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.

3 Ways to Guarantee Your Mediation will Fail

DIVORCE 911 consulted with Jennifer Keaton of 2 Steps Divorce for this blog post.

We also have a video covering this topic.

Divorce Mediation is a step that can be taken before the alternative of seeking out a courtroom for final answers and decisions. There are ways you can help your mediation and there are ways that will greatly hinder it. Here are three ways to GUARANTEE that your mediation will fail!–

The first is not being emotionally prepared for the change. Having not come to terms with the fact that a marriage is ending and the grief that comes along with that is a major issue. Being prepared to deal with that reality. Now, you won’t want to but you need to be at a place where you want the bleeding to stop.
The second is not having your financial information pulled together. If you don’t know your financial future… you will soon enough… And it won’t be pretty! Knowing the cost of that post-divorce apartment, or what health insurance is going to cost you is imperative. If you don’t know these things you’re not ready to talk about how to part ways. Remember, in most cases, your daily expenses have now doubled and your income has been cut in half!
The third way is not knowing and understanding the alternatives. These alternatives include the courthouse and the legal pieces of information that you will need. Understanding how things are divided and granted under the law is important to understand. Having this legal information will allow you to make informed decisions and also be prepared to talk about a huge amount of information.

Let’s make sure your Divorce Mediation does not fail!

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.

Can I Afford to Keep the House?

DIVORCE 911 consulted with Chris Philmon of Angel Oak Home Loans for this blog post.

Please check out our video library to view the video covering this topic.

Whether or not you can afford to keep your house after divorce is a topic that comes up a lot. This comes up because people don’t necessarily understand the process of the mortgage underwriting process as it relates to income and assets moving forward. Let’s assume that the mortgage has been consistently paid on time during the marriage. However, once you have a divorce things can change… Whoever is keeping the house after the divorce needs to requalify on their own for a new mortgage. The main topics that are looked at are credit, assets and most importantly; income, income source, and the trend of that income.DIVORCE 911 consulted with Chris Philmon of Angel Oak Home Loans for this blog post.

Please check out our video library to view the video covering this topic.

There are of course other factors. If there is spousal maintenance, alimony, or child support generally speaking you need to be able to see a track record of 3-6 months before those items can be considered as income. There needs to be a trend of that person receiving it as if it were a regular paycheck. If someone is planning to reenter the workforce to provide income moving forward there are different policies for what is accepted. At Angel Oak Home Loans, we accept an offer letter as long as the start date is within 60 days for that person beginning their new employment.

In this day and age income as compared to what it was years ago is more heavily looked at. The underwriters have to see that trend/stream of income. To summarize that means seeing a track record of receiving child support or alimony. If someone is reentering the workforce there needs to be an offer letter. If someone has worked and will continue to do so then how that income is affected by these new debts and all of the new debt that they will be taking on will be closely examined. This will be done to make sure they can go through the refinance before these things are finalized with the separation agreement or divorce.

You don’t know what you don’t know. The marital house has a lot of responsibility tied to it. Seeking advice and help from a professional mortgage lender is the best way to go about this. This will allow you to get a clear picture of what your financial lifestyle will actually look like. Post-divorce, your income will have been cut in half and your expenses basically doubled. All of your bills become yours and yours alone to pay.

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.

© 2017 Integrity Marketing Solutions. 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.

Identify the Problems to Find the Solutions

DIVORCE 911 Consulted with Wendy Dickinson of Grow Counseling for this blog.

We also have a video covering this topic.

You have to identify the problems to find the solutions. Your first prerogative is to determine if the problem is under your control or outside of your control. If something is under your control then you would use what we call “problem-focused coping”. An example of this would be finding someone to help you find a place to live, you would hire a great realtor, then you would find a moving company, etc… With these situations, there are “problems/tasks” that you can solve thru your own actions. DIVORCE 911 is great for this. They find people to partner with you so that you can find your solutions.

However, if you identify the problem as being outside of your control, the best solution is to manage your emotions around the problem. This is best because you can’t actually take action on the problem. This would be more of a counseling situation where we would talk about grieving the loss of something, work on surrendering a certain set of expectations or acknowledging the feelings of sadness, and being able to shift your emotions around a situation.

Trying to use emotion-focused coping on something that you can control is fruitless because you can actually do something about it. The same goes for vice versa, trying to use problem-focused solutions for something you can’t control is going to feel helpless and overwhelming. You’ll just end up very frustrated. It’s important to figure out which type of problem it is. Is it something you can control or is it something that is outside of your control? This allows you to then pick the best solution.

There is a lot to consider in terms of emotions that we have to move through… We can’t go around them. Part of the solution process is being very intentional and not allowing yourself to get bogged down in the emotions. You’re going to feel angry, hurt, betrayed, etc… We’re human. What you don’t want is for that to become your identity. In order to move through it, you do still have to experience it. This allows you to surrender it and fully live.

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

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.

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.