine not only is pushing fuel prices higher, but also adding even more hidden costs to our fuel bills,” said Tyler.

“To get inflation under control, we need the war to end, U.S. oil producers to put our wells back into production, and the interest rate hikes to engineer a soft landing for our economy,” he said.

Doug Bailey is a journalist and freelance writer who lives outside of Boston. He can be reached at doug.bailey@innfeedback.com.

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Social Security and Retirement: 7 Things Everyone Should Know

July 25, 2022 2022, Media, Paul Tyler No comments

By Gabrielle Olya

Given that a recent GOBankingRates survey found that 23% of Americans have nothing saved for retirement, it’s clear that many will be relying on Social Security to fund their golden years. And even if you do have retirement savings, you’ll want to be strategic about taking your benefits in a way that’s optimal for you.

See: Ways You Can Lose Your Social Security Benefits
Important: 10 Reasons You Should Claim Social Security Early

To help you best understand Social Security and clear up any misconceptions about the benefits system, GOBankingRates spoke with financial experts and asked them what they want everyone to know about Social Security. Here’s what they said.

You Shouldn’t Rely on Social Security To Fund Your Whole Retirement

If you’re expecting Social Security to fully fund your retirement, you could be in for a rude awakening. The average monthly benefit is $1,542.22 as of June 2022.

“Social Security today only covers a portion of the average American’s expected income needs in retirement,” said Henry Yoshida, CFP and CEO of Rocket Dollar, an investment platform that allows individual investors to use tax-advantaged funds for alternative investing.

If you’re in that 23% of Americans who have nothing saved, start saving ASAP so that you’ll be in better financial standing when you reach retirement age.

Take Our Poll: Do You Think You Will Be Able To Retire at Age 65?

Delaying Taking Your Benefits Can Pay Off

You can start to collect Social Security benefits at age 62, but it may pay off for you to wait.

“If you are able to delay taking Social Security after eligibility, you can significantly increase the income [compared to] that minimum amount at the earliest possible access date,” Yoshida said. “For example, if you take Social Security at 62 and your income is $2,364, if you can wait to access Social Security until age 70, the income is $4,194.”

However, Waiting Until Age 70 Isn’t Always the Best Option

It’s true that if you delay taking Social Security until age 70, the amount you receive will be larger than if you start receiving your benefits before, but this doesn’t mean this is always the best option.

“You need to evaluate how that decision impacts your asset balances over time,” said Emily Casey Rassam, senior financial planner at Archer Investment Management. “If you look at the complete picture, which includes a projection of your investment portfolio balance over time, it may make more sense for you to take Social Security earlier. Often, if you delay Social Security until age 70, you are drawing down assets significantly, and that can hurt your long-term asset trajectory. Like all financial decisions, a comprehensive financial plan can tell the whole story and help you make decisions with all of the relevant data organized.”

65 Isn’t the Full Retirement Age for Everyone

When deciding when to collect Social Security, it’s important to understand what you’ll receive at what age.

“Age 62 is the earliest you can take benefits. For every year an individual delays taking benefits beyond their full retirement age — which varies depending on when you were born — through age 70, the annual benefit increases by 8%,” said Richard Freeman, senior director and wealth advisor at Round Table Wealth Management. “Conversely, for every year an individual takes benefits earlier than their full retirement age, their annual benefit is decreased 8%.”

Freeman said that his clients often assume their full retirement age is 65, but this is not always the case. If you were born in 1943 or later, your full retirement age ranges from 66 to 67.

Find Out: Understanding Social Security Retirement Age and Why It Matters

Your Benefits Are Calculated Based on Your 35 Highest-Earning Years

It’s important to understand how the Social Security Administration calculates your benefit amount.

“The primary insurance amount — or amount you get based on your own record — is based on the worker’s highest 35 years of earnings,” said Herman “Tommy” Thompson, Jr., a certified financial planner with Innovative Financial Group in Atlanta. “Most people think it’s based on your last five years. I’ve been talking about Social Security for 18 years and every time I say this, someone is surprised!”

Your Spouse (or Former Spouse) Can Impact Your Benefit Amount

Thompson said it’s important to understand how benefits are calculated when you are the surviving spouse.

“When a spouse dies, the higher Social Security amount remains for the [surviving] spouse, assuming they were married for at least nine months,” he said. “Not half. Not both. The higher remains. Widows and widowers can claim as early as age 60.”

And if you are divorced, you may be able to claim your ex-spouse’s benefits.

“A divorcee can still claim on an ex-spouse’s record if: (1) The individual is at least 62, (2) they were married for at least 10 years, (3) the individual is currently unmarried and (4) the ex-spouse is receiving a benefit or has been divorced for at least two years,” Thompson said.

Social Security (Probably) Won’t Run Out

You’ve likely seen headlines about Social Security running out in 2035 — but this is a worst-case scenario and not something that should cause you to panic. However, you may need to adjust your retirement plans depending on how the gap in funding will be bridged.

“The death of Social Security has been greatly exaggerated,” said Paul Tyler of Nassau Financial Group in Hartford, Connecticut. “If Congress doesn’t add additional funds to the trust, payroll taxes on current workers will continue to support the program. However, the taxes would not fund 100% of the expected benefits. The gap could be closed by imposing means testing, deferring full retirement ages beyond 67 or increasing taxes on benefits. Any of these modifications would require many people to adjust their retirement plans.”

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Episode 157: Let the Guaranty Fund Genie Out of the Bottle With Harry Stout and Bruce Saul

July 21, 2022 2022, Bruce Saul, Harry Stout, Podcast, Retirement No comments

This episode is for producers only. One of the biggest pain points in explaining annuities is describing the nature of the product guarantees. Most state laws prohibit agents or carriers from proactively discussing state guarantee associations with clients during the sales process. However, in an age of Google and best interest standards, does this rule still make sense. Today we have two guests who recently wrote a story for ThinkAdvisor on this exact topic.

Links mentioned on the show:

https://www.thinkadvisor.com/2022/05/16/let-the-guaranty-fund-genie-out-of-the-bottle/

https://www.financialverse.com/

https://content.naic.org/sites/default/files/inline-files/MDL-520.pdf

https://www.nolhga.com/

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Watch

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Episode Transcript

1
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[paul_tyler]: hey this is paul tyler and welcome
to another

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[ramsey_d_smith]: m

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[paul_tyler]: episode of that annuity show ramsey how
are you

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[ramsey_d_smith]: all good

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00:00:08,580 –> 00:00:09,041
[paul_tyler]: hey good this

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[harry_n_stout]: okay

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00:00:09,121 –> 00:00:13,589
[paul_tyler]: is the first episode after we had
a really cool event in

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[harry_n_stout]: ah

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[paul_tyler]: heart for talking about the future of

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[ramsey_d_smith]: yah

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[paul_tyler]: retirements products

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[ramsey_d_smith]: yah

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[paul_tyler]: planning and advisors we called it the

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[ramsey_d_smith]: oh

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[paul_tyler]: first annual retire tech form wish you
could have been there

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[harry_n_stout]: yeah

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[paul_tyler]: ramsey

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[ramsey_d_smith]: yeah me too

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[paul_tyler]: oh

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[ramsey_d_smith]: i was i was out in

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[harry_n_stout]: yeah

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[ramsey_d_smith]: sunny california

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[paul_tyler]: yeah

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[ramsey_d_smith]: so i was it was i was
in a nice place but i i you

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[ramsey_d_smith]: were nice enough to to face time

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[paul_tyler]: yeah

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[harry_n_stout]: yeah

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[ramsey_d_smith]: brief so i can say hello to
you know all my friends

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[paul_tyler]: yeah

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[ramsey_d_smith]: there

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[harry_n_stout]: ah

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[ramsey_d_smith]: so

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[paul_tyler]: yeah

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[harry_n_stout]: yeah

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[ramsey_d_smith]: looking forward to the next one

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[paul_tyler]: yeah it it was it was a
great discussion we’re just

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[harry_n_stout]: yeah

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[paul_tyler]: literally cutting through the

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[harry_n_stout]: yeah

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[paul_tyler]: recordings we did on you know we
did stream it and we’ll cut the recordings

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[harry_n_stout]: yeah

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[paul_tyler]: up and i think ramsey probably makes
sense to

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[ramsey_d_smith]: oh

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[paul_tyler]: wrap some of these up as episodes
maybe

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[ramsey_d_smith]: yeah

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[paul_tyler]: there’ll

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[harry_n_stout]: yeah

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[paul_tyler]: be special episodes and we’ll push them

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[harry_n_stout]: oh

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[ramsey_d_smith]: m

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[paul_tyler]: out to people so they can you
know hear hear

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[ramsey_d_smith]: oh

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[paul_tyler]: parts that we’re not

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[ramsey_d_smith]: yeah

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[paul_tyler]: now the really

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[harry_n_stout]: yeah

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[paul_tyler]: cool part

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[ramsey_d_smith]: oh

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[paul_tyler]: was we had maybe eighty five people
there in person

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[bruce_h__saul]: just

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[paul_tyler]: in hartford connecticut this was not

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[ramsey_d_smith]: m

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[paul_tyler]: los vegas it was in new york

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[ramsey_d_smith]: yeah

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[paul_tyler]: city was hartford connecticut i like hartford
but it wasn’t this was this may have

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[paul_tyler]: been on some people’s bucket

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[harry_n_stout]: oh

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[paul_tyler]: list but

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[ramsey_d_smith]: m

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[paul_tyler]: laura had people

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[ramsey_d_smith]: m

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[paul_tyler]: raise

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[harry_n_stout]: oh

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[paul_tyler]: their

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[ramsey_d_smith]: oh

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[paul_tyler]: hand for everybody had

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[harry_n_stout]: oh

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[paul_tyler]: been on one of our shows

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[ramsey_d_smith]: yah

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[paul_tyler]: and i like half the room

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[ramsey_d_smith]: oh

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[paul_tyler]: had been on him i mean i
think we’ve really created an interesting community

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[harry_n_stout]: oh

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[paul_tyler]: here

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[ramsey_d_smith]: absolutely

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[paul_tyler]: so

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[ramsey_d_smith]: absolutely

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[paul_tyler]: so today

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[harry_n_stout]: ye

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[paul_tyler]: we’ve got some great two great guests
okay

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[ramsey_d_smith]: m

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[harry_n_stout]: ah

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[paul_tyler]: one of them has

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[ramsey_d_smith]: ye

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[paul_tyler]: been on the show before been a
great friend

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[ramsey_d_smith]: m

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[paul_tyler]: and you know

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[ramsey_d_smith]: oh

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[paul_tyler]: we’ve personally cross

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[ramsey_d_smith]: oh

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[paul_tyler]: paths with him

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[harry_n_stout]: oh

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[paul_tyler]: many

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[ramsey_d_smith]: yeah

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[paul_tyler]: times

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[harry_n_stout]: yeah

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[ramsey_d_smith]: ah

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[paul_tyler]: um

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[ramsey_d_smith]: oh

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[paul_tyler]: put a big warning warning label

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[ramsey_d_smith]: ah

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[paul_tyler]: on this episode

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[ramsey_d_smith]: ah

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[paul_tyler]: okay if your

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[harry_n_stout]: yeah

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[paul_tyler]: consumer stop

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[harry_n_stout]: yea

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[paul_tyler]: episode i’ll keep our compliance people happy

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[harry_n_stout]: ah

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[paul_tyler]: were really intending this discussion to be
for producers use only

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[harry_n_stout]: yeah

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[paul_tyler]: however

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[ramsey_d_smith]: ye

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[paul_tyler]: right

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[harry_n_stout]: yeah

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[paul_tyler]: we’ll cross into some some issues that
are probably important for consumers if they wanted

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[paul_tyler]: to know but i’ll just leave it
at that

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[harry_n_stout]: oh

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[paul_tyler]: and if you saw it this thing
marked

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[ramsey_d_smith]: oh

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[paul_tyler]: as explicit that’s why

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[ramsey_d_smith]: yeah

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[harry_n_stout]: oh

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[paul_tyler]: a dangerous

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[harry_n_stout]: ye

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[paul_tyler]: episode

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[ramsey_d_smith]: my

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[paul_tyler]: so

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[bruce_h__saul]: oh

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[paul_tyler]: i’d like to welcome to tuge terrific
individuals

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[harry_n_stout]: yes

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[paul_tyler]: okay and

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[harry_n_stout]: yeah

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[paul_tyler]: first of all m harry stout

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[ramsey_d_smith]: oh

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[paul_tyler]: who almost doesn’t eat an introduct

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[ramsey_d_smith]: oh

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[paul_tyler]: and if you’ve been in the the
independent insurance space harry is an industry

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[ramsey_d_smith]: ah

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[paul_tyler]: veteran with

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[ramsey_d_smith]: m

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[paul_tyler]: over twenty five years of experience in
the u s and abroad and his

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[ramsey_d_smith]: my

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[paul_tyler]: colleague and hopefully friend

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[ramsey_d_smith]: m

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[paul_tyler]: bruce sal

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[bruce_h__saul]: we’re friends

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[paul_tyler]: who your friends who is an attorney

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[bruce_h__saul]: yeah

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[paul_tyler]: with significant

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[ramsey_d_smith]: oh

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[paul_tyler]: industry

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[harry_n_stout]: as

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[paul_tyler]: and business experience in our sex or

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[ramsey_d_smith]: yeah

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[bruce_h__saul]: i

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[paul_tyler]: he’s played some leading roles both in

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[harry_n_stout]: what

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[paul_tyler]: private practice and in legal departments at

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[ramsey_d_smith]: m

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[harry_n_stout]: ah

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[paul_tyler]: insurance cares so

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[bruce_h__saul]: yeah

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[paul_tyler]: welcome harry and bruce

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[ramsey_d_smith]: m

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[bruce_h__saul]: thank

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[harry_n_stout]: glad

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[bruce_h__saul]: you

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[harry_n_stout]: to be here thank you paul

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[paul_tyler]: yeah

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[ramsey_d_smith]: oh

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[paul_tyler]: harry

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[ramsey_d_smith]: oh

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[paul_tyler]: anything you’d want to add in terms
of what else you’ve done i mean i’d

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[paul_tyler]: say that

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[bruce_h__saul]: yeah

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[paul_tyler]: introduction doesn’t do you justice

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[harry_n_stout]: yeah

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[paul_tyler]: you’re an

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[bruce_h__saul]: yeah

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[paul_tyler]: author or speaker

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[bruce_h__saul]: a

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[paul_tyler]: you’ve led companies what else have we

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[harry_n_stout]: yeah

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[paul_tyler]: missed here

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[ramsey_d_smith]: yeah

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[paul_tyler]: m

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[harry_n_stout]: i think

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[ramsey_d_smith]: oh

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[harry_n_stout]: the key for today paul is that
i have been looking at industry pain points

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[ramsey_d_smith]: ah

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[harry_n_stout]: for consumers

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[bruce_h__saul]: oh

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[harry_n_stout]: in the annuity space and we’ll talk
more about that today but

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[ramsey_d_smith]: m

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[harry_n_stout]: i think my focus has

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[ramsey_d_smith]: oh

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[harry_n_stout]: been on consumers i’ve written a book
about today’s annuity

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[ramsey_d_smith]: oh

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[harry_n_stout]: products to help educate consumers

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[bruce_h__saul]: yeah

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[harry_n_stout]: and to improve the knowledge of what
annuity products all bound and you

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[ramsey_d_smith]: oh

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[harry_n_stout]: all have been

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[paul_tyler]: m

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[harry_n_stout]: a number of episodes on your

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[bruce_h__saul]: oh

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[harry_n_stout]: podcast about the increase of the use
of annuities at what we see in the

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[harry_n_stout]: future so my focus has been on
the consumer and how can we make it

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[harry_n_stout]: a better experience than pro as for
them

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[paul_tyler]: this a great set

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[harry_n_stout]: oh

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[paul_tyler]: up for it and bruce just tell
tell

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[ramsey_d_smith]: yah

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[paul_tyler]: people a little bit more about you
know what you’ve done and your roles you’re

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[ramsey_d_smith]: h

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[paul_tyler]: playing in the business

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[bruce_h__saul]: right

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[harry_n_stout]: ah

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[bruce_h__saul]: well paul thank

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[paul_tyler]: oh

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[bruce_h__saul]: you for

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[ramsey_d_smith]: h

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[bruce_h__saul]: the

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[ramsey_d_smith]: yeah

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[bruce_h__saul]: invitation to be on the show

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[paul_tyler]: oh

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[harry_n_stout]: ah

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[bruce_h__saul]: it’s a pleasure

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[ramsey_d_smith]: oh

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[bruce_h__saul]: you gave a great introduction the only
point i would add

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[paul_tyler]: ah

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[bruce_h__saul]: is also in my

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[harry_n_stout]: oh

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[bruce_h__saul]: career

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[harry_n_stout]: yes

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[bruce_h__saul]: as i moved

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[paul_tyler]: oh

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[bruce_h__saul]: along

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[ramsey_d_smith]: m

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[bruce_h__saul]: i had an opportunity

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[ramsey_d_smith]: yeah

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[bruce_h__saul]: to

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[paul_tyler]: yeah

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[bruce_h__saul]: be in the public sector so i

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[harry_n_stout]: so

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[ramsey_d_smith]: yeah

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[paul_tyler]: oh

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[bruce_h__saul]: served as a

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[paul_tyler]: yeah

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[bruce_h__saul]: regulatory

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[ramsey_d_smith]: a

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[bruce_h__saul]: policy annalist in the federal insurance office

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[harry_n_stout]: yeah

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[bruce_h__saul]: that’s

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[paul_tyler]: that

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[bruce_h__saul]: a federal office create under dodd frank
and it is

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[paul_tyler]: oh

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[ramsey_d_smith]: m

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[bruce_h__saul]: housed in the u s treasury department
so i was

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[ramsey_d_smith]: m

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[bruce_h__saul]: with

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[harry_n_stout]: yeah

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[bruce_h__saul]: that organization

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[ramsey_d_smith]: oh

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[bruce_h__saul]: for a number of years and concentrated

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[paul_tyler]: oh

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[bruce_h__saul]: mainly

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[ramsey_d_smith]: oh

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[bruce_h__saul]: on life insurance

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[ramsey_d_smith]: yeah yeah

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[bruce_h__saul]: and annuities the industry

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[harry_n_stout]: ye

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[bruce_h__saul]: and its

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[ramsey_d_smith]: oh

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[bruce_h__saul]: products so

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[ramsey_d_smith]: yes

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[bruce_h__saul]: m that role

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[harry_n_stout]: ah

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[bruce_h__saul]: and others i do have a lot

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[harry_n_stout]: yeah

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[bruce_h__saul]: of

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[ramsey_d_smith]: m

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[bruce_h__saul]: direct experience with fixing variable annuities and
life insurance also disability income and a fair

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[bruce_h__saul]: amount of launcher in care insurance

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[ramsey_d_smith]: yeah

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[bruce_h__saul]: and i also wanted to

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[ramsey_d_smith]: oh

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[bruce_h__saul]: add for purposes of today’s discussion for
a number

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[ramsey_d_smith]: m

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[paul_tyler]: oh

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[bruce_h__saul]: of years i was the chair of
the life and health insurance guarantee corporation of

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[bruce_h__saul]: maryland

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[paul_tyler]: oh

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[harry_n_stout]: yeah

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[bruce_h__saul]: and

307
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[ramsey_d_smith]: ye

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[bruce_h__saul]: later on i

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[paul_tyler]: oh

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[bruce_h__saul]: served

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[harry_n_stout]: yeah

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[bruce_h__saul]: on the board of the minnesota guarantee
association

313
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[paul_tyler]: okay guaranteed association so you know you
kind of know where we’re going a head

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[paul_tyler]: at this point and

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[ramsey_d_smith]: m

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[bruce_h__saul]: little bit eh

317
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[paul_tyler]: yeah

318
00:05:19,453 –> 00:05:19,656
[harry_n_stout]: yeah

319
00:05:19,759 –> 00:05:19,960
[paul_tyler]: pain

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[bruce_h__saul]: yeah

321
00:05:20,040 –> 00:05:20,280
[paul_tyler]: points

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00:05:20,534 –> 00:05:21,494
[ramsey_d_smith]: oh

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00:05:20,761 –> 00:05:21,963
[paul_tyler]: harry you know like okay

324
00:05:21,794 –> 00:05:22,018
[ramsey_d_smith]: oh

325
00:05:22,123 –> 00:05:22,244
[paul_tyler]: i’ve

326
00:05:22,882 –> 00:05:23,224
[harry_n_stout]: oh

327
00:05:22,885 –> 00:05:24,507
[paul_tyler]: i’ve been in a bunch of different
roles you

328
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[ramsey_d_smith]: m

329
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[paul_tyler]: know i’m telling you is marketing

330
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[harry_n_stout]: ah

331
00:05:26,771 –> 00:05:27,012
[paul_tyler]: roll

332
00:05:27,344 –> 00:05:28,784
[ramsey_d_smith]: yeah

333
00:05:27,713 –> 00:05:31,539
[paul_tyler]: this is this is a challenging topic
you know we talk about guarantees day and

334
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[paul_tyler]: day out and then somebody says

335
00:05:32,992 –> 00:05:33,259
[harry_n_stout]: yes

336
00:05:33,022 –> 00:05:34,184
[paul_tyler]: we’ll explain the guarantee

337
00:05:34,416 –> 00:05:35,106
[bruce_h__saul]: oh

338
00:05:34,825 –> 00:05:35,386
[paul_tyler]: to me and all of

339
00:05:35,362 –> 00:05:36,442
[harry_n_stout]: oh

340
00:05:35,426 –> 00:05:37,529
[paul_tyler]: a sudden it feels like i

341
00:05:37,552 –> 00:05:38,056
[harry_n_stout]: oh

342
00:05:37,649 –> 00:05:38,713
[paul_tyler]: move my lips and no

343
00:05:38,714 –> 00:05:38,995
[ramsey_d_smith]: oh

344
00:05:38,854 –> 00:05:39,516
[paul_tyler]: sounds are coming

345
00:05:39,516 –> 00:05:39,619
[harry_n_stout]: ah

346
00:05:39,596 –> 00:05:39,697
[paul_tyler]: out

347
00:05:40,432 –> 00:05:40,752
[harry_n_stout]: yeah

348
00:05:41,541 –> 00:05:41,661
[paul_tyler]: um

349
00:05:41,654 –> 00:05:44,880
[harry_n_stout]: well no i can see that i
mean when you look at

350
00:05:46,050 –> 00:05:46,316
[paul_tyler]: oh

351
00:05:46,562 –> 00:05:50,749
[harry_n_stout]: what we sell in the annuity business
right the key aspect of what we’re selling

352
00:05:50,809 –> 00:05:51,590
[harry_n_stout]: is guarantees

353
00:05:51,689 –> 00:05:51,709
[ramsey_d_smith]: a

354
00:05:52,692 –> 00:05:54,956
[harry_n_stout]: and then the first question that consumers

355
00:05:54,554 –> 00:05:54,896
[ramsey_d_smith]: oh

356
00:05:55,016 –> 00:05:55,156
[harry_n_stout]: have

357
00:05:55,050 –> 00:05:55,271
[paul_tyler]: oh

358
00:05:55,216 –> 00:05:57,360
[harry_n_stout]: is well who’s guaranteeing this

359
00:05:57,433 –> 00:05:57,494
[ramsey_d_smith]: ah

360
00:05:57,480 –> 00:05:57,840
[harry_n_stout]: product

361
00:05:57,584 –> 00:05:57,807
[ramsey_d_smith]: oh

362
00:05:57,880 –> 00:05:58,522
[harry_n_stout]: that i’m buying

363
00:05:59,114 –> 00:05:59,134
[ramsey_d_smith]: m

364
00:05:59,443 –> 00:06:00,405
[harry_n_stout]: and naturally

365
00:06:00,254 –> 00:06:00,535
[ramsey_d_smith]: yeah

366
00:06:00,465 –> 00:06:02,708
[harry_n_stout]: we talk about the insurance company

367
00:06:02,523 –> 00:06:02,996
[ramsey_d_smith]: me oh

368
00:06:02,789 –> 00:06:05,373
[harry_n_stout]: based the insurance company the issuing

369
00:06:05,382 –> 00:06:05,564
[ramsey_d_smith]: yes

370
00:06:05,453 –> 00:06:07,296
[harry_n_stout]: annuity company life insurance company that you’re

371
00:06:07,200 –> 00:06:07,950
[paul_tyler]: yeah

372
00:06:07,316 –> 00:06:12,304
[harry_n_stout]: buying from that’s the primary source the
financial if you will back up for the

373
00:06:12,264 –> 00:06:12,446
[paul_tyler]: back

374
00:06:12,345 –> 00:06:12,605
[harry_n_stout]: product

375
00:06:12,567 –> 00:06:12,628
[paul_tyler]: up

376
00:06:12,645 –> 00:06:15,630
[harry_n_stout]: that you’re buying many times we talk
about

377
00:06:15,644 –> 00:06:15,945
[ramsey_d_smith]: oh

378
00:06:15,790 –> 00:06:17,433
[harry_n_stout]: state regulation as being important

379
00:06:17,430 –> 00:06:18,180
[paul_tyler]: yeah

380
00:06:17,473 –> 00:06:18,174
[harry_n_stout]: we say well you know

381
00:06:18,240 –> 00:06:18,501
[paul_tyler]: oh

382
00:06:18,575 –> 00:06:19,296
[harry_n_stout]: insurance companies

383
00:06:19,118 –> 00:06:19,239
[ramsey_d_smith]: thank

384
00:06:19,376 –> 00:06:20,999
[harry_n_stout]: are regulated very rigorously

385
00:06:20,698 –> 00:06:20,940
[paul_tyler]: very

386
00:06:21,099 –> 00:06:22,982
[harry_n_stout]: on a state basis they’re solve c
is

387
00:06:22,969 –> 00:06:22,990
[ramsey_d_smith]: a

388
00:06:23,042 –> 00:06:28,812
[harry_n_stout]: looked at and that’s that’s a second
item thirdly sometimes we talk about you know

389
00:06:28,932 –> 00:06:29,533
[harry_n_stout]: all the major

390
00:06:29,431 –> 00:06:29,694
[paul_tyler]: all the

391
00:06:29,854 –> 00:06:30,996
[harry_n_stout]: annuity companies

392
00:06:30,936 –> 00:06:31,197
[bruce_h__saul]: yeah

393
00:06:31,036 –> 00:06:31,236
[harry_n_stout]: that are

394
00:06:31,193 –> 00:06:31,214
[ramsey_d_smith]: m

395
00:06:31,276 –> 00:06:31,997
[harry_n_stout]: out there have

396
00:06:32,054 –> 00:06:32,296
[ramsey_d_smith]: yeah

397
00:06:32,158 –> 00:06:33,981
[harry_n_stout]: third party financial strength writings

398
00:06:34,004 –> 00:06:34,664
[ramsey_d_smith]: yeah

399
00:06:34,562 –> 00:06:35,223
[harry_n_stout]: we can talk about

400
00:06:35,135 –> 00:06:35,256
[bruce_h__saul]: yeah

401
00:06:35,263 –> 00:06:35,663
[harry_n_stout]: that that’s

402
00:06:35,916 –> 00:06:35,998
[ramsey_d_smith]: ah

403
00:06:36,184 –> 00:06:36,805
[harry_n_stout]: we can talk about

404
00:06:36,692 –> 00:06:36,794
[ramsey_d_smith]: yah

405
00:06:36,845 –> 00:06:39,490
[harry_n_stout]: those indeed but then there’s the subject
of

406
00:06:39,541 –> 00:06:39,621
[paul_tyler]: ah

407
00:06:39,730 –> 00:06:42,615
[harry_n_stout]: guarantee funds and the existence of guarantee

408
00:06:42,563 –> 00:06:42,746
[paul_tyler]: her

409
00:06:42,715 –> 00:06:46,041
[harry_n_stout]: funds and so bruce and i wrote
an article for think adviser

410
00:06:45,818 –> 00:06:45,962
[ramsey_d_smith]: thank

411
00:06:46,121 –> 00:06:50,030
[harry_n_stout]: on letting the guarantee fund genie out
of the bottle and

412
00:06:50,130 –> 00:06:51,180
[paul_tyler]: yeah

413
00:06:51,082 –> 00:06:53,967
[harry_n_stout]: started in the work i’ve done over
the last several years

414
00:06:53,830 –> 00:06:54,032
[ramsey_d_smith]: yes

415
00:06:54,127 –> 00:06:58,214
[harry_n_stout]: i look at ways in which we’ve
brought in annuities and i mean and you

416
00:06:58,294 –> 00:07:02,421
[harry_n_stout]: all have talked about what’s happening with
the secure act we’ve got new groups of

417
00:07:02,541 –> 00:07:02,902
[harry_n_stout]: individual

418
00:07:02,594 –> 00:07:02,814
[ramsey_d_smith]: oh

419
00:07:03,142 –> 00:07:06,247
[harry_n_stout]: selling these products we got the r
i a community beginning to take

420
00:07:06,146 –> 00:07:06,166
[ramsey_d_smith]: h

421
00:07:06,307 –> 00:07:08,611
[harry_n_stout]: a look at guarantees we have defined

422
00:07:08,273 –> 00:07:08,294
[ramsey_d_smith]: h

423
00:07:08,496 –> 00:07:08,658
[bruce_h__saul]: ye

424
00:07:08,691 –> 00:07:09,352
[harry_n_stout]: contribution

425
00:07:08,924 –> 00:07:09,227
[ramsey_d_smith]: oh

426
00:07:09,452 –> 00:07:13,880
[harry_n_stout]: plans beginning offer guarantees as part of
what they do so guarantees

427
00:07:13,912 –> 00:07:14,012
[ramsey_d_smith]: ye

428
00:07:13,960 –> 00:07:16,484
[harry_n_stout]: are more and more appropriate so

429
00:07:16,703 –> 00:07:16,724
[ramsey_d_smith]: m

430
00:07:17,065 –> 00:07:19,409
[harry_n_stout]: in the industry we have something called
guarantee funds but we

431
00:07:19,457 –> 00:07:19,621
[ramsey_d_smith]: yeah

432
00:07:19,549 –> 00:07:21,112
[harry_n_stout]: really are not able to talk

433
00:07:20,993 –> 00:07:21,014
[ramsey_d_smith]: m

434
00:07:21,192 –> 00:07:22,795
[harry_n_stout]: about them we’re unable to discuss

435
00:07:22,866 –> 00:07:22,987
[ramsey_d_smith]: as

436
00:07:22,875 –> 00:07:28,604
[harry_n_stout]: them yet they are in that pecking
order of what stands behind potentially

437
00:07:28,500 –> 00:07:28,785
[paul_tyler]: oh

438
00:07:28,644 –> 00:07:35,396
[harry_n_stout]: that product if the issuing insurance company
has a financial financial issue and is unable

439
00:07:35,476 –> 00:07:35,556
[harry_n_stout]: to

440
00:07:35,654 –> 00:07:35,897
[ramsey_d_smith]: yes

441
00:07:35,696 –> 00:07:37,499
[harry_n_stout]: pay the liabilities that

442
00:07:37,657 –> 00:07:37,678
[paul_tyler]: i

443
00:07:37,860 –> 00:07:39,242
[harry_n_stout]: for the liabilities that there selling

444
00:07:39,270 –> 00:07:39,930
[paul_tyler]: yeah

445
00:07:39,763 –> 00:07:39,864
[harry_n_stout]: so

446
00:07:39,944 –> 00:07:40,185
[ramsey_d_smith]: oh

447
00:07:40,004 –> 00:07:44,694
[harry_n_stout]: the question is why what are guarantee
funds and why can’t we talk about them

448
00:07:45,126 –> 00:07:45,450
[bruce_h__saul]: oh

449
00:07:45,236 –> 00:07:45,356
[harry_n_stout]: and

450
00:07:45,349 –> 00:07:45,511
[paul_tyler]: what

451
00:07:45,536 –> 00:07:46,579
[harry_n_stout]: what are the prescriptions

452
00:07:46,094 –> 00:07:46,934
[ramsey_d_smith]: yeah

453
00:07:46,639 –> 00:07:47,100
[harry_n_stout]: against that

454
00:07:47,640 –> 00:07:50,485
[paul_tyler]: yeah well so and i tell people
this you know i

455
00:07:50,474 –> 00:07:50,618
[ramsey_d_smith]: ye

456
00:07:50,585 –> 00:07:50,925
[paul_tyler]: want you

457
00:07:50,856 –> 00:07:51,876
[bruce_h__saul]: oh

458
00:07:50,985 –> 00:07:51,787
[paul_tyler]: walk into a bank

459
00:07:52,356 –> 00:07:52,638
[bruce_h__saul]: oh

460
00:07:52,848 –> 00:07:55,773
[paul_tyler]: but before you can open the door
there’s the f d i c sticker

461
00:07:56,015 –> 00:07:56,258
[harry_n_stout]: yes

462
00:07:56,034 –> 00:07:56,535
[paul_tyler]: on the window

463
00:07:57,022 –> 00:07:57,164
[harry_n_stout]: yeah

464
00:07:57,104 –> 00:07:57,631
[ramsey_d_smith]: yeah

465
00:07:57,196 –> 00:07:57,596
[paul_tyler]: guarantee

466
00:07:57,346 –> 00:07:57,366
[bruce_h__saul]: m

467
00:07:57,656 –> 00:07:59,199
[paul_tyler]: guarantee guarantee out insurance

468
00:07:58,925 –> 00:07:59,452
[harry_n_stout]: hm

469
00:07:59,259 –> 00:08:00,321
[paul_tyler]: company it’s almost like

470
00:08:00,305 –> 00:08:00,406
[harry_n_stout]: ah

471
00:08:00,822 –> 00:08:01,884
[paul_tyler]: the reverse of don’t

472
00:08:01,822 –> 00:08:02,103
[harry_n_stout]: oh

473
00:08:01,944 –> 00:08:03,166
[paul_tyler]: ask don’t tell okay

474
00:08:03,554 –> 00:08:03,796
[ramsey_d_smith]: oh

475
00:08:03,747 –> 00:08:03,827
[paul_tyler]: if

476
00:08:03,765 –> 00:08:03,786
[bruce_h__saul]: m

477
00:08:03,907 –> 00:08:04,949
[paul_tyler]: you ask i can tell

478
00:08:05,452 –> 00:08:06,502
[harry_n_stout]: yeah

479
00:08:05,534 –> 00:08:06,344
[ramsey_d_smith]: yeah

480
00:08:06,631 –> 00:08:06,852
[paul_tyler]: right

481
00:08:06,644 –> 00:08:06,664
[ramsey_d_smith]: m

482
00:08:07,442 –> 00:08:07,663
[harry_n_stout]: yeah

483
00:08:07,553 –> 00:08:10,057
[paul_tyler]: so so why why

484
00:08:10,176 –> 00:08:10,337
[ramsey_d_smith]: yeah

485
00:08:10,418 –> 00:08:11,460
[paul_tyler]: first of all what’s the hist

486
00:08:11,594 –> 00:08:11,855
[ramsey_d_smith]: yeah

487
00:08:11,660 –> 00:08:15,227
[paul_tyler]: like why can’t we talk about these
state guarantee funds anybody i don’t i don’t

488
00:08:15,267 –> 00:08:15,808
[paul_tyler]: know the answer

489
00:08:15,836 –> 00:08:16,596
[bruce_h__saul]: yeah

490
00:08:16,942 –> 00:08:17,244
[harry_n_stout]: yeah

491
00:08:17,277 –> 00:08:22,305
[bruce_h__saul]: i can give a little bit of
color there paul really going back there are

492
00:08:22,325 –> 00:08:24,609
[bruce_h__saul]: laws on the books in every state
and the district

493
00:08:24,390 –> 00:08:24,733
[paul_tyler]: oh

494
00:08:24,649 –> 00:08:26,752
[bruce_h__saul]: of columbia and i don’t want to
get

495
00:08:27,382 –> 00:08:27,629
[harry_n_stout]: oh

496
00:08:27,814 –> 00:08:28,415
[bruce_h__saul]: you know overly

497
00:08:28,260 –> 00:08:29,490
[paul_tyler]: oh

498
00:08:28,696 –> 00:08:34,005
[bruce_h__saul]: nichol in this forum but i do
think i’d like just to explain what the

499
00:08:34,045 –> 00:08:34,686
[bruce_h__saul]: law actually

500
00:08:34,754 –> 00:08:35,039
[ramsey_d_smith]: oh

501
00:08:34,826 –> 00:08:36,669
[bruce_h__saul]: says because i think that’s kind of
at the heart

502
00:08:36,524 –> 00:08:37,244
[ramsey_d_smith]: oh

503
00:08:36,749 –> 00:08:38,833
[bruce_h__saul]: of this entire discussion so

504
00:08:38,934 –> 00:08:39,116
[harry_n_stout]: eh

505
00:08:39,013 –> 00:08:40,315
[bruce_h__saul]: every state has

506
00:08:40,334 –> 00:08:40,580
[ramsey_d_smith]: oh

507
00:08:40,435 –> 00:08:44,479
[bruce_h__saul]: a guarantee association set up to protect
policy holders as harry

508
00:08:44,333 –> 00:08:44,354
[ramsey_d_smith]: m

509
00:08:44,600 –> 00:08:44,840
[bruce_h__saul]: said

510
00:08:44,806 –> 00:08:44,949
[paul_tyler]: yeah

511
00:08:45,194 –> 00:08:45,415
[ramsey_d_smith]: oh

512
00:08:45,420 –> 00:08:45,841
[bruce_h__saul]: in the rare

513
00:08:45,652 –> 00:08:45,915
[harry_n_stout]: yes

514
00:08:45,921 –> 00:08:47,783
[bruce_h__saul]: case when an insurance company fails

515
00:08:48,614 –> 00:08:49,604
[ramsey_d_smith]: yeah

516
00:08:48,682 –> 00:08:49,582
[harry_n_stout]: yeah

517
00:08:49,104 –> 00:08:51,988
[bruce_h__saul]: um there were multiple provisions in the
law

518
00:08:52,051 –> 00:08:52,152
[paul_tyler]: oh

519
00:08:52,209 –> 00:08:55,073
[bruce_h__saul]: to accommodate this framework and this

520
00:08:55,320 –> 00:08:56,310
[paul_tyler]: oh

521
00:08:55,554 –> 00:08:58,579
[bruce_h__saul]: goal giving that protection but

522
00:08:59,040 –> 00:08:59,266
[paul_tyler]: oh

523
00:08:59,601 –> 00:09:02,005
[bruce_h__saul]: in almost every state there is also
a

524
00:09:02,293 –> 00:09:02,455
[harry_n_stout]: yeah

525
00:09:03,047 –> 00:09:07,748
[bruce_h__saul]: a prohibition on advertising when you look
at the words

526
00:09:07,544 –> 00:09:08,444
[ramsey_d_smith]: oh

527
00:09:08,409 –> 00:09:09,090
[bruce_h__saul]: it’s interesting

528
00:09:08,984 –> 00:09:09,349
[ramsey_d_smith]: oh

529
00:09:09,651 –> 00:09:11,434
[bruce_h__saul]: that there is really

530
00:09:11,363 –> 00:09:11,384
[ramsey_d_smith]: m

531
00:09:11,534 –> 00:09:12,976
[bruce_h__saul]: no wriggle room at all

532
00:09:13,014 –> 00:09:13,158
[paul_tyler]: oh

533
00:09:13,377 –> 00:09:14,018
[bruce_h__saul]: for any kind

534
00:09:13,904 –> 00:09:14,714
[ramsey_d_smith]: oh

535
00:09:14,078 –> 00:09:18,445
[bruce_h__saul]: of discretion around this subject the law
prohibits any person

536
00:09:18,382 –> 00:09:19,102
[harry_n_stout]: yeah

537
00:09:19,877 –> 00:09:20,178
[bruce_h__saul]: person

538
00:09:19,973 –> 00:09:20,176
[harry_n_stout]: eh

539
00:09:20,258 –> 00:09:25,209
[bruce_h__saul]: includes an insurance company or a producer
for making any statement

540
00:09:25,021 –> 00:09:25,950
[paul_tyler]: okay

541
00:09:26,091 –> 00:09:27,034
[bruce_h__saul]: written or oral

542
00:09:27,862 –> 00:09:28,246
[harry_n_stout]: yes

543
00:09:27,930 –> 00:09:28,174
[paul_tyler]: oh

544
00:09:27,936 –> 00:09:31,884
[bruce_h__saul]: uses the existence of the guarantee fund
for purposes of

545
00:09:32,872 –> 00:09:33,592
[harry_n_stout]: yeah

546
00:09:32,977 –> 00:09:34,062
[bruce_h__saul]: selling or inducing

547
00:09:33,974 –> 00:09:34,257
[ramsey_d_smith]: oh

548
00:09:34,123 –> 00:09:35,067
[bruce_h__saul]: the sale of a product

549
00:09:36,030 –> 00:09:37,020
[paul_tyler]: oh

550
00:09:37,376 –> 00:09:38,118
[bruce_h__saul]: if you think about that

551
00:09:38,144 –> 00:09:38,700
[paul_tyler]: yet

552
00:09:38,438 –> 00:09:39,060
[bruce_h__saul]: for a moment

553
00:09:40,222 –> 00:09:40,465
[harry_n_stout]: yeah

554
00:09:40,422 –> 00:09:40,883
[bruce_h__saul]: the way that

555
00:09:40,784 –> 00:09:41,460
[ramsey_d_smith]: ye

556
00:09:41,043 –> 00:09:42,746
[bruce_h__saul]: drafted it doesn’t

557
00:09:42,587 –> 00:09:42,731
[harry_n_stout]: ah

558
00:09:42,644 –> 00:09:42,865
[ramsey_d_smith]: oh

559
00:09:42,806 –> 00:09:45,670
[bruce_h__saul]: for example say that that a person
is

560
00:09:45,644 –> 00:09:46,514
[ramsey_d_smith]: oh

561
00:09:45,730 –> 00:09:46,512
[bruce_h__saul]: prohibited from

562
00:09:47,483 –> 00:09:47,504
[ramsey_d_smith]: m

563
00:09:48,014 –> 00:09:49,727
[bruce_h__saul]: describing guarantee

564
00:09:49,538 –> 00:09:49,659
[paul_tyler]: yeah

565
00:09:49,808 –> 00:09:51,334
[bruce_h__saul]: funds in a deceptive manner

566
00:09:52,252 –> 00:09:52,556
[harry_n_stout]: yeah

567
00:09:52,760 –> 00:09:56,040
[bruce_h__saul]: it’s stronger to the point of saying
you can’t even

568
00:09:56,002 –> 00:09:56,692
[harry_n_stout]: yeah

569
00:09:56,100 –> 00:09:58,829
[bruce_h__saul]: mention the existence of the fund yeah

570
00:09:59,356 –> 00:09:59,479
[harry_n_stout]: ah

571
00:09:59,767 –> 00:09:59,969
[bruce_h__saul]: um

572
00:10:00,224 –> 00:10:01,274
[ramsey_d_smith]: yah

573
00:10:00,675 –> 00:10:02,476
[bruce_h__saul]: m now as i indicated

574
00:10:03,202 –> 00:10:03,383
[harry_n_stout]: oh

575
00:10:04,186 –> 00:10:05,168
[bruce_h__saul]: the prohibition is on

576
00:10:05,190 –> 00:10:05,373
[paul_tyler]: oh

577
00:10:05,309 –> 00:10:05,509
[bruce_h__saul]: using

578
00:10:05,385 –> 00:10:05,549
[harry_n_stout]: yeah

579
00:10:05,549 –> 00:10:06,772
[bruce_h__saul]: the existence for purposes

580
00:10:06,772 –> 00:10:07,039
[harry_n_stout]: yeah

581
00:10:06,872 –> 00:10:07,534
[bruce_h__saul]: of sales

582
00:10:07,290 –> 00:10:07,472
[paul_tyler]: oh

583
00:10:07,454 –> 00:10:09,944
[ramsey_d_smith]: oh

584
00:10:07,694 –> 00:10:08,355
[bruce_h__saul]: or inducement

585
00:10:08,040 –> 00:10:08,263
[paul_tyler]: oh

586
00:10:08,416 –> 00:10:09,839
[bruce_h__saul]: but the practical problem here

587
00:10:09,944 –> 00:10:10,567
[ramsey_d_smith]: oh

588
00:10:10,702 –> 00:10:11,044
[harry_n_stout]: oh

589
00:10:10,821 –> 00:10:12,284
[bruce_h__saul]: these conversations are happening

590
00:10:12,584 –> 00:10:12,850
[ramsey_d_smith]: oh

591
00:10:13,006 –> 00:10:16,495
[bruce_h__saul]: when consumers asked questions it’s not a
surprise that

592
00:10:16,560 –> 00:10:16,742
[paul_tyler]: oh

593
00:10:16,615 –> 00:10:16,795
[bruce_h__saul]: there

594
00:10:16,672 –> 00:10:16,898
[harry_n_stout]: yea

595
00:10:16,876 –> 00:10:18,199
[bruce_h__saul]: is a sales

596
00:10:17,963 –> 00:10:17,984
[ramsey_d_smith]: m

597
00:10:18,239 –> 00:10:18,640
[bruce_h__saul]: process

598
00:10:18,563 –> 00:10:18,584
[paul_tyler]: a

599
00:10:19,101 –> 00:10:19,542
[bruce_h__saul]: involved

600
00:10:19,672 –> 00:10:20,272
[harry_n_stout]: yeah

601
00:10:20,836 –> 00:10:21,636
[bruce_h__saul]: it’s very difficult

602
00:10:22,312 –> 00:10:22,595
[harry_n_stout]: yeah

603
00:10:22,357 –> 00:10:23,818
[bruce_h__saul]: for the insurance company or the

604
00:10:23,732 –> 00:10:23,875
[paul_tyler]: oh

605
00:10:23,753 –> 00:10:23,774
[ramsey_d_smith]: m

606
00:10:23,878 –> 00:10:25,159
[bruce_h__saul]: producer to have any comfort

607
00:10:24,824 –> 00:10:25,126
[ramsey_d_smith]: oh

608
00:10:25,239 –> 00:10:26,140
[bruce_h__saul]: that with hindsight

609
00:10:25,811 –> 00:10:25,952
[paul_tyler]: oh

610
00:10:26,144 –> 00:10:26,489
[ramsey_d_smith]: oh

611
00:10:27,030 –> 00:10:27,234
[paul_tyler]: oh

612
00:10:27,241 –> 00:10:28,482
[bruce_h__saul]: that can’t be characterized

613
00:10:28,034 –> 00:10:28,218
[ramsey_d_smith]: ye

614
00:10:28,822 –> 00:10:30,063
[bruce_h__saul]: as a conversation

615
00:10:29,730 –> 00:10:29,811
[paul_tyler]: oh

616
00:10:29,963 –> 00:10:29,984
[ramsey_d_smith]: m

617
00:10:30,123 –> 00:10:31,404
[bruce_h__saul]: that was related to a sale

618
00:10:32,092 –> 00:10:32,496
[harry_n_stout]: yes

619
00:10:32,866 –> 00:10:32,946
[bruce_h__saul]: so

620
00:10:32,903 –> 00:10:32,924
[ramsey_d_smith]: m

621
00:10:33,106 –> 00:10:33,126
[bruce_h__saul]: i

622
00:10:33,372 –> 00:10:33,392
[paul_tyler]: i

623
00:10:33,827 –> 00:10:36,532
[bruce_h__saul]: i’ve always thought as a as a
lawyer and a compliance advisor

624
00:10:36,173 –> 00:10:36,194
[ramsey_d_smith]: m

625
00:10:36,672 –> 00:10:38,475
[bruce_h__saul]: effectively um

626
00:10:38,324 –> 00:10:39,194
[ramsey_d_smith]: oh

627
00:10:38,996 –> 00:10:41,360
[bruce_h__saul]: this stifles any discussion between

628
00:10:41,444 –> 00:10:41,464
[ramsey_d_smith]: m

629
00:10:41,664 –> 00:10:41,746
[harry_n_stout]: ah

630
00:10:41,881 –> 00:10:42,562
[bruce_h__saul]: the consumer

631
00:10:42,772 –> 00:10:43,492
[harry_n_stout]: yeah

632
00:10:42,802 –> 00:10:45,491
[bruce_h__saul]: and the company or the producer about

633
00:10:45,323 –> 00:10:45,344
[ramsey_d_smith]: m

634
00:10:45,502 –> 00:10:46,222
[harry_n_stout]: yeah

635
00:10:45,531 –> 00:10:46,841
[bruce_h__saul]: this basic protection

636
00:10:46,604 –> 00:10:46,885
[ramsey_d_smith]: oh

637
00:10:48,176 –> 00:10:48,886
[bruce_h__saul]: has the gist of it

638
00:10:50,392 –> 00:10:51,442
[harry_n_stout]: oh

639
00:10:50,434 –> 00:10:50,514
[ramsey_d_smith]: so

640
00:10:50,503 –> 00:10:50,564
[paul_tyler]: ah

641
00:10:51,055 –> 00:10:52,297
[ramsey_d_smith]: i’ve got a question about

642
00:10:52,820 –> 00:10:52,942
[bruce_h__saul]: oh

643
00:10:53,178 –> 00:10:54,540
[ramsey_d_smith]: whether or not you

644
00:10:54,472 –> 00:10:55,222
[harry_n_stout]: yeah

645
00:10:54,721 –> 00:10:55,442
[ramsey_d_smith]: think that you

646
00:10:55,476 –> 00:10:55,676
[bruce_h__saul]: yeah

647
00:10:55,482 –> 00:10:58,207
[ramsey_d_smith]: know that broadly industry participants

648
00:10:58,132 –> 00:10:58,912
[harry_n_stout]: oh

649
00:10:58,307 –> 00:10:59,288
[ramsey_d_smith]: kind of understand

650
00:10:59,722 –> 00:11:00,049
[harry_n_stout]: oh

651
00:10:59,909 –> 00:11:04,697
[ramsey_d_smith]: you know the structure of the funds
and you know there limitations so you know

652
00:11:04,672 –> 00:11:05,362
[harry_n_stout]: yeah

653
00:11:04,838 –> 00:11:08,043
[ramsey_d_smith]: paul drew a comparison to to f
d i c

654
00:11:08,346 –> 00:11:08,650
[bruce_h__saul]: oh

655
00:11:08,504 –> 00:11:09,626
[ramsey_d_smith]: but i think maybe

656
00:11:10,642 –> 00:11:10,909
[harry_n_stout]: yeah

657
00:11:10,727 –> 00:11:13,252
[ramsey_d_smith]: a good thing to do here is
to talk about you know what’s

658
00:11:13,282 –> 00:11:13,972
[harry_n_stout]: yeah

659
00:11:13,312 –> 00:11:18,356
[ramsey_d_smith]: different about each of each of the
various so the back stops and different

660
00:11:18,322 –> 00:11:18,583
[harry_n_stout]: yeah

661
00:11:18,396 –> 00:11:19,398
[ramsey_d_smith]: parts of the financial services

662
00:11:19,476 –> 00:11:20,436
[bruce_h__saul]: oh

663
00:11:19,498 –> 00:11:23,004
[ramsey_d_smith]: industry all have not just different dollar
limitations

664
00:11:22,680 –> 00:11:22,984
[paul_tyler]: oh

665
00:11:23,164 –> 00:11:25,768
[ramsey_d_smith]: but they have different sources

666
00:11:25,702 –> 00:11:25,968
[harry_n_stout]: oh

667
00:11:25,849 –> 00:11:26,530
[ramsey_d_smith]: and backing like

668
00:11:26,940 –> 00:11:27,200
[paul_tyler]: oh

669
00:11:27,151 –> 00:11:28,653
[ramsey_d_smith]: how are they how are they different
because

670
00:11:28,552 –> 00:11:28,753
[harry_n_stout]: yeah

671
00:11:29,455 –> 00:11:33,243
[ramsey_d_smith]: one of the one of the inherent
risks with the discussion is

672
00:11:33,232 –> 00:11:33,535
[harry_n_stout]: yeah

673
00:11:33,343 –> 00:11:33,584
[ramsey_d_smith]: that

674
00:11:35,152 –> 00:11:35,459
[harry_n_stout]: yeah

675
00:11:35,207 –> 00:11:37,312
[ramsey_d_smith]: either either a producer might

676
00:11:37,052 –> 00:11:37,620
[paul_tyler]: yeah

677
00:11:38,524 –> 00:11:40,707
[ramsey_d_smith]: might not know what the differences are

678
00:11:40,702 –> 00:11:40,887
[harry_n_stout]: yeah

679
00:11:40,727 –> 00:11:43,893
[ramsey_d_smith]: and even if they do they may
not convey the differences

680
00:11:44,076 –> 00:11:44,382
[bruce_h__saul]: oh

681
00:11:44,554 –> 00:11:45,816
[ramsey_d_smith]: as as well as they might

682
00:11:45,816 –> 00:11:46,020
[bruce_h__saul]: oh

683
00:11:46,497 –> 00:11:47,739
[ramsey_d_smith]: to a to a consumer so

684
00:11:48,562 –> 00:11:49,972
[harry_n_stout]: oh

685
00:11:49,101 –> 00:11:52,227
[ramsey_d_smith]: let’s start with like how are those
how are those various entities different

686
00:11:51,960 –> 00:11:52,120
[paul_tyler]: oh

687
00:11:52,508 –> 00:11:54,592
[ramsey_d_smith]: with respect to the coverage that they
provide

688
00:11:56,197 –> 00:11:59,302
[bruce_h__saul]: yeah that’s a that’s a great question
ramsey a couple

689
00:11:59,242 –> 00:11:59,932
[harry_n_stout]: yeah

690
00:11:59,362 –> 00:12:03,188
[bruce_h__saul]: of key differences thinking about consumer experience

691
00:12:02,790 –> 00:12:03,051
[paul_tyler]: oh

692
00:12:03,248 –> 00:12:03,749
[bruce_h__saul]: or producer

693
00:12:03,735 –> 00:12:03,776
[ramsey_d_smith]: hm

694
00:12:03,809 –> 00:12:05,432
[bruce_h__saul]: experience just looking at the landscape

695
00:12:06,173 –> 00:12:06,194
[ramsey_d_smith]: m

696
00:12:06,995 –> 00:12:10,280
[bruce_h__saul]: some of them known back stops are

697
00:12:10,184 –> 00:12:11,264
[ramsey_d_smith]: oh

698
00:12:11,283 –> 00:12:12,987
[bruce_h__saul]: probably the best well known is f
d i

699
00:12:13,124 –> 00:12:13,407
[ramsey_d_smith]: oh

700
00:12:13,127 –> 00:12:15,052
[bruce_h__saul]: c the federal deposit insurance corporation

701
00:12:14,924 –> 00:12:15,186
[ramsey_d_smith]: oh

702
00:12:15,132 –> 00:12:15,693
[bruce_h__saul]: for banks

703
00:12:16,582 –> 00:12:17,302
[harry_n_stout]: yeah

704
00:12:17,033 –> 00:12:17,054
[ramsey_d_smith]: m

705
00:12:17,076 –> 00:12:21,183
[bruce_h__saul]: as paul indicated it’s clearly stated in
a bank lobby that f d

706
00:12:21,194 –> 00:12:21,615
[ramsey_d_smith]: oh

707
00:12:21,303 –> 00:12:23,206
[bruce_h__saul]: i c coverage is available

708
00:12:24,022 –> 00:12:24,430
[harry_n_stout]: oh

709
00:12:24,228 –> 00:12:24,428
[bruce_h__saul]: um

710
00:12:24,390 –> 00:12:24,590
[paul_tyler]: oh

711
00:12:24,869 –> 00:12:26,952
[bruce_h__saul]: the same for cipicthe

712
00:12:26,174 –> 00:12:26,194
[ramsey_d_smith]: m

713
00:12:26,992 –> 00:12:27,233
[bruce_h__saul]: broker

714
00:12:27,134 –> 00:12:27,396
[ramsey_d_smith]: oh

715
00:12:27,313 –> 00:12:27,593
[bruce_h__saul]: dealer

716
00:12:27,600 –> 00:12:28,770
[paul_tyler]: oh

717
00:12:27,834 –> 00:12:29,437
[bruce_h__saul]: protection regime at the federal level

718
00:12:30,172 –> 00:12:30,621
[harry_n_stout]: oh

719
00:12:30,640 –> 00:12:35,488
[bruce_h__saul]: um i think some difference is with

720
00:12:35,460 –> 00:12:35,742
[paul_tyler]: oh

721
00:12:35,548 –> 00:12:37,892
[bruce_h__saul]: the state guarantee association system

722
00:12:38,452 –> 00:12:38,759
[harry_n_stout]: yeah

723
00:12:38,533 –> 00:12:38,934
[bruce_h__saul]: i probably

724
00:12:38,804 –> 00:12:38,985
[ramsey_d_smith]: yeah

725
00:12:39,412 –> 00:12:39,713
[harry_n_stout]: oh

726
00:12:39,875 –> 00:12:45,024
[bruce_h__saul]: boil it down to two that are
most important one is that the

727
00:12:44,932 –> 00:12:45,592
[harry_n_stout]: yeah

728
00:12:45,124 –> 00:12:45,385
[bruce_h__saul]: state

729
00:12:45,434 –> 00:12:46,184
[ramsey_d_smith]: yeah

730
00:12:45,986 –> 00:12:46,787
[bruce_h__saul]: guarantee funds

731
00:12:46,732 –> 00:12:46,999
[harry_n_stout]: oh

732
00:12:46,927 –> 00:12:47,789
[bruce_h__saul]: are not backed

733
00:12:48,199 –> 00:12:48,240
[paul_tyler]: ah

734
00:12:48,229 –> 00:12:48,370
[bruce_h__saul]: by

735
00:12:48,412 –> 00:12:48,659
[harry_n_stout]: yeah

736
00:12:48,530 –> 00:12:50,052
[bruce_h__saul]: any governmental entity

737
00:12:50,324 –> 00:12:52,154
[ramsey_d_smith]: yeah

738
00:12:50,722 –> 00:12:50,864
[harry_n_stout]: ye

739
00:12:51,675 –> 00:12:54,219
[bruce_h__saul]: the states and this is a great
question ramsey raised

740
00:12:54,083 –> 00:12:54,104
[ramsey_d_smith]: m

741
00:12:54,259 –> 00:12:54,981
[bruce_h__saul]: a very good point

742
00:12:54,944 –> 00:12:56,204
[ramsey_d_smith]: yeah

743
00:12:55,161 –> 00:12:56,844
[bruce_h__saul]: about the potential

744
00:12:56,812 –> 00:12:57,472
[harry_n_stout]: yeah

745
00:12:56,904 –> 00:12:57,925
[bruce_h__saul]: for misunderstanding

746
00:12:58,343 –> 00:12:58,364
[ramsey_d_smith]: m

747
00:12:58,432 –> 00:12:58,696
[harry_n_stout]: yeah

748
00:12:58,995 –> 00:13:02,910
[bruce_h__saul]: um m a lot of people are
familiar with f d i c they

749
00:13:02,932 –> 00:13:03,592
[harry_n_stout]: yeah

750
00:13:02,950 –> 00:13:04,813
[bruce_h__saul]: know that the federal government stands

751
00:13:04,702 –> 00:13:05,123
[harry_n_stout]: oh

752
00:13:04,893 –> 00:13:10,586
[bruce_h__saul]: behind but in our state system with
state regulation it’s evolved differently and

753
00:13:10,521 –> 00:13:10,642
[paul_tyler]: ah

754
00:13:10,523 –> 00:13:10,544
[ramsey_d_smith]: m

755
00:13:10,702 –> 00:13:11,362
[harry_n_stout]: yeah

756
00:13:10,787 –> 00:13:14,597
[bruce_h__saul]: there is no uh uh implied

757
00:13:14,633 –> 00:13:14,653
[paul_tyler]: i

758
00:13:14,677 –> 00:13:16,603
[bruce_h__saul]: or explicit explicit or implied

759
00:13:16,124 –> 00:13:16,409
[ramsey_d_smith]: oh

760
00:13:16,635 –> 00:13:16,655
[paul_tyler]: i

761
00:13:17,346 –> 00:13:17,847
[bruce_h__saul]: governmental

762
00:13:17,474 –> 00:13:17,494
[ramsey_d_smith]: m

763
00:13:17,482 –> 00:13:17,729
[harry_n_stout]: yeah

764
00:13:17,887 –> 00:13:25,920
[bruce_h__saul]: backstop um the liabilities of the guarantee
association to cover the obligations of the insure

765
00:13:26,141 –> 00:13:31,321
[bruce_h__saul]: a funded by industry members all of
whom must by law belong to the state

766
00:13:31,361 –> 00:13:33,705
[bruce_h__saul]: guarantee association so that’s one

767
00:13:34,792 –> 00:13:34,975
[harry_n_stout]: ye

768
00:13:34,827 –> 00:13:36,730
[bruce_h__saul]: uh no governmental backstop

769
00:13:37,522 –> 00:13:37,829
[harry_n_stout]: yeah

770
00:13:37,572 –> 00:13:37,652
[bruce_h__saul]: and

771
00:13:37,710 –> 00:13:38,031
[paul_tyler]: oh

772
00:13:37,814 –> 00:13:38,594
[ramsey_d_smith]: yeah

773
00:13:37,892 –> 00:13:40,216
[bruce_h__saul]: to the states system

774
00:13:40,053 –> 00:13:40,215
[harry_n_stout]: yes

775
00:13:40,276 –> 00:13:41,198
[bruce_h__saul]: is not pre funded

776
00:13:41,024 –> 00:13:42,164
[ramsey_d_smith]: yeah

777
00:13:42,172 –> 00:13:44,122
[harry_n_stout]: yeah

778
00:13:42,380 –> 00:13:44,683
[bruce_h__saul]: uh what happens if if a life
insurance

779
00:13:44,397 –> 00:13:44,480
[harry_n_stout]: ah

780
00:13:44,723 –> 00:13:45,665
[bruce_h__saul]: company is in trouble

781
00:13:46,050 –> 00:13:46,292
[paul_tyler]: yeah

782
00:13:46,406 –> 00:13:47,368
[bruce_h__saul]: becomes insolvent

783
00:13:46,792 –> 00:13:47,482
[harry_n_stout]: yeah

784
00:13:47,474 –> 00:13:47,575
[ramsey_d_smith]: ye

785
00:13:47,949 –> 00:13:48,089
[bruce_h__saul]: then

786
00:13:48,142 –> 00:13:49,372
[harry_n_stout]: oh

787
00:13:48,309 –> 00:13:48,510
[bruce_h__saul]: in the

788
00:13:48,556 –> 00:13:48,700
[ramsey_d_smith]: yeah

789
00:13:48,570 –> 00:13:49,672
[bruce_h__saul]: insolvency proceeding

790
00:13:49,762 –> 00:13:50,024
[harry_n_stout]: oh

791
00:13:49,932 –> 00:13:51,595
[bruce_h__saul]: after the fact the guarantee

792
00:13:51,360 –> 00:13:51,583
[paul_tyler]: oh

793
00:13:51,635 –> 00:13:55,108
[bruce_h__saul]: associate aten collects assessments from the members
to pay the obligations

794
00:13:55,752 –> 00:13:55,934
[paul_tyler]: okay

795
00:13:56,192 –> 00:13:56,272
[bruce_h__saul]: so

796
00:13:56,556 –> 00:13:56,699
[harry_n_stout]: ah

797
00:13:57,437 –> 00:13:57,617
[bruce_h__saul]: kind of

798
00:13:57,644 –> 00:13:58,281
[ramsey_d_smith]: ye

799
00:13:57,657 –> 00:13:58,099
[bruce_h__saul]: high level

800
00:13:57,911 –> 00:13:57,931
[paul_tyler]: i

801
00:13:58,179 –> 00:13:59,242
[bruce_h__saul]: those are some of the key

802
00:13:59,264 –> 00:13:59,406
[ramsey_d_smith]: ye

803
00:13:59,302 –> 00:13:59,744
[bruce_h__saul]: differences

804
00:14:00,470 –> 00:14:01,732
[paul_tyler]: and bruce tell me if

805
00:14:01,754 –> 00:14:01,855
[harry_n_stout]: ah

806
00:14:02,013 –> 00:14:02,694
[paul_tyler]: i’m wrong in this

807
00:14:02,654 –> 00:14:04,124
[ramsey_d_smith]: oh

808
00:14:02,754 –> 00:14:03,254
[paul_tyler]: because this is

809
00:14:03,202 –> 00:14:03,605
[harry_n_stout]: oh

810
00:14:03,314 –> 00:14:05,537
[paul_tyler]: a hard subject to kind of wind

811
00:14:05,354 –> 00:14:05,495
[ramsey_d_smith]: ye

812
00:14:05,578 –> 00:14:05,678
[paul_tyler]: your

813
00:14:05,632 –> 00:14:06,119
[harry_n_stout]: ye

814
00:14:05,718 –> 00:14:09,123
[paul_tyler]: way through the structure seems to be
similar

815
00:14:08,992 –> 00:14:09,218
[harry_n_stout]: yeah

816
00:14:09,183 –> 00:14:11,447
[paul_tyler]: state by state but there are some
variations for each

817
00:14:11,444 –> 00:14:11,564
[ramsey_d_smith]: oh

818
00:14:11,847 –> 00:14:14,151
[paul_tyler]: state fund correct i mean i’m not
sure if they are

819
00:14:14,145 –> 00:14:14,185
[harry_n_stout]: m

820
00:14:14,192 –> 00:14:14,272
[paul_tyler]: the

821
00:14:14,294 –> 00:14:14,902
[ramsey_d_smith]: yeah

822
00:14:14,332 –> 00:14:14,913
[paul_tyler]: material

823
00:14:14,984 –> 00:14:15,306
[ramsey_d_smith]: yeah

824
00:14:15,073 –> 00:14:17,537
[paul_tyler]: are they not significant in your

825
00:14:17,804 –> 00:14:18,406
[ramsey_d_smith]: oh

826
00:14:17,958 –> 00:14:18,179
[paul_tyler]: mind

827
00:14:19,072 –> 00:14:19,732
[harry_n_stout]: yeah

828
00:14:20,168 –> 00:14:22,772
[bruce_h__saul]: that’s another interesting and important point

829
00:14:23,452 –> 00:14:23,719
[harry_n_stout]: yeah

830
00:14:23,894 –> 00:14:25,036
[bruce_h__saul]: there are differences

831
00:14:25,222 –> 00:14:25,912
[harry_n_stout]: yeah

832
00:14:26,539 –> 00:14:26,779
[bruce_h__saul]: again

833
00:14:26,798 –> 00:14:27,390
[paul_tyler]: yeah

834
00:14:26,859 –> 00:14:30,105
[bruce_h__saul]: there’s many in the audience

835
00:14:29,901 –> 00:14:30,510
[paul_tyler]: yeah

836
00:14:30,205 –> 00:14:36,374
[bruce_h__saul]: are of course familiar with the whole
the state guarantee well the state regulatory structure

837
00:14:36,450 –> 00:14:36,891
[paul_tyler]: oh

838
00:14:37,746 –> 00:14:38,627
[bruce_h__saul]: there’s an organization

839
00:14:38,299 –> 00:14:38,401
[harry_n_stout]: it

840
00:14:38,354 –> 00:14:38,616
[ramsey_d_smith]: oh

841
00:14:38,727 –> 00:14:39,128
[bruce_h__saul]: the national

842
00:14:39,052 –> 00:14:39,712
[harry_n_stout]: yeah

843
00:14:39,148 –> 00:14:40,671
[bruce_h__saul]: association of insurance commissioners

844
00:14:40,274 –> 00:14:41,144
[ramsey_d_smith]: yeah

845
00:14:40,711 –> 00:14:44,497
[bruce_h__saul]: that adopts model laws so the way
the guarantee fund rules work

846
00:14:44,490 –> 00:14:44,751
[paul_tyler]: oh

847
00:14:44,654 –> 00:14:45,674
[ramsey_d_smith]: oh

848
00:14:44,718 –> 00:14:47,443
[bruce_h__saul]: is the nice uh the last

849
00:14:47,362 –> 00:14:48,202
[harry_n_stout]: yeah

850
00:14:47,523 –> 00:14:49,366
[bruce_h__saul]: time it ook a

851
00:14:49,933 –> 00:14:50,135
[harry_n_stout]: yeah

852
00:14:50,187 –> 00:14:55,556
[bruce_h__saul]: full kind of look at these coverage
limits was back in two thousand nine so

853
00:14:55,547 –> 00:14:55,710
[harry_n_stout]: ah

854
00:14:55,736 –> 00:14:59,603
[bruce_h__saul]: under the model there are limits established

855
00:14:59,032 –> 00:14:59,722
[harry_n_stout]: yeah

856
00:14:59,763 –> 00:14:59,943
[bruce_h__saul]: for

857
00:15:00,622 –> 00:15:01,024
[harry_n_stout]: yeah

858
00:15:01,226 –> 00:15:06,883
[bruce_h__saul]: life insurance benefits one term care disability
and annuities

859
00:15:07,470 –> 00:15:07,934
[paul_tyler]: oh

860
00:15:08,466 –> 00:15:13,634
[bruce_h__saul]: and the limits are generally three hundred
thousand dollars for life

861
00:15:13,674 –> 00:15:13,695
[paul_tyler]: i

862
00:15:13,674 –> 00:15:14,836
[bruce_h__saul]: insurance death benefits

863
00:15:14,700 –> 00:15:14,841
[paul_tyler]: ye

864
00:15:15,578 –> 00:15:16,880
[bruce_h__saul]: lantern care and disability

865
00:15:17,752 –> 00:15:18,140
[harry_n_stout]: oh

866
00:15:17,864 –> 00:15:18,105
[ramsey_d_smith]: oh

867
00:15:18,102 –> 00:15:21,548
[bruce_h__saul]: for annuities it’s two hundred and fifty
thousand dollars in present value

868
00:15:21,750 –> 00:15:22,890
[paul_tyler]: oh

869
00:15:21,862 –> 00:15:23,422
[harry_n_stout]: yeah

870
00:15:22,970 –> 00:15:24,492
[bruce_h__saul]: the states have made good

871
00:15:24,412 –> 00:15:25,102
[harry_n_stout]: yeah

872
00:15:24,573 –> 00:15:25,634
[bruce_h__saul]: progress in the

873
00:15:25,636 –> 00:15:25,657
[harry_n_stout]: a

874
00:15:25,674 –> 00:15:30,102
[bruce_h__saul]: past ten years in gradually reacting to
the model law

875
00:15:30,247 –> 00:15:30,452
[ramsey_d_smith]: oh

876
00:15:30,302 –> 00:15:30,783
[bruce_h__saul]: and actually

877
00:15:31,124 –> 00:15:31,305
[ramsey_d_smith]: oh

878
00:15:31,484 –> 00:15:35,010
[bruce_h__saul]: bringing those levels into compliance with the
law the model

879
00:15:34,814 –> 00:15:35,503
[ramsey_d_smith]: ye

880
00:15:35,050 –> 00:15:39,257
[bruce_h__saul]: law but there are still some differences
some states are higher some

881
00:15:39,202 –> 00:15:39,489
[harry_n_stout]: oh

882
00:15:39,337 –> 00:15:41,561
[bruce_h__saul]: are lower so it’s not uniform but
it’s

883
00:15:41,753 –> 00:15:41,774
[ramsey_d_smith]: m

884
00:15:42,082 –> 00:15:42,410
[harry_n_stout]: oh

885
00:15:42,542 –> 00:15:44,185
[bruce_h__saul]: it’s a bit of a patchwork but

886
00:15:44,324 –> 00:15:44,344
[ramsey_d_smith]: m

887
00:15:44,546 –> 00:15:47,191
[bruce_h__saul]: it has improved pretty significant

888
00:15:46,942 –> 00:15:47,662
[harry_n_stout]: yeah

889
00:15:47,211 –> 00:15:48,334
[bruce_h__saul]: ly in the past ten years

890
00:15:48,203 –> 00:15:48,224
[ramsey_d_smith]: m

891
00:15:48,990 –> 00:15:50,160
[paul_tyler]: oh

892
00:15:49,773 –> 00:15:53,319
[harry_n_stout]: and paul one of the things for
me looking at it as i as i

893
00:15:53,659 –> 00:15:54,801
[harry_n_stout]: looked at this from a consumer

894
00:15:54,597 –> 00:15:55,206
[bruce_h__saul]: right

895
00:15:54,881 –> 00:16:00,431
[harry_n_stout]: standpoint and many producers obviously they’re not
allowed to mention nor do they mention the

896
00:16:00,471 –> 00:16:05,036
[harry_n_stout]: existence guarantee funds as some sort of
inducement to buy the product

897
00:16:04,814 –> 00:16:06,014
[ramsey_d_smith]: yeah

898
00:16:05,737 –> 00:16:06,879
[harry_n_stout]: yet when the consumer

899
00:16:06,958 –> 00:16:07,181
[ramsey_d_smith]: yes

900
00:16:06,979 –> 00:16:11,966
[harry_n_stout]: gets delivery of their contract depending upon
the state there’s going to be

901
00:16:11,984 –> 00:16:12,265
[ramsey_d_smith]: yeah

902
00:16:12,106 –> 00:16:14,691
[harry_n_stout]: information about the guarantee fund that l
of a sudden

903
00:16:14,700 –> 00:16:14,821
[paul_tyler]: ah

904
00:16:14,771 –> 00:16:16,874
[harry_n_stout]: shows up and that’s you know that’s

905
00:16:16,989 –> 00:16:17,109
[paul_tyler]: yea

906
00:16:17,054 –> 00:16:17,495
[harry_n_stout]: added to the

907
00:16:17,520 –> 00:16:17,781
[paul_tyler]: yeah

908
00:16:17,535 –> 00:16:19,739
[harry_n_stout]: contract at that time so

909
00:16:20,033 –> 00:16:20,054
[ramsey_d_smith]: m

910
00:16:20,300 –> 00:16:23,766
[harry_n_stout]: when you when you go thou that
you say to yourself you know what is

911
00:16:24,547 –> 00:16:25,288
[harry_n_stout]: what’s happening

912
00:16:24,900 –> 00:16:25,060
[paul_tyler]: yeah

913
00:16:25,388 –> 00:16:29,255
[harry_n_stout]: here and where did this come from
and why didn’t you talk to me about

914
00:16:29,315 –> 00:16:34,225
[harry_n_stout]: this so it seems to be a
very convoluted process that

915
00:16:34,214 –> 00:16:34,234
[ramsey_d_smith]: m

916
00:16:34,426 –> 00:16:37,579
[harry_n_stout]: is not as focused on the consumer
as it could be

917
00:16:39,691 –> 00:16:41,634
[paul_tyler]: yeah now somebody who’s

918
00:16:41,513 –> 00:16:41,534
[ramsey_d_smith]: m

919
00:16:41,774 –> 00:16:43,838
[paul_tyler]: outside the industry would say oh my
gosh you know

920
00:16:44,106 –> 00:16:44,976
[bruce_h__saul]: oh

921
00:16:44,238 –> 00:16:47,704
[paul_tyler]: harry bruce this is a mess you’ve
got fifty different states with all

922
00:16:47,872 –> 00:16:48,233
[harry_n_stout]: oh

923
00:16:48,185 –> 00:16:49,527
[paul_tyler]: the but it actually

924
00:16:49,454 –> 00:16:49,756
[ramsey_d_smith]: oh

925
00:16:49,607 –> 00:16:50,809
[paul_tyler]: worked remarkably well

926
00:16:50,826 –> 00:16:51,155
[bruce_h__saul]: oh

927
00:16:51,250 –> 00:16:51,951
[paul_tyler]: like you know

928
00:16:51,854 –> 00:16:51,996
[ramsey_d_smith]: ye

929
00:16:52,051 –> 00:16:52,732
[paul_tyler]: yes there have been

930
00:16:52,882 –> 00:16:53,204
[harry_n_stout]: yeah

931
00:16:53,554 –> 00:16:57,701
[paul_tyler]: just as in the case of you
know thrifts or savings banks you know

932
00:16:57,764 –> 00:16:58,025
[ramsey_d_smith]: oh

933
00:16:58,101 –> 00:17:00,485
[paul_tyler]: going to receivership we’ve had insurance cares
but

934
00:17:01,072 –> 00:17:01,942
[harry_n_stout]: yeah

935
00:17:01,106 –> 00:17:04,452
[paul_tyler]: i think the track record is pretty
good ou know state by state right am

936
00:17:04,532 –> 00:17:05,394
[paul_tyler]: i am i wrong

937
00:17:05,782 –> 00:17:06,532
[harry_n_stout]: yeah

938
00:17:06,055 –> 00:17:07,678
[paul_tyler]: i think its function well

939
00:17:09,143 –> 00:17:09,244
[harry_n_stout]: eh

940
00:17:10,527 –> 00:17:10,567
[bruce_h__saul]: i

941
00:17:10,544 –> 00:17:10,867
[ramsey_d_smith]: oh

942
00:17:10,647 –> 00:17:11,287
[bruce_h__saul]: agree with that

943
00:17:11,594 –> 00:17:11,895
[ramsey_d_smith]: oh

944
00:17:12,008 –> 00:17:13,169
[bruce_h__saul]: there are different schools of thought

945
00:17:13,170 –> 00:17:13,492
[paul_tyler]: oh

946
00:17:13,469 –> 00:17:14,971
[bruce_h__saul]: paul that’s a factual question but

947
00:17:15,074 –> 00:17:16,004
[ramsey_d_smith]: yeah

948
00:17:15,231 –> 00:17:15,471
[bruce_h__saul]: you know

949
00:17:16,151 –> 00:17:16,372
[paul_tyler]: yes

950
00:17:16,613 –> 00:17:16,634
[ramsey_d_smith]: m

951
00:17:16,692 –> 00:17:17,893
[bruce_h__saul]: as happens there are

952
00:17:18,060 –> 00:17:18,990
[paul_tyler]: oh

953
00:17:18,234 –> 00:17:24,342
[bruce_h__saul]: different views i will tell you that
there have been some federal government studies and

954
00:17:24,402 –> 00:17:26,045
[bruce_h__saul]: reports and some private

955
00:17:25,874 –> 00:17:26,116
[ramsey_d_smith]: yeah

956
00:17:26,105 –> 00:17:28,990
[bruce_h__saul]: industry studies that have been critical

957
00:17:29,788 –> 00:17:29,890
[harry_n_stout]: ah

958
00:17:29,880 –> 00:17:30,141
[paul_tyler]: oh

959
00:17:30,072 –> 00:17:30,973
[bruce_h__saul]: and as usually

960
00:17:31,004 –> 00:17:31,246
[ramsey_d_smith]: oh

961
00:17:31,033 –> 00:17:31,875
[bruce_h__saul]: these these types

962
00:17:31,882 –> 00:17:32,662
[harry_n_stout]: yeah

963
00:17:31,955 –> 00:17:33,998
[bruce_h__saul]: of report uh generate

964
00:17:33,960 –> 00:17:34,141
[paul_tyler]: oh

965
00:17:34,046 –> 00:17:34,128
[harry_n_stout]: ah

966
00:17:34,259 –> 00:17:37,043
[bruce_h__saul]: after a well known insolvency occurs

967
00:17:38,032 –> 00:17:38,436
[harry_n_stout]: yeah

968
00:17:38,712 –> 00:17:38,732
[paul_tyler]: h

969
00:17:39,157 –> 00:17:41,781
[bruce_h__saul]: some criticisms include concerned that the system

970
00:17:41,834 –> 00:17:42,674
[ramsey_d_smith]: oh

971
00:17:42,543 –> 00:17:43,444
[bruce_h__saul]: may not be adequately

972
00:17:43,110 –> 00:17:43,333
[paul_tyler]: yes

973
00:17:43,524 –> 00:17:46,069
[bruce_h__saul]: funded if there was a major or
series

974
00:17:45,653 –> 00:17:45,674
[ramsey_d_smith]: m

975
00:17:46,269 –> 00:17:49,474
[bruce_h__saul]: of insolvancies kind of a financial panic
type

976
00:17:49,650 –> 00:17:49,670
[paul_tyler]: m

977
00:17:49,995 –> 00:17:50,456
[bruce_h__saul]: environ and

978
00:17:50,932 –> 00:17:52,012
[harry_n_stout]: oh

979
00:17:51,150 –> 00:17:51,371
[paul_tyler]: oh

980
00:17:51,758 –> 00:17:55,765
[bruce_h__saul]: uh my personal opinion is that the
system has functioned fairly well

981
00:17:55,514 –> 00:17:55,777
[ramsey_d_smith]: oh

982
00:17:55,642 –> 00:17:56,302
[harry_n_stout]: yeah

983
00:17:56,346 –> 00:17:56,426
[bruce_h__saul]: in

984
00:17:56,467 –> 00:17:56,630
[ramsey_d_smith]: yes

985
00:17:56,486 –> 00:17:59,351
[bruce_h__saul]: terms of the number of insolvancies over
time

986
00:17:59,183 –> 00:18:01,034
[ramsey_d_smith]: m oh

987
00:18:00,292 –> 00:18:00,613
[harry_n_stout]: oh

988
00:18:00,513 –> 00:18:02,699
[bruce_h__saul]: uh going back about fifty years

989
00:18:03,562 –> 00:18:04,071
[harry_n_stout]: oh

990
00:18:05,131 –> 00:18:05,232
[bruce_h__saul]: so

991
00:18:06,682 –> 00:18:06,945
[harry_n_stout]: yeah

992
00:18:06,936 –> 00:18:07,656
[bruce_h__saul]: these insolvnces

993
00:18:07,451 –> 00:18:07,532
[paul_tyler]: oh

994
00:18:07,737 –> 00:18:10,019
[bruce_h__saul]: aren’t unheard of but they’re

995
00:18:09,974 –> 00:18:11,663
[ramsey_d_smith]: yeah

996
00:18:10,059 –> 00:18:10,560
[bruce_h__saul]: not common

997
00:18:10,312 –> 00:18:10,868
[harry_n_stout]: ye

998
00:18:11,441 –> 00:18:11,822
[bruce_h__saul]: you know that

999
00:18:11,784 –> 00:18:11,905
[harry_n_stout]: ah

1000
00:18:11,922 –> 00:18:13,664
[bruce_h__saul]: said there have been some significant

1001
00:18:14,114 –> 00:18:15,074
[ramsey_d_smith]: yeah

1002
00:18:15,106 –> 00:18:15,650
[bruce_h__saul]: failures

1003
00:18:15,562 –> 00:18:16,222
[harry_n_stout]: yeah

1004
00:18:16,193 –> 00:18:16,214
[ramsey_d_smith]: m

1005
00:18:16,706 –> 00:18:18,969
[bruce_h__saul]: with millions of dollars

1006
00:18:19,004 –> 00:18:19,024
[ramsey_d_smith]: m

1007
00:18:19,130 –> 00:18:21,033
[bruce_h__saul]: and and thousands of policy holders

1008
00:18:21,030 –> 00:18:21,271
[paul_tyler]: oh

1009
00:18:21,754 –> 00:18:22,836
[bruce_h__saul]: such as executive life

1010
00:18:22,853 –> 00:18:22,874
[ramsey_d_smith]: m

1011
00:18:23,437 –> 00:18:24,078
[bruce_h__saul]: of california

1012
00:18:24,000 –> 00:18:24,341
[paul_tyler]: oh

1013
00:18:24,439 –> 00:18:25,661
[bruce_h__saul]: executive life of new york

1014
00:18:25,604 –> 00:18:25,912
[ramsey_d_smith]: yeah

1015
00:18:25,672 –> 00:18:26,302
[harry_n_stout]: oh

1016
00:18:26,762 –> 00:18:26,782
[bruce_h__saul]: u

1017
00:18:26,992 –> 00:18:28,053
[harry_n_stout]: yeah oh

1018
00:18:27,924 –> 00:18:28,405
[bruce_h__saul]: consico

1019
00:18:29,181 –> 00:18:29,624
[harry_n_stout]: yeah yes

1020
00:18:29,587 –> 00:18:29,928
[bruce_h__saul]: so that’s

1021
00:18:29,971 –> 00:18:30,052
[paul_tyler]: ah

1022
00:18:30,469 –> 00:18:30,729
[bruce_h__saul]: you know

1023
00:18:30,862 –> 00:18:31,912
[harry_n_stout]: yeah

1024
00:18:31,871 –> 00:18:35,397
[bruce_h__saul]: like i said different views on the
track record but i don’t think that there’s

1025
00:18:35,477 –> 00:18:35,817
[bruce_h__saul]: a u

1026
00:18:36,173 –> 00:18:36,194
[ramsey_d_smith]: m

1027
00:18:36,479 –> 00:18:39,183
[bruce_h__saul]: i think it’s a fair statement that
in terms of protecting

1028
00:18:38,985 –> 00:18:39,025
[ramsey_d_smith]: m

1029
00:18:39,173 –> 00:18:39,335
[harry_n_stout]: yeah

1030
00:18:39,363 –> 00:18:40,405
[bruce_h__saul]: and providing the support

1031
00:18:40,612 –> 00:18:41,107
[harry_n_stout]: ye

1032
00:18:40,727 –> 00:18:41,292
[bruce_h__saul]: them has worked

1033
00:18:41,414 –> 00:18:41,784
[ramsey_d_smith]: oh

1034
00:18:41,434 –> 00:18:42,060
[bruce_h__saul]: reasonably well

1035
00:18:42,722 –> 00:18:44,206
[paul_tyler]: yeah and i think even those those

1036
00:18:44,302 –> 00:18:44,507
[harry_n_stout]: oh

1037
00:18:44,306 –> 00:18:45,569
[paul_tyler]: those companies you mentioned

1038
00:18:45,373 –> 00:18:45,494
[harry_n_stout]: ah

1039
00:18:45,830 –> 00:18:46,792
[paul_tyler]: you know knowing

1040
00:18:46,686 –> 00:18:46,788
[harry_n_stout]: ah

1041
00:18:46,853 –> 00:18:46,953
[paul_tyler]: what

1042
00:18:46,926 –> 00:18:47,250
[bruce_h__saul]: oh

1043
00:18:47,013 –> 00:18:48,737
[paul_tyler]: i know about them which is not
you know

1044
00:18:50,002 –> 00:18:50,722
[harry_n_stout]: yeah

1045
00:18:50,110 –> 00:18:51,312
[paul_tyler]: what i’ve read in what i’ve seen
or

1046
00:18:51,284 –> 00:18:52,394
[ramsey_d_smith]: yeah

1047
00:18:51,456 –> 00:18:51,697
[bruce_h__saul]: yeah

1048
00:18:51,593 –> 00:18:51,833
[paul_tyler]: heard

1049
00:18:51,885 –> 00:18:52,087
[harry_n_stout]: yeah

1050
00:18:51,913 –> 00:18:52,274
[paul_tyler]: i i

1051
00:18:52,394 –> 00:18:52,675
[ramsey_d_smith]: yeah

1052
00:18:53,356 –> 00:18:53,796
[paul_tyler]: i’m not sure

1053
00:18:53,834 –> 00:18:54,015
[bruce_h__saul]: yeah

1054
00:18:54,157 –> 00:18:56,321
[paul_tyler]: not talking about i’m not

1055
00:18:56,243 –> 00:18:56,264
[ramsey_d_smith]: m

1056
00:18:56,421 –> 00:18:58,765
[paul_tyler]: sure that if they talked about the
guarantees

1057
00:18:58,364 –> 00:18:58,670
[ramsey_d_smith]: oh

1058
00:18:59,205 –> 00:19:00,427
[paul_tyler]: association that would have had any

1059
00:19:00,314 –> 00:19:00,516
[ramsey_d_smith]: ye

1060
00:19:00,928 –> 00:19:01,289
[paul_tyler]: impact

1061
00:19:01,312 –> 00:19:01,920
[harry_n_stout]: ye

1062
00:19:01,409 –> 00:19:05,336
[paul_tyler]: on you know the directory of those
companies i mean

1063
00:19:05,362 –> 00:19:07,012
[harry_n_stout]: yeah

1064
00:19:05,396 –> 00:19:07,139
[paul_tyler]: there a policy is there don’t

1065
00:19:08,782 –> 00:19:09,291
[harry_n_stout]: oh

1066
00:19:08,922 –> 00:19:11,045
[paul_tyler]: i mean is there ramsey can you
think of a good policy

1067
00:19:10,672 –> 00:19:10,976
[harry_n_stout]: oh

1068
00:19:11,145 –> 00:19:14,191
[paul_tyler]: or harry or a bruce is there
good policy reason to keep

1069
00:19:14,768 –> 00:19:14,870
[ramsey_d_smith]: ah

1070
00:19:15,213 –> 00:19:15,394
[paul_tyler]: this

1071
00:19:16,762 –> 00:19:17,572
[harry_n_stout]: yeah

1072
00:19:16,898 –> 00:19:17,940
[paul_tyler]: you know this thing not

1073
00:19:18,224 –> 00:19:18,466
[ramsey_d_smith]: oh

1074
00:19:18,822 –> 00:19:18,883
[paul_tyler]: at

1075
00:19:18,922 –> 00:19:20,272
[harry_n_stout]: yeah

1076
00:19:19,264 –> 00:19:19,845
[paul_tyler]: the forefront

1077
00:19:19,624 –> 00:19:19,725
[ramsey_d_smith]: eh

1078
00:19:19,965 –> 00:19:21,048
[paul_tyler]: of a client discussion

1079
00:19:21,273 –> 00:19:21,374
[ramsey_d_smith]: eh

1080
00:19:22,584 –> 00:19:24,208
[harry_n_stout]: i think that if you look back

1081
00:19:25,320 –> 00:19:25,442
[paul_tyler]: yeah

1082
00:19:26,032 –> 00:19:30,239
[harry_n_stout]: and this goes back and bruce you
can correct me maybe even twenty years there

1083
00:19:30,319 –> 00:19:31,180
[harry_n_stout]: was concern

1084
00:19:31,051 –> 00:19:31,275
[paul_tyler]: yes

1085
00:19:31,421 –> 00:19:31,501
[harry_n_stout]: on

1086
00:19:31,484 –> 00:19:31,764
[ramsey_d_smith]: oh

1087
00:19:31,581 –> 00:19:35,808
[harry_n_stout]: some of the on the part of
some of the more financially secure companies that

1088
00:19:35,868 –> 00:19:41,397
[harry_n_stout]: there were companies out there selling products
that weren’t financially supportable and that there was

1089
00:19:41,477 –> 00:19:47,067
[harry_n_stout]: the potential for those companies to be
in precarious financial shape and the industry was

1090
00:19:47,044 –> 00:19:47,106
[paul_tyler]: the

1091
00:19:47,087 –> 00:19:52,135
[harry_n_stout]: going to have to step in and
pay you will guarantee fund assessments to cover

1092
00:19:53,397 –> 00:19:54,439
[harry_n_stout]: for the liabilities

1093
00:19:54,434 –> 00:19:54,556
[ramsey_d_smith]: ye

1094
00:19:54,479 –> 00:19:57,564
[harry_n_stout]: that they’ve written i think over the
last twenty

1095
00:19:57,494 –> 00:19:57,774
[ramsey_d_smith]: oh

1096
00:19:57,604 –> 00:20:01,691
[harry_n_stout]: years as we’ve improved state regulation as
we’ve gone through how companies can

1097
00:20:01,754 –> 00:20:01,774
[ramsey_d_smith]: m

1098
00:20:01,771 –> 00:20:02,833
[harry_n_stout]: invest reserve

1099
00:20:02,894 –> 00:20:03,015
[ramsey_d_smith]: ye

1100
00:20:03,534 –> 00:20:04,436
[harry_n_stout]: a lot of these

1101
00:20:04,514 –> 00:20:05,564
[ramsey_d_smith]: oh

1102
00:20:04,916 –> 00:20:09,925
[harry_n_stout]: potential areas where you have outliers has
been has been reduced

1103
00:20:09,851 –> 00:20:10,034
[ramsey_d_smith]: yes

1104
00:20:10,686 –> 00:20:10,806
[harry_n_stout]: so

1105
00:20:10,920 –> 00:20:12,060
[paul_tyler]: yah

1106
00:20:11,387 –> 00:20:14,593
[harry_n_stout]: when you when you look at i
think that’s that’s a concern um

1107
00:20:14,520 –> 00:20:14,743
[paul_tyler]: yeah

1108
00:20:15,394 –> 00:20:15,875
[harry_n_stout]: just another

1109
00:20:15,778 –> 00:20:15,900
[paul_tyler]: yeah

1110
00:20:15,955 –> 00:20:20,703
[harry_n_stout]: overall factor here for me if i’m
a consumer buying a product today a financial

1111
00:20:20,333 –> 00:20:20,354
[ramsey_d_smith]: m

1112
00:20:20,743 –> 00:20:21,825
[harry_n_stout]: product i mean we

1113
00:20:22,170 –> 00:20:23,070
[paul_tyler]: yeah

1114
00:20:22,506 –> 00:20:25,030
[harry_n_stout]: or any of us we’re buying consumer
product we look for a j d

1115
00:20:25,200 –> 00:20:25,282
[bruce_h__saul]: ah

1116
00:20:25,210 –> 00:20:25,471
[harry_n_stout]: power

1117
00:20:25,364 –> 00:20:25,625
[ramsey_d_smith]: yeah

1118
00:20:25,551 –> 00:20:30,259
[harry_n_stout]: associate and writing we want to know
what the financial strength rating of the organization

1119
00:20:29,863 –> 00:20:30,044
[ramsey_d_smith]: yeah

1120
00:20:30,319 –> 00:20:30,719
[harry_n_stout]: is we want

1121
00:20:30,614 –> 00:20:31,454
[ramsey_d_smith]: my

1122
00:20:30,759 –> 00:20:31,861
[harry_n_stout]: to know what their

1123
00:20:31,844 –> 00:20:32,069
[ramsey_d_smith]: oh

1124
00:20:32,863 –> 00:20:33,344
[harry_n_stout]: what their

1125
00:20:33,906 –> 00:20:34,986
[bruce_h__saul]: oh

1126
00:20:34,165 –> 00:20:39,754
[harry_n_stout]: other financial strength and other aspects of
that product i’m buying the guarantee that i’m

1127
00:20:39,795 –> 00:20:42,118
[harry_n_stout]: purchasing so it seems a little

1128
00:20:42,006 –> 00:20:44,976
[bruce_h__saul]: yeah

1129
00:20:42,860 –> 00:20:48,148
[harry_n_stout]: a little there’s an incongruity here between
what the in a modern age what

1130
00:20:48,053 –> 00:20:48,074
[ramsey_d_smith]: m

1131
00:20:48,389 –> 00:20:48,810
[harry_n_stout]: consumer

1132
00:20:48,633 –> 00:20:48,654
[paul_tyler]: i

1133
00:20:48,890 –> 00:20:54,960
[harry_n_stout]: would want versus what is available and
what is disclosed and it just

1134
00:20:54,974 –> 00:20:56,114
[ramsey_d_smith]: yeah

1135
00:20:55,000 –> 00:20:56,562
[harry_n_stout]: seems to be a really strange

1136
00:20:56,264 –> 00:20:56,609
[ramsey_d_smith]: oh

1137
00:20:57,184 –> 00:20:58,365
[harry_n_stout]: really strange anomaly

1138
00:20:58,004 –> 00:20:58,904
[ramsey_d_smith]: yes

1139
00:20:58,486 –> 00:20:59,868
[harry_n_stout]: that goes back over

1140
00:21:00,053 –> 00:21:00,074
[ramsey_d_smith]: m

1141
00:21:00,660 –> 00:21:00,862
[paul_tyler]: ye

1142
00:21:00,729 –> 00:21:01,070
[harry_n_stout]: that’s been

1143
00:21:01,004 –> 00:21:01,250
[ramsey_d_smith]: yeah

1144
00:21:01,130 –> 00:21:04,337
[harry_n_stout]: created for a number of you it’s
because for a number of different reasons and

1145
00:21:04,397 –> 00:21:05,099
[harry_n_stout]: maybe it’s time

1146
00:21:05,027 –> 00:21:05,108
[paul_tyler]: at

1147
00:21:05,500 –> 00:21:07,264
[harry_n_stout]: to take a look at it and
streamline it and

1148
00:21:07,260 –> 00:21:07,541
[paul_tyler]: oh

1149
00:21:07,304 –> 00:21:09,449
[harry_n_stout]: make it more effective for the parties

1150
00:21:09,269 –> 00:21:09,429
[paul_tyler]: yeah

1151
00:21:09,489 –> 00:21:09,850
[harry_n_stout]: involved

1152
00:21:11,461 –> 00:21:14,766
[paul_tyler]: ramsey how many times have you done
the dance around the guarantees

1153
00:21:14,466 –> 00:21:14,589
[harry_n_stout]: ah

1154
00:21:15,087 –> 00:21:15,287
[paul_tyler]: you know

1155
00:21:16,094 –> 00:21:16,196
[harry_n_stout]: ah

1156
00:21:16,890 –> 00:21:16,970
[paul_tyler]: the

1157
00:21:16,914 –> 00:21:17,134
[ramsey_d_smith]: i don’t

1158
00:21:17,050 –> 00:21:17,451
[paul_tyler]: guarantee

1159
00:21:17,174 –> 00:21:17,595
[ramsey_d_smith]: talk about

1160
00:21:17,511 –> 00:21:17,912
[paul_tyler]: question

1161
00:21:17,635 –> 00:21:17,735
[ramsey_d_smith]: them

1162
00:21:18,513 –> 00:21:18,673
[paul_tyler]: yeah

1163
00:21:19,116 –> 00:21:20,256
[bruce_h__saul]: oh

1164
00:21:19,735 –> 00:21:20,736
[paul_tyler]: but like i’m a client

1165
00:21:20,478 –> 00:21:20,642
[bruce_h__saul]: yeah

1166
00:21:20,776 –> 00:21:23,080
[paul_tyler]: with you and i’m sure you i’ll
take share with my

1167
00:21:23,033 –> 00:21:23,215
[harry_n_stout]: yeah

1168
00:21:23,160 –> 00:21:24,663
[paul_tyler]: discussions which is well are these really

1169
00:21:24,592 –> 00:21:25,342
[harry_n_stout]: yeah

1170
00:21:24,723 –> 00:21:25,624
[paul_tyler]: backed by anybody that

1171
00:21:25,784 –> 00:21:26,474
[ramsey_d_smith]: oh

1172
00:21:26,626 –> 00:21:26,987
[paul_tyler]: how do you

1173
00:21:26,984 –> 00:21:27,251
[ramsey_d_smith]: oh

1174
00:21:28,008 –> 00:21:30,172
[paul_tyler]: how do you talk about guarantees without

1175
00:21:30,172 –> 00:21:30,982
[harry_n_stout]: yeah

1176
00:21:30,212 –> 00:21:34,119
[paul_tyler]: talking about the not leading to a
guarantee association

1177
00:21:33,833 –> 00:21:33,854
[ramsey_d_smith]: m

1178
00:21:35,104 –> 00:21:36,095
[paul_tyler]: a satisfied client

1179
00:21:36,066 –> 00:21:36,309
[bruce_h__saul]: yah

1180
00:21:38,424 –> 00:21:38,925
[ramsey_d_smith]: is that for me

1181
00:21:39,291 –> 00:21:40,781
[paul_tyler]: that’s for you oh

1182
00:21:41,629 –> 00:21:41,769
[ramsey_d_smith]: um

1183
00:21:42,798 –> 00:21:42,960
[paul_tyler]: right

1184
00:21:43,893 –> 00:21:48,621
[ramsey_d_smith]: my focus has always been on on
the on the on the companies the companies

1185
00:21:48,641 –> 00:21:50,303
[ramsey_d_smith]: themselves but i actually want to do

1186
00:21:51,129 –> 00:21:51,150
[paul_tyler]: m

1187
00:21:51,666 –> 00:21:54,611
[ramsey_d_smith]: one of the hings that i want
to sort of beshiftgarsa little bit on here

1188
00:21:54,671 –> 00:21:59,278
[ramsey_d_smith]: is just going back to the question
of why

1189
00:22:00,126 –> 00:22:01,056
[bruce_h__saul]: oh

1190
00:22:00,160 –> 00:22:00,781
[ramsey_d_smith]: you know why this

1191
00:22:00,684 –> 00:22:00,704
[harry_n_stout]: a

1192
00:22:00,841 –> 00:22:04,187
[ramsey_d_smith]: is a difficult thing to talk and
why there might be a concern you know

1193
00:22:04,287 –> 00:22:08,995
[ramsey_d_smith]: on the part of rags or others
i mean one of things i’ve always wondered

1194
00:22:08,992 –> 00:22:09,113
[harry_n_stout]: ye

1195
00:22:09,075 –> 00:22:10,858
[ramsey_d_smith]: is what does the now what does
the user

1196
00:22:10,890 –> 00:22:11,172
[paul_tyler]: oh

1197
00:22:10,938 –> 00:22:14,063
[ramsey_d_smith]: experience look like like so in the
case of

1198
00:22:14,032 –> 00:22:14,274
[harry_n_stout]: yeah

1199
00:22:14,103 –> 00:22:14,183
[ramsey_d_smith]: the

1200
00:22:14,370 –> 00:22:14,631
[paul_tyler]: oh

1201
00:22:14,504 –> 00:22:16,771
[ramsey_d_smith]: i see right if a bank is
in trouble

1202
00:22:16,950 –> 00:22:17,193
[paul_tyler]: oh

1203
00:22:16,951 –> 00:22:18,995
[ramsey_d_smith]: the bank is taken over by the
f d

1204
00:22:19,140 –> 00:22:19,381
[paul_tyler]: yes

1205
00:22:19,296 –> 00:22:20,297
[ramsey_d_smith]: c overnight like

1206
00:22:20,794 –> 00:22:20,936
[harry_n_stout]: oh

1207
00:22:20,918 –> 00:22:22,822
[ramsey_d_smith]: teams of people come in and depositors

1208
00:22:22,770 –> 00:22:23,074
[paul_tyler]: oh

1209
00:22:23,076 –> 00:22:23,916
[bruce_h__saul]: oh

1210
00:22:23,443 –> 00:22:25,125
[ramsey_d_smith]: depositors don’t know the difference like

1211
00:22:25,097 –> 00:22:25,221
[harry_n_stout]: ah

1212
00:22:25,166 –> 00:22:26,408
[ramsey_d_smith]: the next day they come in they
can

1213
00:22:26,422 –> 00:22:27,202
[harry_n_stout]: yeah

1214
00:22:26,488 –> 00:22:28,912
[ramsey_d_smith]: take money out they can do like
it’s it’s a very

1215
00:22:28,828 –> 00:22:28,950
[paul_tyler]: yeah

1216
00:22:29,012 –> 00:22:32,097
[ramsey_d_smith]: sort of seamless hind the scenes process

1217
00:22:32,692 –> 00:22:32,813
[harry_n_stout]: ye

1218
00:22:33,059 –> 00:22:35,583
[ramsey_d_smith]: and you know and and that

1219
00:22:35,526 –> 00:22:36,186
[bruce_h__saul]: yeah

1220
00:22:35,643 –> 00:22:39,109
[ramsey_d_smith]: may not be the reality of s
i p c or guarantee

1221
00:22:38,974 –> 00:22:39,055
[harry_n_stout]: ah

1222
00:22:39,209 –> 00:22:41,853
[ramsey_d_smith]: as i don’t know what the reality
is per like i’m just saying like

1223
00:22:42,165 –> 00:22:42,186
[bruce_h__saul]: m

1224
00:22:42,194 –> 00:22:42,794
[ramsey_d_smith]: like it’s

1225
00:22:42,840 –> 00:22:43,201
[paul_tyler]: oh

1226
00:22:43,155 –> 00:22:43,535
[ramsey_d_smith]: there’s not

1227
00:22:43,552 –> 00:22:44,212
[harry_n_stout]: yeah

1228
00:22:43,615 –> 00:22:45,036
[ramsey_d_smith]: just the financial

1229
00:22:45,269 –> 00:22:45,369
[paul_tyler]: ah

1230
00:22:45,697 –> 00:22:46,077
[ramsey_d_smith]: backing

1231
00:22:45,742 –> 00:22:46,462
[harry_n_stout]: yeah

1232
00:22:46,237 –> 00:22:47,358
[ramsey_d_smith]: element of it there is

1233
00:22:48,060 –> 00:22:48,323
[paul_tyler]: oh

1234
00:22:48,139 –> 00:22:48,399
[ramsey_d_smith]: there is

1235
00:22:48,472 –> 00:22:48,635
[harry_n_stout]: ye

1236
00:22:48,559 –> 00:22:50,941
[ramsey_d_smith]: user experience and timing or sort of
another

1237
00:22:50,872 –> 00:22:51,054
[harry_n_stout]: ye

1238
00:22:51,441 –> 00:22:53,223
[ramsey_d_smith]: differentiatng issue potentially

1239
00:22:53,062 –> 00:22:53,402
[harry_n_stout]: oh

1240
00:22:54,034 –> 00:22:55,175
[ramsey_d_smith]: between these various these

1241
00:22:55,086 –> 00:22:55,106
[bruce_h__saul]: m

1242
00:22:55,236 –> 00:22:58,461
[ramsey_d_smith]: various these various backing entities so you
know

1243
00:22:58,492 –> 00:22:59,212
[harry_n_stout]: yeah

1244
00:22:58,541 –> 00:23:03,630
[ramsey_d_smith]: all those things are part of the
discussion and and without sort of being able

1245
00:23:03,710 –> 00:23:05,933
[ramsey_d_smith]: to sort of articulate those differences in

1246
00:23:05,992 –> 00:23:06,424
[harry_n_stout]: ye

1247
00:23:06,074 –> 00:23:09,459
[ramsey_d_smith]: very sort of meaningful way i can
i can see i can see why there’s

1248
00:23:10,521 –> 00:23:14,338
[ramsey_d_smith]: reticence right there’s reticence to sort of
to

1249
00:23:15,742 –> 00:23:16,852
[harry_n_stout]: yeah

1250
00:23:15,781 –> 00:23:19,147
[ramsey_d_smith]: put right to to to extend you
know

1251
00:23:19,356 –> 00:23:20,106
[bruce_h__saul]: oh

1252
00:23:19,508 –> 00:23:21,812
[ramsey_d_smith]: any kind of warranty over what it
might look like without

1253
00:23:21,999 –> 00:23:22,566
[bruce_h__saul]: hm

1254
00:23:23,028 –> 00:23:23,594
[ramsey_d_smith]: actually knowing

1255
00:23:24,796 –> 00:23:25,185
[harry_n_stout]: yes

1256
00:23:24,868 –> 00:23:28,474
[bruce_h__saul]: yeah ramsey i think that’s a point
very well taken in one of the public

1257
00:23:28,282 –> 00:23:29,002
[harry_n_stout]: yeah

1258
00:23:28,514 –> 00:23:29,876
[bruce_h__saul]: policy rationals harry

1259
00:23:29,894 –> 00:23:30,136
[ramsey_d_smith]: oh

1260
00:23:30,056 –> 00:23:32,681
[bruce_h__saul]: articulated very well

1261
00:23:33,480 –> 00:23:33,742
[paul_tyler]: yes

1262
00:23:33,502 –> 00:23:33,728
[harry_n_stout]: yeah

1263
00:23:33,742 –> 00:23:34,383
[bruce_h__saul]: one of the points

1264
00:23:34,105 –> 00:23:34,268
[ramsey_d_smith]: yeah

1265
00:23:34,484 –> 00:23:34,944
[bruce_h__saul]: but the other

1266
00:23:34,950 –> 00:23:35,232
[paul_tyler]: yeah

1267
00:23:35,105 –> 00:23:36,707
[bruce_h__saul]: that i’ve heard raised

1268
00:23:37,222 –> 00:23:37,942
[harry_n_stout]: yeah

1269
00:23:37,549 –> 00:23:38,090
[bruce_h__saul]: and i think it’s

1270
00:23:37,994 –> 00:23:38,214
[ramsey_d_smith]: oh

1271
00:23:38,170 –> 00:23:38,190
[bruce_h__saul]: a

1272
00:23:38,199 –> 00:23:38,220
[paul_tyler]: m

1273
00:23:38,851 –> 00:23:39,191
[bruce_h__saul]: important

1274
00:23:39,052 –> 00:23:39,315
[harry_n_stout]: yeah

1275
00:23:39,272 –> 00:23:40,914
[bruce_h__saul]: point to focus on is

1276
00:23:41,229 –> 00:23:41,250
[paul_tyler]: m

1277
00:23:42,277 –> 00:23:43,218
[bruce_h__saul]: the differences among the

1278
00:23:43,163 –> 00:23:43,304
[ramsey_d_smith]: yah

1279
00:23:43,238 –> 00:23:43,979
[bruce_h__saul]: various systems

1280
00:23:43,762 –> 00:23:44,046
[harry_n_stout]: yeah

1281
00:23:44,320 –> 00:23:44,460
[bruce_h__saul]: and

1282
00:23:45,292 –> 00:23:45,681
[harry_n_stout]: yeah

1283
00:23:45,557 –> 00:23:45,639
[ramsey_d_smith]: me

1284
00:23:45,762 –> 00:23:49,609
[bruce_h__saul]: comparing a banker get a deposit with
other products

1285
00:23:49,192 –> 00:23:50,921
[harry_n_stout]: oh oh

1286
00:23:50,771 –> 00:23:53,175
[bruce_h__saul]: it is sometimes the case that there’s
more complexity

1287
00:23:54,600 –> 00:23:55,530
[paul_tyler]: yeah

1288
00:23:54,837 –> 00:23:56,861
[bruce_h__saul]: with annuity and insurance

1289
00:23:56,534 –> 00:23:57,674
[ramsey_d_smith]: yeah

1290
00:23:56,901 –> 00:23:57,762
[bruce_h__saul]: products relatively

1291
00:23:57,480 –> 00:23:57,702
[paul_tyler]: yeah

1292
00:23:57,842 –> 00:23:58,243
[bruce_h__saul]: speaking

1293
00:23:57,914 –> 00:23:58,196
[ramsey_d_smith]: oh

1294
00:23:59,122 –> 00:23:59,992
[harry_n_stout]: yeah

1295
00:23:59,425 –> 00:24:01,931
[bruce_h__saul]: a i still however come back to

1296
00:24:01,883 –> 00:24:01,904
[ramsey_d_smith]: m

1297
00:24:03,876 –> 00:24:08,561
[bruce_h__saul]: take in case with a uh a
fixed annuity of fifty thousand dollar

1298
00:24:08,692 –> 00:24:09,352
[harry_n_stout]: yeah

1299
00:24:09,162 –> 00:24:09,883
[bruce_h__saul]: account value

1300
00:24:10,852 –> 00:24:12,052
[harry_n_stout]: oh

1301
00:24:10,883 –> 00:24:11,086
[ramsey_d_smith]: m oh

1302
00:24:11,946 –> 00:24:16,313
[bruce_h__saul]: a life insurance policy a hundred thousand
dollars whether it’s term or permanent

1303
00:24:16,080 –> 00:24:16,303
[paul_tyler]: yeah

1304
00:24:17,122 –> 00:24:18,142
[harry_n_stout]: oh

1305
00:24:17,796 –> 00:24:22,764
[bruce_h__saul]: those amounts are clearly under the state
coverage limits

1306
00:24:23,392 –> 00:24:24,472
[harry_n_stout]: oh

1307
00:24:23,906 –> 00:24:26,378
[bruce_h__saul]: and i i don’t think that those
are so complex that

1308
00:24:26,242 –> 00:24:27,022
[harry_n_stout]: yeah

1309
00:24:26,559 –> 00:24:30,717
[bruce_h__saul]: it’s difficult or straining to have a
conversation about them

1310
00:24:31,672 –> 00:24:31,979
[harry_n_stout]: yeah

1311
00:24:32,102 –> 00:24:33,136
[bruce_h__saul]: uh or

1312
00:24:33,112 –> 00:24:33,982
[harry_n_stout]: oh

1313
00:24:33,216 –> 00:24:33,557
[bruce_h__saul]: complex

1314
00:24:33,375 –> 00:24:33,455
[ramsey_d_smith]: ay

1315
00:24:33,658 –> 00:24:35,243
[bruce_h__saul]: products take a structured

1316
00:24:35,032 –> 00:24:35,501
[harry_n_stout]: oh

1317
00:24:35,303 –> 00:24:42,661
[bruce_h__saul]: settlement annuity may be a group annuity
those are more difficult to explain but those

1318
00:24:42,741 –> 00:24:44,264
[bruce_h__saul]: aren’t the sort of

1319
00:24:44,554 –> 00:24:44,635
[harry_n_stout]: ah

1320
00:24:44,825 –> 00:24:47,269
[bruce_h__saul]: bread and butter type sales and in
the business

1321
00:24:48,142 –> 00:24:48,384
[harry_n_stout]: oh

1322
00:24:48,371 –> 00:24:48,912
[bruce_h__saul]: so i acknowledge

1323
00:24:48,801 –> 00:24:48,882
[paul_tyler]: no

1324
00:24:48,992 –> 00:24:49,653
[bruce_h__saul]: the point but

1325
00:24:49,844 –> 00:24:50,064
[ramsey_d_smith]: yeah

1326
00:24:50,033 –> 00:24:51,496
[bruce_h__saul]: i don’t know i keep ming

1327
00:24:51,564 –> 00:24:51,625
[harry_n_stout]: ah

1328
00:24:51,576 –> 00:24:53,962
[bruce_h__saul]: back to the wording of the statute

1329
00:24:54,031 –> 00:24:54,052
[harry_n_stout]: m

1330
00:24:54,063 –> 00:24:54,403
[bruce_h__saul]: is so

1331
00:24:55,827 –> 00:24:55,847
[harry_n_stout]: i

1332
00:24:55,906 –> 00:24:56,447
[bruce_h__saul]: prohibitive

1333
00:24:57,022 –> 00:24:58,642
[harry_n_stout]: yeah

1334
00:24:57,448 –> 00:25:00,871
[bruce_h__saul]: that not even be able to respond
to a question is a very tough standard

1335
00:25:01,111 –> 00:25:03,013
[bruce_h__saul]: i think in today’s consumer

1336
00:25:03,804 –> 00:25:04,244
[ramsey_d_smith]: understood

1337
00:25:03,954 –> 00:25:04,634
[bruce_h__saul]: uh yeah

1338
00:25:05,170 –> 00:25:05,331
[paul_tyler]: yeah

1339
00:25:05,426 –> 00:25:10,715
[ramsey_d_smith]: so i guess my my question is
sort of if were something to happen what

1340
00:25:10,755 –> 00:25:13,219
[ramsey_d_smith]: would be the experience in the case
of f d i c like

1341
00:25:13,792 –> 00:25:14,752
[harry_n_stout]: oh

1342
00:25:13,860 –> 00:25:16,044
[ramsey_d_smith]: the next day like you just don’t
know it france

1343
00:25:16,004 –> 00:25:16,105
[harry_n_stout]: oh

1344
00:25:16,605 –> 00:25:17,627
[ramsey_d_smith]: the u s government steps

1345
00:25:17,512 –> 00:25:17,754
[harry_n_stout]: oh

1346
00:25:17,727 –> 00:25:19,790
[ramsey_d_smith]: in right what does the experience

1347
00:25:19,620 –> 00:25:20,520
[paul_tyler]: oh

1348
00:25:19,850 –> 00:25:22,875
[ramsey_d_smith]: look like i mean you ran you
said you were you had a management role

1349
00:25:22,915 –> 00:25:24,498
[ramsey_d_smith]: in two different two different funds so

1350
00:25:24,678 –> 00:25:24,698
[bruce_h__saul]: h

1351
00:25:25,239 –> 00:25:25,440
[ramsey_d_smith]: um

1352
00:25:25,365 –> 00:25:25,386
[bruce_h__saul]: m

1353
00:25:25,960 –> 00:25:26,061
[ramsey_d_smith]: like

1354
00:25:26,152 –> 00:25:26,172
[harry_n_stout]: o

1355
00:25:26,181 –> 00:25:26,682
[ramsey_d_smith]: what is the

1356
00:25:27,142 –> 00:25:27,385
[harry_n_stout]: oh

1357
00:25:27,303 –> 00:25:29,125
[ramsey_d_smith]: what is the experience of the

1358
00:25:29,064 –> 00:25:29,246
[harry_n_stout]: ah

1359
00:25:29,206 –> 00:25:31,849
[ramsey_d_smith]: person you know if somebody if

1360
00:25:31,897 –> 00:25:31,999
[harry_n_stout]: ah

1361
00:25:31,909 –> 00:25:33,732
[ramsey_d_smith]: somebody is has a policy

1362
00:25:33,502 –> 00:25:34,252
[harry_n_stout]: yeah

1363
00:25:33,792 –> 00:25:35,194
[ramsey_d_smith]: that that ultimately

1364
00:25:34,912 –> 00:25:35,076
[harry_n_stout]: ye

1365
00:25:35,274 –> 00:25:38,339
[ramsey_d_smith]: ends up being sort of backed by
the guarantee fund what is the what is

1366
00:25:38,400 –> 00:25:41,204
[ramsey_d_smith]: the experience typical experience they would have
in terms of when

1367
00:25:41,220 –> 00:25:41,441
[paul_tyler]: oh

1368
00:25:41,224 –> 00:25:42,006
[ramsey_d_smith]: they would get their money

1369
00:25:41,812 –> 00:25:43,342
[harry_n_stout]: yeah

1370
00:25:42,587 –> 00:25:47,395
[ramsey_d_smith]: to get their money back like is
it is it measured minutes hour days

1371
00:25:47,101 –> 00:25:47,736
[bruce_h__saul]: hm

1372
00:25:47,515 –> 00:25:47,775
[ramsey_d_smith]: weeks

1373
00:25:47,833 –> 00:25:47,955
[paul_tyler]: as

1374
00:25:47,896 –> 00:25:50,099
[ramsey_d_smith]: months what does that what does that
look like

1375
00:25:50,032 –> 00:25:52,312
[harry_n_stout]: oh

1376
00:25:50,119 –> 00:25:53,666
[ramsey_d_smith]: because that’s an important part of sort
of the differentiation there

1377
00:25:53,544 –> 00:25:53,564
[harry_n_stout]: m

1378
00:25:53,987 –> 00:25:54,149
[bruce_h__saul]: yeah

1379
00:25:54,082 –> 00:25:54,446
[harry_n_stout]: oh

1380
00:25:54,227 –> 00:25:56,731
[ramsey_d_smith]: and just as a matter of setting
expect now seting expectation

1381
00:25:56,452 –> 00:25:57,352
[harry_n_stout]: yeah

1382
00:25:56,791 –> 00:25:57,532
[ramsey_d_smith]: s in the right place

1383
00:25:57,806 –> 00:25:58,006
[bruce_h__saul]: right

1384
00:25:57,892 –> 00:25:58,216
[harry_n_stout]: yeah

1385
00:25:58,247 –> 00:26:00,350
[bruce_h__saul]: right yeah the experience is going to
be

1386
00:26:01,590 –> 00:26:02,340
[paul_tyler]: yeah

1387
00:26:01,642 –> 00:26:02,332
[harry_n_stout]: yeah

1388
00:26:02,534 –> 00:26:03,796
[bruce_h__saul]: along these lines and of course it

1389
00:26:03,794 –> 00:26:03,814
[ramsey_d_smith]: m

1390
00:26:03,816 –> 00:26:05,699
[bruce_h__saul]: will depend on the complexity of the
of

1391
00:26:05,723 –> 00:26:05,744
[ramsey_d_smith]: m

1392
00:26:05,779 –> 00:26:06,320
[bruce_h__saul]: the company

1393
00:26:06,224 –> 00:26:06,485
[ramsey_d_smith]: oh

1394
00:26:06,380 –> 00:26:08,403
[bruce_h__saul]: that failed in the complexity insolvency

1395
00:26:08,894 –> 00:26:09,382
[ramsey_d_smith]: oh

1396
00:26:08,932 –> 00:26:09,300
[harry_n_stout]: oh

1397
00:26:09,205 –> 00:26:10,627
[bruce_h__saul]: but there’s whole you

1398
00:26:10,634 –> 00:26:10,895
[ramsey_d_smith]: oh

1399
00:26:10,687 –> 00:26:12,190
[bruce_h__saul]: know kind of industry that’s

1400
00:26:13,004 –> 00:26:13,166
[ramsey_d_smith]: ye

1401
00:26:13,252 –> 00:26:14,093
[bruce_h__saul]: established to

1402
00:26:14,842 –> 00:26:15,532
[harry_n_stout]: yeah

1403
00:26:14,914 –> 00:26:16,737
[bruce_h__saul]: deal with these insolvancies when they happen

1404
00:26:16,560 –> 00:26:16,782
[paul_tyler]: oh

1405
00:26:17,264 –> 00:26:17,628
[ramsey_d_smith]: oh

1406
00:26:17,619 –> 00:26:23,469
[bruce_h__saul]: so the consumer will learn about the
insolvency from the company or the receiver

1407
00:26:24,232 –> 00:26:24,674
[harry_n_stout]: oh

1408
00:26:24,631 –> 00:26:25,593
[bruce_h__saul]: and there’s consternation

1409
00:26:25,540 –> 00:26:25,762
[harry_n_stout]: yeah

1410
00:26:26,154 –> 00:26:29,500
[bruce_h__saul]: uh but you know here’ll be some
communication about the plan

1411
00:26:29,483 –> 00:26:29,504
[ramsey_d_smith]: m

1412
00:26:29,600 –> 00:26:32,104
[bruce_h__saul]: and typically especially for a relatively

1413
00:26:32,384 –> 00:26:32,711
[ramsey_d_smith]: oh

1414
00:26:32,766 –> 00:26:33,707
[bruce_h__saul]: simple insolvancy

1415
00:26:33,704 –> 00:26:34,775
[ramsey_d_smith]: ye ah

1416
00:26:34,829 –> 00:26:36,692
[bruce_h__saul]: the associations arrange with

1417
00:26:36,734 –> 00:26:37,664
[ramsey_d_smith]: yeah

1418
00:26:36,752 –> 00:26:38,896
[bruce_h__saul]: no ga if it covers more than
one state

1419
00:26:38,963 –> 00:26:38,984
[ramsey_d_smith]: m

1420
00:26:38,996 –> 00:26:40,999
[bruce_h__saul]: arrange for another carrier to come in
and pick up the

1421
00:26:40,950 –> 00:26:43,800
[paul_tyler]: oh

1422
00:26:41,039 –> 00:26:41,360
[bruce_h__saul]: business

1423
00:26:41,264 –> 00:26:41,530
[ramsey_d_smith]: oh

1424
00:26:42,582 –> 00:26:42,862
[bruce_h__saul]: so there’s

1425
00:26:42,712 –> 00:26:43,257
[harry_n_stout]: oh

1426
00:26:42,882 –> 00:26:43,483
[bruce_h__saul]: going to be at least

1427
00:26:43,535 –> 00:26:43,616
[ramsey_d_smith]: ah

1428
00:26:43,564 –> 00:26:45,126
[bruce_h__saul]: the delay of plaining

1429
00:26:45,047 –> 00:26:45,210
[paul_tyler]: wait

1430
00:26:45,166 –> 00:26:50,452
[bruce_h__saul]: what’s going on and remember this is
under a state court proceeding so it’s not

1431
00:26:50,294 –> 00:26:50,314
[ramsey_d_smith]: m

1432
00:26:51,173 –> 00:26:52,114
[bruce_h__saul]: immediate turn around

1433
00:26:51,893 –> 00:26:51,914
[ramsey_d_smith]: m

1434
00:26:53,296 –> 00:26:53,536
[bruce_h__saul]: um

1435
00:26:53,513 –> 00:26:53,534
[ramsey_d_smith]: m

1436
00:26:54,157 –> 00:26:54,538
[bruce_h__saul]: so it’s going

1437
00:26:54,494 –> 00:26:54,616
[harry_n_stout]: ah

1438
00:26:54,558 –> 00:26:56,541
[bruce_h__saul]: to vary but you know i think

1439
00:26:56,482 –> 00:26:56,586
[paul_tyler]: what

1440
00:26:56,882 –> 00:26:59,827
[bruce_h__saul]: if you look at some of these
larger insolvencies that are complicated

1441
00:26:59,433 –> 00:26:59,514
[paul_tyler]: oh

1442
00:26:59,927 –> 00:27:01,229
[bruce_h__saul]: it can be months

1443
00:27:01,184 –> 00:27:01,844
[ramsey_d_smith]: yeah

1444
00:27:01,309 –> 00:27:04,194
[bruce_h__saul]: or years before there’s full resolution other
cases

1445
00:27:03,870 –> 00:27:04,319
[paul_tyler]: oh

1446
00:27:04,414 –> 00:27:04,995
[bruce_h__saul]: it’s you

1447
00:27:04,973 –> 00:27:04,994
[ramsey_d_smith]: m

1448
00:27:05,035 –> 00:27:06,158
[bruce_h__saul]: know not not that log

1449
00:27:05,974 –> 00:27:06,136
[harry_n_stout]: yeah

1450
00:27:06,259 –> 00:27:07,061
[bruce_h__saul]: but it’s not

1451
00:27:07,095 –> 00:27:07,259
[harry_n_stout]: okay

1452
00:27:07,141 –> 00:27:07,803
[bruce_h__saul]: an immediate turn

1453
00:27:07,703 –> 00:27:07,724
[ramsey_d_smith]: m

1454
00:27:07,843 –> 00:27:08,084
[bruce_h__saul]: around

1455
00:27:09,052 –> 00:27:09,133
[paul_tyler]: ah

1456
00:27:09,392 –> 00:27:11,255
[harry_n_stout]: and ramsey one other thought i’d add
to you

1457
00:27:11,262 –> 00:27:11,282
[paul_tyler]: a

1458
00:27:11,336 –> 00:27:14,020
[harry_n_stout]: is even in the case of f
d i c coverage if

1459
00:27:13,964 –> 00:27:14,210
[ramsey_d_smith]: oh

1460
00:27:14,080 –> 00:27:14,421
[harry_n_stout]: you get

1461
00:27:14,448 –> 00:27:15,486
[bruce_h__saul]: oh

1462
00:27:14,561 –> 00:27:15,342
[harry_n_stout]: people with large

1463
00:27:15,284 –> 00:27:15,445
[ramsey_d_smith]: yeah

1464
00:27:15,402 –> 00:27:17,806
[harry_n_stout]: account balances that are that

1465
00:27:17,842 –> 00:27:17,984
[ramsey_d_smith]: yeah

1466
00:27:17,866 –> 00:27:17,967
[harry_n_stout]: are

1467
00:27:18,434 –> 00:27:18,654
[ramsey_d_smith]: oh

1468
00:27:18,467 –> 00:27:18,968
[harry_n_stout]: if you will

1469
00:27:18,996 –> 00:27:19,238
[bruce_h__saul]: oh

1470
00:27:19,129 –> 00:27:22,614
[harry_n_stout]: beyond the f d i c coverage
it’s an issue and i think

1471
00:27:22,486 –> 00:27:22,608
[bruce_h__saul]: right

1472
00:27:22,675 –> 00:27:22,755
[harry_n_stout]: the

1473
00:27:22,777 –> 00:27:22,817
[ramsey_d_smith]: on

1474
00:27:22,875 –> 00:27:26,741
[harry_n_stout]: same thing applies in the case of
insurance and solvencies i mean i think

1475
00:27:27,105 –> 00:27:27,126
[bruce_h__saul]: m

1476
00:27:27,182 –> 00:27:30,688
[harry_n_stout]: and bruce correct me if i’m wrong
here but my experience

1477
00:27:30,704 –> 00:27:31,065
[ramsey_d_smith]: yeah

1478
00:27:30,748 –> 00:27:32,411
[harry_n_stout]: is the typically the

1479
00:27:32,392 –> 00:27:32,573
[ramsey_d_smith]: yeah

1480
00:27:32,431 –> 00:27:36,077
[harry_n_stout]: administrator do everything possible to make sure
that claims within

1481
00:27:36,044 –> 00:27:37,034
[ramsey_d_smith]: oh

1482
00:27:36,137 –> 00:27:40,825
[harry_n_stout]: the limits are paid and cash flows
as quickly as possible they do their best

1483
00:27:40,905 –> 00:27:43,389
[harry_n_stout]: to do that but if there are
individuals

1484
00:27:42,990 –> 00:27:43,434
[paul_tyler]: oh

1485
00:27:43,589 –> 00:27:44,491
[harry_n_stout]: with balances

1486
00:27:44,628 –> 00:27:44,769
[paul_tyler]: yeah

1487
00:27:45,012 –> 00:27:46,434
[harry_n_stout]: accounts that are in excess

1488
00:27:46,110 –> 00:27:47,640
[paul_tyler]: yeah

1489
00:27:47,015 –> 00:27:51,162
[harry_n_stout]: of the amounts involved i think that’s
problematic i mean that’s one of the issues

1490
00:27:51,302 –> 00:27:56,872
[harry_n_stout]: that i do think is problematic and
maybe that’s a consideration that the consumer soul

1491
00:27:56,972 –> 00:27:59,436
[harry_n_stout]: have one they purchase that maybe they
don’t purchase more than

1492
00:27:59,736 –> 00:28:00,122
[bruce_h__saul]: oh

1493
00:27:59,856 –> 00:28:00,257
[harry_n_stout]: a certain

1494
00:28:00,060 –> 00:28:00,324
[paul_tyler]: yeah

1495
00:28:00,297 –> 00:28:01,559
[harry_n_stout]: amount from a certain carrier

1496
00:28:01,724 –> 00:28:02,624
[ramsey_d_smith]: oh

1497
00:28:01,980 –> 00:28:03,122
[harry_n_stout]: because there are limits on

1498
00:28:03,164 –> 00:28:03,447
[ramsey_d_smith]: oh

1499
00:28:03,202 –> 00:28:05,165
[harry_n_stout]: coverage the same way that people will

1500
00:28:05,153 –> 00:28:05,174
[ramsey_d_smith]: m

1501
00:28:06,588 –> 00:28:07,048
[harry_n_stout]: take their

1502
00:28:06,986 –> 00:28:08,084
[ramsey_d_smith]: yeah

1503
00:28:07,730 –> 00:28:08,230
[harry_n_stout]: their bank

1504
00:28:08,078 –> 00:28:08,179
[bruce_h__saul]: ah

1505
00:28:08,351 –> 00:28:10,815
[harry_n_stout]: deposit and put them with you know

1506
00:28:10,943 –> 00:28:10,964
[ramsey_d_smith]: m

1507
00:28:11,336 –> 00:28:14,000
[harry_n_stout]: again i’m not an expert on f
d i c coverage but it’s i think

1508
00:28:14,100 –> 00:28:15,302
[harry_n_stout]: on a per account basis

1509
00:28:14,940 –> 00:28:16,050
[paul_tyler]: yeah

1510
00:28:15,763 –> 00:28:19,950
[harry_n_stout]: so people try to limit their accounts
and spread their potential liability to a number

1511
00:28:19,952 –> 00:28:20,113
[ramsey_d_smith]: yes

1512
00:28:20,010 –> 00:28:24,297
[harry_n_stout]: of banks so that if something does
happen if there’s a wholesale impact of the

1513
00:28:24,337 –> 00:28:25,379
[harry_n_stout]: banking community

1514
00:28:25,176 –> 00:28:25,422
[bruce_h__saul]: yeah

1515
00:28:25,740 –> 00:28:29,065
[harry_n_stout]: they’re covered by deft see insurance and
i think

1516
00:28:29,093 –> 00:28:29,195
[paul_tyler]: ah

1517
00:28:29,406 –> 00:28:30,007
[harry_n_stout]: that’s another issue

1518
00:28:30,008 –> 00:28:30,069
[paul_tyler]: ah

1519
00:28:30,027 –> 00:28:30,888
[harry_n_stout]: when it comes to guarantee

1520
00:28:30,849 –> 00:28:30,870
[paul_tyler]: m

1521
00:28:30,948 –> 00:28:33,192
[harry_n_stout]: funds is you know you ought to
know that

1522
00:28:33,164 –> 00:28:33,449
[ramsey_d_smith]: yes

1523
00:28:33,330 –> 00:28:33,350
[paul_tyler]: m

1524
00:28:33,352 –> 00:28:37,936
[harry_n_stout]: for these larger amounts involved if you
if you have amount with an annuity or

1525
00:28:38,016 –> 00:28:43,041
[harry_n_stout]: a life insurance policy that’s an access
of these limits there’s potentially a concern there

1526
00:28:43,796 –> 00:28:43,936
[bruce_h__saul]: yeah

1527
00:28:43,899 –> 00:28:44,533
[paul_tyler]: m yeah

1528
00:28:44,597 –> 00:28:44,998
[bruce_h__saul]: yeah i agree

1529
00:28:44,845 –> 00:28:44,926
[harry_n_stout]: and

1530
00:28:45,404 –> 00:28:46,274
[ramsey_d_smith]: oh

1531
00:28:45,699 –> 00:28:46,180
[bruce_h__saul]: the point is the

1532
00:28:46,132 –> 00:28:47,092
[harry_n_stout]: yeah

1533
00:28:46,240 –> 00:28:50,607
[bruce_h__saul]: same for f d i c or
in the state the guarantee association is only

1534
00:28:50,727 –> 00:28:51,649
[bruce_h__saul]: obligated to cover

1535
00:28:51,944 –> 00:28:52,164
[ramsey_d_smith]: yeah

1536
00:28:52,250 –> 00:28:54,233
[bruce_h__saul]: the amount up to that limit so
you’re right

1537
00:28:54,334 –> 00:28:54,435
[harry_n_stout]: ah

1538
00:28:54,674 –> 00:28:54,954
[bruce_h__saul]: if the

1539
00:28:55,042 –> 00:28:55,263
[harry_n_stout]: oh

1540
00:28:55,235 –> 00:28:55,996
[bruce_h__saul]: consumer as

1541
00:28:56,384 –> 00:28:56,546
[ramsey_d_smith]: ye

1542
00:28:56,602 –> 00:28:57,103
[harry_n_stout]: oh

1543
00:28:57,037 –> 00:28:58,078
[bruce_h__saul]: life insurance benefits say

1544
00:28:58,064 –> 00:28:58,934
[ramsey_d_smith]: yeah

1545
00:28:58,959 –> 00:29:02,923
[bruce_h__saul]: even with the same company either one
policy or more that exceed that limit

1546
00:29:03,622 –> 00:29:04,642
[harry_n_stout]: yeah

1547
00:29:03,924 –> 00:29:04,925
[bruce_h__saul]: they don’t have that protection

1548
00:29:06,201 –> 00:29:11,029
[paul_tyler]: yeah now i’ve seen i’ve had these
questions come up in context with you guaranteed

1549
00:29:11,449 –> 00:29:13,653
[paul_tyler]: income writers on products

1550
00:29:13,440 –> 00:29:13,481
[bruce_h__saul]: m

1551
00:29:14,755 –> 00:29:14,895
[paul_tyler]: it’s

1552
00:29:14,812 –> 00:29:15,037
[harry_n_stout]: ye

1553
00:29:14,955 –> 00:29:15,296
[paul_tyler]: interesting

1554
00:29:15,194 –> 00:29:15,455
[ramsey_d_smith]: yeah

1555
00:29:15,336 –> 00:29:17,860
[paul_tyler]: we’ve got chat on our website and

1556
00:29:18,172 –> 00:29:18,374
[ramsey_d_smith]: yeah

1557
00:29:18,982 –> 00:29:19,202
[paul_tyler]: you know

1558
00:29:19,122 –> 00:29:19,162
[harry_n_stout]: m

1559
00:29:19,423 –> 00:29:21,186
[paul_tyler]: i think the last two years i

1560
00:29:21,202 –> 00:29:21,484
[harry_n_stout]: yeah

1561
00:29:21,266 –> 00:29:24,812
[paul_tyler]: probably had more direct contact with customers
and with agents on ome of these topics

1562
00:29:24,832 –> 00:29:25,012
[paul_tyler]: than i

1563
00:29:25,012 –> 00:29:25,235
[harry_n_stout]: yes

1564
00:29:25,272 –> 00:29:28,958
[paul_tyler]: ever harry ever had all the years
before which is

1565
00:29:28,932 –> 00:29:29,073
[harry_n_stout]: yeah

1566
00:29:29,459 –> 00:29:33,606
[paul_tyler]: what which is good my gas though
seems to be really driving the conversation i

1567
00:29:33,626 –> 00:29:33,867
[paul_tyler]: think it’s

1568
00:29:34,042 –> 00:29:35,932
[harry_n_stout]: yeah

1569
00:29:34,748 –> 00:29:35,650
[paul_tyler]: given the interest

1570
00:29:35,457 –> 00:29:36,516
[bruce_h__saul]: yeah

1571
00:29:35,730 –> 00:29:36,731
[paul_tyler]: rate environment we’re

1572
00:29:36,652 –> 00:29:36,993
[harry_n_stout]: yeah

1573
00:29:36,932 –> 00:29:39,316
[paul_tyler]: in i just see this issue

1574
00:29:39,721 –> 00:29:39,922
[harry_n_stout]: yeah

1575
00:29:39,817 –> 00:29:42,847
[paul_tyler]: coming up and up and up like
i’m looking at lud rate watch right now

1576
00:29:43,631 –> 00:29:44,556
[paul_tyler]: carry i mean

1577
00:29:44,483 –> 00:29:44,504
[ramsey_d_smith]: m

1578
00:29:45,200 –> 00:29:45,640
[paul_tyler]: i can’t

1579
00:29:45,434 –> 00:29:45,716
[ramsey_d_smith]: yeah

1580
00:29:45,720 –> 00:29:47,343
[paul_tyler]: believe the numbers right it’s like

1581
00:29:47,744 –> 00:29:48,065
[ramsey_d_smith]: oh

1582
00:29:48,385 –> 00:29:52,452
[paul_tyler]: i see one carrier and i’m look
at the five year rates offering a four

1583
00:29:52,532 –> 00:29:52,772
[paul_tyler]: point

1584
00:29:53,043 –> 00:29:53,264
[ramsey_d_smith]: yeah

1585
00:29:53,714 –> 00:29:55,677
[paul_tyler]: three five percent interest right i see
two

1586
00:29:55,733 –> 00:29:55,754
[ramsey_d_smith]: m

1587
00:29:55,737 –> 00:29:56,999
[paul_tyler]: more at four point two five

1588
00:29:57,142 –> 00:29:57,404
[harry_n_stout]: yeah

1589
00:29:57,600 –> 00:29:58,582
[paul_tyler]: if you told me six months

1590
00:29:58,612 –> 00:29:59,195
[harry_n_stout]: oh

1591
00:29:58,642 –> 00:29:59,483
[paul_tyler]: ago we’d be seeing these

1592
00:29:59,496 –> 00:30:00,186
[bruce_h__saul]: my

1593
00:29:59,523 –> 00:30:02,108
[paul_tyler]: kind of rates i would have said
now um

1594
00:30:02,383 –> 00:30:02,626
[harry_n_stout]: yeah

1595
00:30:02,649 –> 00:30:03,931
[paul_tyler]: but people are gonna be looking at
bank

1596
00:30:03,846 –> 00:30:04,052
[bruce_h__saul]: oh

1597
00:30:04,011 –> 00:30:05,173
[paul_tyler]: cd and mi re gonna look

1598
00:30:05,168 –> 00:30:05,331
[bruce_h__saul]: yeah

1599
00:30:05,193 –> 00:30:05,654
[paul_tyler]: at mias

1600
00:30:05,504 –> 00:30:05,864
[ramsey_d_smith]: oh

1601
00:30:05,714 –> 00:30:06,395
[paul_tyler]: more frequently

1602
00:30:06,262 –> 00:30:06,839
[harry_n_stout]: ye

1603
00:30:06,455 –> 00:30:06,495
[paul_tyler]: so

1604
00:30:06,516 –> 00:30:06,696
[bruce_h__saul]: oh

1605
00:30:06,535 –> 00:30:07,477
[paul_tyler]: i think this is going to come
up now

1606
00:30:08,002 –> 00:30:08,226
[harry_n_stout]: oh

1607
00:30:08,218 –> 00:30:09,640
[paul_tyler]: my pro that has

1608
00:30:09,624 –> 00:30:09,829
[harry_n_stout]: yeah

1609
00:30:09,781 –> 00:30:10,101
[paul_tyler]: worked

1610
00:30:10,005 –> 00:30:11,676
[bruce_h__saul]: h yeah

1611
00:30:10,402 –> 00:30:11,704
[paul_tyler]: without going down

1612
00:30:11,577 –> 00:30:12,134
[ramsey_d_smith]: yeah

1613
00:30:11,744 –> 00:30:13,006
[paul_tyler]: that path is first

1614
00:30:13,566 –> 00:30:13,848
[bruce_h__saul]: oh

1615
00:30:13,587 –> 00:30:15,330
[paul_tyler]: head to the balance sheet hey ramsey

1616
00:30:16,214 –> 00:30:16,456
[ramsey_d_smith]: oh

1617
00:30:16,251 –> 00:30:16,892
[paul_tyler]: you know where’s

1618
00:30:16,702 –> 00:30:17,003
[harry_n_stout]: yeah

1619
00:30:16,912 –> 00:30:17,573
[paul_tyler]: the guarantee it’s

1620
00:30:18,587 –> 00:30:19,244
[ramsey_d_smith]: yes

1621
00:30:18,635 –> 00:30:19,597
[paul_tyler]: you guaranteed by our

1622
00:30:19,518 –> 00:30:19,683
[harry_n_stout]: sure

1623
00:30:19,657 –> 00:30:21,139
[paul_tyler]: twenty six billion dollars

1624
00:30:21,052 –> 00:30:22,589
[harry_n_stout]: yeah yeah

1625
00:30:22,330 –> 00:30:23,472
[paul_tyler]: you know assets

1626
00:30:23,122 –> 00:30:23,406
[harry_n_stout]: yes

1627
00:30:23,732 –> 00:30:23,892
[paul_tyler]: okay

1628
00:30:23,812 –> 00:30:24,136
[harry_n_stout]: oh

1629
00:30:23,933 –> 00:30:26,276
[paul_tyler]: that satisfies probably sixty percent of the
people

1630
00:30:26,140 –> 00:30:26,222
[bruce_h__saul]: ah

1631
00:30:27,078 –> 00:30:29,562
[paul_tyler]: yeah but like what else

1632
00:30:29,706 –> 00:30:30,426
[bruce_h__saul]: oh

1633
00:30:29,762 –> 00:30:34,971
[paul_tyler]: well here’s our ratings okay and then
here our trust pilot

1634
00:30:34,847 –> 00:30:34,908
[ramsey_d_smith]: m

1635
00:30:35,392 –> 00:30:36,213
[paul_tyler]: reviews you are going to

1636
00:30:36,203 –> 00:30:36,224
[ramsey_d_smith]: m

1637
00:30:36,233 –> 00:30:39,699
[paul_tyler]: get good service look at all the
thousands of people have had good experiences with

1638
00:30:39,779 –> 00:30:42,243
[paul_tyler]: us you know harry you’re without

1639
00:30:42,074 –> 00:30:42,260
[harry_n_stout]: yes

1640
00:30:42,343 –> 00:30:42,624
[paul_tyler]: going

1641
00:30:42,353 –> 00:30:42,374
[ramsey_d_smith]: m

1642
00:30:42,664 –> 00:30:43,104
[paul_tyler]: there i

1643
00:30:43,132 –> 00:30:43,852
[harry_n_stout]: yeah

1644
00:30:43,165 –> 00:30:44,327
[paul_tyler]: mean what are the best

1645
00:30:44,842 –> 00:30:45,622
[harry_n_stout]: yeah

1646
00:30:45,729 –> 00:30:46,371
[paul_tyler]: consume are

1647
00:30:46,312 –> 00:30:46,636
[harry_n_stout]: oh

1648
00:30:46,692 –> 00:30:47,596
[paul_tyler]: explanations

1649
00:30:47,714 –> 00:30:48,037
[ramsey_d_smith]: yeah

1650
00:30:47,857 –> 00:30:47,977
[paul_tyler]: that

1651
00:30:48,022 –> 00:30:48,742
[harry_n_stout]: yeah

1652
00:30:48,058 –> 00:30:50,287
[paul_tyler]: get people comfortable without even talking about
this

1653
00:30:50,763 –> 00:30:55,051
[harry_n_stout]: well i think you’ve you’ve hit on
them there i think typically you you

1654
00:30:54,983 –> 00:30:55,004
[ramsey_d_smith]: m

1655
00:30:55,191 –> 00:30:55,672
[harry_n_stout]: highlight

1656
00:30:55,888 –> 00:30:55,908
[paul_tyler]: i

1657
00:30:56,393 –> 00:31:00,820
[harry_n_stout]: the company itself how long it’s been
in business their track record of how they

1658
00:31:00,880 –> 00:31:01,040
[harry_n_stout]: treat

1659
00:31:01,090 –> 00:31:01,151
[paul_tyler]: oh

1660
00:31:01,101 –> 00:31:01,181
[harry_n_stout]: the

1661
00:31:01,211 –> 00:31:01,232
[ramsey_d_smith]: i

1662
00:31:01,212 –> 00:31:01,333
[paul_tyler]: yeah

1663
00:31:01,241 –> 00:31:02,583
[harry_n_stout]: consumer i mean that’s primary

1664
00:31:02,230 –> 00:31:02,352
[paul_tyler]: yeah

1665
00:31:02,564 –> 00:31:02,784
[ramsey_d_smith]: oh

1666
00:31:02,643 –> 00:31:03,364
[harry_n_stout]: right and

1667
00:31:03,332 –> 00:31:03,536
[paul_tyler]: right

1668
00:31:03,404 –> 00:31:04,506
[harry_n_stout]: then secondly i think you

1669
00:31:04,481 –> 00:31:04,582
[paul_tyler]: ah

1670
00:31:04,566 –> 00:31:05,648
[harry_n_stout]: hit on the financial strength

1671
00:31:05,469 –> 00:31:05,529
[paul_tyler]: ah

1672
00:31:05,708 –> 00:31:09,274
[harry_n_stout]: ratings of the companies that involved i
think ramsey was alluding to that earlier you

1673
00:31:09,314 –> 00:31:10,616
[harry_n_stout]: know you as a producer

1674
00:31:10,620 –> 00:31:10,841
[paul_tyler]: oh

1675
00:31:10,697 –> 00:31:15,685
[harry_n_stout]: you represent those companies that you feel
most comfortable with a financial strength standpoint and

1676
00:31:15,865 –> 00:31:21,274
[harry_n_stout]: meet whatever threshold you or your organization
has for the sale of those products and

1677
00:31:22,096 –> 00:31:25,642
[harry_n_stout]: different financial different organizations will sell different
financials

1678
00:31:25,304 –> 00:31:25,546
[ramsey_d_smith]: yeah

1679
00:31:25,682 –> 00:31:27,184
[harry_n_stout]: trengthwriting some are comfortable

1680
00:31:27,330 –> 00:31:27,551
[paul_tyler]: oh

1681
00:31:27,605 –> 00:31:29,368
[harry_n_stout]: selling lower financial

1682
00:31:29,123 –> 00:31:29,144
[ramsey_d_smith]: m

1683
00:31:29,428 –> 00:31:32,212
[harry_n_stout]: strength writings others must have a certain
threshold

1684
00:31:31,890 –> 00:31:33,180
[paul_tyler]: yeah

1685
00:31:32,693 –> 00:31:36,460
[harry_n_stout]: and above that they sell and then
i talk about state regulation

1686
00:31:36,494 –> 00:31:36,674
[ramsey_d_smith]: oh

1687
00:31:36,560 –> 00:31:38,463
[harry_n_stout]: being the third bucket

1688
00:31:38,503 –> 00:31:38,663
[ramsey_d_smith]: yes

1689
00:31:38,703 –> 00:31:38,844
[harry_n_stout]: and

1690
00:31:39,037 –> 00:31:39,263
[ramsey_d_smith]: yeah

1691
00:31:39,424 –> 00:31:43,531
[harry_n_stout]: and if i guarantee funds are part
of the conversation if they’re aware of them

1692
00:31:43,936 –> 00:31:44,099
[ramsey_d_smith]: yeah

1693
00:31:44,012 –> 00:31:46,336
[harry_n_stout]: and that they’ve been disclosed to them
i think

1694
00:31:46,364 –> 00:31:47,144
[ramsey_d_smith]: ye

1695
00:31:46,416 –> 00:31:47,298
[harry_n_stout]: a conversation has

1696
00:31:47,190 –> 00:31:47,435
[paul_tyler]: yes

1697
00:31:47,358 –> 00:31:52,987
[harry_n_stout]: to be made aware that that’s another
another element in the overall hierarchy of solvency

1698
00:31:53,248 –> 00:31:56,132
[harry_n_stout]: and i guess i’m not trying to
create maso’s hierarchy of needs here

1699
00:31:56,496 –> 00:31:58,056
[bruce_h__saul]: oh

1700
00:31:56,613 –> 00:31:59,077
[harry_n_stout]: but it’s you know it’s if you
think about it you’ve got a

1701
00:31:59,564 –> 00:32:00,494
[ramsey_d_smith]: oh

1702
00:31:59,778 –> 00:32:00,700
[harry_n_stout]: there is a hierarchy

1703
00:32:01,094 –> 00:32:01,315
[ramsey_d_smith]: oh

1704
00:32:01,361 –> 00:32:02,947
[harry_n_stout]: solving c and

1705
00:32:03,464 –> 00:32:04,304
[ramsey_d_smith]: yes

1706
00:32:04,132 –> 00:32:06,078
[harry_n_stout]: we ought to be able to describe
what that is

1707
00:32:06,980 –> 00:32:12,048
[paul_tyler]: yeah and bruce when these laws were
drafted i guarantee you google wasn’t even a

1708
00:32:12,108 –> 00:32:14,071
[paul_tyler]: company today

1709
00:32:13,906 –> 00:32:14,089
[bruce_h__saul]: right

1710
00:32:14,212 –> 00:32:14,332
[paul_tyler]: now

1711
00:32:14,502 –> 00:32:15,546
[harry_n_stout]: oh yeah

1712
00:32:16,057 –> 00:32:16,098
[bruce_h__saul]: h

1713
00:32:16,209 –> 00:32:17,052
[harry_n_stout]: no doubt about that

1714
00:32:16,853 –> 00:32:16,874
[ramsey_d_smith]: m

1715
00:32:17,025 –> 00:32:17,046
[bruce_h__saul]: m

1716
00:32:17,437 –> 00:32:21,764
[paul_tyler]: so you know you know now there’s
this great website that explains this

1717
00:32:21,742 –> 00:32:22,462
[harry_n_stout]: yeah

1718
00:32:22,085 –> 00:32:23,227
[paul_tyler]: in perfect detail out

1719
00:32:23,152 –> 00:32:23,872
[harry_n_stout]: yeah

1720
00:32:23,267 –> 00:32:27,334
[paul_tyler]: there so i mean consumer says as
cool

1721
00:32:27,352 –> 00:32:28,132
[harry_n_stout]: yeah

1722
00:32:28,095 –> 00:32:28,696
[paul_tyler]: you know ramsey

1723
00:32:29,263 –> 00:32:29,446
[harry_n_stout]: yes

1724
00:32:29,978 –> 00:32:32,402
[paul_tyler]: r n how’re insured palass guaranteed nolgassite

1725
00:32:31,912 –> 00:32:32,303
[harry_n_stout]: yes

1726
00:32:32,462 –> 00:32:32,863
[paul_tyler]: comes up

1727
00:32:33,142 –> 00:32:33,526
[harry_n_stout]: oh

1728
00:32:33,444 –> 00:32:33,504
[paul_tyler]: so

1729
00:32:33,488 –> 00:32:34,116
[bruce_h__saul]: hm

1730
00:32:33,604 –> 00:32:35,728
[paul_tyler]: bruce i mean like if i were
to put us on a website

1731
00:32:35,324 –> 00:32:36,232
[harry_n_stout]: ah

1732
00:32:35,603 –> 00:32:35,624
[ramsey_d_smith]: m

1733
00:32:35,768 –> 00:32:36,188
[paul_tyler]: i’m not going to

1734
00:32:36,562 –> 00:32:36,706
[harry_n_stout]: ye

1735
00:32:36,669 –> 00:32:37,791
[paul_tyler]: hold you know i’m

1736
00:32:37,822 –> 00:32:38,166
[harry_n_stout]: oh

1737
00:32:37,831 –> 00:32:38,392
[paul_tyler]: not asking you this

1738
00:32:38,723 –> 00:32:38,744
[ramsey_d_smith]: m

1739
00:32:38,813 –> 00:32:39,554
[paul_tyler]: for legal advice

1740
00:32:39,412 –> 00:32:40,102
[harry_n_stout]: yeah

1741
00:32:39,614 –> 00:32:40,475
[paul_tyler]: but if i put

1742
00:32:40,462 –> 00:32:41,872
[harry_n_stout]: oh

1743
00:32:40,516 –> 00:32:41,918
[paul_tyler]: on my website f

1744
00:32:41,933 –> 00:32:41,954
[ramsey_d_smith]: m

1745
00:32:41,978 –> 00:32:43,622
[paul_tyler]: a q you know

1746
00:32:43,724 –> 00:32:43,825
[harry_n_stout]: ah

1747
00:32:44,244 –> 00:32:44,886
[paul_tyler]: explain you know

1748
00:32:45,052 –> 00:32:45,832
[harry_n_stout]: yeah

1749
00:32:45,347 –> 00:32:47,735
[paul_tyler]: how how are these products guaranteed c

1750
00:32:48,592 –> 00:32:48,813
[harry_n_stout]: yeah

1751
00:32:49,870 –> 00:32:50,472
[paul_tyler]: i put a hyper

1752
00:32:50,301 –> 00:32:50,461
[harry_n_stout]: yeah

1753
00:32:50,573 –> 00:32:51,396
[paul_tyler]: link to no ga

1754
00:32:51,764 –> 00:32:52,148
[ramsey_d_smith]: yah

1755
00:32:52,972 –> 00:32:57,360
[paul_tyler]: am i starting the law am i
doing that oh

1756
00:32:56,287 –> 00:32:56,748
[bruce_h__saul]: i think that

1757
00:32:57,382 –> 00:32:58,162
[harry_n_stout]: yeah

1758
00:32:57,450 –> 00:32:57,630
[bruce_h__saul]: that

1759
00:32:57,524 –> 00:32:57,805
[ramsey_d_smith]: yah

1760
00:32:57,810 –> 00:32:57,991
[bruce_h__saul]: is

1761
00:32:58,371 –> 00:32:59,100
[paul_tyler]: yeah

1762
00:32:59,053 –> 00:32:59,634
[bruce_h__saul]: an appropriate

1763
00:32:59,242 –> 00:32:59,546
[harry_n_stout]: yes

1764
00:32:59,674 –> 00:33:00,676
[bruce_h__saul]: practice paul

1765
00:33:00,660 –> 00:33:00,883
[paul_tyler]: oh

1766
00:33:00,876 –> 00:33:03,361
[bruce_h__saul]: i mean really it’s to a point
where

1767
00:33:03,750 –> 00:33:03,992
[paul_tyler]: oh

1768
00:33:04,792 –> 00:33:05,233
[harry_n_stout]: oh

1769
00:33:06,269 –> 00:33:07,055
[bruce_h__saul]: what the law does

1770
00:33:08,226 –> 00:33:08,329
[paul_tyler]: ah

1771
00:33:08,242 –> 00:33:08,902
[harry_n_stout]: yeah

1772
00:33:08,986 –> 00:33:10,887
[bruce_h__saul]: kind of for a moment just you
know

1773
00:33:10,942 –> 00:33:11,266
[harry_n_stout]: yes

1774
00:33:11,128 –> 00:33:11,828
[bruce_h__saul]: aside from the

1775
00:33:12,052 –> 00:33:12,416
[harry_n_stout]: oh

1776
00:33:12,330 –> 00:33:12,592
[paul_tyler]: yeah

1777
00:33:12,429 –> 00:33:16,032
[bruce_h__saul]: issue of what what the law should
have shouldn’t say it clearly

1778
00:33:15,754 –> 00:33:18,260
[harry_n_stout]: ah ye

1779
00:33:17,854 –> 00:33:21,523
[bruce_h__saul]: is intended to take the conversations and
take

1780
00:33:21,412 –> 00:33:21,638
[harry_n_stout]: oh

1781
00:33:21,563 –> 00:33:22,307
[bruce_h__saul]: those questions

1782
00:33:22,184 –> 00:33:22,307
[ramsey_d_smith]: ye

1783
00:33:23,152 –> 00:33:23,419
[harry_n_stout]: yeah

1784
00:33:24,216 –> 00:33:24,916
[bruce_h__saul]: away from the

1785
00:33:24,926 –> 00:33:25,028
[ramsey_d_smith]: ah

1786
00:33:24,976 –> 00:33:26,177
[bruce_h__saul]: company and the producer

1787
00:33:27,030 –> 00:33:27,311
[paul_tyler]: oh

1788
00:33:27,202 –> 00:33:27,922
[harry_n_stout]: yeah

1789
00:33:27,238 –> 00:33:28,780
[bruce_h__saul]: to the guarantee associations

1790
00:33:28,154 –> 00:33:29,174
[ramsey_d_smith]: yeah

1791
00:33:29,660 –> 00:33:29,760
[bruce_h__saul]: so

1792
00:33:29,662 –> 00:33:30,322
[harry_n_stout]: yeah

1793
00:33:29,901 –> 00:33:29,941
[bruce_h__saul]: i

1794
00:33:30,013 –> 00:33:30,178
[paul_tyler]: like

1795
00:33:30,021 –> 00:33:36,398
[bruce_h__saul]: think in the current environment given the
prohibition on even mentioning the

1796
00:33:36,450 –> 00:33:36,712
[paul_tyler]: oh

1797
00:33:36,458 –> 00:33:41,196
[bruce_h__saul]: existence or using the existence of the
guarantee fund um

1798
00:33:40,440 –> 00:33:40,562
[paul_tyler]: oh

1799
00:33:41,212 –> 00:33:41,541
[harry_n_stout]: yes

1800
00:33:41,774 –> 00:33:41,794
[ramsey_d_smith]: m

1801
00:33:41,880 –> 00:33:42,142
[paul_tyler]: yeah

1802
00:33:41,976 –> 00:33:48,326
[bruce_h__saul]: it makes sense to be responsive you
don’t want to be completely unresponsive so olga

1803
00:33:48,547 –> 00:33:48,927
[bruce_h__saul]: does have

1804
00:33:48,854 –> 00:33:49,197
[ramsey_d_smith]: oh

1805
00:33:48,967 –> 00:33:49,729
[bruce_h__saul]: good information

1806
00:33:50,775 –> 00:33:50,917
[ramsey_d_smith]: yeah

1807
00:33:50,951 –> 00:33:52,233
[bruce_h__saul]: in fact the way the state

1808
00:33:52,058 –> 00:33:52,161
[ramsey_d_smith]: ah

1809
00:33:52,273 –> 00:33:53,074
[bruce_h__saul]: laws are drafted

1810
00:33:52,830 –> 00:33:54,120
[paul_tyler]: yeah

1811
00:33:53,154 –> 00:33:53,475
[bruce_h__saul]: in most

1812
00:33:53,384 –> 00:33:54,314
[ramsey_d_smith]: yeah

1813
00:33:53,535 –> 00:33:55,538
[bruce_h__saul]: states um here we mentioned

1814
00:33:55,943 –> 00:33:57,601
[ramsey_d_smith]: m ye

1815
00:33:57,121 –> 00:33:59,124
[bruce_h__saul]: at the at the point of delivery
there’s a there’s

1816
00:33:59,033 –> 00:33:59,054
[ramsey_d_smith]: m

1817
00:33:59,144 –> 00:34:00,427
[bruce_h__saul]: a document that

1818
00:34:00,292 –> 00:34:00,534
[harry_n_stout]: yah

1819
00:34:01,108 –> 00:34:02,650
[bruce_h__saul]: describes the guarantee fund and some

1820
00:34:02,611 –> 00:34:02,632
[harry_n_stout]: h

1821
00:34:02,690 –> 00:34:03,972
[bruce_h__saul]: of the issues we’ve been discussing

1822
00:34:03,637 –> 00:34:05,812
[harry_n_stout]: ah oh

1823
00:34:04,794 –> 00:34:04,854
[bruce_h__saul]: it

1824
00:34:04,923 –> 00:34:05,088
[paul_tyler]: yes

1825
00:34:04,934 –> 00:34:07,499
[bruce_h__saul]: says on its fate that the producer

1826
00:34:07,222 –> 00:34:07,570
[harry_n_stout]: oh

1827
00:34:07,559 –> 00:34:08,020
[bruce_h__saul]: in the company

1828
00:34:07,884 –> 00:34:08,106
[ramsey_d_smith]: yeah

1829
00:34:08,181 –> 00:34:09,463
[bruce_h__saul]: cannot talk about the guarantee

1830
00:34:09,270 –> 00:34:09,430
[paul_tyler]: yeah

1831
00:34:09,563 –> 00:34:10,806
[bruce_h__saul]: fund and it

1832
00:34:10,874 –> 00:34:11,075
[ramsey_d_smith]: oh

1833
00:34:10,926 –> 00:34:11,267
[bruce_h__saul]: instructs

1834
00:34:11,034 –> 00:34:11,135
[harry_n_stout]: ah

1835
00:34:11,307 –> 00:34:12,429
[bruce_h__saul]: the consumer to call the

1836
00:34:12,899 –> 00:34:13,039
[paul_tyler]: yeah

1837
00:34:13,412 –> 00:34:14,754
[bruce_h__saul]: the state guarantee association

1838
00:34:15,224 –> 00:34:15,564
[ramsey_d_smith]: uh

1839
00:34:15,600 –> 00:34:15,742
[paul_tyler]: yeah

1840
00:34:16,225 –> 00:34:16,326
[bruce_h__saul]: so

1841
00:34:18,660 –> 00:34:19,380
[paul_tyler]: yeah

1842
00:34:19,107 –> 00:34:19,308
[bruce_h__saul]: you know

1843
00:34:19,240 –> 00:34:19,402
[harry_n_stout]: yes

1844
00:34:19,949 –> 00:34:20,069
[bruce_h__saul]: what

1845
00:34:20,062 –> 00:34:20,609
[harry_n_stout]: ye

1846
00:34:20,169 –> 00:34:20,330
[bruce_h__saul]: to me

1847
00:34:20,357 –> 00:34:20,604
[ramsey_d_smith]: okay

1848
00:34:20,430 –> 00:34:22,734
[bruce_h__saul]: what comes up repeatedly and this is
a good example

1849
00:34:22,770 –> 00:34:23,054
[paul_tyler]: oh

1850
00:34:23,795 –> 00:34:23,916
[ramsey_d_smith]: oh

1851
00:34:24,022 –> 00:34:24,289
[harry_n_stout]: yeah

1852
00:34:24,207 –> 00:34:24,289
[bruce_h__saul]: the

1853
00:34:25,320 –> 00:34:25,503
[paul_tyler]: oh

1854
00:34:26,026 –> 00:34:26,347
[bruce_h__saul]: guarantee

1855
00:34:26,197 –> 00:34:26,340
[paul_tyler]: yeah

1856
00:34:26,388 –> 00:34:28,716
[bruce_h__saul]: funds do exist that’s that’s a

1857
00:34:28,680 –> 00:34:30,142
[paul_tyler]: oh

1858
00:34:28,756 –> 00:34:28,977
[bruce_h__saul]: fact

1859
00:34:29,393 –> 00:34:29,414
[ramsey_d_smith]: m

1860
00:34:29,558 –> 00:34:30,239
[bruce_h__saul]: that’s reality

1861
00:34:29,962 –> 00:34:30,304
[harry_n_stout]: yeah

1862
00:34:31,521 –> 00:34:32,383
[bruce_h__saul]: uh there

1863
00:34:32,392 –> 00:34:32,617
[harry_n_stout]: oh

1864
00:34:32,463 –> 00:34:33,264
[bruce_h__saul]: is a way the

1865
00:34:33,224 –> 00:34:33,486
[ramsey_d_smith]: oh

1866
00:34:33,324 –> 00:34:33,845
[bruce_h__saul]: state laws

1867
00:34:33,840 –> 00:34:34,245
[paul_tyler]: oh

1868
00:34:33,905 –> 00:34:34,526
[bruce_h__saul]: understand

1869
00:34:34,132 –> 00:34:34,419
[harry_n_stout]: yeah

1870
00:34:34,626 –> 00:34:34,787
[bruce_h__saul]: that

1871
00:34:34,664 –> 00:34:34,944
[ramsey_d_smith]: oh

1872
00:34:35,087 –> 00:34:35,708
[bruce_h__saul]: consumers are

1873
00:34:35,723 –> 00:34:36,292
[harry_n_stout]: sit

1874
00:34:35,808 –> 00:34:38,973
[bruce_h__saul]: interested and there is a way to
have that information

1875
00:34:38,640 –> 00:34:38,881
[paul_tyler]: yeah

1876
00:34:39,034 –> 00:34:39,755
[bruce_h__saul]: disseminated

1877
00:34:39,503 –> 00:34:39,524
[ramsey_d_smith]: m

1878
00:34:40,912 –> 00:34:41,445
[harry_n_stout]: yes

1879
00:34:41,038 –> 00:34:41,261
[bruce_h__saul]: um

1880
00:34:41,594 –> 00:34:41,895
[ramsey_d_smith]: oh

1881
00:34:42,135 –> 00:34:43,148
[bruce_h__saul]: m the point that

1882
00:34:43,290 –> 00:34:43,490
[paul_tyler]: yeah

1883
00:34:43,790 –> 00:34:43,890
[bruce_h__saul]: to

1884
00:34:43,903 –> 00:34:44,084
[ramsey_d_smith]: yeah

1885
00:34:43,930 –> 00:34:44,030
[bruce_h__saul]: me

1886
00:34:44,182 –> 00:34:44,465
[harry_n_stout]: yes

1887
00:34:44,191 –> 00:34:44,993
[bruce_h__saul]: causes the

1888
00:34:45,323 –> 00:34:45,344
[ramsey_d_smith]: m

1889
00:34:45,846 –> 00:34:46,370
[bruce_h__saul]: discomfort

1890
00:34:46,163 –> 00:34:46,184
[ramsey_d_smith]: m

1891
00:34:46,430 –> 00:34:48,141
[bruce_h__saul]: and seems kind of out of sink
with

1892
00:34:48,742 –> 00:34:48,969
[ramsey_d_smith]: yes

1893
00:34:49,506 –> 00:34:51,409
[bruce_h__saul]: way consumer protection regulation

1894
00:34:51,044 –> 00:34:52,484
[ramsey_d_smith]: yeah

1895
00:34:51,449 –> 00:34:53,352
[bruce_h__saul]: has been going for some time

1896
00:34:53,337 –> 00:34:53,420
[harry_n_stout]: ah

1897
00:34:53,412 –> 00:34:53,592
[bruce_h__saul]: now

1898
00:34:54,532 –> 00:34:54,996
[harry_n_stout]: oh

1899
00:34:54,694 –> 00:34:55,416
[bruce_h__saul]: is that bar

1900
00:34:55,154 –> 00:34:55,174
[ramsey_d_smith]: m

1901
00:34:55,716 –> 00:34:59,643
[bruce_h__saul]: on any discussion of the subject with
the company or the producer that the consumer

1902
00:34:59,273 –> 00:34:59,294
[ramsey_d_smith]: m

1903
00:34:59,783 –> 00:35:03,815
[bruce_h__saul]: is looking to yeah

1904
00:35:02,610 –> 00:35:02,710
[paul_tyler]: so

1905
00:35:03,153 –> 00:35:03,334
[harry_n_stout]: yes

1906
00:35:03,271 –> 00:35:05,174
[paul_tyler]: i’m curious look i saw your article

1907
00:35:05,354 –> 00:35:06,074
[ramsey_d_smith]: yeah

1908
00:35:05,415 –> 00:35:06,877
[paul_tyler]: and harry i reached out like i
think the

1909
00:35:07,582 –> 00:35:07,602
[harry_n_stout]: m

1910
00:35:07,939 –> 00:35:09,221
[paul_tyler]: about five minutes after to

1911
00:35:09,232 –> 00:35:09,694
[harry_n_stout]: oh

1912
00:35:09,281 –> 00:35:11,966
[paul_tyler]: get you on here you know bruce
and harry what

1913
00:35:11,873 –> 00:35:11,894
[ramsey_d_smith]: m

1914
00:35:12,026 –> 00:35:14,009
[paul_tyler]: kind of response have you received from
people off the

1915
00:35:14,144 –> 00:35:14,984
[ramsey_d_smith]: oh

1916
00:35:14,611 –> 00:35:15,333
[paul_tyler]: put in think

1917
00:35:15,334 –> 00:35:15,436
[harry_n_stout]: ah

1918
00:35:15,393 –> 00:35:15,795
[paul_tyler]: advisor

1919
00:35:17,974 –> 00:35:20,298
[harry_n_stout]: actually the folks at olga read it

1920
00:35:21,396 –> 00:35:21,719
[bruce_h__saul]: um

1921
00:35:21,941 –> 00:35:23,323
[harry_n_stout]: they posted on their website

1922
00:35:23,097 –> 00:35:23,180
[ramsey_d_smith]: the

1923
00:35:23,704 –> 00:35:24,606
[harry_n_stout]: and took to send it out

1924
00:35:24,546 –> 00:35:24,727
[bruce_h__saul]: oh

1925
00:35:24,646 –> 00:35:25,968
[harry_n_stout]: to state regulators all around the

1926
00:35:25,899 –> 00:35:25,980
[paul_tyler]: oh

1927
00:35:26,008 –> 00:35:26,469
[harry_n_stout]: country which

1928
00:35:26,354 –> 00:35:26,637
[ramsey_d_smith]: oh

1929
00:35:26,529 –> 00:35:27,370
[harry_n_stout]: i thought was interesting

1930
00:35:27,816 –> 00:35:28,117
[bruce_h__saul]: oh

1931
00:35:28,061 –> 00:35:28,283
[paul_tyler]: okay

1932
00:35:28,512 –> 00:35:29,674
[harry_n_stout]: i think i think that

1933
00:35:29,624 –> 00:35:29,946
[ramsey_d_smith]: yeah

1934
00:35:31,237 –> 00:35:31,437
[harry_n_stout]: i think

1935
00:35:31,304 –> 00:35:31,588
[ramsey_d_smith]: yeah

1936
00:35:31,477 –> 00:35:32,519
[harry_n_stout]: the response we’ve gotten was

1937
00:35:32,575 –> 00:35:32,656
[ramsey_d_smith]: ah

1938
00:35:32,879 –> 00:35:36,325
[harry_n_stout]: a lot of the response we got
from ramsey when we started our session today

1939
00:35:36,385 –> 00:35:37,447
[harry_n_stout]: which i don’t mention

1940
00:35:37,514 –> 00:35:37,819
[paul_tyler]: question

1941
00:35:37,527 –> 00:35:37,707
[harry_n_stout]: this

1942
00:35:37,746 –> 00:35:38,607
[ramsey_d_smith]: testing oh

1943
00:35:38,409 –> 00:35:39,230
[harry_n_stout]: do you know what i mean this
is

1944
00:35:39,442 –> 00:35:39,543
[paul_tyler]: oh

1945
00:35:39,461 –> 00:35:39,584
[ramsey_d_smith]: yeah

1946
00:35:39,550 –> 00:35:41,694
[harry_n_stout]: this is this controversy there’s confusion

1947
00:35:41,903 –> 00:35:41,924
[ramsey_d_smith]: m

1948
00:35:42,355 –> 00:35:45,080
[harry_n_stout]: i don’t really mention this as i
should but

1949
00:35:45,840 –> 00:35:46,085
[paul_tyler]: oh

1950
00:35:45,861 –> 00:35:49,547
[harry_n_stout]: if you talk to people and i’ve
talked to probably ten to twenty

1951
00:35:50,174 –> 00:35:50,435
[ramsey_d_smith]: oh

1952
00:35:50,529 –> 00:35:55,377
[harry_n_stout]: fairly large producers around the country who
responded back and what they’re saying is this

1953
00:35:55,437 –> 00:35:57,520
[harry_n_stout]: is a pain point for us this
is kind of crazy

1954
00:35:58,321 –> 00:35:58,463
[paul_tyler]: yeah

1955
00:35:58,382 –> 00:35:59,864
[harry_n_stout]: and for me as i write

1956
00:35:59,792 –> 00:35:59,893
[paul_tyler]: ah

1957
00:35:59,924 –> 00:36:04,953
[harry_n_stout]: about the industry and look at what
the what your program has done ou highlight

1958
00:36:05,093 –> 00:36:10,782
[harry_n_stout]: technology changes expansion of product all these
things we’re trying to do to make annuities

1959
00:36:10,863 –> 00:36:15,170
[harry_n_stout]: more mainstream and used by more and
more people as part of their as a

1960
00:36:15,250 –> 00:36:18,195
[harry_n_stout]: tool in their retirement planning this is

1961
00:36:18,145 –> 00:36:18,327
[ramsey_d_smith]: yes

1962
00:36:19,197 –> 00:36:21,560
[harry_n_stout]: this is part of that equation and
has to be mentioned

1963
00:36:21,374 –> 00:36:21,537
[ramsey_d_smith]: ye

1964
00:36:21,641 –> 00:36:21,961
[harry_n_stout]: at some

1965
00:36:22,020 –> 00:36:22,200
[paul_tyler]: yeah

1966
00:36:22,041 –> 00:36:24,445
[harry_n_stout]: point and they’re saying that’s kind of
it’s crazy

1967
00:36:24,344 –> 00:36:24,671
[ramsey_d_smith]: yeah

1968
00:36:24,525 –> 00:36:28,772
[harry_n_stout]: for us why can’t we say something
about it why why can’t we talk about

1969
00:36:28,833 –> 00:36:32,439
[harry_n_stout]: it and and if you look at
it from the consumer standpoint

1970
00:36:32,504 –> 00:36:32,766
[ramsey_d_smith]: yeah

1971
00:36:32,639 –> 00:36:34,963
[harry_n_stout]: you have to admit it’s kind of
convoluted you don’t talk about and of

1972
00:36:34,934 –> 00:36:35,195
[ramsey_d_smith]: yeah

1973
00:36:34,983 –> 00:36:36,626
[harry_n_stout]: a sudden you get a document pops

1974
00:36:36,582 –> 00:36:36,824
[ramsey_d_smith]: yeah

1975
00:36:36,686 –> 00:36:37,868
[harry_n_stout]: up when you get your contract

1976
00:36:37,784 –> 00:36:38,277
[ramsey_d_smith]: yes

1977
00:36:37,988 –> 00:36:42,836
[harry_n_stout]: that talks about it so i’ve been
kind of free as someone who writes about

1978
00:36:42,896 –> 00:36:45,400
[harry_n_stout]: consumer issues i tell consumers

1979
00:36:45,330 –> 00:36:45,712
[paul_tyler]: oh

1980
00:36:45,560 –> 00:36:48,726
[harry_n_stout]: in my book i’ve said look you
want to know what the guarantee fund coverage

1981
00:36:48,786 –> 00:36:51,410
[harry_n_stout]: is in the state that you’re buying
the product you should

1982
00:36:51,434 –> 00:36:51,717
[ramsey_d_smith]: yes

1983
00:36:51,470 –> 00:36:55,176
[harry_n_stout]: do that and i direct them to
the nogwebsite i’ve had a section of my

1984
00:36:55,237 –> 00:36:57,961
[harry_n_stout]: book on that and i think but
i can do that i’m not

1985
00:36:57,916 –> 00:36:57,936
[ramsey_d_smith]: i

1986
00:36:58,061 –> 00:36:59,103
[harry_n_stout]: selling the product i’m

1987
00:36:59,144 –> 00:36:59,446
[ramsey_d_smith]: oh

1988
00:36:59,163 –> 00:36:59,303
[harry_n_stout]: just

1989
00:37:00,156 –> 00:37:00,504
[bruce_h__saul]: um

1990
00:37:00,265 –> 00:37:05,394
[harry_n_stout]: an industry observer some one commenting commenting
in the industry so i do that and

1991
00:37:05,694 –> 00:37:08,318
[harry_n_stout]: i encourage folks look at as a
as a informed

1992
00:37:08,130 –> 00:37:08,451
[paul_tyler]: oh

1993
00:37:08,399 –> 00:37:13,567
[harry_n_stout]: buyer you should know that this exists
and that it’s out there and what implications

1994
00:37:13,551 –> 00:37:13,675
[ramsey_d_smith]: ye

1995
00:37:13,647 –> 00:37:14,208
[harry_n_stout]: it will have

1996
00:37:14,100 –> 00:37:14,264
[paul_tyler]: ye

1997
00:37:14,268 –> 00:37:18,395
[harry_n_stout]: potentially for you should something go wrong
and naturally

1998
00:37:18,104 –> 00:37:18,704
[ramsey_d_smith]: yeah

1999
00:37:18,475 –> 00:37:21,941
[harry_n_stout]: the nice thing that in our industry
has been we’ve had very few things go

2000
00:37:22,041 –> 00:37:22,282
[harry_n_stout]: wrong

2001
00:37:22,194 –> 00:37:22,418
[ramsey_d_smith]: yeah

2002
00:37:22,863 –> 00:37:25,647
[harry_n_stout]: and we haven’t had massive numbers of
insolvencies

2003
00:37:25,350 –> 00:37:25,632
[paul_tyler]: oh

2004
00:37:26,028 –> 00:37:26,749
[harry_n_stout]: we we haven’t

2005
00:37:26,663 –> 00:37:26,684
[ramsey_d_smith]: m

2006
00:37:26,809 –> 00:37:26,949
[harry_n_stout]: had

2007
00:37:26,940 –> 00:37:28,020
[paul_tyler]: yeah

2008
00:37:26,989 –> 00:37:28,913
[harry_n_stout]: these issues were consumed s have been
hurt

2009
00:37:29,024 –> 00:37:29,307
[ramsey_d_smith]: my

2010
00:37:29,434 –> 00:37:33,741
[harry_n_stout]: or in any way negatively impacted we’ve
had some very little amount but not a

2011
00:37:33,821 –> 00:37:38,148
[harry_n_stout]: lot but you know in a day
in age when we’re trying to lift our

2012
00:37:38,228 –> 00:37:42,574
[harry_n_stout]: game everywhere to me and and that’s
why i reached out to bruce

2013
00:37:42,383 –> 00:37:42,404
[ramsey_d_smith]: m

2014
00:37:42,774 –> 00:37:44,997
[harry_n_stout]: and he and i collaborated on the
article

2015
00:37:45,180 –> 00:37:45,384
[paul_tyler]: oh

2016
00:37:45,357 –> 00:37:46,198
[harry_n_stout]: maybe it’s time we

2017
00:37:46,184 –> 00:37:46,486
[ramsey_d_smith]: oh

2018
00:37:46,478 –> 00:37:48,620
[harry_n_stout]: we lift this one up a little
bit and let people know a little bit

2019
00:37:48,660 –> 00:37:49,161
[harry_n_stout]: more about it

2020
00:37:51,341 –> 00:37:54,165
[paul_tyler]: so okay change change is interesting

2021
00:37:54,232 –> 00:37:55,162
[harry_n_stout]: oh

2022
00:37:54,246 –> 00:37:54,706
[paul_tyler]: right it’s

2023
00:37:55,642 –> 00:37:55,904
[harry_n_stout]: oh

2024
00:37:56,054 –> 00:37:56,954
[ramsey_d_smith]: yeah

2025
00:37:56,089 –> 00:37:57,912
[paul_tyler]: there’s a pain point in the industry

2026
00:37:57,704 –> 00:37:58,934
[ramsey_d_smith]: my

2027
00:37:57,892 –> 00:37:58,073
[harry_n_stout]: yeah

2028
00:37:58,152 –> 00:37:59,875
[paul_tyler]: oh it just goes away no no
no

2029
00:38:00,083 –> 00:38:00,104
[ramsey_d_smith]: m

2030
00:38:00,196 –> 00:38:00,716
[paul_tyler]: my experience

2031
00:38:00,650 –> 00:38:00,811
[harry_n_stout]: yeah

2032
00:38:00,776 –> 00:38:01,357
[paul_tyler]: is it usually

2033
00:38:01,672 –> 00:38:01,938
[harry_n_stout]: oh

2034
00:38:02,139 –> 00:38:02,580
[paul_tyler]: takes some

2035
00:38:02,564 –> 00:38:02,865
[ramsey_d_smith]: oh

2036
00:38:02,640 –> 00:38:02,920
[paul_tyler]: buddy

2037
00:38:03,542 –> 00:38:03,663
[harry_n_stout]: ah

2038
00:38:03,581 –> 00:38:07,167
[paul_tyler]: or some group to really sort of
ride that horse

2039
00:38:06,922 –> 00:38:07,366
[harry_n_stout]: oh

2040
00:38:07,247 –> 00:38:08,369
[paul_tyler]: and make

2041
00:38:08,354 –> 00:38:08,984
[ramsey_d_smith]: my

2042
00:38:08,409 –> 00:38:08,730
[paul_tyler]: the change

2043
00:38:08,872 –> 00:38:09,135
[harry_n_stout]: yeah

2044
00:38:10,172 –> 00:38:11,595
[paul_tyler]: who who would do this and

2045
00:38:11,572 –> 00:38:11,833
[harry_n_stout]: yah

2046
00:38:11,675 –> 00:38:11,815
[paul_tyler]: how

2047
00:38:11,774 –> 00:38:11,895
[ramsey_d_smith]: ye

2048
00:38:11,855 –> 00:38:12,516
[paul_tyler]: would this happen

2049
00:38:14,928 –> 00:38:17,394
[harry_n_stout]: um i think one of the things
is going to

2050
00:38:17,384 –> 00:38:17,605
[ramsey_d_smith]: yeah

2051
00:38:17,450 –> 00:38:17,471
[paul_tyler]: a

2052
00:38:17,454 –> 00:38:18,436
[harry_n_stout]: take place in

2053
00:38:18,392 –> 00:38:18,533
[ramsey_d_smith]: yeah

2054
00:38:18,516 –> 00:38:24,506
[harry_n_stout]: bruce bruce kana here as i go
through um with respect to new standards for

2055
00:38:24,626 –> 00:38:25,467
[harry_n_stout]: best interest

2056
00:38:25,964 –> 00:38:26,227
[ramsey_d_smith]: oh

2057
00:38:26,028 –> 00:38:28,332
[harry_n_stout]: and fiduciary prac this is

2058
00:38:28,373 –> 00:38:28,394
[ramsey_d_smith]: m

2059
00:38:28,412 –> 00:38:28,553
[harry_n_stout]: with

2060
00:38:28,454 –> 00:38:30,194
[ramsey_d_smith]: yeah

2061
00:38:28,653 –> 00:38:30,255
[harry_n_stout]: respect to the

2062
00:38:30,314 –> 00:38:31,454
[ramsey_d_smith]: yeah

2063
00:38:30,496 –> 00:38:31,297
[harry_n_stout]: offering of

2064
00:38:31,574 –> 00:38:31,594
[ramsey_d_smith]: m

2065
00:38:31,758 –> 00:38:36,987
[harry_n_stout]: guaranteed pay out options in either defined
contribution plans or across the industry and all

2066
00:38:37,027 –> 00:38:37,848
[harry_n_stout]: different spectrum

2067
00:38:38,070 –> 00:38:38,354
[paul_tyler]: oh

2068
00:38:38,709 –> 00:38:40,813
[harry_n_stout]: the whole spectrum of how we’re bring
these products

2069
00:38:40,710 –> 00:38:41,017
[paul_tyler]: oh

2070
00:38:40,986 –> 00:38:41,310
[bruce_h__saul]: yeah

2071
00:38:41,795 –> 00:38:42,616
[harry_n_stout]: you would think

2072
00:38:42,764 –> 00:38:43,026
[ramsey_d_smith]: oh

2073
00:38:43,357 –> 00:38:44,920
[harry_n_stout]: as part of those

2074
00:38:45,434 –> 00:38:45,676
[ramsey_d_smith]: yeah

2075
00:38:45,861 –> 00:38:47,444
[harry_n_stout]: adhering to those standards

2076
00:38:47,114 –> 00:38:48,164
[ramsey_d_smith]: yeah

2077
00:38:47,504 –> 00:38:50,589
[harry_n_stout]: and then we’re going to have developing
fiduciary standards over the next

2078
00:38:50,550 –> 00:38:50,852
[paul_tyler]: oh

2079
00:38:50,649 –> 00:38:52,117
[harry_n_stout]: couple of years what

2080
00:38:51,996 –> 00:38:52,656
[bruce_h__saul]: yeah

2081
00:38:53,003 –> 00:38:55,492
[harry_n_stout]: should not this be part of that
conversation because

2082
00:38:55,380 –> 00:38:55,561
[paul_tyler]: yeah

2083
00:38:55,552 –> 00:38:57,378
[harry_n_stout]: it is it is part of what

2084
00:38:57,554 –> 00:38:57,818
[ramsey_d_smith]: yeah

2085
00:38:58,482 –> 00:39:03,450
[harry_n_stout]: if you will the guarantees are part
of the solvency backstop for the annuity products

2086
00:39:03,490 –> 00:39:03,610
[harry_n_stout]: that

2087
00:39:03,561 –> 00:39:03,581
[bruce_h__saul]: a

2088
00:39:03,650 –> 00:39:03,730
[harry_n_stout]: are

2089
00:39:03,773 –> 00:39:03,794
[ramsey_d_smith]: m

2090
00:39:03,811 –> 00:39:04,091
[harry_n_stout]: sold

2091
00:39:04,394 –> 00:39:04,634
[ramsey_d_smith]: yeah

2092
00:39:04,612 –> 00:39:07,336
[harry_n_stout]: so you would think maybe that as
part of that conversation

2093
00:39:07,178 –> 00:39:07,465
[bruce_h__saul]: yet

2094
00:39:07,458 –> 00:39:07,478
[paul_tyler]: a

2095
00:39:07,917 –> 00:39:13,892
[harry_n_stout]: something would nudge it along to big
and have these these funds disclosed and talked

2096
00:39:13,932 –> 00:39:16,580
[harry_n_stout]: about more that’s just the thought and
bruce you want to add to that

2097
00:39:18,107 –> 00:39:18,267
[bruce_h__saul]: yeah

2098
00:39:18,202 –> 00:39:18,862
[harry_n_stout]: yeah

2099
00:39:18,307 –> 00:39:23,256
[bruce_h__saul]: i think those are very good points
harry one thing i would add

2100
00:39:23,225 –> 00:39:23,409
[harry_n_stout]: oh

2101
00:39:23,337 –> 00:39:26,643
[bruce_h__saul]: just for interest and maybe a little
bit of direction is

2102
00:39:27,044 –> 00:39:27,324
[ramsey_d_smith]: oh

2103
00:39:28,166 –> 00:39:30,710
[bruce_h__saul]: the state of minnesota i believe it
was in two thousand

2104
00:39:30,704 –> 00:39:30,888
[ramsey_d_smith]: ye

2105
00:39:30,770 –> 00:39:34,516
[bruce_h__saul]: fifteen amended their guarantee fund law in
an interesting way

2106
00:39:34,544 –> 00:39:35,564
[ramsey_d_smith]: yeah

2107
00:39:35,898 –> 00:39:41,327
[bruce_h__saul]: the state retained the advertising prohibition so
the language i used earlier

2108
00:39:41,962 –> 00:39:42,204
[harry_n_stout]: oh

2109
00:39:42,249 –> 00:39:46,556
[bruce_h__saul]: is still unchanged in the minnesota statute
but the law also

2110
00:39:46,443 –> 00:39:46,463
[paul_tyler]: a

2111
00:39:46,736 –> 00:39:49,501
[bruce_h__saul]: goes on to say explicitly that the

2112
00:39:49,544 –> 00:39:49,745
[ramsey_d_smith]: oh

2113
00:39:49,581 –> 00:39:54,147
[bruce_h__saul]: producer may verbally explain those are the
words verbally explain

2114
00:39:53,744 –> 00:39:56,084
[ramsey_d_smith]: oh oh

2115
00:39:55,048 –> 00:39:55,489
[bruce_h__saul]: guarantee

2116
00:39:55,564 –> 00:39:55,686
[harry_n_stout]: ah

2117
00:39:55,569 –> 00:39:56,510
[bruce_h__saul]: fund coverage at

2118
00:39:56,564 –> 00:39:56,828
[ramsey_d_smith]: oh

2119
00:39:56,610 –> 00:39:57,170
[bruce_h__saul]: any time

2120
00:39:57,824 –> 00:39:58,089
[ramsey_d_smith]: yeah

2121
00:39:57,931 –> 00:39:59,713
[bruce_h__saul]: during the application process or

2122
00:39:59,864 –> 00:40:00,704
[ramsey_d_smith]: oh

2123
00:39:59,933 –> 00:40:01,715
[bruce_h__saul]: after um

2124
00:40:01,673 –> 00:40:01,694
[ramsey_d_smith]: m

2125
00:40:02,660 –> 00:40:07,523
[bruce_h__saul]: that’s yeah maybe a separate conversation that
seems to me

2126
00:40:07,523 –> 00:40:07,644
[harry_n_stout]: said

2127
00:40:07,623 –> 00:40:10,692
[bruce_h__saul]: not an ideal solution because it’s a
little bit of a head scratcher you know

2128
00:40:11,062 –> 00:40:11,932
[harry_n_stout]: yeah

2129
00:40:11,153 –> 00:40:13,538
[bruce_h__saul]: i can’t use the existence of the
fun to

2130
00:40:13,514 –> 00:40:13,835
[ramsey_d_smith]: yeah

2131
00:40:13,598 –> 00:40:16,603
[bruce_h__saul]: sell but i can verbally explain it

2132
00:40:16,898 –> 00:40:16,980
[harry_n_stout]: oh

2133
00:40:17,124 –> 00:40:20,550
[bruce_h__saul]: but i just offer that is at
least some maybe some fresh thinking about

2134
00:40:20,551 –> 00:40:20,692
[paul_tyler]: yeah

2135
00:40:20,590 –> 00:40:21,571
[bruce_h__saul]: the possibility

2136
00:40:21,143 –> 00:40:21,164
[ramsey_d_smith]: m

2137
00:40:21,792 –> 00:40:26,350
[bruce_h__saul]: of taking this very hard wired prohibition
and

2138
00:40:26,280 –> 00:40:27,090
[paul_tyler]: yeah

2139
00:40:26,390 –> 00:40:30,609
[bruce_h__saul]: having a little flexibility um you know

2140
00:40:30,927 –> 00:40:31,152
[harry_n_stout]: you know

2141
00:40:31,210 –> 00:40:33,674
[bruce_h__saul]: meaningful change given the

2142
00:40:33,990 –> 00:40:34,211
[paul_tyler]: yah

2143
00:40:34,155 –> 00:40:35,277
[bruce_h__saul]: existing state laws

2144
00:40:36,329 –> 00:40:36,450
[paul_tyler]: yah

2145
00:40:36,352 –> 00:40:36,496
[harry_n_stout]: ye

2146
00:40:36,479 –> 00:40:36,739
[bruce_h__saul]: really

2147
00:40:36,480 –> 00:40:36,807
[paul_tyler]: oh

2148
00:40:37,000 –> 00:40:37,140
[bruce_h__saul]: to

2149
00:40:37,094 –> 00:40:39,326
[ramsey_d_smith]: yah ah ye

2150
00:40:39,964 –> 00:40:41,086
[bruce_h__saul]: change the curren structure

2151
00:40:41,093 –> 00:40:41,114
[ramsey_d_smith]: m

2152
00:40:41,327 –> 00:40:42,348
[bruce_h__saul]: is a significant

2153
00:40:41,880 –> 00:40:42,185
[paul_tyler]: oh

2154
00:40:42,449 –> 00:40:44,031
[bruce_h__saul]: undertaking because it comes

2155
00:40:43,924 –> 00:40:44,025
[harry_n_stout]: oh

2156
00:40:44,131 –> 00:40:45,554
[bruce_h__saul]: back to the nice

2157
00:40:45,652 –> 00:40:46,582
[harry_n_stout]: oh

2158
00:40:45,694 –> 00:40:46,075
[bruce_h__saul]: model

2159
00:40:47,229 –> 00:40:47,331
[ramsey_d_smith]: ah

2160
00:40:47,337 –> 00:40:48,579
[bruce_h__saul]: any changes in the model

2161
00:40:48,584 –> 00:40:49,074
[ramsey_d_smith]: yes

2162
00:40:49,100 –> 00:40:49,360
[bruce_h__saul]: um

2163
00:40:49,934 –> 00:40:50,684
[ramsey_d_smith]: yeah

2164
00:40:50,362 –> 00:40:54,812
[bruce_h__saul]: you know just as a general proposition
are um take a long time to accomplish

2165
00:40:55,012 –> 00:40:58,963
[bruce_h__saul]: it’s a deliberative process with a lot
of input from various parties

2166
00:40:58,574 –> 00:40:58,857
[ramsey_d_smith]: yeah

2167
00:41:00,276 –> 00:41:00,376
[bruce_h__saul]: so

2168
00:41:00,674 –> 00:41:02,024
[ramsey_d_smith]: oh

2169
00:41:01,217 –> 00:41:02,199
[bruce_h__saul]: any kind of undertaking

2170
00:41:02,264 –> 00:41:02,726
[ramsey_d_smith]: oh

2171
00:41:02,359 –> 00:41:05,304
[bruce_h__saul]: to change the laws nation wide i
think would

2172
00:41:05,562 –> 00:41:05,723
[ramsey_d_smith]: yeah

2173
00:41:05,625 –> 00:41:06,286
[bruce_h__saul]: have to go through

2174
00:41:06,164 –> 00:41:06,425
[ramsey_d_smith]: oh

2175
00:41:06,346 –> 00:41:07,568
[bruce_h__saul]: that any ice process

2176
00:41:08,264 –> 00:41:08,549
[ramsey_d_smith]: oh

2177
00:41:08,750 –> 00:41:11,755
[bruce_h__saul]: to me in that conversation the starting
point has to be

2178
00:41:12,271 –> 00:41:12,291
[harry_n_stout]: a

2179
00:41:12,918 –> 00:41:18,787
[bruce_h__saul]: the points that we’ve discussed today uh
you know what what are the concerns

2180
00:41:18,574 –> 00:41:19,102
[harry_n_stout]: what

2181
00:41:18,807 –> 00:41:20,690
[bruce_h__saul]: how do we address concerns that

2182
00:41:20,984 –> 00:41:21,974
[ramsey_d_smith]: yah

2183
00:41:22,050 –> 00:41:23,310
[paul_tyler]: yeah

2184
00:41:22,193 –> 00:41:23,314
[bruce_h__saul]: some players might

2185
00:41:23,198 –> 00:41:23,320
[ramsey_d_smith]: for

2186
00:41:23,742 –> 00:41:23,905
[paul_tyler]: yeah

2187
00:41:23,778 –> 00:41:23,799
[harry_n_stout]: i

2188
00:41:23,795 –> 00:41:26,119
[bruce_h__saul]: inappropriately use the existence of the fund

2189
00:41:26,084 –> 00:41:26,306
[ramsey_d_smith]: yeah

2190
00:41:26,920 –> 00:41:31,909
[bruce_h__saul]: for for sales that aren’t in the
best interest what about the complexity of these

2191
00:41:31,949 –> 00:41:32,590
[bruce_h__saul]: products how do we

2192
00:41:32,616 –> 00:41:32,780
[ramsey_d_smith]: yes

2193
00:41:32,670 –> 00:41:33,271
[bruce_h__saul]: explain them

2194
00:41:34,334 –> 00:41:34,637
[ramsey_d_smith]: oh

2195
00:41:34,815 –> 00:41:35,059
[harry_n_stout]: yeah

2196
00:41:35,415 –> 00:41:42,086
[bruce_h__saul]: so the conversation would have to absolutely
seriously consider those points and others but i

2197
00:41:42,146 –> 00:41:45,012
[bruce_h__saul]: think a foreseeable outcome would be something

2198
00:41:45,011 –> 00:41:45,172
[paul_tyler]: yes

2199
00:41:45,072 –> 00:41:45,232
[bruce_h__saul]: that

2200
00:41:45,246 –> 00:41:45,369
[harry_n_stout]: yeah

2201
00:41:45,953 –> 00:41:50,823
[bruce_h__saul]: appropriately protects the consumer and the solvency
but doesn’t have

2202
00:41:50,610 –> 00:41:51,420
[paul_tyler]: oh

2203
00:41:52,696 –> 00:41:53,977
[bruce_h__saul]: what frankly is a gag

2204
00:41:53,984 –> 00:41:54,854
[ramsey_d_smith]: yeah

2205
00:41:54,077 –> 00:41:56,079
[bruce_h__saul]: rule on the ability to talk about
it

2206
00:41:56,820 –> 00:41:57,690
[paul_tyler]: yeah

2207
00:41:56,864 –> 00:41:57,614
[ramsey_d_smith]: yeah

2208
00:41:57,260 –> 00:42:00,364
[bruce_h__saul]: you know with consumers for companies and
producers that would

2209
00:42:00,290 –> 00:42:00,432
[paul_tyler]: yeah

2210
00:42:00,404 –> 00:42:01,224
[bruce_h__saul]: be my bottom line

2211
00:42:01,770 –> 00:42:04,515
[paul_tyler]: well thanks well hey rams you were
like at the top of the hour here

2212
00:42:05,926 –> 00:42:05,946
[ramsey_d_smith]: a

2213
00:42:06,058 –> 00:42:06,279
[paul_tyler]: final

2214
00:42:06,142 –> 00:42:06,484
[harry_n_stout]: yes

2215
00:42:06,359 –> 00:42:06,659
[paul_tyler]: thoughts

2216
00:42:06,674 –> 00:42:07,261
[ramsey_d_smith]: my

2217
00:42:06,780 –> 00:42:07,260
[paul_tyler]: questions

2218
00:42:08,525 –> 00:42:11,830
[ramsey_d_smith]: um it’s a it’s a it’s a
delicate issue

2219
00:42:12,170 –> 00:42:12,331
[paul_tyler]: yeah

2220
00:42:12,816 –> 00:42:13,179
[bruce_h__saul]: oh

2221
00:42:13,012 –> 00:42:14,482
[harry_n_stout]: oh yeah

2222
00:42:14,455 –> 00:42:17,961
[ramsey_d_smith]: and you know and i think at
the end of the day like

2223
00:42:17,940 –> 00:42:18,630
[paul_tyler]: oh

2224
00:42:19,083 –> 00:42:19,243
[ramsey_d_smith]: it’s

2225
00:42:19,599 –> 00:42:19,620
[paul_tyler]: m

2226
00:42:19,704 –> 00:42:21,567
[ramsey_d_smith]: it’s going to be up to the
regulators

2227
00:42:21,786 –> 00:42:22,068
[bruce_h__saul]: oh

2228
00:42:22,388 –> 00:42:25,714
[ramsey_d_smith]: to decide you know what the right
you know what the right what the right

2229
00:42:25,774 –> 00:42:31,463
[ramsey_d_smith]: balance is and you know within put
from the industry you know that again a

2230
00:42:31,543 –> 00:42:36,131
[ramsey_d_smith]: rod und a best interest framework i
think is a very good way to do

2231
00:42:36,211 –> 00:42:36,411
[ramsey_d_smith]: that

2232
00:42:36,390 –> 00:42:36,934
[paul_tyler]: i like that

2233
00:42:36,792 –> 00:42:43,664
[ramsey_d_smith]: ultimately ultimately is is not talking about
it in everybody’s best interest especially the clien

2234
00:42:44,405 –> 00:42:49,213
[ramsey_d_smith]: or is really really finding a very
specific way to communicate it uh

2235
00:42:49,627 –> 00:42:49,767
[harry_n_stout]: yep

2236
00:42:50,174 –> 00:42:50,275
[ramsey_d_smith]: the

2237
00:42:50,932 –> 00:42:51,253
[harry_n_stout]: oh

2238
00:42:51,396 –> 00:42:52,138
[ramsey_d_smith]: in the best interest

2239
00:42:52,901 –> 00:42:52,921
[bruce_h__saul]: m

2240
00:42:52,999 –> 00:42:53,961
[ramsey_d_smith]: and and if so

2241
00:42:54,129 –> 00:42:54,290
[harry_n_stout]: yeah

2242
00:42:55,343 –> 00:42:58,068
[ramsey_d_smith]: how does and how does one do
that in a way that’s that works for

2243
00:42:58,109 –> 00:43:01,030
[ramsey_d_smith]: everybody involved so i think that’s a
worthwhile goal oh

2244
00:43:01,320 –> 00:43:04,144
[paul_tyler]: yeah hey well listen bruce harry thanks

2245
00:43:04,394 –> 00:43:04,576
[ramsey_d_smith]: ye

2246
00:43:04,425 –> 00:43:05,527
[paul_tyler]: so much for joining us

2247
00:43:05,596 –> 00:43:05,780
[ramsey_d_smith]: yeah

2248
00:43:06,929 –> 00:43:07,210
[paul_tyler]: what’s the

2249
00:43:07,244 –> 00:43:08,324
[ramsey_d_smith]: oh

2250
00:43:07,250 –> 00:43:09,053
[paul_tyler]: best way people want to contact your
reach you

2251
00:43:10,432 –> 00:43:10,653
[harry_n_stout]: yeah

2252
00:43:10,535 –> 00:43:12,018
[paul_tyler]: and you know work with

2253
00:43:11,984 –> 00:43:13,034
[ramsey_d_smith]: oh

2254
00:43:12,058 –> 00:43:13,844
[paul_tyler]: you on this parti the topic what’s

2255
00:43:13,694 –> 00:43:13,914
[ramsey_d_smith]: oh

2256
00:43:13,925 –> 00:43:15,355
[paul_tyler]: what’s the best way to get in
touch with you

2257
00:43:16,462 –> 00:43:20,906
[harry_n_stout]: yeah and people can reach me at
financial verse dot com just go right to

2258
00:43:20,966 –> 00:43:25,650
[harry_n_stout]: my website and just fill out the
contact form will get right back to you

2259
00:43:25,710 –> 00:43:27,191
[harry_n_stout]: but financial verse dot com

2260
00:43:27,820 –> 00:43:29,483
[paul_tyler]: when we’ll put that link in including
the book

2261
00:43:29,467 –> 00:43:29,488
[harry_n_stout]: t

2262
00:43:30,626 –> 00:43:34,154
[paul_tyler]: you’ve got written a great series of
books that i think advisers could give to

2263
00:43:34,214 –> 00:43:35,336
[paul_tyler]: clients and bruce

2264
00:43:36,096 –> 00:43:37,638
[bruce_h__saul]: yeah i haven’t established a website but
i’m

2265
00:43:37,634 –> 00:43:37,995
[ramsey_d_smith]: oh

2266
00:43:37,718 –> 00:43:42,985
[bruce_h__saul]: always reachable at my email address which
is bruce all at codcast dot net

2267
00:43:43,650 –> 00:43:45,893
[paul_tyler]: okay excellent all right well listen thank
you

2268
00:43:45,862 –> 00:43:46,150
[harry_n_stout]: yeah

2269
00:43:45,994 –> 00:43:47,596
[paul_tyler]: all thanks for joining us and

2270
00:43:48,562 –> 00:43:48,823
[harry_n_stout]: oh

2271
00:43:48,618 –> 00:43:50,040
[paul_tyler]: as always you know give us feedback

2272
00:43:50,062 –> 00:43:50,386
[harry_n_stout]: oh

2273
00:43:50,120 –> 00:43:51,984
[paul_tyler]: and suggest topics we should

2274
00:43:52,192 –> 00:43:52,516
[harry_n_stout]: oh

2275
00:43:52,324 –> 00:43:56,335
[paul_tyler]: talk about and join us again next
week for another episode that annuity show

2276
00:43:56,752 –> 00:43:57,592
[harry_n_stout]: yeah

SPECIAL EPISODE – From the Office of the Chief Investment Officer With David Czerniecki

July 18, 2022 2022, Podcast, Retirement No comments

Inflation, war and the risk of a recession is weighing heavily on everyone’s mind. In this special episode, David Czerniecki, Chief Investment Officer for Nassau joins us again to share his perspective on the state of the economy.

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Episode 156: Selling Equity As New Way To Access The Value of Your Home In Retirement With David Shapiro

July 14, 2022 2022, David Shapiro, Podcast, Retirement No comments

A home is typically one of the largest individual assets we must include in a retirement plan. However, it’s also one of the most illiquid ones. We’ve had several episodes exploring the role of home equity loans in solving the problem. Today, we look at a second option – selling part of the equity in your house to a third party. David Shapiro, Founder and CEO of EquiFi Corporation explains the new product and the benefits it potentially offers.

Also, do you want to get regular updates on news about guests of our show? Go to https://thatannuityshow.com and subscribe to our newsletter.

We hope you enjoy the show.

Links mentioned:

Equifi:

Home page

David on Linkedin:
https://www.linkedin.com/in/dshapiro1/

Thank you to our show sponsor; The Index Standard!

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Episode Transcript

1
00:00:01,230 –> 00:00:02,832
[paul_tyler]: hi this is paul tyler and

2
00:00:03,119 –> 00:00:03,323
[ramsey_d_smith]: oh

3
00:00:03,153 –> 00:00:07,599
[paul_tyler]: welcome to another episode of the annuity
show ramsey how are you

4
00:00:08,139 –> 00:00:08,742
[ramsey_d_smith]: fantastic

5
00:00:09,661 –> 00:00:15,190
[paul_tyler]: good i had a great trip with
the mark fitzgerald down to the medicarians conference

6
00:00:15,431 –> 00:00:16,232
[paul_tyler]: in las vegas

7
00:00:16,118 –> 00:00:16,139
[ramsey_d_smith]: m

8
00:00:16,633 –> 00:00:20,239
[paul_tyler]: last week and we had some great
conversations i think you heard a few of

9
00:00:20,279 –> 00:00:20,399
[paul_tyler]: them

10
00:00:20,669 –> 00:00:20,689
[ramsey_d_smith]: i

11
00:00:20,785 –> 00:00:20,949
[paul_tyler]: wow

12
00:00:20,789 –> 00:00:24,072
[ramsey_d_smith]: listened to all the ones you sent
me the really fantastic

13
00:00:23,850 –> 00:00:24,570
[paul_tyler]: yeah

14
00:00:24,172 –> 00:00:27,214
[ramsey_d_smith]: conversations and some real real hitters you
managed

15
00:00:26,970 –> 00:00:27,191
[paul_tyler]: oh

16
00:00:27,254 –> 00:00:30,898
[ramsey_d_smith]: to get on the get on the
podcast with you as fantastic

17
00:00:31,360 –> 00:00:33,363
[paul_tyler]: ah no great conversation and well

18
00:00:33,488 –> 00:00:33,509
[ramsey_d_smith]: m

19
00:00:33,503 –> 00:00:33,984
[paul_tyler]: we’ll release

20
00:00:33,959 –> 00:00:34,139
[ramsey_d_smith]: oh

21
00:00:34,024 –> 00:00:37,790
[paul_tyler]: them a little later the summer but
you now just a superb conference

22
00:00:37,799 –> 00:00:38,041
[ramsey_d_smith]: oh

23
00:00:37,850 –> 00:00:41,296
[paul_tyler]: that jane wine rub put on and
it was actually a really

24
00:00:41,099 –> 00:00:41,279
[ramsey_d_smith]: oh

25
00:00:41,396 –> 00:00:49,029
[paul_tyler]: good intersection ween you know companies in
the senior health care market startups um and

26
00:00:49,845 –> 00:00:49,945
[ramsey_d_smith]: at

27
00:00:49,891 –> 00:00:52,174
[paul_tyler]: traditional distribution and kind of that

28
00:00:52,169 –> 00:00:52,431
[ramsey_d_smith]: oh

29
00:00:52,214 –> 00:00:53,937
[paul_tyler]: actual is going to be kind of
a zone

30
00:00:53,807 –> 00:00:53,948
[ramsey_d_smith]: yeah

31
00:00:53,977 –> 00:00:58,025
[paul_tyler]: we’re talking about today um and i’ll
start with we’re gonna be talking about homes

32
00:00:58,627 –> 00:01:03,577
[paul_tyler]: homes are at such an important asset
class for for most retires you know for

33
00:01:03,857 –> 00:01:11,851
[paul_tyler]: typical people retiring social security and home
equity are probably the two biggest assets they’ve

34
00:01:11,931 –> 00:01:16,178
[paul_tyler]: got to to work with and and
use for

35
00:01:16,139 –> 00:01:16,422
[ramsey_d_smith]: oh

36
00:01:16,299 –> 00:01:18,125
[paul_tyler]: income in later years

37
00:01:18,299 –> 00:01:18,540
[ramsey_d_smith]: oh

38
00:01:18,406 –> 00:01:20,394
[paul_tyler]: now how do you convert that home
into

39
00:01:21,269 –> 00:01:21,517
[ramsey_d_smith]: yes

40
00:01:22,200 –> 00:01:27,708
[paul_tyler]: retirement income probably the most common strategy
is downside sell sell our house you know

41
00:01:28,650 –> 00:01:33,117
[paul_tyler]: they take the proceeds move somewhere smaller
cheaper tax rates are lower and you freed

42
00:01:33,137 –> 00:01:37,845
[paul_tyler]: up this equity i mean that’s an
expense i very disruptive way to solve that

43
00:01:37,905 –> 00:01:43,935
[paul_tyler]: problem we’ve had rams your friend don
on several times talking to us about hecham

44
00:01:44,015 –> 00:01:46,680
[paul_tyler]: loans reverse mortgages as a potential

45
00:01:46,619 –> 00:01:47,339
[ramsey_d_smith]: yeah

46
00:01:46,740 –> 00:01:47,401
[paul_tyler]: solution today

47
00:01:47,339 –> 00:01:48,248
[ramsey_d_smith]: oh

48
00:01:47,682 –> 00:01:49,985
[paul_tyler]: we have david chipero

49
00:01:49,709 –> 00:01:50,012
[ramsey_d_smith]: yeah

50
00:01:50,286 –> 00:01:57,378
[paul_tyler]: who is founder in c equify corpse
ration to talk about another approach to david

51
00:01:57,398 –> 00:02:03,868
[paul_tyler]: i’m going to say nondisruptively allow retires
the tap into their value of their home

52
00:02:04,670 –> 00:02:05,975
[paul_tyler]: to provide a stable

53
00:02:06,809 –> 00:02:07,169
[ramsey_d_smith]: oh

54
00:02:06,919 –> 00:02:08,967
[paul_tyler]: income and retirement so welcome to our
show david

55
00:02:09,213 –> 00:02:10,559
[david_shapiro]: well thank you it’s great to be
here

56
00:02:10,979 –> 00:02:11,161
[ramsey_d_smith]: oh

57
00:02:11,191 –> 00:02:11,892
[paul_tyler]: yes and

58
00:02:11,814 –> 00:02:11,937
[david_shapiro]: yeah

59
00:02:11,992 –> 00:02:12,553
[paul_tyler]: you actually

60
00:02:12,476 –> 00:02:12,658
[ramsey_d_smith]: yes

61
00:02:12,633 –> 00:02:15,678
[paul_tyler]: are this is actually start up company
that we’re going to talk about today correct

62
00:02:16,073 –> 00:02:16,894
[david_shapiro]: yeah yeah yeah

63
00:02:16,940 –> 00:02:17,102
[paul_tyler]: yeah

64
00:02:17,054 –> 00:02:21,321
[david_shapiro]: yeah we’re an aging start up because
we started in two thousand sixteen but because

65
00:02:21,421 –> 00:02:25,588
[david_shapiro]: of the way that we’re coming to
market the regulatory piece of the business

66
00:02:25,680 –> 00:02:27,270
[paul_tyler]: yeah

67
00:02:26,229 –> 00:02:29,014
[david_shapiro]: takes an exceedingly long or at a
time so

68
00:02:29,669 –> 00:02:30,959
[ramsey_d_smith]: oh

69
00:02:29,695 –> 00:02:29,835
[david_shapiro]: but

70
00:02:29,880 –> 00:02:30,221
[paul_tyler]: uh

71
00:02:30,035 –> 00:02:31,638
[david_shapiro]: yeah we launched in we launched in

72
00:02:31,929 –> 00:02:31,950
[paul_tyler]: h

73
00:02:32,679 –> 00:02:34,462
[david_shapiro]: late january early february but ye

74
00:02:34,590 –> 00:02:35,310
[paul_tyler]: yeah

75
00:02:35,113 –> 00:02:35,254
[david_shapiro]: yeah

76
00:02:35,430 –> 00:02:36,251
[paul_tyler]: interesting all right well

77
00:02:36,345 –> 00:02:36,507
[david_shapiro]: yeah

78
00:02:36,531 –> 00:02:40,178
[paul_tyler]: well tell tell us about your company
and tell us about the product that you’re

79
00:02:40,033 –> 00:02:40,174
[david_shapiro]: yeah

80
00:02:40,278 –> 00:02:40,598
[paul_tyler]: offering

81
00:02:40,955 –> 00:02:41,115
[david_shapiro]: sure

82
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[paul_tyler]: oh

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[david_shapiro]: so what led me to this was
you know

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[paul_tyler]: oh

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[david_shapiro]: a career in the annuity space basically
designing annuities for insurance

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[paul_tyler]: yah

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[david_shapiro]: companies train stockbrokers back in the old
days and

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[paul_tyler]: oh

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[david_shapiro]: financial planners on how important it is
to save for retirement

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[paul_tyler]: oh

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[david_shapiro]: and you know i i built a
company called in fo one with the fur

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[david_shapiro]: sas model

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[ramsey_d_smith]: ah

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[david_shapiro]: that had every variable annuity on our
platform it was all cloud based back in

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[paul_tyler]: oh

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[david_shapiro]: nineteen ninety seven nineteen ninety eight when
bill gates was talking about the internet and

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[david_shapiro]: so we built this eco system around
annuities and it allowed advisors to look at

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[david_shapiro]: all the annuities on the product illustrate
them you know screen scrape in their clients

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[david_shapiro]: data and trade it would go through
pershing or d t c or the whatever

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[david_shapiro]: firm the was the clearing firm and
equify is fundamentally using the exact same eco

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[david_shapiro]: system but

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[ramsey_d_smith]: oh

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[david_shapiro]: it’s focused you know you said paul
primarily

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[ramsey_d_smith]: m

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[david_shapiro]: on the baby boomers that want to
retire in place and

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[paul_tyler]: oh

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[david_shapiro]: as you said

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[ramsey_d_smith]: oh

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[david_shapiro]: the home

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[ramsey_d_smith]: yeah

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[david_shapiro]: is

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[ramsey_d_smith]: yeah

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[david_shapiro]: you know the average american has

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[paul_tyler]: oh

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[david_shapiro]: seventy to seventy five per cent of
their wealth is in their home um and

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[david_shapiro]: so being able to give people access
to that in a form that isn’t debt

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[david_shapiro]: that

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[paul_tyler]: yeah

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[david_shapiro]: doesn’t have a current interest rate doesn’t
have an crude interest

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[paul_tyler]: a

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[david_shapiro]: um provides them the flexibility to stay
in their home the rest of their lives

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[david_shapiro]: was

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[paul_tyler]: oh

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[david_shapiro]: the gating factor for me to create
equify which we did in two thousand sixteen

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[david_shapiro]: and we’re

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[paul_tyler]: oh

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[david_shapiro]: organized delaware public benefit corporation so our
intent

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[ramsey_d_smith]: m oh

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[david_shapiro]: is to help people create

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[ramsey_d_smith]: yeah

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[david_shapiro]: wealth and manage

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[ramsey_d_smith]: ye

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[david_shapiro]: the wealth that they have in the
most important asset that they own which is

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[david_shapiro]: their home

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[ramsey_d_smith]: ah

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[david_shapiro]: um and that’s that’s kind of what

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[ramsey_d_smith]: oh

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[david_shapiro]: led to to this journey and the
product is purely a trade between

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[ramsey_d_smith]: m

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[david_shapiro]: a home owner that has equity and
their home once to access that equity doesn’t

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[david_shapiro]: want have it in the form of
a loan and there’s an investor on the

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[david_shapiro]: other side that says hey you know
i’d love to get some exposure to home

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[david_shapiro]: price appreciation and if i can be
a silent investor with the home owner just

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[david_shapiro]: take the ride on the appreciated value
of the home

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[paul_tyler]: yeah

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[david_shapiro]: then that’s a great

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[paul_tyler]: yeah

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[david_shapiro]: deal for us so it’s it’s designed
to be

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[paul_tyler]: oh

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[david_shapiro]: a very fair trade between a home
owner and an investor allows both parties us

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[david_shapiro]: to feel that you know they’ve entered
to an agreement that they both can live

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[david_shapiro]: with and it provides the benefits to
both and and in the middle of that

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[david_shapiro]: is the distribution of product and we
exclusively provide the product through financial advisors insurance

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[david_shapiro]: agents mortgage mortgage brokers folks like that
that already

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[ramsey_d_smith]: m

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[david_shapiro]: have a trusted relation ship with the
consumer

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[ramsey_d_smith]: so can you talk a little bit
about

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[david_shapiro]: yeah

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[ramsey_d_smith]: what the actual transaction looks like what
is it you know so t zero starting

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[ramsey_d_smith]: point you know i’m i’m seventy

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[paul_tyler]: oh

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[ramsey_d_smith]: years old i owned my house

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[paul_tyler]: yeah

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[ramsey_d_smith]: and

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[david_shapiro]: hm

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[ramsey_d_smith]: then i

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[paul_tyler]: yeah

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[ramsey_d_smith]: enter into a you now transaction with
equify and you know t plus a week

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[ramsey_d_smith]: later or hover long it takes i’ve
now i’ve now entered into

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[paul_tyler]: oh

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[ramsey_d_smith]: an equifye contract

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[david_shapiro]: hm

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[ramsey_d_smith]: um what’s different what do i what
do i have i still own my house

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[david_shapiro]: you’re

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[ramsey_d_smith]: um

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[david_shapiro]: still in your house

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[ramsey_d_smith]: but and so how much of my
house would i typically what i typically own

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[ramsey_d_smith]: like how would you typically would equify
or

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[paul_tyler]: a

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[ramsey_d_smith]: equifys investors what percentage

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[paul_tyler]: oh

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[ramsey_d_smith]: of a house would you typically purchase
in one of the transactions

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[david_shapiro]: yeah

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[paul_tyler]: oh

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[david_shapiro]: we can go up to thirty five
per cent

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[paul_tyler]: yeah

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[david_shapiro]: of the value of the home sometimes
a little bit more than thirty five percent

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[david_shapiro]: um so let’s just take an example

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[ramsey_d_smith]: oh

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[david_shapiro]: let’s say you’ve got a million dollar
home and for purposes of this since thirty

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[david_shapiro]: seven per cent of the homes in
the country have no mortgage

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[paul_tyler]: oh

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[david_shapiro]: let’s assume that there’s no mortgage on
the home so we’ve got a million dollar

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[david_shapiro]: home let’s say the home owner wants
to get four hundred thousand dollars out of

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[david_shapiro]: their home let’s max it out and
say we can give him forty

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[ramsey_d_smith]: ah

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[david_shapiro]: per cent right so we basically

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[ramsey_d_smith]: hm

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[david_shapiro]: advance them forty per cent of the
value of their home and then since the

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[david_shapiro]: home is got a value of a
million dollars we

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[paul_tyler]: oh

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[david_shapiro]: put in three hundred thousand dollars of
what we call protected equity that sits on

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[david_shapiro]: top of the four hundred thousand that
we put in and then when the home

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[david_shapiro]: owner dies sells the property or chooses
to repay for that forty per cent they’re

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[david_shapiro]: going to give us you know half
of the value of the home above their

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[david_shapiro]: protected equity

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[ramsey_d_smith]: yeah

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[david_shapiro]: so the homes a million dollars we
put up for hundred thousand there’s three hundred

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[david_shapiro]: thousand that we don’t share in at
all and then anything above that plus the

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[david_shapiro]: appreciation in the home we would take
fifty percent and they would take fifty percent

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[david_shapiro]: if it was three hundred thousand dollar
instead of a four hundred thousand which is

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[david_shapiro]: thirty per cent we would probably take
thirty seven thirty eight per cent and they’d

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[david_shapiro]: have four hundred thousand in protected equity
that’s that’s in it plays out very nicely

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[david_shapiro]: in pictures

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[ramsey_d_smith]: i

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[david_shapiro]: it

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[ramsey_d_smith]: was going to say that

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[paul_tyler]: yeah

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[ramsey_d_smith]: that

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[david_shapiro]: yeah

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[ramsey_d_smith]: is that is that is

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[paul_tyler]: oh

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[ramsey_d_smith]: a transaction that that definitely would benefit
from a

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[paul_tyler]: oh

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[ramsey_d_smith]: would benefit from an illustration or

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[david_shapiro]: yes

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[ramsey_d_smith]: you know

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[david_shapiro]: yeah

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[ramsey_d_smith]: you know a picture so you can
understand so of what the parts are like

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[ramsey_d_smith]: what what exactly the terms are for
the protected equity etcetera but

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[david_shapiro]: yeah

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[ramsey_d_smith]: fundamentally so let’s maybe let’s just stick
with sort of like the general outcome so

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[ramsey_d_smith]: if i once i’ve engaged in this
transaction

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[paul_tyler]: yeah

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[ramsey_d_smith]: with you like how is

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[paul_tyler]: yeah

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[ramsey_d_smith]: it how is it you know how
is it different than a typical reverse mortgage

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[david_shapiro]: yeah

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[ramsey_d_smith]: why am i in a the consumer
why am i in a better position

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[david_shapiro]: yeah so i think the better question
is based on each individual right so we

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[david_shapiro]: don’t necessarily

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[ramsey_d_smith]: oh

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[david_shapiro]: believe that there is a right or
a wrong

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[ramsey_d_smith]: yeah

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[david_shapiro]: so think that if you’re an advisor
and you’re working

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[ramsey_d_smith]: oh

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[david_shapiro]: with you know

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[ramsey_d_smith]: oh

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[david_shapiro]: a client of yours

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[ramsey_d_smith]: yeah

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[david_shapiro]: that is in this position

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[paul_tyler]: oh

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[david_shapiro]: you should be presenting them a he
lock you can’t really

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[paul_tyler]: a

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[david_shapiro]: you know with

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[ramsey_d_smith]: oh

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[david_shapiro]: finn registered rep can’t recommend a key
lock because of the fender restrictions on utilizing

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[david_shapiro]: home equity particularly if you’re going to
be utilizing that toby security

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[paul_tyler]: m oh

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[david_shapiro]: so but they should make them aware
of their options one would be a key

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[david_shapiro]: lock you know paul you started that
with they could sell their home right and

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[david_shapiro]: re locate and you know get a
smaller place there verse mortgage presents a

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[paul_tyler]: yeah

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[david_shapiro]: different opportunity because

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[ramsey_d_smith]: oh

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[david_shapiro]: it doesn’t have a current interest rate
it has

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[ramsey_d_smith]: oh

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[david_shapiro]: an accruived interest rate

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[ramsey_d_smith]: oh

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[david_shapiro]: and

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[ramsey_d_smith]: yeah

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[david_shapiro]: you can’t

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[paul_tyler]: oh

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[david_shapiro]: be on a heem heck mortgage which
is the most popular

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[paul_tyler]: oh

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[david_shapiro]: government guaranteed reverse mortgage you can’t have
a first mortgage so one differential

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[paul_tyler]: yeah

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[david_shapiro]: between us and reverse mortgage is if
somebody has a mortgage on their home and

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[david_shapiro]: it’s at a four per

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[paul_tyler]: yeah

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[david_shapiro]: cent or three percent you know they
may not want to pay that off just

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[david_shapiro]: to get the reverse mortgage which today
is going to be starting at probably a

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[david_shapiro]: six and a half per and you
know adjustable rate interest so that that’s one

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[david_shapiro]: of the things that they need to
consider and then the thing i think that

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[david_shapiro]: that

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[ramsey_d_smith]: m

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[david_shapiro]: most differentiates us is that

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[ramsey_d_smith]: m

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[david_shapiro]: our market with aging

290
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[paul_tyler]: m

291
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[david_shapiro]: baby boomers the older people get they
don’t want to mortgage they don’t want to

292
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[david_shapiro]: have you know a current payment they
don’t want to see a accruing inter rate

293
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[david_shapiro]: where every statement that they get pay
the balance is going up

294
00:10:17,309 –> 00:10:18,029
[ramsey_d_smith]: yeah

295
00:10:17,321 –> 00:10:20,627
[david_shapiro]: and up and up it’s not going
to ever go down so i think that

296
00:10:20,437 –> 00:10:20,579
[ramsey_d_smith]: yeah

297
00:10:21,047 –> 00:10:27,138
[david_shapiro]: you know that’s real limitation end frankly
the other issue with reversed mortgages is that

298
00:10:27,598 –> 00:10:30,864
[david_shapiro]: you know there’s a cost to our
product there’s a cost to reverse mortgage there’s

299
00:10:30,904 –> 00:10:31,324
[david_shapiro]: a cost to

300
00:10:31,349 –> 00:10:31,752
[ramsey_d_smith]: yeah

301
00:10:31,385 –> 00:10:33,909
[david_shapiro]: a hey lock with reversed mortgages

302
00:10:33,407 –> 00:10:33,548
[ramsey_d_smith]: yeah

303
00:10:34,229 –> 00:10:34,430
[david_shapiro]: and

304
00:10:34,590 –> 00:10:35,220
[paul_tyler]: yeah

305
00:10:34,610 –> 00:10:36,814
[david_shapiro]: with he locks a lot of that
call t is

306
00:10:36,749 –> 00:10:36,931
[ramsey_d_smith]: oh

307
00:10:37,314 –> 00:10:39,638
[david_shapiro]: you know is built into the spread
on the interest

308
00:10:39,434 –> 00:10:39,454
[paul_tyler]: i

309
00:10:39,739 –> 00:10:40,580
[david_shapiro]: rate but

310
00:10:40,649 –> 00:10:40,890
[ramsey_d_smith]: oh

311
00:10:40,660 –> 00:10:43,124
[david_shapiro]: just the up front cost we were
looking at

312
00:10:42,987 –> 00:10:43,148
[ramsey_d_smith]: yeah

313
00:10:43,665 –> 00:10:48,052
[david_shapiro]: a comparison one of our financial planters
r i s and sacramento has a client

314
00:10:48,193 –> 00:10:48,393
[david_shapiro]: that

315
00:10:48,690 –> 00:10:48,710
[paul_tyler]: m

316
00:10:48,974 –> 00:10:53,041
[david_shapiro]: wants to use our product and the
apples apples comparison to get

317
00:10:53,430 –> 00:10:53,651
[paul_tyler]: oh

318
00:10:53,481 –> 00:10:56,186
[david_shapiro]: you know four hundred thousand dollars out
of their home

319
00:10:57,210 –> 00:10:57,472
[paul_tyler]: oh

320
00:10:57,248 –> 00:10:59,151
[david_shapiro]: the reverse mortgage just the cost

321
00:10:58,919 –> 00:10:59,226
[ramsey_d_smith]: oh

322
00:10:59,211 –> 00:11:05,361
[david_shapiro]: to originate it with twenty eight thousand
dollars our product was twelve thousand dollars

323
00:11:05,138 –> 00:11:05,159
[ramsey_d_smith]: m

324
00:11:05,501 –> 00:11:10,430
[david_shapiro]: so much more expensive up front and
then the other issue with reversed mortgages is

325
00:11:10,570 –> 00:11:13,314
[david_shapiro]: that you don’t know what the lie
of bill ty to the estate is going

326
00:11:13,355 –> 00:11:17,802
[david_shapiro]: to be so with our product you
know exactly if we’re putting up that you

327
00:11:17,842 –> 00:11:20,827
[david_shapiro]: know forty per cent which is a
lot right and we’re going to take half

328
00:11:20,927 –> 00:11:24,293
[david_shapiro]: of the of the net equity in
the home you know upon their death or

329
00:11:24,393 –> 00:11:29,982
[david_shapiro]: sale whatever they know that fifty percent
of their home can be managed in the

330
00:11:30,042 –> 00:11:34,510
[david_shapiro]: estate where with the reverse mortgage you
just don’t know what that balance is going

331
00:11:34,550 –> 00:11:40,660
[david_shapiro]: to be you know in until there
are so for financial planning purposes it’s it’s

332
00:11:40,720 –> 00:11:41,401
[david_shapiro]: a difference that we

333
00:11:41,400 –> 00:11:41,664
[paul_tyler]: oh

334
00:11:41,461 –> 00:11:43,264
[david_shapiro]: think you know helps helps our

335
00:11:43,620 –> 00:11:43,901
[paul_tyler]: oh

336
00:11:43,685 –> 00:11:46,109
[david_shapiro]: cause in you know setting that comparison
up

337
00:11:46,320 –> 00:11:46,626
[paul_tyler]: oh

338
00:11:46,550 –> 00:11:47,772
[david_shapiro]: and then reputationally

339
00:11:47,999 –> 00:11:48,260
[ramsey_d_smith]: oh

340
00:11:48,233 –> 00:11:51,017
[david_shapiro]: oh you know i don’t want to

341
00:11:51,479 –> 00:11:51,680
[ramsey_d_smith]: oh

342
00:11:51,698 –> 00:11:53,742
[david_shapiro]: malign the reverse mortgage industry but

343
00:11:54,060 –> 00:11:54,301
[paul_tyler]: oh

344
00:11:54,363 –> 00:11:55,565
[david_shapiro]: there is a historical

345
00:11:55,765 –> 00:11:55,949
[ramsey_d_smith]: yeah

346
00:11:56,747 –> 00:12:00,874
[david_shapiro]: a legacy fear of reverse mortgages that
built there early in the

347
00:12:00,869 –> 00:12:01,153
[ramsey_d_smith]: oh

348
00:12:01,114 –> 00:12:01,775
[david_shapiro]: in the industry

349
00:12:02,026 –> 00:12:02,189
[ramsey_d_smith]: yeah

350
00:12:02,436 –> 00:12:02,877
[david_shapiro]: um

351
00:12:03,330 –> 00:12:03,350
[paul_tyler]: m

352
00:12:03,398 –> 00:12:06,543
[david_shapiro]: and so you know you have to
deal with that general generation

353
00:12:06,360 –> 00:12:06,601
[paul_tyler]: oh

354
00:12:06,603 –> 00:12:08,386
[david_shapiro]: ally as well because a lot of
the

355
00:12:08,849 –> 00:12:09,179
[ramsey_d_smith]: oh

356
00:12:08,927 –> 00:12:10,069
[david_shapiro]: baby boomers had

357
00:12:10,020 –> 00:12:10,324
[paul_tyler]: oh

358
00:12:10,350 –> 00:12:13,374
[david_shapiro]: parents of theirs that you know looked
at a reverse

359
00:12:13,230 –> 00:12:13,511
[paul_tyler]: oh

360
00:12:13,434 –> 00:12:18,298
[david_shapiro]: mortgage and felt that it was not
not appropriate for them so the reverse mortgage

361
00:12:18,338 –> 00:12:19,479
[david_shapiro]: industry has some baggage

362
00:12:19,530 –> 00:12:19,772
[paul_tyler]: oh

363
00:12:19,560 –> 00:12:22,122
[david_shapiro]: that that they have to deal with
historically

364
00:12:22,829 –> 00:12:23,130
[ramsey_d_smith]: yah

365
00:12:23,101 –> 00:12:25,067
[paul_tyler]: well well and you kind of you

366
00:12:25,098 –> 00:12:25,238
[ramsey_d_smith]: yah

367
00:12:25,107 –> 00:12:25,549
[paul_tyler]: know alluded

368
00:12:25,483 –> 00:12:25,744
[david_shapiro]: oh

369
00:12:25,589 –> 00:12:25,649
[paul_tyler]: to

370
00:12:25,619 –> 00:12:25,905
[ramsey_d_smith]: oh

371
00:12:25,689 –> 00:12:29,390
[paul_tyler]: this earlier which is when people

372
00:12:29,443 –> 00:12:30,011
[david_shapiro]: yeah

373
00:12:29,470 –> 00:12:31,093
[paul_tyler]: say is this good product or bad
product well

374
00:12:31,418 –> 00:12:31,439
[ramsey_d_smith]: m

375
00:12:31,434 –> 00:12:32,816
[paul_tyler]: it always starts with

376
00:12:32,819 –> 00:12:33,749
[ramsey_d_smith]: yeah

377
00:12:33,777 –> 00:12:34,819
[paul_tyler]: two words it depends

378
00:12:35,493 –> 00:12:35,635
[david_shapiro]: yeah

379
00:12:35,961 –> 00:12:39,126
[paul_tyler]: now now if my goal you know
ramsey

380
00:12:39,043 –> 00:12:39,325
[david_shapiro]: oh

381
00:12:39,587 –> 00:12:41,691
[paul_tyler]: i’m thinking if i’m goin to do
one of these things i think there are

382
00:12:41,731 –> 00:12:45,477
[paul_tyler]: two goals i have tell me challenging
me on the question because maybe i’m not

383
00:12:45,577 –> 00:12:46,579
[paul_tyler]: thinking of this way one is

384
00:12:46,829 –> 00:12:48,239
[ramsey_d_smith]: yeah

385
00:12:47,240 –> 00:12:55,033
[paul_tyler]: i want to maximize my income available
for my house two leaves something probably you

386
00:12:55,093 –> 00:12:58,819
[paul_tyler]: know as much as i possibly can
to my my survivor so think i have

387
00:12:58,879 –> 00:13:02,405
[paul_tyler]: two goals now david i can see
two different scenarios taking place here

388
00:13:02,369 –> 00:13:02,531
[ramsey_d_smith]: yeah

389
00:13:02,565 –> 00:13:06,132
[paul_tyler]: one is let’s say t zero ramsey

390
00:13:06,523 –> 00:13:06,543
[david_shapiro]: m

391
00:13:06,934 –> 00:13:07,656
[paul_tyler]: housing market

392
00:13:07,402 –> 00:13:07,423
[david_shapiro]: m

393
00:13:07,796 –> 00:13:12,306
[paul_tyler]: is it’s index to a hundred you
know by the time i pass on it’s

394
00:13:12,406 –> 00:13:12,587
[paul_tyler]: now

395
00:13:14,189 –> 00:13:14,435
[ramsey_d_smith]: yeah

396
00:13:14,650 –> 00:13:19,257
[paul_tyler]: two thirty five yu know what it
was you know prior huge

397
00:13:19,499 –> 00:13:19,702
[ramsey_d_smith]: yeah

398
00:13:19,618 –> 00:13:20,339
[paul_tyler]: appreciation

399
00:13:20,806 –> 00:13:21,373
[david_shapiro]: hm

400
00:13:21,201 –> 00:13:25,668
[paul_tyler]: one scenario other scenarios you know is
pretty flat market you know only we only

401
00:13:25,708 –> 00:13:31,358
[paul_tyler]: had i appreciate david how do those
each of those how would these instruments perform

402
00:13:32,019 –> 00:13:32,219
[paul_tyler]: you know

403
00:13:32,939 –> 00:13:33,689
[ramsey_d_smith]: yeah

404
00:13:33,040 –> 00:13:36,586
[paul_tyler]: reverse mortgage versus what you’re doing those
are my two goals

405
00:13:37,093 –> 00:13:37,215
[david_shapiro]: yeah

406
00:13:37,127 –> 00:13:37,608
[paul_tyler]: max mis

407
00:13:37,539 –> 00:13:37,661
[david_shapiro]: yeah

408
00:13:37,708 –> 00:13:39,356
[paul_tyler]: income max that’s what i’m leaving

409
00:13:39,803 –> 00:13:41,125
[david_shapiro]: yeah well and

410
00:13:41,359 –> 00:13:41,479
[ramsey_d_smith]: we

411
00:13:41,405 –> 00:13:45,132
[david_shapiro]: the two factors that you have to
take into account are what’s the

412
00:13:45,779 –> 00:13:46,769
[ramsey_d_smith]: oh

413
00:13:46,170 –> 00:13:46,312
[paul_tyler]: ye

414
00:13:46,233 –> 00:13:47,235
[david_shapiro]: forward looking

415
00:13:47,150 –> 00:13:47,352
[ramsey_d_smith]: yes

416
00:13:47,816 –> 00:13:48,537
[david_shapiro]: interest rate

417
00:13:48,691 –> 00:13:48,855
[ramsey_d_smith]: yes

418
00:13:48,958 –> 00:13:49,579
[david_shapiro]: over time

419
00:13:49,690 –> 00:13:49,913
[paul_tyler]: yes

420
00:13:49,829 –> 00:13:50,193
[ramsey_d_smith]: oh

421
00:13:49,860 –> 00:13:51,482
[david_shapiro]: versus what’s the home appreciation

422
00:13:51,450 –> 00:13:52,620
[paul_tyler]: oh

423
00:13:51,743 –> 00:13:55,569
[david_shapiro]: our time and i mean that’s you
know that’s an unknown that you know each

424
00:13:55,629 –> 00:14:00,297
[david_shapiro]: person is going to have to answer
for for themselves so i think it becomes

425
00:14:01,078 –> 00:14:02,741
[david_shapiro]: it is it is a financial decision

426
00:14:02,759 –> 00:14:02,964
[ramsey_d_smith]: yah

427
00:14:03,883 –> 00:14:06,808
[david_shapiro]: but there are other elements you know
like just not wanting

428
00:14:06,629 –> 00:14:06,830
[ramsey_d_smith]: yah

429
00:14:06,868 –> 00:14:11,195
[david_shapiro]: to have a mortgage or the whole
estate thing but

430
00:14:11,190 –> 00:14:11,391
[paul_tyler]: yeah

431
00:14:11,275 –> 00:14:15,342
[david_shapiro]: it is it is a financial equation
that is not

432
00:14:15,809 –> 00:14:16,619
[ramsey_d_smith]: yah

433
00:14:15,883 –> 00:14:19,809
[david_shapiro]: it’s not perfect because we can’t you
know we can we can’t see that far

434
00:14:19,870 –> 00:14:20,010
[david_shapiro]: into

435
00:14:19,919 –> 00:14:20,123
[ramsey_d_smith]: yeah

436
00:14:20,050 –> 00:14:20,531
[david_shapiro]: the future

437
00:14:20,280 –> 00:14:21,000
[paul_tyler]: yeah

438
00:14:21,569 –> 00:14:21,877
[ramsey_d_smith]: oh

439
00:14:21,813 –> 00:14:21,973
[david_shapiro]: and

440
00:14:22,140 –> 00:14:22,421
[paul_tyler]: yah

441
00:14:22,233 –> 00:14:22,634
[david_shapiro]: that’s one

442
00:14:22,559 –> 00:14:22,741
[ramsey_d_smith]: oh

443
00:14:22,674 –> 00:14:23,496
[david_shapiro]: of the reasons that

444
00:14:23,908 –> 00:14:24,109
[paul_tyler]: yah

445
00:14:24,357 –> 00:14:28,724
[david_shapiro]: that i think that reverse mortgages you
know most of them are on an adjustable

446
00:14:28,824 –> 00:14:34,494
[david_shapiro]: rate because the way that their structure
you know with heckhams you really can’t get

447
00:14:34,554 –> 00:14:37,679
[david_shapiro]: a lot out if you’re doing a
lump sum in a fixed interest rate you

448
00:14:37,719 –> 00:14:41,265
[david_shapiro]: can get very little out of your
home so to the reverse mortgages are variable

449
00:14:41,325 –> 00:14:46,834
[david_shapiro]: rate and that adds a unknown that
you know that’s hard to quantify ours is

450
00:14:47,095 –> 00:14:48,918
[david_shapiro]: fully quantified but you’re right paul

451
00:14:48,839 –> 00:14:49,140
[ramsey_d_smith]: oh

452
00:14:49,078 –> 00:14:49,158
[david_shapiro]: if

453
00:14:49,560 –> 00:14:49,862
[paul_tyler]: oh

454
00:14:49,799 –> 00:14:52,804
[david_shapiro]: if home price is appreciated higher than

455
00:14:52,650 –> 00:14:52,994
[ramsey_d_smith]: i like

456
00:14:53,045 –> 00:14:55,249
[david_shapiro]: we assume in our you

457
00:14:55,238 –> 00:14:55,259
[ramsey_d_smith]: m

458
00:14:55,289 –> 00:15:00,517
[david_shapiro]: know illustrations than you know the investor
but but they’re but they’re in lock step

459
00:15:00,678 –> 00:15:05,446
[david_shapiro]: right the you know the investor in
the home one are sharing that in lock

460
00:15:05,506 –> 00:15:11,976
[david_shapiro]: step so um i think that’s probably
the the safest way to look at it

461
00:15:12,059 –> 00:15:12,283
[ramsey_d_smith]: oh

462
00:15:12,377 –> 00:15:15,142
[david_shapiro]: without being able to know what the
future is going to be

463
00:15:15,150 –> 00:15:15,395
[paul_tyler]: yeah

464
00:15:15,182 –> 00:15:15,342
[david_shapiro]: like

465
00:15:15,929 –> 00:15:17,692
[ramsey_d_smith]: i mean it just highlights you know
there’s their

466
00:15:18,420 –> 00:15:18,722
[paul_tyler]: oh

467
00:15:18,794 –> 00:15:23,521
[ramsey_d_smith]: there the are different complexities for each
of these solutions i mean they just fundamentally

468
00:15:23,541 –> 00:15:24,864
[ramsey_d_smith]: they have very different risk profiles

469
00:15:25,225 –> 00:15:25,407
[david_shapiro]: yes

470
00:15:25,284 –> 00:15:27,428
[ramsey_d_smith]: and that’s at the heart of your
your your

471
00:15:27,399 –> 00:15:27,420
[paul_tyler]: m

472
00:15:27,628 –> 00:15:28,433
[ramsey_d_smith]: your question paul

473
00:15:28,813 –> 00:15:29,533
[david_shapiro]: oh

474
00:15:29,903 –> 00:15:36,638
[ramsey_d_smith]: is yeah i in an environment where
home prices are flat to down and interest

475
00:15:36,698 –> 00:15:40,745
[ramsey_d_smith]: rates are spiking then the hakim loan
is kind of a tough call right

476
00:15:41,040 –> 00:15:41,242
[paul_tyler]: right

477
00:15:41,226 –> 00:15:41,833
[david_shapiro]: hm

478
00:15:42,448 –> 00:15:47,837
[ramsey_d_smith]: and an en iron ment where home
prices are expanding dramatically and interest rates are

479
00:15:47,917 –> 00:15:53,676
[ramsey_d_smith]: low then then he may be the
better one in some sense you got to

480
00:15:53,716 –> 00:15:53,756
[ramsey_d_smith]: do

481
00:15:54,750 –> 00:15:54,971
[paul_tyler]: yeah

482
00:15:54,958 –> 00:15:56,641
[ramsey_d_smith]: if you do a monte carlo analysis
but

483
00:15:56,643 –> 00:15:56,784
[david_shapiro]: yeah

484
00:15:57,162 –> 00:15:57,262
[ramsey_d_smith]: as

485
00:15:57,592 –> 00:15:58,320
[paul_tyler]: oh

486
00:15:57,803 –> 00:16:02,691
[ramsey_d_smith]: it seems to me like a fiduciary
advisor is they’re thinking about um providing

487
00:16:02,543 –> 00:16:02,563
[paul_tyler]: i

488
00:16:02,751 –> 00:16:05,316
[ramsey_d_smith]: a menu to their to their customers

489
00:16:05,160 –> 00:16:06,300
[paul_tyler]: oh

490
00:16:06,277 –> 00:16:09,943
[ramsey_d_smith]: in addition to sort of factoring in
those preferences that you were talking about david

491
00:16:09,960 –> 00:16:09,980
[paul_tyler]: m

492
00:16:10,003 –> 00:16:10,644
[ramsey_d_smith]: which is i

493
00:16:10,680 –> 00:16:11,820
[paul_tyler]: oh

494
00:16:10,745 –> 00:16:14,371
[ramsey_d_smith]: want to i want something that’s alone
versus now an equity share like that

495
00:16:14,463 –> 00:16:15,313
[david_shapiro]: yeah

496
00:16:14,591 –> 00:16:17,015
[ramsey_d_smith]: that decision which may be is much
sort of

497
00:16:17,040 –> 00:16:17,383
[paul_tyler]: oh

498
00:16:17,055 –> 00:16:18,117
[ramsey_d_smith]: a personal preference thing

499
00:16:18,420 –> 00:16:18,684
[paul_tyler]: oh

500
00:16:19,709 –> 00:16:23,956
[ramsey_d_smith]: addition to this notion of well what
is the risk propel i want to have

501
00:16:24,036 –> 00:16:26,981
[ramsey_d_smith]: vcvfthis house you know over the course
of the next ten or fifteen twenty years

502
00:16:27,061 –> 00:16:30,547
[ramsey_d_smith]: so it’s look i think there need
to be more answers like i think i

503
00:16:30,567 –> 00:16:31,388
[ramsey_d_smith]: think you need to have more

504
00:16:31,410 –> 00:16:31,430
[paul_tyler]: m

505
00:16:31,729 –> 00:16:36,633
[ramsey_d_smith]: ways to sort of peel this onion
effectively so i think it’s you know you’re

506
00:16:36,673 –> 00:16:40,697
[ramsey_d_smith]: bringing another practical solution which is very
interesting now i had

507
00:16:40,674 –> 00:16:40,716
[paul_tyler]: a

508
00:16:40,737 –> 00:16:44,031
[ramsey_d_smith]: a question about i had a question
about costs

509
00:16:43,890 –> 00:16:44,071
[paul_tyler]: oh

510
00:16:44,512 –> 00:16:47,937
[ramsey_d_smith]: about maintenance cost so one of the
other things that often seems that sort of

511
00:16:48,037 –> 00:16:51,884
[ramsey_d_smith]: not get discussed enough and where i
think sometimes people get into trouble you know

512
00:16:51,964 –> 00:16:55,790
[ramsey_d_smith]: with with their homes is that you
know when they get a reverse mortgage as

513
00:16:55,870 –> 00:16:57,974
[ramsey_d_smith]: they take money out right which is
great

514
00:16:57,715 –> 00:16:58,303
[david_shapiro]: hm

515
00:16:59,076 –> 00:17:03,463
[ramsey_d_smith]: but sometimes they get sometimes property taxes
and other sort of maintenance costs end up

516
00:17:03,523 –> 00:17:10,316
[ramsey_d_smith]: being the problem that comes up so
under your under your construct dohomoners still bear

517
00:17:10,436 –> 00:17:14,585
[ramsey_d_smith]: all of those all of those maintenance
of property tax costs et cetera or is

518
00:17:14,605 –> 00:17:15,647
[ramsey_d_smith]: there any sharing of that

519
00:17:16,033 –> 00:17:18,277
[david_shapiro]: no because we don’t go on title
we’re

520
00:17:18,120 –> 00:17:18,140
[paul_tyler]: m

521
00:17:18,317 –> 00:17:18,858
[david_shapiro]: not owners of

522
00:17:18,889 –> 00:17:19,012
[ramsey_d_smith]: yeah

523
00:17:18,918 –> 00:17:22,724
[david_shapiro]: the home so they pay the property
taxes you know they pay their insurance

524
00:17:23,399 –> 00:17:23,682
[ramsey_d_smith]: oh

525
00:17:23,786 –> 00:17:25,709
[david_shapiro]: you know we do have provisions

526
00:17:26,040 –> 00:17:26,385
[paul_tyler]: oh

527
00:17:26,949 –> 00:17:27,131
[ramsey_d_smith]: yeah

528
00:17:27,192 –> 00:17:32,481
[david_shapiro]: where e can step in and if
they fall behind we can make what we

529
00:17:32,489 –> 00:17:32,509
[ramsey_d_smith]: m

530
00:17:32,541 –> 00:17:35,846
[david_shapiro]: call preservation payments and then we just
tack those on to

531
00:17:35,918 –> 00:17:35,939
[ramsey_d_smith]: m

532
00:17:35,926 –> 00:17:39,873
[david_shapiro]: the back end and you know they
are you know they are required to just

533
00:17:39,973 –> 00:17:44,501
[david_shapiro]: maintain the home it doesn’t require them
to improve the home um so if if

534
00:17:44,581 –> 00:17:47,786
[david_shapiro]: the home is in disrepair and they
haven’t improved it then there

535
00:17:47,802 –> 00:17:48,869
[ramsey_d_smith]: hm

536
00:17:47,846 –> 00:17:49,028
[david_shapiro]: is an adjustment at the

537
00:17:48,989 –> 00:17:49,232
[ramsey_d_smith]: oh

538
00:17:49,068 –> 00:17:53,996
[david_shapiro]: back end you know to take into
account the cost of you know making

539
00:17:53,880 –> 00:17:54,101
[paul_tyler]: oh

540
00:17:54,056 –> 00:17:57,983
[david_shapiro]: that home you know up dating whatever
maintenance that needs to be done

541
00:17:58,269 –> 00:17:58,290
[paul_tyler]: m

542
00:17:58,424 –> 00:18:00,447
[david_shapiro]: that gets factored in but you

543
00:18:00,480 –> 00:18:00,722
[paul_tyler]: oh

544
00:18:00,487 –> 00:18:01,689
[david_shapiro]: know that that’s kind of the only

545
00:18:01,528 –> 00:18:01,650
[paul_tyler]: yeah

546
00:18:01,729 –> 00:18:03,152
[david_shapiro]: way that we can attack that

547
00:18:04,993 –> 00:18:05,113
[ramsey_d_smith]: so

548
00:18:05,180 –> 00:18:05,261
[paul_tyler]: ah

549
00:18:05,694 –> 00:18:10,622
[ramsey_d_smith]: another another another item that we talked
about of leading up to this conversation

550
00:18:10,537 –> 00:18:10,558
[david_shapiro]: m

551
00:18:10,743 –> 00:18:14,529
[ramsey_d_smith]: was who you’re going to de fund
this so the tire

552
00:18:14,522 –> 00:18:14,542
[paul_tyler]: i

553
00:18:14,629 –> 00:18:15,971
[ramsey_d_smith]: mortgage industry or also of

554
00:18:15,960 –> 00:18:16,224
[paul_tyler]: oh

555
00:18:16,011 –> 00:18:17,314
[ramsey_d_smith]: like ll call it the mortgage

556
00:18:17,323 –> 00:18:17,624
[david_shapiro]: oh

557
00:18:17,354 –> 00:18:21,761
[ramsey_d_smith]: of mortgage equivalent industry ultimately is funded
by pools of assets that can be insurance

558
00:18:21,801 –> 00:18:22,142
[ramsey_d_smith]: companies

559
00:18:22,132 –> 00:18:22,153
[david_shapiro]: m

560
00:18:22,182 –> 00:18:24,505
[ramsey_d_smith]: that can be institutional investors in some
cases it’s

561
00:18:24,420 –> 00:18:24,664
[paul_tyler]: oh

562
00:18:24,853 –> 00:18:24,873
[david_shapiro]: m

563
00:18:25,187 –> 00:18:31,497
[ramsey_d_smith]: venture capitalists it’s pension funds sovereign wealth
funds and now you are

564
00:18:31,440 –> 00:18:31,702
[paul_tyler]: oh

565
00:18:31,818 –> 00:18:35,063
[ramsey_d_smith]: you would mention that you’re building a
product that you think is

566
00:18:34,980 –> 00:18:35,242
[paul_tyler]: oh

567
00:18:35,604 –> 00:18:38,550
[ramsey_d_smith]: particularly interesting to sort of one set
of investors so tell

568
00:18:38,483 –> 00:18:38,603
[david_shapiro]: yeah

569
00:18:38,591 –> 00:18:39,054
[ramsey_d_smith]: us about that

570
00:18:39,011 –> 00:18:39,780
[paul_tyler]: yeah

571
00:18:39,244 –> 00:18:44,272
[david_shapiro]: yeah our product is specifically designed to
meet the needs of both the investor and

572
00:18:44,352 –> 00:18:49,681
[david_shapiro]: the home owner and our targeted investor
long term our insurance companies to hold this

573
00:18:49,741 –> 00:18:53,608
[david_shapiro]: on their balance and he rated security
so when we designed our product

574
00:18:53,249 –> 00:18:54,089
[ramsey_d_smith]: yeah

575
00:18:53,708 –> 00:18:58,756
[david_shapiro]: and you’ll note that in the example
there’s thirty percent equity on top right that

576
00:18:58,937 –> 00:19:00,860
[david_shapiro]: there’s thirty percent equity in the home

577
00:19:01,959 –> 00:19:01,980
[paul_tyler]: m

578
00:19:02,463 –> 00:19:08,112
[david_shapiro]: we needed to have that thirty per
cent cushion because when the rating agencies stress

579
00:19:08,272 –> 00:19:10,336
[david_shapiro]: this asset the asset back security

580
00:19:10,500 –> 00:19:10,721
[paul_tyler]: yah

581
00:19:10,917 –> 00:19:12,139
[david_shapiro]: the first thing they do is

582
00:19:12,089 –> 00:19:12,210
[paul_tyler]: yah

583
00:19:12,279 –> 00:19:14,883
[david_shapiro]: take an overnight drop in home prices
thirty

584
00:19:14,648 –> 00:19:14,669
[ramsey_d_smith]: m

585
00:19:14,923 –> 00:19:15,264
[david_shapiro]: per cent

586
00:19:15,210 –> 00:19:15,472
[paul_tyler]: oh

587
00:19:15,925 –> 00:19:16,326
[david_shapiro]: and then they

588
00:19:16,278 –> 00:19:16,419
[paul_tyler]: yeah

589
00:19:16,386 –> 00:19:18,349
[david_shapiro]: look at eight to twelve year recovery

590
00:19:17,910 –> 00:19:19,050
[paul_tyler]: oh yeah

591
00:19:18,950 –> 00:19:19,050
[david_shapiro]: so

592
00:19:19,740 –> 00:19:19,981
[paul_tyler]: oh

593
00:19:19,751 –> 00:19:22,095
[david_shapiro]: for us to get a rated security
we needed to have that

594
00:19:22,149 –> 00:19:22,170
[paul_tyler]: m

595
00:19:22,155 –> 00:19:25,621
[david_shapiro]: thirty per cent and that’s one of
the reasons that we have that piece

596
00:19:25,479 –> 00:19:25,500
[paul_tyler]: m

597
00:19:25,681 –> 00:19:31,531
[david_shapiro]: of the equity rum and you know
eventually you know when we create these asset

598
00:19:31,571 –> 00:19:35,838
[david_shapiro]: back securities insurance companies will be able
to hold those in you know the kinds

599
00:19:35,918 –> 00:19:40,105
[david_shapiro]: of volumes that we need to be
able to meet the demand from the consumer

600
00:19:40,346 –> 00:19:40,546
[david_shapiro]: i mean

601
00:19:41,078 –> 00:19:41,099
[ramsey_d_smith]: m

602
00:19:41,448 –> 00:19:42,209
[david_shapiro]: the residential

603
00:19:42,270 –> 00:19:43,440
[paul_tyler]: oh

604
00:19:42,589 –> 00:19:43,371
[david_shapiro]: residential homes

605
00:19:43,289 –> 00:19:43,612
[ramsey_d_smith]: yeah

606
00:19:43,431 –> 00:19:45,134
[david_shapiro]: in the country or what closing in
on

607
00:19:45,147 –> 00:19:45,308
[ramsey_d_smith]: right

608
00:19:45,935 –> 00:19:51,685
[david_shapiro]: forty trillion dollars thirty seven thirty eight
trillion dollars there’s twenty trillion dollars of twenty

609
00:19:52,005 –> 00:19:58,175
[david_shapiro]: twenty six trillion dollars now of equity
in homes so the massive scale of this

610
00:19:58,356 –> 00:20:03,044
[david_shapiro]: and and you consider the fact that
we’re only working through financial advice ers and

611
00:20:03,444 –> 00:20:07,731
[david_shapiro]: folks that have a trusted relationship and
they’re integrating the home into the

612
00:20:07,709 –> 00:20:07,953
[ramsey_d_smith]: oh

613
00:20:07,771 –> 00:20:11,578
[david_shapiro]: financial planning process you know there’s we
have to have significant

614
00:20:11,549 –> 00:20:11,856
[ramsey_d_smith]: yeah

615
00:20:12,139 –> 00:20:15,965
[david_shapiro]: capital to come into the market and
the security ation s the only way to

616
00:20:16,025 –> 00:20:19,271
[david_shapiro]: do that and and that you guys
know that that takes a long time you

617
00:20:19,291 –> 00:20:20,933
[david_shapiro]: know i was fortunate enough back

618
00:20:20,888 –> 00:20:20,909
[ramsey_d_smith]: m

619
00:20:21,054 –> 00:20:23,237
[david_shapiro]: in two thousand and seventeen

620
00:20:23,558 –> 00:20:23,579
[ramsey_d_smith]: m

621
00:20:23,878 –> 00:20:23,978
[david_shapiro]: to

622
00:20:24,090 –> 00:20:24,352
[paul_tyler]: oh

623
00:20:24,119 –> 00:20:28,706
[david_shapiro]: spend an hour and a half with
luraneri you know who created the mortgage back

624
00:20:28,766 –> 00:20:30,089
[david_shapiro]: securities and

625
00:20:31,080 –> 00:20:31,710
[paul_tyler]: yeah

626
00:20:31,491 –> 00:20:35,417
[david_shapiro]: you know i have to admit that
when i designed this product initially i designed

627
00:20:35,458 –> 00:20:40,125
[david_shapiro]: it in two thousand and five so
i had my first year witty company back

628
00:20:40,185 –> 00:20:44,753
[david_shapiro]: in two thousand five which was you
know well before the housing crisis then nate

629
00:20:45,033 –> 00:20:48,059
[david_shapiro]: adventures was an investor oppenheim and bernhimerphones

630
00:20:47,969 –> 00:20:48,113
[ramsey_d_smith]: ye

631
00:20:48,199 –> 00:20:48,339
[david_shapiro]: were

632
00:20:48,360 –> 00:20:48,723
[paul_tyler]: yes

633
00:20:48,399 –> 00:20:49,721
[david_shapiro]: investors and

634
00:20:50,288 –> 00:20:50,309
[ramsey_d_smith]: m

635
00:20:50,543 –> 00:20:52,145
[david_shapiro]: you know then we morgan stanley

636
00:20:52,049 –> 00:20:53,639
[ramsey_d_smith]: oh

637
00:20:52,205 –> 00:20:52,326
[david_shapiro]: was

638
00:20:52,230 –> 00:20:53,100
[paul_tyler]: oh

639
00:20:52,366 –> 00:20:53,808
[david_shapiro]: gonna securitize

640
00:20:53,849 –> 00:20:53,990
[ramsey_d_smith]: ye

641
00:20:53,888 –> 00:20:56,753
[david_shapiro]: the asset and then the housing crisis
came so i’m sitting

642
00:20:56,641 –> 00:20:56,802
[paul_tyler]: yeah

643
00:20:56,833 –> 00:20:57,254
[david_shapiro]: with lou

644
00:20:57,173 –> 00:20:57,194
[ramsey_d_smith]: a

645
00:20:57,454 –> 00:20:59,878
[david_shapiro]: in two thousand seventeen and i said
i’m just curious how

646
00:20:59,939 –> 00:21:00,202
[ramsey_d_smith]: yeah

647
00:20:59,958 –> 00:21:02,342
[david_shapiro]: long did it take before the first
mortgage

648
00:21:02,379 –> 00:21:02,400
[paul_tyler]: m

649
00:21:02,663 –> 00:21:06,549
[david_shapiro]: security you know how long did it
take you to get from concept to the

650
00:21:06,609 –> 00:21:08,192
[david_shapiro]: security and he said twelve years

651
00:21:08,648 –> 00:21:08,669
[ramsey_d_smith]: m

652
00:21:08,713 –> 00:21:09,174
[david_shapiro]: and i said so

653
00:21:09,141 –> 00:21:09,264
[paul_tyler]: wow

654
00:21:09,254 –> 00:21:11,377
[david_shapiro]: i said okay well i’m about in
that fall part

655
00:21:11,639 –> 00:21:11,659
[ramsey_d_smith]: m

656
00:21:12,539 –> 00:21:12,639
[david_shapiro]: so

657
00:21:13,500 –> 00:21:13,722
[paul_tyler]: yeah

658
00:21:14,062 –> 00:21:14,583
[david_shapiro]: i don’t know i’m

659
00:21:14,508 –> 00:21:14,729
[ramsey_d_smith]: right

660
00:21:14,603 –> 00:21:15,224
[david_shapiro]: going to feel bad

661
00:21:15,238 –> 00:21:15,360
[paul_tyler]: yeah

662
00:21:15,304 –> 00:21:18,069
[david_shapiro]: about that it does take time but
you know i think now

663
00:21:17,999 –> 00:21:18,323
[ramsey_d_smith]: oh

664
00:21:18,209 –> 00:21:18,890
[david_shapiro]: we are within

665
00:21:19,417 –> 00:21:19,538
[ramsey_d_smith]: yeah

666
00:21:19,531 –> 00:21:24,820
[david_shapiro]: within a year maybe a little less
than that three quarters of a year to

667
00:21:24,880 –> 00:21:31,371
[david_shapiro]: get a rated security out and there
have been three securitizations of our competitors products

668
00:21:31,992 –> 00:21:36,259
[david_shapiro]: they haven’t been rated nor can they
be rated the design of our competitors products

669
00:21:36,339 –> 00:21:41,965
[david_shapiro]: don’t allow for securities tion um either
either they have a ten year term on

670
00:21:42,026 –> 00:21:44,147
[david_shapiro]: them that’s problematic to the rating agencies

671
00:21:44,069 –> 00:21:44,229
[ramsey_d_smith]: yeah

672
00:21:44,408 –> 00:21:46,509
[david_shapiro]: or they’re based on home price

673
00:21:46,409 –> 00:21:46,592
[ramsey_d_smith]: yeah

674
00:21:46,589 –> 00:21:48,451
[david_shapiro]: appreciation and a shock loss you

675
00:21:48,402 –> 00:21:48,959
[ramsey_d_smith]: yeah

676
00:21:48,511 –> 00:21:53,307
[david_shapiro]: know would blow it out so we
feel that we’re perfectly positioned to be the

677
00:21:53,348 –> 00:21:58,656
[david_shapiro]: leaders in a rated security and that’s
why we’re working you know primarily with insurance

678
00:21:58,696 –> 00:21:59,498
[david_shapiro]: companies and

679
00:21:59,610 –> 00:21:59,893
[paul_tyler]: oh

680
00:21:59,738 –> 00:22:03,665
[david_shapiro]: with the hedge fund the private equity
fun that own insurance

681
00:22:03,540 –> 00:22:03,560
[paul_tyler]: m

682
00:22:03,725 –> 00:22:07,191
[david_shapiro]: companies because they’re the best partners for
us to achieve that

683
00:22:08,540 –> 00:22:13,509
[paul_tyler]: yeah well capital charges are can be
very consequential as you know we

684
00:22:13,889 –> 00:22:14,172
[ramsey_d_smith]: oh

685
00:22:14,170 –> 00:22:18,657
[paul_tyler]: at a prior company we we put
a lot of effort into trying to partner

686
00:22:18,697 –> 00:22:23,746
[paul_tyler]: with a company down you know so
stepping in and providing jumbo

687
00:22:23,498 –> 00:22:23,519
[ramsey_d_smith]: m

688
00:22:24,006 –> 00:22:24,787
[paul_tyler]: reverse mortgages

689
00:22:24,613 –> 00:22:24,633
[david_shapiro]: m

690
00:22:24,968 –> 00:22:25,789
[paul_tyler]: right on hecham

691
00:22:25,563 –> 00:22:25,684
[david_shapiro]: yeah

692
00:22:26,871 –> 00:22:32,180
[paul_tyler]: loans and the yell look right now
compared to rams investing in a

693
00:22:32,219 –> 00:22:32,482
[ramsey_d_smith]: oh

694
00:22:32,520 –> 00:22:34,444
[paul_tyler]: corporate bonds the challenge

695
00:22:34,242 –> 00:22:34,445
[ramsey_d_smith]: like

696
00:22:34,484 –> 00:22:35,365
[paul_tyler]: though david was the

697
00:22:35,669 –> 00:22:36,117
[ramsey_d_smith]: oh

698
00:22:36,126 –> 00:22:38,190
[paul_tyler]: was a capital charge and i can’t
remember what the rating

699
00:22:38,699 –> 00:22:38,960
[ramsey_d_smith]: oh

700
00:22:39,071 –> 00:22:41,996
[paul_tyler]: you know was hat were determined but
it was enough to sort of take the

701
00:22:42,036 –> 00:22:43,619
[paul_tyler]: yield down like below

702
00:22:44,288 –> 00:22:44,309
[ramsey_d_smith]: m

703
00:22:44,323 –> 00:22:44,833
[david_shapiro]: oh

704
00:22:44,500 –> 00:22:51,612
[paul_tyler]: quickly below corporate bonds do you have
any indication that you’ll end up um you’ll

705
00:22:51,652 –> 00:22:56,019
[paul_tyler]: be rated higher on the n c
scale and sort

706
00:22:56,129 –> 00:22:56,469
[ramsey_d_smith]: yeah

707
00:22:57,064 –> 00:23:00,417
[paul_tyler]: a reverse mortgage sitting on a insurance
balance sheet

708
00:23:00,733 –> 00:23:01,875
[david_shapiro]: well are you talking about

709
00:23:02,175 –> 00:23:02,195
[ramsey_d_smith]: a

710
00:23:02,296 –> 00:23:05,761
[david_shapiro]: scenario where the insurance company so that’s
a jumbo

711
00:23:05,559 –> 00:23:05,580
[paul_tyler]: m

712
00:23:05,861 –> 00:23:07,664
[david_shapiro]: so they would be holding those on
their balance seat

713
00:23:07,590 –> 00:23:08,550
[paul_tyler]: oh

714
00:23:07,684 –> 00:23:09,147
[david_shapiro]: those aren’t securitized right they were

715
00:23:09,150 –> 00:23:09,210
[paul_tyler]: no

716
00:23:09,167 –> 00:23:09,528
[david_shapiro]: just holding

717
00:23:09,391 –> 00:23:09,571
[paul_tyler]: not

718
00:23:09,568 –> 00:23:09,688
[david_shapiro]: him on

719
00:23:09,692 –> 00:23:09,832
[paul_tyler]: not

720
00:23:09,728 –> 00:23:10,109
[david_shapiro]: their balance

721
00:23:09,933 –> 00:23:10,736
[paul_tyler]: securitized

722
00:23:10,149 –> 00:23:10,269
[david_shapiro]: sheet

723
00:23:10,418 –> 00:23:10,439
[ramsey_d_smith]: m

724
00:23:10,930 –> 00:23:11,090
[david_shapiro]: yeah

725
00:23:10,997 –> 00:23:11,198
[paul_tyler]: right

726
00:23:11,250 –> 00:23:11,351
[david_shapiro]: so

727
00:23:11,459 –> 00:23:11,640
[paul_tyler]: hold

728
00:23:11,571 –> 00:23:11,831
[david_shapiro]: so the

729
00:23:11,800 –> 00:23:12,041
[paul_tyler]: holding

730
00:23:11,912 –> 00:23:12,252
[david_shapiro]: surplus

731
00:23:12,082 –> 00:23:12,262
[paul_tyler]: these

732
00:23:12,292 –> 00:23:12,493
[david_shapiro]: strain

733
00:23:12,463 –> 00:23:12,624
[paul_tyler]: yeah

734
00:23:12,573 –> 00:23:15,277
[david_shapiro]: for that was probably fifteen percent right

735
00:23:15,080 –> 00:23:16,069
[paul_tyler]: ah that sounds

736
00:23:15,878 –> 00:23:16,199
[david_shapiro]: um

737
00:23:16,129 –> 00:23:16,634
[paul_tyler]: about right

738
00:23:17,080 –> 00:23:17,240
[david_shapiro]: yeah

739
00:23:17,520 –> 00:23:17,761
[paul_tyler]: oh

740
00:23:17,738 –> 00:23:17,759
[ramsey_d_smith]: m

741
00:23:18,282 –> 00:23:22,249
[david_shapiro]: and so that and that’s problematic with
the asset back

742
00:23:22,230 –> 00:23:22,394
[paul_tyler]: yes

743
00:23:22,329 –> 00:23:24,212
[david_shapiro]: security we think that we’re going to
get

744
00:23:24,570 –> 00:23:24,936
[paul_tyler]: oh

745
00:23:25,379 –> 00:23:25,664
[ramsey_d_smith]: oh

746
00:23:25,695 –> 00:23:26,175
[david_shapiro]: senior

747
00:23:27,209 –> 00:23:28,019
[ramsey_d_smith]: oh

748
00:23:27,898 –> 00:23:29,561
[david_shapiro]: a senior a at

749
00:23:30,719 –> 00:23:30,962
[ramsey_d_smith]: oh

750
00:23:31,043 –> 00:23:32,245
[david_shapiro]: single a or a triple

751
00:23:32,197 –> 00:23:32,318
[ramsey_d_smith]: yeah

752
00:23:32,306 –> 00:23:33,728
[david_shapiro]: b at the worst so

753
00:23:33,719 –> 00:23:33,980
[ramsey_d_smith]: oh

754
00:23:33,870 –> 00:23:34,132
[paul_tyler]: oh

755
00:23:33,888 –> 00:23:35,972
[david_shapiro]: it’s a whole different you know it’s
in an

756
00:23:35,948 –> 00:23:36,090
[paul_tyler]: yeah

757
00:23:36,089 –> 00:23:36,109
[ramsey_d_smith]: m

758
00:23:36,112 –> 00:23:40,101
[david_shapiro]: ice it’s an ice to it’s the
surplus trains going to be a lot less

759
00:23:41,379 –> 00:23:44,545
[ramsey_d_smith]: who holds the rest of it so
you’ve got right the senior

760
00:23:44,370 –> 00:23:46,009
[paul_tyler]: yeah

761
00:23:44,665 –> 00:23:45,266
[ramsey_d_smith]: trunch is what

762
00:23:45,303 –> 00:23:45,445
[david_shapiro]: yeah

763
00:23:45,326 –> 00:23:46,768
[ramsey_d_smith]: the insurance companies are going to buy

764
00:23:47,183 –> 00:23:47,325
[david_shapiro]: yeah

765
00:23:47,449 –> 00:23:48,772
[ramsey_d_smith]: and then you’re going to have you
know

766
00:23:49,020 –> 00:23:49,243
[paul_tyler]: oh

767
00:23:49,312 –> 00:23:52,578
[ramsey_d_smith]: lower trenches and i guess maybe like
an equity trunch or something equivalent

768
00:23:52,483 –> 00:23:52,584
[david_shapiro]: oh

769
00:23:52,980 –> 00:23:53,242
[paul_tyler]: oh

770
00:23:53,079 –> 00:23:56,645
[ramsey_d_smith]: sort of thinking of it in the
framework of a like a collateral ized dead

771
00:23:56,673 –> 00:23:56,813
[david_shapiro]: yeah

772
00:23:56,745 –> 00:23:57,266
[ramsey_d_smith]: obligation

773
00:23:57,456 –> 00:23:58,379
[david_shapiro]: yeah yeah exactly

774
00:23:59,269 –> 00:24:03,656
[ramsey_d_smith]: who are the who’s going to retain
the know all the risk all the risky

775
00:24:03,696 –> 00:24:04,598
[ramsey_d_smith]: or trenches do you think

776
00:24:04,719 –> 00:24:04,740
[paul_tyler]: m

777
00:24:04,999 –> 00:24:06,734
[ramsey_d_smith]: do you see his target audience for
those

778
00:24:06,743 –> 00:24:06,883
[david_shapiro]: well

779
00:24:07,020 –> 00:24:07,261
[paul_tyler]: oh

780
00:24:07,063 –> 00:24:10,128
[david_shapiro]: that’s where i think the hedge funds
come in the you know the hedge

781
00:24:10,092 –> 00:24:10,619
[ramsey_d_smith]: hm

782
00:24:10,168 –> 00:24:11,691
[david_shapiro]: funds come in insurance

783
00:24:11,550 –> 00:24:11,791
[paul_tyler]: oh

784
00:24:11,751 –> 00:24:13,514
[david_shapiro]: companies that have other arms

785
00:24:13,470 –> 00:24:13,691
[paul_tyler]: oh

786
00:24:13,955 –> 00:24:17,000
[david_shapiro]: that you know a lot of insurance
companies want to buy the a b vertical

787
00:24:16,829 –> 00:24:17,133
[ramsey_d_smith]: oh

788
00:24:18,422 –> 00:24:18,662
[david_shapiro]: and then

789
00:24:18,728 –> 00:24:18,749
[ramsey_d_smith]: m

790
00:24:18,863 –> 00:24:20,944
[david_shapiro]: got you now then you’ve got the
equity trench which is

791
00:24:20,909 –> 00:24:21,539
[ramsey_d_smith]: yeah

792
00:24:21,085 –> 00:24:23,847
[david_shapiro]: you know when we do them you
know we’ll be we’ll be holding the equity

793
00:24:24,027 –> 00:24:26,189
[david_shapiro]: trench so but

794
00:24:26,372 –> 00:24:26,575
[ramsey_d_smith]: got

795
00:24:26,409 –> 00:24:26,609
[david_shapiro]: you know

796
00:24:26,635 –> 00:24:26,696
[ramsey_d_smith]: it

797
00:24:26,690 –> 00:24:29,252
[david_shapiro]: lots of interest in the a and
the b

798
00:24:30,000 –> 00:24:30,263
[paul_tyler]: yeah

799
00:24:31,141 –> 00:24:31,262
[ramsey_d_smith]: yeah

800
00:24:31,981 –> 00:24:32,485
[paul_tyler]: interesting

801
00:24:32,329 –> 00:24:36,636
[ramsey_d_smith]: so by the way i think i’m
just want to make a circle back to

802
00:24:37,337 –> 00:24:41,344
[ramsey_d_smith]: your description of this structure earlier on
because now i think took me a while

803
00:24:41,364 –> 00:24:42,746
[ramsey_d_smith]: but i think i got it right
so

804
00:24:43,008 –> 00:24:43,573
[david_shapiro]: hm

805
00:24:43,527 –> 00:24:45,811
[ramsey_d_smith]: let’s go back to example of the

806
00:24:45,789 –> 00:24:45,810
[paul_tyler]: m

807
00:24:47,013 –> 00:24:48,676
[ramsey_d_smith]: it’s a it’s a it’s a million
dollar loan

808
00:24:49,325 –> 00:24:49,345
[david_shapiro]: h

809
00:24:49,437 –> 00:24:50,098
[ramsey_d_smith]: right and

810
00:24:50,032 –> 00:24:50,893
[david_shapiro]: m yeah

811
00:24:50,439 –> 00:24:51,521
[ramsey_d_smith]: you you your

812
00:24:51,510 –> 00:24:51,712
[paul_tyler]: oh

813
00:24:51,581 –> 00:24:54,606
[ramsey_d_smith]: organization puts up forty per cent so
you you give

814
00:24:54,510 –> 00:24:54,652
[paul_tyler]: oh

815
00:24:54,726 –> 00:24:57,210
[ramsey_d_smith]: four hundred thousand dollars to the participant

816
00:24:57,566 –> 00:24:58,153
[david_shapiro]: hm

817
00:24:57,750 –> 00:24:58,032
[paul_tyler]: oh

818
00:24:57,911 –> 00:25:03,361
[ramsey_d_smith]: right so if the let’s let’s use
two scenarios one scenario is the value of

819
00:25:03,381 –> 00:25:04,042
[ramsey_d_smith]: the house doubles

820
00:25:04,050 –> 00:25:04,354
[paul_tyler]: oh

821
00:25:04,663 –> 00:25:06,105
[ramsey_d_smith]: over the course of the ensuing years

822
00:25:06,688 –> 00:25:07,243
[david_shapiro]: hm

823
00:25:06,826 –> 00:25:07,047
[ramsey_d_smith]: so it

824
00:25:07,050 –> 00:25:07,311
[paul_tyler]: oh

825
00:25:07,107 –> 00:25:08,790
[ramsey_d_smith]: goes to two million dollars so then

826
00:25:09,090 –> 00:25:09,313
[paul_tyler]: oh

827
00:25:09,230 –> 00:25:10,292
[ramsey_d_smith]: you will you will then

828
00:25:10,162 –> 00:25:10,183
[david_shapiro]: m

829
00:25:10,352 –> 00:25:16,122
[ramsey_d_smith]: get back if i’m correct you’ll get
back you’ll get back

830
00:25:15,960 –> 00:25:16,122
[paul_tyler]: yeah

831
00:25:16,522 –> 00:25:19,988
[ramsey_d_smith]: your original four hundred thousand dollars plus
fifty per

832
00:25:20,010 –> 00:25:20,237
[paul_tyler]: oh

833
00:25:20,028 –> 00:25:21,651
[ramsey_d_smith]: cent the price appreciation so

834
00:25:22,260 –> 00:25:22,521
[paul_tyler]: oh

835
00:25:22,272 –> 00:25:25,416
[ramsey_d_smith]: equify would get nine hundred thousand dollars
back in that scenario is that

836
00:25:25,815 –> 00:25:26,015
[david_shapiro]: well

837
00:25:25,857 –> 00:25:26,257
[ramsey_d_smith]: is that right

838
00:25:26,115 –> 00:25:26,416
[david_shapiro]: now so

839
00:25:26,340 –> 00:25:26,440
[paul_tyler]: ye

840
00:25:26,656 –> 00:25:26,756
[david_shapiro]: so

841
00:25:26,999 –> 00:25:27,019
[ramsey_d_smith]: m

842
00:25:27,037 –> 00:25:29,240
[david_shapiro]: think of it think of it the
house sells

843
00:25:29,150 –> 00:25:29,230
[ramsey_d_smith]: no

844
00:25:29,441 –> 00:25:31,604
[david_shapiro]: right so we know with the ending
value of the houses

845
00:25:31,720 –> 00:25:31,881
[ramsey_d_smith]: yeah

846
00:25:32,105 –> 00:25:34,649
[david_shapiro]: and then the closing statements the easiest
way to look at that so

847
00:25:34,659 –> 00:25:34,680
[paul_tyler]: m

848
00:25:34,750 –> 00:25:35,210
[david_shapiro]: the closing

849
00:25:34,958 –> 00:25:35,389
[ramsey_d_smith]: m yeah

850
00:25:35,270 –> 00:25:37,094
[david_shapiro]: statement we get back r four

851
00:25:38,116 –> 00:25:38,236
[ramsey_d_smith]: yeah

852
00:25:38,396 –> 00:25:39,679
[david_shapiro]: the home owner gets

853
00:25:39,630 –> 00:25:40,429
[paul_tyler]: yea

854
00:25:39,920 –> 00:25:43,617
[david_shapiro]: three hundred right because they’re protected

855
00:25:43,481 –> 00:25:43,665
[ramsey_d_smith]: right

856
00:25:43,718 –> 00:25:47,631
[david_shapiro]: equity we don’t share in and anything
above that is split fifty fifty

857
00:25:50,379 –> 00:25:56,547
[ramsey_d_smith]: okay so even though it was a
million dollar was a million dollar house but

858
00:25:56,687 –> 00:26:02,811
[ramsey_d_smith]: you’re of the original principle amount you
will have a claim on on seven hundred

859
00:26:02,851 –> 00:26:04,416
[ramsey_d_smith]: thousand dollars worth then

860
00:26:06,103 –> 00:26:07,451
[david_shapiro]: um nope

861
00:26:07,620 –> 00:26:07,781
[paul_tyler]: well

862
00:26:07,712 –> 00:26:07,853
[david_shapiro]: the

863
00:26:07,861 –> 00:26:07,921
[paul_tyler]: no

864
00:26:08,074 –> 00:26:08,295
[david_shapiro]: home

865
00:26:08,161 –> 00:26:10,265
[paul_tyler]: no ud be the appreciation right so

866
00:26:10,559 –> 00:26:10,781
[ramsey_d_smith]: yeah

867
00:26:10,565 –> 00:26:10,686
[paul_tyler]: tell

868
00:26:10,623 –> 00:26:11,533
[david_shapiro]: yeah

869
00:26:10,746 –> 00:26:11,747
[paul_tyler]: me if i’m getting it right so

870
00:26:12,003 –> 00:26:12,763
[david_shapiro]: yeah

871
00:26:12,288 –> 00:26:16,275
[paul_tyler]: the million dollar house goes to two
million ramsey see if i understand this

872
00:26:16,252 –> 00:26:16,413
[ramsey_d_smith]: yeah

873
00:26:16,335 –> 00:26:22,445
[paul_tyler]: so so you keep three hundred i
was in david you get you split fifty

874
00:26:22,545 –> 00:26:25,771
[paul_tyler]: fifty of the hundred the million that
went up is that right so you

875
00:26:25,741 –> 00:26:25,821
[ramsey_d_smith]: oh

876
00:26:25,791 –> 00:26:27,073
[paul_tyler]: would get half a million is that

877
00:26:27,029 –> 00:26:27,869
[ramsey_d_smith]: yeah

878
00:26:27,133 –> 00:26:30,018
[paul_tyler]: right or am i wrong here see
how i understood

879
00:26:30,069 –> 00:26:30,229
[ramsey_d_smith]: that’s

880
00:26:30,078 –> 00:26:30,218
[paul_tyler]: this

881
00:26:30,249 –> 00:26:30,349
[ramsey_d_smith]: what

882
00:26:30,373 –> 00:26:30,656
[david_shapiro]: oh

883
00:26:30,710 –> 00:26:32,151
[ramsey_d_smith]: that was my original version so that’s

884
00:26:32,070 –> 00:26:32,312
[paul_tyler]: okay

885
00:26:32,211 –> 00:26:35,735
[ramsey_d_smith]: like that’s nine hundred thousand bucks on
the up side in the upside scenario

886
00:26:36,514 –> 00:26:36,655
[david_shapiro]: yeah

887
00:26:36,736 –> 00:26:38,498
[ramsey_d_smith]: but it sounds like it’s more complicated
than that

888
00:26:38,743 –> 00:26:40,354
[david_shapiro]: yeah no it’s it’s

889
00:26:41,044 –> 00:26:41,206
[ramsey_d_smith]: yeah

890
00:26:41,436 –> 00:26:43,038
[david_shapiro]: now so all right so the

891
00:26:43,200 –> 00:26:43,489
[paul_tyler]: oh

892
00:26:43,539 –> 00:26:44,441
[david_shapiro]: math isn’t you know

893
00:26:45,809 –> 00:26:46,416
[ramsey_d_smith]: oh

894
00:26:45,930 –> 00:26:46,233
[paul_tyler]: oh

895
00:26:45,963 –> 00:26:47,225
[david_shapiro]: i’ll turn it over in my c

896
00:26:47,348 –> 00:26:47,369
[ramsey_d_smith]: h

897
00:26:47,405 –> 00:26:48,668
[david_shapiro]: i o at some point in time

898
00:26:48,540 –> 00:26:48,560
[paul_tyler]: m

899
00:26:48,748 –> 00:26:48,868
[david_shapiro]: he’s

900
00:26:48,759 –> 00:26:48,840
[ramsey_d_smith]: no

901
00:26:48,908 –> 00:26:48,928
[david_shapiro]: a

902
00:26:48,921 –> 00:26:49,162
[ramsey_d_smith]: worries

903
00:26:48,968 –> 00:26:49,489
[david_shapiro]: lot better at

904
00:26:49,500 –> 00:26:50,430
[paul_tyler]: yah

905
00:26:49,529 –> 00:26:50,230
[david_shapiro]: that so

906
00:26:51,179 –> 00:26:51,504
[ramsey_d_smith]: yah

907
00:26:51,794 –> 00:26:53,768
[david_shapiro]: so it went from what one million
to two million

908
00:26:53,670 –> 00:26:54,676
[paul_tyler]: one million to two million

909
00:26:54,449 –> 00:26:54,910
[ramsey_d_smith]: one million to

910
00:26:54,963 –> 00:26:55,124
[david_shapiro]: yeah

911
00:26:54,970 –> 00:26:55,450
[ramsey_d_smith]: two million

912
00:26:55,400 –> 00:26:55,541
[paul_tyler]: yeah

913
00:26:55,445 –> 00:26:56,188
[david_shapiro]: okay all right

914
00:26:56,072 –> 00:26:57,854
[ramsey_d_smith]: they got four hundred thousand dollars up
front

915
00:26:58,204 –> 00:26:58,348
[david_shapiro]: yep

916
00:26:58,536 –> 00:26:59,097
[ramsey_d_smith]: and now there’s

917
00:26:59,113 –> 00:27:00,343
[david_shapiro]: oh

918
00:26:59,277 –> 00:27:02,602
[ramsey_d_smith]: there’s a there’s a one million dollar
gain so in my view

919
00:27:02,743 –> 00:27:03,167
[david_shapiro]: oh

920
00:27:02,823 –> 00:27:05,888
[ramsey_d_smith]: as i understand it the one million
dollar game is split fifty fifty between you

921
00:27:05,948 –> 00:27:06,733
[ramsey_d_smith]: and the home on a right

922
00:27:06,973 –> 00:27:13,372
[david_shapiro]: yeah so the two millions now down
to one six after we get our money

923
00:27:13,472 –> 00:27:13,692
[david_shapiro]: back

924
00:27:13,590 –> 00:27:13,772
[ramsey_d_smith]: yeah

925
00:27:14,033 –> 00:27:14,233
[david_shapiro]: right

926
00:27:14,679 –> 00:27:14,901
[ramsey_d_smith]: okay

927
00:27:15,235 –> 00:27:15,335
[david_shapiro]: and

928
00:27:15,312 –> 00:27:15,536
[paul_tyler]: okay

929
00:27:15,535 –> 00:27:19,002
[david_shapiro]: then three hundred goes to the home
owners down to one one

930
00:27:20,015 –> 00:27:20,258
[ramsey_d_smith]: okay

931
00:27:20,713 –> 00:27:21,718
[david_shapiro]: and that’s what’s split

932
00:27:22,440 –> 00:27:25,367
[paul_tyler]: okay all right so we’re close we
were

933
00:27:25,353 –> 00:27:25,474
[david_shapiro]: yeah

934
00:27:25,427 –> 00:27:25,708
[paul_tyler]: close

935
00:27:26,653 –> 00:27:26,915
[david_shapiro]: oh

936
00:27:26,800 –> 00:27:35,655
[paul_tyler]: so that is potentially right this is
where potentially rising super rising home environment ramsey

937
00:27:35,773 –> 00:27:35,976
[david_shapiro]: oh

938
00:27:36,456 –> 00:27:37,357
[paul_tyler]: maybe i go with a home

939
00:27:37,589 –> 00:27:37,930
[ramsey_d_smith]: yeah

940
00:27:37,858 –> 00:27:38,580
[paul_tyler]: the hecham right

941
00:27:39,238 –> 00:27:39,378
[ramsey_d_smith]: yeah

942
00:27:39,741 –> 00:27:40,122
[paul_tyler]: it feels

943
00:27:39,949 –> 00:27:40,111
[ramsey_d_smith]: yeah

944
00:27:40,643 –> 00:27:40,764
[david_shapiro]: yeah

945
00:27:40,663 –> 00:27:43,828
[paul_tyler]: if my goal is to leave money
that i will never see

946
00:27:45,009 –> 00:27:45,132
[ramsey_d_smith]: yeah

947
00:27:45,374 –> 00:27:45,841
[paul_tyler]: my kids

948
00:27:46,193 –> 00:27:50,199
[david_shapiro]: yeah i think that the way we
look at it is we just look at

949
00:27:50,240 –> 00:27:50,841
[david_shapiro]: historical

950
00:27:50,460 –> 00:27:50,480
[paul_tyler]: m

951
00:27:51,201 –> 00:27:55,248
[david_shapiro]: you know we look at you know
look back on twenty years of home price

952
00:27:55,328 –> 00:27:56,029
[david_shapiro]: appreciation

953
00:27:55,548 –> 00:27:55,629
[paul_tyler]: what

954
00:27:56,209 –> 00:27:57,692
[david_shapiro]: you know the last

955
00:27:57,700 –> 00:27:57,760
[paul_tyler]: it

956
00:27:57,772 –> 00:27:57,992
[david_shapiro]: five

957
00:27:57,840 –> 00:27:57,981
[paul_tyler]: was

958
00:27:58,033 –> 00:28:01,458
[david_shapiro]: years are going to level out and
who knows what’s going to happen

959
00:28:01,409 –> 00:28:01,589
[ramsey_d_smith]: yeah

960
00:28:01,518 –> 00:28:05,184
[david_shapiro]: in the future but i mean that’s
the best way for us to analyze anything

961
00:28:05,245 –> 00:28:05,745
[david_shapiro]: is look at where

962
00:28:05,640 –> 00:28:05,863
[paul_tyler]: oh

963
00:28:05,805 –> 00:28:10,153
[david_shapiro]: interest rates have been look at where
home price appreciation has been and then o

964
00:28:10,294 –> 00:28:13,249
[david_shapiro]: make our own view of take our
own view of what the forward looking is

965
00:28:14,211 –> 00:28:14,591
[paul_tyler]: okay well

966
00:28:14,793 –> 00:28:14,914
[david_shapiro]: yeah

967
00:28:14,852 –> 00:28:16,394
[paul_tyler]: maybe let’s just stick there in the
last couple

968
00:28:16,263 –> 00:28:17,173
[david_shapiro]: yeah

969
00:28:16,454 –> 00:28:17,797
[paul_tyler]: few minutes we have about a

970
00:28:17,894 –> 00:28:18,077
[david_shapiro]: yeah

971
00:28:17,937 –> 00:28:22,965
[paul_tyler]: forward looking view of housing now i
don’t judge me on the source but

972
00:28:22,903 –> 00:28:22,923
[david_shapiro]: m

973
00:28:23,005 –> 00:28:23,626
[paul_tyler]: i’m really looking

974
00:28:23,553 –> 00:28:24,103
[david_shapiro]: hm

975
00:28:23,687 –> 00:28:23,747
[paul_tyler]: at

976
00:28:24,119 –> 00:28:24,380
[ramsey_d_smith]: yah

977
00:28:25,289 –> 00:28:25,690
[paul_tyler]: head lind

978
00:28:25,668 –> 00:28:25,808
[ramsey_d_smith]: yah

979
00:28:25,770 –> 00:28:28,254
[paul_tyler]: is rams can pick you can tell
me what new source this is

980
00:28:28,160 –> 00:28:28,180
[ramsey_d_smith]: m

981
00:28:29,055 –> 00:28:34,444
[paul_tyler]: property prices plunge up to twenty percent
across parts of uses buyers

982
00:28:34,123 –> 00:28:34,143
[ramsey_d_smith]: a

983
00:28:34,505 –> 00:28:40,735
[paul_tyler]: shun the market amid buy inflation and
spiking interest rats okay ramsey that was tailing

984
00:28:40,682 –> 00:28:41,219
[ramsey_d_smith]: okay

985
00:28:40,795 –> 00:28:46,204
[paul_tyler]: mail caseshiyeah

986
00:28:42,429 –> 00:28:42,570
[ramsey_d_smith]: gainst

987
00:28:42,523 –> 00:28:42,543
[david_shapiro]: m

988
00:28:42,631 –> 00:28:43,778
[ramsey_d_smith]: that clearly a conservative

989
00:28:43,515 –> 00:28:44,083
[david_shapiro]: hm

990
00:28:43,838 –> 00:28:44,321
[ramsey_d_smith]: new source

991
00:28:45,046 –> 00:28:45,889
[david_shapiro]: yeah yeah

992
00:28:46,545 –> 00:28:48,488
[paul_tyler]: but so david you know what’s the
outlook is

993
00:28:48,523 –> 00:28:49,243
[david_shapiro]: yeah

994
00:28:48,528 –> 00:28:54,196
[paul_tyler]: this you know this rise off of
you pandemic everything low interest rates everybody moving

995
00:28:54,216 –> 00:28:59,465
[paul_tyler]: out of te city now flation comes
up what’s the you if we are going

996
00:28:59,485 –> 00:29:03,734
[paul_tyler]: to invest in your enterprise how do
you how do you look at the housing

997
00:29:03,774 –> 00:29:04,515
[paul_tyler]: market over the next

998
00:29:04,619 –> 00:29:04,880
[ramsey_d_smith]: oh

999
00:29:05,057 –> 00:29:05,758
[paul_tyler]: ten twenty years

1000
00:29:06,043 –> 00:29:06,523
[david_shapiro]: sure and

1001
00:29:06,659 –> 00:29:06,860
[ramsey_d_smith]: oh

1002
00:29:06,904 –> 00:29:11,131
[david_shapiro]: you know for our investors you know
they don’t really care about the next three

1003
00:29:11,191 –> 00:29:12,193
[david_shapiro]: years they’re looking

1004
00:29:12,180 –> 00:29:12,544
[paul_tyler]: oh

1005
00:29:12,313 –> 00:29:17,321
[david_shapiro]: out you know that we expect that
the average duration on any one is going

1006
00:29:17,381 –> 00:29:18,624
[david_shapiro]: to be you know

1007
00:29:18,660 –> 00:29:18,882
[paul_tyler]: oh

1008
00:29:19,505 –> 00:29:20,707
[david_shapiro]: eight to twelve years

1009
00:29:20,400 –> 00:29:20,705
[paul_tyler]: oh

1010
00:29:20,827 –> 00:29:24,594
[david_shapiro]: something like that right so and that’s
why it’s good for insurance companies it’s a

1011
00:29:24,654 –> 00:29:25,575
[david_shapiro]: great long asset

1012
00:29:25,470 –> 00:29:25,673
[paul_tyler]: yes

1013
00:29:25,715 –> 00:29:27,238
[david_shapiro]: to put on their balance sheets to
match up

1014
00:29:27,210 –> 00:29:27,960
[paul_tyler]: oh

1015
00:29:27,318 –> 00:29:29,301
[david_shapiro]: against annuity liabilities life

1016
00:29:29,130 –> 00:29:30,720
[paul_tyler]: yeah

1017
00:29:29,381 –> 00:29:33,929
[david_shapiro]: liability it’s perfect for them so when
you look out i don’t think

1018
00:29:33,929 –> 00:29:35,099
[ramsey_d_smith]: my

1019
00:29:33,989 –> 00:29:37,315
[david_shapiro]: that there’s going to be this huge
bubble that’s going to burst i think that

1020
00:29:37,816 –> 00:29:38,957
[david_shapiro]: we’re going to go from

1021
00:29:38,610 –> 00:29:38,895
[paul_tyler]: yeah

1022
00:29:39,639 –> 00:29:44,346
[david_shapiro]: you know eighteen and twenty percent crazy
home price appreciation

1023
00:29:43,830 –> 00:29:44,134
[paul_tyler]: oh

1024
00:29:44,887 –> 00:29:46,069
[david_shapiro]: down to you know

1025
00:29:46,799 –> 00:29:47,413
[ramsey_d_smith]: ye

1026
00:29:47,412 –> 00:29:48,513
[david_shapiro]: two three four

1027
00:29:48,270 –> 00:29:48,571
[paul_tyler]: oh

1028
00:29:48,894 –> 00:29:50,056
[david_shapiro]: i mean you know we

1029
00:29:50,099 –> 00:29:50,662
[ramsey_d_smith]: oh

1030
00:29:50,176 –> 00:29:51,178
[david_shapiro]: track that data

1031
00:29:51,870 –> 00:29:52,323
[paul_tyler]: my

1032
00:29:52,039 –> 00:29:54,363
[david_shapiro]: every quarter we get up dated forward

1033
00:29:54,360 –> 00:29:55,440
[paul_tyler]: oh

1034
00:29:54,423 –> 00:29:55,365
[david_shapiro]: looking views on

1035
00:29:55,319 –> 00:29:55,583
[ramsey_d_smith]: oh

1036
00:29:55,665 –> 00:29:56,807
[david_shapiro]: on home price appreciation

1037
00:29:56,941 –> 00:29:57,022
[ramsey_d_smith]: no

1038
00:29:57,609 –> 00:30:02,657
[david_shapiro]: and what we’ve seen the trend over
the last two quarters is that the urban

1039
00:30:02,917 –> 00:30:09,228
[david_shapiro]: areas are still holding at very loud
forward looking h p s like we we

1040
00:30:09,368 –> 00:30:12,273
[david_shapiro]: cap our assumption at four per cent
but but

1041
00:30:12,232 –> 00:30:12,435
[ramsey_d_smith]: yes

1042
00:30:12,553 –> 00:30:13,735
[david_shapiro]: what we’re finding is there’s

1043
00:30:13,678 –> 00:30:13,779
[paul_tyler]: it

1044
00:30:13,796 –> 00:30:19,405
[david_shapiro]: still areas that are six eight you
know whatever the rural areas are the areas

1045
00:30:19,505 –> 00:30:20,326
[david_shapiro]: that have softened

1046
00:30:20,370 –> 00:30:21,060
[paul_tyler]: oh

1047
00:30:20,647 –> 00:30:26,637
[david_shapiro]: and they’ve dropped you know anywhere from
you know half a per cent to one

1048
00:30:26,677 –> 00:30:27,038
[david_shapiro]: and a half

1049
00:30:26,910 –> 00:30:27,131
[paul_tyler]: yes

1050
00:30:27,118 –> 00:30:30,904
[david_shapiro]: per cent and we’re just seeing the
flight that pandemic led

1051
00:30:30,810 –> 00:30:31,052
[paul_tyler]: oh

1052
00:30:31,004 –> 00:30:34,089
[david_shapiro]: to people getting out of the city
you know most

1053
00:30:34,050 –> 00:30:34,273
[paul_tyler]: oh

1054
00:30:34,149 –> 00:30:34,210
[david_shapiro]: of

1055
00:30:34,199 –> 00:30:34,504
[ramsey_d_smith]: oh

1056
00:30:34,250 –> 00:30:39,078
[david_shapiro]: those people are gone and you know
the rural areas are the ones that are

1057
00:30:39,639 –> 00:30:45,749
[david_shapiro]: suffering right now but now long term
i think it’s going to normalize and investors

1058
00:30:45,809 –> 00:30:45,989
[david_shapiro]: in our

1059
00:30:46,049 –> 00:30:46,919
[ramsey_d_smith]: yeah

1060
00:30:46,069 –> 00:30:49,775
[david_shapiro]: product i don’t think are are you
know they care a little bit about the

1061
00:30:49,836 –> 00:30:50,316
[david_shapiro]: short term

1062
00:30:50,219 –> 00:30:50,319
[ramsey_d_smith]: ye

1063
00:30:50,376 –> 00:30:53,502
[david_shapiro]: but they really are looking for long
term return long term investments

1064
00:30:53,669 –> 00:30:53,932
[ramsey_d_smith]: oh

1065
00:30:55,800 –> 00:30:56,610
[paul_tyler]: yeah

1066
00:30:56,804 –> 00:30:56,947
[david_shapiro]: yep

1067
00:30:56,870 –> 00:30:58,372
[paul_tyler]: interest now here’s a curve

1068
00:30:58,180 –> 00:30:58,200
[ramsey_d_smith]: m

1069
00:30:58,412 –> 00:30:59,314
[paul_tyler]: ball so our

1070
00:30:59,288 –> 00:30:59,309
[ramsey_d_smith]: m

1071
00:30:59,354 –> 00:31:03,621
[paul_tyler]: mutual acquaintance kinjjqoyis going o come up
to a form we have next week in

1072
00:31:03,661 –> 00:31:05,724
[paul_tyler]: one of the panels is discussion is
on

1073
00:31:05,669 –> 00:31:05,930
[ramsey_d_smith]: yeah

1074
00:31:05,985 –> 00:31:09,591
[paul_tyler]: climate and what that means for retirement
so climate housing

1075
00:31:09,388 –> 00:31:09,509
[ramsey_d_smith]: yeah

1076
00:31:09,631 –> 00:31:11,995
[paul_tyler]: i just watched this house get washed
away in

1077
00:31:11,943 –> 00:31:11,984
[ramsey_d_smith]: he

1078
00:31:12,055 –> 00:31:12,936
[paul_tyler]: yellowstone right

1079
00:31:13,673 –> 00:31:13,796
[david_shapiro]: yeah

1080
00:31:14,078 –> 00:31:19,527
[paul_tyler]: you know with a flooding um what’s
what’s how do you how are you goin

1081
00:31:19,567 –> 00:31:25,536
[paul_tyler]: approach and look at values of homes
in areas that may be impacted by climate

1082
00:31:25,576 –> 00:31:25,956
[paul_tyler]: may not just

1083
00:31:26,012 –> 00:31:26,177
[ramsey_d_smith]: yes

1084
00:31:26,016 –> 00:31:27,018
[paul_tyler]: be coast hilarious right

1085
00:31:27,083 –> 00:31:27,926
[david_shapiro]: yeah yeah yeah yeah

1086
00:31:28,470 –> 00:31:28,670
[paul_tyler]: middle

1087
00:31:28,589 –> 00:31:28,730
[david_shapiro]: yeah

1088
00:31:28,731 –> 00:31:32,103
[paul_tyler]: mountains rybrok new york where i am
right it’s a

1089
00:31:32,103 –> 00:31:32,784
[david_shapiro]: yeah yeah

1090
00:31:32,806 –> 00:31:32,968
[ramsey_d_smith]: yes

1091
00:31:33,247 –> 00:31:33,408
[paul_tyler]: yeah

1092
00:31:33,645 –> 00:31:36,189
[david_shapiro]: yeah you know the answer is

1093
00:31:36,638 –> 00:31:36,659
[ramsey_d_smith]: m

1094
00:31:37,712 –> 00:31:43,802
[david_shapiro]: the question is not one that we’re
going to answer because it’s the investor right

1095
00:31:44,363 –> 00:31:47,809
[david_shapiro]: so you know when we talk to
investors and you know

1096
00:31:47,849 –> 00:31:48,899
[ramsey_d_smith]: yeah

1097
00:31:48,129 –> 00:31:51,715
[david_shapiro]: to finance our product you know we
can’t use warehouse financing

1098
00:31:51,293 –> 00:31:51,313
[ramsey_d_smith]: i

1099
00:31:51,755 –> 00:31:54,981
[david_shapiro]: because there’s no interest rate on our
product right there’s no cash flows on the

1100
00:31:55,021 –> 00:31:55,341
[david_shapiro]: product

1101
00:31:55,529 –> 00:31:55,870
[ramsey_d_smith]: yes

1102
00:31:55,722 –> 00:31:57,886
[david_shapiro]: so we we what’s forward flow agreements
which is

1103
00:31:57,940 –> 00:31:58,041
[ramsey_d_smith]: ah

1104
00:31:59,248 –> 00:32:00,770
[david_shapiro]: financing where an

1105
00:32:00,840 –> 00:32:00,963
[paul_tyler]: ye

1106
00:32:00,850 –> 00:32:01,331
[david_shapiro]: investor

1107
00:32:01,079 –> 00:32:01,829
[ramsey_d_smith]: yeah

1108
00:32:01,451 –> 00:32:04,877
[david_shapiro]: advances us the money to fund the
equity

1109
00:32:04,830 –> 00:32:06,579
[paul_tyler]: oh

1110
00:32:05,358 –> 00:32:09,505
[david_shapiro]: and then we sell that asset back
to them so you know we can provide

1111
00:32:09,525 –> 00:32:10,967
[david_shapiro]: them guidance but they’re the

1112
00:32:10,950 –> 00:32:11,030
[paul_tyler]: and

1113
00:32:11,067 –> 00:32:16,537
[david_shapiro]: ones like there’s one insurance company that
you know just is scared to death that

1114
00:32:16,737 –> 00:32:22,286
[david_shapiro]: california is going to burn and doesn’t
want more then like a ten percent exposure

1115
00:32:22,346 –> 00:32:22,947
[david_shapiro]: to california

1116
00:32:22,769 –> 00:32:23,849
[ramsey_d_smith]: yeah

1117
00:32:23,007 –> 00:32:27,435
[david_shapiro]: real estate so we just have to
fill you know if we were to take

1118
00:32:27,515 –> 00:32:32,944
[david_shapiro]: capital from them we’d have a much
smaller box to fill so it’s clearly a

1119
00:32:32,984 –> 00:32:33,405
[david_shapiro]: problem

1120
00:32:33,540 –> 00:32:34,920
[paul_tyler]: yeah

1121
00:32:34,387 –> 00:32:39,036
[david_shapiro]: and the investors are the ones that
are going to define you know very specifically

1122
00:32:39,337 –> 00:32:41,200
[david_shapiro]: how how much of a concern that

1123
00:32:41,159 –> 00:32:41,382
[ramsey_d_smith]: oh

1124
00:32:41,261 –> 00:32:41,721
[david_shapiro]: is to them

1125
00:32:43,439 –> 00:32:47,085
[ramsey_d_smith]: so i mean as i listened to
you it’s i mean it’s remarkable you you’re

1126
00:32:47,145 –> 00:32:49,469
[ramsey_d_smith]: serving many masters here right you’ve got

1127
00:32:49,274 –> 00:32:49,417
[david_shapiro]: yeah

1128
00:32:50,110 –> 00:32:55,849
[ramsey_d_smith]: you’ve got the consumer you have you’re
certainly going to have regulators and

1129
00:32:56,229 –> 00:32:56,250
[paul_tyler]: m

1130
00:32:56,593 –> 00:32:56,854
[david_shapiro]: oh

1131
00:32:56,819 –> 00:33:02,168
[ramsey_d_smith]: and you have you have investors and
you have lots of different types of investors

1132
00:33:02,508 –> 00:33:07,476
[ramsey_d_smith]: the person that’s going to buy the
top conches the insurance company and be very

1133
00:33:07,516 –> 00:33:09,940
[ramsey_d_smith]: differ than the people that buy by
the risk of your trenches

1134
00:33:10,446 –> 00:33:10,993
[david_shapiro]: hm

1135
00:33:10,521 –> 00:33:15,009
[ramsey_d_smith]: when you talk about what you just
said there that that some some of those

1136
00:33:15,209 –> 00:33:18,835
[ramsey_d_smith]: some of those investors are going to
want to kind of pass out certain certain

1137
00:33:18,895 –> 00:33:19,957
[ramsey_d_smith]: regions and things like that

1138
00:33:20,093 –> 00:33:20,215
[david_shapiro]: yeah

1139
00:33:20,340 –> 00:33:20,645
[paul_tyler]: oh

1140
00:33:20,418 –> 00:33:20,438
[ramsey_d_smith]: i

1141
00:33:20,479 –> 00:33:20,601
[david_shapiro]: yeah

1142
00:33:20,498 –> 00:33:23,643
[ramsey_d_smith]: mean it becomes a you know in
some sense it becomes a very

1143
00:33:23,608 –> 00:33:23,629
[paul_tyler]: a

1144
00:33:23,723 –> 00:33:25,526
[ramsey_d_smith]: sort of complicated puzzle it’s

1145
00:33:25,574 –> 00:33:26,083
[david_shapiro]: define

1146
00:33:25,587 –> 00:33:26,789
[ramsey_d_smith]: definitely a complicated puzzle

1147
00:33:27,003 –> 00:33:27,144
[david_shapiro]: yeah

1148
00:33:27,650 –> 00:33:29,934
[ramsey_d_smith]: but you know sometimes complexity there’s a
situation you know

1149
00:33:29,940 –> 00:33:30,241
[paul_tyler]: oh

1150
00:33:29,974 –> 00:33:32,698
[ramsey_d_smith]: if you know with that kind of
value add you may

1151
00:33:32,730 –> 00:33:32,977
[paul_tyler]: yes

1152
00:33:32,819 –> 00:33:33,880
[ramsey_d_smith]: you know you may ultimately

1153
00:33:33,750 –> 00:33:33,770
[paul_tyler]: m

1154
00:33:34,121 –> 00:33:36,665
[ramsey_d_smith]: be you know well compensated for that
i know if you can talk about it

1155
00:33:36,725 –> 00:33:42,996
[ramsey_d_smith]: but what as you talk to investors
what kinds of return bogies are they looking

1156
00:33:43,076 –> 00:33:47,144
[ramsey_d_smith]: for in what are you are you
giving them as a range is that

1157
00:33:47,183 –> 00:33:47,363
[david_shapiro]: well

1158
00:33:47,184 –> 00:33:47,686
[ramsey_d_smith]: something you can

1159
00:33:48,044 –> 00:33:48,204
[david_shapiro]: yeah

1160
00:33:48,348 –> 00:33:48,730
[ramsey_d_smith]: discuss

1161
00:33:48,425 –> 00:33:49,727
[david_shapiro]: yeah it’s interesting

1162
00:33:49,312 –> 00:33:50,295
[ramsey_d_smith]: or is that the secret sauce

1163
00:33:50,088 –> 00:33:51,390
[david_shapiro]: no no it’s interesting

1164
00:33:51,469 –> 00:33:51,614
[ramsey_d_smith]: yeah

1165
00:33:51,650 –> 00:33:58,281
[david_shapiro]: and i personally think that there’s a
lot of gold in the in the complexity

1166
00:33:58,421 –> 00:34:02,789
[david_shapiro]: because people that don’t you know this
is a huge market right it’s probably the

1167
00:34:02,829 –> 00:34:04,812
[david_shapiro]: largest asset class out there right

1168
00:34:05,100 –> 00:34:05,241
[paul_tyler]: yeah

1169
00:34:05,313 –> 00:34:10,281
[david_shapiro]: so coming up with a complex solution
in an asset class that is in the

1170
00:34:10,662 –> 00:34:16,411
[david_shapiro]: you know trillions and trillions of dollars
is worth the work associated with it so

1171
00:34:16,530 –> 00:34:16,796
[paul_tyler]: oh

1172
00:34:16,972 –> 00:34:17,453
[david_shapiro]: i don’t mind

1173
00:34:17,460 –> 00:34:17,701
[paul_tyler]: oh

1174
00:34:17,533 –> 00:34:22,602
[david_shapiro]: complexity doesn’t bother me at all i
mean it does not fare well for us

1175
00:34:22,862 –> 00:34:28,872
[david_shapiro]: right trying to raise capital from a
venture investor it is too complicated for venture

1176
00:34:28,772 –> 00:34:28,854
[paul_tyler]: ah

1177
00:34:28,932 –> 00:34:29,373
[david_shapiro]: investors

1178
00:34:29,490 –> 00:34:29,731
[paul_tyler]: yes

1179
00:34:29,553 –> 00:34:29,654
[david_shapiro]: and

1180
00:34:29,639 –> 00:34:30,329
[ramsey_d_smith]: yeah

1181
00:34:29,774 –> 00:34:31,777
[david_shapiro]: i’m too old for adventure investors anyway

1182
00:34:31,829 –> 00:34:32,489
[ramsey_d_smith]: yeah

1183
00:34:32,138 –> 00:34:33,720
[david_shapiro]: so but the

1184
00:34:33,741 –> 00:34:33,881
[paul_tyler]: yeah

1185
00:34:33,780 –> 00:34:39,630
[david_shapiro]: strategic investors that see the value of
this particularly those that have distribution you know

1186
00:34:39,750 –> 00:34:47,223
[david_shapiro]: the insurance companies um you know it’s
fine now the really important question is the

1187
00:34:47,303 –> 00:34:51,350
[david_shapiro]: pricing on the product and with interest
rates moving up the cost of equity is

1188
00:34:51,390 –> 00:34:56,198
[david_shapiro]: going to move up so it’s not
dollar for dollar you have to look at

1189
00:34:56,558 –> 00:35:00,545
[david_shapiro]: other you can’t just look at the
now two hundred and fifty or three hundred

1190
00:35:00,605 –> 00:35:05,894
[david_shapiro]: basis point rise in interest rates as
a guide to how much the equity cost

1191
00:35:05,994 –> 00:35:10,321
[david_shapiro]: should be because that really needs to
be a function of h p a credit

1192
00:35:10,381 –> 00:35:15,590
[david_shapiro]: risk stuff that right so we do
think that there will be a relationship in

1193
00:35:15,650 –> 00:35:22,101
[david_shapiro]: the cost of equity to to that
that right now it’s much more narrow than

1194
00:35:22,161 –> 00:35:26,809
[david_shapiro]: it’s ever been because we haven’t had
any pricing impact but we’re going to in

1195
00:35:26,829 –> 00:35:28,832
[david_shapiro]: the next few months and we think
that

1196
00:35:29,072 –> 00:35:29,153
[paul_tyler]: ah

1197
00:35:29,253 –> 00:35:33,460
[david_shapiro]: you know we’ll probably go from a
nine percent i r r to the investor

1198
00:35:33,560 –> 00:35:34,902
[david_shapiro]: to probably something closer to a

1199
00:35:34,919 –> 00:35:34,939
[ramsey_d_smith]: m

1200
00:35:35,163 –> 00:35:37,086
[david_shapiro]: per cent i r r but

1201
00:35:37,166 –> 00:35:37,829
[ramsey_d_smith]: hm

1202
00:35:37,286 –> 00:35:40,031
[david_shapiro]: it’s not going to be it’s not
going to be two or three hundred bass

1203
00:35:40,071 –> 00:35:40,972
[david_shapiro]: points and

1204
00:35:41,001 –> 00:35:41,505
[ramsey_d_smith]: sure i just

1205
00:35:41,493 –> 00:35:41,573
[david_shapiro]: and

1206
00:35:41,546 –> 00:35:42,575
[ramsey_d_smith]: for right

1207
00:35:42,435 –> 00:35:46,602
[david_shapiro]: it’s the same the same the same
problem that anyone is going to have interest

1208
00:35:46,662 –> 00:35:48,326
[david_shapiro]: rates ye entirely you’re going

1209
00:35:48,139 –> 00:35:48,283
[ramsey_d_smith]: yeah

1210
00:35:48,386 –> 00:35:49,510
[david_shapiro]: up so i don’t think we get
singled

1211
00:35:49,411 –> 00:35:49,512
[ramsey_d_smith]: ah

1212
00:35:49,570 –> 00:35:49,670
[david_shapiro]: out

1213
00:35:50,890 –> 00:35:50,970
[ramsey_d_smith]: so

1214
00:35:51,060 –> 00:35:51,181
[paul_tyler]: uh

1215
00:35:51,271 –> 00:35:54,724
[ramsey_d_smith]: for the benefit of our our audience
when you say h pa that’s home price

1216
00:35:54,754 –> 00:35:54,915
[david_shapiro]: price

1217
00:35:54,785 –> 00:35:55,327
[ramsey_d_smith]: appreciation

1218
00:35:54,996 –> 00:35:56,708
[david_shapiro]: appreciation yeah yeah

1219
00:35:57,020 –> 00:35:57,241
[ramsey_d_smith]: okay

1220
00:35:57,220 –> 00:35:57,460
[paul_tyler]: okay

1221
00:35:57,462 –> 00:35:57,763
[ramsey_d_smith]: all right

1222
00:35:57,845 –> 00:35:58,810
[david_shapiro]: yeah exactly

1223
00:35:58,783 –> 00:35:58,963
[paul_tyler]: well

1224
00:35:59,168 –> 00:35:59,309
[ramsey_d_smith]: eh

1225
00:35:59,364 –> 00:36:00,566
[paul_tyler]: well this is a great conversation

1226
00:36:00,308 –> 00:36:01,269
[ramsey_d_smith]: m yeah

1227
00:36:01,087 –> 00:36:06,697
[paul_tyler]: ramsey any other thoughts or questions this
is a very different take on a common

1228
00:36:06,777 –> 00:36:07,658
[paul_tyler]: problem people have

1229
00:36:08,459 –> 00:36:11,884
[ramsey_d_smith]: like i i grew up in a
world of financial

1230
00:36:11,842 –> 00:36:11,863
[david_shapiro]: m

1231
00:36:11,945 –> 00:36:17,213
[ramsey_d_smith]: complexity so i always find these things
you know very interesting at the same time

1232
00:36:17,354 –> 00:36:22,823
[ramsey_d_smith]: you know i always now and my
my post complex career i also focus on

1233
00:36:22,863 –> 00:36:23,063
[ramsey_d_smith]: and well

1234
00:36:22,980 –> 00:36:23,940
[paul_tyler]: oh

1235
00:36:23,083 –> 00:36:24,205
[ramsey_d_smith]: how do we how do you make

1236
00:36:24,120 –> 00:36:24,812
[paul_tyler]: oh

1237
00:36:24,245 –> 00:36:25,748
[ramsey_d_smith]: it sort of palatable for the consumer

1238
00:36:25,890 –> 00:36:26,760
[paul_tyler]: oh

1239
00:36:26,068 –> 00:36:29,854
[ramsey_d_smith]: and and i thought it was very
interesting that you were very clear from the

1240
00:36:29,894 –> 00:36:34,121
[ramsey_d_smith]: beginning that the distribution here is though
someone like a financial advisor that

1241
00:36:34,043 –> 00:36:34,184
[david_shapiro]: yeah

1242
00:36:34,162 –> 00:36:38,769
[ramsey_d_smith]: can can put it make it part
of a menu and help a help a

1243
00:36:38,829 –> 00:36:43,517
[ramsey_d_smith]: consumer get to the get to the
right place i think i agree with you

1244
00:36:43,798 –> 00:36:44,723
[ramsey_d_smith]: that fun mentally

1245
00:36:44,383 –> 00:36:44,486
[paul_tyler]: met

1246
00:36:44,865 –> 00:36:50,806
[ramsey_d_smith]: that that that the house value being
house poor is like a big problem especially

1247
00:36:50,826 –> 00:36:53,050
[ramsey_d_smith]: in places like california where you know
where you live

1248
00:36:53,359 –> 00:36:53,893
[david_shapiro]: hm

1249
00:36:54,060 –> 00:36:54,282
[paul_tyler]: yeah

1250
00:36:54,192 –> 00:36:59,140
[ramsey_d_smith]: and so people need solutions people need
solutions there and so new and creative ones

1251
00:36:59,200 –> 00:37:01,603
[ramsey_d_smith]: i think are are great to have

1252
00:37:01,650 –> 00:37:03,060
[paul_tyler]: oh

1253
00:37:01,663 –> 00:37:05,547
[ramsey_d_smith]: and again i keep on going through
the formula in my head i’ve got it

1254
00:37:05,608 –> 00:37:07,230
[ramsey_d_smith]: now sure i got it now

1255
00:37:07,230 –> 00:37:08,670
[paul_tyler]: oh

1256
00:37:08,091 –> 00:37:08,292
[ramsey_d_smith]: um

1257
00:37:08,212 –> 00:37:08,750
[david_shapiro]: m ah

1258
00:37:09,013 –> 00:37:13,300
[ramsey_d_smith]: and and anyway good luck with good
luck with your journey it sounds like you’ve

1259
00:37:13,320 –> 00:37:18,228
[ramsey_d_smith]: been at it for a while and
and you’re bring you know another another solution

1260
00:37:18,470 –> 00:37:19,220
[ramsey_d_smith]: market which is great

1261
00:37:19,293 –> 00:37:21,066
[david_shapiro]: yeah exactly well thanks for having

1262
00:37:21,020 –> 00:37:21,180
[paul_tyler]: yeah

1263
00:37:21,086 –> 00:37:21,328
[david_shapiro]: me guys

1264
00:37:22,082 –> 00:37:25,070
[paul_tyler]: hey well david thanks so much and
and if people want to get in touch

1265
00:37:25,110 –> 00:37:28,098
[paul_tyler]: with you or learn more about the
company where should they go

1266
00:37:28,903 –> 00:37:30,185
[david_shapiro]: uhequifi dot com

1267
00:37:30,030 –> 00:37:30,485
[paul_tyler]: oh

1268
00:37:30,586 –> 00:37:31,908
[david_shapiro]: is the easiest just

1269
00:37:32,549 –> 00:37:32,792
[ramsey_d_smith]: my

1270
00:37:32,549 –> 00:37:34,032
[david_shapiro]: it’s a contraction of equity

1271
00:37:33,927 –> 00:37:34,049
[ramsey_d_smith]: right

1272
00:37:34,072 –> 00:37:34,573
[david_shapiro]: in finance

1273
00:37:34,649 –> 00:37:34,890
[ramsey_d_smith]: oh

1274
00:37:34,993 –> 00:37:40,122
[david_shapiro]: q u i f i dot com
we’re on linked in were on facebook so

1275
00:37:40,262 –> 00:37:40,727
[david_shapiro]: easy in

1276
00:37:41,510 –> 00:37:41,830
[paul_tyler]: okay good

1277
00:37:41,849 –> 00:37:41,990
[ramsey_d_smith]: yeah

1278
00:37:41,910 –> 00:37:42,070
[paul_tyler]: we’ll

1279
00:37:42,043 –> 00:37:42,166
[david_shapiro]: yeah

1280
00:37:42,090 –> 00:37:43,772
[paul_tyler]: put that in show so listen david
thanks

1282
00:37:43,832 –> 00:37:46,654
[paul_tyler]: so much ramsey it was great and
for all the listeners to keep the

1283
00:37:46,619 –> 00:37:47,369
[ramsey_d_smith]: yeah

1284
00:37:46,674 –> 00:37:51,919
[paul_tyler]: feedback coming and join us again next
week for another episode of that annuity show

Episode 155: The Social Security Sky Isn’t Falling with Kerry Pechter

July 7, 2022 2022, Kerry Pechter, Podcast, Retirement No comments

In 2034 or 2035, the Social Security trust fund will be depleted. Much has been written about the significance of the event. Kerry Pechter, Editor of the Retirement Income Journal joins us again on the show to discuss why this fear is overblown.

Also, do you want to get regular updates on news about guests of our show? Go to https://thatannuityshow.com and subscribe to our newsletter.

We hope you enjoy the show.

Links mentioned:

https://www.linkedin.com/in/kerry-pechter-1b05705/

https://retirementincomejournal.com/

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Episode Transcript

1
00:00:00,136 –> 00:00:01,101
[kerry_h_pechter]: i’m accustomed to

2
00:00:01,656 –> 00:00:03,409
[ramsey_d_smith]: yeh yeah

3
00:00:03,756 –> 00:00:03,938
[kerry_h_pechter]: that

4
00:00:04,636 –> 00:00:04,777
[ramsey_d_smith]: yeah

5
00:00:06,700 –> 00:00:09,767
[paul_tyler]: all right high this is paul tyler

6
00:00:09,726 –> 00:00:10,716
[ramsey_d_smith]: yeah

7
00:00:09,887 –> 00:00:10,609
[paul_tyler]: and welcome to

8
00:00:10,806 –> 00:00:11,107
[ramsey_d_smith]: yeah

9
00:00:10,809 –> 00:00:13,154
[paul_tyler]: another episode of that annuity show

10
00:00:12,982 –> 00:00:13,003
[ramsey_d_smith]: a

11
00:00:13,815 –> 00:00:15,178
[paul_tyler]: ramsey good to see you

12
00:00:16,268 –> 00:00:16,672
[ramsey_d_smith]: a pleasure

13
00:00:18,360 –> 00:00:23,308
[paul_tyler]: and we’ve got another returning guest today
do you want to do the intro

14
00:00:24,126 –> 00:00:29,935
[ramsey_d_smith]: absolutely we’re delighted to have cary petto
rejoin us carry for those of you don’t

15
00:00:29,996 –> 00:00:33,702
[ramsey_d_smith]: know and i imagine like anybody was
on this call is probably either at least

16
00:00:33,762 –> 00:00:41,334
[ramsey_d_smith]: heard of carry or s publication the
retirement income journal a very important voice in

17
00:00:41,375 –> 00:00:46,864
[ramsey_d_smith]: the space a thoughtful and a critical
voice in in the life insurance space and

18
00:00:46,904 –> 00:00:51,031
[ramsey_d_smith]: we’re really lucky to have him here
a m there are lots of there are

19
00:00:51,071 –> 00:00:56,319
[ramsey_d_smith]: lots of topics in the retirement space
that that that cary can speak to and

20
00:00:56,360 –> 00:01:01,489
[ramsey_d_smith]: today we’re going to focus on social
security which is um i think we can

21
00:01:01,529 –> 00:01:07,120
[ramsey_d_smith]: never talk too much about it and
care brings a very unique and passionate perspective

22
00:01:07,160 –> 00:01:08,904
[ramsey_d_smith]: to it so with that cary tell
us

23
00:01:09,396 –> 00:01:09,659
[kerry_h_pechter]: oh

24
00:01:09,996 –> 00:01:14,142
[ramsey_d_smith]: tell us a little bit about the
retirement income journal its objectives your mission and

25
00:01:14,223 –> 00:01:19,171
[ramsey_d_smith]: then after that we can really start
hitting on what you think needs to change

26
00:01:19,792 –> 00:01:22,280
[ramsey_d_smith]: with respect to the discussion on social
security oh

27
00:01:23,116 –> 00:01:26,221
[kerry_h_pechter]: sure sure yeah i’m founder editor and
publisher

28
00:01:26,226 –> 00:01:26,489
[ramsey_d_smith]: oh

29
00:01:26,301 –> 00:01:31,349
[kerry_h_pechter]: of the retirement income journal it was
created in two thousand nine right in at

30
00:01:31,409 –> 00:01:33,573
[kerry_h_pechter]: the beginning of the recovery from the

31
00:01:33,636 –> 00:01:33,857
[ramsey_d_smith]: yeah

32
00:01:33,693 –> 00:01:34,475
[kerry_h_pechter]: financial crisis

33
00:01:35,436 –> 00:01:35,680
[ramsey_d_smith]: oh

34
00:01:35,697 –> 00:01:38,141
[kerry_h_pechter]: when the financial crisis bottomed and

35
00:01:38,406 –> 00:01:38,631
[ramsey_d_smith]: oh

36
00:01:39,604 –> 00:01:41,668
[kerry_h_pechter]: i set out to cover everything

37
00:01:41,736 –> 00:01:42,696
[ramsey_d_smith]: yeah

38
00:01:41,908 –> 00:01:48,159
[kerry_h_pechter]: involved with retirement income and that would
be everything from personal retirement income planning to

39
00:01:49,026 –> 00:01:49,864
[ramsey_d_smith]: ye

40
00:01:49,662 –> 00:01:54,089
[kerry_h_pechter]: all the products involved in that the
annuity products as well as

41
00:01:54,618 –> 00:01:54,698
[ramsey_d_smith]: ah

42
00:01:54,911 –> 00:01:59,556
[kerry_h_pechter]: bond ladders and and deferred annuities and
uh

43
00:01:59,196 –> 00:01:59,886
[ramsey_d_smith]: yeah

44
00:01:59,966 –> 00:02:04,498
[kerry_h_pechter]: and also not so much to find
benefit plans but the four o one case

45
00:02:04,598 –> 00:02:09,749
[kerry_h_pechter]: space the social security space the and
then

46
00:02:09,787 –> 00:02:09,907
[ramsey_d_smith]: ah

47
00:02:10,150 –> 00:02:16,100
[kerry_h_pechter]: comparative systems around the world to our
retirement system for the sake of comparison so

48
00:02:16,561 –> 00:02:18,163
[kerry_h_pechter]: i’ve sort of brought

49
00:02:18,201 –> 00:02:18,283
[ramsey_d_smith]: no

50
00:02:18,284 –> 00:02:20,607
[kerry_h_pechter]: in whatever seem to be interesting

51
00:02:20,946 –> 00:02:21,129
[ramsey_d_smith]: yeah

52
00:02:21,068 –> 00:02:22,050
[kerry_h_pechter]: at the time and that

53
00:02:21,963 –> 00:02:22,086
[ramsey_d_smith]: yeah

54
00:02:22,110 –> 00:02:22,130
[kerry_h_pechter]: i

55
00:02:22,176 –> 00:02:22,597
[ramsey_d_smith]: oh

56
00:02:22,210 –> 00:02:26,016
[kerry_h_pechter]: hoped people would give a wider perspective
because i thought that that the

57
00:02:26,796 –> 00:02:27,606
[ramsey_d_smith]: yeah

58
00:02:26,858 –> 00:02:30,644
[kerry_h_pechter]: people should people are buried pretty much
in their silos their sort of their gopher

59
00:02:30,704 –> 00:02:34,849
[kerry_h_pechter]: holes and and the best best thing
i could do to

60
00:02:35,256 –> 00:02:35,516
[ramsey_d_smith]: yeah

61
00:02:35,931 –> 00:02:38,193
[kerry_h_pechter]: to help them would be to give
them a kind of cross

62
00:02:38,665 –> 00:02:38,826
[ramsey_d_smith]: yeah

63
00:02:38,774 –> 00:02:39,715
[kerry_h_pechter]: silos look

64
00:02:42,240 –> 00:02:42,581
[paul_tyler]: all right

65
00:02:42,809 –> 00:02:42,950
[ramsey_d_smith]: well

66
00:02:42,843 –> 00:02:42,905
[kerry_h_pechter]: ah

67
00:02:43,023 –> 00:02:43,365
[paul_tyler]: i will

68
00:02:43,150 –> 00:02:45,393
[ramsey_d_smith]: that’s fantastic go ahead go ahead paul

69
00:02:45,880 –> 00:02:48,925
[paul_tyler]: no i’ll just roll a ball right
down the center

70
00:02:48,906 –> 00:02:48,926
[ramsey_d_smith]: m

71
00:02:48,985 –> 00:02:50,147
[paul_tyler]: lane here challenge the

72
00:02:50,106 –> 00:02:50,367
[ramsey_d_smith]: oh

73
00:02:50,207 –> 00:02:53,112
[paul_tyler]: question challenge the answer so

74
00:02:53,736 –> 00:02:53,977
[ramsey_d_smith]: yeah

75
00:02:53,946 –> 00:02:55,416
[kerry_h_pechter]: yeah

76
00:02:54,354 –> 00:02:55,616
[paul_tyler]: you know look i’ve got

77
00:02:55,476 –> 00:02:55,696
[ramsey_d_smith]: yeah

78
00:02:55,717 –> 00:02:59,523
[paul_tyler]: i’m not that far away from return
but it’s still got away as carry i

79
00:02:59,603 –> 00:02:59,783
[paul_tyler]: don’t

80
00:02:59,717 –> 00:02:59,859
[ramsey_d_smith]: oh

81
00:02:59,817 –> 00:03:00,546
[kerry_h_pechter]: yeah

82
00:02:59,844 –> 00:03:01,486
[paul_tyler]: think social security is going to be

83
00:03:01,536 –> 00:03:02,496
[ramsey_d_smith]: oh

84
00:03:01,566 –> 00:03:02,728
[paul_tyler]: there that safety net that

85
00:03:02,646 –> 00:03:03,115
[ramsey_d_smith]: oh

86
00:03:02,788 –> 00:03:03,950
[paul_tyler]: insurance program started

87
00:03:03,936 –> 00:03:04,179
[ramsey_d_smith]: oh

88
00:03:04,010 –> 00:03:05,854
[paul_tyler]: by the government it’s going broke

89
00:03:07,875 –> 00:03:07,896
[ramsey_d_smith]: m

90
00:03:07,897 –> 00:03:08,919
[paul_tyler]: what what

91
00:03:08,835 –> 00:03:08,856
[kerry_h_pechter]: m

92
00:03:10,440 –> 00:03:10,660
[paul_tyler]: help

93
00:03:11,586 –> 00:03:11,888
[ramsey_d_smith]: oh

94
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[paul_tyler]: how should i really be thinking about
this how should be framing

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[ramsey_d_smith]: yeah

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[paul_tyler]: this question what’s the real

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[ramsey_d_smith]: ah

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[paul_tyler]: what’s real what’s not

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[kerry_h_pechter]: well we have to understand that that
social security is important to everyone because you

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[kerry_h_pechter]: have to remember that even people who
whose main interest is in investing in the

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[kerry_h_pechter]: risky markets that that social

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[ramsey_d_smith]: yeah

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[kerry_h_pechter]: security acts as kind of a ballast
in their

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[ramsey_d_smith]: oh

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[kerry_h_pechter]: retirement income so that if sort

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[ramsey_d_smith]: yeah

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[kerry_h_pechter]: of you’re professional getting you know somewhere
or a couple getting somewhere between forty and

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[ramsey_d_smith]: oh

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[kerry_h_pechter]: eighty thousand dollars a year social

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[ramsey_d_smith]: oh

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[kerry_h_pechter]: security minus taxes and meta care

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[ramsey_d_smith]: yes

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[kerry_h_pechter]: that you know that’s giving you that’s
opening up a big

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[ramsey_d_smith]: he

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[kerry_h_pechter]: space for you to

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[ramsey_d_smith]: oh

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[kerry_h_pechter]: invest that much more money in equities
and not have to worry so you have

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[kerry_h_pechter]: to think of it in the context
of the entire uh uh everybody needs to

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[kerry_h_pechter]: think about

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[ramsey_d_smith]: yeah

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[kerry_h_pechter]: social security it’s not as though the
wealthy can can say

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[ramsey_d_smith]: oh

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[kerry_h_pechter]: i mean perhaps the very

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[ramsey_d_smith]: yeah

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[kerry_h_pechter]: very wealthy can say but

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[ramsey_d_smith]: yeah

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[kerry_h_pechter]: even

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[ramsey_d_smith]: yeah

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[kerry_h_pechter]: the affluent need to think about how
it works as a element in their portfolio

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[kerry_h_pechter]: so that’s that’s the way

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[paul_tyler]: yeah

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[kerry_h_pechter]: of establishing a larger audience for this
but but as far as the i wrote

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[kerry_h_pechter]: i’m called

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[paul_tyler]: oh

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[kerry_h_pechter]: social securities problems are more political than
financial

136
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[ramsey_d_smith]: yeah

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[kerry_h_pechter]: and i’m going to explain

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[ramsey_d_smith]: yeah

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[kerry_h_pechter]: basically why that’s true and also why

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[ramsey_d_smith]: yeah

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[kerry_h_pechter]: the financial the financing problems that have
are are easily are not as scary as

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[kerry_h_pechter]: they’ve been made out to be the
first thing i have t do is to

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[kerry_h_pechter]: acknowledge the economist

144
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[ramsey_d_smith]: m

145
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[kerry_h_pechter]: jeff brown at the university of illinois

146
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[ramsey_d_smith]: yeah

147
00:04:53,194 –> 00:04:58,182
[kerry_h_pechter]: for for help all of us in
the annuity industry see that the product and

148
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[kerry_h_pechter]: annuity and social security is an annuity
that the that the

149
00:05:02,226 –> 00:05:02,427
[ramsey_d_smith]: yeah

150
00:05:02,830 –> 00:05:05,795
[kerry_h_pechter]: product is insurance

151
00:05:06,156 –> 00:05:06,458
[ramsey_d_smith]: oh

152
00:05:07,566 –> 00:05:11,630
[kerry_h_pechter]: it’s not an investment and so that
and i say

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[ramsey_d_smith]: yah

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[kerry_h_pechter]: that so when people say to

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[ramsey_d_smith]: ah

156
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[kerry_h_pechter]: me you know i can invest my
own money better than the ah government can

157
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[kerry_h_pechter]: or an advisor tells me that they’ve
done the math and they’ve shown that anybody

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[kerry_h_pechter]: who’s making more than eighty thousand dollars

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[paul_tyler]: ah

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[kerry_h_pechter]: a year can do better

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[ramsey_d_smith]: m

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00:05:27,632 –> 00:05:28,794
[kerry_h_pechter]: with the investments

163
00:05:28,656 –> 00:05:28,998
[ramsey_d_smith]: oh

164
00:05:28,874 –> 00:05:30,597
[kerry_h_pechter]: than they can over their lifetime with

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[ramsey_d_smith]: m

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[kerry_h_pechter]: social security i say well and in
you know in recalling jeff brown observation that

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[kerry_h_pechter]: it’s not an investment it’s insurance that
social

168
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[ramsey_d_smith]: yeah

169
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[kerry_h_pechter]: security is yes you can

170
00:05:44,976 –> 00:05:45,257
[ramsey_d_smith]: oh

171
00:05:45,179 –> 00:05:47,141
[kerry_h_pechter]: invest your own money better than

172
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[ramsey_d_smith]: yeah

173
00:05:47,981 –> 00:05:49,343
[kerry_h_pechter]: social security can the government

174
00:05:49,326 –> 00:05:49,346
[ramsey_d_smith]: m

175
00:05:49,403 –> 00:05:58,983
[kerry_h_pechter]: can but you can’t insure yourself against
the things that social security for insurance you

176
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[kerry_h_pechter]: need large numbers

177
00:06:00,135 –> 00:06:00,156
[ramsey_d_smith]: m

178
00:06:00,365 –> 00:06:04,292
[kerry_h_pechter]: and insurance s based on the law
of large numbers the risks and the costs

179
00:06:04,432 –> 00:06:04,532
[kerry_h_pechter]: are

180
00:06:04,626 –> 00:06:04,868
[ramsey_d_smith]: oh

181
00:06:04,652 –> 00:06:07,477
[kerry_h_pechter]: spread out over not we three

182
00:06:07,307 –> 00:06:07,327
[ramsey_d_smith]: a

183
00:06:07,537 –> 00:06:08,018
[kerry_h_pechter]: hundred you

184
00:06:07,933 –> 00:06:08,115
[ramsey_d_smith]: fish

185
00:06:08,058 –> 00:06:10,983
[kerry_h_pechter]: know two hundred million workers but also
the

186
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[ramsey_d_smith]: ye

187
00:06:11,464 –> 00:06:12,586
[kerry_h_pechter]: you know the long term

188
00:06:12,638 –> 00:06:12,983
[ramsey_d_smith]: yes

189
00:06:13,267 –> 00:06:14,729
[kerry_h_pechter]: infinite lifetime of the united

190
00:06:14,526 –> 00:06:14,766
[ramsey_d_smith]: yeah

191
00:06:14,789 –> 00:06:18,516
[kerry_h_pechter]: states more or less and so you
have an insure

192
00:06:18,275 –> 00:06:18,435
[ramsey_d_smith]: yeah

193
00:06:18,776 –> 00:06:18,916
[kerry_h_pechter]: you’re

194
00:06:18,936 –> 00:06:19,197
[ramsey_d_smith]: oh

195
00:06:18,956 –> 00:06:22,883
[kerry_h_pechter]: having insurance product and this insurance product
not only

196
00:06:22,775 –> 00:06:23,613
[ramsey_d_smith]: yeah much

197
00:06:23,564 –> 00:06:25,207
[kerry_h_pechter]: provides you with a return

198
00:06:25,260 –> 00:06:25,522
[paul_tyler]: yeah

199
00:06:25,327 –> 00:06:25,928
[kerry_h_pechter]: in fact return

200
00:06:26,037 –> 00:06:26,524
[ramsey_d_smith]: thank you

201
00:06:26,369 –> 00:06:28,292
[kerry_h_pechter]: is the wrong way to think about
what

202
00:06:28,326 –> 00:06:28,346
[ramsey_d_smith]: i

203
00:06:28,332 –> 00:06:33,360
[kerry_h_pechter]: you get from self security because you’re
not they get an income you get you

204
00:06:33,460 –> 00:06:39,771
[kerry_h_pechter]: get insurance from longevity risk the risk
of outliving your income you get insurance from

205
00:06:39,911 –> 00:06:43,057
[kerry_h_pechter]: market risk the risk of retiring in
it down turn

206
00:06:42,936 –> 00:06:43,178
[ramsey_d_smith]: oh

207
00:06:43,238 –> 00:06:44,522
[kerry_h_pechter]: also called sequence risk

208
00:06:45,066 –> 00:06:45,267
[ramsey_d_smith]: oh

209
00:06:45,204 –> 00:06:48,254
[kerry_h_pechter]: the you’re protected from inflation risk

210
00:06:48,006 –> 00:06:48,372
[ramsey_d_smith]: yeah

211
00:06:48,968 –> 00:06:49,090
[kerry_h_pechter]: and

212
00:06:49,116 –> 00:06:49,361
[ramsey_d_smith]: oh

213
00:06:50,617 –> 00:06:57,528
[kerry_h_pechter]: and a couple of other risks and
so to not under to think of social

214
00:06:57,588 –> 00:07:02,536
[kerry_h_pechter]: security in terms of average internal rate
of return is ex there the same

215
00:07:02,736 –> 00:07:02,977
[ramsey_d_smith]: yes

216
00:07:02,897 –> 00:07:06,243
[kerry_h_pechter]: making the same mistake is when people
look at an income annuity

217
00:07:05,976 –> 00:07:07,086
[ramsey_d_smith]: yeah

218
00:07:06,443 –> 00:07:07,044
[kerry_h_pechter]: and try to

219
00:07:06,969 –> 00:07:06,990
[paul_tyler]: m

220
00:07:07,665 –> 00:07:08,226
[kerry_h_pechter]: compare

221
00:07:07,716 –> 00:07:07,939
[ramsey_d_smith]: yeah

222
00:07:08,647 –> 00:07:09,228
[kerry_h_pechter]: the internal

223
00:07:09,186 –> 00:07:09,954
[ramsey_d_smith]: yeah

224
00:07:09,288 –> 00:07:11,471
[kerry_h_pechter]: rate of return on average of the
income

225
00:07:11,406 –> 00:07:11,867
[ramsey_d_smith]: oh

226
00:07:11,531 –> 00:07:17,722
[kerry_h_pechter]: annuity to an investment and to the
average long term return to the markets so

227
00:07:18,082 –> 00:07:26,236
[kerry_h_pechter]: so we’re mixing apples and origins and
somehow the narrative about social security has alling

228
00:07:26,296 –> 00:07:36,434
[kerry_h_pechter]: into the hands of the investment folks
which is not altogether surprising but but it’s

229
00:07:36,734 –> 00:07:36,874
[kerry_h_pechter]: it’s

230
00:07:36,996 –> 00:07:37,198
[ramsey_d_smith]: yeah

231
00:07:37,295 –> 00:07:38,878
[kerry_h_pechter]: so it’s been miss it’s mis

232
00:07:38,826 –> 00:07:39,106
[ramsey_d_smith]: oh

233
00:07:38,978 –> 00:07:42,063
[kerry_h_pechter]: characterized it’s the ugly duck in rather

234
00:07:42,366 –> 00:07:42,628
[ramsey_d_smith]: yeah

235
00:07:42,504 –> 00:07:43,345
[kerry_h_pechter]: its portrayed as the

236
00:07:43,506 –> 00:07:43,806
[ramsey_d_smith]: oh

237
00:07:43,706 –> 00:07:48,575
[kerry_h_pechter]: duckling rather than the swan that it
is now that’s i’ve said a lot there

238
00:07:48,755 –> 00:07:52,542
[kerry_h_pechter]: and maybe i can if you still
have some questions about it maybe i can

239
00:07:52,926 –> 00:07:53,646
[ramsey_d_smith]: yeah

240
00:07:53,003 –> 00:07:53,765
[kerry_h_pechter]: unpack it a little

241
00:07:54,705 –> 00:07:58,988
[ramsey_d_smith]: m no i think that’s very clear
and

242
00:07:59,118 –> 00:07:59,261
[kerry_h_pechter]: yeah

243
00:07:59,268 –> 00:07:59,489
[ramsey_d_smith]: you know

244
00:07:59,910 –> 00:08:00,178
[paul_tyler]: oh

245
00:07:59,910 –> 00:08:06,581
[ramsey_d_smith]: i will say personally i agree with
everything you said about the the value proposition

246
00:08:06,921 –> 00:08:09,465
[ramsey_d_smith]: of social security v c v just
about any oth

247
00:08:10,311 –> 00:08:10,394
[kerry_h_pechter]: ah

248
00:08:10,327 –> 00:08:14,013
[ramsey_d_smith]: uh potential source for all the various
reasons that you mentioned now um

249
00:08:14,526 –> 00:08:15,126
[kerry_h_pechter]: oh

250
00:08:15,215 –> 00:08:18,300
[ramsey_d_smith]: one of the one of the the
elements of the

251
00:08:18,369 –> 00:08:18,390
[paul_tyler]: m

252
00:08:18,380 –> 00:08:22,748
[ramsey_d_smith]: current dialogue in the market about social
security as well yeah fine even if i

253
00:08:22,808 –> 00:08:23,570
[ramsey_d_smith]: agree it’s great

254
00:08:25,086 –> 00:08:25,327
[kerry_h_pechter]: yeah

255
00:08:26,716 –> 00:08:33,086
[ramsey_d_smith]: the average consumer is hearing frequently that
that it’s not going to be around i

256
00:08:33,186 –> 00:08:37,213
[ramsey_d_smith]: spoke to i spoke to somebody ho
was doing some work around my house recently

257
00:08:37,313 –> 00:08:38,175
[ramsey_d_smith]: and who mentioned

258
00:08:38,211 –> 00:08:38,374
[paul_tyler]: yeah

259
00:08:38,235 –> 00:08:41,059
[ramsey_d_smith]: that you know that she had just
started taking social security she was sixty two

260
00:08:41,100 –> 00:08:44,966
[ramsey_d_smith]: years old and i said well why
did you do that i mean borrowing a

261
00:08:45,006 –> 00:08:49,013
[ramsey_d_smith]: health reason i said you should do
everything you can she was still employed in

262
00:08:49,073 –> 00:08:51,998
[ramsey_d_smith]: some way you should do everything you
can do hanging on to your seventy and

263
00:08:52,058 –> 00:08:56,407
[ramsey_d_smith]: one of the first things she said
she was concerned about it not being around

264
00:08:56,487 –> 00:09:02,764
[ramsey_d_smith]: for her and she’s only she’s already
sixty two m so how do you think

265
00:09:02,804 –> 00:09:08,175
[ramsey_d_smith]: that perception was created and you know
what do you think we can do to

266
00:09:08,496 –> 00:09:14,263
[ramsey_d_smith]: to alleviate that perception to the people
actually use this this amazing benefit

267
00:09:14,010 –> 00:09:14,252
[paul_tyler]: yeah

268
00:09:14,404 –> 00:09:15,588
[ramsey_d_smith]: more optimately

269
00:09:17,326 –> 00:09:20,472
[kerry_h_pechter]: well it’s interesting that you know people
believe what they hear over

270
00:09:20,436 –> 00:09:20,718
[ramsey_d_smith]: oh

271
00:09:21,153 –> 00:09:24,139
[kerry_h_pechter]: the back fence more readily than they
believe say

272
00:09:24,051 –> 00:09:24,191
[ramsey_d_smith]: yeah

273
00:09:24,599 –> 00:09:27,365
[kerry_h_pechter]: steve goss the chief actuary of social
security

274
00:09:28,446 –> 00:09:28,707
[ramsey_d_smith]: oh

275
00:09:28,726 –> 00:09:32,472
[kerry_h_pechter]: who who’s not as far as i
know shouldn’t speak for him but from the

276
00:09:32,533 –> 00:09:33,574
[kerry_h_pechter]: time that i’ve talked to him

277
00:09:33,746 –> 00:09:33,988
[ramsey_d_smith]: yeah

278
00:09:34,436 –> 00:09:36,018
[kerry_h_pechter]: he’s not particularly concerned

279
00:09:35,616 –> 00:09:35,897
[ramsey_d_smith]: yeah

280
00:09:35,880 –> 00:09:36,484
[paul_tyler]: oh

281
00:09:36,539 –> 00:09:38,122
[kerry_h_pechter]: about so security but her

282
00:09:38,215 –> 00:09:38,457
[paul_tyler]: yes

283
00:09:38,543 –> 00:09:45,634
[kerry_h_pechter]: her she’s where her fear comes from
of course is the ms characterization

284
00:09:45,096 –> 00:09:45,498
[ramsey_d_smith]: oh

285
00:09:45,694 –> 00:09:49,441
[kerry_h_pechter]: is that she’s read but the mis
characterizations are rooted in this

286
00:09:49,296 –> 00:09:49,660
[ramsey_d_smith]: oh

287
00:09:49,601 –> 00:09:54,433
[kerry_h_pechter]: idea that the social security system is
going to he broke in twenty thirty four

288
00:09:55,416 –> 00:09:55,577
[kerry_h_pechter]: and

289
00:09:56,316 –> 00:09:56,537
[ramsey_d_smith]: yeah

290
00:09:56,982 –> 00:09:59,626
[kerry_h_pechter]: that’s ah complete

291
00:09:59,295 –> 00:10:00,576
[ramsey_d_smith]: yeah yeah

292
00:09:59,666 –> 00:10:00,668
[kerry_h_pechter]: mischaracterization

293
00:10:00,666 –> 00:10:00,686
[ramsey_d_smith]: m

294
00:10:00,870 –> 00:10:02,010
[paul_tyler]: yeah

295
00:10:01,369 –> 00:10:07,099
[kerry_h_pechter]: the let’s say that you were buying
a health insurance and the demographics of your

296
00:10:07,239 –> 00:10:15,633
[kerry_h_pechter]: pool changed and the uh insurance company
was no longer to maintain the same level

297
00:10:15,974 –> 00:10:17,877
[kerry_h_pechter]: of protections

298
00:10:17,376 –> 00:10:17,798
[ramsey_d_smith]: oh

299
00:10:18,358 –> 00:10:19,059
[kerry_h_pechter]: unless you went to

300
00:10:19,116 –> 00:10:19,377
[ramsey_d_smith]: yeah

301
00:10:19,139 –> 00:10:20,982
[kerry_h_pechter]: a cheaper unless same expense

302
00:10:20,646 –> 00:10:20,950
[ramsey_d_smith]: oh

303
00:10:21,122 –> 00:10:22,504
[kerry_h_pechter]: and level so you would have

304
00:10:22,446 –> 00:10:22,747
[ramsey_d_smith]: yeah

305
00:10:22,525 –> 00:10:24,267
[kerry_h_pechter]: to either pay higher premium to get

306
00:10:24,180 –> 00:10:24,382
[paul_tyler]: oh

307
00:10:24,648 –> 00:10:27,613
[kerry_h_pechter]: the coverage that you’re getting now or
you would have to

308
00:10:27,765 –> 00:10:27,786
[ramsey_d_smith]: m

309
00:10:28,755 –> 00:10:29,596
[kerry_h_pechter]: take lower benefits

310
00:10:29,256 –> 00:10:29,600
[ramsey_d_smith]: my

311
00:10:30,240 –> 00:10:31,350
[paul_tyler]: yeah

312
00:10:30,398 –> 00:10:33,944
[kerry_h_pechter]: and and the i guess implied there
would be that

313
00:10:33,756 –> 00:10:35,076
[ramsey_d_smith]: yeah

314
00:10:34,304 –> 00:10:38,638
[kerry_h_pechter]: well if the insurance and he does
not either raise you know if you

315
00:10:38,796 –> 00:10:39,606
[ramsey_d_smith]: yeah

316
00:10:39,199 –> 00:10:40,621
[kerry_h_pechter]: do not choose either higher

317
00:10:40,416 –> 00:10:41,256
[ramsey_d_smith]: yeah

318
00:10:40,962 –> 00:10:42,544
[kerry_h_pechter]: premiums or lower benefits

319
00:10:42,186 –> 00:10:42,386
[ramsey_d_smith]: yeah

320
00:10:43,186 –> 00:10:47,673
[kerry_h_pechter]: the insurance company will in effect go
out of business if that’s its only business

321
00:10:47,796 –> 00:10:48,062
[ramsey_d_smith]: yeah

322
00:10:48,414 –> 00:10:52,020
[kerry_h_pechter]: and so so but of course nobody
ever thinks

323
00:10:51,966 –> 00:10:52,288
[ramsey_d_smith]: yeah

324
00:10:52,381 –> 00:10:56,408
[kerry_h_pechter]: when they get a rate increase from
their insurance company or even from their electrical

325
00:10:56,488 –> 00:10:57,469
[kerry_h_pechter]: company they

326
00:10:57,360 –> 00:10:57,601
[paul_tyler]: yeah

327
00:10:57,549 –> 00:11:01,476
[kerry_h_pechter]: may not like it but it does
not mean that the insurance come he is

328
00:11:01,556 –> 00:11:02,558
[kerry_h_pechter]: going to go broke

329
00:11:02,826 –> 00:11:03,007
[ramsey_d_smith]: yeah

330
00:11:03,018 –> 00:11:08,497
[kerry_h_pechter]: in the insurentin the united states of
america is the biggest safest richest

331
00:11:09,126 –> 00:11:10,446
[ramsey_d_smith]: yeah

332
00:11:09,178 –> 00:11:12,884
[kerry_h_pechter]: most stable insurance company that has ever
existed in the

333
00:11:12,936 –> 00:11:13,836
[ramsey_d_smith]: oh

334
00:11:12,944 –> 00:11:18,794
[kerry_h_pechter]: history of the world and so to
say that social security is going to go

335
00:11:18,974 –> 00:11:19,896
[kerry_h_pechter]: broke is like saying

336
00:11:20,265 –> 00:11:20,286
[ramsey_d_smith]: m

337
00:11:20,517 –> 00:11:24,383
[kerry_h_pechter]: that the united states is going to
go broke and and unless you want to

338
00:11:24,423 –> 00:11:27,428
[kerry_h_pechter]: break in here i’ll i’ll go on
with with

339
00:11:27,876 –> 00:11:28,081
[ramsey_d_smith]: yeah

340
00:11:28,410 –> 00:11:31,034
[kerry_h_pechter]: i don’t want to go too much
into the history of social security and the

341
00:11:31,074 –> 00:11:34,358
[kerry_h_pechter]: political reasons why it was set up
the

342
00:11:34,275 –> 00:11:34,296
[ramsey_d_smith]: m

343
00:11:34,418 –> 00:11:36,940
[kerry_h_pechter]: way it was in order to look
something

344
00:11:36,606 –> 00:11:36,992
[ramsey_d_smith]: oh

345
00:11:37,081 –> 00:11:41,285
[kerry_h_pechter]: like a defined benefit pension and the
defined benefit pension can

346
00:11:41,046 –> 00:11:41,247
[ramsey_d_smith]: yeah

347
00:11:42,266 –> 00:11:42,346
[kerry_h_pechter]: you

348
00:11:42,276 –> 00:11:43,305
[ramsey_d_smith]: yeah

349
00:11:42,406 –> 00:11:46,330
[kerry_h_pechter]: know can default on its full

350
00:11:46,335 –> 00:11:46,356
[ramsey_d_smith]: m

351
00:11:46,410 –> 00:11:50,634
[kerry_h_pechter]: benefits but the social security system is
not and there is not

352
00:11:50,676 –> 00:11:50,976
[ramsey_d_smith]: oh

353
00:11:50,834 –> 00:11:51,515
[kerry_h_pechter]: going to be

354
00:11:51,999 –> 00:11:52,179
[ramsey_d_smith]: yeah

355
00:11:52,616 –> 00:11:56,186
[kerry_h_pechter]: a crisis unless you call the like
there’s goin to be no more of a

356
00:11:56,246 –> 00:11:57,891
[kerry_h_pechter]: crisis with so security

357
00:11:58,200 –> 00:11:58,444
[paul_tyler]: oh

358
00:11:58,553 –> 00:12:01,779
[kerry_h_pechter]: in in twenty thirty four then there
was going to be

359
00:12:01,746 –> 00:12:02,826
[ramsey_d_smith]: yeah

360
00:12:02,140 –> 00:12:02,961
[kerry_h_pechter]: a default

361
00:12:02,886 –> 00:12:03,048
[ramsey_d_smith]: oh

362
00:12:03,161 –> 00:12:05,565
[kerry_h_pechter]: of the united states debt in two
thousand eleven

363
00:12:05,877 –> 00:12:06,039
[ramsey_d_smith]: yeah

364
00:12:06,287 –> 00:12:07,308
[kerry_h_pechter]: when we had the

365
00:12:07,383 –> 00:12:07,545
[ramsey_d_smith]: yeah

366
00:12:07,469 –> 00:12:08,230
[kerry_h_pechter]: quote you know

367
00:12:08,346 –> 00:12:08,527
[ramsey_d_smith]: that’s

368
00:12:09,572 –> 00:12:10,654
[kerry_h_pechter]: temper tantrum over the

369
00:12:10,806 –> 00:12:11,066
[ramsey_d_smith]: oh

370
00:12:11,155 –> 00:12:13,479
[kerry_h_pechter]: debt the debt limit yet

371
00:12:13,355 –> 00:12:13,927
[ramsey_d_smith]: yeah oh

372
00:12:13,599 –> 00:12:14,781
[kerry_h_pechter]: we as we have debt limits

373
00:12:14,640 –> 00:12:15,360
[paul_tyler]: yeah

374
00:12:14,841 –> 00:12:21,332
[kerry_h_pechter]: they come and go and so securities
debt limit so to speak will come and

375
00:12:21,392 –> 00:12:28,023
[kerry_h_pechter]: go and but we don’t even we
won’t even necessarily notice it unless people make

376
00:12:28,063 –> 00:12:32,170
[kerry_h_pechter]: a big deal out of it because
social security is already coming

377
00:12:31,866 –> 00:12:32,329
[ramsey_d_smith]: oh

378
00:12:32,370 –> 00:12:35,295
[kerry_h_pechter]: out of part of socialsecurity benefits are
already

379
00:12:35,130 –> 00:12:35,212
[ramsey_d_smith]: ah

380
00:12:35,475 –> 00:12:35,796
[kerry_h_pechter]: kind ing

381
00:12:35,766 –> 00:12:36,027
[ramsey_d_smith]: oh

382
00:12:36,057 –> 00:12:39,179
[kerry_h_pechter]: out of the general fund of the
united states

383
00:12:39,496 –> 00:12:39,777
[ramsey_d_smith]: right so

384
00:12:39,802 –> 00:12:40,224
[kerry_h_pechter]: neiborhood

385
00:12:39,817 –> 00:12:39,957
[ramsey_d_smith]: let’s

386
00:12:39,960 –> 00:12:40,162
[paul_tyler]: yeah

387
00:12:40,117 –> 00:12:41,379
[ramsey_d_smith]: let’s let’s

388
00:12:41,538 –> 00:12:41,658
[kerry_h_pechter]: so

389
00:12:41,619 –> 00:12:41,780
[ramsey_d_smith]: let’s

390
00:12:42,200 –> 00:12:42,361
[kerry_h_pechter]: there

391
00:12:42,321 –> 00:12:42,421
[ramsey_d_smith]: can

392
00:12:42,421 –> 00:12:42,562
[kerry_h_pechter]: was

393
00:12:42,461 –> 00:12:42,841
[ramsey_d_smith]: we break it

394
00:12:42,863 –> 00:12:42,963
[kerry_h_pechter]: no

395
00:12:42,881 –> 00:12:43,442
[ramsey_d_smith]: down a little bit

396
00:12:44,308 –> 00:12:46,096
[kerry_h_pechter]: okay well let’s we need to break
that down

397
00:12:46,026 –> 00:12:46,366
[ramsey_d_smith]: yeah

398
00:12:46,216 –> 00:12:47,803
[kerry_h_pechter]: go ahead and maybe you can me

399
00:12:47,909 –> 00:12:51,535
[ramsey_d_smith]: i want to yeah so let’s because
there’s there’s a lot

400
00:12:51,450 –> 00:12:52,830
[paul_tyler]: yeah

401
00:12:51,615 –> 00:12:54,019
[ramsey_d_smith]: of here’s a lot of important elements
to what you’re

402
00:12:53,940 –> 00:12:53,960
[paul_tyler]: m

403
00:12:54,059 –> 00:12:58,486
[ramsey_d_smith]: saying so let’s first start with this
notion of the of the twenty thirty four

404
00:12:58,526 –> 00:13:03,575
[ramsey_d_smith]: dat moves around at twenty four five
every i don’t know periodically it gets updated

405
00:13:04,657 –> 00:13:07,642
[ramsey_d_smith]: but one is just to be clear
on what happens on that date it’s not

406
00:13:07,702 –> 00:13:12,009
[ramsey_d_smith]: that it’s not that social security does
not enough in flows to pay the outflows

407
00:13:12,670 –> 00:13:16,917
[ramsey_d_smith]: it just to pay any outflows is
just that the inflows

408
00:13:16,560 –> 00:13:16,781
[paul_tyler]: oh

409
00:13:16,957 –> 00:13:20,102
[ramsey_d_smith]: will only equal only equal eighty percent
of the outflows

410
00:13:20,100 –> 00:13:20,120
[paul_tyler]: m

411
00:13:20,162 –> 00:13:20,904
[ramsey_d_smith]: and the trust fund

412
00:13:21,356 –> 00:13:21,538
[kerry_h_pechter]: right

413
00:13:21,605 –> 00:13:23,933
[ramsey_d_smith]: the trust won’t be able to make
up the difference is that correct

414
00:13:24,849 –> 00:13:26,117
[kerry_h_pechter]: uh yes i think we’re

415
00:13:26,202 –> 00:13:26,262
[ramsey_d_smith]: is

416
00:13:26,278 –> 00:13:26,660
[kerry_h_pechter]: already

417
00:13:26,343 –> 00:13:26,384
[ramsey_d_smith]: it

418
00:13:27,926 –> 00:13:28,447
[kerry_h_pechter]: out of the

419
00:13:28,509 –> 00:13:28,530
[paul_tyler]: m

420
00:13:28,527 –> 00:13:33,095
[kerry_h_pechter]: interest on the trust fund or the
trust fund is already so

421
00:13:33,156 –> 00:13:33,378
[ramsey_d_smith]: yeah

422
00:13:33,175 –> 00:13:35,259
[kerry_h_pechter]: what is happening now is that the
general

423
00:13:35,014 –> 00:13:35,196
[ramsey_d_smith]: yeah

424
00:13:35,379 –> 00:13:35,680
[kerry_h_pechter]: fund

425
00:13:35,556 –> 00:13:35,817
[ramsey_d_smith]: oh

426
00:13:36,141 –> 00:13:38,325
[kerry_h_pechter]: is redeeming trust fund assets

427
00:13:38,976 –> 00:13:40,056
[ramsey_d_smith]: yeah

428
00:13:39,436 –> 00:13:41,119
[kerry_h_pechter]: in other words the government

429
00:13:41,137 –> 00:13:41,318
[ramsey_d_smith]: right

430
00:13:41,399 –> 00:13:44,244
[kerry_h_pechter]: is paying to redeem those it’s giving

431
00:13:44,079 –> 00:13:44,181
[ramsey_d_smith]: ah

432
00:13:44,344 –> 00:13:45,686
[kerry_h_pechter]: social security money from

433
00:13:45,756 –> 00:13:46,686
[ramsey_d_smith]: oh

434
00:13:45,767 –> 00:13:53,240
[kerry_h_pechter]: the general fund technically to redeem social
securities trust fund but it doesn’t really matter

435
00:13:53,280 –> 00:13:57,347
[kerry_h_pechter]: whether it’s redeeming the trust fund or
not the important thing is to know is

436
00:13:57,447 –> 00:14:03,000
[kerry_h_pechter]: that the money started coming out of
the common of the general fund of the

437
00:14:03,020 –> 00:14:09,277
[kerry_h_pechter]: united states and no one noticed it
it was a purely

438
00:14:09,413 –> 00:14:09,514
[paul_tyler]: ah

439
00:14:09,898 –> 00:14:10,499
[kerry_h_pechter]: technical

440
00:14:10,236 –> 00:14:10,539
[ramsey_d_smith]: oh

441
00:14:10,760 –> 00:14:16,550
[kerry_h_pechter]: event there was no crisis and this
is going to go on until twenty thirty

442
00:14:16,650 –> 00:14:19,314
[kerry_h_pechter]: four whereas in twenty thirty four there
will be a

443
00:14:19,485 –> 00:14:19,506
[ramsey_d_smith]: m

444
00:14:19,494 –> 00:14:20,476
[kerry_h_pechter]: technical limit

445
00:14:20,616 –> 00:14:20,897
[ramsey_d_smith]: oh

446
00:14:20,957 –> 00:14:22,139
[kerry_h_pechter]: to the amount of money

447
00:14:22,326 –> 00:14:22,668
[ramsey_d_smith]: oh

448
00:14:22,680 –> 00:14:24,543
[kerry_h_pechter]: that the general fund can continue

449
00:14:24,585 –> 00:14:24,606
[ramsey_d_smith]: m

450
00:14:24,623 –> 00:14:27,327
[kerry_h_pechter]: to supply to social security because

451
00:14:27,156 –> 00:14:27,176
[ramsey_d_smith]: m

452
00:14:27,648 –> 00:14:28,810
[kerry_h_pechter]: of a technical

453
00:14:28,536 –> 00:14:28,840
[ramsey_d_smith]: oh

454
00:14:29,431 –> 00:14:35,661
[kerry_h_pechter]: law there is nothing in the world
to stop the united states general fund from

455
00:14:35,762 –> 00:14:38,847
[kerry_h_pechter]: continuing to make up the short fall
in the social

456
00:14:38,850 –> 00:14:39,840
[paul_tyler]: oh

457
00:14:38,907 –> 00:14:39,788
[kerry_h_pechter]: security as

458
00:14:39,816 –> 00:14:40,596
[ramsey_d_smith]: oh

459
00:14:39,888 –> 00:14:43,675
[kerry_h_pechter]: they are doing now and there is
no reason for and

460
00:14:43,626 –> 00:14:43,889
[ramsey_d_smith]: oh

461
00:14:43,755 –> 00:14:44,476
[kerry_h_pechter]: to have this

462
00:14:44,406 –> 00:14:44,647
[ramsey_d_smith]: yah

463
00:14:44,977 –> 00:14:47,440
[kerry_h_pechter]: i’m going to get really excited to
hear and i don’t know if that’s a

464
00:14:47,480 –> 00:14:48,182
[kerry_h_pechter]: good thing or not

465
00:14:48,523 –> 00:14:48,543
[ramsey_d_smith]: h

466
00:14:48,822 –> 00:14:50,044
[kerry_h_pechter]: but there is

467
00:14:50,216 –> 00:14:51,018
[ramsey_d_smith]: before you do though

468
00:14:51,156 –> 00:14:53,286
[kerry_h_pechter]: yeah

469
00:14:51,218 –> 00:14:55,205
[ramsey_d_smith]: before you before you do i just

470
00:14:55,167 –> 00:14:55,309
[kerry_h_pechter]: yeah

471
00:14:55,225 –> 00:14:58,290
[ramsey_d_smith]: want to be i just want to
be clear on something because right just

472
00:14:58,566 –> 00:14:59,376
[kerry_h_pechter]: yeah

473
00:14:58,931 –> 00:15:03,561
[ramsey_d_smith]: so there there’s the general fund which
pays which pays the money that ends up

474
00:15:03,621 –> 00:15:04,784
[ramsey_d_smith]: in people’s mail box right

475
00:15:05,406 –> 00:15:05,646
[kerry_h_pechter]: there’s

476
00:15:05,606 –> 00:15:05,747
[ramsey_d_smith]: and

477
00:15:05,827 –> 00:15:06,147
[kerry_h_pechter]: general

478
00:15:06,048 –> 00:15:06,228
[ramsey_d_smith]: eighty

479
00:15:06,207 –> 00:15:06,468
[kerry_h_pechter]: fund

480
00:15:06,288 –> 00:15:06,730
[ramsey_d_smith]: percent of

481
00:15:07,189 –> 00:15:07,950
[kerry_h_pechter]: redeems

482
00:15:07,311 –> 00:15:07,773
[ramsey_d_smith]: i’m going to just

483
00:15:08,311 –> 00:15:13,980
[kerry_h_pechter]: redeems the trust fund assets and then
the social security takes the money

484
00:15:14,136 –> 00:15:16,086
[ramsey_d_smith]: yeah

485
00:15:14,521 –> 00:15:19,792
[kerry_h_pechter]: it gets from the redemption of the
trust fund ass and puts it into people’s

486
00:15:19,852 –> 00:15:21,964
[kerry_h_pechter]: mail boxes virtually

487
00:15:22,207 –> 00:15:28,037
[ramsey_d_smith]: agreed so when when the trust but
assets good to zero right on or around

488
00:15:28,117 –> 00:15:33,586
[ramsey_d_smith]: twenty thirty four then that twenty percent
if that’s the short whatever the show fall

489
00:15:33,686 –> 00:15:33,807
[ramsey_d_smith]: is

490
00:15:33,690 –> 00:15:33,931
[paul_tyler]: yeah

491
00:15:34,187 –> 00:15:35,249
[ramsey_d_smith]: it has to come from

492
00:15:35,319 –> 00:15:35,460
[paul_tyler]: yeah

493
00:15:35,329 –> 00:15:38,254
[ramsey_d_smith]: somewhere it can no longer come from
the trust fund so

494
00:15:38,199 –> 00:15:38,220
[paul_tyler]: m

495
00:15:38,334 –> 00:15:42,521
[ramsey_d_smith]: then some action will have to be
taken and we may agree that it’s likely

496
00:15:42,581 –> 00:15:47,250
[ramsey_d_smith]: that some political action will be taken
but some politica action somebody will have to

497
00:15:47,290 –> 00:15:50,658
[ramsey_d_smith]: do something somebody in the united states
government whether it’s the president our congress or

498
00:15:50,718 –> 00:15:55,908
[ramsey_d_smith]: somebody is gonna have to take some
action to source that money to make up

499
00:15:56,008 –> 00:15:57,790
[ramsey_d_smith]: that short fall that’s now being covered

500
00:15:57,720 –> 00:15:57,740
[paul_tyler]: m

501
00:15:57,810 –> 00:15:58,531
[ramsey_d_smith]: by the trust fund

502
00:15:58,847 –> 00:15:58,969
[kerry_h_pechter]: yea

503
00:15:59,172 –> 00:16:02,035
[ramsey_d_smith]: so how do we think about the
risk around that

504
00:16:03,316 –> 00:16:03,516
[kerry_h_pechter]: well

505
00:16:03,496 –> 00:16:03,958
[ramsey_d_smith]: potential

506
00:16:03,716 –> 00:16:03,917
[kerry_h_pechter]: well

507
00:16:04,199 –> 00:16:05,827
[ramsey_d_smith]: action or inaction in twenty thirty

508
00:16:05,720 –> 00:16:05,880
[kerry_h_pechter]: as i

509
00:16:05,867 –> 00:16:05,987
[ramsey_d_smith]: four

510
00:16:05,980 –> 00:16:10,327
[kerry_h_pechter]: said at the beginning we’re talking about
a political risk in the same sense that

511
00:16:10,407 –> 00:16:11,609
[kerry_h_pechter]: the debt sealing

512
00:16:11,347 –> 00:16:11,508
[ramsey_d_smith]: yeah

513
00:16:12,170 –> 00:16:17,066
[kerry_h_pechter]: involved a political risk it did not
solve it did not involved

514
00:16:16,866 –> 00:16:17,131
[ramsey_d_smith]: oh

515
00:16:17,147 –> 00:16:18,429
[kerry_h_pechter]: the inability

516
00:16:17,826 –> 00:16:18,086
[ramsey_d_smith]: oh

517
00:16:18,930 –> 00:16:20,793
[kerry_h_pechter]: of the united states to make good

518
00:16:21,197 –> 00:16:21,217
[ramsey_d_smith]: h

519
00:16:21,474 –> 00:16:23,878
[kerry_h_pechter]: on it on its promises

520
00:16:23,505 –> 00:16:24,377
[ramsey_d_smith]: h yah

521
00:16:24,339 –> 00:16:25,821
[kerry_h_pechter]: so money

522
00:16:25,889 –> 00:16:26,556
[ramsey_d_smith]: hm

523
00:16:25,901 –> 00:16:27,203
[kerry_h_pechter]: is coming out of the general fund

524
00:16:27,096 –> 00:16:27,439
[ramsey_d_smith]: oh

525
00:16:27,324 –> 00:16:29,728
[kerry_h_pechter]: now we will

526
00:16:29,736 –> 00:16:30,696
[ramsey_d_smith]: yeah

527
00:16:29,788 –> 00:16:31,170
[kerry_h_pechter]: reach a just like

528
00:16:31,200 –> 00:16:31,403
[paul_tyler]: oh

529
00:16:31,210 –> 00:16:31,511
[kerry_h_pechter]: the debt

530
00:16:31,515 –> 00:16:31,536
[ramsey_d_smith]: m

531
00:16:31,571 –> 00:16:32,252
[kerry_h_pechter]: limit we will

532
00:16:32,277 –> 00:16:32,400
[paul_tyler]: yeah

533
00:16:32,312 –> 00:16:33,093
[kerry_h_pechter]: reach a legal

534
00:16:33,162 –> 00:16:33,304
[ramsey_d_smith]: yes

535
00:16:33,173 –> 00:16:36,178
[kerry_h_pechter]: limit that the that more money

536
00:16:36,066 –> 00:16:36,247
[ramsey_d_smith]: yeah

537
00:16:36,319 –> 00:16:39,544
[kerry_h_pechter]: is now coming out of the general
fund than was intended

538
00:16:39,246 –> 00:16:39,547
[ramsey_d_smith]: oh

539
00:16:39,684 –> 00:16:41,487
[kerry_h_pechter]: by the original securities laws

540
00:16:41,395 –> 00:16:41,436
[ramsey_d_smith]: ah

541
00:16:41,948 –> 00:16:45,414
[kerry_h_pechter]: and then as i you know showed
in the analogy to the insurance

542
00:16:45,278 –> 00:16:45,380
[ramsey_d_smith]: ah

543
00:16:45,474 –> 00:16:47,958
[kerry_h_pechter]: company we can either raise premiums

544
00:16:47,676 –> 00:16:48,456
[ramsey_d_smith]: yeah

545
00:16:48,480 –> 00:16:48,500
[paul_tyler]: m

546
00:16:48,696 –> 00:16:49,686
[ramsey_d_smith]: yeah

547
00:16:48,779 –> 00:16:50,242
[kerry_h_pechter]: or we can cut benefits

548
00:16:50,526 –> 00:16:51,546
[ramsey_d_smith]: yeah

549
00:16:50,863 –> 00:16:51,704
[kerry_h_pechter]: and that will

550
00:16:51,666 –> 00:16:52,806
[ramsey_d_smith]: yeah

551
00:16:51,764 –> 00:16:54,708
[kerry_h_pechter]: be a pill litically incredibly ownerous

552
00:16:54,606 –> 00:16:55,596
[ramsey_d_smith]: yeah

553
00:16:54,848 –> 00:16:57,570
[kerry_h_pechter]: process because it’s going to you know

554
00:16:57,636 –> 00:16:57,860
[ramsey_d_smith]: oh

555
00:16:57,750 –> 00:17:02,435
[kerry_h_pechter]: change you know what’s mine and what’s
yours but but i want to establish

556
00:17:02,352 –> 00:17:03,640
[ramsey_d_smith]: hm ah

557
00:17:04,216 –> 00:17:07,401
[kerry_h_pechter]: and this goes back to what i
said before about the different risks that social

558
00:17:07,461 –> 00:17:08,683
[kerry_h_pechter]: security i

559
00:17:08,685 –> 00:17:08,706
[ramsey_d_smith]: m

560
00:17:08,743 –> 00:17:09,524
[kerry_h_pechter]: want to establish

561
00:17:09,189 –> 00:17:09,373
[ramsey_d_smith]: yeah

562
00:17:09,885 –> 00:17:12,830
[kerry_h_pechter]: that even if you’re paying more in

563
00:17:12,786 –> 00:17:13,066
[ramsey_d_smith]: oh

564
00:17:13,030 –> 00:17:17,197
[kerry_h_pechter]: premiums which is what we call the
pay roll tack is what the payroll tax

565
00:17:17,286 –> 00:17:17,946
[ramsey_d_smith]: oh

566
00:17:17,310 –> 00:17:17,553
[paul_tyler]: yeah

567
00:17:17,357 –> 00:17:18,580
[kerry_h_pechter]: is the more

568
00:17:18,906 –> 00:17:19,186
[ramsey_d_smith]: oh

569
00:17:19,802 –> 00:17:22,045
[kerry_h_pechter]: what you even if your premiums go

570
00:17:22,176 –> 00:17:22,845
[ramsey_d_smith]: yeah

571
00:17:22,326 –> 00:17:23,788
[kerry_h_pechter]: up and even if your benefits

572
00:17:23,556 –> 00:17:23,844
[ramsey_d_smith]: oh

573
00:17:23,888 –> 00:17:26,152
[kerry_h_pechter]: go down a little whichever way it
goes

574
00:17:25,956 –> 00:17:26,177
[ramsey_d_smith]: yeah

575
00:17:26,252 –> 00:17:30,097
[kerry_h_pechter]: for you that if it is still

576
00:17:29,663 –> 00:17:30,906
[ramsey_d_smith]: a my

577
00:17:30,658 –> 00:17:32,799
[kerry_h_pechter]: going to be worth it and it’s
going to be

578
00:17:32,916 –> 00:17:33,161
[ramsey_d_smith]: oh

579
00:17:32,920 –> 00:17:34,481
[kerry_h_pechter]: worth it measurably

580
00:17:34,446 –> 00:17:34,729
[ramsey_d_smith]: yeah

581
00:17:34,821 –> 00:17:36,843
[kerry_h_pechter]: in terms of what it would cost
you

582
00:17:37,086 –> 00:17:37,106
[ramsey_d_smith]: m

583
00:17:37,463 –> 00:17:40,376
[kerry_h_pechter]: to go into the private market or

584
00:17:40,356 –> 00:17:41,316
[ramsey_d_smith]: yeah

585
00:17:40,597 –> 00:17:43,141
[kerry_h_pechter]: into the investment market to either save
enough

586
00:17:43,056 –> 00:17:43,317
[ramsey_d_smith]: oh

587
00:17:43,481 –> 00:17:45,705
[kerry_h_pechter]: to insure yourself against those same risks

588
00:17:45,576 –> 00:17:45,596
[ramsey_d_smith]: m

589
00:17:46,246 –> 00:17:47,588
[kerry_h_pechter]: or to buy insurance

590
00:17:47,505 –> 00:17:47,526
[ramsey_d_smith]: m

591
00:17:47,648 –> 00:17:50,573
[kerry_h_pechter]: against those same risks from an insurance
company

592
00:17:50,466 –> 00:17:51,186
[ramsey_d_smith]: yeah

593
00:17:51,334 –> 00:17:54,240
[kerry_h_pechter]: no matter what the premiums go up

594
00:17:54,186 –> 00:17:54,655
[ramsey_d_smith]: oh

595
00:17:54,260 –> 00:17:56,265
[kerry_h_pechter]: we’re talking about a twenty percent gap
no matter

596
00:17:56,166 –> 00:17:56,448
[ramsey_d_smith]: oh

597
00:17:56,345 –> 00:18:01,806
[kerry_h_pechter]: what the premiums go up to or
how much the benefits go down that if

598
00:18:01,906 –> 00:18:03,288
[kerry_h_pechter]: it is still going

599
00:18:03,239 –> 00:18:05,316
[ramsey_d_smith]: ah

600
00:18:03,369 –> 00:18:06,334
[kerry_h_pechter]: to be an incredible value and

601
00:18:06,276 –> 00:18:06,537
[ramsey_d_smith]: yeah

602
00:18:06,834 –> 00:18:08,117
[kerry_h_pechter]: i’m it’s unfortunate

603
00:18:07,681 –> 00:18:07,821
[ramsey_d_smith]: yeah

604
00:18:08,157 –> 00:18:13,085
[kerry_h_pechter]: to me that it seems unfortunate to
me that even the pro social security crowd

605
00:18:13,726 –> 00:18:14,007
[kerry_h_pechter]: or say

606
00:18:14,526 –> 00:18:14,908
[ramsey_d_smith]: oh

607
00:18:14,770 –> 00:18:17,581
[kerry_h_pechter]: the bi partisan policy center that

608
00:18:18,546 –> 00:18:18,772
[ramsey_d_smith]: yeah

609
00:18:19,346 –> 00:18:19,486
[kerry_h_pechter]: that

610
00:18:19,509 –> 00:18:19,530
[paul_tyler]: m

611
00:18:19,846 –> 00:18:20,568
[kerry_h_pechter]: weighs in on this

612
00:18:20,556 –> 00:18:20,801
[ramsey_d_smith]: yes

613
00:18:20,728 –> 00:18:24,855
[kerry_h_pechter]: a lot of times with a lot
of credibility they have all adopted

614
00:18:24,546 –> 00:18:25,536
[ramsey_d_smith]: oh

615
00:18:25,556 –> 00:18:25,656
[kerry_h_pechter]: the

616
00:18:25,686 –> 00:18:26,052
[ramsey_d_smith]: oh

617
00:18:25,756 –> 00:18:27,519
[kerry_h_pechter]: investment view of social

618
00:18:27,516 –> 00:18:27,717
[ramsey_d_smith]: oh

619
00:18:27,539 –> 00:18:31,686
[kerry_h_pechter]: security and saying well it’s not that
much more expensive or

620
00:18:31,776 –> 00:18:33,844
[ramsey_d_smith]: oh

621
00:18:32,207 –> 00:18:37,194
[kerry_h_pechter]: maybe we should invest some of that
money in stocks and they are abandoning

622
00:18:36,936 –> 00:18:37,137
[ramsey_d_smith]: oh

623
00:18:38,646 –> 00:18:41,491
[kerry_h_pechter]: the real the true story

624
00:18:41,745 –> 00:18:41,766
[ramsey_d_smith]: m

625
00:18:41,751 –> 00:18:41,791
[kerry_h_pechter]: of

626
00:18:41,766 –> 00:18:42,636
[ramsey_d_smith]: yeah

627
00:18:42,072 –> 00:18:47,561
[kerry_h_pechter]: the true justification for sociacurity it’s insurance
it’s called social

628
00:18:47,756 –> 00:18:47,857
[ramsey_d_smith]: ah

629
00:18:47,841 –> 00:18:49,224
[kerry_h_pechter]: insurance for

630
00:18:49,084 –> 00:18:49,145
[ramsey_d_smith]: ye

631
00:18:49,384 –> 00:18:56,716
[kerry_h_pechter]: a reason it’s not an investment there
is no fund that’s generating returns an insurance

632
00:18:56,756 –> 00:19:02,085
[kerry_h_pechter]: company doesn’t give you back the money
that you put in it gives you a

633
00:19:02,205 –> 00:19:02,346
[kerry_h_pechter]: cur

634
00:19:02,286 –> 00:19:02,567
[ramsey_d_smith]: oh

635
00:19:02,446 –> 00:19:10,369
[kerry_h_pechter]: and it pays a claim if you
experience an insurable event insurance is not an

636
00:19:10,469 –> 00:19:17,801
[kerry_h_pechter]: investment it’s an offloading of risk and
that offloading of risk is extremely valuable and

637
00:19:18,162 –> 00:19:19,203
[kerry_h_pechter]: in in our investment

638
00:19:19,058 –> 00:19:19,219
[ramsey_d_smith]: is he

639
00:19:19,283 –> 00:19:19,684
[kerry_h_pechter]: world

640
00:19:19,299 –> 00:19:20,102
[ramsey_d_smith]: freezing up for you too

641
00:19:20,245 –> 00:19:25,474
[kerry_h_pechter]: which all attuned to you know because
of our involvement in for one k we

642
00:19:25,574 –> 00:19:26,716
[kerry_h_pechter]: have lost sight of

643
00:19:26,625 –> 00:19:26,646
[ramsey_d_smith]: m

644
00:19:27,397 –> 00:19:28,118
[kerry_h_pechter]: what the value

645
00:19:27,846 –> 00:19:27,966
[ramsey_d_smith]: ah

646
00:19:28,198 –> 00:19:32,465
[kerry_h_pechter]: of insurance is it’s easy to lose
sight of because it’s a call

647
00:19:32,314 –> 00:19:32,475
[ramsey_d_smith]: yes

648
00:19:33,006 –> 00:19:33,106
[kerry_h_pechter]: but

649
00:19:33,146 –> 00:19:33,327
[ramsey_d_smith]: yeah

650
00:19:33,147 –> 00:19:37,774
[kerry_h_pechter]: it’s very easy to lose sight of
the value of the coverage and yet

651
00:19:37,806 –> 00:19:38,067
[ramsey_d_smith]: yeah

652
00:19:37,814 –> 00:19:39,577
[kerry_h_pechter]: we all know what the value of
the coverage is

653
00:19:39,546 –> 00:19:40,536
[ramsey_d_smith]: yeah

654
00:19:39,637 –> 00:19:41,080
[kerry_h_pechter]: every time somebody rams

655
00:19:40,830 –> 00:19:41,092
[paul_tyler]: yeah

656
00:19:41,140 –> 00:19:41,821
[kerry_h_pechter]: into our car

657
00:19:42,178 –> 00:19:42,362
[ramsey_d_smith]: sir

658
00:19:42,602 –> 00:19:44,505
[kerry_h_pechter]: and or burns our hat

659
00:19:44,583 –> 00:19:44,764
[paul_tyler]: yeah

660
00:19:44,647 –> 00:19:44,871
[kerry_h_pechter]: down

661
00:19:44,866 –> 00:19:50,495
[ramsey_d_smith]: all right yeah so we’re going to
agree with you because we were sort of

662
00:19:51,537 –> 00:19:52,038
[ramsey_d_smith]: were focusing

663
00:19:51,870 –> 00:19:52,113
[paul_tyler]: oh

664
00:19:52,058 –> 00:19:58,330
[ramsey_d_smith]: the insurance industry and the the value
one of

665
00:19:58,320 –> 00:19:59,160
[paul_tyler]: oh

666
00:19:58,370 –> 00:20:02,382
[ramsey_d_smith]: the challenges the value of insurance is
sometimes very hard for

667
00:20:02,520 –> 00:20:02,843
[paul_tyler]: oh

668
00:20:03,976 –> 00:20:06,780
[ramsey_d_smith]: people to appreciate or perceive or the
value

669
00:20:06,450 –> 00:20:06,690
[paul_tyler]: oh

670
00:20:06,861 –> 00:20:12,510
[ramsey_d_smith]: of it to them in the first
order and in the second order the real

671
00:20:12,650 –> 00:20:16,677
[ramsey_d_smith]: cost of providing them with that value
i think it’s hard for peopl two to

672
00:20:16,737 –> 00:20:18,560
[ramsey_d_smith]: appreciate and so one of the challenges

673
00:20:18,330 –> 00:20:18,453
[paul_tyler]: ye

674
00:20:19,381 –> 00:20:21,846
[ramsey_d_smith]: carry that i think that the government
will have

675
00:20:22,137 –> 00:20:22,319
[kerry_h_pechter]: yes

676
00:20:22,927 –> 00:20:26,914
[ramsey_d_smith]: is the same one that that we
often have in this industry which is that

677
00:20:27,916 –> 00:20:33,225
[ramsey_d_smith]: um hat in fact this is more
valuable than perhaps you know you not you

678
00:20:33,385 –> 00:20:39,395
[ramsey_d_smith]: but like the sort of the persona
of the consumer can can necessarily sort of

679
00:20:39,455 –> 00:20:45,149
[ramsey_d_smith]: quantify i appreciate and in fact in
a in a strange way you should want

680
00:20:45,269 –> 00:20:50,277
[ramsey_d_smith]: to you should want you should want
a you should want somebody to come to

681
00:20:50,317 –> 00:20:53,463
[ramsey_d_smith]: you and say you know it’s going
to cost you a bit more but it’s

682
00:20:53,523 –> 00:20:58,050
[ramsey_d_smith]: so valuable and i can help you
understand how valuable it is that that you

683
00:20:58,170 –> 00:21:02,257
[ramsey_d_smith]: want you want to be paying more
and you want everybody else in the society

684
00:21:02,297 –> 00:21:06,164
[ramsey_d_smith]: to pay more to maintain this very
sort of very valuable benefit but that is

685
00:21:06,284 –> 00:21:07,045
[ramsey_d_smith]: very hard to do

686
00:21:08,158 –> 00:21:08,339
[kerry_h_pechter]: well

687
00:21:08,236 –> 00:21:08,417
[ramsey_d_smith]: arry

688
00:21:08,560 –> 00:21:08,621
[kerry_h_pechter]: it

689
00:21:08,679 –> 00:21:08,799
[ramsey_d_smith]: it’s

690
00:21:08,721 –> 00:21:08,822
[kerry_h_pechter]: is

691
00:21:08,860 –> 00:21:09,021
[ramsey_d_smith]: very

692
00:21:08,940 –> 00:21:09,690
[paul_tyler]: oh

693
00:21:09,061 –> 00:21:11,616
[ramsey_d_smith]: hard and yeah

694
00:21:11,156 –> 00:21:12,879
[kerry_h_pechter]: it’s well it’s hard to do because

695
00:21:12,776 –> 00:21:12,997
[ramsey_d_smith]: go ahead

696
00:21:13,580 –> 00:21:15,503
[kerry_h_pechter]: for a simple reason social security

697
00:21:15,636 –> 00:21:15,919
[ramsey_d_smith]: oh

698
00:21:15,663 –> 00:21:20,792
[kerry_h_pechter]: you can’t look at social people people
want to look at it it’s very it’s

699
00:21:21,052 –> 00:21:21,793
[kerry_h_pechter]: almost impossible

700
00:21:21,576 –> 00:21:21,857
[ramsey_d_smith]: oh

701
00:21:21,853 –> 00:21:25,927
[kerry_h_pechter]: to look at insurance as an asset
it’s not priced

702
00:21:25,716 –> 00:21:25,958
[ramsey_d_smith]: oh

703
00:21:26,027 –> 00:21:27,389
[kerry_h_pechter]: as an asset it’s not

704
00:21:27,456 –> 00:21:27,738
[ramsey_d_smith]: oh

705
00:21:27,510 –> 00:21:30,715
[kerry_h_pechter]: traded as an asset it’s not inherited
as an asset

706
00:21:30,876 –> 00:21:31,956
[ramsey_d_smith]: oh

707
00:21:31,376 –> 00:21:36,444
[kerry_h_pechter]: it’s it’s and it only pays out
if an insurable event occurs which means you

708
00:21:36,505 –> 00:21:39,880
[kerry_h_pechter]: may never get your money but that
doesn’t

709
00:21:39,666 –> 00:21:39,946
[ramsey_d_smith]: oh

710
00:21:40,021 –> 00:21:43,819
[kerry_h_pechter]: make it less valuable while you have
it

711
00:21:44,106 –> 00:21:44,308
[ramsey_d_smith]: oh

712
00:21:44,160 –> 00:21:48,868
[kerry_h_pechter]: because it by taking certain kinds of
risk off your plate it allows you to

713
00:21:48,948 –> 00:21:52,374
[kerry_h_pechter]: take other risks like invest in

714
00:21:52,807 –> 00:21:53,009
[ramsey_d_smith]: sure

715
00:21:52,834 –> 00:21:57,803
[kerry_h_pechter]: if you you people don’t realize that
if social security went away they might have

716
00:21:57,863 –> 00:22:02,491
[kerry_h_pechter]: to in order to maintain their same
risk profile which everyone understands

717
00:22:02,106 –> 00:22:03,669
[ramsey_d_smith]: oh oh

718
00:22:03,432 –> 00:22:05,415
[kerry_h_pechter]: they would have to put more of
their money into bond

719
00:22:05,226 –> 00:22:06,036
[ramsey_d_smith]: yeah

720
00:22:05,616 –> 00:22:06,758
[kerry_h_pechter]: s because

721
00:22:06,546 –> 00:22:06,790
[ramsey_d_smith]: oh

722
00:22:06,838 –> 00:22:09,563
[kerry_h_pechter]: so security is a bond portfolio

723
00:22:09,456 –> 00:22:09,658
[ramsey_d_smith]: oh

724
00:22:10,365 –> 00:22:17,239
[kerry_h_pechter]: and and and i and i don’t
know why it’s it’s just very difficult to

725
00:22:17,299 –> 00:22:22,392
[kerry_h_pechter]: get this across and and i certainly
don’t want to be the only person saying

726
00:22:22,452 –> 00:22:23,154
[kerry_h_pechter]: this because

727
00:22:23,256 –> 00:22:23,536
[ramsey_d_smith]: oh

728
00:22:23,936 –> 00:22:27,644
[kerry_h_pechter]: i mean no one is going to
believe me alone even though i’m

729
00:22:28,545 –> 00:22:28,705
[ramsey_d_smith]: yeah

730
00:22:28,756 –> 00:22:30,225
[kerry_h_pechter]: right so

731
00:22:31,571 –> 00:22:32,232
[ramsey_d_smith]: and passionate

732
00:22:34,140 –> 00:22:34,830
[paul_tyler]: yeah

733
00:22:34,299 –> 00:22:34,940
[kerry_h_pechter]: and i can

734
00:22:34,986 –> 00:22:35,269
[ramsey_d_smith]: yeah

735
00:22:35,020 –> 00:22:36,763
[kerry_h_pechter]: marshal a lot of evidence for this

736
00:22:36,696 –> 00:22:37,596
[ramsey_d_smith]: oh

737
00:22:36,843 –> 00:22:37,925
[kerry_h_pechter]: and i can bring in people

738
00:22:37,706 –> 00:22:37,866
[ramsey_d_smith]: yeah

739
00:22:37,985 –> 00:22:38,866
[kerry_h_pechter]: who will who are

740
00:22:38,820 –> 00:22:39,046
[paul_tyler]: oh

741
00:22:38,946 –> 00:22:42,012
[kerry_h_pechter]: smarter than me and better qualified than
me to explain it in greater

742
00:22:41,817 –> 00:22:41,958
[ramsey_d_smith]: just

743
00:22:42,052 –> 00:22:47,020
[kerry_h_pechter]: detail but but i believe that the
problem is that social security and its defenders

744
00:22:47,100 –> 00:22:47,701
[kerry_h_pechter]: are playing

745
00:22:47,466 –> 00:22:47,667
[ramsey_d_smith]: oh

746
00:22:48,042 –> 00:22:51,107
[kerry_h_pechter]: the game they’re playing a running they’re
trying to play a running game done

747
00:22:51,006 –> 00:22:51,274
[ramsey_d_smith]: yeah

748
00:22:51,207 –> 00:22:55,194
[kerry_h_pechter]: game running gun game when their actual
game

749
00:22:55,116 –> 00:22:55,776
[ramsey_d_smith]: oh

750
00:22:55,374 –> 00:23:00,480
[kerry_h_pechter]: is a half court game and and
if they can’t if they have to play

751
00:23:00,980 –> 00:23:04,163
[kerry_h_pechter]: the running gun then they’re going to
lose that basketball game

752
00:23:04,746 –> 00:23:04,966
[ramsey_d_smith]: oh

753
00:23:05,264 –> 00:23:08,569
[kerry_h_pechter]: and and go celtic

754
00:23:08,526 –> 00:23:08,746
[ramsey_d_smith]: yeah

755
00:23:08,749 –> 00:23:11,697
[kerry_h_pechter]: because i’m from philadelphia and it might

756
00:23:11,559 –> 00:23:11,580
[paul_tyler]: m

757
00:23:11,737 –> 00:23:14,023
[kerry_h_pechter]: as well be the celtic rather than
the

758
00:23:13,956 –> 00:23:14,296
[ramsey_d_smith]: oh

759
00:23:15,056 –> 00:23:15,761
[kerry_h_pechter]: west coasters

760
00:23:16,552 –> 00:23:19,535
[paul_tyler]: well well you know argue

761
00:23:19,326 –> 00:23:19,587
[ramsey_d_smith]: oh

762
00:23:19,675 –> 00:23:22,117
[paul_tyler]: we’ve already seen those reductions you know
carry and

763
00:23:22,326 –> 00:23:23,406
[ramsey_d_smith]: yeah

764
00:23:22,598 –> 00:23:27,374
[paul_tyler]: tell me how if you think i’m
how you re frame or disagree with my

765
00:23:27,475 –> 00:23:32,523
[paul_tyler]: perspective on this you mentioned cut benefits
we know how popular that is okay

766
00:23:32,526 –> 00:23:32,546
[ramsey_d_smith]: m

767
00:23:32,583 –> 00:23:34,506
[paul_tyler]: we can raise premiums where

768
00:23:35,166 –> 00:23:35,607
[ramsey_d_smith]: oh

769
00:23:35,728 –> 00:23:40,937
[paul_tyler]: we’re kind of getting to and with
that today the third is need base testing

770
00:23:41,157 –> 00:23:41,418
[paul_tyler]: you know

771
00:23:42,216 –> 00:23:42,318
[ramsey_d_smith]: ye

772
00:23:42,660 –> 00:23:46,787
[paul_tyler]: now we saw that the full retirement
age start to creep out that that arguable

773
00:23:46,847 –> 00:23:50,535
[paul_tyler]: was a take away that was a
reduction social security benefits do you think we’ll

774
00:23:50,575 –> 00:23:50,695
[paul_tyler]: see

775
00:23:50,637 –> 00:23:50,801
[kerry_h_pechter]: right

776
00:23:50,776 –> 00:23:55,448
[paul_tyler]: need space is needs base testing an
effective way to make the numbers work better

777
00:23:55,360 –> 00:23:55,441
[ramsey_d_smith]: ah

778
00:23:57,157 –> 00:24:04,183
[kerry_h_pechter]: you have to remember needs base testing
uh would would go along with a complete

779
00:24:04,344 –> 00:24:08,833
[kerry_h_pechter]: overhaul now if you’re in a country
overseas that like

780
00:24:10,146 –> 00:24:10,450
[ramsey_d_smith]: oh

781
00:24:10,326 –> 00:24:12,108
[kerry_h_pechter]: i don’t know spain or

782
00:24:12,396 –> 00:24:12,577
[ramsey_d_smith]: oh

783
00:24:12,709 –> 00:24:13,591
[kerry_h_pechter]: other countries that have

784
00:24:13,716 –> 00:24:14,856
[ramsey_d_smith]: my

785
00:24:13,771 –> 00:24:18,339
[kerry_h_pechter]: gone from a pago system like we
have to a investment system once

786
00:24:18,306 –> 00:24:18,552
[ramsey_d_smith]: yes

787
00:24:18,419 –> 00:24:19,521
[kerry_h_pechter]: you if you have

788
00:24:19,416 –> 00:24:19,436
[ramsey_d_smith]: m

789
00:24:19,581 –> 00:24:23,868
[kerry_h_pechter]: an investment based system a workplace country
ibution system like our far one k

790
00:24:24,420 –> 00:24:25,470
[paul_tyler]: yeah

791
00:24:24,549 –> 00:24:29,397
[kerry_h_pechter]: then you have to think about having
a minimum benefit for people who don’t make

792
00:24:29,457 –> 00:24:32,703
[kerry_h_pechter]: enough money and pay enough in so
it’s it’s the

793
00:24:32,646 –> 00:24:33,169
[ramsey_d_smith]: oh

794
00:24:33,244 –> 00:24:34,105
[kerry_h_pechter]: the minimum

795
00:24:34,296 –> 00:24:35,076
[ramsey_d_smith]: oh

796
00:24:34,346 –> 00:24:34,806
[kerry_h_pechter]: benefit

797
00:24:35,076 –> 00:24:35,558
[ramsey_d_smith]: oh

798
00:24:35,608 –> 00:24:36,970
[kerry_h_pechter]: the means tested benefit

799
00:24:37,056 –> 00:24:39,323
[ramsey_d_smith]: yeah

800
00:24:37,771 –> 00:24:40,215
[kerry_h_pechter]: that is an artifact that is

801
00:24:40,356 –> 00:24:40,641
[ramsey_d_smith]: yeah

802
00:24:40,516 –> 00:24:41,638
[kerry_h_pechter]: a functionality

803
00:24:41,646 –> 00:24:42,014
[ramsey_d_smith]: oh

804
00:24:42,239 –> 00:24:44,963
[kerry_h_pechter]: of a different kind of retirement system

805
00:24:45,495 –> 00:24:45,516
[ramsey_d_smith]: m

806
00:24:45,785 –> 00:24:49,130
[kerry_h_pechter]: and so we i think it would
probably

807
00:24:49,065 –> 00:24:49,086
[ramsey_d_smith]: m

808
00:24:49,230 –> 00:24:50,352
[kerry_h_pechter]: be too expensive

809
00:24:50,256 –> 00:24:51,756
[ramsey_d_smith]: yeah

810
00:24:50,953 –> 00:24:56,723
[kerry_h_pechter]: to guarantee a certain level of you
know say twenty percent of retires who are

811
00:24:56,923 –> 00:25:01,871
[kerry_h_pechter]: may not even qualify right now for
so security benefit if we guaranteed them eight

812
00:25:01,911 –> 00:25:04,315
[kerry_h_pechter]: hundred dollars a month with no on
a means

813
00:25:04,116 –> 00:25:04,356
[ramsey_d_smith]: yeah

814
00:25:04,416 –> 00:25:11,168
[kerry_h_pechter]: tested basis anyway that would that in
itself would would require jumping off of the

815
00:25:11,228 –> 00:25:11,889
[kerry_h_pechter]: pago system

816
00:25:11,646 –> 00:25:11,931
[ramsey_d_smith]: oh

817
00:25:12,872 –> 00:25:13,814
[kerry_h_pechter]: is that is that clear

818
00:25:13,979 –> 00:25:14,222
[ramsey_d_smith]: yes

819
00:25:14,157 –> 00:25:14,670
[paul_tyler]: hm

820
00:25:15,356 –> 00:25:15,757
[kerry_h_pechter]: it’s really

821
00:25:15,740 –> 00:25:15,925
[paul_tyler]: yes

822
00:25:15,817 –> 00:25:16,999
[kerry_h_pechter]: a facet of a different

823
00:25:16,950 –> 00:25:17,092
[paul_tyler]: yeah

824
00:25:17,200 –> 00:25:23,932
[kerry_h_pechter]: kind of financing of retirement so and
then i think that and that brings around

825
00:25:24,073 –> 00:25:26,087
[kerry_h_pechter]: another subject which

826
00:25:26,616 –> 00:25:26,636
[ramsey_d_smith]: m

827
00:25:26,969 –> 00:25:30,179
[kerry_h_pechter]: which we have to consider is that
switching from a pago

828
00:25:30,156 –> 00:25:33,096
[ramsey_d_smith]: yah

829
00:25:30,320 –> 00:25:37,723
[kerry_h_pechter]: system to four or one i mean
a bigger four or one case system with

830
00:25:37,863 –> 00:25:39,806
[kerry_h_pechter]: less risk in it and

831
00:25:39,876 –> 00:25:40,776
[ramsey_d_smith]: yeah

832
00:25:40,307 –> 00:25:42,530
[kerry_h_pechter]: and then bringing in a minimum benefit

833
00:25:42,993 –> 00:25:43,174
[ramsey_d_smith]: yeah

834
00:25:43,010 –> 00:25:48,016
[kerry_h_pechter]: wow the negotiations and the design i

835
00:25:48,015 –> 00:25:48,036
[ramsey_d_smith]: m

836
00:25:48,056 –> 00:25:54,947
[kerry_h_pechter]: mean the amount of work politically and
economic and actuarial and investment and market and

837
00:25:55,545 –> 00:25:55,566
[ramsey_d_smith]: m

838
00:25:55,608 –> 00:25:57,491
[kerry_h_pechter]: i mean the amount of work that
would have to

839
00:25:57,465 –> 00:25:57,486
[ramsey_d_smith]: m

840
00:25:57,551 –> 00:26:06,716
[kerry_h_pechter]: go into that kind of transition utterly
utterly dwarfs the amount of effort it’s going

841
00:26:06,796 –> 00:26:11,504
[kerry_h_pechter]: to take for us to tweak social
security so that there’s a non event

842
00:26:11,886 –> 00:26:12,189
[ramsey_d_smith]: yeah

843
00:26:11,904 –> 00:26:13,832
[kerry_h_pechter]: and that people can stop worrying

844
00:26:13,626 –> 00:26:14,030
[ramsey_d_smith]: oh

845
00:26:13,913 –> 00:26:19,391
[kerry_h_pechter]: about it and and ironically you know
all these people these younger people who aren’t

846
00:26:19,411 –> 00:26:19,772
[kerry_h_pechter]: collecting

847
00:26:19,800 –> 00:26:20,022
[paul_tyler]: yeah

848
00:26:19,832 –> 00:26:22,997
[kerry_h_pechter]: social security they are paying fifteen per
cent into

849
00:26:22,830 –> 00:26:22,850
[paul_tyler]: m

850
00:26:23,057 –> 00:26:26,944
[kerry_h_pechter]: their out of their pay checks and
thinking that they’re not getting

851
00:26:26,686 –> 00:26:26,787
[ramsey_d_smith]: ah

852
00:26:27,084 –> 00:26:28,887
[kerry_h_pechter]: anything when they reach how

853
00:26:28,896 –> 00:26:29,324
[ramsey_d_smith]: ye

854
00:26:29,448 –> 00:26:30,249
[kerry_h_pechter]: insane

855
00:26:30,186 –> 00:26:30,206
[ramsey_d_smith]: m

856
00:26:31,091 –> 00:26:32,974
[kerry_h_pechter]: is that that they’re they’re

857
00:26:33,036 –> 00:26:33,056
[ramsey_d_smith]: m

858
00:26:33,054 –> 00:26:37,561
[kerry_h_pechter]: giving up a sixth of their pay
for something that they don’t believe i mean

859
00:26:37,742 –> 00:26:39,645
[kerry_h_pechter]: why are they not rioting

860
00:26:39,387 –> 00:26:39,467
[ramsey_d_smith]: ah

861
00:26:40,206 –> 00:26:43,998
[kerry_h_pechter]: in the streets instead of paying fifteen

862
00:26:43,659 –> 00:26:43,680
[paul_tyler]: m

863
00:26:43,665 –> 00:26:43,686
[ramsey_d_smith]: m

864
00:26:44,039 –> 00:26:47,952
[kerry_h_pechter]: per cent it makes no sense so
on some level

865
00:26:47,955 –> 00:26:47,976
[ramsey_d_smith]: m

866
00:26:48,000 –> 00:26:48,344
[paul_tyler]: oh

867
00:26:48,052 –> 00:26:50,137
[kerry_h_pechter]: they must believe they’re

868
00:26:50,085 –> 00:26:50,106
[ramsey_d_smith]: m

869
00:26:50,197 –> 00:26:56,908
[kerry_h_pechter]: going to get that benefit or else
i mean i would tell my kids now

870
00:26:57,875 –> 00:27:01,441
[kerry_h_pechter]: it’s time to go to the streets

871
00:27:04,506 –> 00:27:04,686
[ramsey_d_smith]: yeah

872
00:27:04,544 –> 00:27:04,925
[paul_tyler]: time to go

873
00:27:04,926 –> 00:27:05,230
[kerry_h_pechter]: oh

874
00:27:04,966 –> 00:27:06,129
[paul_tyler]: to the streets ramsey

875
00:27:06,526 –> 00:27:06,966
[kerry_h_pechter]: i mean we’re

876
00:27:06,911 –> 00:27:07,052
[paul_tyler]: we’re

877
00:27:07,026 –> 00:27:07,286
[kerry_h_pechter]: talking

878
00:27:07,112 –> 00:27:07,313
[paul_tyler]: at the

879
00:27:07,346 –> 00:27:07,927
[kerry_h_pechter]: about fifteen

880
00:27:07,834 –> 00:27:08,055
[paul_tyler]: near

881
00:27:08,007 –> 00:27:08,327
[kerry_h_pechter]: per cent

882
00:27:08,195 –> 00:27:08,336
[paul_tyler]: near

883
00:27:08,387 –> 00:27:08,727
[kerry_h_pechter]: of pay

884
00:27:08,650 –> 00:27:08,831
[ramsey_d_smith]: yeah

885
00:27:09,268 –> 00:27:11,490
[kerry_h_pechter]: i mean what is more what is
more gut level

886
00:27:11,550 –> 00:27:12,630
[paul_tyler]: yeah

887
00:27:11,570 –> 00:27:13,431
[kerry_h_pechter]: than that i mean don’t take that
money

888
00:27:13,266 –> 00:27:13,428
[ramsey_d_smith]: oh

889
00:27:13,348 –> 00:27:13,531
[paul_tyler]: yeah

890
00:27:13,492 –> 00:27:16,054
[kerry_h_pechter]: from me if you’re if you’re not
going to that’s fraud

891
00:27:15,726 –> 00:27:16,029
[ramsey_d_smith]: oh

892
00:27:16,734 –> 00:27:17,555
[kerry_h_pechter]: okay and

893
00:27:17,506 –> 00:27:17,586
[ramsey_d_smith]: so

894
00:27:17,652 –> 00:27:17,835
[paul_tyler]: right

895
00:27:17,827 –> 00:27:20,412
[ramsey_d_smith]: well how are you getting to the
fifteen per cent that’s the that’s the pica

896
00:27:20,493 –> 00:27:24,522
[ramsey_d_smith]: that somebody sees in their w to
plus the employer contribution together is that how

897
00:27:24,582 –> 00:27:25,524
[ramsey_d_smith]: you get the fifteen per cent

898
00:27:26,767 –> 00:27:28,871
[kerry_h_pechter]: oh yeah because everyone all economists

899
00:27:28,746 –> 00:27:30,015
[ramsey_d_smith]: yeah

900
00:27:28,971 –> 00:27:34,380
[kerry_h_pechter]: agree and and i’m speaking now for
all economists the agree

901
00:27:34,086 –> 00:27:34,287
[ramsey_d_smith]: yes

902
00:27:34,500 –> 00:27:36,323
[kerry_h_pechter]: that that you know whether

903
00:27:36,390 –> 00:27:36,617
[paul_tyler]: yeah

904
00:27:37,285 –> 00:27:42,162
[kerry_h_pechter]: the employ it takes its share of
the pay roll tax out of its compensation

905
00:27:41,588 –> 00:27:41,608
[ramsey_d_smith]: i

906
00:27:42,322 –> 00:27:44,561
[kerry_h_pechter]: budget and so that

907
00:27:44,428 –> 00:27:44,591
[ramsey_d_smith]: sure

908
00:27:44,963 –> 00:27:46,932
[kerry_h_pechter]: whether it whether it would give you
that

909
00:27:47,895 –> 00:27:47,916
[ramsey_d_smith]: m

910
00:27:47,936 –> 00:27:48,477
[kerry_h_pechter]: they it would give

911
00:27:48,486 –> 00:27:48,506
[ramsey_d_smith]: m

912
00:27:48,537 –> 00:27:49,378
[kerry_h_pechter]: you that income

913
00:27:49,596 –> 00:27:49,940
[ramsey_d_smith]: oh

914
00:27:49,618 –> 00:27:54,146
[kerry_h_pechter]: that’s an interesting thought experiment of whether
you would you know you’d get the extra

915
00:27:54,767 –> 00:27:55,989
[kerry_h_pechter]: six percent if the

916
00:27:56,280 –> 00:27:57,270
[paul_tyler]: oh

917
00:27:56,570 –> 00:28:01,518
[kerry_h_pechter]: employer didn’t have to pay any payroll
tax but i’ll tell you believe me when

918
00:28:02,420 –> 00:28:07,128
[kerry_h_pechter]: a country that goes to a defined
defined contribution

919
00:28:07,176 –> 00:28:07,498
[ramsey_d_smith]: oh

920
00:28:07,208 –> 00:28:11,795
[kerry_h_pechter]: plan with minimum benefits those they have
mandatory

921
00:28:10,995 –> 00:28:12,416
[ramsey_d_smith]: m yeah m

922
00:28:12,976 –> 00:28:14,118
[kerry_h_pechter]: employer contributions

923
00:28:14,346 –> 00:28:14,547
[ramsey_d_smith]: yeah

924
00:28:14,779 –> 00:28:16,502
[kerry_h_pechter]: so get real if we’re

925
00:28:16,444 –> 00:28:16,566
[ramsey_d_smith]: yeah

926
00:28:16,622 –> 00:28:18,205
[kerry_h_pechter]: going away to an investment based

927
00:28:18,036 –> 00:28:18,445
[ramsey_d_smith]: oh

928
00:28:18,265 –> 00:28:21,631
[kerry_h_pechter]: system from sociasecurity we’re going to a
new kind

929
00:28:21,465 –> 00:28:21,486
[ramsey_d_smith]: m

930
00:28:21,711 –> 00:28:22,532
[kerry_h_pechter]: of mandatory

931
00:28:22,337 –> 00:28:22,641
[ramsey_d_smith]: yes

932
00:28:22,672 –> 00:28:25,788
[kerry_h_pechter]: it’s not going to be optional under
those circumstances

933
00:28:25,211 –> 00:28:25,293
[ramsey_d_smith]: ah

934
00:28:25,908 –> 00:28:28,052
[kerry_h_pechter]: for employes to benefit and an employe

935
00:28:28,056 –> 00:28:28,318
[ramsey_d_smith]: my

936
00:28:28,092 –> 00:28:35,556
[kerry_h_pechter]: contribution is in australia or israel or
cost erica that’s going to be bigger what

937
00:28:35,676 –> 00:28:39,883
[kerry_h_pechter]: people have to pay now and people
have an option now to whether to contribute

938
00:28:39,923 –> 00:28:42,768
[kerry_h_pechter]: to their social security they’re not going
to it’s going to be more than six

939
00:28:42,868 –> 00:28:47,556
[kerry_h_pechter]: per cent so that’s what i’m saying
when it’s this is just not going to

940
00:28:47,596 –> 00:28:51,262
[kerry_h_pechter]: be like throwing a lever and half
of your social security budget goes into the

941
00:28:51,282 –> 00:28:53,746
[kerry_h_pechter]: stock market no that’s not what’s going
to happen

942
00:28:54,126 –> 00:28:54,146
[ramsey_d_smith]: m

943
00:28:54,167 –> 00:28:55,269
[kerry_h_pechter]: i mean if it does then

944
00:28:55,322 –> 00:28:55,506
[paul_tyler]: yeah

945
00:28:56,130 –> 00:29:00,800
[kerry_h_pechter]: it’s just it’s just making kicking a
problem on the road because then when

946
00:29:00,697 –> 00:29:00,717
[ramsey_d_smith]: m

947
00:29:00,840 –> 00:29:01,061
[kerry_h_pechter]: people

948
00:29:00,960 –> 00:29:01,830
[paul_tyler]: yeah

949
00:29:01,141 –> 00:29:02,023
[kerry_h_pechter]: realize how much risk

950
00:29:01,950 –> 00:29:02,274
[paul_tyler]: oh

951
00:29:02,083 –> 00:29:07,106
[kerry_h_pechter]: they’re carrying that they didn’t use to
carry that they’re going to start either they’re

952
00:29:07,186 –> 00:29:07,687
[kerry_h_pechter]: completely

953
00:29:07,680 –> 00:29:07,700
[paul_tyler]: m

954
00:29:07,827 –> 00:29:12,295
[kerry_h_pechter]: financially illiterate or they’re just going to
start i mean they may absorb it the

955
00:29:12,315 –> 00:29:16,061
[kerry_h_pechter]: way people are now absorbing a fifteen
percent tax without thinking that they’re going to

956
00:29:16,101 –> 00:29:17,984
[kerry_h_pechter]: get anything for it i mean get

957
00:29:17,956 –> 00:29:18,076
[ramsey_d_smith]: well

958
00:29:18,024 –> 00:29:18,145
[kerry_h_pechter]: your

959
00:29:18,096 –> 00:29:21,960
[ramsey_d_smith]: they’re only because hey’re only seeing seven
or eight percent of it right even i

960
00:29:22,040 –> 00:29:25,944
[ramsey_d_smith]: agree with you with the the from
an comes perspective but i think that most

961
00:29:26,044 –> 00:29:30,583
[ramsey_d_smith]: people only see the you know the
face that shows up on their pay check

962
00:29:30,623 –> 00:29:31,546
[ramsey_d_smith]: and that’s painful enough

963
00:29:31,510 –> 00:29:31,691
[paul_tyler]: yeah

964
00:29:32,007 –> 00:29:32,127
[ramsey_d_smith]: so

965
00:29:32,335 –> 00:29:32,516
[paul_tyler]: yeah

966
00:29:32,516 –> 00:29:33,657
[kerry_h_pechter]: i don’t know if they even i

967
00:29:33,642 –> 00:29:33,742
[paul_tyler]: all

968
00:29:33,738 –> 00:29:33,898
[kerry_h_pechter]: don’t

969
00:29:33,803 –> 00:29:33,944
[paul_tyler]: right

970
00:29:33,938 –> 00:29:34,038
[kerry_h_pechter]: know

971
00:29:33,964 –> 00:29:34,125
[paul_tyler]: well

972
00:29:34,098 –> 00:29:37,945
[kerry_h_pechter]: if they even they even think about
it if you’re making enough money so that

973
00:29:37,985 –> 00:29:38,906
[kerry_h_pechter]: you’ve reached your pier

974
00:29:38,736 –> 00:29:40,085
[ramsey_d_smith]: yeah

975
00:29:38,946 –> 00:29:41,791
[kerry_h_pechter]: limit by the middle of february then
you know

976
00:29:41,660 –> 00:29:41,801
[ramsey_d_smith]: yeah

977
00:29:41,911 –> 00:29:42,692
[kerry_h_pechter]: all about pica

978
00:29:42,726 –> 00:29:43,007
[ramsey_d_smith]: yeah

979
00:29:42,773 –> 00:29:45,037
[kerry_h_pechter]: limits but other people you

980
00:29:45,059 –> 00:29:45,199
[ramsey_d_smith]: yeah

981
00:29:45,097 –> 00:29:48,384
[kerry_h_pechter]: know have they don’t even know what
ficus stands for

982
00:29:50,649 –> 00:29:53,582
[ramsey_d_smith]: yeah

983
00:29:51,522 –> 00:29:55,852
[paul_tyler]: all right so hey listen we are
right at time ramsey

984
00:29:56,046 –> 00:29:58,470
[ramsey_d_smith]: yuh

985
00:29:56,132 –> 00:29:58,317
[paul_tyler]: final thoughts questions for carry

986
00:29:58,930 –> 00:30:03,237
[ramsey_d_smith]: carry great having you back on um
and i love to have you on again

987
00:30:04,179 –> 00:30:08,206
[ramsey_d_smith]: to talk about i can think of
three or four things i was reminded your

988
00:30:08,266 –> 00:30:08,987
[ramsey_d_smith]: trip to israel

989
00:30:08,806 –> 00:30:08,826
[paul_tyler]: i

990
00:30:09,227 –> 00:30:11,571
[ramsey_d_smith]: and how enlightening you know the writings

991
00:30:11,280 –> 00:30:12,120
[paul_tyler]: yeah

992
00:30:11,672 –> 00:30:16,039
[ramsey_d_smith]: that came out of that were and
how it was interesting perspective for comparison purposes

993
00:30:16,119 –> 00:30:16,219
[ramsey_d_smith]: so

994
00:30:16,686 –> 00:30:17,436
[kerry_h_pechter]: oh

995
00:30:16,800 –> 00:30:18,242
[ramsey_d_smith]: between between alternative

996
00:30:18,195 –> 00:30:18,216
[kerry_h_pechter]: m

997
00:30:18,303 –> 00:30:18,803
[ramsey_d_smith]: system so

998
00:30:19,266 –> 00:30:19,286
[kerry_h_pechter]: m

999
00:30:19,625 –> 00:30:23,211
[ramsey_d_smith]: thanks for come ing on and and
talking to us about social security and we

1000
00:30:23,271 –> 00:30:28,020
[ramsey_d_smith]: should we should line up you know
some other topics to to go over in

1001
00:30:28,080 –> 00:30:30,464
[ramsey_d_smith]: the end as the year progresses

1002
00:30:30,981 –> 00:30:31,142
[paul_tyler]: yeah

1003
00:30:31,106 –> 00:30:31,767
[kerry_h_pechter]: well i’m blowing to

1004
00:30:31,825 –> 00:30:32,348
[paul_tyler]: absolutely

1005
00:30:31,868 –> 00:30:32,749
[kerry_h_pechter]: iceland in august

1006
00:30:32,469 –> 00:30:32,931
[paul_tyler]: care we’ll put

1007
00:30:32,950 –> 00:30:33,030
[kerry_h_pechter]: and

1008
00:30:32,952 –> 00:30:33,253
[paul_tyler]: the links

1009
00:30:33,090 –> 00:30:33,371
[kerry_h_pechter]: i’ll be

1010
00:30:33,334 –> 00:30:33,434
[paul_tyler]: to

1011
00:30:33,531 –> 00:30:33,912
[kerry_h_pechter]: meeting with

1012
00:30:33,796 –> 00:30:33,876
[paul_tyler]: you

1013
00:30:33,952 –> 00:30:36,818
[kerry_h_pechter]: people there about their system they have
a a

1014
00:30:37,365 –> 00:30:37,976
[ramsey_d_smith]: m oh

1015
00:30:37,900 –> 00:30:42,480
[kerry_h_pechter]: a collective d c that’s it’s going
to be interesting

1016
00:30:43,725 –> 00:30:43,926
[ramsey_d_smith]: yeah

1017
00:30:44,300 –> 00:30:44,983
[paul_tyler]: interesting all right

1018
00:30:44,867 –> 00:30:44,967
[ramsey_d_smith]: i’m

1019
00:30:45,004 –> 00:30:45,144
[paul_tyler]: we’ll

1020
00:30:45,007 –> 00:30:45,147
[ramsey_d_smith]: going

1021
00:30:45,184 –> 00:30:45,406
[paul_tyler]: carry

1022
00:30:45,187 –> 00:30:45,448
[ramsey_d_smith]: to send

1023
00:30:45,486 –> 00:30:45,667
[paul_tyler]: wilt

1024
00:30:45,488 –> 00:30:49,258
[ramsey_d_smith]: you my my last my last and
most successful linked in post in six months

1025
00:30:49,298 –> 00:30:51,243
[ramsey_d_smith]: was about iceland so i’m going to
send it to you

1026
00:30:51,456 –> 00:30:51,977
[kerry_h_pechter]: oh great

1027
00:30:51,853 –> 00:30:52,015
[paul_tyler]: yeah

1028
00:30:52,559 –> 00:30:54,063
[kerry_h_pechter]: great okay it’s always

1029
00:30:53,916 –> 00:30:54,019
[ramsey_d_smith]: ye

1030
00:30:54,103 –> 00:30:54,364
[kerry_h_pechter]: good to

1031
00:30:54,360 –> 00:30:54,542
[paul_tyler]: oh

1032
00:30:54,424 –> 00:30:55,287
[kerry_h_pechter]: talk with you guys

1033
00:30:55,746 –> 00:30:55,766
[ramsey_d_smith]: m

1034
00:30:55,969 –> 00:30:57,272
[kerry_h_pechter]: you give me a lot of leash

1035
00:30:57,096 –> 00:30:57,816
[ramsey_d_smith]: yeah

1036
00:30:57,433 –> 00:30:57,573
[kerry_h_pechter]: so

1037
00:30:57,737 –> 00:30:58,021
[paul_tyler]: okay

1038
00:30:58,686 –> 00:30:59,489
[kerry_h_pechter]: always appreciate it

1039
00:31:00,096 –> 00:31:00,638
[ramsey_d_smith]: uh

1040
00:31:01,757 –> 00:31:01,778
[kerry_h_pechter]: i

1041
00:31:01,880 –> 00:31:02,101
[paul_tyler]: right

1042
00:31:02,085 –> 00:31:02,106
[ramsey_d_smith]: h

1043
00:31:02,261 –> 00:31:04,526
[paul_tyler]: excellent all right well thank you carry
thank you ramsey

1044
00:31:04,266 –> 00:31:04,507
[ramsey_d_smith]: oh

1045
00:31:04,826 –> 00:31:06,610
[paul_tyler]: and thanks to all our listeners join
us again

1046
00:31:06,516 –> 00:31:06,536
[ramsey_d_smith]: m

1047
00:31:06,650 –> 00:31:10,598
[paul_tyler]: next week for another episode of that
annuity show thanks

1048
00:31:11,556 –> 00:31:11,777
[kerry_h_pechter]: oh

Rising rates are good news for near-retirees seeking longevity insurance

July 5, 2022 2022, Media, Moshe Milevsky No comments

For years, low interest rates have been a boon to borrowers but a curse to older investors wanting low-risk interest income options. Now, after a decade of minuscule rates, interest rates are starting to inch back up again: another 0.5% as of June 1st. That’s good for GIC investors (guaranteed investment certificates), as we covered in my recent column on the alleged “death” of bonds.

This is also welcome news for retirees seeking so-called “longevity insurance,” even if it’s probable that the same forces at work are also depressing stock prices. In other words, the time may be fast approaching when near-retirees and full retirees start to consider annuities.

Are fixed annuities a safe investment?

I’ve written about annuities from time to time over this low-interest journey, but it never got to the point for me to pull the trigger personally and buy life annuities. It’s generally a bad time to annuitize when interest rates are low. And it’s worse in periods of high inflation. Another attractive benefit of annuities is that they provide some hedge against stock market volatility: you may have noticed that friends with inflation-hedged defined benefit pension plans tend to be less concerned about the current bear market.

In May, pension expert Fred Vettese wrote that retirees may start to be tempted to implement his suggested guideline of converting about 30% of investment portfolios into annuities. As for the timing, he says it is “certainly not now: but it could be sooner than you think.” He suggests the optimal time to commit to them is around May 2023, just under a year from now.

Fee-only financial planner Robb Engen recently wrote about this on Boomer & Echo, where he likened annuities to the creation of your own personal pension plan. He cites a March 2022 RBC Insurance study of Canadians aged 55 to 75. It found that among those already retired, 28% are spending more than they planned for, and 41% have unexpected expenses. Inflation and loss of purchasing power is the most pressing concern for most (78%), along with a lack of guaranteed income (47%), outliving their savings (48%) or their spouse (38%), feelings of loneliness (36%) and not leaving behind a legacy (25%).

Engen was pleasantly surprised by current annuity payouts on $100,000 and $250,000. After the June 1, 2022, rate hike, I asked Cannex Financial Exchanges Ltd. to provide updated quotes for registered life annuities and taxable (proscribed) annuities on comparable amounts. Here’s what it found:

For a 65-year-old male, investing $100,000 early in June 2022, with a 10-year guarantee period in a prescribed (non-registered) single life annuity, monthly income ranged from a high of $548 to $564 at Desjardins Financial Security, with a cluster at major bank and life insurance companies between $538 and $542. (All figures rounded.) Comparable payouts on $250,000 ranged from $1,299 to $1,390.

Because of their greater longevity, 65-year-old females received slightly less—ranging from around $500 per month to a high of $518, and for the $250,000 version, from $1,238 to $1,319.

Here’s what Cannex provides for comparable registered annuities (held in RRSPs):

For a 65-year-old male (born in 1957), $100,000 in a single life annuity nets between $551 and $571 per month, depending on the supplier; $250,000 generates between $1,399 and $1,461 a month. For a 70-year-old male (born in 1952), comparables are $625 to $640 per month and $1,578 to $1,634 a month.For a 65-year-old female (born in 1957), $100,000 in a single life annuity nets you between $518 and $532 per month, depending on the supplier; $250,000 generates between $1,335 and $1,362 a month. For a 70-year-old female, comparables are $576 to $595 per month and $1,475 to $1,523 a month.

Income on non-registered accounts

Investor	Investment Amount	Monthly Income
65-year-old male	$100,000 early in June 2022, 10-year guarantee period in a prescribed (non-registered) single-life annuity	$538 to $542
65-year-old female	$100,000 early in June 2022, 10-year guarantee period in a prescribed (non-registered) single-life annuity	$500 to $518

Income on registered accounts

65-year-old male	$100,000 early in June 2022, 10-year guarantee period in registered single-life annuity	$551 to $570
65-year-old female	$100,000 early in June 2022, 10-year guarantee period in registered single-life annuity	$518 to $531

What are the different types of annuities?

As for whether to go the registered or prescribed route, for some, there’s little choice. All they have are registered investments. However, for those with significant taxable investments, fee-only planner Rona Birenbaum, of Caring for Clients, prefers “non-registered to replace non-registered fixed income… Annuities are particularly compelling for investors with taxable portfolios… The tax efficiency of non-registered prescribed annuities is hard to beat when compared to GICs and other conservative fixed-income investments.”

Choosing guaranteed periods reduces the risk of estate erosion in the case of premature death, and the lower taxable income can protect investors from Old Age Security (OAS) clawback.

Birenbaum says that leaving more to your estate and/or heirs by paying more for a longer guarantee period—say, 10 years or more—is worth the cost. Take a 65-year-old couple with a joint last-to-die annuity, non-reducing, which means payments continue for the life of both annuitants without reduction of payments upon the first death. A 20-year guarantee ensures that even if both pass away soon after this purchase, named beneficiaries would receive the remaining payments until 20 years of payments have been made. A $100,000 investment at Desjardins would yield $484 a month, of which only $176 a month is taxable. At a 20% tax rate, that would yield net annual cash flow of $450 a month.

Compare that to a GIC paying 4%, which generates $266 a month net of taxes. That’s “a big difference, especially if it helps avoid OAS clawback,” Birenbaum says. And if you value leaving a larger estate, then a slightly higher payment for a longer guarantee period for your heirs could pay off, depending when you die.

“I prefer a longer guarantee period than shorter. For example, if we used a 10-year guarantee in the example, the net monthly cash flow would be $455 a month. Only $5 per month more in cash flow to get $58,000 more in guaranteed payments if the annuitants die in year 10.”

Matthew Ardrey, wealth advisor for Toronto-based TriDelta Financial, says his firm has felt that annuity rates have been too low for some years, because interest rates are too low. “Does the rising rate environment change that? My answer would be not yet. Rates are still well below what they were when COVID hit—1.75% in Feb 2020, versus 1.00% today.” Also, he says, it’s likely we are going to get more hikes this year. Based on that alone, “I would wait for further rate increases before locking in my savings.”

Ardrey recommends investing the same $100,000 in the stocks of the five big Canadian banks and getting a combined dividend yield of 4.18%—almost enough to match the return on an annuity.“To perfectly match it so the same stream of payments is available until age 90, the banks would only need to appreciate 0.56% per year for a total return of 4.74%,” says Ardrey. “If they make more than 0.56% per year, then the investor is better off choosing the investment portfolio. This is a bet I am willing to take.”

What about timing?

Just as you could invest in both registered and prescribed annuities, you can also hedge on the timing of when to purchase annuities. Finance professor Moshe Milevsky, who is writing a book on the history of annuities (following his co-authored Pensionize Your Nest Egg), advises investors to inch slowly into committing to annuities.

“I have no idea where long-term rates (the important ones) are heading, even if you have a clear vision of the Bank of Canada’s plans… when it comes to annuities and annuitization, the mathematics are more favourable to acting slow versus all at once.”

In 2016, Milevsky likened the gradual inching into annuities to the dollar-cost averaging of stocks: “In fact, the optimal behaviour of a risk-averse consumer resembles an asymmetric dollar-cost averaging strategy,” he wrote in a co-authored academic paper titled “A Glide Path for Target Date Fund Annuitization.”

As for Vettese’s recommendation of annuitizing around 30% of your retirement assets, Milevsky says that sounds “good and prudent, which these days appear to be enough to allocate to anything.”

MoneySense Investing Editor at Large Jonathan Chevreau is also founder of the Financial Independence Hub, author of Findependence Day and co-author of Victory Lap Retirement. He can be reached at jonathan@findependenceHub.com.

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Energy, food, housing costs cited

Fed rate increase possible next week

Home prices may be bellwether

Facing ‘big structural issues’

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You Shouldn’t Rely on Social Security To Fund Your Whole Retirement

Delaying Taking Your Benefits Can Pay Off

However, Waiting Until Age 70 Isn’t Always the Best Option

65 Isn’t the Full Retirement Age for Everyone

Your Benefits Are Calculated Based on Your 35 Highest-Earning Years

Your Spouse (or Former Spouse) Can Impact Your Benefit Amount

Social Security (Probably) Won’t Run Out

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Are fixed annuities a safe investment?

Income on non-registered accounts

Income on registered accounts

What are the different types of annuities?

What about timing?

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