Four Dangerous Excuses

Welcome to Mr. Stillman's [something about which of what John still in the phone. Listening and John, this is always call this conversation, making excuses which you agree that a great excuse maker yeah like it couple years ago when you coming to work for a while. You blamed it on the fact that your voice was gone.

All you are you are not allowed to talk for a month awfully convenient excuse to not come to work. You think I made all the same. Well I tell you little secret. I actually came to work every day. You just couldn't talk to people I was doing stuff behind the scenes I was writing, etc. but very often we see people who know that the financial decisions that they're making aren't really the best decisions, but they trying to create excuses or explanations for why they're doing what they're doing the kind of justify their actions.

I guess let's talk about what why be certain excuses usually don't hold any water running well when someone wants to start their Social Security at age 62, they can make up excuses what are some of the things that they say while so they'll probably say something like well you know I paid in the system.

All those years, all to be sure I get my money back before he goes bankrupt. So probably there's something in the back of their mind is telling them you know what we shouldn't actually be taking your Social Security right now but we want to go and create that income. We want that additional income will have the discipline to wait till full retirement age or even later. So let's come up with a reason in our our logical brain to try to convince ourselves that our logical brains are in control when really it's our emotional brain is in control, but we need the logical brain to pretend like it's in charge of the logical side of your brain is much smaller piece of your brain and the emotional side but it's very narcissistic in that it likes to believe that it's in control. The logical brain and so it has to be tricked into thinking it's in control so you come up with things like well the system is going to go bankrupt if I don't start my Social Security benefit. Now I might not ever get it. Well, if you're old enough to be in the position of making that decision. Social Security just isn't going to be an issue for you. Yes, there are problems in the system need to be addressed. If you're in your 60s is not going to affect you in your lifetime.

Just not realistic for that to be something that you worry about and realize you were such an expert on narcissism. Well, thank you very much. Try to observe people I know.

How about when someone is taking too much risk with their money. Excuses do you hear from from someone in that situation so sometimes it's well II feel like I'm behind in my savings and I need to make up for lost time right so you feel like you didn't save enough in your 30s and 40s, and so now you're in your 50s or 60s, and you try to close the gap by hitting some home runs making up for lost time, which could work or it could pan out very badly for you and you be in worse shape than if you just tried to take no risk and leave everything in cash so you have to really think about okay if you feel behind first all it. Let's establish are you actually behind or not because sometimes people feel like they're behind a feeling they don't have enough saved boldly actually look at the situation and figure out how much income you're going to need in retirement relative to how much you have, you might actually be okay. And sometimes people maybe still have kids on the payroll still have a mortgage payment and fast forward a few years to retirement what the house is going to be paid off and the kids will be completely independent. While this is suddenly monthly expenses that you won't have and so maybe your income needs in retirement won't be as high as you think they are. So let's first establish if you're actually behind or not and if you are behind.

Let's determine what is the best way to make up the gap usually is not by taking more risk usually is by saving more, or working a little bit longer maybe than you originally planned or just accepting a different lifestyle in retirement than what you'd originally imagined me. There are different letters you can pull, you get to be in charge of making the decision, but usually just trying to have all of your cake and eat it too.

By taking more risk and hoping things work out is usually not the best way to go and we often talk about people who have too much money in cash and I know that you meet with a lot of people for the first time and find out they have a tremendous amount of money in cash or kind of excuses they make to you for why that's so yeah let's establish what we mean by too much in cash. I mean if you say well I have 40,000 in the bank and I probably only need 30,000 will that that's not the kind of conversation we talked about here what I'm talking about is people without 100 or 200,000 in the bank because maybe they inherited some money said well I'll get around to doing something with this eventually, but stuck in the bank for now or maybe you just spend two or $3000 a month less than you're actually bringing home and instead of investing that money somewhere just piles up in the bank and after a year or 2 You Have Way too much in cash. It can happen if you different ways but it's one of those things you tend to procrastinate and say well I'll eventually do something with this and I've seen people have five or $600,000 in cash which is an amazing amount of money that's just doing nothing for you so you just have to be very conscious of that but usually the excuse that people give me is one of two things either one well I just like to be sure I have enough for emergencies. Well, fine. I agree you should have an emergency fund, but in almost every situation were talking 3 to 6 months expenses for your emergency fund. Maybe a little bit more. If you have a lot of rental property or chronic medical issues or something like that where you have a need for cash but for the most part let's say you bring home $5000 a month and that's Primus. What you spend well at the high end 30,000 is what you need in the bank for your emergency fund.

So if you're sitting there with 140,000 in the bank and you say you like to have it for emergencies. What hundred and $40,000 emergency. Can you come up with like the Lindbergh baby is going to get kidnapped and you're in charge of paying the ransom. I don't understand what are these hundred and $40,000 emergencies so you have to be realistic about what an emergency might look like first place that the second excuse is what I lost a lot in the last market crash and don't go down that road again.

Which is fine. That's a perfectly reasonable emotion to have, but that doesn't mean that you should just completely retreat to have everything in cash.

Let's come up with some more conservative ways to invest in your portfolio other than just sitting in cash. There ways that you can be invested and still have the potential to earn money without being exposed to a 50% downturn of your assets so we just want to be conscious of ways to invest conservatively without parking it in a money market fund, or just having cash in the bank there listening to Mr. Stillman's opus with John Stillman, the founder and president of Rosewood wealth management were talking about making excuses when somebody in this happens a lot when somebody comes in and they have no idea what they're invested in, or what their money is doing for them the kind of risk they are taking all that kind of thing, but they make excuses. What kind of excuse do you hear well you know financial stuff just isn't really my thing. What people say yeah I just I don't really understand it I I'm more of an artistic person or I'm not a numbers person, or whatever does financial stuff isn't my thing, what it doesn't have to be your thing, but it's important enough that you need to understand the basics of what's going on with your money and not just stick your head in the sand and say I'll be with it another day. I'll never deal with it. It'll just take care of itself and you will be equivalent to me going to the doctor and him telling me I have a significant heart issue missing well yeah but medicine is it really my thing so I'm not really in a pay any attention to this, obviously, that would make any sense. Nobody would ever say that but you do the same thing with your money with the excuse of well it's just not my area of expertise and part of the issue could be that you never talk to somebody who can communicate some of these things in a way that you can actually understand and apply to your life that might be one problem, or it could be that you just never really sought out help and it seems very overwhelming to you. Looking at it by yourself. But if you have something to coach along you might find it. Maybe it's not as overwhelming as well.

This is Mr. Stillman's opus with John Stillman. There retirement planning strategies and financial coach final and of course John is at Rosewood wealth management and John were imparting all that wisdom, not to mention the lift to all of the source for here for man, always a pleasure and great Carolina welts towards doing business as Rosewood wealth management is a registered investment advisor in the state of North Carolina. The material presented is intended to be general information and should not be construed by any consumer is the rendering of personalized investment advice