May 30, 2025 • 34 mins
Episode Summary:
Laura Rehbein shares her journey from becoming head of household at age 12 in rural Michigan to building a successful financial advisory practice over nearly three decades. Her book "Fearless Finance" addresses the anxiety that highly educated, successful professionals feel about their finances despite their achievements. Laura reveals why knowledge replaces fear and how proper planning can help clients "face everything and rise" rather than "forget everything and run." She discusses practical strategies like productive pessimism, the bucket approach to retirement income, and often-overlooked risks that can derail investment plans.
About the Guest:
- Laura Rehbein owns Impavid Wealth and has spent nearly 30 years in financial advising. Growing up in rural Michigan farming country, she became responsible for her household at age 12. She entered the financial industry after recognizing a need for more women advisors.
Key Concepts Explained:
Fearless vs. Reckless: Laura defines fearless as making informed decisions with knowledge and clarity, not reckless choices. Her approach focuses on empowering clients with understanding rather than eliminating all fear.
"Throw It in a Pile" Strategy: Laura encourages overwhelmed clients to gather all financial documents without organizing them perfectly. She compares this to hiring a personal stylist who sorts through your closet - sometimes you need an objective professional.
Productive Pessimism: This planning approach involves overestimating expenses, underestimating investment returns, and planning for longer lifespans. Rather than being negative, it creates a buffer that helps ensure money lasts throughout retirement.
"Bad Math": Laura's term for overly optimistic financial thinking, like believing you can retire by cutting out Starbucks or that a $100,000 inheritance solves all retirement needs. It occurs when people avoid doing real calculations.
Bucket Strategy: Laura structures retirement assets in three buckets: 12-24 months of expenses in cash, 3-6 years in medium-risk investments, and the remainder in growth investments. This provides short-term security while maintaining long-term growth potential.
Overlooked Financial Risks:
Sequence of Returns Risk: Two identical retirees can have vastly different outcomes depending on whether they retire at the beginning of a bull or bear market. Early losses can devastate portfolios even if long-term returns average out.
Healthcare and Long-Term Care: Laura shares stories of clients facing unexpected healthcare costs that required rapid plan adjustments, emphasizing the importance of addressing these risks proactively.
Modern Estate Planning Considerations:
Digital Assets: Beyond cryptocurrency and online accounts, this includes cloud-stored photos, social media profiles, and email accounts. Some platforms delete accounts upon notification of death, potentially losing family memories.
Pet Trusts: Laura emphasizes that verbal promises to care for pets often fail due to changing circumstances. Pet trusts provide funding and assign responsibility for animal care, preventing beloved pets from ending up in shelters.
Practical Takeaways:
Laura emphasizes that financial planning requires ongoing adjustments as life changes. Whether facing health crises, remarriage, or unexpected events, having a trusted advisor helps navigate transitions while keeping long-term goals on track.
Connect with Laura:
Email: impavidwealthadvisors@ampf.com | Book: "Fearless Finance"
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
What if there was a way to eliminate the financial
anxiety that keeps you awake atnight?
That's exactly what our guestpromises in her new book,
Fearless Finance by Laura Rabine.
Drawing from her uniqueexperience of becoming head of
household at just 12 years old,Laura has spent 30 years proving
that true financialfearlessness comes not from
(00:22):
knowing it all, but from havingclarity about what really
matters.
In today's interview, sheexplains why most people are
doing what she describes as badmath with their retirement
planning and how to create whatshe calls a retirement paycheck
(00:45):
that actually works.
Laura Rabine, how are you doingtoday?
I'm fabulous.
How are you so very excited tohave this conversation with you
today?
Awesome.
So we'll be talking mostlyabout your new book, Fearless
Finance, and, as we do so,though, I'd just love to have
(01:05):
our audience have a chance toget to know you.
My understanding is that youbecame the head of your
household at age 12.
How did that shape your view ofmoney and responsibility.
Speaker 2 (01:14):
I did grow up in rural Michigan so I saw a lot of
families that I was close toand peers in my school things
like that that were strugglingin various ways.
It wasn't a wealthy part of thecountry, it was farming country
, so I knew the struggles of myhousehold, but I saw others and
it truly puts the definition onmoney can't buy happiness but,
(01:34):
again, it can put that roof overyour head and food on your
table and if you have that thenyou can build from there and so,
having the fearlessness andhaving removing the anxiety over
your financial situation, youcan build the building blocks
and it's just a little bitdifferent background than what
other people have experienced,just because of growing up where
I grew up and in thecircumstances that I did.
Speaker 1 (01:56):
That's interesting.
Here you are.
You've been in the industry forseveral decades and you are the
owner of Impavid Wealth.
Looking back from that12-year-old version of yourself
to the current version ofyourself, what does fearless
mean to you, when it comeseither to your own finances or
how you help guide your clientsand perhaps, by extension, your
book that you just wrote?
Speaker 2 (02:16):
Fearless to me isn't making reckless decisions about
your situation.
It's you, look at it.
Knowledge replaces fear and itcan empower you.
Do you know that old sayingabout fear?
It has two meanings Forgeteverything and run, face
everything and rise.
Here for clients that work withus at Impavel Wealth Advisors,
we want people to have theknowledge and clarity over the
situation where they can faceeverything and rise, and we want
(02:37):
to give them the knowledge onwhere they stand in terms of
what they want to see happen.
Speaker 1 (02:42):
That's awesome.
Speaker 2 (02:49):
When did you decide that financial advising was your
calling?
I decided when I was living inNaples.
I was in a career that I reallyjust didn't like and wasn't
happy with and needed to figurewhat was I going to do next.
And living in Naples, florida,there were not a lot of large
companies or big places that hadlots of jobs and lots of
opportunities, so it's like Ihad to create something myself,
and back in the day, financialadvisors would do their seminars
and that's how they would getnew clients, and they would put
(03:11):
an ad in the Sunday paper cometo my seminar and I'm retirement
or whatever.
Maybe I would see these ads,and almost all of them were
older white men, and as I lookedat them, I thought they're not
smarter than me.
Somebody has taught them, andif I can find somebody to teach
me, I can help people build afoundation to be fearless about
(03:31):
their finances, and I definitelysaw that there was a need for
females in the industry, and sothat's truly how it all started.
And almost 30 years later, hereI am.
Speaker 1 (03:39):
What led you to decide to write your book?
Speaker 2 (03:42):
It has been something that's been on my mind for a
number of years.
I wasn't sure if I could do it,quite frankly, because if you
think about it in my brain,writing a book as somebody who's
not an author is almost likesaying I want to run a marathon
(04:09):
but I have to train and gothrough all that.
To me it was the same type ofhurdle, and so I wasn't quite
sure I wanted to do it or Icould do it, and so I figured
why not take a stab at it?
And the reason behind wantingto write it was the fact that
over these decades, I can't tellyou the number of times that I
have sat across the table fromhighly educated, highly
professional and successfulpeople who are anxious about the
future.
They have worries, they haveconcerns, but they feel like
they should be an expert, andthey don't want to admit that
they have the concerns, thefears and the worries because
they feel like they should be anexpert.
Why do they feel like theyshould be an expert and they
don't want to admit that theyhave the concerns, the fears and
the worries?
Because they feel like theyshould be an expert.
Why do they feel like this 24seven?
(04:29):
We're getting bombarded withsnippets of things.
The market is up, the market isdown.
Did you hear about Bitcoin?
Did you hear about the latestcryptocurrency?
What does any of that matter toyour personal situation?
But it makes you have theperception that I should know it
all and I don't, and I wantedto create a book that had good
strategies and ideas forsomebody to be able to take that
(04:51):
and then look at their ownsituation and apply it.
Speaker 1 (04:54):
What's one of the biggest myths that the
successful professionals, thepeople that you work with day to
day, believe about theirfinances?
That your book helps to bustthat myth.
Speaker 2 (05:09):
That they need to know it all or they should know
it all, quite frankly, becauseof our constant bombardment of
financial things at us that theydon't need to know it all and
it's okay to reach out to aprofessional.
If you think about it, if youget sick and you don't feel well
, whatever it might be.
You might go on the internetand Google WebMD and get some
ideas.
You're still going to go to thedoctor If you don't know what
you're doing on your taxes or ifyou have a tax question, you
(05:30):
may look it up and get an ideaof what you should do in that
tax situation.
You're still going to call yourCPA and for some reason,
sometimes with a financiallandscape, people tend to think
I can do it myself and usuallythey're in the lane of
investments and that's whattheir sole focus is, and they
miss all the other lanes of thefinancial highway that impacts
their life and they don'trealize it.
(05:50):
So the myth is it's okay toreach out to a professional.
Speaker 1 (05:53):
Curiosity.
Do you find that it's harderfor men or for women to reach
out and ask for help?
Speaker 2 (05:57):
I don't find one more than the other.
What I do find people will cometo me because they have a,
typically the question do I haveenough?
And that's the question.
They come and they don'trealize what they don't know.
So, as we are able to look ateverything, they don't realize
all of these other risks thatare poking around in their
situation that they're justunaware of because they're
(06:18):
literally on the lane ofinvestments and they've missed
the other lanes of the financialhighway.
And so I find that, acrossgenders, what are the other
lanes?
What if you get sick?
Do you have enough to coverthat?
What if your spouse prematurelydies?
Are you okay?
What if you only have oneincome?
What if you lose a job?
What if someday you're like me,you don't have a spouse?
Someday?
What if you're incapacitated inyour retirement?
(06:40):
Who's going to step in and helpyou?
It could all be a mess.
You could have the bestinvestments in the world and all
these other things are outthere, and if you've got speed
bumps or potholes it can derailyou.
Speaker 1 (06:51):
What do you find is the biggest benefit that your
typical client gets from workingwith?
Speaker 2 (06:57):
you, as a financial planner, what I do and what my
team does.
If we sit down and listen towhat the client's concerns are
and it's usually do I haveenough?
Or I'm struggling, like my kidsneed to go to college?
I've got parents to take careof.
Do I have enough?
As I listen to what's keepingthem up at night, what's causing
them the anxiety and what theyneed clarity around, I can also
(07:19):
look at all the other differentlanes on that financial highway
and see what are the things thatthey need to be aware of and
they don't know that I can helppull everything together and so,
at the end of it, they feeltruly much more empowered over
their situation.
And that's where the fearlesscomes in.
Speaker 1 (07:34):
Are you going to?
Speaker 2 (07:35):
eliminate all fear?
No, but the more you know andthe more knowledge you have, the
more clarity you have aroundyour situation, the more
confident and fearless you'll beabout your finances you have
around your situation, the moreconfident and fearless you'll be
about your finances.
Speaker 1 (07:47):
In your book, you introduce the concept of what
you call throw it in a pile, andthe question I have is that I
would imagine, for someone justgetting started, right, I think
there's a tendency toprocrastinate, as, hey, I know I
need to do this, I should dothis, but now I feel overwhelmed
.
Tell us about your approach ofthrowing everything in a pile.
Speaker 2 (08:02):
It serves two purposes.
Exactly what you just said.
If somebody realizes, hey, Ineed help or I need to get some
guidance or advice, it can bedaunting to have to gather a
whole bunch of information andpull it together, and what I
find is those individuals thatI'm across the table from, those
successful, professional,educated people feel like they
have to have perfection beforethey walk in the door and so it
(08:24):
stops them from walking in thedoor because it's not perfect.
And the throw it in the pile isthe concept of just gather it
all together and I will helpsort it out.
It doesn't need to be perfect,just throw it in and I will tell
people.
If you have something in yoursituation that you aren't sure
if I need to look at or not,throw it in the pile, let me
make the judge.
And I've had people bring mestuff that they didn't know what
(08:44):
it was and I'm like, hey, doyou know?
You have this account over herefrom 20 years ago from an old
job, like I didn't know why Iwas getting this and had they
been organized, they wouldn'thave given it to me because they
didn't know what it was.
There's also this visual, or Ilook at it like taking an
inventory of your closet and theanalogy I use is think about
your real closet and the clothesin your closet.
(09:04):
If you're like a lot of people,you may have a suit in there
that fit maybe 20 years ago andmaybe you used it at some
special event.
It's way in the back drives ofyour closet A woman might have
their prom dress from highschool or things that it's just
back there and your closet isstuffed full of stuff and the
thought of going in there andcleaning it out and getting rid
(09:24):
of things that don't serve youis overwhelming.
And several years back a friendof mine said oh, there's this
personal stylist that she'sfabulous, you need to hire
whatever.
She comes to your house, came tomy house clean out the closet.
She goes in the closet, shestarts digging around and she
takes everything that she feelsdoesn't serve me and she throws
it in a pile and every now andthen I would squeak and I'd be
like you can't take and she andher thing was go over there, put
(09:47):
it on, stand in front of themirror and you have to sell it
to me and you literally arechanging in front of this book
and putting this thing on thatyou think you can't live without
, and standing in front of themirror and realizing she's right
, and after a while I'd squeakand she'd go up here and I no,
and I throw it on the pile.
But when I was done, she hadremoved everything out of my
closet that truly no longerserved me.
(10:08):
So I had the things left thatwere right for me and work, and
it's the same thing I equatewith the financial.
Throw it in the pile.
I can sort through it of whatyou need and what doesn't serve
you anymore.
Speaker 1 (10:19):
That is so true in so many different ways of life.
I find when you have adifferent person who's just,
objective and professional anddoesn't have the emotional
attachment that you might havein any aspect of life, you can
go from this thing that I'vebeen procrastinating on for
years to a day later.
It's done Exactly In your book.
In Fearless Finance.
You mention productivepessimism as a strategy, so help
(10:43):
our listeners understand whatproductive pessimism is.
Speaker 2 (10:46):
Sounds a little negative, right, not designed to
be Productive.
Pessimism is just the thoughtprocess of as you look at your
situation and figure out howmuch you need for whatever.
The future goal is Retirement.
Let's just use retirementbecause we're all facing
retirement, right?
So how much do you need forretirement?
Being pessimistic is almost thesame thing as being somewhat
(11:08):
conservative.
So overestimate what you thinkyou might spend on certain
things in retirement or yourexpenses.
Maybe underestimate what youanticipate your rate of return
on your investments to be.
Overestimate life expectancy.
When I run the numbers and showthem the projections for
clients sometimes I'll have alife expectancy my clients laugh
at me.
They're like I'm never going tolive to that.
(11:29):
That's great.
I don't want your money to runout before you do the money to
still be here, and so for me,that's the productive pessimism,
just being a little skeptical.
Overestimate what you're goingto spend and underestimate how
much you're going to grow at.
So that way, worst casescenario, you will have more
money than you needed.
Hey, that's better than havingthe issue of running out.
Speaker 1 (11:51):
I'm imagining it's human nature to do the opposite.
It's human nature tooverestimate what you're going
to earn and underestimate howmuch you're going to spend.
Speaker 2 (12:00):
Yes, and funny that you should mention that, because
that also leads into the otherthing that I talk about in the
book, which is the being overlyoptimistic.
And you do see it quite oftenmy terminology is bad math.
My significant other hates it.
When I say bad math, he's all.
Why do you say that?
I'm like because it's true, andso I say bad math.
(12:23):
And bad math is not the factthat my clients don't know how
to do math.
They're highly intelligent,wildly successful.
They clearly can do math.
They don't want to and theydon't want to know the answer
and they don't want to look atit, for whatever reason.
So have you ever heard peoplesay things like I'll be fine in
retirement, I'll just stop goingto Starbucks and I'll just cut
out a vacation?
Bad math.
Have you ever heard somebodysay, hey, I just got an
(12:46):
inheritance.
My aunt on my father's sidepassed and she left me $100,000.
I can retire.
Bad math, because what you'renot looking at is what the real
math looks like and what happenswhen you put in inflation and
medical costs and longevity andtaxes and all these horrible
things that none of us want tolook at.
And so the productive pessimismis the opposite side of the
(13:09):
whole bad mathing, where peopleput their rose colored glasses
on and they don't want to seewhat is reality because it's
scary.
It's scary sometimes and it'sdaunting.
Speaker 1 (13:18):
So bad math?
Is that something that you sayoften Because it seems catchy?
Speaker 2 (13:22):
I don't know where I got it and it just, it's just,
I'll be sitting.
I remember sitting somewhere onbeach with friends and there's
a couple that one person, acouple, is much older.
The spouse is much younger andhe would like her to retire.
And he was like she's got thisand I've got this and this life
insurance and this, whatever,and if something happens to him
(13:42):
she'll have this life insurancepolicy.
And I said I'm like bad math.
She's 40, you have insurancepremiums and health care costs
and what.
And everyone's my significantother's looking at me, like stop
saying that.
Like it's true, it's bad mathbecause she's so young.
And you think of the length oftime and inflation and costs and
just the sheer amount thatyou'll need 25 years down the
(14:03):
road to pay for the things thatyou pay for today, for much less
, because just all thatinflation and the whole nine
years.
Speaker 1 (14:10):
So that leads me to my next question, which is let's
talk a little about risk, andwhat are the most misunderstood
types of financial risk thatpeople overlook, I think most of
the risks people tend tooverlook, except market, and it
goes back to we're constantlybombarded with tidbits about the
market, but people sometimesoverlook inflation risk,
(14:30):
reinvestment risk.
Speaker 2 (14:31):
When I talk about reinvestment risk, if somebody
gets nervous about the market orthey want to have too much in
cash CDs.
Overlook inflation risk,reinvestment risk.
When I talk about reinvestmentrisk, if somebody gets nervous
about the market or they want tohave too much in cash CDs,
bonds, and when all that maturesand you reinvest it in similar
things, what happened tointerest rates?
What is the reinvestment riskSequence of returns?
I never hear anybody talk aboutthat.
(14:51):
Why?
Why would somebody even havethat in their head?
But when you head intoretirement, the sequence of
returns in your retirementassets has a huge impact on what
your success or your notsuccess is.
People don't know about that.
Speaker 1 (15:05):
And just for clarity, what is sequence of returns
risk?
Speaker 2 (15:07):
Sequence of returns is, if you look at, say, two
people identical people, sameexpense need same assets for
retirement, same age, samelength of longevity.
If one retires at the beginningof a down market and one
retires at the beginning of apositive market, the one that
retires at the beginning of thedown market might run out of
(15:29):
money and so that takes intoaccount.
If you're going to retire andthe market tends to be not great
today, that has an impactPeople don't necessarily think
about.
How will that impact me 20years down the road?
Speaker 1 (15:40):
The question on their mind is will I run out of money
, which is a very basic versionof that question, right?
Speaker 2 (15:46):
Yes, and so the will I run out of money?
They're just thinking of do Ihave enough accumulated so that
way it will last year after year.
But they don't know how to puttogether the pieces in there of
what will impact that.
Most people are only going tothink of market returns in terms
of what am I going to earn?
And they're thinking like Iearn this every year, not is it
(16:07):
several down years?
Is it several positive years?
And how do I structure it?
But they come with the basic doI have enough?
And the fear and the worry andthe anxiety comes from they
don't know how to do the mathand they don't have the software
, quite frankly, that as anadvisor I have that can do those
projections to show them whatreality might look like good or
bad, I would imagine it.
Speaker 1 (16:28):
also.
You said that productivepessimism right, Because we just
literally don't know.
None of us have a crystal ball.
We might have an idea of whenwe might retire, but we don't
know what the market's going tobe like at that moment in time.
Did you find, just at the timeof recording this, the past
maybe month or two, we've had alittle bit of volatility?
What kind of conversations didthat create for you?
Speaker 2 (16:47):
Not as many as you would expect.
Okay, and interestingly enough,when the market becomes very
volatile like this, friends,people around me, centers of
influence, just everyone I knowis, oh my gosh, you must be
really busy.
Your phone must be ringing offthe hook, not really.
And I say that and you're like,oh really, why?
Because our clients dofinancial planning.
We know the numbers, we knowwhat they need and then, as they
(17:10):
transition into retirement,we've created, we recreate their
paycheck so that way we knowhow to structure their assets
and that goes into this wholebucket strategy that we have.
So when in retirement, we havethis bucket strategy of how we
layer their assets, that theyhave enough cash to get them
through anywhere from 18 to 36months of a market downturn and
(17:32):
not have to touch their assets,so they're not freaking out the
way other people might be,because their investments are
crafted in a way to match theirtimeline and what they need.
Just going through that wholeplanning process, it goes back
to that fearless, I'm not havingpeople make reckless decisions.
I'm helping to bring themclarity and have knowledge so
(17:53):
they know what they have and whythey have and how they have it,
and so all these temporarygyrations won't make them lose
their minds.
Speaker 1 (18:01):
It sounds to me, fearlessness leads naturally to
clarity and ultimately, I guessthe word that comes to my mind
is confidence.
Speaker 2 (18:08):
Yes, very much and also part of the whole financial
planning piece is that we wantto provide the confidence, we
want to provide the clarity.
But also life changes and youhave to have the ability or know
where to go, aka call youradvisor to help walk you through
when life changes.
And life could change in not agreat way or life could change
(18:29):
in a wonderful way.
For example, a not so fun way.
I had a couple that I workedwith for decades where we've
been planning and mapped theirwhole thing out the husband when
we started talking aboutlong-term care, the husband's
I'm not going into one of thoseplaces and it was one of that
whole old school attitude I'mjust not doing it and refused to
address the risk of long-termcare.
(18:51):
Fast forward decades down theroad as both of their health
declined, he ended up being bedbound in their condo in Naples.
Their children are gettinground the clock, care for both
of them and we've managed theassets.
So the last, but we're stilltrying to stretch them.
And what happens?
All of a sudden you take whatyou think is going to be the
long-term plan and you have toshift it and change it quickly
(19:14):
to adapt to the new scenario.
The new scenario is now we needa lot more money, faster,
because of the health careexpenses, than we would have
before, and so did their moneylast their lifetime?
Yeah, it did.
They ultimately had to move dadup north to be close to the
daughter First class planeticket, escorted by a nurse, the
transport van, because he'sliterally in a bed, and that was
(19:36):
like $15,000 to get him fromNaples on a flight up there.
And so were we able to shiftand adjust their finances to
meet those needs.
Yeah, but if the daughtersdidn't know who to reach out to,
meaning me, who knows whatwould have happened in terms of
how to structure their assets?
But it also goes on thepositive side as well.
I've had, unfortunately, knockon wood.
(19:57):
Usually it's the man that diesfirst, historically speaking,
not always and then you have thewoman who's single.
You've planned the retirementfor both of them and what they
need for both of them.
So when it's just one, you haveone social security.
There might be shifts inpension incomes, there's shifts
for her.
But I've had women that werewidowed and then all of a sudden
(20:18):
they meet somebody else and getremarried and their husband's
10 years younger.
Fabulous, but now the numbershave to shift differently,
because now I have a differenttimeline because of the age gap.
So financial planning isn'tlike a do it once and you're
done it's.
Life constantly throwscurveballs at us and it just has
to roll with the punches andadapt and shift to make your
(20:38):
money last.
Speaker 1 (20:39):
I would imagine being in your position, working with
hundreds of families, that yousee these patterns happen all
the time and just going back tothe productive pessimism of none
of us expect, none of us wantsto think about the negatives
that could happen, but probablyhappen very frequently to people
.
So you must have a veryinteresting perspective on that
or point of view when it comesto it, because you just see the
patterns happen.
Speaker 2 (20:59):
Honestly, I feel like I've seen just about everything
over the course of the yearsand I do have more and more
people that come to me with thefear and the anxiety and the
concerns and they do haveconcerns in the long-term care
and in the healthcareenvironment for a number of
reasons.
They're currently taking careof a parent who's needing
long-term care and in the healthcare environment for a number
of reasons.
They're currently taking careof a parent who's needing
long-term care help.
(21:20):
So they're seeing what happensand now they're like wait a
minute, I need to look at mysituation, I don't know what to
do, and that's usually whathappens.
But people sometimes will comein with that on their mind
because they're in the thick ofit with family members.
Speaker 1 (21:31):
In the book.
You mentioned the concept ofretirement paycheck.
How can people start thinkingdifferently about drawing down
their savings?
Speaker 2 (21:38):
Let's start that with looking at retirement.
And I say that because a lot oftimes people will come to me
and they think retirement is oneday.
It's one day and so in that oneday you don't shift everything,
like you don't take yourinvestments and all of a sudden
go and like just sell everythingand all of a sudden make it
(22:00):
super conservative.
It's one day.
You have the years leading upto retirement where you're
accumulating your assets, youhave the retirement day and then
you have all the yearsfollowing retirement and I help
clients see we need to look athow to distribute money from
your assets and make that lastover your lifespan.
And so creating that paycheckis a conversation I always have
(22:22):
with clients, because they'llinvariably come to me and go
okay, laura, I'm going to beretired in a month.
What do we do?
Because I want my paycheckMoney, you should ask.
That's what the conversation is.
And so we'll take theirinvestments and you segment them
and figure out how much moneydo they need from their
investments every month.
Let's make it at five grand,let's just make up a figure.
It means they need $60,000 ayear, and so we will keep 12, 18
(22:47):
, 24 months of that need in cashor cash equivalents, then
you'll keep three to six yearsof money that they'll need in
medium-term risk typeinvestments.
So they're not ultraconservative but they're not
real growth oriented either.
And then you take the rest ofthe money and make it growth
oriented.
And so then I take theconservative bucket, the cash
(23:08):
equivalents, and you justliterally think of the faucet in
your bathtub.
You turn on the spigot and outdrops the money you need every
month into your bank account andas the bathtub gets empty you
replenish it from themedium-term bucket into the
bathtub and then from the growthyou replenish the medium-term
bucket from the long-term bucketand this way it helps clients
(23:28):
have the money they need in theshort run so they're not
freaking out over marketvolatility and it keeps the
amount of assets that theyshould have growth oriented in
growth, because retirement is aday.
You might have a 30 yearretirement period.
Some of your money needs to beinvested for 30 years, but not
all of it, and so having thatstructure gives clients the
peace of mind of how is thisgoing to work.
Speaker 1 (23:50):
Here's a question for someone listening to this.
How can they determine whetheror not they've saved enough?
How do you help peopledetermine?
Speaker 2 (23:58):
that the software that we have is very detailed,
where we can run, literallyillustrate those projections
forward and take their currentassets with a rate of return
that fits their risk and thentake their expenses with an
inflation rate and their taxrate.
We look at what the taxbrackets are for them.
We can build in anything elsethat's going on.
(24:19):
If there is pension withsurvivor benefits and one person
the person passes away and thenspouse gets a survivor benefits
, we can factor in all thosechanges in income and add in
specific expenses like 10 years,I'm gonna buy a new car or
whatever.
Is it perfect?
It's not perfect, it's nevergonna be perfect, but it'll get
you really close to what youprobably should have.
And there are a lot of onlinetools you can get access to
(24:43):
things like that.
They tend to be very simplistic, in my opinion, end up giving
you bad math for no other reason, other than they're just too
simplistic in people'ssituations.
Speaker 1 (24:52):
They're always more complex than that I've been
watching on youtube somefinancial podcasts and it seems
that, at least the ones I watch,that the people typically will
spend more money than they havenow.
Is that something that you comeacross, or is it thought?
Or do the people that come toyou, do they typically, or are
they typically good savers?
Speaker 2 (25:09):
Both.
Like I said, I swear I've seeneverything, and I have clients
that are very diligent inunderstanding what they spend
and what's coming up in unusualthings, cause we all have
unusual things.
You have a hurricane, you'vegot a roof leak, you got to fix
your screen, whatever.
But then I also have clientsthat oh, my son needs help, I
need to give him $100,000.
(25:29):
Oh, my daughter's getting adivorce, I need to buy her a new
house.
What, okay?
But then they forget that theydid that.
And so when you look at howmuch they're spending and
they'll swear I only spent X.
No, you don't.
You spent X plus Y because lastyear you gave money to the son
the year before you bought ahouse for the daughter.
The year before that you didthis and you forget all those
(25:51):
one-off things that you've donewhere you think you're spending
a certain level but you're wayover it.
So we need to look at the newnumber of the way over it,
because you're going to keepdoing that.
That's what gives you purposeand that's what you're going to
do in life.
We need to plan that in.
But I have other people thatare very like.
They know what they spent.
Speaker 1 (26:08):
It's just people fall into both areas Do you find as
an advisor with some people whoare probably great savers
throughout their lives, do youever get to the conversation
where you have to encourage themto spend their money, spend
more of their money?
Does that come up very often?
Speaker 2 (26:22):
It doesn't come up often, unfortunately, just
because facing health care costsand those types of things right
now, it's such an unknown forpeople that I want people to
have more money than less money.
But historically speaking, Ihave had times.
I worked with a couple forquite a while and they had good
pensions, they had saved a lotof money, they had one child and
(26:43):
a grandson and they were notspending their money.
They had one child and agrandson and they were not
spending their money and Iliterally and they were like of
the depression era generationtype client, where they truly
didn't spend money and I triedto get them to spend money.
I'm like, what would give youjoy?
And the wife was like, oh, Ialways wanted one of those
little Mercedes or whatever.
And I'm like, then go buy one.
Do you want me to go with you?
I will go with you and we'll gobuy a little Mercedes.
(27:05):
Will that bring you joy?
Oh, that would bring me joy.
I never could get her to buy theMercedes that could put a dent
in their money.
No, and they were so completelyfrugal.
They both passed.
The son, inherited all of itand he was not as frugal as them
, but he wasn't like he didn'tspend money Crazy.
He did travel, he lived a goodlife, but he didn't make bad
(27:28):
decisions.
And then he passed and then hasgone on to the grandson, and so
the grandparents had so muchmoney that it is filtered all
the way down, but I could notget them to spend.
I really tried.
Speaker 1 (27:36):
So another question, as it relates to the book
digital assets and pet trustswhy are these overlooked areas
of estate planning that morepeople should think about?
And I can tell you, I'm askingyou this question as a proud pet
parent, so I am personallyinvested in the answer here, as
I'm happy to hear that you are.
Speaker 2 (27:56):
I have volunteered in the pet rescue arena for
decades and that is one of mypet projects, but in terms of
digital assets and pet trusts, Ifeel that they're overlooked.
Not because estate attorneysare bad or they don't know
anything there's so manyfabulous, awesome attorneys out
there that my clients rely on.
(28:17):
It's the fact that this stuffis newer on the scene, so it's
not something people alwaysthink about and the attorney is
protecting the investments inthe stuff.
When you think of digitalassets, it's bigger than your
cryptocurrency and onlineaccounts.
That is part of.
It Could be a cryptocurrencyaccount, it could be an online
(28:38):
banking account, but digitalassets are also the assets of
stuff that is out there in thecloud.
Speaker 1 (28:46):
Where are your?
Speaker 2 (28:46):
pictures stored, Paul .
Do you have them printed inalbums?
Speaker 1 (28:50):
I do not.
Speaker 2 (28:51):
Nobody does.
What about your social media?
What happens to your Facebookaccount?
What happens to your LinkedIn?
I can tell you on my Facebook.
There are at least five or sixof my Facebook friends that,
unfortunately, have passed awayand their Facebook profile is
out there.
Did you know that you can put alegacy contact on your Facebook
and they can take over it?
Okay, same thing with LinkedIn.
You have to think about thedigital assets, because what you
(29:14):
don't want to do is justrandomly leave a piece of paper
with all these passwords in itand go okay, my daughter's going
to handle it.
I'm not the attorney, so don'ttake my advice on it, but it's
not really legal.
So what if your daughter andyour son don't get along, or
(29:35):
your daughter doesn't get alongwith your new wife and you pass
away?
I have had times where somebodyhas passed and a child has
taken all of the family photosand won't give them to anybody.
I have had times where somebodyhas gotten access to dad's
email and, oh looky, herethere's all the evidence of
dad's affair.
Probably should control whogets in the email.
So you have to think about that,because where do you want your
family photos to go?
Where do you want all of thesethings that you're collecting
(29:55):
that truly are assets of yourlife.
They just happen to be digital.
You need to put somebody incharge of that stuff and people
just don't think about it.
If you look at the terms ofservice for various platforms
and I don't know if it's changedor not, but, like, for instance
, yahoo at one point and maybestill is if you pass away and
you have a Yahoo email, if theyget notification that you've
(30:16):
passed away, your email's done,shut down, gone, history.
So anything that you have inthere that your family might
need, your email's gone.
You've got to think about that,that stuff.
So digital assets, to me is animportant thing for a client to
talk to their attorneys aboutpet trusts.
Talk about pet trust, becausethat's near to my heart.
Speaker 1 (30:33):
Pet trusts are very near and dear to my heart.
Just for the breaks for thelistener, I do have children,
they're just the four-leggedtype.
So how do I look after mychildren after I'm gone?
Speaker 2 (30:44):
a lot of attorneys will include pet trusts If you
ask them.
They don't.
It's not always a given thing.
All of my clients that haveanimals now or may have animals
in the future.
I will tell them tospecifically talk to their
attorney and have a pet trustdrafted and you can put it in
your existing documents.
And what a pet trust does itwill set aside whatever dollar
amount that you want to setaside for the care of that
(31:06):
animal and put somebody incharge.
Because what happens time andtime again and I can tell you
this from being in the rescueworld people don't make plans
for their pets.
Both of my dogs I have twofive-pound chihuahuas that are
under my desk now.
They're both rescues.
My older rescue, levi, is 13years old and at 10, he was one
of four dogs that lived in aroom with his bed-bound human.
(31:26):
She died and had no plans forthose four dogs.
All four dogs ended up in theshelter.
All four senior dogs ended upin a crowded shelter with a
whole bunch of other animalsthat were also looking for a way
out.
So it just creates more of aburden on the shelters that are
already bursting at the scene,and Levi found his way out and
found his way to me, and wealways joke that he came to
Florida to retire because he'sfrom Nebraska.
(31:48):
But that's a whole nother story.
But what people will tell meover and over?
My sister said she'll take them.
My daughter said she'll takethem.
They might tell you that theywill take them and they might
have every intention to takethem, but you don't know where
they're going to be.
What if your daughter's marriedto somebody who is highly
allergic to cats and they can'ttake your cat?
(32:09):
What if your sister has healthissues and she's moved to a
long-term care facility thatcan't take your Doberman?
You have to have plans,otherwise your pet is going to
end up at the shelter withhundreds and hundreds of other
pets.
And if you put somebody incharge of the pet trust, they
might not be able to take youranimal, but they can find where
(32:29):
the animal could go and live outthe rest of their life and they
have money to pay for the foodand the vet care.
So you're not taking yourbeloved animals, that your fur
babies, and just randomlyputting them in the shelter.
That they're all struggling andthey're all bursting at the
gills right now.
It's just, it's the smartestthing to do.
And if you pass and you don'thave the animals, then the pet
(32:50):
trust won't take effect becausethere's no pet to care for.
Speaker 1 (32:52):
So it doesn't matter.
Speaker 2 (32:54):
if you've got your pet cat, your pet dog, your pet
pot, belly bait or iguana, youhave to figure out where you
want that animal to go and who'sgoing to be in charge of making
sure they get somewhere for thecare and not rely on promises
from people, because people havegood intentions but situations
change.
Speaker 1 (33:09):
A couple of final questions before we wrap up
today.
How can someone listening tothis podcast do one of two
things either get a copy of yourbook Fearless Finance, or
simply reach out to you to learnmore about your services.
Speaker 2 (33:22):
The easiest way to do that is just send me a quick
email to ImpavedWealthAdvisorsat AMPFcom,
ameriprisefinancialcom, so AMPF.
That's it.
Just shoot an email and my teamwill respond and get you the
book or get you with me.
Speaker 1 (33:42):
Final question what does true financial fearlessness
look like to you in real life?
Speaker 2 (33:49):
True financial fearlessness to me is having the
tools to understand the numbers, spending the time to
understand the risks that couldbe out there that could affect
you in your life, and having thecourage to look at it and
address it, rather than put therose-colored glasses on and be
in your own version of bad math.
Speaker 1 (34:09):
Thank you very much for your time today.
I've enjoyed the conversation.
You're welcome.
What if there was a way to eliminate the financial
anxiety that keeps you awake atnight?
That's exactly what our guestpromises in her new book,
Fearless Finance by Laura Rabine.
Drawing from her uniqueexperience of becoming head of
household at just 12 years old,Laura has spent 30 years proving
that true financialfearlessness comes not from
(00:22):
knowing it all, but from havingclarity about what really
matters.
In today's interview, sheexplains why most people are
doing what she describes as badmath with their retirement
planning and how to create whatshe calls a retirement paycheck
(00:45):
that actually works.
Laura Rabine, how are you doingtoday?
I'm fabulous.
How are you so very excited tohave this conversation with you
today?
Awesome.
So we'll be talking mostlyabout your new book, Fearless
Finance, and, as we do so,though, I'd just love to have
(01:05):
our audience have a chance toget to know you.
My understanding is that youbecame the head of your
household at age 12.
How did that shape your view ofmoney and responsibility.
Speaker 2 (01:14):
I did grow up in rural Michigan so I saw a lot of
families that I was close toand peers in my school things
like that that were strugglingin various ways.
It wasn't a wealthy part of thecountry, it was farming country
, so I knew the struggles of myhousehold, but I saw others and
it truly puts the definition onmoney can't buy happiness but,
(01:34):
again, it can put that roof overyour head and food on your
table and if you have that thenyou can build from there and so,
having the fearlessness andhaving removing the anxiety over
your financial situation, youcan build the building blocks
and it's just a little bitdifferent background than what
other people have experienced,just because of growing up where
I grew up and in thecircumstances that I did.
Speaker 1 (01:56):
That's interesting.
Here you are.
You've been in the industry forseveral decades and you are the
owner of Impavid Wealth.
Looking back from that12-year-old version of yourself
to the current version ofyourself, what does fearless
mean to you, when it comeseither to your own finances or
how you help guide your clientsand perhaps, by extension, your
book that you just wrote?
Speaker 2 (02:16):
Fearless to me isn't making reckless decisions about
your situation.
It's you, look at it.
Knowledge replaces fear and itcan empower you.
Do you know that old sayingabout fear?
It has two meanings Forgeteverything and run, face
everything and rise.
Here for clients that work withus at Impavel Wealth Advisors,
we want people to have theknowledge and clarity over the
situation where they can faceeverything and rise, and we want
(02:37):
to give them the knowledge onwhere they stand in terms of
what they want to see happen.
Speaker 1 (02:42):
That's awesome.
Speaker 2 (02:49):
When did you decide that financial advising was your
calling?
I decided when I was living inNaples.
I was in a career that I reallyjust didn't like and wasn't
happy with and needed to figurewhat was I going to do next.
And living in Naples, florida,there were not a lot of large
companies or big places that hadlots of jobs and lots of
opportunities, so it's like Ihad to create something myself,
and back in the day, financialadvisors would do their seminars
and that's how they would getnew clients, and they would put
(03:11):
an ad in the Sunday paper cometo my seminar and I'm retirement
or whatever.
Maybe I would see these ads,and almost all of them were
older white men, and as I lookedat them, I thought they're not
smarter than me.
Somebody has taught them, andif I can find somebody to teach
me, I can help people build afoundation to be fearless about
(03:31):
their finances, and I definitelysaw that there was a need for
females in the industry, and sothat's truly how it all started.
And almost 30 years later, hereI am.
Speaker 1 (03:39):
What led you to decide to write your book?
Speaker 2 (03:42):
It has been something that's been on my mind for a
number of years.
I wasn't sure if I could do it,quite frankly, because if you
think about it in my brain,writing a book as somebody who's
not an author is almost likesaying I want to run a marathon
(04:09):
but I have to train and gothrough all that.
To me it was the same type ofhurdle, and so I wasn't quite
sure I wanted to do it or Icould do it, and so I figured
why not take a stab at it?
And the reason behind wantingto write it was the fact that
over these decades, I can't tellyou the number of times that I
have sat across the table fromhighly educated, highly
professional and successfulpeople who are anxious about the
future.
They have worries, they haveconcerns, but they feel like
they should be an expert, andthey don't want to admit that
they have the concerns, thefears and the worries because
they feel like they should be anexpert.
Why do they feel like theyshould be an expert and they
don't want to admit that theyhave the concerns, the fears and
the worries?
Because they feel like theyshould be an expert.
Why do they feel like this 24seven?
(04:29):
We're getting bombarded withsnippets of things.
The market is up, the market isdown.
Did you hear about Bitcoin?
Did you hear about the latestcryptocurrency?
What does any of that matter toyour personal situation?
But it makes you have theperception that I should know it
all and I don't, and I wantedto create a book that had good
strategies and ideas forsomebody to be able to take that
(04:51):
and then look at their ownsituation and apply it.
Speaker 1 (04:54):
What's one of the biggest myths that the
successful professionals, thepeople that you work with day to
day, believe about theirfinances?
That your book helps to bustthat myth.
Speaker 2 (05:09):
That they need to know it all or they should know
it all, quite frankly, becauseof our constant bombardment of
financial things at us that theydon't need to know it all and
it's okay to reach out to aprofessional.
If you think about it, if youget sick and you don't feel well
, whatever it might be.
You might go on the internetand Google WebMD and get some
ideas.
You're still going to go to thedoctor If you don't know what
you're doing on your taxes or ifyou have a tax question, you
(05:30):
may look it up and get an ideaof what you should do in that
tax situation.
You're still going to call yourCPA and for some reason,
sometimes with a financiallandscape, people tend to think
I can do it myself and usuallythey're in the lane of
investments and that's whattheir sole focus is, and they
miss all the other lanes of thefinancial highway that impacts
their life and they don'trealize it.
(05:50):
So the myth is it's okay toreach out to a professional.
Speaker 1 (05:53):
Curiosity.
Do you find that it's harderfor men or for women to reach
out and ask for help?
Speaker 2 (05:57):
I don't find one more than the other.
What I do find people will cometo me because they have a,
typically the question do I haveenough?
And that's the question.
They come and they don'trealize what they don't know.
So, as we are able to look ateverything, they don't realize
all of these other risks thatare poking around in their
situation that they're justunaware of because they're
(06:18):
literally on the lane ofinvestments and they've missed
the other lanes of the financialhighway.
And so I find that, acrossgenders, what are the other
lanes?
What if you get sick?
Do you have enough to coverthat?
What if your spouse prematurelydies?
Are you okay?
What if you only have oneincome?
What if you lose a job?
What if someday you're like me,you don't have a spouse?
Someday?
What if you're incapacitated inyour retirement?
(06:40):
Who's going to step in and helpyou?
It could all be a mess.
You could have the bestinvestments in the world and all
these other things are outthere, and if you've got speed
bumps or potholes it can derailyou.
Speaker 1 (06:51):
What do you find is the biggest benefit that your
typical client gets from workingwith?
Speaker 2 (06:57):
you, as a financial planner, what I do and what my
team does.
If we sit down and listen towhat the client's concerns are
and it's usually do I haveenough?
Or I'm struggling, like my kidsneed to go to college?
I've got parents to take careof.
Do I have enough?
As I listen to what's keepingthem up at night, what's causing
them the anxiety and what theyneed clarity around, I can also
(07:19):
look at all the other differentlanes on that financial highway
and see what are the things thatthey need to be aware of and
they don't know that I can helppull everything together and so,
at the end of it, they feeltruly much more empowered over
their situation.
And that's where the fearlesscomes in.
Speaker 1 (07:34):
Are you going to?
Speaker 2 (07:35):
eliminate all fear?
No, but the more you know andthe more knowledge you have, the
more clarity you have aroundyour situation, the more
confident and fearless you'll beabout your finances you have
around your situation, the moreconfident and fearless you'll be
about your finances.
Speaker 1 (07:47):
In your book, you introduce the concept of what
you call throw it in a pile, andthe question I have is that I
would imagine, for someone justgetting started, right, I think
there's a tendency toprocrastinate, as, hey, I know I
need to do this, I should dothis, but now I feel overwhelmed
.
Tell us about your approach ofthrowing everything in a pile.
Speaker 2 (08:02):
It serves two purposes.
Exactly what you just said.
If somebody realizes, hey, Ineed help or I need to get some
guidance or advice, it can bedaunting to have to gather a
whole bunch of information andpull it together, and what I
find is those individuals thatI'm across the table from, those
successful, professional,educated people feel like they
have to have perfection beforethey walk in the door and so it
(08:24):
stops them from walking in thedoor because it's not perfect.
And the throw it in the pile isthe concept of just gather it
all together and I will helpsort it out.
It doesn't need to be perfect,just throw it in and I will tell
people.
If you have something in yoursituation that you aren't sure
if I need to look at or not,throw it in the pile, let me
make the judge.
And I've had people bring mestuff that they didn't know what
(08:44):
it was and I'm like, hey, doyou know?
You have this account over herefrom 20 years ago from an old
job, like I didn't know why Iwas getting this and had they
been organized, they wouldn'thave given it to me because they
didn't know what it was.
There's also this visual, or Ilook at it like taking an
inventory of your closet and theanalogy I use is think about
your real closet and the clothesin your closet.
(09:04):
If you're like a lot of people,you may have a suit in there
that fit maybe 20 years ago andmaybe you used it at some
special event.
It's way in the back drives ofyour closet A woman might have
their prom dress from highschool or things that it's just
back there and your closet isstuffed full of stuff and the
thought of going in there andcleaning it out and getting rid
(09:24):
of things that don't serve youis overwhelming.
And several years back a friendof mine said oh, there's this
personal stylist that she'sfabulous, you need to hire
whatever.
She comes to your house, came tomy house clean out the closet.
She goes in the closet, shestarts digging around and she
takes everything that she feelsdoesn't serve me and she throws
it in a pile and every now andthen I would squeak and I'd be
like you can't take and she andher thing was go over there, put
(09:47):
it on, stand in front of themirror and you have to sell it
to me and you literally arechanging in front of this book
and putting this thing on thatyou think you can't live without
, and standing in front of themirror and realizing she's right
, and after a while I'd squeakand she'd go up here and I no,
and I throw it on the pile.
But when I was done, she hadremoved everything out of my
closet that truly no longerserved me.
(10:08):
So I had the things left thatwere right for me and work, and
it's the same thing I equatewith the financial.
Throw it in the pile.
I can sort through it of whatyou need and what doesn't serve
you anymore.
Speaker 1 (10:19):
That is so true in so many different ways of life.
I find when you have adifferent person who's just,
objective and professional anddoesn't have the emotional
attachment that you might havein any aspect of life, you can
go from this thing that I'vebeen procrastinating on for
years to a day later.
It's done Exactly In your book.
In Fearless Finance.
You mention productivepessimism as a strategy, so help
(10:43):
our listeners understand whatproductive pessimism is.
Speaker 2 (10:46):
Sounds a little negative, right, not designed to
be Productive.
Pessimism is just the thoughtprocess of as you look at your
situation and figure out howmuch you need for whatever.
The future goal is Retirement.
Let's just use retirementbecause we're all facing
retirement, right?
So how much do you need forretirement?
Being pessimistic is almost thesame thing as being somewhat
(11:08):
conservative.
So overestimate what you thinkyou might spend on certain
things in retirement or yourexpenses.
Maybe underestimate what youanticipate your rate of return
on your investments to be.
Overestimate life expectancy.
When I run the numbers and showthem the projections for
clients sometimes I'll have alife expectancy my clients laugh
at me.
They're like I'm never going tolive to that.
(11:29):
That's great.
I don't want your money to runout before you do the money to
still be here, and so for me,that's the productive pessimism,
just being a little skeptical.
Overestimate what you're goingto spend and underestimate how
much you're going to grow at.
So that way, worst casescenario, you will have more
money than you needed.
Hey, that's better than havingthe issue of running out.
Speaker 1 (11:51):
I'm imagining it's human nature to do the opposite.
It's human nature tooverestimate what you're going
to earn and underestimate howmuch you're going to spend.
Speaker 2 (12:00):
Yes, and funny that you should mention that, because
that also leads into the otherthing that I talk about in the
book, which is the being overlyoptimistic.
And you do see it quite oftenmy terminology is bad math.
My significant other hates it.
When I say bad math, he's all.
Why do you say that?
I'm like because it's true, andso I say bad math.
(12:23):
And bad math is not the factthat my clients don't know how
to do math.
They're highly intelligent,wildly successful.
They clearly can do math.
They don't want to and theydon't want to know the answer
and they don't want to look atit, for whatever reason.
So have you ever heard peoplesay things like I'll be fine in
retirement, I'll just stop goingto Starbucks and I'll just cut
out a vacation?
Bad math.
Have you ever heard somebodysay, hey, I just got an
(12:46):
inheritance.
My aunt on my father's sidepassed and she left me $100,000.
I can retire.
Bad math, because what you'renot looking at is what the real
math looks like and what happenswhen you put in inflation and
medical costs and longevity andtaxes and all these horrible
things that none of us want tolook at.
And so the productive pessimismis the opposite side of the
(13:09):
whole bad mathing, where peopleput their rose colored glasses
on and they don't want to seewhat is reality because it's
scary.
It's scary sometimes and it'sdaunting.
Speaker 1 (13:18):
So bad math?
Is that something that you sayoften Because it seems catchy?
Speaker 2 (13:22):
I don't know where I got it and it just, it's just,
I'll be sitting.
I remember sitting somewhere onbeach with friends and there's
a couple that one person, acouple, is much older.
The spouse is much younger andhe would like her to retire.
And he was like she's got thisand I've got this and this life
insurance and this, whatever,and if something happens to him
(13:42):
she'll have this life insurancepolicy.
And I said I'm like bad math.
She's 40, you have insurancepremiums and health care costs
and what.
And everyone's my significantother's looking at me, like stop
saying that.
Like it's true, it's bad mathbecause she's so young.
And you think of the length oftime and inflation and costs and
just the sheer amount thatyou'll need 25 years down the
(14:03):
road to pay for the things thatyou pay for today, for much less
, because just all thatinflation and the whole nine
years.
Speaker 1 (14:10):
So that leads me to my next question, which is let's
talk a little about risk, andwhat are the most misunderstood
types of financial risk thatpeople overlook, I think most of
the risks people tend tooverlook, except market, and it
goes back to we're constantlybombarded with tidbits about the
market, but people sometimesoverlook inflation risk,
(14:30):
reinvestment risk.
Speaker 2 (14:31):
When I talk about reinvestment risk, if somebody
gets nervous about the market orthey want to have too much in
cash CDs.
Overlook inflation risk,reinvestment risk.
When I talk about reinvestmentrisk, if somebody gets nervous
about the market or they want tohave too much in cash CDs,
bonds, and when all that maturesand you reinvest it in similar
things, what happened tointerest rates?
What is the reinvestment riskSequence of returns?
I never hear anybody talk aboutthat.
(14:51):
Why?
Why would somebody even havethat in their head?
But when you head intoretirement, the sequence of
returns in your retirementassets has a huge impact on what
your success or your notsuccess is.
People don't know about that.
Speaker 1 (15:05):
And just for clarity, what is sequence of returns
risk?
Speaker 2 (15:07):
Sequence of returns is, if you look at, say, two
people identical people, sameexpense need same assets for
retirement, same age, samelength of longevity.
If one retires at the beginningof a down market and one
retires at the beginning of apositive market, the one that
retires at the beginning of thedown market might run out of
(15:29):
money and so that takes intoaccount.
If you're going to retire andthe market tends to be not great
today, that has an impactPeople don't necessarily think
about.
How will that impact me 20years down the road?
Speaker 1 (15:40):
The question on their mind is will I run out of money
, which is a very basic versionof that question, right?
Speaker 2 (15:46):
Yes, and so the will I run out of money?
They're just thinking of do Ihave enough accumulated so that
way it will last year after year.
But they don't know how to puttogether the pieces in there of
what will impact that.
Most people are only going tothink of market returns in terms
of what am I going to earn?
And they're thinking like Iearn this every year, not is it
(16:07):
several down years?
Is it several positive years?
And how do I structure it?
But they come with the basic doI have enough?
And the fear and the worry andthe anxiety comes from they
don't know how to do the mathand they don't have the software
, quite frankly, that as anadvisor I have that can do those
projections to show them whatreality might look like good or
bad, I would imagine it.
Speaker 1 (16:28):
also.
You said that productivepessimism right, Because we just
literally don't know.
None of us have a crystal ball.
We might have an idea of whenwe might retire, but we don't
know what the market's going tobe like at that moment in time.
Did you find, just at the timeof recording this, the past
maybe month or two, we've had alittle bit of volatility?
What kind of conversations didthat create for you?
Speaker 2 (16:47):
Not as many as you would expect.
Okay, and interestingly enough,when the market becomes very
volatile like this, friends,people around me, centers of
influence, just everyone I knowis, oh my gosh, you must be
really busy.
Your phone must be ringing offthe hook, not really.
And I say that and you're like,oh really, why?
Because our clients dofinancial planning.
We know the numbers, we knowwhat they need and then, as they
(17:10):
transition into retirement,we've created, we recreate their
paycheck so that way we knowhow to structure their assets
and that goes into this wholebucket strategy that we have.
So when in retirement, we havethis bucket strategy of how we
layer their assets, that theyhave enough cash to get them
through anywhere from 18 to 36months of a market downturn and
(17:32):
not have to touch their assets,so they're not freaking out the
way other people might be,because their investments are
crafted in a way to match theirtimeline and what they need.
Just going through that wholeplanning process, it goes back
to that fearless, I'm not havingpeople make reckless decisions.
I'm helping to bring themclarity and have knowledge so
(17:53):
they know what they have and whythey have and how they have it,
and so all these temporarygyrations won't make them lose
their minds.
Speaker 1 (18:01):
It sounds to me, fearlessness leads naturally to
clarity and ultimately, I guessthe word that comes to my mind
is confidence.
Speaker 2 (18:08):
Yes, very much and also part of the whole financial
planning piece is that we wantto provide the confidence, we
want to provide the clarity.
But also life changes and youhave to have the ability or know
where to go, aka call youradvisor to help walk you through
when life changes.
And life could change in not agreat way or life could change
(18:29):
in a wonderful way.
For example, a not so fun way.
I had a couple that I workedwith for decades where we've
been planning and mapped theirwhole thing out the husband when
we started talking aboutlong-term care, the husband's
I'm not going into one of thoseplaces and it was one of that
whole old school attitude I'mjust not doing it and refused to
address the risk of long-termcare.
(18:51):
Fast forward decades down theroad as both of their health
declined, he ended up being bedbound in their condo in Naples.
Their children are gettinground the clock, care for both
of them and we've managed theassets.
So the last, but we're stilltrying to stretch them.
And what happens?
All of a sudden you take whatyou think is going to be the
long-term plan and you have toshift it and change it quickly
(19:14):
to adapt to the new scenario.
The new scenario is now we needa lot more money, faster,
because of the health careexpenses, than we would have
before, and so did their moneylast their lifetime?
Yeah, it did.
They ultimately had to move dadup north to be close to the
daughter First class planeticket, escorted by a nurse, the
transport van, because he'sliterally in a bed, and that was
(19:36):
like $15,000 to get him fromNaples on a flight up there.
And so were we able to shiftand adjust their finances to
meet those needs.
Yeah, but if the daughtersdidn't know who to reach out to,
meaning me, who knows whatwould have happened in terms of
how to structure their assets?
But it also goes on thepositive side as well.
I've had, unfortunately, knockon wood.
(19:57):
Usually it's the man that diesfirst, historically speaking,
not always and then you have thewoman who's single.
You've planned the retirementfor both of them and what they
need for both of them.
So when it's just one, you haveone social security.
There might be shifts inpension incomes, there's shifts
for her.
But I've had women that werewidowed and then all of a sudden
(20:18):
they meet somebody else and getremarried and their husband's
10 years younger.
Fabulous, but now the numbershave to shift differently,
because now I have a differenttimeline because of the age gap.
So financial planning isn'tlike a do it once and you're
done it's.
Life constantly throwscurveballs at us and it just has
to roll with the punches andadapt and shift to make your
(20:38):
money last.
Speaker 1 (20:39):
I would imagine being in your position, working with
hundreds of families, that yousee these patterns happen all
the time and just going back tothe productive pessimism of none
of us expect, none of us wantsto think about the negatives
that could happen, but probablyhappen very frequently to people
.
So you must have a veryinteresting perspective on that
or point of view when it comesto it, because you just see the
patterns happen.
Speaker 2 (20:59):
Honestly, I feel like I've seen just about everything
over the course of the yearsand I do have more and more
people that come to me with thefear and the anxiety and the
concerns and they do haveconcerns in the long-term care
and in the healthcareenvironment for a number of
reasons.
They're currently taking careof a parent who's needing
long-term care and in the healthcare environment for a number
of reasons.
They're currently taking careof a parent who's needing
long-term care help.
(21:20):
So they're seeing what happensand now they're like wait a
minute, I need to look at mysituation, I don't know what to
do, and that's usually whathappens.
But people sometimes will comein with that on their mind
because they're in the thick ofit with family members.
Speaker 1 (21:31):
In the book.
You mentioned the concept ofretirement paycheck.
How can people start thinkingdifferently about drawing down
their savings?
Speaker 2 (21:38):
Let's start that with looking at retirement.
And I say that because a lot oftimes people will come to me
and they think retirement is oneday.
It's one day and so in that oneday you don't shift everything,
like you don't take yourinvestments and all of a sudden
go and like just sell everythingand all of a sudden make it
(22:00):
super conservative.
It's one day.
You have the years leading upto retirement where you're
accumulating your assets, youhave the retirement day and then
you have all the yearsfollowing retirement and I help
clients see we need to look athow to distribute money from
your assets and make that lastover your lifespan.
And so creating that paycheckis a conversation I always have
(22:22):
with clients, because they'llinvariably come to me and go
okay, laura, I'm going to beretired in a month.
What do we do?
Because I want my paycheckMoney, you should ask.
That's what the conversation is.
And so we'll take theirinvestments and you segment them
and figure out how much moneydo they need from their
investments every month.
Let's make it at five grand,let's just make up a figure.
It means they need $60,000 ayear, and so we will keep 12, 18
(22:47):
, 24 months of that need in cashor cash equivalents, then
you'll keep three to six yearsof money that they'll need in
medium-term risk typeinvestments.
So they're not ultraconservative but they're not
real growth oriented either.
And then you take the rest ofthe money and make it growth
oriented.
And so then I take theconservative bucket, the cash
(23:08):
equivalents, and you justliterally think of the faucet in
your bathtub.
You turn on the spigot and outdrops the money you need every
month into your bank account andas the bathtub gets empty you
replenish it from themedium-term bucket into the
bathtub and then from the growthyou replenish the medium-term
bucket from the long-term bucketand this way it helps clients
(23:28):
have the money they need in theshort run so they're not
freaking out over marketvolatility and it keeps the
amount of assets that theyshould have growth oriented in
growth, because retirement is aday.
You might have a 30 yearretirement period.
Some of your money needs to beinvested for 30 years, but not
all of it, and so having thatstructure gives clients the
peace of mind of how is thisgoing to work.
Speaker 1 (23:50):
Here's a question for someone listening to this.
How can they determine whetheror not they've saved enough?
How do you help peopledetermine?
Speaker 2 (23:58):
that the software that we have is very detailed,
where we can run, literallyillustrate those projections
forward and take their currentassets with a rate of return
that fits their risk and thentake their expenses with an
inflation rate and their taxrate.
We look at what the taxbrackets are for them.
We can build in anything elsethat's going on.
(24:19):
If there is pension withsurvivor benefits and one person
the person passes away and thenspouse gets a survivor benefits
, we can factor in all thosechanges in income and add in
specific expenses like 10 years,I'm gonna buy a new car or
whatever.
Is it perfect?
It's not perfect, it's nevergonna be perfect, but it'll get
you really close to what youprobably should have.
And there are a lot of onlinetools you can get access to
(24:43):
things like that.
They tend to be very simplistic, in my opinion, end up giving
you bad math for no other reason, other than they're just too
simplistic in people'ssituations.
Speaker 1 (24:52):
They're always more complex than that I've been
watching on youtube somefinancial podcasts and it seems
that, at least the ones I watch,that the people typically will
spend more money than they havenow.
Is that something that you comeacross, or is it thought?
Or do the people that come toyou, do they typically, or are
they typically good savers?
Speaker 2 (25:09):
Both.
Like I said, I swear I've seeneverything, and I have clients
that are very diligent inunderstanding what they spend
and what's coming up in unusualthings, cause we all have
unusual things.
You have a hurricane, you'vegot a roof leak, you got to fix
your screen, whatever.
But then I also have clientsthat oh, my son needs help, I
need to give him $100,000.
(25:29):
Oh, my daughter's getting adivorce, I need to buy her a new
house.
What, okay?
But then they forget that theydid that.
And so when you look at howmuch they're spending and
they'll swear I only spent X.
No, you don't.
You spent X plus Y because lastyear you gave money to the son
the year before you bought ahouse for the daughter.
The year before that you didthis and you forget all those
(25:51):
one-off things that you've donewhere you think you're spending
a certain level but you're wayover it.
So we need to look at the newnumber of the way over it,
because you're going to keepdoing that.
That's what gives you purposeand that's what you're going to
do in life.
We need to plan that in.
But I have other people thatare very like.
They know what they spent.
Speaker 1 (26:08):
It's just people fall into both areas Do you find as
an advisor with some people whoare probably great savers
throughout their lives, do youever get to the conversation
where you have to encourage themto spend their money, spend
more of their money?
Does that come up very often?
Speaker 2 (26:22):
It doesn't come up often, unfortunately, just
because facing health care costsand those types of things right
now, it's such an unknown forpeople that I want people to
have more money than less money.
But historically speaking, Ihave had times.
I worked with a couple forquite a while and they had good
pensions, they had saved a lotof money, they had one child and
(26:43):
a grandson and they were notspending their money.
They had one child and agrandson and they were not
spending their money and Iliterally and they were like of
the depression era generationtype client, where they truly
didn't spend money and I triedto get them to spend money.
I'm like, what would give youjoy?
And the wife was like, oh, Ialways wanted one of those
little Mercedes or whatever.
And I'm like, then go buy one.
Do you want me to go with you?
I will go with you and we'll gobuy a little Mercedes.
(27:05):
Will that bring you joy?
Oh, that would bring me joy.
I never could get her to buy theMercedes that could put a dent
in their money.
No, and they were so completelyfrugal.
They both passed.
The son, inherited all of itand he was not as frugal as them
, but he wasn't like he didn'tspend money Crazy.
He did travel, he lived a goodlife, but he didn't make bad
(27:28):
decisions.
And then he passed and then hasgone on to the grandson, and so
the grandparents had so muchmoney that it is filtered all
the way down, but I could notget them to spend.
I really tried.
Speaker 1 (27:36):
So another question, as it relates to the book
digital assets and pet trustswhy are these overlooked areas
of estate planning that morepeople should think about?
And I can tell you, I'm askingyou this question as a proud pet
parent, so I am personallyinvested in the answer here, as
I'm happy to hear that you are.
Speaker 2 (27:56):
I have volunteered in the pet rescue arena for
decades and that is one of mypet projects, but in terms of
digital assets and pet trusts, Ifeel that they're overlooked.
Not because estate attorneysare bad or they don't know
anything there's so manyfabulous, awesome attorneys out
there that my clients rely on.
(28:17):
It's the fact that this stuffis newer on the scene, so it's
not something people alwaysthink about and the attorney is
protecting the investments inthe stuff.
When you think of digitalassets, it's bigger than your
cryptocurrency and onlineaccounts.
That is part of.
It Could be a cryptocurrencyaccount, it could be an online
(28:38):
banking account, but digitalassets are also the assets of
stuff that is out there in thecloud.
Speaker 1 (28:46):
Where are your?
Speaker 2 (28:46):
pictures stored, Paul .
Do you have them printed inalbums?
Speaker 1 (28:50):
I do not.
Speaker 2 (28:51):
Nobody does.
What about your social media?
What happens to your Facebookaccount?
What happens to your LinkedIn?
I can tell you on my Facebook.
There are at least five or sixof my Facebook friends that,
unfortunately, have passed awayand their Facebook profile is
out there.
Did you know that you can put alegacy contact on your Facebook
and they can take over it?
Okay, same thing with LinkedIn.
You have to think about thedigital assets, because what you
(29:14):
don't want to do is justrandomly leave a piece of paper
with all these passwords in itand go okay, my daughter's going
to handle it.
I'm not the attorney, so don'ttake my advice on it, but it's
not really legal.
So what if your daughter andyour son don't get along, or
(29:35):
your daughter doesn't get alongwith your new wife and you pass
away?
I have had times where somebodyhas passed and a child has
taken all of the family photosand won't give them to anybody.
I have had times where somebodyhas gotten access to dad's
email and, oh looky, herethere's all the evidence of
dad's affair.
Probably should control whogets in the email.
So you have to think about that,because where do you want your
family photos to go?
Where do you want all of thesethings that you're collecting
(29:55):
that truly are assets of yourlife.
They just happen to be digital.
You need to put somebody incharge of that stuff and people
just don't think about it.
If you look at the terms ofservice for various platforms
and I don't know if it's changedor not, but, like, for instance
, yahoo at one point and maybestill is if you pass away and
you have a Yahoo email, if theyget notification that you've
(30:16):
passed away, your email's done,shut down, gone, history.
So anything that you have inthere that your family might
need, your email's gone.
You've got to think about that,that stuff.
So digital assets, to me is animportant thing for a client to
talk to their attorneys aboutpet trusts.
Talk about pet trust, becausethat's near to my heart.
Speaker 1 (30:33):
Pet trusts are very near and dear to my heart.
Just for the breaks for thelistener, I do have children,
they're just the four-leggedtype.
So how do I look after mychildren after I'm gone?
Speaker 2 (30:44):
a lot of attorneys will include pet trusts If you
ask them.
They don't.
It's not always a given thing.
All of my clients that haveanimals now or may have animals
in the future.
I will tell them tospecifically talk to their
attorney and have a pet trustdrafted and you can put it in
your existing documents.
And what a pet trust does itwill set aside whatever dollar
amount that you want to setaside for the care of that
(31:06):
animal and put somebody incharge.
Because what happens time andtime again and I can tell you
this from being in the rescueworld people don't make plans
for their pets.
Both of my dogs I have twofive-pound chihuahuas that are
under my desk now.
They're both rescues.
My older rescue, levi, is 13years old and at 10, he was one
of four dogs that lived in aroom with his bed-bound human.
(31:26):
She died and had no plans forthose four dogs.
All four dogs ended up in theshelter.
All four senior dogs ended upin a crowded shelter with a
whole bunch of other animalsthat were also looking for a way
out.
So it just creates more of aburden on the shelters that are
already bursting at the scene,and Levi found his way out and
found his way to me, and wealways joke that he came to
Florida to retire because he'sfrom Nebraska.
(31:48):
But that's a whole nother story.
But what people will tell meover and over?
My sister said she'll take them.
My daughter said she'll takethem.
They might tell you that theywill take them and they might
have every intention to takethem, but you don't know where
they're going to be.
What if your daughter's marriedto somebody who is highly
allergic to cats and they can'ttake your cat?
(32:09):
What if your sister has healthissues and she's moved to a
long-term care facility thatcan't take your Doberman?
You have to have plans,otherwise your pet is going to
end up at the shelter withhundreds and hundreds of other
pets.
And if you put somebody incharge of the pet trust, they
might not be able to take youranimal, but they can find where
(32:29):
the animal could go and live outthe rest of their life and they
have money to pay for the foodand the vet care.
So you're not taking yourbeloved animals, that your fur
babies, and just randomlyputting them in the shelter.
That they're all struggling andthey're all bursting at the
gills right now.
It's just, it's the smartestthing to do.
And if you pass and you don'thave the animals, then the pet
(32:50):
trust won't take effect becausethere's no pet to care for.
Speaker 1 (32:52):
So it doesn't matter.
Speaker 2 (32:54):
if you've got your pet cat, your pet dog, your pet
pot, belly bait or iguana, youhave to figure out where you
want that animal to go and who'sgoing to be in charge of making
sure they get somewhere for thecare and not rely on promises
from people, because people havegood intentions but situations
change.
Speaker 1 (33:09):
A couple of final questions before we wrap up
today.
How can someone listening tothis podcast do one of two
things either get a copy of yourbook Fearless Finance, or
simply reach out to you to learnmore about your services.
Speaker 2 (33:22):
The easiest way to do that is just send me a quick
email to ImpavedWealthAdvisorsat AMPFcom,
ameriprisefinancialcom, so AMPF.
That's it.
Just shoot an email and my teamwill respond and get you the
book or get you with me.
Speaker 1 (33:42):
Final question what does true financial fearlessness
look like to you in real life?
Speaker 2 (33:49):
True financial fearlessness to me is having the
tools to understand the numbers, spending the time to
understand the risks that couldbe out there that could affect
you in your life, and having thecourage to look at it and
address it, rather than put therose-colored glasses on and be
in your own version of bad math.
Speaker 1 (34:09):
Thank you very much for your time today.
I've enjoyed the conversation.
You're welcome.
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