fee-only financial planning

A Different Look at Life Expectancy

One of the key assumptions in any financial plan is life expectancy. We are all living longer. Some studies have shown that if a married couple both reach their 65th birthdays, there is a 15% chance one of them will celebrate their 100th. To some people, living to 100 sounds a bit scary. They imagine a not-so-great quality of life at that age. Several say bluntly, "I don't want to live that long." In one respect, that's an understandable response. There aren't a lot of communities reaching out to the elderly, supporting them with social activities, easing the navigation of the health care system, or just plain caring about who they are and where they've come from. The follow-on question then becomes, "And what will my health be like?" The good news is that modern medicine has expanded our life expectancy by preventing a lot of the ailments that take lives too soon. Sometimes the not-so-good news is that we then have more years to manage a slow decline. What factors determine whether we live, not just a long life, but a long vibrant one?​ I recently discovered a new app and research that is helping to answer that question -Blue Zones. The twist to Blue Zones' life expectancy calculator is that you get, not one, but three life expectancies - 1) Your "healthy" (without chronic conditions) life expectancy; 2) Your actual life expectancy; and 3) Your potential (if you follow their suggestions) life expectancy. The difference between 1) and 2) is the length of time you can expect to live with some sort of chronic condition like cancer, diabetes or heart disease. The recommendations are based on research by the author, Dan Buettner, who spent years finding the common threads among societies where people live very long, vibrant lives. In my own case, the difference between 1) and 2) was 10 years. Translation: Even though my life expectancy is 91, for the last 10 years of my life, I am likely to have a chronic condition to manage. Yikes. I don't like that answer at all; so I feel motivated to implement Blue Zones' tips about my diet, social life, stress management, spirituality, and exercise. None of them are new ideas; I just didn't realize their impact until I used this app. Those last 10 years, played right, have the potential to be some of the most fulfilling. Due to the Baby Boomer generation's size, and their tendency to reinvent every age-decade they enter, I am optimistic our society will begin to embrace the contributions of the elderly, to support aging, and dignify the end of life. Rather than dreaded in financial planning discussions, long life will be something to welcome and embrace.

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Scared of Financial Success?

At one point in my banking career I was in line for a big promotion that involved a panel interview, and I blew it. People who served on the panel couldn’t believe the same person showed up for the interview who showed up for work every day. Instead of feeling pride and confidence when I first heard about the opportunity, I remember feeling discomfort and anxiety with the new title and bonus potential. It made no sense. Because I thought I might be given the opportunity again, I spent the following year working on the internal and external sources of my fear of success. I improved my inner confidence by joining Toastmasters (see that story here); and I improved my external messages by consciously surrounding myself with people who gave me joy and support. It worked: the next year, I aced it, and got the promotion. Research on our messages about money has uncovered that some people may have an inner upper limit they have set on financial success. Past that limit, they become uncomfortable. Unknowingly, they will begin to sabotage themselves.  According to Ken Donaldson, LMHC, an emotional intelligence expert in Seminole Florida and author of Marry Yourself First , the upper limit is set by “history, events, programming, parents, institutions and cultural messages.” Financial professionals often see this with windfalls. When someone has been handed a great deal more money than they have had before, and are uncomfortable with their new position, they may spend it or give it away until they are back in the financial position where they first started. Still others allow the windfall to sit in an account, untouched, unwilling to acknowledge its presence. For some people, the windfall can represent a real or imagined radical change in lifestyle and in relationships. It may give them a new self-identity, and they need time to grieve their old one. Meanwhile, some in their circles will accept them as they are, while others try to drag them down. To address fear of success, self-made or not, work needs to be done on both inside and outside factors. Two steps in this direction: First, write your feelings about your new position today, then imagine how you would like to be spending your life three years from now. Second, surround yourself only with people who bring you joy and support. This may mean saying “no” to people whom you previously said “yes” to, detaching from them in a loving way. Keep the messages of confidence flowing – from the inside and out – to embrace success, rather than ruin it.

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Having “The Visit” At the Holidays

For many families, the holidays are one of the few times when adult kids, parents, grandkids, and grandparents get to see each other. That time together might be the best time to have a planned "Visit." There are two common topics for the Visit: 1) finances; and 2) health and home. Today's post will deal with finances. Next week I will have a guest post from Monica Stynchula, LCSW and CEO of ReunionCare, about health and home. Members of the Greatest Generation are notorious for keeping quiet about money. Yet, as they reach old age, their Baby Boomer kids begin to wonder, "Do Mom and Dad have enough money to live on?" "What if they need in-home care?" "What if they need to make modifications to their home?" "Did they really need those $5000 new windows, or are they being scammed and not know it?" "If I had to pay bills for them, where do they keep their money?" "What if they have money or accounts stashed somewhere and they forget about it?" Some parents may discourage the money topic by cutting conversations about it short. Perhaps they do not want to acknowledge their own mortality. Perhaps they are embarrassed about falling victim to a scam already. Perhaps they see all of their kids as spendthrifts who will not be responsible (regardless of their age, education, and career status). Perhaps they are afraid of having the keys to their car, or their home, taken away. And it's not always the parents that don't want to talk about it. Sometimes the adult kids are uncomfortable talking about their parents' mortality, and they are the ones cutting off the communication. Regardless, every time the topic, and its underlying emotion, is avoided, it feeds an elephant in the living room. If not acknowledged, it stays there, and gets bigger, until a crisis erupts, and everyone is forced to talk about it under duress. How do you bring up the money topic before a crisis? Try owning your discomfort about it up front. "There's something I am struggling with talking to you about," might be a good beginning, for example. Then let them know what you want to talk about: "There are two main concerns that keep coming up for me, and I need your help." However, if they still shut down, keep your cool, and ​be empathetic: "I​f I were in your shoes, I would find this hard to talk about, too. Perhaps this wasn't the best time to bring it up." ​Try writing them a letter instead to keep the conversation going. ​​But, ​if you find the discussion goes even better than you thought, let them know how relieved you are: "Wow, I was so worried about talking to you about this, but I feel better now." You may find you have paved the way for more open conversation, and even happier holidays with the family, in the future.

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Independence, Emotional Intelligence, and Better Business

(Prefer video to text? See this message in a 3-minute video here: Independence, Emotional Intelligence, and Better Business) This month included Independence Day, but it is also included Independents Week - a nationwide campaign to heighten awareness of local businesses, jobs and economic prosperity brought to a community by non-chain, non-corporate enterprises. As an independent businessperson for 10 years now, I learned that practicing emotional intelligence is one of the best skills for managing the multiple relationships that come with running a business. Following are 3 of these skills. 1) Boundaries - Being unaware of my need to please people, I took a very nice client in my first year who asked me to make house calls. She often had to meet after work, which was a 50-minute commute for me in bumper-to-bumper rush hour traffic. The doorbell or her phone would ring, which sometimes prevented her from focusing on our tasks at hand. I violated my policy of meeting during regular business hours in my own office environment, free of distractions, because I wanted so badly for "her to be happy." While I believe she was happy, and we got her project completed on time, I was usually exhausted, a little irritable, and resentful before, during, and after our meetings. Yet, it was not her fault - it was mine, because I made a business decision without the intelligence of setting boundaries. 2) Listening - I used to think listening meant keeping my mouth shut until the other person quit talking. That certainly works better than interrupting, which I used to be a pro at. Later I learned that repeating back what I thought I heard, followed by something like, "Have I heard you correctly?" worked wonders for my relationships with clients, vendors, employees, and, wow, even friends and family. There are as many ways to strengthen your listening skills as there are ways to strengthen your muscles. Exercising my listening ability has helped me be a better receiver of sensitive information, and deepened my understanding of where others are coming from. Whether it's a vendor or a client, both of these made me better at business. 3) Customer Focus - I used to think if I advertised or discussed my credentials, picture, achievements, or experience, then I would win people over. Instead I found that the more I make it about them, the happier everyone, including me, is. I find other people's stories and tribulations far more interesting than my own. Besides, business is not the best place to get my needs met. I have a support network of friends and family who gladly fill that role. My website, my marketing materials, my message, and my meetings may include personal stories, but their purpose is an attempt to provide a direct lesson or benefit for my reader, my client, or my vendor. These interactions focus primarily on what they have told me is most important to them (which is generally not my credentials, picture, achievements, or years of experience) -…

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Read more about the article Investing Vehicles: Getting You Where You Want To Go
Are you in the right investing vehicles for your destination?

Investing Vehicles: Getting You Where You Want To Go

With the stockmarket falling, it's normal for investors to wonder what kind of investing vehicles to choose right now. Stocks, bonds, even real estate, seem poised to crater as soon as we decide to buy. It's probably the most common question a financial planner receives in times like this - "Where should I put my money?" The media is filled with quick-fix advice on this all-important question. Research has shown that the best long-term predictor of investing success is the percentage we have in stocks vs. bonds. Further down the list in importance is the specific stocks and bonds (or mutual funds) selected.  But, financial products, or investing vehicles, are what sell pop-up ads and keep eyeballs glued to our screens. So, it’s no wonder that this is a common question. The Question Before The Question However, precisely because it is so important, it’s not a question that can normally be answered in an hour, or even two. There is a reason that financial products are called “vehicles.”  They get you where you want to go.  Consider - if you get behind the wheel of a real vehicle, turn on the ignition, put it in drive, and step on the gas without a destination in mind, what happens? You might have some fun and adventure, but not a lot to show for the trip before you have to fill up again. Wild Destinations When investors are asked where they would like the vehicle to go, financial planners often hear something like the following: Rich-Land (News flash: most of us are there already.) Growth-With-No-Risk Land 100%-Guaranteed-Income Land Cake-and-Eat-It-Too Land Whatever-the-Most-My-Portfolio-Can-Make-Me Land These kinds of wild places only exist in Financial-Fantasy-Land. They are too vague for any kind of meaningful map. Having one of these as your sole destination is a recipe for exhaustion and frustration. No vehicle will get you there, no matter what you might hear or read. Fun and Fulfilling Destinations In comparison, what are some examples of fun and fulfilling destinations? Try these: Have $X per year to support my basic living needs beginning in 20__ Replace my car with one like it every 5 years until I can’t drive anymore Spend 3 weeks every year in Scotland beginning in 20__ Put my kids through private school Provide sufficient support for the kids to attend a liberal arts college at age 18 if they want to Buy a mountain house by 20__ Host my children and grandchildren on a cruise every summer beginning in 20__ Build my own boat by 20__ Hold a 50th anniversary party for my parents Open a beachside bistro by 20__ Go to graduate school full-time in 20__ Spend 20 hours per week volunteering at the shelter beginning in 20__ These are real-life goals from real-life people with real achievability. Some of the destinations they knew off the top of their heads. Others took some time to dream, discuss, and discover. In some cases, that discovery was hard work. But once we knew the destination,…

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