Financial Storytelling

This blog is courtesy of Russ Thornton of Wealthcare for Women.

I’ve joked before with you about how my job as a financial advisor is as much about psychology, therapy, and counseling as it is about money advice. Because no matter what money advice I give – or that you’re giving to yourself – what really matters is your behavior. And I believe your behavior, both today and over time, is not so much about money as it is about emotions and mindset. With this in mind, I’d like to share some thoughts on financial storytelling.

But first, let me state the obvious. I’m a financial advisor. I am not a psychologist, therapist, or counselor. The following are my amateur-ish thoughts based on 23+ years serving individuals and families as a financial advisor.

So, let me ask you an important question . . .

What story are you telling yourself about money?

And while you chew on that question, I’ll ask another . . .

Is your money story true?

OK, let’s dig into this a little deeper.

I’ve written in the past about an “adult money model” that I’ve been tinkering with over the past few years. Based on that model, perhaps you consider yourself an investor but not a planner. Or a planner but not a designer.

Or if you’ve ever considered the concept of “money scripts” then maybe you tell yourself – either out loud or quietly to yourself – that you’re a “money avoider” or one of the other identified money scripts.

Perhaps you have an altogether different perspective on money and financial planning based on your own experiences or those of others who are close to you.

Keep all this in mind, because I want to shift gears here for a moment.

We Are Natural Storytellers

Please watch this video which is less than 90 seconds long.

In fact, before we proceed, I’d like you to watch it again.

Now, think about what you saw in the video.

What is happening?

Watch the video once more if it will help you think through what’s going on.

Here are some possible explanations of the video:

  • The bigger triangle is a homeowner. Smaller triangle is a contractor telling the homeowner all the repairs and improvements that need to be made to the home. The circle is the interior designer outlining all the money that needs to be spent on redecorating the home. The homeowner (bigger triangle) gets frustrated and tells them both to get out.
  • If you’re a parent, perhaps the triangles are parents and the circle is a child or children goofing around and frustrating the parents.
  • Or perhaps this is a domestic abuse story. The big triangle is an angry husband and the wife is the smaller triangle. The circle is a child. The angry dad is yelling at the mom and about to do the same to the child, but the mom grabs the child and gets out of there.
  • Maybe the big triangle is “hitting on” the smaller triangle and wants to date him/her. Thinks they’ll get along because they look similar. However, the smaller triangle has no interest. So the bigger triangle tries to ask the circle out on a date because the circle looks nothing like the triangle. Again, it doesn’t work out. The smaller triangle and the circle wind up together and the bigger triangle is frustrated and alone.

Again, the above are just examples of how you might interpret the video. You might have come up with something wildly different.

By the way, this video comes from a 1944 experiment. If you’re interested, you can learn more about the backstory here.

Is Your Story True?

So based on the video above and either the sample explanations or your own story of what’s going on in the video, I have another question:

Which story is true?

Or to put it in different terms, which story is right and which is wrong?

Perhaps you’ll agree with me that there isn’t a story that’s any more right or truer than another. These are simple interpretations – or stories – we tell ourselves to help us better understand or explain what we’re seeing.

As humans, we’re story-telling machines. This dates back to our tribal ancestors who passed information and knowledge from one generation to the next. There was no Wikipedia in the earliest days of human history.

I imagine if you were out hunting with others from your stone-age cave dwelling and you happened upon a saber-tooth tiger, your brain told a quick story: run away or get eaten.

You probably wouldn’t have pulled out a stone tablet and scratched out a detailed set of scenarios, assumptions, and possible results and then decided how to deal with the tiger.

The story you would have told yourself as a cave-man (run or get eaten by the tiger) was likely learned from others or personal experience. Maybe the last time a hunting party went out, one of the hunters didn’t run and was eaten by a tiger. Your “what to do when you encounter a tiger” story was informed by others, personal experience, or both.

Likewise, the story you may have seen in the video above reflects who you are and the experiences that led you to where you are today.

If you agree that we (and our minds) are natural storytellers, then we, as humans, can easily believe that the story we’re telling ourselves is the reality of our daily lives.

The video above is designed to help you experience our natural tendency toward storytelling and hopefully allow you to glimpse what it’s like to detach yourself and your life from your story-based interpretation of your life and the world around you. Perhaps you’ll even begin to give yourself permission to evaluate each experience or event in your life independently and identify what’s actually going on versus the “story” that your brain made up to help you more quickly interpret and deal with your perceptions.

And yes, you’re telling yourself a story about money. Some are positive and some may be negative. But the point I’m trying to make is that you control the story you’re telling yourself.

Maybe it’s Time for a New Story

If you don’t like the story you’ve been telling yourself about money – or anything else in your life – why not change it up?

Let’s take an example of two women. Both are 55 years old. Both have 2 grown children. Both have identical financial situations and resources. And both of them were just served with divorce papers from their soon-to-be ex-husbands.

Both of these women have been loving and faithful wives. They’ve both been caring mothers. Both have been stay-at-home Moms for the last 15 years.

What do they do when faced with divorce? What story do they tell themselves?

Are they going to play the role of the victim and say “woe is me” and never fully recover from this major life transition?

Or are they going to deal with it, navigate all the emotions and decision making and get on with living?

In fact, I’ve seen both of these very different stories play out in my work with women dealing with divorce.

I’m sure you’ve seen or can think of two or more people in similar circumstances or stations in life, but one manages to take charge of her life and make progress toward her goals. Sure she might stumble along the way, and she might even fall down on her face, but she gets back up and keeps fighting to live her life on her own terms.

While others in a similar situation seem to be perpetually stuck.

And while this can be about money and money decisions, it can also be about your health, your relationships, your career or anything else in your life.

I know people – you probably do too – who one day decided they were going to eat better and get fit. And they didn’t just decide it, they actually did it. Several months or a couple of years later, they look like a different person. But they’re not a different person, they just starting telling themselves a different story about what they were going to eat and how they were going to work on their fitness goals.

Or you’ve read stories about people who were once flat broke going on to create a thriving and profitable business.

There are more examples that I can list here, but I hope you get what I’m talking about.

Now, I’m not suggesting that simply by adopting positive thinking, your life will be all rainbows and unicorns. This isn’t about pursuing some unrealistic version of life. Life is hard. And getting harder every day.

What I am suggesting is that you can simply tell yourself a different and better story.

There are no guarantees that a different or better story will lead to all your dreams coming true. But if you feel stuck, or you can’t seem to get ahead, try a different perspective or story. What have you got to lose?

 

©2018 Divorce911.com. All Rights Reserved |This information is deemed to be accurate. Reader / User is required to perform their own due diligence with the appropriate professionals. DIVORCE 911 is not a law firm, financial institution or advisor, registered mental health resource, does not practice law, and does not offer legal, financial, or therapeutic advice.

Fast & Customized! Click Here

DIVORCE 911 collaborated with Jennifer Keaton of 2 Step Divorces for this blog.

We also have a video covering this topic.

Fast, customized, and private divorces are hard to come by. Most of these occur either through negotiations directly, or through attorneys at a mediation. Mediation allows for easier communication among the parties versus phone tag or the back and forth that often occurs. It’s often “speedier” because you move the finish line up by several miles. Instead of waiting for a court decree, you’re pulling that finish line closer to you. Additionally, you have control over what the terms will be and your terms of the divorce are kept private. It is a private setting to get some hard, hard stuff done that is not necessarily going to be pretty. The end result of that mediated settlement will be thoughtful, it will be customized, and (most likely) will be much better than what a court/judge is going to issue.  The judge is going to look at who gets the Ford, who gets the Chevy, but not the details of when those golf clubs need to come out of the trunk, when that title is going to be transferred, when the bills are shut off or who’s responsible for _______ (fill in the blank here)…

Customized, predictable, and really putting that timeline together is something that can be done in mediation whereas with a judge; it’s not his or her problem. Mediation allows you to narrow down all the specifics so that no details are left to chance while also being a fast and customized divorce settlement process.

 

This information is deemed to be accurate. Reader / User is required to perform their own due diligence with the appropriate professionals. DIVORCE 911 is not a law firm, financial institution or advisor, registered mental health resource, does not practice law, and does not offer legal, financial, or therapeutic advice.

Why Do Judges Order Mediation

Why Do Judges Order Mediation

DIVORCE 911 collaborated with Jennifer Keaton of 2 Step Divorces.

We also have a video covering this topic.

Judges in the state of Georgia are actually required to order most parties to attend mediation before they go to trial. So, it’s a mediate now or mediate later situation for most families. It’s a court rule. The other reason is that it works. Most divorces do settle in the state of Georgia. In a divorce, there’s a lot of grey area with all of the different factors that most judges consider. How they determine their outcome is going to be very specific to each judge. Figuring out what that judge is going to do (versus what you would like to see) and have some control over the outcome is important. This is especially true if you have kids. You want to have that customized solution. That’s another reason mediation works and why courts use it. Of course, they also get the benefit of a smaller docket and less work to do when people can resolve their own terms of their divorces.

Hiring an expert in mediation services like what is discussed above is really the better decision. The court is going to order it anyway. It helps narrow down the time you have to spend in court. If you‘ve figured out things such as finances before you go to court everything is that much easier to handle. It allows the parties to have control over the process. There is something to be said for having control and certainty and knowing where the chips are going to fall. There are some things you can get from a mediation that you can’t get in a courthouse because the judges are handcuffed by the terms of the law. They deal with the “What Side” of the divorce. ie…“What Side” of the fence is going to get the car, the furniture, the 2nd home, etc…but how that transpires is completely different.

So having control over how and stepping through a timeline of how the two lives get teased apart into two units can be a pretty big deal particularly when there are kids.

Mediation does afford both parties more control over their futures.      

©2017 This information is deemed to be accurate. Reader / User is required to perform their own due diligence with the appropriate professionals. DIVORCE 911 is not a law firm, financial institution or advisor, registered mental health resource, does not practice law, and does not offer legal, financial, or therapeutic advice.

Single Income Lifestyle

Single Income Lifestyle

DIVORCE 911 collaborated with Howard Cattie of Career Oyster.

Divorce 911 consulted with Howard Cattie of Career Oyster for this blog post.
When you have a divorce, you are now faced with a single income lifestyle. This
is the most common issue facing many spouses. The problem is, in a two income
family you have a lot of shared expenses that get covered. Now all of sudden
there are two separate lifestyles with two separate incomes/budgets. If you
weren’t working, you may have to reenter the workforce.

In today’s environment that’s more than a little bit challenging. You need the
confidence, you need the strategy, you need the tactics and the techniques of an
effective resume, proper interviewing, etc… to compete with the existing job market
candidates.

If you are working, it dawns on you that you need to make more money or have a
better long term vision and career. If that’s the case, now you are underemployed
relative to your single family needs. You should evaluate skills now! Maybe you
should consider some of the volunteer things you’ve done, maybe look at some
other experiences you’ve had and try to put yourself on a better track by upping
your search for a higher level position. That’s a career change and a transition.

It also requires a little forward thinking in your resume. Not backward thinking,
forward thinking! This requires you to go to a hidden market then reach the right
decision maker so that you can sell yourself for the new opportunity. More
importantly, you will need the confidence in yourself to do just that.
These are the things you should do to increase your income for your future
income lifestyle strategy. This is a new chapter in your life, why not really make
the best out of it? Talk to a career coach that will provide you with a resume that
is forward thinking. It will allow you to make more money for the current
circumstances that you have.

Remember! In a divorce, your income has now been cut in half and your
expenses have now doubled!

 

This information is deemed to be accurate. Reader / User is required to perform their own due diligence with the
appropriate professionals. DIVORCE 911 is not a law firm, financial institution or advisor, registered mental
health resource, does not practice law, and does not offer legal, financial, or therapeutic advice.

How to Benefit From Financial Routines

This blog is courtesy of Russ Thornton of Wealthcare for Women.

Steve Jobs. Mark Zuckerberg. Albert Einstein.

They each wear (or wore) essentially the same outfit every single day.

Before his death, Steve Jobs was best remembered in his signature black mock turtleneck, jeans, and sneakers.

The founder of Facebook, Mark Zuckerberg, typically wears a gray t-shirt with a black hoody and jeans.

And Einstein reportedly purchased several variations of the same gray suit so he wouldn’t have to waste time deciding what to wear each morning.

And there are others.

Johnny Cash is often remembered as the “man in black” while the author Tom Wolfe has been wearing his white suits since the early 60s.

This article credits these same-outfit-wearing folks as having simplified their lives by helping to reduce their decision fatigue.

While I don’t wear the same thing every day (I’m not sure my wife Elizabeth would go for that), I think there’s something to this idea of reducing or eliminating the choices we’re all faced with every day.

I’ve written before about the value of constraints in financial planning, but that article was primarily about applying constraints to your investment decisions.

But there are other areas where I believe you can benefit financially from routines that reduce your responsibility to make decisions.

“Automating your finances” is a great place to begin.

As many of my clients will attest, I’m a big fan of automating things as much as possible when it comes to your finances. Here are some guidelines on how you might go about automating your own finances courtesy of Ramit Sethi.

But automation can extend beyond how you divvy up your paycheck to savings, bill payment, etc.

What if you’re nearing retirement and are unsure of how best to transition from accumulating wealth through savings to utilizing your wealth through prudent spending? One way is to simply create a “retirement paycheck.”

Through proper planning and a disciplined portfolio management process, you can have supplemental income deposited into your checking account on the 1st and 15th of every month, or whatever interval works best for you.

Or if you want to begin paying down your mortgage ahead of schedule, simply setup and increase your automatic monthly payment with some of the extra applied directly toward principal.

Sure, automated routines can help make your life easier and help you avoid missed bills, but that’s just the tip of the iceberg.

Researchers estimate that an average adult makes 35,000 daily choices of varying degrees of significance.

No amount of financial routine building is going to put a meaningful dent in that figure, but I think it’s as much about quality as it is quantity.

Let’s say you get your latest paycheck deposited into your checking account.

Do you make the minimum credit card payment? Do you save some into your IRA? Do you just let it sit in your checking account earning 00.001% interest or whatever measly interest rate your bank checking account pays you?

And even if you’re disciplined and have a financial plan in place, some decisions can hit you at the worst possible time. Like when you’ve had a rough day (or week or month) at work and just want to go out and blow off some steam.

Or when you’re dealing with an unexpected auto or home expense.

Or when your high schooler neglected to mention the latest of what feels like a never ending stream of fees and expenses that need to be paid. And she’s in public school!

As you might imagine, even the best of intentions can easily be waylaid by circumstances that are often outside your locus of control.

Even when you know the best advice is “don’t just do something, stand there,” it’s much easier said than done when you’re faced with 35,000 choices a day.

To combat this situation, I encourage you to build routines and put things on auto-pilot as much as you can.

Whether that’s your wardrobe, your finances or something else, having some of these areas already addressed will hopefully free up some precious time for you to spend on more important things in your life.

 

©2017 Divorce911.com. All Rights Reserved |This information is deemed to be accurate. Reader / User is required to perform their own due diligence with the appropriate professionals. DIVORCE 911 is not a law firm, financial institution or advisor, registered mental health resource, does not practice law, and does not offer legal, financial, or therapeutic advice.

Divorce and the House

 

I kept the house after my divorce.  I receive alimony/support until my three children all turn 18, in five years.  Approximately a little more than half of my support goes to my mortgage and home living expenses. Once my support ends I can no longer afford to live in my home. In the meantime, does it make sense that a large chunk of my support goes to maintaining my home and just making ends meet each month? Real estate is expensive where I live so I have limited options. I am not sure if should continue to hang onto my home and not save any money each month or sell before my support comes to an end.

 

The primary objective is to “Create Margin” in your life. In this case, we are referring to how much financial margin you need now and for the future. Your first step in finding out what that looks like is to talk with a financial planner.  A thorough review of a comprehensive plan for the future is the key to success here… Anything less will simply not work.  Once you have this knowledge and information you will understand the changes/choices that are necessary for you to survive. No… THRIVE!

 

It’s obvious that you already see the writing on the wall… Divorce will require intentional, dedicated, and focused decision making. Some (or many…) of them will be sacrificial. Life and the finances are different now. Face it HEAD ON! From my perspective on your situation – Build cash reserves now and if you are not in the work force… build your resume and get in today!

 

I would recommend that you get an appraisal on your current residence to establish a payout/baseline. Then take a look at the marker that you would “downsize” into.  You might even enjoy renting, as the landlord will be responsible for the burdening repairs and maintenance on the property.

 

Bottom line— Get educated by a professional, stay focused and encouraged with your plan, and enjoy finding ways to “Create Margin” in all the areas of your wonderful life!

Best wishes to you and your family!

 

 

©2017 Divorce911.com. All Rights Reserved |This information is deemed to be accurate. Reader / User is required to perform their own due diligence with the appropriate professionals. DIVORCE 911 is not a law firm, financial institution or advisor, registered mental health resource, does not practice law, and does not offer legal, financial, or therapeutic advice.

Post-Divorce

DIVORCE 911 Collaborated with Wendy Hayes of Mitchell Hayes for this blog.

We also have a video covering this topic.

 

In many cases, people will return years after their divorce for some kind of modification. That could be property that wasn’t properly titled when the division of assets was supposed to happen, or worse yet… the division of debt. Perhaps one party is responsible for paying off debt and did not do it.  Then the bank or whoever the lender on the debt comes after the other spouse. If you haven’t taken the appropriate steps to have your name removed off of that debt the lender has every right to come after you to pay it.  They are not required to administer or respect your divorce.

This is why it’s so imperative to think forward and think about what is going to happen post divorce. You want to do everything you can to minimize the possibility that you have to go back and seek a modification in the future. It can be extremely costly to be able to do so, it’s very difficult, and it’s emotionally draining.

Once again, that is why it is so important to think through all of what can happen once you get that settlement. Make sure everything gets titled correctly post divorce. This prevents the ability to come back later and ask for more money.  When it comes to child support, remember that your child’s expenses increase over time.  Thinking far enough in advance so that your settlement has your future protected should keep you from going back to court and asking for an increase.

The biggest thing to remember to do is to think forward. Really get out of your past, separate yourselves from the now, think forward to what your future is going to look like.

 

 

This information is deemed to be accurate. Reader / User is required to perform their own due diligence with the appropriate professionals. DIVORCE 911 is not a law firm, financial institution or advisor, registered mental health resource, does not practice law, and does not offer legal, financial, or therapeutic advice.

Child Support

DIVORCE 911 collaborated with Steve Shewmaker of Shewmaker & Shewmaker for this blog.

We also have a video covering this topic.

 

There is a common misconception of how you would pay child support. Let’s suppose that your children are going to live with your ex-spouse or perhaps someone you were never married to but have children with. The common misconception is that you would pay this ex a straight percentage 23% of your income for one child or 33% of your income for two children. That was the model that Georgia and many states followed.  Some states still follow that model. Georgia moved away from that model several years ago and has joined the majority of states using a new model.  This new model is called income sharing.

The way income sharing works is that both parents gross monthly incomes are added together to get a total monthly income. This again is the gross income, before taxes. That total and the number of children are the factors for child support. There is a table in the law under the official code of Georgia 19-6-15. This table will tell you on the combined gross income of the parents and the number of children how much child support is required for the child.

Say for example it’s $1,000 a month in this table. That’s not the end of the story. You wouldn’t necessarily pay $1,000 dollars a month. The next thing we would consider between you and your ex-spouse is what your pro rata percentage of that income is to the total. Say yours is 40% and the other spouse’s amount is 60%. In that case, you would be 40% of the amount in the table for the total gross income and the number of children. That’s not the quite the end either. We then also account pro rata for two things. Those two things are health insurance for the children paid on a monthly basis and work related child care for the children. You would pay 40% of those expenses in addition to the 40% of the prescribed amount.

Some of the primary deviations from the total amount would be work related child care and health insurance premiums. Also, there are special deviations/circumstances that can occur for many other things. Always consult with a professional to make sure the law is benefitting you the best way possible.

This information is deemed to be accurate. Reader / User is required to perform their own due diligence with the appropriate professionals. DIVORCE 911 is not a law firm, financial institution or advisor, registered mental health resource, does not practice law, and does not offer legal, financial, or therapeutic advice.

Step Inside Your Financial Comfort Zone

This blog is courtesy of Russ Thornton of Wealthcare for Women.

 

“Life begins at the end of your comfort zone.”

You may have heard this quote before or seen it on one of those motivational posters.

If you search Google for “comfort zone quotes,” you’ll find no shortage of pithy advice about the benefits of getting outside your comfort zone.

This advice is fundamentally about breaking your routine, getting out of a rut, trying something new, and generally forcing some level of discomfort upon yourself and in your life in order to uncover new opportunities.

I can see some wisdom here and don’t think any of us want to spend our days simply going through the motions.

But does this same concept relate to your money?

Should you expose not just your life, but your financial resources as well, to discomfort in order to really begin living?

I don’t think so.

In fact, I believe the opposite to be true.

Your best life is waiting for you inside your comfort zone.

Let me explain.

There already seems to be plenty of financial discomforts to go around.

Many people don’t have much money and those that do don’t talk about it on the grounds of social decorum. Money is generally considered an uncomfortable topic of conversation.

So I don’t think we need to add any unnecessary discomfort to money matters in our lives.

But what if you could actually live your best life and keep your money matters in order by staying in your comfort zone?

Here’s how this works . . .

As part of my Wealthcare financial planning process, instead of focusing solely on a singular set of your goals, we instead split every goal into two unique flavors of your goals: Ideal and Acceptable.

With a singular set of goals, like retirement age, retirement spending, a travel budget, education funding and more, your plan either works or it doesn’t. It’s almost like your financial plan is balancing on a tightrope. Or a razor’s edge.

One hiccup in the market, your life or the lives of those that are important to you, and your plan becomes null and void. Back to the drawing board to start over at square one.

This isn’t financial planning.

It’s a series of individual financial plans. One after another, hoping this next plan will have a longer shelf life than its predecessor.

And it can also convey a false sense of precision. With a singular set of goals, you could be expected to believe that as long as your plan is on track that there’s little that could change a comfortable and confident financial future.

Until, of course, life happens.

Financial planning is a contact sport. It exists at the intersection of your money and your life.

And it’s about more that just your investment portfolio and the investment markets.

Thankfully, I have an alternative to the uncomfortable reality of basing your financial plan on a tightrope of singular goals.

And as it happens, my approach to financial planning lives – thrives even – inside your very own, personalized comfort zone.

Creating your financial comfort zone begins with a different approach to goal setting.

Instead of a singular set of goals, we’ll develop an Ideal and Acceptable version of each.

Fox example, I would ask you when you want to retire, and you might say age 60. But instead of moving along to your next goal, I would ask some clarifying questions.

My next question would explore if you have any interest in retiring prior to age 60 if you could do so with comfort and confidence?

Maybe you tell me you’d love to retire at 55 if you could, but you doubt it’s possible. In this exercise, a little doubt is OK. Remember, this is an IDEAL goal.

But we’re not done with discussing your retirement age because next, I’ll ask if you’re willing to work beyond age 60 if it meant you could accomplish other, perhaps more important, goals.

And maybe you tell me you could possibly work until age 62, but not a day longer. Age 62 retirement isn’t your goal. It’s an acceptable version of your goal.

And we repeat this process for every goal that’s important to you and your family. Even goals that might feel more like wishes or dreams.

We’ll establish Ideal and Acceptable versions of:

  • Retirement age (see example above)
  • Retirement spending
  • Education planning for children, grandchildren or others (including yourself)
  • Travel spending
  • Charitable giving
  • Investment risk (you don’t have to take risk just because you’re willing to tolerate it)
  • Leaving a financial legacy behind to family and/or organizations
  • Supporting aging parents
  • Downsizing your home in retirement
  • Supporting grown children
  • Starting a business
  • Selling a business
  • And the list goes on

Not only do these Ideal and Acceptable conversations lead to a more personalized plan, it creates a true discovery experience to help you identify and clarify the things, experiences, people, and organizations that are truly important in your life.

And this also avoids the goal tightrope that traditional financial plans revolve around.

Now we have a range of goals between Ideal and Acceptable. We’ve established early in the financial planning process goals that you’ve perhaps only dreamed about in the past. And we’ve balanced these dreams with less aspirational, acceptable goals that would still make for a comfortable life for you and your family.

Your financial plan no longer balances on a tightrope. It now lives and breathes inside your very own financial comfort zone which is the range between your Ideal and Acceptable goals.

And this comfort zone gives us more choice and flexibility.

It naturally supports ongoing financial planning which depends on regularly updating, reviewing and adjusting your plan. This is in stark contrast to a plan that no longer works and calls for the creation of an essentially new plan.

Financial planning is all about trade-offs.

Save more now so you spend more in retirement, retire earlier, take less investment risk, or all of the above. And having an established range of goals which define the borders of your comfort zone facilitates a better understanding of these trade-offs.

The market goes down?

Then we’ll have to move one or more of your goals toward your Acceptable values.

The market goes up?

This provides an opportunity to move one or more of your goals closer to your ideal values.

These are just a couple of quick examples. The investment market (and your portfolio) is just one of many factors that can necessitate adjustments among your Ideal and Acceptable goals.

In fact, my primary role as your financial advisor is to create a “recommended” plan that gets you as close to your Ideal goals as possible while keeping your plan squarely in your comfort zone of sufficient confidence given the uncertainty of the future.

So despite the quips and quotes about your life beginning outside your comfort zone, when it comes to your financial plan and your future, I believe your best life resides inside your personal comfort zone.

 

©2017 Divorce911.com. All Rights Reserved |This information is deemed to be accurate. Reader / User is required to perform their own due diligence with the appropriate professionals. DIVORCE 911 is not a law firm, financial institution or advisor, registered mental health resource, does not practice law, and does not offer legal, financial, or therapeutic advice.

The Seductive Siren Song of Pessimism

This post is courtesy of Russ Thornton from

Wealthcare for Women.

 

Watch the news and it appears the world is falling apart.

You can find a “glass half empty” viewpoint pretty much anywhere you turn.

Maybe that’s why we collectively flock to Facebook and Instagram . . . so we can see the “highlight reels” of peoples’ lives.

But if you watch or read the news, expect more of the same old programming.

Whether it’s the movies or our daily lives, it seems we’re wired to watch conflict. Whether it’s crime, violence, drama or apocalyptic forecasts, we can’t get enough.

But why?

For a good explanation, I encourage you to read this article from Morgan Housel.

It’s called “The Seduction of Pessimism,” and it provides some sound theory on why pessimism, in general, is more appealing to us than optimism.

This is the best thing I’ve read this week, and I hope you’ll find it as engaging as I did.

And to be absolutely clear, I’m not a Pollyanna that thinks everything is always champagne and roses.

In fact, I’m reminded of this on a near-daily basis through my conversations with people who are facing big personal challenges associated with things like divorce and widowhood.

Yet, I consider myself an optimist and a generally positive person.

Reading the article I suggested above, you might think I have a dampened sense of self-preservation or that perhaps I’m not enough of a critical thinker.

I would respectfully disagree with this conclusion.

Instead, I’m reminded of this quote from financial services industry veteran Nick Murray:

Optimism is the only realism.”

For more context around this quote, check out this PDF.

As I’ve shared before, I don’t watch CNBC or other business news. I don’t read the Wall Street Journal or Investor’s Business Daily. And while I consume a lot of information and do a lot of reading online, almost none of it news or current event based information.

You may interpret my approach as sticking my head in the sand or deliberate ignorance.

I prefer to think of it as “informed apathy.”

Or, as I’ve said and written many times before, I believe in focusing on the things I can control.

I would encourage you to do the same. And avoid the seductive siren song of pessimism.

 

 

©2016 Divorce911.com. All Rights Reserved |This information is deemed to be accurate. Reader / User is required to perform their own due diligence with the appropriate professionals. DIVORCE 911 is not a law firm, financial institution or advisor, registered mental health resource, does not practice law, and does not offer legal, financial, or therapeutic advice.

Make Life Easier with Your Own Team of Experts

The blog is courtesy of IRC Wealth.

“I’m not the smartest fellow in the world, but I sure can pick smart colleagues.”
~ President Franklin D. Roosevelt

Having a team of experts to support you, especially the “business” side of YOU, Inc., is crucial. Because everyone, even the smartest person in the world, can benefit from the experience, knowledge, and insight of trusted advisors such as an accountant, attorney, financial planner, and/or personal coach. And while you may be DIY in some of these areas, there can be times when an outside opinion is necessary and can make life easier.

With yourself as the CEO of YOU, Inc., here are some of the benefits each of these experts can bring to help your life run more smoothly and with more success:

Accountant

Even if you file your own taxes, having a CPA review your forms can help you keep up with the tax code as well as any red flags that might lead to an audit. If you’re a business owner, having an accountant can not only let you focus on growing the business, but also help identify potential issues early. They may even help you save money with better tax planning and awareness of special rules like tax credits.

Attorney

Hopefully, you won’t need a lawyer very often, but at a minimum having an attorney who specializes in estate planning and asset protection to help create a will, a revocable living trust, a durable power of attorney for finances, and a durable power of attorney for health care is crucial. Already having a relationship with an attorney can also be one less hurdle if you ever really do need one in the future.

Financial Planner

Many people choose to manage their own investments. A financial planner, however, should do more than invest your money. They should also help you identify your financial goals and then create a realistic and simple plan to achieve them. And then be there to support and advise you, adjusting the plan as necessary along the way.

Personal Coach, Therapist and/or Counselor

Whether it’s career, relationships, or spending too much money, everyone has challenges and there are times when having an outside perspective who is completely focused on what’s best for you can make a huge difference. Don’t be afraid to ask for help. The personal, and often the financial rewards, can be significant.

As you’re choosing your team, keep in mind that these individuals should not only resonate with YOU and your culture and beliefs systems but also with each others. Your goal is a cohesive team that reflects what you want and communicates with each other as necessary; you don’t want them to operate in silos. To further help you succeed, you also want your team members to share their knowledge and educate you.  Because even if you’re not the smartest person in the world, with your team behind you, you’ll be that much closer.

 

©2016 Divorce911.com. All Rights Reserved |This information is deemed to be accurate. Reader / User is required to perform their own due diligence with the appropriate professionals. DIVORCE 911 is not a law firm, financial institution or advisor, registered mental health resource, does not practice law, and does not offer legal, financial, or therapeutic advice.

The Fight Against Financial Entropy

This blog is courtesy of Russ Thornton of Wealthcare for Women.

 

 

I was reading this article from James Clear about “why life always seems to get more complicated.”

Not sure about you, but I’ve certainly felt this before in my life (sometimes more than others).

Clear goes on in his article to explain this observation with the word “entropy.”

One definition of “entropy” that works for both the James Clear article and what I want to share with you today is, “gradual decline into disorder.”

More specifically, I’d like to talk about “financial entropy.”

One of the many benefits that my clients have gotten out of working with me on their financial planning is that their plan brings a sense of order and purpose to their money matters.

It helps to simplify things.

And as I’ve written before, I believe there are many advantages to keeping your finances (and everything else in your life) as simple as possible.

But here’s the thing . . . this isn’t a one-time fix.

You can’t “set it and forget it.”

As the article states about entropy, “it always increases over time.”

In other words, virtually everything becomes more disordered as time passes.

This is such a fundamental principle, in fact, that it’s also the 2nd law of thermodynamics (also knows as the law of increased entropy).

And I believe the same holds true with the idea of financial entropy. It always increases over time.

And as a result, your relationship with money will perpetually become less structured over time.

Examples include:

  • You change jobs and now you have a 401k with your prior employer
  • You get married and have to figure out how to manage money with your spouse
  • You get divorced and have to learn how to manage money on your own again
  • You have children which introduce new challenges and decisions into your money matters
  • Your turn 65 and have to figure out Medicare
  • Your parents are aging and you might need to help care for them – physically and/or financially
  • Tax laws changes
  • Investment markets change
  • You’ll experience personal and professional change in your life
  • And the list goes on . . .

All of these can introduce an element of disorder into your financial life.

If you review the list above, you might notice that while these examples serve to explain the idea of financial entropy in your life, they’re also great examples of why you want to regularly review and update your financial plan.

Not just to keep things in order and fight against financial entropy, but also to make sure your plan reflects your current reality as your money comes into contact with your life.

TWO BIRDS WITH ONE STONE

Not only does the ongoing process of financial planning help keep your plan as current and relevant to your life as possible, but it also provides a process through which you can keep your financial life in order and fight the inevitable creep of financial entropy and a decline into disorder.

Without effort, life tends to lose order. This is another important lesson from the James Clear article. And the same is true of your financial planning.

A financial plan is a product. Or, if you look at how most advisors use financial planning, it’s a proposal or sales tool.

However, financial planning, done the right way, is an ongoing process. It takes some effort and patience and discipline.

 

 

This information is deemed to be accurate. Reader / User is required to perform their own due diligence with the appropriate professionals. DIVORCE 911 is not a law firm, financial institution or advisor, registered mental health resource, does not practice law, and does not offer legal, financial, or therapeutic advice.

Is Your Retirement Plan A Ticking Time Bomb?

Is Your Retirement Plan
A Ticking Time Bomb?

According to this recent article from Quartz, the world is sitting on a $400 trillion financial time bomb.

From the article:

The World Economic Forum (WEF) predicts that by 2050 the world will face a $400 trillion shortfall (pdf) in retirement savings. (Yes, that’s trillion, with a “T”.) The WEF defines a shortfall as anything less than what’s required to provide 70% of a person’s pre-retirement income via public pensions and private savings.

The US will find itself in the biggest hole, falling $137 trillion short of what’s necessary to fund adequate retirements in 2050. It is followed by China’s $119 trillion shortfall.

The article goes on to compare this problem to climate change. I’ll let you decide whether or not that’s an accurate description.

However, upon reading and thinking about this article a couple of thoughts came to mind:

  • The people I work with have done a good job of diffusing their own retirement time bomb through years (often decades) of preparation, savings, patience and hard work. My clients are clearly above-average, and the credit goes to them for achieving a relatively bomb-proof financial status.
  • Women, in general, are going to have an even tougher time overcoming this scenario. As I’ve written before, women have unique challenges when it comes to planning for their retirement. They live longer, typically work fewer years and earn less pay while working and often assume the role of caregiver for both aging parents and many adult children.
  • As my colleague, John Lohr, recently addressed, we’re all living longer. Babies born today in developed countries have a life expectancy of 100 years of age.
  • These statistics from the WEF are based on 70% of pre-retirement income. This coincides with a widely followed rule of thumb that you’ll only need 70-80% of your earned income in retirement based on the assumption that some of your expenses will change or perhaps go away altogether. But why is this? Why not plan to have the same (or more) income in retirement as you did while you’re working. This is what many of my clients are preparing for in their financial plans.

If, however, you find yourself in the average or below-average category in terms of “time bomb” statistics, here are a couple of recommendations:

  1. Get started. Whether you’re 25 or 55 years old, the sooner you start saving, the more time you have to take advantage of the wonders of compound interest.
  2. Don’t try to make up for lost time by taking a lot of unnecessary risks with your savings and investments. Slow and steady is the strategy to follow here. Be a tortoise; not a hare.
  3. Focus on the things within your control. You can control or influence things like time (and timing) of goals, cash flow (saving vs spending) and risk. Almost everything else is noise which you would do best to ignore.
  4. Have a personal financial plan. Don’t wing it. And regularly review and update your plan to account for new information and changes in your life.
  5. Keep costs low. This can include investment expenses as well as costs like taxes. The less you spend, the more you keep. And the more that can compound over time for your benefit.
  6. Diversify. Don’t put all your eggs in one basket. Let capitalism work for you over time by investing in the entire market.
  7. Manage your cash wisely. Have a lot of cash in a savings account paying you 0.2% interest and also have balances on a credit card charging you 14% interest? Why? And be sure to have an emergency fund for life’s little (and not-so-little) surprises. Don’t create a budget. No one like those. Create a cash management plan instead.

While the list of recommendations above certainly isn’t exhaustive, it will hopefully give you some ideas on how to get started if you haven’t already. And if you’re already on the way to a bomb-proof financial future, perhaps you’ll find an idea or two you can apply to your situation.

Hopefully, you won’t be the victim of a ticking financial time bomb in the future.

 

This information is deemed to be accurate. Reader / User is required to perform their own due diligence with the appropriate professionals. DIVORCE 911 is not a law firm, financial institution or advisor, registered mental health resource, does not practice law, and does not offer legal, financial, or therapeutic advice.

3 Ways to Use Your Attorney During Mediation

DIVORCE 911 consulted with Jennifer Keaton of 2 Step Divorces for this blog. We also have a video covering this topic.

 There are 3 ways that people would typically use a lawyer in a divorce mediation.

  1. Your attorney is with you in the mediation room helping you negotiate as well as helping you draft the documents. The lawyer is also there, full on. However, we pay attorneys by the hour so it can be expensive to do it that way.
  2. Another option is that some attorneys are willing to let individuals go to mediation by themselves. The attorney would be on speed dial “waiting in the wings” so that no document is signed without personally being seen by the attorney. This allows them to not be sitting at the mediation table at hundreds of dollars per hour. The mediator will be involved in a caucus amongst the parties. A caucus is performed by having discrete discussions with one party then meeting with the other spouse and back and forth until all parties are satisfied.
  3. The third way is drafting. Drafting the documents or reviewing the documents to see if it’s a good deal, if they missed anything, and are these documents correct and what else (if anything) needs to be addressed. Basically, this is reaching your own agreement tentatively. Then you would take those documents to legal counsel to polish up and get their blessing. If there needs to be some “massaging” of the terms, that can still occur. You get the benefit of legal counsel without necessarily paying full retail for the attorney to be at the table. It’s not for everyone but it’s certainly an option that’s out there.

There are so many experts and team members that are going to be a part of this divorce process. You need to use them most effectively. Many times people are going to rely on perhaps the most expensive portion of their divorce, i.e.: the divorce attorney. We love them, they do a great job, and they’re a critical piece of the process. However, we have found that when you assemble the correct legal, financial, emotional, real estate and coaching divorce care team from the beginning, your time and money is used most effectively. These experts will be providing your due diligence, information, education, and resources so that you are prepared for your attorney and your mediation.

This information is deemed to be accurate. Reader / User is required to perform their own due diligence with the appropriate professionals. DIVORCE 911 is not a law firm, financial institution or advisor, registered mental health resource, does not practice law, and does not offer legal, financial, or therapeutic advice.

Your Inner Badass

DIVORCE 911 consulted with Wendy Dickinson of Grow Counseling for this blog. We also have a video covering this topic.

When someone is going through hard stuff that is overwhelming we lose sight of who we are a lot of the time. We can feel like we’re invisible, we feel like we’re weak, or we feel like the best parts of ourselves have sort of gotten lost in the process of being overwhelmed. It’s important to have someone that can speak hope & life over you. It’s important to hear “I know there’s an inner badass in there!”. Seeing a counselor or therapist can help call forth that inner strength that will empower you to get back to being the best version of yourself.

Events and relationships can be very emotionally charged. This can lead to you being in a situation where you are unable to think straight. Once again, it is very important to seek out a professional to help encourage you, assist and sort through all of your emotions and conflicts. This will allow you to figure out and prioritize what you need to do to get back in control.

While a trained therapist is most often the better option, it doesn’t always have to be. It can be friend or family member that you chose to confide in. Most importantly, it needs to someone that can see the strength in you and help you overcome when you have lost your way. At DIVORCE911.com and GROW Counseling we like to say that “counselors are vendors of hope”!

This information is deemed to be accurate. Reader / User is required to perform their own due diligence with the appropriate professionals. DIVORCE 911 is not a law firm, financial institution or advisor, registered mental health resource, does not practice law, and does not offer legal, financial, or therapeutic advice.

Let Me Apologize In Advance

This blog is courtesy of Russ Thornton of Wealthcare for Women.

In investing, being well-diversified means always having to say I’m sorry.

That’s because, in a diversified portfolio of investments, some of your investment will almost always be down in value. At least relative to your other investments.

Of course, the hope is that at the same time, while some of your investments may be down, some of your investments will also be up in value.

This is the essence of diversifying your investments. Or not putting all your eggs in one basket.

If all your investments are going up in value at the same time, while it might feel good to watch your account balance grow, you’re not diversified. And everything won’t go up in value forever.

The same holds true if all your investments are doing down in value at the same time.

So you might be asking about now if I’m truly diversified in my investments will I ever make any money? Or will investments going up in value be offset by other investments going down in value?

This brings up the concept of correlation among investments.

Correlation is a statistical measure that calculates how closely the performance of one investment mirrors the performance of another investment.

If two investments have a perfect negative correlation, it means they move in opposite directions all the time.

If they have a perfect positive correlation, it means they move in the same direction all the time.

The more your investments approach perfect positive correlation, the less diversified they are. They will all be up or all be down because they all move in the same direction at all times.

But this isn’t a statistics class.

Just remember that you want to construct a portfolio that reduces the chance that all your investments move in the same direction at the same time.

And please note: even proper diversification isn’t perfect all the time. For an example, look at the markets in 2008 when pretty much all investments fell at the same time regardless of their correlation measures.

But more times than not, diversification works. Especially over long periods of time.

I believe the best financial strategies are those which are simultaneously simple and effective.

But simple and effective isn’t always easy. Just as it isn’t always easy to remain diversified when the broad market is going up.

And while diversification isn’t the only element of sound, long-term investing, but it’s certainly a key component. And one that I believe in and utilize with my clients as well as with my own investments.

But even if, like me, you believe in the benefits of diversification, there will be times where some of your portfolio will down in value.

That’s part of the bargain with diversification. But it’s a small price to pay in the short-term for what will hopefully be smoother, less erratic wealth building that stretches over decades into your future.

If fact, I take back my apology.

When it comes to diversification, I have nothing to apologize for.

However, if you’re not broadly diversified across your portfolio, you might wind up being the one who’s sorry.

 

This information is deemed to be accurate. Reader / User is required to perform their own due diligence with the appropriate professionals. DIVORCE 911 is not a law firm, financial institution or advisor, registered mental health resource, does not practice law, and does not offer legal, financial, or therapeutic advice.

Marital House and Names Shown on the Debt

DIVORCE 911 consulted with Matt Dickason of Dickason Law.

We also have a video covering this topic.

 

Divorce is a very emotional event and is often difficult to handle. There are different things a Real Estate law firm/title company can do to help. If the law firm understands that the transaction with the marital home is happening because of a divorce, whether it’s being sold or refinanced there are things that are very easy for us to do. One simple and effective way to help is to split the closings. When a law firm allows for the divorcing or divorced couple to not have to handle things in the same room together, it is great appreciated. That’s just the emotional side of it.

One of the things a law firm can really appreciate on every closing; is that the clients are participating in what is probably the largest transaction a person will ever have. Professionalism and candor for sure, but when you add that element of divorce it’s different.  Instead of selling or buying the house a person wants to buy or sell… it’s occurring for a different reason. It might be that one person gets to keep the house and the other is leaving or that neither party stays in the house. This might be because of a financial issue or maybe the emotions attached to that property are just too much to manage.

A decision is made (by the court or the individuals) to put the house on the market. Depending on how the title is vested, which means how you own the property if it’s a joint title it can be worked through. One example: The husband owns the property in his name but he needed the wife’s income to support the payments. Different payments and payoffs have to be taken care of before any money is divided up between the parties. Things must be paid off that are attached to the name(s) shown on the title.

A family law attorney might say “$250,000 is owed on the mortgage, you’re selling it for $300,000. Real estate commissions, property taxes, HOA fees, any additional leans, etc…that are on the house and property itself must be paid off before any remaining funds are disbursed.”.  Whether the debt is under one or both names, a clear title must be delivered to the subsequent buyer. So no matter what, if you signed off on that mortgage or REFI, or Equity Line of Credit, etc… (regardless if it was your idea or your spouses’) these loans/liens must be paid off. You will come to realize that part of the divorce negotiation process is not just determining the fair market value of the house and then only subtracting the mortgage payoff. You must investigate further to determine what other debts are associated with this property. One of the owners might feel as if these debts (loans or liens) are not his or her’s responsibility… And so the debate amongst the divorcing parties begins… 

Your first objective, hire an experienced real estate agent that specializes in Divorce Care. They must have a full & complete team of legal and financial professionals to bring you the best information needed DURING the mediation/divorce process.

This information is deemed to be accurate. Reader / User is required to perform their own due diligence with the appropriate professionals. DIVORCE 911 is not a law firm, financial institution or advisor, registered mental health resource, does not practice law, and does not offer legal, financial, or therapeutic advice.

Forward Thinking Résumé

DIVORCE 911 consulted with Howard Cattie of Career Oyster for this blog.

We also have a video covering this topic.

 

People often think of a resume as being about what a person used to do. However, just because this is the prevailing opinion does not mean it is prevailing. So, when new ideas come out people often react with “gee, isn’t that different”.  When you think about a prospectus or a company looking to make money, they write what they’re going to do in the future. In a career, why can’t you write a resume that projects your past experiences but projects it to the future of what you want to do? Brilliant!

This is especially important for people that are making transitions, have gaps, have been home for a while, have volunteer experience, or are underemployed. This is the case because these people don’t want the same job, the low-end work, or something menial from their past. These people really want to get on a new track.

There are 3 things you need to do to make this a reality:

  1. You define a vision and write your resume forward looking to where you’re going with the objective of your background and the desire to support it.
  2. You get the confidence up to sell that through an interview and you’ll be able to present what you want to do and why.
  3. You don’t go through the posted ads because that’s American Idol. That is where everybody is competing and you’re just not going to get through the consensus. Instead, you find the companies you want, target the managers, and have an exploratory where you share your forward thinking ideas.

Think you can’t do that? Sure you can! It always possible as long as you prepare properly, understand how to put your background together, and find what you want. You can get that job.  This is a proven and successful way of finding the job you want and deserve. The corporate environments are doing this. They tell you about what they’ll be able to do in the future. It only makes sense for you to take the same approach. It’s a paradigm shift to have a forward thinking resume!

 

This information is deemed to be accurate. Reader / User is required to perform their own due diligence with the appropriate professionals. DIVORCE 911 is not a law firm, financial institution or advisor, registered mental health resource, does not practice law, and does not offer legal, financial, or therapeutic advice.

Child Custody

DIVORCE 911 consulted with Patty Shewmaker of Shewmaker & Shewmaker for this blog post. We also have a video covering this topic.

Child custody is a very complicated and hot topic. Jurisdiction and child custody create a lot of contention. It’s topic that can’t be covered in a single blog but we’re going to hit the high points at the very least in this post. Jurisdiction is just a big fancy word for whether or not the court has the authority to hear a particular matter. In this case with the jurisdiction of child custody matters, it’s controlled by a law called the “Uniform Child Custody Jurisdiction Enforcement Act”. What that says is that “the state that has jurisdiction for child custody matters is the state that the child has lived in for the last 6 months”. It’s what we call “the home state” of the child. This determines jurisdiction for initial child custody determinations.

What makes this interesting and tricky is that jurisdiction for child custody may not be the same as the jurisdiction for divorce. An example of this would be as follows: In Georgia for a divorce someone has to live here for 6 months. Typically, it’s the plaintiff sometimes it’s the defendant. In this situation, the father has lived in Georgia for 6 months. However, his wife and minor child had been living in Nevada. This caused Georgia to have jurisdiction for divorce. It did not allow for Georgia to have jurisdiction over child custody because Georgia is not the home state of the child.

So it can be tricky when we start talking about jurisdiction with child custody and how that interplays with divorce and other matters. It is highly suggested to seek legal guidance when facing a situation involving child custody. Deciding on the best place to deal with child custody issues can have many factors. It’s an issue that has many layers with many decisions to be made when trying to resolve all of the different problems. Reaching out a to a professional is the best way to make this happen.

This information is deemed to be accurate. Reader / User is required to perform their own due diligence with the appropriate professionals. DIVORCE 911 is not a law firm, financial institution or advisor, registered mental health resource, does not practice law, and does not offer legal, financial, or therapeutic advice.

The Family Business

DIVORCE 911 collaborated with Wendy Hayes of Mitchell Hayes for this blog.

We also have a video covering this topic.

 

Family businesses may be another asset in a marriage. You have to consider all of the sweat equity as well as whatever monetary equity that went into building that business. You also have to consider that the purpose of putting all of that sweat equity and capital into a business is to expect a future stream of revenue. Another consideration is to possibly sell that business down the road so that you can finance your retirement or other goals.

First, establish a fair market value for the business. This allows us to consider the entire financial portfolio of a divorcing couple so that we can make sure that the spouse that will not be a part of that business is going to get their fair share. However, we also don’t want to cripple the future business owner. It doesn’t help either party if we’re bankrupting the business to be to able to pay off the other party. There are creative ways that we can create and design that settlement so that both parties can win.

Understand that the business is only one item on the marital balance sheet that makes up the couple’s entire net worth.  It is also important to understand the cash flow the business provides and how adding debt to the business would impact cash flow and operations of the business.  In dividing the assets, allowing the business owner to keep all or more of the business means that the other spouse will receive other assets to compensate or offset the value of the business.  If a lump sum payout at the time of the divorce is not in the couple’s best interest, a promissory note could be used to pay the spouse over time.  There are many options.  Remember that no one wins if you prevent the business from providing the future earnings that are in dispute.   Work with a team of professionals who can craft an agreement that will allow you both to realize the financial benefits of the business as well as your other assets.

 

This information is deemed to be accurate. Reader / User is required to perform their own due diligence with the appropriate professionals. DIVORCE 911 is not a law firm, financial institution or advisor, registered mental health resource, does not practice law, and does not offer legal, financial, or therapeutic advice.

Compare Yourself to Others at Your Own Risk

Compare Yourself to Others

This blog is courtesy of Russ Thornton of Wealthcare for Women.

I’m the oldest of 3 boys.

A while back, my youngest brother and I were helping my Mom move some furniture.

While moving beds, dressers, nightstands and more around her house and down a flight of stairs, I strained my back pretty bad. It took several weeks for the pain and discomfort to go away.

This wasn’t IKEA furniture we were moving around either. Some of it was heavy. The rest of it was HEAVY.

But, was I going to let my little brother get the best of me?

Should I have said, “let’s take a break for a minute (or an hour)” before picking up that armoire?

Was I going to be the first one to say “uncle” and confess my limitations?

Of course not.

Now to be clear, we weren’t taunting each other or competing. Not explicitly, at least.

And I’m confident that my brother didn’t see anything we were doing that day as a competition or an opportunity to prove himself to his older brother.

But I’m pretty sure I did.

And my back paid the price.

Thankfully, after a few weeks, I was back to feeling fine.

Perhaps I should mention that my youngest brother is more than 10 years younger than me. And he and his wife own and operate a gym. It would be a gross understatement to say he’s fit just as it would be a gross overstatement to say I’m fit.

But there I was comparing myself to a Crossfit-loving, paleo-eating beast of a younger brother.

It sounds a little silly in hindsight, but apparently, I’m not the only one that is tempted to compare themselves to others.

I see it every day in my financial planning work with clients.

But instead of a sore back hanging in the balance, the consequences can be much more serious and long-lasting.

It’s not uncommon, for example, for a person or couple to ask me – sometimes in a first conversation – how they compare financially with my other clients. Or others in general.

My answer is always “I can’t answer that question.”

Then, seeing the puzzled look on their face, I explain . . .

There is no apples-to-apples comparison of one person’s personal financial situation with another’s.

I have younger clients with a significant net worth who live within their means and take very little investment risk (because they don’t need to).

And I have older clients with a more modest net worth who need to take more investment risk to support their lifestyle and the achievement of future goals.

And I have other clients that fall everywhere in between.

But this isn’t simply about how your balance sheet stacks up against someone else.

Even if you and another person were the same age and both had accumulated a net worth of $2 million, you will almost certainly have different goals, different professional circumstances, different personal circumstances and more. Even if you share a similar balance sheet, in my experience, the similarities end there.

Yet we still want to compare ourselves to others.

I think this is largely because money is such a taboo subject in our society. People don’t talk about money with each other.

And even for those of you who are doing all the right things with your money, you’re the only one that knows it. Money is a private matter. We have to celebrate our financial success and achievement in private just as we have to learn from our financial mistakes in private as well.

Despite this, it’s always interesting to read articles that cover topics like “average retirement savings by age” or “average net worth by age.”

And don’t get me wrong, I always click the links and read those articles too. Just like you, I’m human.

But don’t lose sight of the core concept behind “personal financial planning.” Remember, it’s personal. And as a result, it can be problematic to compare yourself to others.

When it comes to money. Or with regard to anything else.

This information is deemed to be accurate. Reader / User is required to perform their own due diligence with the appropriate professionals. DIVORCE 911 is not a law firm, financial institution or advisor, registered mental health resource, does not practice law, and does not offer legal, financial, or therapeutic advice.

How did I get here?

This blog is courtesy of Wendy Hayes of Mitchell Hayes.

Going through a divorce is a very difficult experience.  It can also be a very confusing time, but there are resources available that will provide you with the clarity that you need.

How did you get here?

While you were building a life with your spouse, you made many decisions that encompass the standard of living that you now enjoy, the assets that you have, and how you financed your life.  While you were making those decisions you worked with many other professionals along the way to make personal business decisions.

First, you decided how you would earn your income.  You may have worked with career coaches or recruiting professionals as you and/or your spouse established your career(s).  Someone may have advised you on the importance of planning for your retirement and helped you establish a plan that could include a 401K, 403B, and/or a pension.  Those decisions provided income for your current needs as well as income you will enjoy later.

You also had to have a place to live.  This was a huge decision that could not be taken lightly.  Where you live impacts all aspects of your life.  How long will it take you to get to and from work?  Where will your children go to school?  What type of neighbors will you have?  Where will you shop?  Where will you go for entertainment?  How much will it cost and how will you pay for it?  You probably worked with a realtor, a mortgage broker, possibly contractors and decorators, movers, and a real estate attorney.

You and your spouse had to determine what your standard of living would be?  Will you be a spenders or savers or a bit of both?  Did you seek advice from a wealth manager or investment advisor?  As you acquired things along the way how did you pay for them?  Did you use credit or savings?  Do you have investments?  Do you have debt?

As you journeyed through life, did you start your own business?  What are your goals for the business beyond generating an income?  Do you have an exit strategy?  What role does your spouse play in the business and/or decisions about the business?  Did you seek advice from your CPA, banker, business attorney, or an equity group?  How did you finance the business?  What did you do with the earnings in excess of what you need for your ‘salary’?  Did you invest the surplus in growing the business and/or invest in your personal nest egg?  How are business taxes paid?

 

It Takes A Village

So many questions.  The list could go on and on.  Perhaps some of the situations felt overwhelming as you were going through them, but you made it through with the help of many professionals along the way.  Now, as you are going through a divorce, you have the same types of questions and decisions to make.  One of the biggest differences is that you have to make those decisions in a relatively short period of time when you are not emotionally or mentally at your best.  This is why we say that it takes a village.  You deserve to surround yourself with a team that will help you understand all of the emotional, financial, and legal aspects of your life, help you arrive at the best settlement possible, and then help you build your new life.

 

Where do I Start?

Divorce 911 is the village that can connect you with a team of professionals to support and advise you.  Your team should provide you with the information and tools to make informed decisions for the future.

At Mitchell Hayes, we address the business aspects of your life to provide you with financial clarity to make informed decisions.  We will help you organize and understand the income, expenses, assets, and debts.  Mitchell Hayes will develop settlement scenarios that will empower you to make informed decisions about your financial future.  We will also provide child support and alimony calculations where appropriate.  We can work with your attorney and provide them with financial analysis and expertise that enable them to achieve the best possible settlement for you.  Mitchell Hayes will also provide you with budgets that will guide your future financial decisions and ensure that you have the resources you will need post-divorce to ensure that your future financial goals will be met.

As Certified Divorce Financial Analyst™, we are here to help and ensure that you have a better outcome.  Please call Mitchell Hayes at 404-870-9040 to schedule a consultation.
 © 2017 Mitchell Hayes
This information is deemed to be accurate. Reader / User is required to perform their own due diligence with the appropriate professionals. DIVORCE 911 is not a law firm, financial institution or advisor, registered mental health resource, does not practice law, and does not offer legal, financial, or therapeutic advice.

Choosing Guardians for Minors

DIVORCE 911 consulted with Greg Jacobs of Jacobs & King for this blog post.

Choosing Guardians for Minors

It makes for an interesting movie storyline. The parents of a minor child tragically perish in an accident. They had no estate plan. A judge awards guardianship of the child and responsibility to oversee the sizeable inheritance to the incredibly immature adult sibling of one of the parents. The crass humor blended with a few predictable, heartwarming moments, make for an entertaining fare at the box office. However, the stakes are much higher in real life, when real lives and real inheritances are at stake.

As in the movie plot, a legal guardian is an adult who is legally appointed to rear an orphaned minor child to adulthood (i.e., age 18 in most states). Every parent of a minor child needs to designate a guardian through proper estate planning. Otherwise, a judge may appoint the “wrong” guardian by default.

Picking the Guardian

Deciding who to designate as guardian can be an extremely difficult and emotional decision. It is one of the main reasons why parents of minor children procrastinate on their estate planning. Therefore, where do you start?

You should make a list of all of the possible candidates. Then discuss the list with the other parent to consider the pros and cons of each individual. Here are some things to evaluate as you work your way through the list of potential guardians:

  • Parenting style;
  • Values and religious beliefs;
  • Your child’s relationship with each of them;
  • Location, location, location and the effect of a move;
  • Whether there are other children in the home, and if so, how your child would fit into that family;
  • Their realistic ability to take on the responsibility of caring for a child, emotionally, financially, and physically; and
  • Whether the potential guardian has the time and energy to devote to your child now and later on.

Many couples will choose grandparents for guardianship as their first, natural inclination. However, you should look at their ages and health. You would not want your child to lose his or her parents, then turn around and lose grandparents a few years later.

Practical Pointers

Both parents should ultimately agree on the same person as guardian, as well as successor guardians if the primary is unwilling or unable when the time comes. Before executing the legal documents that make the designation official, ask the guardian if he or she would be willing and able to serve. While it is a matter of common courtesy, from a practical perspective, it is better to know now rather than risk leaving your minor child in a lurch later.

Once signed, legal documents require “legal formalities” to make changes. Therefore, how do you provide guidance to your guardian regarding your wishes for how your children should be reared? Consider writing a letter to cover such practical matters as educational priorities, religious instruction, access to family members, and travel opportunities.

While this letter is not legally binding, it will provide your guardian with some additional guidance on your thoughts when parenting your child. You should update the letter as needed, as well as your estate plan.

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This information is deemed to be accurate. Reader / User is required to perform their own due diligence with the appropriate professionals. DIVORCE 911 is not a law firm, financial institution or advisor, registered mental health resource, does not practice law, and does not offer legal, financial, or therapeutic advice.

Unintended Consequences

Unintended Consequences

Today’s blog post is from our mentor Russ Thornton of Wealthcare for Women

Financial planning – or really any kind of planning, for that matter – is really about reducing the likelihood of unintended consequences.

Some of these scenarios are pretty obvious, I think.

If you spend every dollar you make (and then some), you’re jeopardizing your future and your retirement. You’re not, I assume, making a deliberate choice to compromise your future in exchange for living it up today. This is an unintended consequence.

You buy the biggest house you can by borrowing as much as a mortgage lender will give you. Some potential unintended consequences include less discretionary income for savings or paying down student loans or credit card debt.

But unintended consequences aren’t simply about spending too much today at the possible cost of a more secure future.

What about saving too much?

This can have the opposite effect.

Sure, saving too much is a good problem to have, if it’s a problem at all. But an unintended consequence of saving too much is that you might be trading an overconfident future for a less than optimal today. In other words, maybe you’re missing out on opportunities to travel more or have a little more fun along life’s journey instead of saving for tomorrow.

Here’s one I encounter a lot . . . a “let’s be conservative” philosophy underlying financial planning decisions. This might manifest in areas like planning to work longer than is actually necessary or not including an anticipated inheritance from a parent or other family member.

While I get the thinking behind erring to the side of conservatism, by not including likely events or making manual adjustments to make them “more conservative,” you could unintentionally be making more aggressive decisions elsewhere.

For instance, by being more conservative in some areas of your finances, your financial plan might necessarily call for more risk, more savings or a later retirement in order to make up for it.

This is another example of unintended consequences.

OK, so maybe you get this idea of unintended consequences in your finances that can trickle over into your lifestyle.

What do you do about it?

The first step is to realize there is no magic bullet that will solve this for you. Instead, I encourage a regular, ongoing financial planning evaluation to review past inputs and assumptions and accommodate new information as it becomes available.

This is where financial planning becomes much more important and useful than simply having a financial plan (which is really just a snapshot in time).

If you’d like to review your finances and your lifestyle to uncover potential unintended consequences as well as get plugged into a financial planning system to make the inevitable adjustments and course corrections that will be needed from time to time, please let me know.

I’d love to have that conversation with you.

This information is deemed to be accurate. Reader / User is required to perform their own due diligence with the appropriate professionals. DIVORCE 911 is not a law firm, financial institution or advisor, registered mental health resource, does not practice law, and does not offer legal, financial, or therapeutic advice.

How to Pick a Divorce Attorney

DIVORCE 911 consulted with

Steve Shewmaker of Shewmaker & Shewmaker for this blog.

We have a video covering this topic as well.

How you pick a Family Law (Divorce) attorney is an interesting topic.  If you’ve had an attorney in the past, one of the first things you can do is some soul searching and decide what did you like or not like about your previous attorney. Generally, when you reach out to an attorney you will call the office. Some offices are structured so that you don’t talk to the actual attorney but instead talk to a paralegal or secretary. Just because you can’t get an attorney on the phone with the initial call does not mean you should rule out that attorney.

You’ll most likely end up in a face to face meeting with the attorney, giving you a chance to feel each other out to see if you are a good fit. It’s extremely important that you can gel or mesh with the attorney that’s representing you. If there’s something about the attorney that rubs you the wrong way or that you find annoying, find a different attorney. Finding an attorney you can handle spending time with is imperative. You are going to go through a long journey with this person.

You need an attorney that will listen to you. Occasionally the attorney might interrupt to focus in on a specific issue and go over it with you. An attorney that understands your goals and desires, being on the same page goes a long way. The initial meeting can be anywhere from 1-2 hours and lots of notes will likely be taken. 

You should expect to pay a consult fee when you talk to a quality attorney. This is time and money spent with the lawyer to educate you about your legal matter as well as allowing the attorney to become educated about you and your circumstances. It’s a time consuming mutual process.  Most family law (divorce) attorneys will charge an hourly fee and you need to expect this because these cases can be very long and drawn out. Have your attorney provide you with a copy of the discussion notes. This allows you to have something to refer back to. Make sure that these notes include the following: the client’s goals, an outline of the next steps, and what the legal strategy is. Your attorney will believe in complete disclosure. As always, a great attorney should be happy to answer emails and phone calls after meetings.

 
This information is deemed to be accurate. Reader / User is required to perform their own due diligence with the appropriate professionals. DIVORCE 911 is not a law firm, financial institution or advisor, registered mental health resource, does not practice law, and does not offer legal, financial, or therapeutic advice.

Spousal Social Security Benefits

 

DIVORCE 911 collaborated with Russ Thornton of Wealthcare for Women for this blog post. 

We have a video covering this topic as well.

Social security benefits are a fairly complicated topic. People are often confused even more when divorce is an added dynamic.  One facet of this is the opportunity for a spouse to receive social security spousal benefits based on their ex spouse’s earnings record.

This can apply to you if you were a stay at home parent or out of the workforce for a long period of time. Another instance could be if you’ve worked throughout the marriage but it was part time or a lower income job. This would lead to the former spouse being eligible for a larger social security benefit.

The next fundamental part of this process to consider is the number of years that you were married. You are required to have been married for 10 or more years to be eligible to receive spousal benefits. Even then, this only applies if the spousal benefits are greater than your own.

To put it simply; if you were married for more than 10 years and half of your former spouse’s social security benefit is greater than your own social security benefit, you get the larger of the two benefits. An example of this would be as follows: Your retirement benefit at the age of 66 is $1000 per month. Your former spouse’s benefit is $2500 per month. If you were married for more than 10 years and got divorced you would be entitled to half of $2500. This would be $1250 and that sum is greater than your current $1000. Please remember… You are eligible for this amount for the rest of your life! This has zero impact on the amount your former spouse receives. If you outlive your former spouse you would go from receiving $1250 a month to the full $2500. Receiving the full $2500 per month would fall under the spousal survivorship benefit.

It’s important to be aware of the rules and the different benefits that may be applicable to your situation. As you can see, spousal social security benefits can play a role in your financial and retirement planning. Unfortunately, many people are unaware of the different social security benefits he or she may be entitled to after a divorce.

With so many different rules and regulations, it is easy to be unaware of the ones that can benefit you the most.

DIVORCE 911 is ready to provide you with the right resources and information that you will need.

 

This information is deemed to be accurate. Reader / User is required to perform their own due diligence with the appropriate professionals. DIVORCE 911 is not a law firm, financial institution or advisor, registered mental health resource, does not practice law, and does not offer legal, financial, or therapeutic advice.

The Lautenberg Amendment

We had a very productive conversation with

Casey Doyle of Shewmaker & Shewmaker for this blog post

We have a video covering this topic as well.

During a divorce, domestic cases often come to the surface. This may occur with one spouse taking out a protective order against the other. This can happen because of a history of conflicts or new developing ones. This is fairly common knowledge. What a lot of people do not know and are unaware of is what a protective order will trigger. The Lautenberg Amendment came about in the mid ‘90’s and was to amend the Gun Control Act of 1968. The 1968 Gun Control Act made it illegal for anyone with a felony conviction to possess, sell, and conceal a firearm.

The Lautenberg Amendment specifies that these gun regulations now apply to anyone with a misdemeanor of family violence, a domestic violence conviction or anyone who is currently subject to a temporary protective order. There are of course some requirements that are called upon for the protective order. The protective order has to have allowed the person an opportunity to be heard in a hearing and it has to be between what is known as “intimate partners”. Intimate partners means either spouses, parents, people that have cohabitated, or people that share a child together.

When the Lautenberg Amendment is triggered this person can not carry or possess a firearm.  It becomes a federal crime if they do so. This applies to anyone that is under a protective order which may include limiting verbiage banning any future contact. This would include but is not limited to harassment, stalking, or violence to the other individual.

The amendment’s purpose is to prevent any kind of future harm from occurring. That’s why when it’s not a felony involved the amendment is limited to either misdemeanor convictions that are dealing with domestic violence or temporary protective orders that are in response to domestic violence. If violated, it is classified as a federal crime. It’s important to understand that this limits the rights of the person that the temporary protective order is taken out against. If it is taken out against you then your rights are limited as well. Also, the right to carry a firearm will be restored after the protective order is dismissed. This is a very complicated subject and domestic violence should never be taken lightly. Be sure to know your rights as some one seeking help or if these charges are being brought against you.

This information is deemed to be accurate. User is required to perform their own due diligence with the appropriate professionals.

DIVORCE 911 is not a Law Firm, Does Not Practice Law, & Can Not Offer Legal Advice

Is Divorce Mediation Cheap?

Divorce mediation can be cheaper than hiring attorneys to litigate (battle!) your divorce, but only when it results in some agreements or significant traction towards agreements.

One of the best ways to set your mediation up for success is to take the time to get prepared – emotionally, intellectually, and financially.  Denial is a frequent visitor to the divorce process that undermines its potential for success (if this your situation, consider Discernment Counseling). Great offers often are rejected when emotions are not managed well or legal counsel is not present to assist in negotiations.  In those cases, mediation is not a cheap solution, it is an additional expense. 
On the other hand, a mediator is a great facilitator of solution-focused discussions that can move the divorce from battle-ground to a settlement that can shorten the legal process by months (or be used for an uncontested divorce). When some or all issues are resolved in mediation, the emotional and financial costs of moving through the legal process are cut down immensely.
  
Mediation is hard work and positive endurance on both sides to strike a deal where no one gets everything that they want, but enough to be satisfied. 

Jennifer Keaton
2StepDivorces.com

 

How Much is Divorce Mediation?

Most divorce mediators charge an hourly rate that can range from about $150/hour to $300/hour. This fee is usually divided between the two parties (though sometimes the finances have not been separated out). But then, how long will mediation last?

Divorce mediations last as long as both parties want to continue negotiating (many mediations will have several appointments – pacing matters as work and children’s needs are folded into the schedule). Where the parties are prepared for negotiations (both emotionally, as well as in “financial and legal information”), divorces without minor children can average 5-8 hours. Divorces with minor children (which requires more court required paperwork) can average 6-12 hours.

If attorneys are present, those expenses must also be taken into account, too. Some attorneys, in very specific circumstances, allow clients to attend mediation alone so long as do not sign anything without the attorney’s review. But, for individuals with “low or no” attorneys, they can condition agreements on having time for an attorney to review the drafted agreement before signing.

Jennifer Keaton
2StepDivorces.com

We Can’t Agree, So Why Bother With Mediation?

Why do Georgia Courts order most divorce cases to participate in mediation?  Because it works!

Litigation applies pressure (time and money) to parties that often makes a settlement look better than waiting on a judge.  Courts also find that many cases resolve a large percentage of the issues, leaving them with less work to do.  It’s easy to see why courts like mediation, but do the spouses like it, too?
Not every family will reach agreements in divorce mediation.  For those that do, it is often because they are emotionally ready to discuss hard topics and have done a lot of preparation ahead of time. The “homework” of divorce involves a lot of number crunching, understanding how likely you are to win or lose at trial on certain issues, and how ready you are to take on the new demands that will be on you (financial independence or transitions, parenting with less control when then kids are away, etc.). It can be scary.  It may be scarier to toss these decisions to a judge at some unknown time in the future – a critical reason that mediation works for so many families in transition.
 

Jennifer Keaton
2StepDivorces.com

I’m Afraid of Attorneys As Much As I’m Afraid of this Divorce!

Most of us have never hired an attorney.  In divorce cases, this inexperience coupled with fear can lead to huge legal expenses.

As an attorney and mediator, I encourage parties to “buy what they need when they need it” when it comes to hiring an attorney. There are four common ways that attorneys provide services in the separation and divorce context.  http://www.2stepdivorces.com/watch-videos/  Most individuals start with the “Ferrari” of legal services (sometimes it’s unavoidable) when what they really wanted was the “Honda” of legal services.  

Understand what you’re buying when hiring your attorney, and be cautious of over-purchasing or purchasing the wrong legal services.

Jennifer Keaton

2StepDivorces.com