If I knew then what I know now...

At any point in life it seems we can look back and wish we knew back then what we know now.  If knew back in high school what I know now, I would have done some things differently.  If I knew in college what I know now, I would have altered a few decisions.  My first job, if only I’d known.  My first failed business endeavor, I would have, could have, and should have…  Life is full of lessons and experiences, and in most cases the lessons come after we’re given the test.  It’s backward from what we’re taught in school.  With school, we’re taught the material, then given an exam on how well we retained and regurgitated it.  Just so you know, this is rarely the case in life.

In speaking with people early in their careers, those that have recently graduated, and really most people, there are a few common themes.  Debt accumulated during and after college is scary.  Finding a job with decent income is far more challenging than expected.  For those that are starting to make money, they aren’t entirely sure where to put it.  And it’s very difficult to find an advisor you can relate to and trust.  Good news, you aren’t alone.  The challenge, it takes effort to overcome these unknowns. 

Here’s a little food for thought:  There are two major flaws in what and how we’re selling the future to our young adults.  (A few more than two really, but I’ll just share these two or you won’t read the entire article.  We can revisit the others later…) 

This first flaw is setting the expectation that with a college degree you will graduate and get a well-paying job, maybe one that you like.  The reality is that your diploma may get you in the door for a few interviews you wouldn’t otherwise get, may even get you hired somewhere when all else is equal, but it provides no guarantee of success, longevity, a baseline of income, or much of anything else.  It does, however, provide an opportunity for you to get to know a bit about yourself – how you learn, who you interact well with, who you don’t, how you respond to authority, the types of people you attract – all of which are very valuable outcomes.  A recent grad shared that her college experience, and life to this point, had felt like a long conveyor belt.  She had ridden along, moved from one thing to the next, but after college, the belt ended, there was a grand drop and neither landing spot nor new belt in sight; just a free fall to a concrete slab.  That’s pretty scary!  How are we preparing students for what’s next?  When do they learn how to add value to an organization?  And if they do happen to land that first “real” job and start making a little money, how do we prepare them for the money decisions.  We don’t, and therein lies flaw #2.

In over 25 years of formal education, not once did anyone broach the subject of making intelligent financial decisions.  Not once did someone sit me down and explain a few core principles or truths that would have greatly impacted my early financial decision making.  And what’s interesting is that it’s no secret that this is a problem; there are thousands of “financial literacy” programs out there designed to solve this, but they obviously aren’t working.  Why aren’t they working?  I have a few theories:

One: People would rather talk about politics, religion, or sex than have a conversation about their money, what they make, challenges, or debt.  These are taboo subjects that we just don’t talk about.  I think this will change in an upcoming generation that values transparency, but we have a ways to go.

Two: Financial concepts are boring, dull, and rarely seem to apply to real life.  If I ask a room full of people how many would like me to teach them how to read and understand a tax return and the US tax code, I don’t get a lot of hands in the air.

Three: When you first start making money and need advice the most, the only advisors you have access to are those that are new in the business and lack the experience to give good advice.  Most of these folks are trained by financial institutions, which are product manufacturing companies, on how to sell their products.  The products are not necessarily bad, but for the most part advisors are paid to sell stuff, not provide sage financial advice. 

So, if no one will talk about money, those that do we don’t want to listen to because it’s not exciting, and the ones that we think we can trust for advice are really just commissioned sales people, what the heck are you supposed to do? 

What if… 

What if it’s really not all that complicated?  What there are just a few core principles that you can follow without having to have a degree in finance?  What if you didn’t have to do the math on the number of lattes you buy each week or stop doing fun things to be able to pay off your debt?  What if you could tap into the things that have been working for wealth creators for years? 

None of this is complicated, but it does require discipline.  None of this is rocket science, but it does require you to start.  One of the grand lessons you’ll learn is that most things in life are not about a destination where you’ll arrive; it’s about the journey you’re on today.  If you want to become wealthy, you need to learn the principles that wealthy people live by and begin living them today.

So I’ve already written more than you’ll read, and you don’t even have any of the solutions.  Want to hear them?  Great!  I’ll be sharing several of these core principles in future articles and upcoming webcasts.  Want to get in the loop?  Simple, follow our community at

www.MasteryInitiative.com

or 

Mastery Initiative on Facebook

Final thought: 

Is there anything you know now that you wish you’d known ten years ago?  Is there?  I bet there is.  (If not, you’ve wasted ten years of your life learning nothing – ha!)  Life truly is short, and decisions do matter.  As anyone approaching the latter half of life will attest to, your greatest asset when you’re young is time.  It also becomes a bit of a liability as you age.  If you’re not leveraging your greatest asset, you’re missing the boat.  Like the rest of us, you’ll come to your senses some number of years from now and wish you’d paid more attention.  Well, now is your chance to pay attention.  Learn a few basics, your small decisions will bear fruit.  I know mine would have!     

Cheers!

2 Truths and 7 Tips about the Financial Industry

The world of financial advice and investment management is a wildly misunderstood industry.  Many of us are under the assumption that their role is to help you make money and create wealth.  Sorry to break it to you, but it’s just not the case.  It took me over a decade of being undercover in the industry to even recognize what it’s really about, and another decade to figure out what to do about it.  (Yes, I’m slow.)  Maybe these cliff notes will come in handy for one or two of you. 

In the early stages of my career in financial services, I was fortunate to move quickly through a large banking institution into their Private Bank where we specialized in working with the bank’s highest net worth clients.  Sitting across from someone with ten, twenty, or over 100 million dollars, I was insatiably curious to understand how they got there.  Saving a portion of my paycheck, contributing to my 401(k), even with the company match and exceptional investment returns, I couldn’t make the math work to my achieving anything close to their levels of financial success.  So, to satisfy my curiosity, I began asking questions.  It didn’t take long to realize that their path was vastly different from the one I was on. 

Within a few months, it became obvious that with very few exceptions, all of our financially successful clients had accumulated their wealth in one of three ways. 

1. They had built, owned, and monetized Businesses
2. Many had found success through Real Estate, or
3. They had Inherited from previous generations. 

Then I began to observe the work we were doing with clients.  We were supposed to be the most qualified financial experts, working at the most qualified institution, with the most qualified clients.  Yet we did essentially nothing to help business owners grow, monetize, or successfully exit their businesses.  For real estate investors, we would occasionally lend them money if they didn’t really need it; but once they did, or they had accumulated too many properties, we quickly lost interest.  And for those that had inherited their wealth, what I saw was money transferring to kids, kids blowing the money and ultimately hating each other.  I couldn’t help but wonder what business we were actually in; it clearly wasn’t to help families continue to create wealth.  My conclusion?

Financial and investment advisors aren’t in the business of helping families create or accumulate wealth at all;they simply move assets you’ve made out of accumulation vehicles and spread it around to protect long term purchasing power.   

Lots of fancy math is used to show statistical evidence of risk reduction, and as long as your life and the rest of the world operates within the bell curve, there’s a statistically decent chance you’ll end up somewhere close to what was projected.  Not many times have I seen that happen, but nonetheless, it’s possible.

My second awakening came when I began looking at what made clients actually implement our recommendations.  We created impressive spreadsheets, graphs, statistics, and all sorts of complex math to show them how they could get better returns, take less risk, out-perform their friends, save on taxes, and who knows what else to improve their financial positions.  However, it seemed that more often than not, the couples we met with wanted to go home and think about it; code for thanks, but no thanks.  What was this all about?

 

A business coach at the time challenged me to try something new with my next client engagement.  Meeting with a prospective family, I stood in front of a large flip chart with a Sharpie pen and asked them what was most important to them in life.  They looked at me blankly, I smiled back.  It was awkward for a few moments, they looked at each other, then began speaking.  As they spoke, I wrote on the chart.  They shared what was most important, we prioritized them from most to least important, and discussed why each of these were on the list.  After about 30 minutes, we had a comprehensive list, all of seven items.  As we reviewed each item, something became immediately clear.  Not once did they mention the standard deviations, alpha, beta, outperforming a benchmark, rates on loans, or anything else I typically talked about all day.  On their list, they had shared about their family, their faith, stability, giving, relationships, making a difference, ensuring their kids wouldn’t be entitled; and things vastly more important than money.  It was at this moment that it became clear to me that money and financial resources were merely the tool, the engine that could be designed to propel their life goals, dreams, visions, and ultimate purpose.  My role changed that day. 

Over the coming months, I had more meaningful conversations with individuals, couples, and families than in the entire previous decade.  They were sharing things with me about their business challenges, issues with heirs taking over responsibility of family real estate holdings, not enjoying the philanthropic work they were doing, their dreams, fears, visions, and what kept them awake at night.  These families were less concerned about the return on their investments, and far more concerned about the impact their success would have on their kids, their relationships, and their communities.  There was an itch that no financial solution, advisor, or spreadsheet had solved.  As families opened up, my ability to serve them grew.  When the solutions designed were aligned with what was most important, they also began to take action on the recommendations.  With the added opportunity to serve, I needed access to a team that could address their business needs, assist in aligning family interests, and breathe life and clarity into their dreams. 

As I presented my findings and new engagement process to the leadership team at the bank, I quickly became aware of another disappointing reality of the financial industry.  It was made very clear that the extra several hours I was spending with new clients getting to know them were not adding shareholder value.  (At the time, every activity we did had to be accounted for as a metric of “shareholder value added – a topic for another article.”)  I was instructed that if a product was not sold by our second meeting, my process was ineffective.  Silly and naïve little me; I was under the impression we were in the business of designing financial solutions to improve peoples’ lives.  It was at that moment that the financial industry became extremely simple, and clearly not about the families we were meeting with. 

Financial institutions are product manufacturing companies.Financial advisors are distribution channels of these products.

   

Nothing complex about it; couldn’t be more simple.  And once we all realize this simple truth, getting financial advice becomes much easier.  You simply need to understand the motivations of the sales person across from you. 

Now, are all advisors and firms built this way?  Of course not.  There are many that d0 approach their clients from a client-centric, solution-based perspective.  However, in most cases, it seems it takes years for these advisors to get to this point in their careers.  Nearly everyone that enters the financial industry begins their careers with an institution – a bank, insurance company, wire house, brokerage firm, investment company, etc.  The inherent reality is that they are thereby trained by manufacturing companies to sell their products.  There’s no real problem with this; that’s how the industry earns profit and continues to create and deliver products, many of which are great for investors.  However, as a consumer, it’s imperative you understand that it’s not about you. 

For me, I left the institutional world shortly after my awakening and assembled a team to be able to effectively engage families looking to continue creating wealth, live with greater impact, and maintain family continuity throughout the process.  It’s been a process to re-educate the world on this strange new perspective, but the results couldn’t be more rewarding for our team and the families we serve. 

I expect this isn’t any break-through knowledge for many of you, but perhaps puts what you knew or suspected into words.  So, what can you do about it?  What do you need to know? 

Here are a few tips I have shared with others that may come in handy:

7 Tips on Finding your Financial Advisor

1. Be clear on your purpose for hiring an advisor in the first place.  What are you really looking for?  What’s missing in your life that you need fulfilled?  Do you simply have a rock in your shoe that needs to be removed, or are you looking for someone to assess how the rock got in there in the first place?   
2. Find someone that is intently curious about you, you family, your dreams, your fears, and understands how your financial resources play into this. 
3. Look for someone that asks the right questions.  Coming up with intelligent sounding answers is easy.  Coming up with the right answers is a direct result of asking the right questions.  Most of the time, the right question is “why?”
4. Look for someone that can and has effectively partnered with other advisors in their own and other industries.  Comprehensive solutions rarely come entirely from a single discipline.  Your real estate solution will affect your tax and legal strategies.  Your investments may need to be positioned to off-set the risk of your closely-held business with exposure to a specific sector. 
5. Seek a leading advisor that has a broad knowledge and mastery of multiple disciplines so they can identify the overall risks and opportunities.  Supplement them with technicians and experts in individual fields.  You shouldn’t be on your own to determine how it all fits together.
6. Have absolute clarity on how everyone gets compensated.  To the extent you can, ensure that solutions are completely objective and not influenced by the need to sell a product. 
7. If family is important to you, look for an advisor or team that asks about and understands the implications of your wealth on your kids and other family members.  The natural outcome of wealth in families is conflict and destruction, but it doesn’t have to be that way. 

There are, of course, plenty of other things to look for, but these seem to be ones that are less often discussed.  The world of financial, estate, tax, real estate, investment, and insurance planning is not a simple one.  We’re never really taught these things in school, and even if we were, most would rather have a root canal than sit in a class on the US tax code, calculating bond yields, or transferring risk through insurance.  So in all fairness, it’s a tough world to navigate, and has massive implications.  Making intelligent financial decisions can have a significant impact on life, relationships, and overall well-being.   Don’t take it too lightly, surround yourself with the right people with the right perspective.  In doing so, you’ll find your way to financial confidence and overall peace of mind.  The good news is that there are nerds like us that cherish relationships and love this stuff!  Cheers!

Inheritance - a Blessing or a Curse?

While Susan sat in the waiting room to meet with her parents’ financial advisors, she was nervous, excited, sad, curious, overwhelmed, and anxious, all at the same time.  She knew these guys had worked with her parents for a very long time; Mom and Dad spoke very highly of them, but she had never met them in person.  Neither had her brother or sister. 

Receiving the call that her father had passed away, just four months after losing her Mom, had come as a pretty big shock.  He had seemed so healthy, so vibrant, so alive just a month ago, and now he was gone.  When she was informed that she had been selected as the successor trustee of the estate, the person that would have to “handle all of the affairs,” she became even more overwhelmed.  She knew Mom and Dad had done pretty well in their years, saved well, planned, invested, even owned a few properties.  But she had no idea where to begin to get everything figured out and finalized. 

Both her brother and sister had been a little surprised when they found that Susan had been selected to manage the estate.  In fact, they didn’t just seemed surprised; they seemed a little skeptical.  Susan had been the one to care for Mom in her final year.  What did she know that they didn’t?  Had she had some input in determining who would get what?  Did she encourage Mom and Dad to put her in charge so she could be in control? 

As Susan waited to meet with these unknown financial people, her nerves began to kick in.  Would she even know what they were talking about?  Should she trust them? Would they be able to answer the flood of questions that filled her mind every night as she lay awake in bed?

While Susan couldn’t anticipate what would happen in the next two hours meeting with her parent’s financial advisors, she had zero clue what would happen in the coming months as she attempted to settle her parent’s estate.  She had no idea of the complexity in understanding the legal documents that defined what she could and couldn’t do.  She had no idea what she would do with the funds she would inherit.  But most importantly, she was completely unaware of the strain that would be placed on her relationships with her brother and sister.

Even though they had always gotten along well, over the coming months, making financial decisions together, discussing who would get which assets and personal possessions, what was fair, what would be kept, what would be sold, what would Mom and Dad have wanted – every one of these decisions seemed to end in disagreement.  In the coming months, their relationships would fracture in ways that would become irreparable.  In the coming years, each of them would have challenges maintaining the wealth they had inherited. 

Susan and her family were not a rare unfortunate situation.  They were just like 90% of the families in the world.  When wealth transfers from one generation to the next, the odds of failure of maintaining the wealth, and the probability that family relationships will fracture, are astounding.  If you’re losing sleep when your portfolio declines by 9%, try considering addressing the 70-90% risk that could deplete by 100%!  To make it a little worse, while the loss of assets is certainly disappointing, the destruction of relationships is tragedy.  Siblings no longer talk to each other, in-laws become out-laws, and attorneys seem to end up benefiting the most. 

What’s interesting is that we all know this happens.  If this hasn’t happened in our own family, we know someone who has had a negative experience with an inheritance.  The money was squandered, the kids now hate each other.  We don’t think this is possible with our family, but not only is it possible; it’s likely. 

Even more interesting is that we do nothing effective to solve this issue.  The problem here is that when asked, most families think the cause of the fracture will be bad investment decisions, a flawed or non-existent trust or estate plan, economic downturn, taxes, or a myriad of other technical or planning breakdowns.  Examining the characteristics of families that have failed in transfer, and those that have been successful, it’s quickly learned that these are rarely the issue.  In fact, in a study of 3,250 families over several generations, less than 5% of the time was the family failure attributed to poor estate planning, taxes, or any of the other technical solutions that we all focus on.  That doesn’t mean we shouldn’t address those aspects of our plan, in fact one could argue that it means that most legal and financial advisors do a pretty good job of preparing our assets for transfer.  However, here’s the rub – the problem isn’t the positioning of your assets; it’s the preparation of your heirs. 

What are you doing to prepare your heirs for the decisions they’ll face?  How often are they making joint financial decisions where they share in the benefits or consequences of the outcomes?  Do your heirs have a shared purpose or vision of the future that will help them get through challenging situations?  Would they know how to evaluate and select qualified advisors?  Can they communicate effectively in emotionally charged situations (like when Mom and Dad die)?  Has your plan, and the reason for your decisions been communicated to them? 

Overcoming the issues associated with the transfer of wealth is not rocket science.  Many solutions are very simple and can be implemented by a family on their own.  Others require facilitation or coordination.  Regardless of how you approach or solve the issues, addressing them and getting started will make the world of difference.  For families looking to protect your hard work and earned wealth, seek understanding of the risks that you face.  Evaluate with honesty your own family situation.  If a better outcome is important to you, seek assistance from those that can help. 

This article was originally written by Ryan Ponsford for TE Wealth, a financial advisory from in Canada that invited him to speak to their top clients throughout Vancouver, Calgary, Toronto, and Montreal.

Ryan Ponsford is the Founder and Principal of Akili Capital, a firm that partners with families and their advisors to provide financial confidence, peace of mind, and family continuity over multiple generations. He is a sought after speaker, thought provoker, and facilitator at events and family retreats across the United States and Canada.  Ryan can be reached by email at rponsford@akilicap.com

Sunday Worship is Practice

What is the worship part of the Sunday morning service all about?  The songs, the music, the praises; why do we do that?  For many churches, it’s getting prepared for the service, the message, the word that will be spoken.  Worship is designed to prepare our hearts; open ourselves to God.  I don’t disagree with that, and I think there’s more.  As usual, let me disclose that while I very actively seek understanding and relationship with God and Christ, I’m far from a perfect, or even a very good Christian.  I do my best, but most of the time I screw up.  That said, I have tremendous curiosity, ponder with regularity, and occasionally share perspectives that others find useful.  Maybe this is one of them…

The purpose of worship is to create closeness to God.  It’s more difficult and more useful to be able to do that outside the church than inside.

As it turns out, there are many times in life when being close to God can be a really really good thing.  One of those times is certainly when we’re in church, preparing ourselves to hear a message from the Word of God.  But I think getting close to God when we’re in church is not all that difficult.  We’re surrounded by a bunch of other people doing the same thing, reinforcing our odd behavior, and we’ve come prepared.  It’s a pretty safe place to let it go (in the wise words of Queen Elsa).  It’s when we’re out in the world, going through life that closeness to God can be difficult, and really come in handy.  For this, I believe that Sunday morning worship is merely practice for when we’re really going to need to know how to worship. 

On any given week, or any given day, we’re going to go through some nonsense.  We’re going to have hard times, get bad news, feel betrayed, depressed, anxious, nervous, sad, ripped off, shut out, cut-off on the freeway, and who knows how many other bad feelings.  These are the times when knowing how to worship can make all the difference.  Being able to let lose in song, praising a mighty living God, singing out to a heavenly Dad will provide that peace that defies understanding. 

Worship and praise is an act of magnifying God.  Magnification makes things bigger.  A big God can solve problems.  When we get stressed out, anxious, worried, it’s usually because we’ve lost perspective on the size and ability of our God.  Big problems, little God; might as well not have him around.  When we realize that God is big, when we magnify Him, put Him into perspective, we realize the insignificance of our problems relative to His capabilities.  We’re taking about a God that has power to heal sick people, raise people from the dead, not to mention create this universe and all of its infinitely perfect mystery.  Do you really think this God can’t solve any one of our issues? 

He can; He already has.  

What’s your go-to worship song?  I always have a few spinning in my head – some upbeat, some more lamenting.  Tomorrow, driving in your car, give it a shot.  If you’re just stoked on life and everything around you, sing a praise song.  Thank God for blessing you.  If you’re facing challenges, beat down, tired, sing a praise song.  Get close to God, open up your soul a bit.  If there’s a void, He’ll fill it.  And believe me, it’s far better to have Him fill in than whatever the world will put inside you. 

This Sunday, make your worship service about practice.  Practice getting close to God so that next week when you’re out there on your own, you’ll be able to recreate the experience.  You’ll be happy you did.  

Losing a Spouse Sucks

Suck of Reality #9 

The Loss of a Spouse

I’ll provide warning right out of the gate that this writing will not be enjoyable to read.  This may trigger thoughts and emotions that you’d rather not deal with.  However, what I’ll share here is reality.  There are some things about reality that really suck.  Losing a spouse is one of those things.  I'd like to think it won't happen, it never happens, my wife and I, along with those I know and love will never have to face this reality.  However, it's just not true.  Maybe because as I age I see more, or know more people, but I've witnessed this on multiple occasions just in the last few months.  Face reality for a few moments.  You may not have to deal with this for many years (or never), but someone will.  If not you, it will be your spouse.  If you're convinced that you'll both live forever, die together, or be raptured, someone you know will face this reality; perhaps you can help them... 

Do you remember the song from Snow White, “Some day my prince will come…”?  We often fantasize about being swept away by romance and love, Prince Charming, a beautiful Princess.  Why don’t we ever consider what could happen if our prince or princess goes down in the proverbial airplane?  Granted, it’s not a very pleasant thought, and I guess part of the point of fantasy is to escape the grim of reality, but let’s face it, we’re not immortal; even Prince Charming will die.  And while men are not immune from losing their spouse, probability favors wives’ survival at a rate of about 4 to 1.  In addition, although a generalization, wives, more so than husbands, tend to be financially unprepared for the loss of their spouse.  Most of us don’t like to talk about death, and we also don’t like to talk about money, which makes the circumstance significantly worse.  Did you know that being widowed ranks highest on the Stress Related Disease Scale?  Can you guess the second?  Divorce.  (Source: Holmes-Rahe Life Stress Inventory)  The loss of a spouse is a major issue that most of us will face one way or another.  It’s neither politics nor religion, let’s discuss it. 

What would you do?

Your phone rings in the middle of the night.  The caller on the other end has the burden of letting you know that your spouse is gone.  How would you react?  What would you do?  Think about it…  Where would you begin?  Who would you call?  Is the mere notion overwhelming?  Here begins the tsunami of questions and emotions…

            The next few weeks – a blur of sleepless nights, emotional days, decisions you’re not sure how to make, and people all around trying to “help” but having no idea how to do so.  How will this be communicated to your children?  What affect will this have on their lives?  What about the minutiae that now seems so unimportant – is the cable bill due?  Does the lawn need to be mowed?  What will I do with all these deviled eggs people keep bringing (a story behind that one!)?  Funeral arrangements will be made, people will cross the country to vow their love and support, then, shortly thereafter, the procession will leave town and the world will be silent.  Everything will be different.  The life you were accustomed to will be forever different.  One ending, another beginning…

  

The Widow’s Roadmap

When the news becomes official that you’re about to face the world without your spouse at your side, having specific action items at your finger tips will provide a significant reduction of stress.  Merely knowing where to begin and who to call, a few simple starting steps will help keep you from becoming derailed.  There's a ton more to share, but here are four initial thoughts...

1. Locate Your Life Preservers

In most cases, by the end of that dreaded phone call and for days, weeks, maybe months afterward, you’re in a poor position to make significant decisions.  Your first flotation device should be one or two close family members or friends.  Invite them to stay with you, or at least be physically around for the next week or two.  They ought to be emotionally stable individuals with a take-charge mindset.  Their responsibility will be that of your gatekeeper and task implementer.  They will answer all phone calls, doorbells, questions, and inquiries on your behalf.  They will help with funeral arrangements, ensure your bills are being paid on time, and will listen to your thoughts and fears.  In this early phase, you’ll review the wishes of your loved one for funeral and burial arrangements, and find a quiet time and place to jot down your thoughts for an obituary. 

As the dust begins to settle and the procession begins leaving town, you’ll want to begin contacting your Professional Life Preservers.  This may include the attorney who drafted your wills, trusts, and estate plan, your tax professional, or your financial advisor.  Hopefully, among these is at least one with whom you have a high level of trust that can guide you through the upcoming decisions that will need to be made.  And perhaps more importantly, he or she ought to be able to help you prioritize which decisions do not yet need to be made. 

Who are your personal life preservers?  Do you have professional life preservers?  These aren’t easy to come by; these people are of a unique skill set in the time of crisis.   

2. Manage through the Tsunami

When I first mentioned the dreaded phone call, did you consider how that would make you feel?  Was it overwhelming?  One surviving spouse we worked with described the number of questions and the amount of unknown as a tidal wave followed by a flood.  She had no idea where to begin, what to ask, what to do, who to turn to, and felt as though she were drowning.  The only thought she could come up with was, “losing your spouse really sucks!”  You get the feeling she’s right about that one?  She desperately needed a flotation device. 

In taking control of all the questions and tasks that seem to be at hand, we’ve found that a basic list and organization can go a long way.  All of the questions and tasks can be divided into one of three categories.  Immediate – Soon – Later.  Most things can fall into the “Later” category, especially any major or irreversible decision.  Unbalanced emotional states are not good ones for decision making.  When possible, decisions should be postponed until they need to be made. 

3. Acknowledge the Silence in the Middle of the Ocean

            Coping with your loss really begins once the funeral procession leaves town.  Your new life and identity will begin to come forth, and it’s time for you to take some control over what that will be.  Again, sorting through your questions, fears, and the unknown will help provide guidance.  Write out all of your fears and concerns.  Will you be lonely?  Will people view you differently without your spouse?  Will you be able to handle the decisions on your own?  What about your kids – will they be okay?  Who will help sort through your legal and financial decisions? 

            Similar to before, it’s now time to sort the list.  Determine which items can be controlled, which need to be worked through, and which may not be in your control, but should be monitored to ensure you maintain proper perspective.  Identify the threats and obstacles you expect to face – deal with the biggest threats first.  Will you be short on cash flow with the loss of income?  Not sure how next months bills will be paid, or in many cases – not even sure what bills are due?  Overcoming these fears may again be helped with professional advisors.  Coming from a financial background, I tend to help remove financial questions, obstacles and fears.  However, for most who have lost a spouse, the natural fear and questions revolve around whether you will be alone for the rest of your life.  There is no shame in speaking with professional counselors and therapists about these challenges.  In fact, often the point of a professional is that they’ve already been down your path with others.  They know what lies ahead.  They know the roadblocks, obstacles, and hidden waterfalls.  Why not gain from their experience?    

4. Chart Your New Course

            

As was mentioned before, every end constitutes a new beginning.  Losing a spouse will change your life.  It will alter your trajectory.  It will affect who you are, how you act, how you view the world and relationships.  It’s an opportunity to repaint the cover on the puzzle box.  Reassemble the pieces, and determine your new purpose.  Ask yourself several questions – Values: What’s important to you about life?  Vision: Looking back, seven years from now, what will that picture look like?  Twenty years from now?  Goals: What will have to happen for you to achieve these visions? 

Now, assemble your trusted crew, raise your anchor, and venture from the harbor…

An Ounce of Prevention

            Some may be curious if there are steps that ought to be taken to better prepare for the loss of a spouse.  Of course there are!  There is much preparation that ought to be done from a more technical and legal perspective – know where income will come from, have an estate plan, have life insurance to provide immediate cash, have a buy-sell agreement in place for your business, and many many more!  I’ll share that the most painful losses seem to occur when a young spouse dies unexpectedly.  Please, oh please have some life insurance in place.  Term insurance is inexpensive; make sure you have enough that your spouse will be okay.  Having to stress about financial obligations is dreadful, unfair, and avoidable. 

Lastly, an entire book could be written on the importance of communicating your financial situation with your spouse (and many fine ones have).  Most relationships have a division of labor such that one person handles the finances.  If that person is gone tomorrow, the survivor is in a bind.  Who do we owe money to?  What sources of income will continue?  I’m pretty sure we have life insurance, but I have no idea who it’s with, how much it’s for, how to get it, or what to do with it once I have it.  What about the business?  Often the spouse that made the financial decisions also maintained the relationship with the advisors.  What if they’re not a good fit for the personality of the survivor?  Communicate with your spouse.  Ensure there is a roadmap in place if one of you receives that late night call.  Know what you’ll do next.  Know who you can trust to guide you through.  You may think this could never happen to you, and statistics confirm that it likely won’t.  However, if there’s something I’ve learned in life, statistics lie.  Probability is great on a large scale with countless iterations where only the average matters.  But if the individual matters, probability is out the window when you’re the one affected. 

One of the highest compliments I’ve ever received came from a client for whom I’ve really only done a minor amount of planning.  When I asked him why he continued to work with me, he responded that I was in his life because if anything ever happened to him, he knew that I had the wisdom, resources, and compassion to care for his family.  His family was given instruction that if anything happens to him, there’s a red file in his drawer.  Inside the file are a few instructions and my contact information.  Truth be told, it kinda freaked me out when he shared this.  It’s a pretty big responsibility.  But when I get that call, I’ll show up and manage through the crisis.  Evaluating what actions need to be taken, what resources are required, and ensuring the family remains connected.  There could be no greater use of my God given gifts.  There could be no greater honor than to serve a family in this capacity.  I don’t share this to imply my greatness; I’m sure there are others far more qualified for this role than I am.  However, you ought to have someone in your red file with the right skill-set, demeanor, and whom you implicitly trust. 

Don’t lay awake another night unsure about what would happen to your family if you don’t come home tomorrow.  Don’t lie awake wondering how you’ll cope if your spouse doesn’t return.  These things happen.  Princes and Princesses die.  Whose contact info will be in your red file?  Who will be there to help calm the storm?  If you’re not sure, it’s time you made a little effort.  If not for you, for your spouse.  In the words of Denis Waitley, “Expect the best, plan for the worst, and prepare to be surprised.”

RyanPonsford is the Founder and Principal of Akili Capital, a consulting firm to families seeking financial confidence and peace of mind.  In addition to maintaining client relationships, he is a sought after speaker, writer, and educator on subjects of wealth creation and the impact of wealth on family and communities.  Philanthropic efforts supported through www.MainStreetPhilanthropy.org. Comments can be sent to rponsford@akilicap.com.

17 things you ought to know about your finances

17-Things You Need to Know About the

Financial Industry and Your Wealth

After nearly 20-years of providing financial guidance to families, I've picked up a few things along the way.  While each of these comes with extensive stories and experiences, for now I'll just share the bullets.  Perhaps one day I'll elaborate; in the meantime, ask questions if you have them... 

1. Financial Institutions manufacture products.  Financial Advisors are the distribution channel for these products.

2. A diversified portfolio is intended to protect your future purchasing power, not accumulate vast amounts of wealth.  Most wealth is accumulated through monetizing a business, real estate, or inheritance. 

3. During your Accumulation years, your ability to earn income is your most valuable assets.  Protect it.

4. During Distribution years, your assets are your ticket to reliable income.  Protect them. 

5. Losing a spouse really sucks; own plenty of life insurance. 

6. You can transfer nearly any risk if you’re willing to pay the premium.

7. Statistics and iterations of possible outcomes work well if you’re predicting for a million people.  Unfortunately, your single instance is the only one that will matter.    

8. Most Financial Advisors medicate symptoms.  Good ones diagnose the cause.  Don’t confuse the drug dealers with the physicians. 

9. Taxes matter.  Understand the basics of the system and how it works.  (Or doesn’t)

10. You have rights to things, but own nothing.  You are only responsible for the temporary management of stuff. 

11. Always seek a balance of flexibility and certainty.

12.  Debt stinks and limits your flexibility when opportunities arise to do what you should be doing.

13. Having a financial plan is not a destination or achievement.  Having a financial direction and system for decision making is. 

14. Transferring assets is easy science.  Transferring values, roles and responsibilities, and positioning your family to get along, is masterful art.

15. Losing your spouse or parent and having to pick up the pieces sucks.  Not knowing where to look for the pieces, or if there are any pieces is much much worse.   

16. Neither you nor your financial advisor can predict the future. 

17. When considering who will oversee your affairs when you’re gone or unable, consider the person with the best peace-making skills as opposed to the one with the most financial acumen.  

I could add many many more; hope these are helpful or inspire a little thought!  

Cheers ~ RyP

Gluttony or Gratitude?

When holidays rolls around, I always fear that each year we move farther from the true purpose of the day, replacing it with more self-oriented indulgences.  I suppose it’s human nature to make things revolve around ourselves, but embedded in each of these holidays are wonderful teaching moments for our families, our communities, and especially our children. 

One of the major risks I see in Thanksgiving is that it becomes more about the food than it does the purpose.  Food is wonderful; we need food.  Food is a great source of comfort and conversation.  It’s also one of the great distractors from dealing with real issues.  We use food to make us feel better.  We congregate around the kitchen where the food is being prepared and we talk about haw tasty it is.  There’s nothing wrong with this.  There’s nothing wrong with taking a single day of the year to prepare a feast in which we celebrate our many blessings.  We have all been incredibly blessed to living in America, a country overflowing with milk and honey.  Let’s not make is about the milk and honey, let’s make it about the blessing. 

From the time we are kids, we are taught to say “thank you.”  Why is this?  Why is saying please and thank you part of what we consider to be a reflection of good manners?  Who invented manners anyway?  In doing a little research, I found myself down a rabbit hole of discovery around manners verses etiquette.  What I concluded was that etiquette is an outward, learned language that was put in place for us to all get along better (and perhaps to separate the nobles from the hoi polloi back in the 1600s).  Manners, while also learned, are more of a reflection of inner self.  Saying “thank you” is a reflection of your genuine gratitude for having received something.  Teaching your kids to say “thank you” is a seed planted to instill them with a heart of gratitude. 

What is gratitude?  Simplified, gratitude is an appreciation for having received something unexpected or undeserved.  From the Latin word gratia, we also get the word grace, which means an unearned gift.  In my peanut-sized brain, I’ve come to believe three important things about Gratitude.  Gratitude is essential to a fulfilling life, gratitude is voluntary, and gratitude can change our society, our culture; our people. 

Since the birth of mankind, since we began to ask questions, since philosophies and religions have been developed, gratitude has been intertwined.  From ancient writings, to current empirical studies, there is irrefutable evidence that being grateful leads to better health, happiness, spiritual well-being, and even financial well-being.  Since it’s based on an expression of an unearned gift, there’s a humility that comes with gratitude.  Who doesn’t want better health, happiness, and overall well-being?  So if there’s clear evidence as to the benefits of gratitude, what’s keeps us from being grateful? 

For some reason, it seems to me that our society and culture is constantly reminding us that we deserve more.  We’re constantly being reminded of our individual greatness and abilities.  I don’t know about each of you, but I’m a pretty flawed individual.  I make stupid decisions, say the wrong things, don’t exercise enough, take selfish action, and have all sorts of traits that could use vast improvement.  And in spite of my many many flaws, I live a wonderfully blessed life.  I have three healthy children, live in arguably one of the nicest places on earth, have an incredible wife, was raised in a fantastic family, none of which I’ve earned or deserved.  If we feel we deserve everything we’ve been given, where is the place for gratitude?  When will we reflect on and appreciate the grace we’ve been shown?  With the promotion of self-orientation and personal greatness, I fear that gratitude is being shoved aside.  Please don’t let this happen in your life, or in the lives of those around you.  There are too many benefits to gratitude that you don’t want to miss. 

When we get our families, our communities, our country, and our society to begin to express gratitude, we have the power to create the type of world we want for our kids and grandkids.  With gratitude comes generosity, humility, compassion, and selflessness.  Can you argue that these are bad things?  Don’t you think a culture that embodies these characteristics is one in which we will all be happier, healthier, and more spiritually fulfilled?  This all starts with gratitude.  Consider this when teaching your kids to say thank you; you are planting the seed of gratitude. 

Thanksgiving has always been one of my favorite holidays.  For me, I was incredibly blessed to be born into a wonderful family.  We’re far from perfect; we each have our defects, but we genuinely love each other without conditions.  For us, Thanksgiving has been a day that we all get to be together, break bread, talk, sing songs, then fall asleep on the floor all over the house.  I did nothing to deserve being born into this family, it was a gift for which I’ll be eternally grateful.

Today, on Thanksgiving, let’s change the perspective a bit.  Rather than getting out the laundry list of things we’re thankful for, let’s think of what we’re grateful for.  What are the gifts you’ve been given that you didn’t necessarily deserve?  Did you deserve your family?  Your kids?  Your health or wealth?  Do you think these are the result of your coolness?  The list might be similar, but the perspective is different.  

For those of us with a Christ-centered perspective, do we deserve the ultimate gift, the gift of salvation, to get into Heaven, to have life in eternity?  Are we blameless and without sin?  I’m not.  But you and I have both been given a gift.  We were given the gift that someone else was blameless, without sin, and was qualified to get into Heaven.  And He took the blame for us.  We are guilty as accused, but He offered to take the punishment, the capital punishment, that we might be set free.  The fact is that He already did this.  It’s done.  He paid your debt.  All you have to do is say “thank you.”  All you have to do is be grateful. 

May this Thanksgiving, and the year to come, be a wonderful blessing to you and your family!  I’m grateful you took the time you view this snapshot into my mind! 

In the wise words of Grandma O, 

"Gobble Gobble!"