The Stacking Benjamins Show – Episode SB1662: Better Investing Using Horrible Investment Products

Release Date: March 28, 2025

In this engaging and insightful episode of The Stacking Benjamins Show, hosts Joe Saul-Sehy and OG delve deep into the world of questionable investment products. Titled "Better Investing Using Horrible Investment Products," this episode aims to shed light on why certain investment vehicles are often misleading, misused, and detrimental to the average investor's financial health. Joined by financial experts Don McDonald from Talking Real Money, Paula Pant of Afford Anything, and Jesse Kramer from Personal Finance for Long Term Investors, the discussion is both enlightening and cautionary for listeners navigating the complex landscape of personal finance.

1. Infinite Banking and Permanent Life Insurance

The episode kicks off with a critical examination of Infinite Banking and permanent life insurance products. Don McDonald passionately argues against their widespread use, highlighting their inherent flaws and the niche audience they truly serve.

Maxwell East (Don McDonald) [11:05]: “I believe that most financial life insurance products are devilish and dangerous and commissionish. They are loved by those who sell them. They are rarely, if ever, purchased actively by clients because they don't make much sense.”

Paula Pant adds to the skepticism, emphasizing the complexity and questionable benefits of Infinite Banking for the average investor.

Paula Pant [12:24]: “I went down the rabbit hole at that time and I was like, wow, this is complicated and stupid and no one should do this.”

Jesse Kramer attempts to present a counterpoint but is met with robust rebuttals from Don and Maxwell, reinforcing the notion that such products are predominantly beneficial only for a minuscule segment of high-net-worth individuals.

Maxwell East [15:54]: “Yeah, the infinite banking's a gimmick. It's just a sales gimmick.”

2. The Perils of Penny Stocks

Shifting focus, the discussion moves to penny stocks, another category of investments that often lure inexperienced investors with the promise of exorbitant returns. The hosts dismantle common misconceptions, comparing penny stocks to gambling due to their high volatility and lack of transparency.

Jesse Kramer [10:49]: “Penny stocks, I think are akin to just straight up gambling. Go play the roulette wheel.”

Maxwell East further deconstructs the illusion behind low-priced stocks, explaining the fundamental misunderstanding of share price versus market capitalization.

Maxwell East [21:26]: “It's the share price fallacy that so many investors have. If it's trading for a penny, it's a great deal—nothing could be further from the truth.”

The conversation underscores the dangers of pump and dump schemes prevalent in the penny stock market, highlighting the SEC's limited capacity to police these fraudulent activities.

Maxwell East [24:59]: “The SEC's ability to police penny stocks also is incredibly low. So the pump and dump schemes... pretty good.”

3. Equity Indexed Annuities: The Biggest Lie in Investment

In the latter half of the episode, the hosts tackle Equity Indexed Annuities (EIAs), branding them as some of the most misleading and financially harmful products available. Don McDonald passionately criticizes EIAs for their deceptive sales practices and exorbitant fees.

Maxwell East [38:02]: “Equity indexed annuities... are the most horribly sold product in all of the financial universe. They are the subject of almost every free steak dinner you get in the mail.”

Joe Saul-Sehy highlights the false promises made by annuity salespeople, particularly the claim of achieving stock market returns without any risk.

Joe Saul-Sehy [39:21]: “They're being pushed more often than they're being bought. They're being pushed onto people more than those people are actually seeking them out.”

Paula Pant points out the role of financial illiteracy in the widespread acceptance of EIAs, emphasizing how sales tactics exploit the lack of knowledge among investors.

Paula Pant [41:07]: “In a world with the lack of financial literacy, it's tempting to believe it because you want to believe it.”

4. Misleading Sales Tactics and the Importance of Financial Literacy

A recurring theme throughout the episode is the rampant use of misleading sales tactics employed to sell these inferior investment products. The hosts discuss how high commissions and enticing freebies, like steak dinners, are used to lure investors into making poor financial decisions.

Maxwell East [42:38]: “They're being pushed more often than they're being bought. They're being pushed onto people more than those people are actually seeking them out.”

Jesse Kramer provides practical advice for teachers navigating their 403B plans, warning against high-commission annuity providers that often overshadow low-fee, reputable firms like Fidelity and Vanguard.

Jesse Kramer [49:57]: “If they bring the donuts, they're automatically on the naughty list to some extent.”

5. Concluding Insights and Takeaways

As the episode wraps up, the hosts reinforce the critical need for investors to be vigilant and well-informed. They advocate for education and transparency, urging listeners to avoid products that promise unrealistic returns without corresponding risks.

Joe Saul-Sehy [45:05]: “Beware. Charts and graphs can show you whatever anybody wants to tell you.”

The episode concludes with a strong message: prioritize financial literacy, question high-commission products, and seek out investment options that align with long-term financial goals rather than succumbing to flashy but flawed investment schemes.

Notable Quotes

• Maxwell East (Don McDonald) [11:12]: “Infinite banking can work and all the math they're doing is not incorrect, but they're telling you three quarters of the story.”

• Paula Pant [12:28]: “I was like, wow, this is complicated and stupid and no one should do this.”

• Maxwell East [15:54]: “Infinite banking's a gimmick. It's just a sales gimmick.”

• Jesse Kramer [10:49]: “Penny stocks, I think are akin to just straight up gambling. Go play the roulette wheel.”

• Paula Pant [41:07]: “In a world with the lack of financial literacy, it's tempting to believe it because you want to believe it.”

• Maxwell East [38:02]: “Equity indexed annuities... are the most horribly sold product in all of the financial universe.”

Final Thoughts

This episode of The Stacking Benjamins Show serves as a crucial guide for investors, especially novices, to recognize and steer clear of investment traps that promise high returns with little to no risk. By dissecting Infinite Banking, Penny Stocks, and Equity Indexed Annuities, the hosts provide valuable insights into the pitfalls of these products, emphasizing the importance of informed and strategic investment decisions.

Listeners are left with a clear understanding of why skepticism toward certain investment products is warranted and the importance of building a diversified, transparent, and low-fee investment portfolio to secure long-term financial well-being.