Hey - if you’re super risk-averse (despite listening to our very soothing risk-encouraging podcast), this episode is for you!

Caitlin learns that her big investment idea to get an annuity so she gets paid some amount of money every year actually has nothing to do with investing. It’s insurance??? Get the F out of here, Sara. Do you even know what you’re talking about??

Sara goes on to explain that annuities are contracts with insurance companies to protect us from losing money in the stock market and guarantee a yearly income in our senior years. But ON THE OTHER HAND, you don’t get any of the advantages of compounding interest.

The lows are higher and the highs are lower. That doesn’t sound like the way to make a million dollars. And it’s not. Sara says that they really only appeal to the moooooost risk adverse humans who are okay with giving up the chance to make more money in the stock market in exchange for a sure thing.

In fact, we go so far as to claim that getting an annuity is more like a psychological strategy than an investing one. Look at us go! A couple of Freuds over here!

We even (lightly) touch on actuarial sciences! (I know that has nothing to do with Freud, but it’s also very sophisticated.)

Ask us your dumb investing and finance questions for Season 3 on our Ask Us page!

We have the social medias!! Here’s our Instagram and Facebook and LinkedIn.

This episode was edited by our co-producer Kelly West. Music by Bad Bad Hats and Devmo.