Shownotes
This episode of the Ditch the Suits Podcast dives deep into the emotional and financial complexities that arise after losing a loved one..
Co-hosts Travis Maus and Steve Campbell emphasize the importance of taking time to grieve and not rushing into decisions, advocating for a thoughtful gap analysis to assess financial needs and future goals. They explore the potential emotional burdens tied to property ownership and the responsibility that comes with selling, particularly the concern for future buyers.
The conversation highlights the necessity of understanding the intention behind financial decisions made by the deceased, ensuring that those left behind honor their legacy rather than feeling obligated to make irrational choices.
With practical insights and heartfelt advice, this episode provides guidance to anyone navigating the difficult terrain of grief and financial planning.
Takeaways:
- Navigating the loss of a loved one involves financial and emotional complexities that require careful consideration.
- It's crucial to allow yourself time to grieve without making hasty financial decisions.
- Owner financing can provide flexibility when selling property, but it carries its own risks.
- Understanding the true value of your assets helps avoid emotional decision-making during grief.
- Always assess your financial position before selling a property to avoid future hardships.
- Building a financial projection helps clarify your goals and the reality of your situation.
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Thanks to our sponsor, S.E.E.D. Planning Group! S.E.E.D. is a fee-only financial planning firm with a fiduciary obligation to put your best interest first. Schedule your free discovery meeting at www.seedpg.com
You can watch all episodes, as well as other great content produced by NQR Media through their YouTube channel at https://youtube.com/@NQRMedia
📧 For more information or to get in touch with us, visit https://www.ditchthesuits.com
👍🏼 You can also follow us on Facebook, Instagram and Twitter at @nqrmedia
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About Your Co-Hosts:
Travis Maus has been in financial services for over fifteen years. He is a Senior Wealth Manager and Chief Executive Officer at S.E.E.D. Planning Group. Travis also hosts the Unleashing Leadership Podcast, where he dissects some of his favorite books on leadership and how you can apply it to your business or life.
Steve Campbell has over a decade of industry experience and is the Chief Brand Officer at S.E.E.D. Planning Group. Steve also hosts the One Big Thing Podcast, an interview-style show meant to inspire and encourage 30 and 40-year-olds going through difficult seasons of navigating marriage, raising kids, and growing personally.
Transcripts
Welcome to Ditch the Suits Podcast where we share insights nobody in the financial services industry wants you to know about.
Steve Campbell:We're here to help you get the most from your money in life.
Steve Campbell:So buckle up and welcome to Ditch the Suits.
Steve Campbell:Welcome to Ditch the Suits podcast.
Steve Campbell:I am Steve Campbell here with my co host Travis Moss.
Steve Campbell:If you're brand new to Ditch the Suits, I serve as the Chief Brand Officer at Seed Planning Group.
Steve Campbell:Travis serves as our ce.
Steve Campbell:Seed is a fee only financial planning firm where we have a fiduciary obligation to put our clients best interests first.
Steve Campbell:So Ditch the Suits is us bringing our years of collective experience together to really help you as the listener, get the most from your money in life.
Steve Campbell:And this is going to be part two of a conversation that we're continuing on really talking about death and how to pick up after the loss of a loved one, but give you some ideas that you can maximize the conversations that need to be have.
Steve Campbell:So Travis, I don't want to steal the thunder of the conversation.
Steve Campbell:Why don't you help people understand part two and kind of what we're going to talk about today.
Travis Moss:All right, so.
Travis Moss:So we have this question that was posted and I was, I wasn't going to read it again but I think it because you can go back to last episode and listen but like anybody, I think sometimes when you hear it more than once it resonates a little bit better.
Travis Moss:So I'm going to read it again.
Travis Moss:My question is what do I do?
Travis Moss:Since I lost my partner, I now have the farm we both had and still on the farm, but we have been told it has increased in value.
Travis Moss:I want to move but am not ready since my mom has decided to be closer to me and I feel obligated to stay because of her.
Travis Moss:They go on.
Travis Moss:I don't want whoever buys the property to be under if the market fails or falls as I could not justify someone being upside down.
Travis Moss:If the market goes down, goes and then they go on.
Travis Moss:What advice would you give me on what to do and not to do at this point in my life?
Travis Moss: cular person is at Don Bowles: Travis Moss:But most importantly, in our last episode, we answered the first part of this very big question.
Travis Moss:But we purposely did not get into the financial calculus of the issue.
Travis Moss:Yeah, we literally did not talk about, okay, what about the money stuff.
Travis Moss:In fact, we went out of our way to say sometimes you got to make a decision not about the money.
Travis Moss:But we wanted to say those numbers for this and then give maybe a little bit of final advice on the situation overall.
Travis Moss:So this episode was the last.
Travis Moss:This is for you and anyone else in this situation, Don, and trying to navigate kind of their.
Travis Moss:Your way through very similar type of difficult situations.
Travis Moss:I don't think anybody ever has the exact same situation as somebody else, but I think people do have very similar situations.
Travis Moss:And I think there's a lot of people walking this path and trying to figure out, you know, come to the conclusions of these.
Travis Moss:And although the question was very good, most of the time, that question, the person who's posing that because they're struggling with the decision.
Travis Moss:There's a lot of emotion and a lot of just raw power behind that question that is just kind of holding on like a thread.
Travis Moss:So if we can help you kind of reconcile that in any way, that's our goal with this.
Travis Moss:Yeah.
Steve Campbell:And I think this episode will be helpful.
Steve Campbell:Again, ditch the suits.
Steve Campbell:Listeners span different ages, different backgrounds, different geographies.
Steve Campbell:We're all in different seasons of life.
Steve Campbell:You may not have ever experienced death.
Steve Campbell:And you're like, why should I listen to this episode?
Steve Campbell:Maybe you have a mom or dad who's dealing with death.
Steve Campbell:I think that this conversation, death is coming for all of us at some point.
Steve Campbell:That's not a morbid statement.
Steve Campbell:It's the reality of it.
Steve Campbell:In just helping that this might be an episode that maybe you share with somebody that's going through something, somebody who's trying to pick up the pieces in life, like Don right now, again, trying to do the right things, trying to make the right decisions.
Steve Campbell:But there's a weightiness to it because the one that they were making decisions with isn't here anymore to share their opinion or how they feel.
Steve Campbell:So you said you want to talk dollars and cents.
Steve Campbell:Give us maybe some perspective now, you know, really around Don's situation of some things you might want to consider.
Travis Moss:Yeah.
Travis Moss:So in my experience, this is.
Travis Moss:It's really normal for someone who's lost somebody to feel.
Travis Moss:And I think we talked about this, like they're unworthy or.
Travis Moss:I've heard this so many times, people.
Travis Moss:I'll just start over.
Travis Moss:It's hard to start over at certain ages.
Travis Moss:Like, it's in thought, I'll just start over.
Travis Moss:But, you know, age has a way of catching up on you, and that's not necessarily a super healthy.
Travis Moss:We want to start over from a standpoint of life's got to continue and we're going to start a new chapter.
Travis Moss:But you don't start over from a standpoint.
Travis Moss:Of the past didn't happen.
Travis Moss:And we're not who we are today.
Travis Moss:Right.
Travis Moss:Like you.
Travis Moss:You don't just get to skip that part.
Travis Moss:So people have a tendency to try to disinherit themselves.
Travis Moss:I've seen it with women and I've seen it with men.
Travis Moss:I've seen men, some of the strongest men I've ever met in their 80s, in tears because they don't deserve anything that they have because their wife was the only reason why they had anything.
Travis Moss:They were their reason to get up in the morning.
Travis Moss:They were their reason not to be a little wild thing when they were younger.
Travis Moss:They were the heartbeat that made that body go right.
Travis Moss:And I've seen women that, you know, everything I have is because of my husband and I don't need it.
Travis Moss:I'm just going to give it all to the kids or I'm going to, you know, I don't deserve anything more.
Travis Moss:I'm fine where I'm at, you know, that type of thing.
Travis Moss:You do.
Travis Moss:And there are financial realities of your situation and we need to be careful that we don't disinherit ourselves, that we don't give everything away, that we don't refuse to address our financial realities, that we don't spoil kids.
Travis Moss:I've seen people spoil kids in the worst ways.
Travis Moss:When one of the kids parents you mentioned, I think earlier this episode or last episode, you know, if you're.
Travis Moss:If you're younger and you've got younger kids and one of the.
Travis Moss:Your spouse passes away, spoiling the kids.
Travis Moss:Spoiling the kids.
Travis Moss:Whether both spouses are alive or one spouse is alive is never good.
Travis Moss:It will make you feel better for a little while until the kids.
Travis Moss:So the kid can't be independent someday, you know, and if you're trying to represent the legacy and the memory of the person that you've lost, spoiling the kids is probably not what they had in mind.
Travis Moss:But I always come back to, you do not need to deprive yourself just because you've lost somebody.
Travis Moss:It's not your fault and you don't know, you don't need to go without because you've experienced loss.
Travis Moss:That grieving process that you go through, the despair that you feel that says, I'm not.
Travis Moss:I don't need anything and I'm not worthy of anything and it doesn't matter anyway.
Travis Moss:That is a season that you're going through.
Travis Moss:Yeah.
Travis Moss:That we need to get through that season.
Travis Moss:When we get through to the other side of that season, if you've given everything away, we.
Travis Moss:A Lot of times can't go get it back.
Travis Moss:And so we need to, you know, like when I was saying six to 12 months to decide what to do with the farm.
Travis Moss:Six to 12 months, really decide what to do with most things.
Travis Moss:Right.
Travis Moss:You need to.
Travis Moss:You need to make sure that the emotions aren't driving things.
Travis Moss:And even if you think you're really calm when it's happening, I mean, you probably have emotions, you're just burying them, you know, so we want to be very careful with that.
Travis Moss:You want to think about what and why.
Travis Moss:Did your significant others set things up the way that they did for you?
Travis Moss:So did they set things up?
Travis Moss:Did you have that.
Travis Moss:Those conversations and talk about, did we set everything up right?
Travis Moss:Did we get professional help to make sure everything.
Travis Moss:All the boxes were checked?
Travis Moss:Is this going to work?
Travis Moss:And why did you do that and what was the purpose of it?
Travis Moss:That gives you permission.
Travis Moss:Like if your spouse sets you up so that you could be retired and they pass away and you get that money and instead of retiring, you give it away to the kids, what did you do?
Travis Moss:Yeah, that's not why they gave you the money.
Travis Moss:They gave you the money so that you could be financially independent, not so that you would have to work until you're 85 years old or be poor or live in subsidized housing or have to move into your kid's basement or so their kid could have a boat.
Travis Moss:If they wanted that, they would have wrote the check, right?
Travis Moss:So they wanted to take care of you and make sure that you were taken care of.
Travis Moss:Do not feel guilty about that.
Travis Moss:You've been loved.
Travis Moss:Receive.
Travis Moss:You know, this whole idea of being good at receiving, right.
Travis Moss:Sometimes the only thing you can do is allow people to give to you.
Travis Moss:Because you.
Travis Moss:If somebody wants to give to you, it's because they see value in you and they appreciate you.
Travis Moss:Let them give to you.
Travis Moss:Don't spit at that by saying, okay, it's great.
Travis Moss:You give that to me.
Travis Moss:I don't deserve it, and you get rid of it.
Travis Moss:They would have made that decision for you if that was truly the case.
Travis Moss:When you're grieving, you're in a situation where you can't see that sometimes.
Travis Moss:So it's always go back to why and what, right?
Travis Moss:Why was that put there?
Travis Moss:What was the point of that?
Travis Moss:They could have done it different, and they didn't.
Travis Moss:Why?
Travis Moss:Or they tried to do it.
Travis Moss:Why were they trying to do it?
Travis Moss:You know, what was their intent behind it?
Travis Moss:And I think that that helps people deal with this kind of natural Tendency to say, I don't deserve.
Steve Campbell:Well, and Travis, I was just thinking about, too.
Steve Campbell:I mean, again, unless you've been on this side of the equation, you don't know what to expect.
Steve Campbell:There are some people that when they lose a spouse and the accounts are being settled and money's coming their way, it might be significant dollars they've never seen before.
Steve Campbell:So you're mixing a few.
Steve Campbell:A vulnerability of the loss of someone with now big dollars and trying to make sense of that.
Steve Campbell:And what does all this money mean?
Steve Campbell:There are people in situations that just don't know how to cope, and so they end up spoiling, like you said, because that's a way of kind of, you know, coping with what they're going through.
Travis Moss:But retail therapy.
Steve Campbell:Yeah.
Steve Campbell:And I, and I think it's also hard, too, because, you know, you had mentioned in the first episode, I think there is a distrust with professionals in the industry, whether it's attorneys or financial advisors.
Steve Campbell:And, you know, when you're talking about big dollars and settling of estates, just being mindful of, you know, have somebody that' talks to you.
Steve Campbell:I, I would say the way that Travis is talking to you through your speakers today, have somebody that is allowing you and giving you permission to not only grieve, but to really think through and talk through.
Steve Campbell:Don't deval yourself or consider yourself unworthy.
Steve Campbell:So, again, just as a, as a co host man, I appreciate you for these type of conversations.
Travis Moss:Well, there's, there's something that happens.
Travis Moss:Let's say that one of the spouses handled all the money.
Travis Moss:So the money area is them.
Travis Moss:The accounts kind of represent that spouse.
Travis Moss:The other spouse now gets it.
Travis Moss:That spouse a lot of times looks at that money as if it's their other spouse and they're afraid to break it because that's their, that's the, that's, that's the other person.
Travis Moss:And so there's, there's, there's a representation.
Travis Moss:And people do this a lot of times with their parents.
Travis Moss:I've had tons of clients who have gotten stock handed down to them from their parents, and they cannot bring themselves to sell the stock because it was their parents.
Travis Moss:And it's like their, their idolizing the stock as if that's the urn on their dresser, you know, and, and that's, that's something that you do have to work through.
Travis Moss:But people really, it's a real thing that people will struggle with.
Travis Moss:And again, that's why you have the conversation.
Travis Moss:Mom and dad leave you stock.
Travis Moss:What was their intention of the stock you get to need a want.
Travis Moss:You know, do you have.
Travis Moss:Do you have what you need?
Travis Moss:If you don't have what you need, you know, you have to address that.
Travis Moss:If not, you need to make, you know, like, if you don't have what you need, you need to address it.
Travis Moss:If you do, then you can just kind of proceed to, you know, focus more on what you want.
Travis Moss:Which gets back to that maybe not the optimal my financial decision, but it's for your health, right?
Travis Moss:And it's to try to get you in the right situation.
Travis Moss:If you have what you need, then what are the parameters that you can work within to get what you want without recreating a need?
Travis Moss:So again, if you're emotional short time after you've lost somebody, you have.
Travis Moss:You think you have enough, you look at it and go, I've never seen a pile of money like that.
Travis Moss:I'm gonna, you know, I got some insurance money in here and that kind of stuff, so I'm gonna go do what I want.
Travis Moss:So you do what you want.
Travis Moss:And then in doing what you want, you create a need again.
Travis Moss:You know, you.
Travis Moss:You spend more money than you should have.
Travis Moss:And all of a sudden now it's going to be a very difficult way.
Travis Moss:It's going to be very difficult to retire early or pay the bills when you're retired.
Travis Moss:I've seen people do that.
Travis Moss:It's, well, I gave money to that kid for this and I gave money to that kid for that, and I bought that over there.
Travis Moss:And then it's like, you didn't have enough money to do that.
Travis Moss:You had enough money to pay the bills so you could be retired.
Travis Moss:You didn't have enough money to buy a cottage or something like that.
Travis Moss:If you're going to do something that creates that need again, so you're perfectly fine.
Travis Moss:You do something that you want to do, and now you're going to have a need.
Travis Moss:The big thing is you just want to do that with eyes wide open.
Travis Moss:You want to be aware of what you're doing.
Travis Moss:So you're going to say, look, I know I was set up for retirement.
Travis Moss:That person's not coming home anymore.
Travis Moss:I'm going back to work because I don't want to be home alone.
Travis Moss:So I can afford to spend a little bit more of this money and do XYZ with that, you know, so it can kind of cause an effect, some of these decisions that we need to make.
Travis Moss:I think that you had mentioned something I think that is very important.
Travis Moss:I think that at the point of death, with death Claims there's a easy way for advisors to professional advisors to abuse the heirs of the assets.
Travis Moss:And by that in the financial industry, so this is all about secrets the financial industry doesn't really tell you about a lot of times, depending on the compensation structure.
Travis Moss:So if an advisor is in a commission oriented compensation structure, a lot of the time they get a commission just for getting you to sign the dotted line, to keep the investments at whatever firm they're in and kind of recycle whatever product they were in at the time.
Travis Moss:So that's kind of a scary proposition.
Travis Moss:And other times it's, I'm going to help you while you're grieving.
Travis Moss:And because I help you while you're grieving, you know, we'll have this, you know, connection and then I can maybe get you to do other things and buy other things from me.
Travis Moss:So if you are dealing with having lost a loved one or potentially losing a loved one, you need to seek out qualified advice.
Travis Moss:But it's best if you have it in place before you go through the event.
Travis Moss:Yeah, right.
Travis Moss:Because once you go through the event, your guards down, you're just trying to get things done.
Travis Moss:You just want to sign the bottom line.
Travis Moss:You don't want to fight and haggle over the money.
Travis Moss:You know, you're just like, just, it's not about the money.
Travis Moss:I'm grieving.
Travis Moss:And then you, you sign things kind of like the wrong way.
Travis Moss:Have you ever known anybody who got divorced and they just didn't want to fight us and they just turned everything over and then people are like, what are you, nuts?
Travis Moss:And years later they really regret the decision.
Travis Moss:That's kind of what happens sometimes when people are grieving.
Travis Moss:We're not thinking long term.
Steve Campbell:Yeah.
Travis Moss:You know, we're just kind of stuck in the here and now.
Travis Moss:We're just trying to get through today.
Travis Moss:I just want to get through today.
Travis Moss:I want to.
Travis Moss:I want everybody leave me alone.
Travis Moss:I want everybody away from me.
Travis Moss:I just want to go home and I want to hug my pillow.
Travis Moss:That's what I want to do.
Travis Moss:So I'm just going to sign this and get it done with.
Travis Moss:It's all done.
Travis Moss:I don't have to think about it.
Travis Moss:But what did you just sign?
Travis Moss:That's, that's what's so dangerous, I think, in that particular situation.
Steve Campbell:Well, and that's what I'm, you know, appreciative of you taking the time to put together some content for Don because, you know, I know we give people a lot of ideas around financial planning and the thoughts and the processes and the mindset and sometimes people want to know like, yeah, but how do I actually do it?
Steve Campbell:In this case, you got Don asking about a farm.
Steve Campbell:So I think this will be a very interesting way for you to express from your experiences.
Steve Campbell:If we were sitting down with Don, what advice or what questions would we ask that would get us to the ultimate place of where we need to go?
Steve Campbell:Because it's not dictating to Don what to do, but through a series of questions we can have a better eye of what to do.
Steve Campbell:So talk to us about then regarding the farm.
Steve Campbell:Again, Don situation.
Steve Campbell:If you're just jumping into this episode now, Don has lost a loved one trying to figure out what to do with the farm.
Steve Campbell:Mom potentially is going to be involved some way somehow, but doesn't know what to do because their spouse isn't here.
Steve Campbell:So when we're talking about the farm, where do we want to start?
Steve Campbell:Let's pause and hear a word from our sponsor.
Steve Campbell:This episode is brought to you by the One Big Thing podcast.
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Steve Campbell:Each episode will bring you as a listener, a life hack or a way of looking at life that will help you move from inspiration to transformation.
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Travis Moss:Well, I.
Travis Moss:These are big, big conversations with backstories that you have to get to.
Travis Moss:But not knowing anything, what I would want to think about is we'd have to know why you have the farm in the first place, what was the intention of it and what does it represent to you both financially but also on the personal side, that physical, mental, spiritual kind of well being side.
Travis Moss:What does that farm actually represent?
Travis Moss:Because that's going to be something that could potentially bring you great, great discomfort to kind of unwind or unpack or deal with.
Travis Moss:And before you go through the process of selling it or trying to sell it and all those types of things, being real with that situation I think is very important.
Travis Moss:For instance, we, we had a conversation with a friend about, you know, somebody has passed away and we have a house and we can either sell the house or we can renovate the house and sell the house.
Travis Moss:What kind of trauma do you think somebody would go through Renovating a house that their loved one had built or designed, or it was their dream house, probably a lot.
Travis Moss:So there's.
Travis Moss:There's parts of.
Travis Moss:There's things that there's.
Travis Moss:There's no go zones that you might have because of the significance of that item.
Travis Moss:And it's very important to understand that as you're kind of working your way through it, because then you can help weigh the pros and cons of the options.
Travis Moss:And they're not all just financial, but financial being part of them.
Travis Moss:Look, if you're willing to deal with that, you can get this much more money.
Travis Moss:If you're not willing to deal with that, you'll get this much less money.
Travis Moss:And it just helps kind of frame in what's it cost you to make the decisions that you need to make or to avoid making the decisions that you need to make.
Travis Moss:If you don't make the decision, this is what will happen.
Travis Moss:I think a lot of times that's what people are missing, too.
Travis Moss:Somebody's trying to sell them on how to make a decision.
Travis Moss:Well, what happens if you don't make a decision?
Travis Moss:And I think it's very important to point out that the listener brings up how much they care about whoever that would buy the farm from them.
Travis Moss:They seem really, really concerned that somebody would buy it.
Travis Moss:And if the market flips, that that person doesn't want whoever bought the property to actually have a financial hardship for what they paid for it.
Travis Moss:So that's how I'm interpreting this.
Steve Campbell:Yep.
Travis Moss:So one way to approach this is here's a creative way.
Travis Moss:You could offer owner financing to sell the property, which means you basically become the mortgage company.
Travis Moss:So it would be the bank of Don, and Don is doing a mortgage to whoever's buying it.
Travis Moss:What that gives you the flexibility to do is to renegotiate all the terms down the road.
Travis Moss:So if the price of the Property falls by 20% and you're so inclined to cut 20% off the top, you could rewrite that mortgage and, you know, forgive some of the debts or something like that, you know, so there.
Travis Moss:There's.
Travis Moss:There's ways to do that.
Travis Moss:I think that there's an enormous amount of risk in there, and I don't think that that's necessarily a good thing to do.
Travis Moss:But if there's, you know, that type of philanthropy and that relationship, and maybe that was the point of that property in the first place, and maybe there's a relative or somebody that wants to buy that, and that's why you would do that.
Travis Moss:There is There are some things like that that you could do to make to try to make it fair.
Travis Moss:Another approach, though, is to realize that, you know, anybody who buys something assumes both the potential risk and the potential return.
Travis Moss:So if somebody buys the property and the property value goes up, do they have to cut down a check for the difference?
Travis Moss:No.
Travis Moss:Somebody buys a property and they discover oil on it, do they have to share with Don?
Travis Moss:No.
Travis Moss:Somebody buys a property and they have a very successful farm and make a ton of money doing organic carrots.
Travis Moss:Do they have to share that profit with Don?
Travis Moss:No.
Travis Moss:So they get the upside.
Travis Moss:So really, what you want to think about is you're selling the property to another person based on what that other person thinks the property is worth to them.
Steve Campbell:Yeah.
Steve Campbell:Yep.
Travis Moss:And they are a responsible party and they have to live with the cause and effect of their own decisions.
Travis Moss:So this is again, one of those conversations.
Travis Moss:If it's somebody close to you and there was, you know, you're trying to cut them a deal, there may be other things to consider.
Travis Moss:But ultimately, if you put that house on the farm, on the market and somebody comes in and buys it, that's their responsibility to do due diligence and understand their financial situation and their capabilities to afford loss or gain.
Travis Moss:They're not going to share with you.
Travis Moss:If the property makes money in the future, it's not your responsibility to make sure that they make a good financial decision.
Travis Moss:It's their responsibility.
Steve Campbell:Yeah, you did a really nice job of.
Steve Campbell:It was a short segment in the first episode.
Steve Campbell:But saying cases of abuse, cases of things, that's a completely different conversation.
Steve Campbell:What we're teeing up is somebody that has lost a loved one that you're assuming had a healthy relationship.
Steve Campbell:There's love there.
Steve Campbell:They're emotional, you know, and maybe in your world, you don't own a farm.
Steve Campbell:Maybe it's a second home, maybe it's a lake house, Maybe it's your primary residence.
Steve Campbell:What do I do with this?
Steve Campbell:So you can take some of these concepts and ideas that Travis is saying and just understand that there are a lot of moving points to it.
Steve Campbell:But what we've been leading up to is that got to give yourself the ability to grieve.
Steve Campbell:We don't want to do anything short term or too emotional, and we want to make sure that we are considering all the different options.
Steve Campbell:Like you said, you presented an option of owner financing, but there is some risk to it.
Steve Campbell:So that is an idea.
Steve Campbell:But you want to understand the risk.
Steve Campbell:I think, though, that maybe then there is a solution.
Steve Campbell:That, Don, if you.
Steve Campbell:If you've tracked with us this long, partner, we have given you 56 minutes of our heart to yours, but now we actually want to give you solutions.
Steve Campbell:So, Travis, what's one way to approach it?
Travis Moss:Well, I think one of the best ways to approach this is just to do that gap analysis.
Travis Moss:I think we talked about it in previous episodes when we talked about selling a business and whatnot.
Travis Moss:But you need to find out what you need financially to move on to the next chapter.
Travis Moss:So.
Travis Moss:And I think whether.
Travis Moss:Whether this is because of a death or divorce or just you and a spouse are trying to move, or whatever the reason is, whatever reason people are moving from one property to the next, you should do a gap analysis.
Travis Moss:And so before I explain that in a little bit more detail, I do want to put a caveat.
Travis Moss:When you, you know, we've talked a lot about moving on to the next chapter, I just want to emphasize I think I did it in the first episode.
Travis Moss:When you move on to the next chapter, you.
Travis Moss:You are not forgetting about the past people in your story.
Travis Moss:And I would encourage people to continue to use the person that they've lost, to use their name, to talk about them, to celebrate them.
Travis Moss:They are a part of who you are now and who you will be in the future.
Travis Moss:So, anyhow, the gap analysis by preparing a financial projection.
Travis Moss:So you prepare a financial projection.
Travis Moss:I was looking at my notes there.
Travis Moss:Sorry, it sounded like I was just reading right off of it.
Travis Moss:But you're preparing a financial projection to kind of show where you want to be financially in your future.
Travis Moss:She's like, here's the ideal situation I'm going to be that I would be in some point in the future.
Travis Moss:Then you prepare where you're currently at, you know, based on kind of your current plan.
Travis Moss:I would sell the farm for $600,000 or whatever you might do with it.
Travis Moss:Right.
Travis Moss:Is there a gap between your financial goals and that first projection, the second projection, the goals, and the reality?
Travis Moss:So now selling the farm doesn't have to solve all problems.
Travis Moss:It may be impossible to solve all problems by selling the farm.
Travis Moss:But what it does mean.
Travis Moss:Back to the other question about being worried about, you know, somebody else maybe not getting as good a deal because the market changes afterwards or something like that.
Travis Moss:Maybe they end up with buyer's remorse or something.
Travis Moss:If you have a positive gap, that means you have more than you need.
Travis Moss:So that means you look at the gap, and it's not a minus.
Travis Moss:You just.
Travis Moss:You have extra money.
Travis Moss:So if you want to sell the farm for less than market value at that point, to help somebody out, you can do so.
Travis Moss:It's not going to affect you.
Travis Moss:If the gap, though, is negative, you don't have enough money.
Travis Moss:When you're selling the farm based on your plan, anything that you do that's contrary to improving the situation, like selling the farm for less than it's worth is very, very detrimental to you and it could cause a very significant hardship in the future.
Travis Moss:Again, not saying that you can't do it, but you have to be wide open to this.
Travis Moss:You have to know what it's actually costing you to do it.
Travis Moss:You might say, well, it's only $100,000 to sell it for less than it's worth.
Travis Moss:But what does that $100,000 cost you?
Travis Moss:Does that cost you an extra three years worth of work?
Travis Moss:Does it mean you have to go back and get a job?
Travis Moss:Does it, you know, like, what does it mean?
Travis Moss:You also have to, though, stress test these results.
Travis Moss:So in most situations, when you do a projection, so you do these two projections, everything's built on the same expectation.
Travis Moss:Oh, we're going to make 7% a year on our investments and get 3% a year on our Social Security for the rest of our lives, blah, blah, blah.
Travis Moss:And look, we got this nice little chart here, shows how rich we're going to be someday.
Travis Moss:The world doesn't happen like that, though.
Travis Moss:There's the thing called sequence of returns.
Travis Moss:You don't get 3% inflation every year.
Travis Moss:You get 1%, 0%, 3%, 2 and a half percent, that kind of stuff.
Travis Moss:You don't get 7% a year.
Travis Moss:You get 15%, 0, negative 5, 32, stuff like that.
Travis Moss:So you have to go and you have to stress test it.
Travis Moss:And a stress test is a fancy word for Monte Carlo simulation.
Travis Moss:But you have to look at variables in the situation and what happens if the variable, like the expected performance changes year to year in a number of different ways.
Travis Moss:And you're going to end up with a range of output, let's say by looking at.
Travis Moss:We tend to do a thousand different scenarios.
Travis Moss:So we're going to look at a thousand different scenarios.
Travis Moss:And it gives us a scatter chart range of output.
Travis Moss:Now you're much more informed because, you know, wow, 80% of the time this works.
Travis Moss:I feel pretty comfortable selling the farm for less than it's worth because 80, you know, in 80 of scenarios, I'm in great shape.
Travis Moss:We tend to live in the range of 20 to 50%.
Travis Moss:If it's in the bottom 20 to bottom 50 percentile.
Travis Moss:Whenever you do an analysis because you're guesstimating on what the future might look like, you never want to take the pie in the sky number, right?
Travis Moss:You like the average number is the best scenario you want to take because average is your probably more likely to be somewhere around average.
Travis Moss:Right.
Travis Moss:So you really want to go average and then be pessimistic to give yourself room for error.
Travis Moss:So we normally go in that bottom half to down to that bottom 20 percentile, that range.
Travis Moss:If we're, if we're in that range and we still have a positive outcome, we're pretty happy with that, you know, making that financial decision.
Travis Moss:So this is going to sound daunting, as we said, do a projection based on what you want, do projection based on the reality, compare them and then stress test it, and then live within the bottom 20 to 50%.
Travis Moss:So that sounds kind of daunting and exhaustive.
Travis Moss:And it is, because it's a lot of specialized work and it requires people who know what they're doing to get it right.
Travis Moss:So I say it like this because this is what financial planners are supposed to do for you.
Travis Moss:A lot of people say, I got a financial guy or a financial advisor.
Travis Moss:Are they doing this for you?
Travis Moss:If they're not doing this for you, figure out who would do this for you and go work with them.
Travis Moss:That's my advice on that.
Travis Moss:This type of work too, there should be a fee for it.
Travis Moss:It's a lot of work.
Travis Moss:Something like this would take 20 to 35 hours to work up for a client.
Travis Moss:You're talking three to six 60 to 90 minute meetings, probably within the first three months that you would be meeting with somebody to go through all these scenarios, because you have to build the backstory, you have to build the projections, you have to run the scenarios.
Travis Moss:I'm sure there's other complications in here that we haven't talked about.
Travis Moss:There's a lot of things to consider and a lot of details to kind of work your way through.
Travis Moss:So I wish now that we could just tell you, go ahead and sell the farm or don't sell the farm or just sell it for that number.
Travis Moss:But you've got to write that chapter and you've got a unique story that you're writing, and probably the solution is as unique as you are, but hopefully this at least points you in the right direction.
Steve Campbell:Well, and I think Travis did a really nice job because death is something that, whether you've gone through it, you may not understand.
Steve Campbell:But I think you teed it up really well at the beginning, either in the show or before.
Steve Campbell:You and I discussed recording today that we many times, because of what we do, get asked very simple questions that have very, very complex answers to.
Steve Campbell:And so when people see you and I, they'll say like, hey, should I do a Roth conversion?
Steve Campbell:Or when should I take Social Security?
Steve Campbell:Or what pension option should I do?
Steve Campbell:These seem like very surface level questions because you can go out and ask the Internet what you should do and you'll, you'll find a myriad of blogs.
Steve Campbell:But what you just did at the end here I thought was do a really nice job of really explaining what financial planning is and what a good financial planner will actually help you look through, through the gap analysis, through the stress testing.
Steve Campbell:If you've never heard of that before and your relationship is just buying or selling of products, that's not really financial.
Steve Campbell:Plan beginning.
Steve Campbell:Find somebody that talks to you the way that Travis talked to you for the last almost hour and a half through these two episodes.
Steve Campbell:Find somebody that helps you understand you are worth it.
Steve Campbell:No matter if you've lost somebody or not, your life is not over.
Steve Campbell:There is a next chapter, but let's learn how to celebrate the legacy of a person, not just recognize the loss.
Steve Campbell:And now let's, let's face the reality.
Steve Campbell:They're no longer here.
Steve Campbell:We have all these pieces, we have all these assets, we have land, we have houses, we have children.
Steve Campbell:How do you make decisions?
Steve Campbell:Find somebody that's going to be in your corner to really understand what's important to you.
Steve Campbell:That's going to give you the time and space to grieve those six to 12 months.
Steve Campbell:But also realize that you still have to make decisions along the way.
Steve Campbell:They can't be careless, they can't be near jerk.
Steve Campbell:We have to have a long term perspective in mind.
Steve Campbell:Death is coming for all of us at some point and you either are going to be somebody that says, I acknowledge that and I want to have healthy conversations now so that my well wishes are taken care of.
Steve Campbell:But also because like you said, I don't want to be selfish and leave my spouse, your spouse, our children, in a position to have to deal with something that I could have dealt with in my time here.
Steve Campbell:So if you're in a position like Don, where you're on the other side trying to make decisions, I really hope these two conversations helped you at least have a framework.
Steve Campbell:But if you are somebody who's got time, got a healthy spouse in a situation, use these two conversations, share them with a friend.
Steve Campbell:But as always I hope you know Travis and I's heart.
Steve Campbell:And really, Travis took the lead on this one.
Steve Campbell:If you have questions, if you have situations in your life, it might be a simple question, but it's a complex answer.
Steve Campbell:Don't be a stranger.
Steve Campbell:Get in touch with us.
Steve Campbell:Head over to ditchthesuits.com There's a comment button up in the corner.
Steve Campbell:Send us a note.
Steve Campbell:Let us know what's important to you.
Steve Campbell:We appreciate the opportunity to share a little bit of our heart with you as to why this stuff matters.
Steve Campbell:And as always, thanks for being a guest on Ditch the Suits.
