Episode 3 – Time to Turn Over a New Leaf!

Turn over a new leaf

Today, Matt Halloran and Danielle Howard discuss the importance of turning over a new leaf and making a fresh start, financially.

When the recession hit in 2007, retirees worldwide had a hard time getting back on their feet. Still shaken, many retirees and pre-retirees are making fear-based decisions that are only holding them back. In this episode, Danielle gently challenges those behaviors and emphasizes that we’re in a new season life now. It’s time to turn over a new leaf and redefine what retirement looks like. It’s also time to toss out the word “retirement” and take on an updated and more accurate view of this life phase—it’s a time for rewiring and growth.

Tune in as Danielle discusses how you can embrace this season of your life and turn over a new leaf.

[00:00:02] Welcome to the Wealth Done Differently Retirement Podcast. Danielle Howard a certified financial planner shares insight into the financial tools techniques and temperaments needed to make the most of your retirement dollars and relationships. Danielle bridges the gap between Wall Street, and Main Street bringing complex financial topics down to earth. Danielle will educate and inspire you as you define and refine your version of prosperity. Hello and welcome to another episode with Danielle Howard. Today we’re talking about time to turn over a new leaf Now Danielle welcome to the show. First off good morning Matt. Good morning. A lot of stuff contributes to turning over a new leaf but I’d like to get historical on you for a moment if you don’t mind. What happened between 07 and 09 and who really was affected with that especially when it comes to retirees. Well we know that everyone was affected by it worldwide. And it was an experience that I think impacted our psyches and our pocketbooks. And my hope is that we can learn something from it. So as we look at what turning over a new leaf means I come about it from a couple different viewpoints. One is financially what does it mean to turn over a new leaf to begin again to make a fresh start or to change for the better. And as we look at what happened in that recession in that very painful time are we learning something or are we wanting to do something new and especially for retirees. I think the impact of that economic season it was an economic winter.

[00:01:55] And I think that we have an opportunity to embrace what happened there to learn from it and to do our money differently and Richard they are his the Nobel Peace Prize economy winner for his economic work on behavioral finance or behavioral economics. He really brought into the conversation the idea of what happens with some concepts like loss aversion and anchoring. And those are components that I think retirees need. You know retirees need to look at and go wow you know what is loss aversion. And that’s when somebody would experience a negative feeling of loss more strongly. So back in 2007 09 we felt that recessionary period much more deeply and profoundly than we do when the bulls are running and the market is growing. And how do we internalize that and what are the behaviors that come out of that. And as we look at who is affected by the recession everybody but then how do we deal with the behaviors that came out of that and are our feelings. I’ve heard people say oh you know I lost money in the market I’m never getting into the market again. Well is that really serving you or is that a belief system that may be holding you back. I’ve also had conversations with people about the concept of anchoring. And again something that happened in the recession was when people’s assets went down in value. Instead of looking at maybe some things that needed to change they hung on to a reference point that isn’t that didn’t serve them.

[00:03:54] What I heard it going around about whether with real estate you know somebody may have planned on selling some real estates to retire to shift their lifestyle and then the recession happened and they were so anchored to that price point that their house could have sold for had they sold it a couple years earlier that they don’t visit the plan and say Would it still work for me to sell my home. Even though the prices come down and really play out all of the different scenarios that could come into play when making that decision. They just held on to that idea that oh my gosh I can’t let go of this. Now the price has gone down. Now I just caution people that we need to look at the recession and learn from it and to know that yes there will be another one down the road. And how is that going to impact both our current financial decisions as well as what it takes to turn over a new leaf in this new season of life. Interesting and we’re not indestructible and the markets aren’t indestructible so I mean I’m assuming market markets wax and wane and you just were referring to the bulls have been running really for a long time now. It’s most likely going to happen again. What do we do to prepare to learn from it. And you just said I think a key point which is to revisit the plan is that is that the mantra is that what you want to make sure that you’re meeting with your clients on to prepare for something like that to happen again. Yes. And I believe that moving into this new season of life this fall season of life that may last 30 years or more.

[00:05:42] It’s not our parents are our grandparents version of retirement anymore and that’s another component of the new leaf that I wanted to touch on to is that were completely redefining what retirement looks like. We’re actually I like to toss that word out of our vocabulary. I like to call it retirement retirement. What do the vesper years look like or your encore years and the whole idea that we’re going to withdraw or remove ourselves or fall back and retreat which is what retirement means doesn’t exist anymore. And so how do we embrace this new season of life turn over a new leaf in the fact that we get to do life completely different than our parents or grandparents did in that we need to look at financial planning as a continuous process it’s a strategic alignment with what’s important to us in our lives and putting the financial pieces together to undergird that and to strengthen and make sure we’ve got the cash flow. So many times people will think well if I have a financial plan it’s a static it’s a one time thing. I get the plan. I follow the plan it set in stone and it doesn’t work that way. It’s much more challenging it’s much more fluid and as we look at embracing our life seasons as well as understanding that we are going to encounter economic seasons we really need to stay on top of our game. A lot of people gave up as you said right at the beginning in a way that either they weren’t going to hit the benchmarks they weren’t going to do. You know they were going to hit their price points or they held on too long or they had kind of unrealistic expectations.

[00:07:33] A lot of them still haven’t gone back into the market. What what are they supposed to do now. I mean for those people who’ve been sitting in money in banks and credit unions. Help us understand you know how do they get back in. Can they get back in should they stay given up should they not stay. No. You just said it might not meet your needs. Help us understand the whole situation will be better. This is where people need to do some strategic planning. They need to sit down with a planner a financial advocate that is going to lay all the pieces out on the table whether it’s Social Security whether it’s their 401k whether it’s their equity in their home or not equity in their home depending on where you live. Taking a look at how all of these different pieces are going to be unpacked to help them create their version of true prosperity. One of the first things you need to do is come up with your why and why do you want to continue to grow. Or if you don’t want to continue to grow. How do you use what you have to the best of its ability and when you understand what your priorities that your it is and what’s truly important to you and start putting the financial pieces together and understanding how each one of those financial pieces work for you. You’re going to be empowered and you may not need to be in the market. I don’t know. Every situation is a little bit different.

[00:09:15] And I think that’s one of the things that really holds people back from going to a true financial adviser is they think all financial advisers are going to do is tell me how I need to be in the market. And that’s not necessarily true but depending on what type investments you’re comfortable with depending on what your goals are. There may be times that people have enough in the bank that given their lifestyle they don’t need to be in the market. It all depends on what your goals are what your comfort level is what what is important to you. Understanding your perspective on risk. We know that we need to incorporate inflation. So if you know you need to and you need to look at just lifestyle inflation that may be really low. Right now we’re hovering around 2 percent. And we know historically it’s been much higher than that. And we know for medical care for health care that it is a much higher rate. So how do you put those pieces together and address your concerns your opportunities for what lies around the corner and way down the road and make sure that your financial resources are as optimized as possible. Well you just talked about working with a real financial planner or adviser and that is one of the big differences between what you do for a living with your alphabet soup after your name and your experience in all of those things but you switch the conversation because you want them to actually look at what you refer to as a gratefulness journal and having the conversation as the deep question which is why instead of how much or what can you elaborate on those.

[00:11:10] The money part is important but I think culturally the narrative has banned just about how do we get a better rate of return or how do we beat our benchmarks or what’s the latest greatest investment that’s going to perform really well without any risk and no tax implications. And what does that perfect investment. And we know that doesn’t exist out there. I think it is really important that people sit down and enter into the conversation about why are we doing this money thing. What is important to it what is important about money to us. What are some of my mindsets around money. As we move towards retirement what I have found is the conversations whether it’s with an individual or with a couple can be much richer and much much deeper on things that truly are important to them. And once we get what is important and why it is important and what their version of prosperity means to them. But but what that wanting to accomplish and live for are what some of that not only financial goals are but what brings meaning and purpose to their day that we can start putting the pieces together. You mentioned the Graddick journal. This is a piece that I found very beneficial for myself. When I was going through some challenging times in my life and was kind of focused on what I didn’t have back in the recession we had two kids in college and my husband had made a life choice to become a teacher and we needed to make some pretty big changes in our life. And we had to tap into some of our financial resources in ways that we hadn’t really planned on.

[00:13:16] They were kind of set up for more down the road than we were having to tap into them sooner than later. And I had to make a shift in my attitude. I had to really embrace what led twister’s and her book The Soul of Money an attitude of gratitude and start looking at everything that we did have and be grateful that we were able to make such ships in our situation and our financial resources and use them differently than what we had originally thought we were going to use them. And this process to me really opened the door to what it means to be content and to understand that that gratitude is that foundation that breaks the chains of of of material LSM and that keeping up with the Joneses. So I encourage all of my clients as part of their daily practice to start their day with what am I. What am I grateful for today. And it maybe our health it may be relationships it may be something outside that you can look and say with a beautiful sunrise but it changes are kind of our perspective on how we want to handle the day and maybe even make some different financial choices. I’ve heard advisers talk about Maslow’s hierarchy of needs but they really just gloss over it because they’re just talking about the bottom foundation and it sounds to me that you’re talking about a lot of the self actualisation the higher levels of maslow’s hierarchy. Would you mind talking a little bit about how that applies to turning over a new leaf especially in this this new season of preparing for retirement or retirement. Thank you Matt.

[00:15:10] That’s a chapter in my book that I dig into from the perspective of we need to start with again that that foundation of physiological and so as we apply this towards our requirement years we want to look at what changes. And we know that we are going to go through the aging process is going to do something. We crave different foods or guess what our sex life is going to change a little bit that the physiological needs change and there are financial implications to all of that. Believe it or not this pope. So it changes financially on that real ground level physiological perspective as you move up that hierarchy of needs. The next one is going to be safety and we can look at that as the roof over your head knowing how you’re going to pay your bills knowing how the money is going to be coming into you to make decisions about keeping your family protected. And as you enter the retirement years safety also includes how do you protect yourself against elder abuse. How do you protect yourself in your health. You know the type of insurances you’re going to have are going to going to change. There’s things that are covered by Medicare. There are things that are not covered by Medicare. There’s there’s long term care issues that you want to incorporated your plan that is going to again fill that that safety level of Maslow’s Hierarchy of Needs. We dig into love and belonging which changes as as you move into your retirement years. Around that love and belonging. We hear a lot of people that want to change locations they want to move to a warmer climate. What does that mean for your family dynamics.

[00:17:19] Some people want to move and downsize to be closer to family members. So there’s financial components and financial decisions that need to be addressed as you’re looking at how do you address that. That belonging that that community mindedness when we take that next step up to a. That’s what we’re looking at achievement respected by others and continuing to build that confidence. And as we look at this season of life I think the opportunities to really simplify in order to be able to focus more on these top three levels whether the love and belonging they esteem and the self actualisation. This is where we can be challenged many times just that foundational level of physiological what how do we live in. You know what. Roof do we have over our head when we’re young and we are have a growing family and we need a larger home. That that changes. And so if we can simplify our life we’re more able to focus not only our financial resources but our our time and our efforts and our talents on some of those upper level needs that we can start looking at what it means to be that focus on that esteem that achievement that that self actualisation. I’m seeing more and more that second half folks in line that up in the south actualisation where they talk about creativity and spontaneity focusing on problem solving. This is where we get into the opportunity to get involved in volunteer efforts. And we maybe not have to earn a living but we’re able to use our financial resources to support organizations that are important to us creativity.

[00:19:25] Oh my gosh when you go to a summer arts festival look at the number of people who are retired and they have found this whole fount of creativity and art created in the most amazing pieces of art and repurposing materials. And it’s so exciting to see people exploring this facet of their life and knowing that yes there are financial contacts that we need to really pull apart and make sure that you’re able to do what is important to you. Now this has been you’ve covered a lot of ground and you know you really have no other would use something that our listeners can do now to implement some of the things you’ve talked about whether that’s the gratefulness journal whether that is starting with why taking a look at where they’re out on Mansell’s maybe stretching their wings a little bit and learning some of those other things you just talked about. Maybe they need to express themselves artistically what would be a good takeaway from today’s podcast so that when people go back and listen to this again because I highly recommend that all of our listeners listen to this podcast a couple to three different times because you’re going to glean different things. Like I said Danielle covered an enormous amount of ground here so what is something you can do today that could very well change for the better. This next season I think that people want to take a big bite and change the lives 180 degrees not encourage people to take a small bite. And the topics we’re talking about there are elephants. It’s a huge piece and tape. How do you eat an elephant one bite at a time.

[00:21:15] So take one small bite which one piece out of the conversation that we talked about today kind of pricked your not process. It may be as simple as I’m thinking about what does retirement mean to you. What are you looking forward to. What are you concerned about. And and having a conversation I think out of all of this if I can cultivate people talking a little bit more about different aspects take it and go with it. Just have a conversation. Being willing to share your thoughts or ideas and being willing to listen to somebody else about their perspective on retirement or maybe what is different. How do you see your life in this new expanse that lies ahead of you being different from what you may be encountered with your parents or your grandparents what you saw. Just take one small bite chew on it a little bit share it with others listen to somebody else and decide how you want to make a 1 percent difference in the 1 percent change in your course direction and step into it. I was reading you just triggered something I was reading Japanese philosopher and and the Japanese philosopher said what. How. How does one climb a mountain. And the philosopher said You take one step toward the mountain. So I think that’s applicable here. Please take one step toward the mountain. You’re not halfway up the mountain. Starting walk towards it. And Danielle this was a magnificent podcast Sunday. For those of you who haven’t subscribed to the podcast yet this is what we’re going to be talking about.

[00:23:05] This is life changing life affirming in a very different perspective on what your relationship should be with a financial services professional. And if you’re not having these conversations it might be a good time for you to reassess your relationship or even ask your financial services professional if they’re willing to have conversations like what Danielle brought up today. So Danielle thank you so much for your leadership. You’re welcome appreciate the opportunity. And if there was one thing in this podcast or multiple things that did really spark your interest in something that you are planning on chewing on like Danielle said make sure that you share this podcast it’s very very simple to do all you have to do is click that share button below and that we can send it to your friends and family so that they can glean some of the insight that you were just able to glean and if you have not subscribe to the podcast yet make sure you click that subscribe now button below. For Danielle Howard this is Matt Halloran. We’ll see you on the other side of the mic very soon. Thank you for listening to the Wealth Done Differently Retirement Podcast click the subscribe button below to be notified when new episodes become available. The information covered and posted represents the views and opinions of the guest and does not necessarily represent the views or opinions of Wealth By Design LLC. The content has been made available for informational and educational purposes only. The content is not intended to be a substitute for professional investing advice always seek the advice of your financial adviser or other qualified service provider with any questions you may have regarding your investment planning.

[00:24:36] Danielle Howard certified financial planner is an investment adviser representative of Cambridge Investment Research Advisors a registered investment adviser. Securities offered through Cambridge investment research inc. A broker dealer member FINRA SIPC Cambridge and Welath By Design LLC are not affiliated.

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