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An Unforgettable Journey

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Dadphotos 006My Dad, 1991

We sat on the other side of the doctor’s desk.  My father was wedged between my mother and me, just in case he tried to make a break for it.

It turns out, I was the one who wanted to run.

The doctor started off in a light, conversational tone but my father, even in his confused state knew an interrogation was coming.  He looked to me, a weak nervous smile on his face, and I wanted to stop what was coming next. But we were there for answers – even if I didn’t really want to believe what those answers might be.

“How many children do you have?” The doctor asked.

My father broke into a wide smile; he knew the answer – lucky seven – like the back of his hand.  He even managed to name us all, which in his younger years would sometimes cause him trip over the names, as parents often do.

“Can you name their spouses?”

And with just the second question, everything began to unravel.  My father peered at me nervously, like a kid trying to cheat on a test; my hands started twisting.

I couldn’t run; I couldn’t help him and all that energy coiling in my gut started to knot my fingers. I blinked over and over, to stop any tears from building up.  To avoid eye contact with everyone in that room, I fished a pen out of my pocketbook and scribbled meaningless notes that I didn’t recognize as my own writing.  Occasionally, even blinking didn’t help; a fat tear would splatter the page, in spite of my best efforts.

He had overcome heart attacks and various brushes with cancer.  His mind, though, through all his life, was sharp; frighteningly so. He could spot a problem, mistruth or danger and stop it dead in its tracks.  Now his mind was just a trap door that kept opening and swallowing up precious memories.

“Technically, Alzheimer’s disease can only be diagnosed at autopsy,” the doctor said.

I didn’t need my father to die as proof of what was apparent; this disease was erasing bits of him in front of our eyes. I wondered how long his essence would last and how long we would grieve his loss before he actually did leave us for good.

Years after my father passed away, Tony and I stood in front of a group of family member/caregivers at an Alzheimer’s Association-sponsored seminar.  There were several presenters sharing their various areas of expertise – an elder care attorney, a visiting nurse, and a director of a facility for the memory-impaired.  Though we all had unique insights to give the attendees, the best perspectives we had to offer were that each and every one of us had had a front-row seat as the disease consumed a loved one.

We were there to talk about what my father’s illness taught us and what they needed to consider, such as:

  • How medical costs for someone with this disease would increase faster than inflation and the costs could last a long time – the average lifespan after diagnosis is eight to 10 years;
  • How to make sure assets were divided into short-term needs (five years of cash) with other assets invested to provide some future growth to tackle the rising costs of care;
  • Why a durable power of attorney was only useful if it was placed on every bank and investment account;
  • Why eliminating any high investment fees would make more money available for caregiving; and
  • Why locking the money up in complex investments and insurance policies could be a dangerous idea.

His illness led us to the most important work we have ever done.  Ultimately it resulted in a complete change in our respective career paths to financial advisors; it was the reason we were able to stand in front of that group and truly empathize.

The Centers for Disease Control and Prevention names Alzheimer’s disease and other dementias as the sixth leading cause of death in the U.S. (2014); the only major causes of death on the increase.  Of the 46 million Americans 65 years of age and older, an estimated 5.3 million suffer specifically from Alzheimer’s disease.  This is a far-reaching swipe that many will deal with directly (as a patient) or as a concerned family member.

Expect to hear more from me – and the financial services industry – about the challenges this presents and the importance of planning.

There was a time that I wished we didn’t understand this situation, but we do; we can’t un-walk that walk.

Now I see it for what it is — an unforgettable journey we were forced to take that just might help someone navigate that heartbreaking and treacherous terrain.

Shoot the Inner, Sitting Duck

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My last post, “Nailing Financial Predators,”  may have left some feeling like an easy mark.  But what if we could take our six natural human responses to persuasion and make them work in our favor?  Well, we can.  Here are some ideas on how to proactively take charge and shoot that inner, sitting duck:

1. Authority – If we respond to the perception that someone has expertise or power over us, it’s best to make sure that that reverence is actually warranted before heeding their advice.  Seek out respected authorities on investing, such as Warren Buffett; who keeps his advice simple:

“When trillions of dollars are managed by Wall Streeters charging high fees, it will usually be the managers who reap outsized profits, not the clients. Both large and small investors should stick with low-cost index funds.”

2. Reciprocity – When someone does a kindness (even with ulterior motives), we are tempted to do something kind in return.  What if the good starts with us?  Seek out a helpful resource, such as Vanguard’s tips for becoming financially responsible and pass it on.  Doesn’t that feel good?

3. Liking – We want to do business with people we like — there is no crime in that.  Just make sure that they can: give objective advice, keep costs low, provide a plan that is thoughtfully personalized, explain everything  – including fees, and not press for an immediate commitment.  If they can make good on that, there truly is a lot to like about this arrangement.

4. Scarcity – Salespeople love to create a sense of urgency so we will be manipulated into prematurely pulling the trigger.  What if we were to make attaining our goals the urgency — and the scarcity is time?  Every day we fail to plan is one more day we lose.  Stop procrastinating, make a plan and get at it already.  The meter is running.  Tools, such as Vanguard’s When Can I Retire? can be a great way to assess the current situation and start the process of goal-setting.

5. Social Proof – Because we tend to look to others to help us make decisions, this can get tricky if we turn to the wrong person.  Luckily, facts have no feelings, nor do they lie.  The Financial Industry Regulatory Authority (FINRA) has helpful resources to protect investors.  BrokerCheck is a great tool to investigate the background of a financial professional and a firm.  Make sure to look at the firm, as well. Why do business with a company that engages in questionable behavior?  Also on FINRA’s site are the very useful Fund Analyzer and 529 College Savings Plan Expense Analyzer, which allow investors to examine the costs associated with different investment options.  Remember Warren Buffett’s advice — keep costs low!  For teachers, understanding the fees associated with their 403(b) plans can be like solving an open-ended riddle.  Two great resources to help cut through the fog of ambiguity are 403bcompare and 403bwise.

6. Commitment and Consistency – Once we commit to something, it makes it uncomfortable to turn back on our word.  Instead of committing to someone else’s agenda, what if we commit to ourselves, our goals, and the financial well-being of our families?  When these become the motivation for our efforts — when we fear disappointing ourselves more than others — we can move in the right direction.  Systematically investing every paycheck, treating investing as a bill that must be paid every single month,  and increasing the amount every year — this consistency will turn commitment into meaningful action.

These six natural responses can be our best friend or worst enemy.  The decision is ours as to whether to sit like a duck and let others take aim, or make our efforts reflect the goals we aim for.  It seems like a pretty easy choice, doesn’t it?

 

Intelligence is no Match for Ignorance

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I remember the first time I helped a colleague of Tony’s switch out of a horrible 403(b).  Tony had come to me aghast over what he had seen; an annuity with 4% in fees and longstanding surrender fees.  We had no idea that this was not the exception to the rule; nor did we realize that this would become our full-time obsession.

Here was an educated, savvy woman who had absolutely no idea how badly she was being ripped off.  It turns out that there were many more teachers, just like her, who had listened to recommendations from esteemed (but ignorant) colleagues.  One-by-one they formed a chain of the blind leading the blind and, in spite of their intelligence; they all went right over the same cliff.

Secretly I wondered if I could have been one of these people, if I didn’t know what I knew.  The answer is probably.

Let’s face it; most people would rather not spend their free time researching where they should squirrel away funds for a rainy day some decades into the future.  If someone smart and confident gives a seal of approval on an investment choice, it would be like getting the Cliffs Notes to a torturous read.

Teachers, of all people, know there is no short-cut to learning something well and no substitution for diligence.  After all, a semester cannot be learned in a day.  And one must be well aware of the quality of the sources, to prevent propaganda from being mistaken for fact.

Because there is no curriculum to follow or tests along the way to measure retention, aptitude and mastery, many are unaware of just how ignorant they really are.

If I issued a final exam on their retirement plans, many teachers would end up in summer school – as students!

Why does this topic elude so many?  The math involved is nothing complex – it’s actually basic elementary school level.  From my experience these attitudes and perceptions are what handicap so many teachers:

  1. Complacency. “I have my pension, so I don’t have to contribute to my 403(b).”  I hear this all the time, and the data backs it up; only 30% of teachers participate in their plan. This is a very damaging mindset.  Retirement can last 35 years or more and, in that time, the dollar amount of the pension will remain unchanged while inflation will make everything – food, living expenses, and health care – more expensive.
  2. Intelligence with Ignorance. I have encountered teachers with multiple advanced degrees who are unaware of what they pay for their investments, how the advisor is paid and why they own what they own. But, because they are successful and accomplished professionals in their line of work, they think this intellect translates into areas where they are out-matched by a “nice” salesman telling them they pay nothing for their investments. (Spoiler alert: advisors are not working for free).  Being “smart” also means knowing what you don’t know.  If you haven’t taken the time to learn something, then your smartness is limited only to those areas of your expertise.  Tony is a very bright guy, but if I asked him to rewire the house, he would burn it to the ground.  What makes him particularly smart is that he would call my brothers and ask them for their very knowledgeable opinion and then hire a contractor they would recommend.  A Masters or PhD in education does not a savvy investor make; unless, of course, hard work has been put in to learn about investing.
  3. Fear. Maybe after years of threatening students with a trip to the principal’s office, a phone call home or “permanently marking” a transcript, teachers feel the need to walk the line and not cause trouble. (Note to teachers – this is how nefarious regimes have risen to power, just ask the history teachers you work with.) Sometimes in order to avoid a crappy fate, you have to make some noise and shake some trees.  Yet, when we point out how bad their options are, and tell them to approach their union or business office to ask for better options in their plan we are frequently told:
  • “I don’t want to start trouble;”
  • “I don’t have tenure yet;” or, my personal favorite
  • “The high ranking school official’s son/daughter/niece/nephew sells annuities in my school and I feel pressured to work with them.”

So, the answer is to look away and allow predators to take advantage, uncontested?  This is not an inspiring mindset; and certainly not good behavior for our children to model.

Luckily, we also have encountered teachers who are hungry to learn more and have become motivated vigilantes.  Once they understand the common problems, such as high fees, conflicts of interests, and unnecessarily owning annuities, they dive into their own accounts and research what they have.  They do not accept ridiculous answers like, “You are paying nothing.”  They get to work demanding better options for their school district.  They get their investments out of the shoddy choices.  They tell others.  They operate from a place of empowerment by:

  1. Getting informed. There has been no shortage of articles exposing the treacheries in the 403(b) arena and the importance of the fiduciary standard.  Reading these articles raises their awareness of the landmines under foot and inspires them to research their own set of circumstances.  They never like what they find.
  2. Using their outrage as motivation. Rather than feel helpless or fearful, these teachers get angry and do not delay in standing up and taking swift action.  If a company has exploited their ignorance, they take away every cent as soon as possible.  They do not tolerate being taken advantage of.
  3. Speaking out.  Teachers have told their colleagues what to look out for (and have expressed frustration at some of their co-workers’ inaction and apathy).  They have invited us in to their schools on their own time to educate and inform others.

So for those teachers who wish not to “go quietly into the night,” we’re here to help show you how to protect your best interests; because if there’s one thing I’m certain of, the insurance rep isn’t cutting it.

Becoming informed would be an intelligent first step, for those smart enough to realize it.

 

Matters of the Heart

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I learned, at a fairly young age, that life can change as quickly as it takes a heart to beat.

It was the day before Thanksgiving, 1973, when my father suffered a heart attack.  He was 56 and I was 8. As the sole breadwinner, I am sure all the worries he had about caring for his wife and seven kids (four of whom were minors) were pinging in his head, keeping time with his rapid pulse rate.

Thankfully, after several weeks in the hospital, he was allowed to come home in time for Christmas.  It was a gift; but frankly, the anxiety over his health issues would haunt me throughout his lifetime.  Fortunately, he lived into his late eighties; but having no way of knowing that he would be blessed with longevity, I began the egg-shell walk that would span decades.

It took me well into my adulthood before my fears eased up a bit.  Perhaps experiencing milestones that I worried might never come, like having my father walk me down the aisle, allowed me to exhale.

And now, at the age of 51, I think I have finally figured out a few things about that experience and how it shaped me and how it affects my interactions with clients.

I guess I’m a slow learner.

Discovering the up-side to this down-side has become most apparent in my profession.  It has influenced how I relate to others.  When clients come to me with their fears – real or imagined; likely or unlikely – their discomfort pulses in my stomach and I want to help them make it stop.

Though it has taken me some time to realize this, I fall into the pattern that my father had silently taught me.

He set about eliminating known threats and stresses that could undo him.  He did it without so much as an eye-blink.  He was methodical and the message was powerful:  Control what you can; prepare in advance for what you can and then do your best not to dwell.  Pay attention to new information that can change a situation and adjust accordingly, but don’t fixate.

Financial plans are all about that.  It gives me great comfort to take someone’s worries and systematically address what changes need to be made – save more, work longer, spend less, down size, work part time, start a small business … the list goes on.  I like giving them options – it puts the control back in their hands.

Even when the news isn’t as ideal as I would like, there is a sense of relief that comes from taking an honest look at a difficult situation and then making a plan.  Clients always feel better.

Sometimes, though, there is no “better” to a situation.  Over the years, I have helped clients get their affairs in order as the end of life approached.  I have ensured that heirs quickly received proceeds from IRA accounts; I have even brought paperwork to wakes and funerals so that out of town family members could sign what they needed to and I could explain things in person.  No amount of apologizing could ever make me feel like anything less than the grim reaper.

Eleven years after my father’s death, my mother passed away.  The job I had performed for many clients now fell in my lap.  There was no “me” to make it all go away.  I moved slowly, though I knew what I was doing.  It was as if dividing my mother’s assets was the final burial that I simply wasn’t ready for.

Thankfully, my siblings showed great understanding and realized that I was struggling with this morbid task.  They were more patient with me than I was with myself.

No matter how many times I have walked into a situation like this for a client, I am affected.  I can feel their sadness and uncertainty; and I think they know it.  Never once have I been met with anything but relief; they don’t want to have to worry about one more thing.

After years of doing this for others,  I finally see the gift I am able to give is more valuable than any inheritance: it is peace of mind that they are free to focus where they need to  —  on the more pressing matters of the heart.