Family

Blind Spots and Seeing the Whole Picture

Posted on Jul 27, 2018 in Community, Family, Investments, Planning, Relationship

I’m a huge movie buff. In a different life, I would have been behind a camera, capturing people’s stories on film. One of the best stories I’ve seen on film is a movie making the festival circuit this year, Blindspotting. Daveed Diggs of Hamilton fame, along with longtime friend, poet and fellow actor Rafael Casal, have made a buddy movie like no other. It is smart, funny, painful, intense, and powerful. The writing is tight, the acting top-notch. The pair had been working on finding a way to produce the film for ten years, and its tone and subject matter could not be more pertinent today.

And why am I telling you about this in a personal finance blog? The power of the movie is in its exercise in asking the audience whether they can see more than one thing at the same time: Can you see the two people in profile AND the vase? Can you see a black ex-con and a thoughtful man reinventing himself? Can you see that the friend you’ve known your whole life has a different experience of the world because his skin color is different than yours? Can you see a rich person and someone struggling? Can you actively look to see past your blind spots? This is important because without the ability to do so, you can miss important information about your friends, your family, the people you work with, and the broader world around you, as well as about your finances.

What is “Blindspotting”? You’ll find that out when you go to see the movie. (And seriously, go see it.) We’ve all heard of blind spots: something in your range of vision that you should be able to see, but which is obstructed. The obstructions come from a variety of sources, but they can come straight from you: a blind spot is a predisposition, a prejudice. The most dangerous are the ones that you don’t know you have. Dangerous because you may think you are lighting candlesticks when you are lighting dynamite.

We all have them. We are all products of our own stories and experience: our upbringing, our families, and the shortcuts that help us make sense of the world. Sometimes those shortcuts don’t show us the whole picture and result in blind spots. Here are three common ones that might impact your personal financial life, and one additional that can cause you to negatively affect someone else’s:

Confirmation bias – You embrace information that supports your perspective and cultivate a blind spot to that which contradicts it. You buy a stock and when there is good news about the stock, you acknowledge that and feel you have made a wise investment. When there is negative information about the stock, you discount the news.

Recognizing that you’re likely to have a bias for the choices you make and being able to look past that blind spot and take in all relevant information about an investment will make you a better investor.

Over-confidence – What you’ve done in the past has been successful, so you are confident that you know what you’re doing. You have a blind spot to the role luck can play and to evidence itself, and in investment management, that’s one place where numbers don’t lie.

You invest in real estate and home prices soar. You feel like a brilliant investor. Real estate prices plunge, and you blame the market, not your strategy. The blind spot is your confidence in your ability versus the capriciousness of markets.  Why you were investing in real estate in the first place should be your benchmark: you needed a home and were buying for the long-term, or you wanted a long-term investment in rental property and could carry the on-going costs of the property during the periods you couldn’t rent it. That’s the measure you need to be using as a benchmark for success, not your ability to time a market. It’s hard not to get caught up in a frenzy, which also makes it the best time to go back to your desk and work through the numbers to see if an investment will meet your goals over your time horizon.

Note that the corollary of over-confidence exists as well: under-confidence. You invest in the S&P 500 and the market goes up. You consider yourself lucky. The market falls and you blame yourself for a bad investment. Your blind spot is self-confidence: without question, luck factors into timing of investing. But if you invested in the S&P 500 as a long-term strategy for growth, knowing that there will be market fluctuations, there is no luck or blame, that is a solid strategy.

Rationalizing: You overspend but explain how much you’re saving by buying things on sale. You desperately want to get out of debt but as soon as you’ve freed up some extra income, you’ve committed it to another loan or run up a balance on another credit card. You’ll start saving tomorrow.

We are creatures of habit. We are attached to our rituals, our patterns, our ways of doing things, and accepting that they may not be serving us – to say nothing of actually changing them – is hard to do. The blind spot is what you believe is really important and whether your actions support it. What is your goal? Looking at actions instead of hopes or dreams is where planning comes in. All of the above actions are rational in some way to the person making them. Seeing how the action (buying something you don’t expressly need because it’s on sale) impacts your stated goal (saving for a vacation to Italy) can help you release an old rationale and better align actions with what you really want.

And one more for the other people in your life:

Making an Assumption: This is the quickest shortcut we all use. You don’t give the plum project to the new parent because it involves travel and you assume they wouldn’t be interested in that now. You order a $90 bottle of wine at dinner with a friend, not realizing that her half of the price of the wine was what she was budgeting for the whole meal. You see your neighbor’s new Tesla, their designer shoes, the gardener at their house and you assume they are greedy and material people.

But are you making an assumption that interferes with seeing the whole picture? Your predisposition creates a blind spot. You won’t see the whole picture in each case until you ask questions and learn more. You’ll retain a prejudiced view of what a new parent wants at work, what your friend can afford, and what your neighbor is really like. The effort to see a blind spot takes time and attention and energy, all of which feel for most of us like increasingly scarce resources.

These decisions we make based on our biases, our assumptions, our blind spots, can have a very real impact on the lives – financial and otherwise – of other people. You limit the professional growth of an employee, you burden a friend with an unexpected expense, you fail to offer friendship to a neighbor because you are operating in a blind spot.

Are you seeing what you think you are seeing? Or could there be another way of looking at something? Can you step back and take in the whole picture objectively? Could there be more to the story? People and situations can be more than one thing. In developing an awareness of what we know for a fact, setting aside the shortcuts, expanding our view into blind spots, we get better information for action. Blind spots are not blindness – we can improve the completeness of what we see. It requires observation, attention, and sometimes confronting a limitation under which we’ve been operating.

Financial self-awareness is the first step. Learning to be aware of our blind spots can lead us to greater understanding, compassion, and better decision-making all around.

As for Blindspotting the movie, my experience at the SIFF screening was intense and very personal. There is an art to allowing us to laugh while we cry, something Shakespearean about giving us that release so that we can continue to watch, to engage, to care about these characters, flawed as they may be, in the short time we have with them. This is a powerful film, coming at a time when we are churning up some deeply held beliefs among us, which I continue to believe is the first part of healing. Right now it may not feel like we’re making progress, yet like any problem – or blind spot – you can’t do anything to change it until you recognize it’s there.

It is only a movie. But if it promotes a continued conversation about racial tension, police violence, gentrification, growing income inequality, and how we can promote empathy and compassion while tackling these issues, then it is so much more.  Blindspotting opens nationwide July 27th.

Read More

Planning in the New Year

Posted on Jan 9, 2017 in Community, Family, Planning, Tax

You all know I love to plan. The power of planning comes from setting your intention, and taking action to make it happen. It’s about dreaming, but it’s more about doing.

Starting a new year is a perfect time to set your intention on how you want to affect the world outside your personal sphere. I know I’m not alone in that while I am glad to put 2016 behind me, I’m not altogether too sure about 2017. All the more reason to have a plan about how you want things to go down. It can be overwhelming to figure out where to start. So start at the beginning:

1. FOCUS – Ask yourself what the top issue is for you – it’s overwhelming to try and solve all the world’s problems at once. Believe me, my mom and I tried over numerous cups of coffee. What is the area that you feel most concerned about protecting? Civil rights? Climate change? Women’s health? Choose one (or two, tops) and put your energies here.

When we’re talking about your portfolio, diversification is beneficial. For philanthropic investments, concentrating your giving – of time and money – focuses your precious resources on the specific goal you want to support, and can enhance your involvement in something you care about.

2. Next, DECIDE how you’d like to help. There are three main ways to support the causes that matter to you:

• Gifts to traditional charities
• Gifts to not-for-profits with a political agenda
• Gifts of action

Gifts to Traditional Charities
Our tax code currently provides some incentive for charitable giving, allowing a tax deduction for giving to not-for-profit – and generally non-political – groups. We’re entering a whole new world this year, both with potential changes to the tax code and changes in the political climate.

We don’t yet know how the changes to the tax code will affect charitable giving from a tax perspective. One thing we can know with some certainty is that there will be less spending of our collective tax dollars for social services or human rights protection. Organizations that work in these areas – food banks, civil rights groups, women’s health – are going to need your help more than ever. If they are 501(c)3 organizations, you can take a tax deduction to the full extent of the law as it stands now.

From what we have heard thus far, the new administration is proposing tax reform that stresses simplification, part of which would reduce the number of tax brackets and substantially increase the standard deduction (from $6,300 to $15,000 for single filers, $11,500 to $30,000 for jointly-filed tax returns). Meaning many people who may have itemized and received a tax benefit for charitable giving will now receive no additional tax benefit from this unless their total itemized deductions exceed the standard deduction.

Gifts for Political Action
There are many reasons to give beyond a tax deduction, and giving to groups that lobby or otherwise take political action may now be on an equal footing tax-wise with giving to tax-exempt organizations. Some not-for-profit groups which lobby or otherwise participate in political campaigns don’t have 501(c)(3) status, so your donation may not be tax-deductible.

It’s easy to get overwhelmed by the many areas of need, and you’re going to need to pick your battles. On one of his first post-election shows, comedian John Oliver of Last Week Tonight offered a solid list of organizations you may want to help. Oliver made a very serious call to action on his program, noting that until now we’ve generally felt that the rights of all Americans would be protected by those in Washington. But many may feel that will no longer be the case, and some groups will need help under the new administration. He organized his list by cause:

Women’s health: Planned ParenthoodCenter for Reproductive Rights           

Climate change: Natural Resources Defense Council

Refugees:  International Refugee Assistance Project

Civil rights: American Civil Liberties UnionNAACP Legal Defense FundThe Trevor Project,

Mexican-American Legal Defense and Education Fund

All of these groups, with the exception of the ACLU, are 501(c)3 organizations and donations to them are tax deductible to the full extent of the law. Note you can donate to the ACLU Foundation to make a tax-deductible gift to support their work on civil rights issues.  Here’s a description of the difference: Giving to ACLU or ACLU Foundation: What is the Difference?

If you want to make your own list — and not rely on one from a fake news show — check out Charity Navigator or Guidestar to search for organizations doing work you want to support. You can search by area of interest.  On Charity Navigator you can start with its Perfect 100, charities that execute their missions such that they’ve received top marks for good governance.

Gifts of Action
You may want to take action beyond writing checks. While you can blog and tweet and email and post about how the world should change, coming together with others is what creates a message that cannot be denied.

You can do this without leaving your house. Just last week, plans to alter the House of Representatives independent Office of Congressional Ethics (OCE) were scrapped after thousands of phone calls opposing the move tied up Representatives’ telephone lines. The fight to curb the power of the OCE was not new, nor was the tool used to voice disapproval. You have your First Amendment Rights for a reason. Likewise, over dinner recently with a long-time friend, she surprised me by saying if the new administration rolls out a Muslim registry, she’s planning to register. She is not Muslim nor of a targeted ethnicity. It was her way to disrupt a rounding up of people according to religion or ethnicity, and she was betting it was unlikely that the authorities would come round to arrest a white, middle-aged mom in the suburbs.

I felt obliged to remind her that that was a reasonable bet now, but perhaps not in the future. (See point #3, below).

3. If you plan to act, PLAN to act

You know this is all really leading up to some planning. Whether you give money – for a tax deduction or not – or decide to take action yourself, make sure you plan for it. It will take time out of your already busy lives, to research a charity, to call your Congressperson, or better still, to show up en masse at his or her office. To work on a committee, to meet up with others to plan, to work, to act. It will use nights, weekends, vacation, PTO. And you’re going to need to protect yourself when you do.

When I was in graduate school, a visiting professor taught a course on ethics. I was skeptical about what ethics you could teach to MBA students, but her approach was pragmatic. Specifically, she talked about how to be prepared in case you found yourself working somewhere in which you found corporate behavior to be illegal or unethical. There is often an enormous toll for speaking out, not only in legal costs but in damage to your career in the short- and sometimes long-term, to your social and professional networks, personal financial security, and to personal health. At a minimum, you need to be able to walk away. We all want to be the kind of person who acts when needed, but not everyone feels they can for some of these reasons.

One of the things she taught us was to have a cash reserve. Yes, I’ll always recommend you have an emergency fund. Beyond cash for a short-term shortfall, consider building another kind of reserve. Have “pin money,” bail money, a Go F*ck You Fund, a reserve in case you need to make a change, or end up at Santa Rita after your weekend activities.

A Brave New World
Progress often feels like two steps forward and one step back. We are at the beginning of a new cycle for social justice, and things are going to get bad before they get better. It’s going to take work and sacrifice to make progress. Civil rights, women’s rights, human rights all seem under threat as we move into this New Year.

You can leave it to others. 56% of Californians and 39% of Washingtonians did not vote, they left the decision to others. Don’t leave the work to others. Plan for your part in it, whatever that is.

I’m encouraged by the numerous people in the media, experts in disparate professions, and yes, even some politicians, who understand what is at stake and who are ready to put their time and effort towards moving us forward. Find your cause, find others working towards the same goals, find your tribe. At a minimum, it’s an opportunity to get to know your neighbors, co-workers, kids, parents in new ways. It’s our connection to others that gives us a rich life, and believe it or not, this year and beyond could prove to be some of the most moving and meaningful times we might have. It takes courage, and time and effort. Set your intention: what do you want to look back on with pride at the end of this year? It is a New World in this New Year, and we need to be brave in it.

Read More

Talking Turkey, Talking Trump

Posted on Nov 24, 2016 in Community, Family

This month my book club read Where the Right Went Wrong, E.J. Dionne Jr’s book about conservativism in America, a selection made long before Election Day, and back when we thought we’d be in a different place politically when we met to discuss it. One of our group told us how she was anxious about her upcoming visit to family for Thanksgiving. Her political views differed from theirs, and she would be outnumbered. She told us about the letter she was drafting to send to them prior to the holiday, in hopes that they would sensitive to her feelings.

Everyone in your household may be on the same page regarding the election. In case that’s not the case, before you lob a turkey leg or a fistful of Tofurkey across the dining room table, take a breath.

Think about how you’d guide two kids arguing over a toy. What is the value you want to instill in the kids? Sharing? Fairness? Generosity? What is the value you want to demonstrate at your table? Respect? Gratitude? Love? Let that be your rock, and if the conversation starts to get heated or voices are raised, grab onto it and let it anchor you.Then consider these steps to help bring the folks at your table together:

Set some ground rules: In your first toast or when everyone sits down at the table, give your values a voice:

I’m so glad we can all be together, and share this holiday, even if we don’t share the same views on events in the news

OR

I’m so grateful to be part of this family, and to respectfully sharing all the differing points of view we each have

OR

Thanks to everyone for coming, and for sharing this food, and good conversation, with love and understanding

OR

I have spent the last five hours preparing this meal, and I hope whenever you feel like saying something about the election, you will choose instead to say something nice about my cooking. I hope that’s something we can all agree on!

There are some families in which this approach simply won’t work. In this case, you may have to accept that ground rules aren’t going to constrain some. You’ll need to decide with whom you want to engage, but I’d encourage you to ask for space, or time if needed, or to try turning what might feel like an attack to you into an exploration about what matters to the other person. And if none of that works, you can always change the subject and ask them to pass the mashed potatoes.

Acknowledge feelings: Think about how we encourage good sportsmanship in our kids. We encourage the same behavior in winners and losers. We encourage respect, and acceptance of the outcome as well as the feelings winning or losing brings with it.

Expressing sadness or grief over the outcome of the election is not a sign of weakness.  If we can separate out the feelings from the events that generated them, we can start there. No one wants to see those they love hurting.

Recognize that however YOU are feeling, not everyone may be in the same place, even if they are on the same side. At yoga the Saturday after the Election, our instructor led us through a practice and a meditation about anger. Except I wasn’t angry. I was sad. Grief-stricken. Heartsick. I cried most of the way through the class. Recognize that not everyone will be processing events in the same way, at the same pace. They may not be ready to talk. Let them grieve, or be angry, or sad, or quiet. Ask them how they feel, whether they want to talk. And respect the answer.

Ask questions: The biggest challenge we face now is talking with those who we see as holding a diametrically opposing view. You can’t understand how someone on the other side can BE on the other side. So let’s find out: Take out the political angle, and you have either an angry/despairing/grieving family member, or a happy/excited relation. If you were just responding to the feelings, what would you ask?

What is your biggest hope for the new Administration?
What concerns you the most about the next President?

Listen: Ask your question, and then just be quiet. Seriously, just stop talking. Take in what the other person has told you. You actually don’t have to say anything. Each of us needs to feel heard. Resolve that right now your goal is not to persuade the other person to see the light. Your goal is to hear what the other person has to say.  You can think up a counterpoint tomorrow.  Right now you’re listening.

This stuff matters because what we’re really arguing about is values. I believe we have more in common, and share more in terms of values, than the highly-charged campaign hype may lead you to feel. Headlines and sound bites are made to amp you up, not usually in a good way. No question there is much at stake.  Talking past each other is just not a productive approach to keeping the nation – or your family – together.

Change happens in living rooms and kitchens, and at dining room tables. Ground yourself in what matters to you, ask questions, and listen. Democracy is often messy, frustrating and loud. Just like families.

Happy Thanksgiving.

Read More

Planning in One Page

Posted on Sep 14, 2015 in Blog, Community, Family, Planning, Simplicity

Colleague and sketch guy extraordinaire, Carl Richards, has a new book called The One-Page Financial Plan. My work is all about organizing, simplifying, and getting clarity around what really matters for you, and a one-page plan sounded awesome. As I often do, I test-drove this process myself and here’s what my One-Page Plan looks like:

To be able to take care of myself:

1. Own my home

2. Financial freedom at 70

3. Ability to participate in the communities I love

What you’ll see right away is that the plan is very focused, and simple. But for any of you who have practiced yoga or tried meditation, steadying the wiggly body or calming the monkey mind is harder than it looks.

But this is exactly what you must do to have a plan that works: You must get to the “why” of what you’re doing. I call what I do “values-based” financial planning, and at its core it’s about what you value, what is important to you. The “why” will become your litmus test for financial decision-making.

The “Why”
Carl’s one-page plan starts where I also start the planning process, with the “why.” The Why is your financial mission. His question is: Why is money important to you?

To have a secure retirement?

To take care of your family?

To die with the most toys?

The Why is totally internally-driven. If you are looking for external validation, your “why” will always fail, because you’re not directing it. When it’s externally-driven, you’re looking to the outside for validation, and you won’t feel a sense of calm when you answer the question. When you answer truly, you relax, you feel a relief from anxiety. You’ve answered the question.

What Gets in the Way of The Why
Part of getting to The Why is digging into what money means to you. My financial mission is to be able to take care of myself.  My process looked like this:

Money is important to me because I want to be financially secure.
Because I want to be able to take care of myself.
Because no one else will be there to do it.

In those three sentences, I got to one of my core values: self-sufficiency. I came from a working class family. My parents bought their first house on the GI Bill, my dad went to school and worked part-time, and money was a struggle. I worked my way through college, and graduate school. There was a lot of messaging in my early life around my family not having any support outside the four of us — my parents, brother and me — and how we could only rely on ourselves.

Being able to take care of myself financially – pay my bills, never get in over my head, take educated risks but don’t bet the farm, have a little money socked away, a few staples in the pantry always– is at the core of how I run my financial life.

For you, it might be thinking you “should” have a house, but you’re really fine renting and would rather put your savings into a business idea. It might be feeling you deserve a certain standard of living, when the fear is really not living up to someone else’s (or your) standards, of not being as good as your peers. Only you can know why money is important in your life.

The “What”
Once you figure out why you’re working hard and saving – or spending your nest egg in a certain way – then you can get more specific about the actions you need to be taking to work towards these goals. What Carl notes – and embraces – is the certainty of change. Don’t wait around for the perfect answer or the “right” decision. Good planning is a lot like living your life fully: you start where you are, with what you can do today, and do it. You have to translate The Why into actionable goals. You need to list everything you want to do or have, then prioritize in terms of how “The What” supports the Why.

To live up to my Why, I want to own my own home, save enough to be financially independent at age 70, and participate in the communities I love.  Taking care of myself doesn’t mean spending all my time at the office, it also means having a good life today, and so I’ve included how I’ll spend my time in addition to what I’m doing with my money.  Your plan is about you and building a meaningful life.

The What is the top three specific things that you need to do to fulfill your financial mission. You’ll note that not all these goals necessarily require financial resources: two of the communities I love involve dogs and books, and I’ve volunteered in animal shelters, libraries and school reading programs. What is your What? What are the three goals you’ll work on now?

Putting Your Why and What into Action
Once you have your Why, you have a measure against which you can evaluate the financial decisions you face. When you wonder how to spend your money or how to save, ask yourself, is this action supporting your Why? For me, I ask “Will this action enhance my ability to take care of myself?” Then test the decision about which of your three top goals it’s advancing.

OnePagePlan_napkinv2That’s it. Write your Why and your What on a post-it or an index card (Carl wrote his, shown here, on a napkin with a Sharpie). Put it on your mirror, keep a copy in your wallet. This isn’t about other people telling you what to do, this is a talisman of your creation, your money mantra to keep you centered and on track to get what you really want out of this life.

Get out your Sharpie and get to work!

Read More

When Your Partner Has a Secret Life

Posted on Apr 18, 2014 in Divorce, Family, Relationship

In the aftermath of the Boston Marathon bombings, many turned to the dead bomber’s widow for answers. What seems impossible for some to believe is that she knew nothing of her husband’s plans. How could she be so close and not know?  Here, a year later, I can offer my perspective from my own experience.

In the last years of my marriage, I discovered my husband had a secret life. There had been hidden addiction, other relationships, thousands of dollars from our accounts that went missing.   It all came out slowly, painfully, over a period of years. It wasn’t until I saw the funds missing from our accounts, which couldn’t be explained away with a story, that I finally could see the truth.

But prior to that, I wanted to believe my husband. I loved and trusted him. We’d met as sophomores in college and had known each other for 25 years. And even though he’d been caught in that first lie that started the unraveling of our marriage, I wanted to believe that after that he was telling the truth. That I fell for that over and over – well, that speaks to my contribution to our dynamic. I couldn’t see some of what was going on because I didn’t want to. Other parts he hid deliberately and effectively. Other people, friends, and family were complicit in the charade because they didn’t want to believe the truth about him either.

From time to time I asked questions. And I would get answers that didn’t quite make sense. Or answers that were true – but incomplete. There were periods when I worried about my mental state. He said he’d told me something, but I was pretty sure he had not. Case in point was his description of a trip he was taking. He was going to see his brother and he’d found a hotel with a cheap local’s rate. That much was true. What was revealed after a forensic search of his credit card statements was that he made the trip with another woman (and her dog), paid for their airfare, meals and shopping from our money. The hotel with the local’s rate was a four-star resort. He could say what he’d told me was the truth. But there’s a reason they make you swear in court to tell “the truth, the whole truth, and nothing but the truth.” Slowly I began to see half-truths, omissions, and out-and-out lies.

You want to believe the people you love, especially if the truth is too painful to see. There were many times I felt something was wrong, but didn’t know what to do about it. The lesson for me was how to press for answers, how to keep my partner engaged in a difficult conversations, and at least for me, if he can’t participate in these difficult talks, to leave.

Some of the things you might look for if you suspect your partner is hiding something from you are the following:

  • Creating distance between you – My husband was pulling away from me, physically and emotionally. All long-term relationships go through ups and downs.  He also created distance by coming home consistently later than he’d said. I used to joke that if he said he’d be home at 5:30, I’d see him at 7. What I should have done is kept trying to close the distance. It might not have changed the end result, but I think the truth would have come to light sooner.
  • Things may not be what they seem – What you think you see may not be correct – actions may be subject to interpretation. I had an explanation for what was happening in my marriage: many times I was put off because my husband had work to do. He was dedicated to his job (an attribute I admired greatly) and I wasn’t going to interfere with his work. Only later I learned much of that time spent “working” was actually on-line and in person with other women, other activities that were not advancing his career.
  • Denial – My ex-husband had a difficult and traumatic childhood. That he survived it, and even thrived as an adult in his work life, was again a quality I found laudable. His family and even our marriage counselor supported his inability to talk about difficulty in our relationship as “being stoic” or “flooding”—being so overcome during an emotionally-charged time that he could not speak. His father had been a bigamist, and spent time in prison. There was no way his family was going to believe that my husband would grow up to hide things like his father. It worked to his advantage that there was no expectation that he needed to explain his actions or thoughts. That was just him being stoic.
  • Manipulation – What I didn’t see was that he used this vulnerability to get what he wanted from me, and the rest of his family. Unhappy in a city with limited career choices for me, I suggested I move temporarily to another city, apprentice in a new field, and return to start a new career. In tears and on his knees, he told me how he didn’t want us to be apart. Despite my deep dissatisfaction with my own career prospects, but not wanting to have him be so unhappy, I stayed. When I look back over our years together, I see this pattern of my wanting something, his hurt, my wanting to stop that hurt more than honor my own needs, and relinquishing my want.
  • Deep investment in the marriage – I loved and respected my husband, and I believed we are each responsible for our own happiness. Things that started off as small slights – being inattentive at a party, coming home late, using work as an excuse to abandon our Thursday Date Nights and time with family – these added up over time. But I wasn’t going to leave him over these things. We had been together since college, and I doubled down and worked harder to be happy on my own – which should have been an indicator itself of a troubled marriage.

In my case there was no terrorist plot. There was just a man who got off by hiding things from his wife. Being so close to him, at least in my case, was part of the problem. And for a long time, I didn’t want to see it. Once I did, my life made a lot more sense.

Read More

Downton Do’s and Don’ts: What Downton Abbey Can Teach You ABout Financial Planning

Posted on Mar 30, 2014 in Estate Planning, Family, Uncategorized, Women

SPOILER ALERT: If you’re not already watching PBS’ masterpiece series, Downton Abbey, first of all, where have you been? Secondly, you may want to read this after you’re caught up on the travails of the Crawleys and the Granthams through Season Three of the series.

In the wealthy world of Downton Abbey in early twentieth century England, one didn’t discuss money. And gender lines often determined roles in financial management, despite one’s skills, or lack thereof. In the early twenty-first century, one luxury we don’t have is to ignore our personal financial lives, and Downton provides some solid lessons.

1. DON’T Die Without A Will
After surviving war, injury and star-crossed romance, Matthew Crawley finally finds love with Lady Mary Grantham. Tragedy strikes at the end of Season Three when Matthew is killed in a car accident, leaving a widow with a young child. He was 32.

Don’t think it can’t happen to you. I still have young clients who start an estate planning conversation with “ If I die…” The only two things I can say for sure about anyone’s financial plans are that their plans will change, and they will die. No one expects an accident (thus the name) and the time is now to get your affairs in order.

Often it’s a life change (marriage, birth of children) that prompts clients to start the estate planning process. Guardianship of children and taking care of a surviving spouse are classic needs addressed in estate planning, but everyone including single individuals needs to have a plan: to make known your wishes for life-sustaining treatment (or not), management of assets in the event of incapacity, even planning for your pets. Your dependents are depending on you.

Matthew left a witnessed note that was deemed adequate to express his wishes, but without it, English law would have decided the financial fate of his wife, son and estate. Single or married, with children or without, see an estate planning attorney for basic documents (Will, durable powers of attorney for health care and financial matters). If you don’t have an estate plan, the State will have one for you.

2. DO consider your skills realistically
Robert, Lord Grantham, wants to manage all of Downton’s assets now that Matthew is gone. Viewers will recall not one but two incidents in which Robert’s poor money management almost cost the family its ancestral home. The first crisis was averted by his marriage to Cora Crawley and her fortune. Season Two found Downton in financial peril again, after Robert has lost Cora’s fortune through bad investments. It’s Matthew inheritance from ex-fiancée Lavinia Swire that comes to the rescue and Matthew becomes co-owner of Downton.

Season Four opens with Robert’s assumption that despite his history of poor investment choices, he is nonetheless the right person to make financial decisions for Downton, and he talks excitedly about a new investment scheme by this fellow called Ponzi.

Note that the 2013 IRS Schedule A now has a new section (Form 4684) for reporting “Ponzi-type investment losses.” Charles Ponzi was a con artist who in the 1920s swindled clients out of $20 million. Bernie Madoff is our modern-day equivalent.

Why would Robert consider himself a competent money manager, given his history? Because he is head of the household? Because he has a title? Because he is a man? Talent and skill in one area do not necessarily indicate talent and skill in others. You may have skill or interest in personal finance, but do you have the time and discipline to implement what you learn? And to stay current? Ultimately you own financial decisions about your assets. Consider your skill, interest and available time when determining whether to go it alone in managing your finances. Whether you seek help through your own research or through the help of an advisor, don’t let traditional roles or pride deprive you of access to the information you need to make the best decisions for your financial situation. And don’t (like Cora) relinquish all involvement in management of your assets.

3. DON’T Be House-Poor
Downton Abbey consists of a grand country house (the real Highclere Castle in Hampshire, England and its 5,000 acres of grounds) and land, some of which is leased to local tenant farmers. The dilemma of much of the landed gentry is having real estate with high operating costs, but no income-generating assets to support on-going expenses.

Similarly, modern-day families can end up “house-poor”: taking out the highest mortgage possible on a home, keeping the family home in divorce, or maintaining a home with lots of equity but minimal sources of income in retirement, all without regard for the cash flow needed to support the debt and the upkeep on the property. A house-poor situation can leave you with such a large portion of your income going to support your home that you are short of cash for discretionary items, or even other financial obligations.

Downton’s estate agent is working to use empty farmyards as an additional source of income, among other ideas. Turning a house into an income-generator is harder: you can rent out rooms, or take a reverse mortgage. Better still: consider not only the capital cost of an asset (its purchase price), but its on-going operating expenses (mortgage payment, property taxes, insurance, utilities and maintenance). Trading a dear family home for a more financially manageable one could be the optimal solution to restore a balance between income needed to support your home and income you can use for other expenses, giving you a financial life that is less cash-constrained and less stressful.

4. DO Take a Place at the Table
Mary Crawley begins Season Four haunting the halls of Downton Abbey, the closest thing you’ll see to a zombie on PBS, grieving the loss of her husband Matthew. Often when parents can barely keep going for themselves, they pull themselves together for their children, but she is so deep in mourning she isn’t even able to engage with her child, George.

But Mary has a mentor. Two actually. Tom Branson, the ex-chauffeur and widower of Lady Sybil, has straddled lives above and below stairs. As estate agent, Tom is responsible for the competent management of Downton. He sees Robert working to take control over the estate after Matthew’s death, and believes Mary’s salvation – personal and financial – lies in finding an interest outside of herself, which he thinks is Downton.

The second mentor, Mr. Carson, master of the house below stairs, has known Mary her whole life. At the urging of Tom, Mr. Carson has a caring but stern talk with Mary about her need to step up for George. Initially Mary rebuffs Mr. Carson, but in time embraces his encouragement literally and figuratively. Both mentors were key to helping Mary reconnect with the things she values.

With Mary unstuck from her grief, she shows up at a gathering of tenant farmers and takes a place at the table. Sheryl Sandberg would be proud. Both mentors and taking a place at the table figured prominently in Sandberg’s book Lean In. Lady Mary doesn’t know all the answers, she knows not everyone (and including some dear to her, like her father) will cheer her involvement, but she knows it is her responsibility to George, to Matthew, and to herself, to try to become the best steward she can of the family’s legacy.

By taking a place at the table, you engage in your financial life. You don’t need to know everything: sometimes you’ll listen, other times you’ll speak. All of us are better served by fully participating in the decisions that affect our lives, and financial decisions are some of the biggest. You aren’t going to have all the answers, but you do need to be part of the discussion.

5. DO consider whether you’d be comfortable above stairs
Assuming you’re not already a member of the landed gentry, you might want to reconsider whether a life upstairs is for you.

We spend a lot of time thinking about how to accumulate enough money to leave paid employment. But once you get there, is it enough? Many retirees face the challenge of leaving their identities behind with their jobs, and finding meaningful activities to replace their work. Some of you might be longing for days filled with golf or shopping, but others might be bored with the Grantham-style whirlwind of constant clothing changes and gossip about what other people are doing, while doing little else themselves.

Particularly for the young and freshly financially independent, think about what you’ll do with yourself now that money isn’t the object. If money isn’t the object, what is? Virtually all the research on happiness points towards having a purpose and a connection to others that give us joy in life. Whether you’re from old money or new, or working to get there, taking time to reflect on what really matters to you, and using these values to guide management of your finances is more likely to provide you with a truly rich life.

The early twentieth century was a time of changing roles, changing technology, changing economies. In the early twenty-first century we face similar challenges, and we can tune in to Downton to find lessons that still apply today.

Read More