Good morning,

As I mentioned a couple of weeks back, I spent some time in Richmond, VA, at my company’s annual advisor conference last week.

It was good to reconnect with many friends and colleagues.

And it was a refreshing reminder that despite our differences, every advisor I spoke with is clearly focused on taking care of their clients to the best of their ability.

I take comfort from that realization as that’s also my focus.

As you might imagine, we covered a lot of interesting and thought-provoking topics at the conference, so today I thought I’d share some of these with you in addition to some not-yet-fully-formed ideas I’ve been toying with.

First up, I enjoyed a presentation about behavioral finance and our biases around money and how they can derail our best-laid plans.

The above is an excerpt from the workbook that accompanied this presentation. Here’s the entire PDF if you’re interested.

I appreciated the distinction between “cognitive” and “emotional” biases.

While many believe financial planning and investing is all in our heads, don’t overlook the influence our hearts (and emotions) play in our decision making.

And as I’ve shared before, these biases are part of how we’re wired. I’m not immune to them any more than you are.

Thankfully there are strategies and behaviors - automation, for example - to help us be more resilient and likely to stick to our planning.

No matter how worrisome and crazy the world seems these days…

We had several panel discussions including one on retirement income solutions.

For this panel, the discussion covered the use of reverse mortgages, annuities, and long-term portfolio strategies combined with a flexible approach to financial planning by adjusting one of the “six levers.” (more on that another time)

In fact, a week ago today I had a client close on her reverse mortgage.

It will enable her to pay off the rest of her regular mortgage balance (no more payments), access some additional funds to make some updates on her home, and have a growing line of credit that she can access tax-free in the future for anything.

Including long-term care, if needed.

And she owns her home and no one can take it away from her. And the equity in her home still passes to her heirs.

A reverse mortgage certainly isn’t a fit for everyone, but it can be a good tool in certain situations.

There was a great multi-generational planning presentation from my buddy Ryan.

I talk to many clients who want to give their children and grandchildren the best possible odds to live a great life. This can include giving money to them now and/or leaving money behind as part of their estate plan.

But - and this is a BIG but - several clients have also shared with me that they’re worried…

Worried that any money they give or leave behind to their family could cause problems.

Problems among family members. Personal problems with their kids. Or grandkids.

Ryan, in his presentation, suggested that “giving” could be the solution.

Everyone has unique interests and causes they care about.

What if you could use these unique interests and causes to create a shared project with your children, grandchildren, or other family members?

Yes, to ultimately give money away (and it doesn’t have to be a lot).

But to also create a shared family vision.

Maybe even a family mission statement.

This isn’t guaranteed to eliminate family issues around money, but I could easily see how this approach could go a long way toward minimizing them.

Hit reply and let me know if this idea resonates with you or if you’d like to learn more. I found this idea and Ryan’s approach fascinating.

Moving on from the conference, some other ideas I’ve been thinking on…

Let me know if any of these are something you’d like me to develop further.

• Do you really know?
  • I’m increasingly convinced that very few people know the specifics around things like:
    • How much you make
    • How much you pay in taxes
    • How much you save
  • Sure, you know your salary or income. But do you know how your paycheck works and which deductions are which? Should you adjust your tax withholding?
  • How about your taxes? For most of you, taxes are just a number that comes out of your paycheck every couple of weeks. And then you either write a check or get money back when you file every year. But for many, your taxes are your largest annual expense. Might be good to know what that number is, how it’s calculated, and what you might be able to do about it.
  • And when it comes to savings, you might know that you contribute 6% of your income to your 401k at work. But how does that number compare to your after-tax income? Or how does it stack up relative to your total spending and savings?
• Your next $100…
  • Related to the above, for the next $100 you earn, how much of it is going where?
  • If you’re putting 6% into your 401k, that’s $6 of the $100. What about the other $94?
  • How much of your $100 gets spent on fixed expenses? Flexible expenses?
  • How much, if any, do you give to causes that are important to you?
  • A good approach is to know where your dollars are going before you earn them.
  • Think of it like giving every dollar a job, including spending some of it on the things you enjoy.
• Story telling…
  • We’re story telling machines. We use stories to make sense of the world around us. And we’ve been doing this since the beginning…
    • That sound in the brush? Maybe it’s nothing. Or perhaps it’s a saber-tooth tiger about to pounce.
      • Story is part of our survival instinct.
    • And we all tell ourselves stories about money.
    • For example:
      • Are all millionaires and billionaires jackasses who took advantage of others to achieve their success? Maybe in some cases, but certainly not all. Money isn't a zero-sum game. Someone else doesn't have to lose for you to win. But many people tell themselves the story that money is bad. Often to their own detriment.
      • Your friend that can't get out of debt no matter how much love and support you've given him? But maybe he grew up with there never being enough money. Is he someone who often had to go hungry and couldn't reliably pay utilities bills growing up? Maybe they see money as a source of happiness and satisfaction which is why they always want more, even if much of it is credit card debt.
      • Stories are how we interpret and cope with others and the world around us. But have you ever stopped to think about the stories you’re telling yourself? Especially your stories about money?

Links & Things

About a month ago, I recorded and shared an educational webinar on Medicare Open Enrollment. You can watch it here.

Two weeks ago, I recorded another educational webinar, this time on Marketplace/Exchange open enrollment which starts today and runs through mid-January. But if you want your 2024 coverage to begin on January 1st, you’ll need to enroll by December 15th. Learn more by watching this:

And here’s another good one from Morgan Housel:

• A Few Laws of Getting Rich