Women

A Post-Election Note

Posted on Nov 9, 2016 in Community, Investments, Planning, Tax, Women

Like me, you may have felt that the world would look different this morning (if we even woke up at all) after the results of the presidential election. And yet, the sun rose, the day began, and here we are.

What we know after the election is that our country is seriously divided. As we saw when we elected Barack Obama, we want real change. The trouble as I see it is that the direction in which President Trump will lead us will be more of the same. Right now, markets — and the people who make them up — are orderly. There may come a time when the emotions that drove this election will react negatively to a lack of any real change.

Here are a few thoughts on what comes next:

Economics – We have limited specifics on Trump’s plans for “national growth and renewal” in the economy, but there are echoes of Reaganomics: lower taxes, relaxed regulation, big government spending. If the fiscal stimulus he plans repairs and expands our infrastructure, that’s a plus. Reduced regulation (such as repeal of the new DOL Rule (which requires advisors to your 401k to act in your best interest), repeal of Dodd-Frank (Wall Street reform), repeal of the Affordable Care Act) means you’ll be more on your own to protect your interests.

Taxes – We can expect lower taxes, at least on higher earners. I am doubtful Trump’s plan to bring overseas corporate earnings home; if he is able to do this, that’s again a plus for higher earners. Given the structure of our Federal budget, we can’t grow our way out of a deficit spending situation, so lower taxes means increasing deficits.

The World – We are more connected globally than ever, and building walls and reducing trade is likely to hurt us economically, as well as in our leadership role in the world. Bombastic rhetoric in discussions with other leaders and nations could have dire consequences.

The Rhetoric – The most difficult part of the campaign for me has been the vitriolic, threatening language that stirred up some of the ugliest facets of the American character. As a woman, I feel unheard, less safe and decidedly second-class. But I believe we can’t change what we don’t acknowledge, and we must admit this election cycle has revealed a dark side we have wanted to ignore. How we continue the conversation around these issues and change them is the real challenge.

Markets are mixed this morning, after some strong negative indications overnight. We can expect to see more volatility in the months and years ahead, and increasing economic inequality. What we can do is focus on what we can control: diversifying the risk in portfolios, organizing your accounts for tax diversification and to keep expenses as low as possible, saving more, and when we spend, spending with intent.

The table next to mine at the Election Watch Party I attended last night joked that at least here in California we also passed a recreational marijuana law, which we’ll need all the more after this election. (To be clear: I don’t recommend that as a personal financial strategy.)

In the meantime, we need to continue the conversation, and fighting for what we believe: “Let us not lose heart in doing good, for in due time we will reap if we do not grow weary.”

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Mad Men. And Surprisingly Not Angry Women.

Posted on May 21, 2015 in Divorce, Uncategorized, Women

SPOILER ALERT: This post contains several spoilers for AMC’s Mad Men series finale.

For several nights last week I was catching up with the rest of you on the trials and travails of Mad Men in time for the series finale. For years I avoided watching the Emmy-award winning show: Who wanted to relive the awful way women were treated in the late 50s/early 60s, especially in an office environment? But a good friend with style and an eye for mid-century design worked in advertising as a copywriter and was a fan of the show. She, along with the hype around the finale, persuaded me to tune in.

Over a four-day marathon, I covered the ten or so years of the series, which coincided with ten of the more tumultuous years of change in the U.S. I was surprised to find I preferred the first few seasons set in the early 1960s: the world just looked better, cleaner, and more orderly than in the later seasons of the early 1970s, with sideburns and tie dye and slightly sloppy clothes (and some would say, sloppy morals).

But as we all know, looks can be deceiving.

These years were just on the edge of my personal history: I was born two weeks before President Kennedy was shot, and as an adult I wondered what my mom must have thought, having only immigrated to the States in 1952 and now with a baby girl, civil unrest and what must have seemed like chaos everywhere. We went from pill box hats to openly pill-popping in a very short time.  We often forget how far we’ve come since.

So we see Mad Men begin with the introduction of a new woman to Madison Avenue: Peggy Olsen. Sincere, ambitious, slightly naïve. I related to Peggy. The other women of the series – Joan (statuesque office manager), Betty (blonde and beautiful wife of Don Draper, former model, now mother of his children) – never settled into the stereotypes they might have. They all struggled with what we now call work/life balance.

But in this era, the choices were few. In one episode the men mock how the young women in a focus group about cold cream only wanted to know if the product would help them find a husband. The reality of the time was that there were few other options: before the 1970s, a woman could be fired if she was pregnant (the Pregnancy Discrimination Act of 1978 changed this), she couldn’t get a credit card without a husband to cosign (changed by the Equal Credit Opportunity Act of 1974), and could be forced to retire at 32 (Pan Am’s requirement for stewardesses, changed by the Civil Rights Act).

At the end of the Mad Men run, the women found contentment we might not have expected. Joan chooses love of career over romantic love, Betty chooses honesty and her education over the image of perfect domesticity, Peggy chooses career – and finds love that fits into that choice. The strength it took for the women to make these choices — and other difficult ones along the way — given the obstacles of their time, was for me the real draw of the series. The women focused on what they really wanted, and went for it, despite the odds. Fairer sex indeed.

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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.

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