Published December 1, 2021
If there’s one thing I’ve learned doing all these episodes, it’s that planning is a lifelong process.
If there’s one thing I’ve learned doing all these episodes, it’s that planning is a lifelong process.
What would you do with an extra $100,000? Contemplating such a windfall—and the various ways you can responsibly invest or save any unexpected funds that may enter your life—is exactly how our green-eyeshade crew decided to celebrate the 100th episode of The Adviser You Can Talk To Podcast.
In addition to divvying up the $100K of their dreams, the crew discuss their favorite episodes of the podcast and what they’ve learned through working on the show.
We’re proud to have reached this milestone—but we couldn’t, and wouldn’t, have gotten this far without the help and support of our listeners and subscribers. It’s been a pleasure creating these podcasts for you; we hope they’ve been useful and informative. Click below to listen to this week’s episode and subscribe to hear many more to come!
Hello. This is Andrew Busa, and I’m a financial planner here at Adviser Investments. We’re here with another The Adviser You Can Talk To Podcast. And today I’m joined by two of my colleagues, Jeff DeMaso, he’s the director of research here, and Diana Linn, account manager and financial planner.
Hey, Andrew. Hi, Diana. Nice to see you both.
It’s good to have you both. You know, this is a special episode because this is our 100th episode that we’ve recorded of The Adviser You Can Talk To Podcast. Can you both believe we’ve actually done 100 episodes?
We did. We did it.
Yeah. We did. And you know what? The tech setup for this one wouldn’t have made me believe that, but…
…we’re here, we’re recording and we’re excited.
But we have done 100 of these and we wanted to do a special episode to commemorate that. We also want to thank you, all the listeners, for listening to all these episodes. You know, you’re the reason we do these episodes, so we appreciate your support, the questions that you’ve asked along the way. You’ve helped us improve and get better.
So we thought a fun premise for today’s episode would be to not only recount what we’ve learned and some of the history of the podcast very quickly, but also just talk about if you were to all of a sudden come into $100,000—in sort of relation to 100 episodes—if you come into that sort of money, how would you go about investing it? How would you go about planning for it? We thought that might be a fun question to tackle.
It’s a great one. Yeah.
I like thinking about getting $100,000. Yeah.
Yeah. And I wouldn’t mind that at all. So the reason this is a perfect episode to have both Jeff and Diana is because to answer this sort of a question, you obviously need both a financial planning and an investing perspective to get that full wealth management experience, to really tackle that. So any other thoughts, Jeff and Diana, before we dive in to talk a little bit about the history of the podcast?
Sure. I’ll jump in. I’ve got kind of two lessons that I’ve learned. And one’s maybe a little bit self-serving in that I think the podcast’s a nice reminder that we’re more than just an investment firm. We started out as really an investment firm.
But honestly, some of the financial planning episodes have been some of the more popular ones and really impactful for our clients and listeners. So that’s just a nice reminder that we’re really a wealth management firm.
And then the second lesson, and I think this can be applied broadly, is we just had to start doing them. I think we started talking about podcasts for a while, and finally we just kind of pulled the Band-Aid and started doing them. Sure, those first ones, if we listen back, may be a little cringeworthy. But hopefully, we’ve improved. And it’s just a nice reminder that if there’s something that you’ve been putting off doing, just start doing it.
I’ve really liked thinking about the broad spectrum of topics that we talk about. You know, I was thinking we’ve spoken about everything from spring cleaning your finances, talking about the CARES Act, to more in-depth research-related topics. So I think that’s really nice too.
Yeah. Absolutely. We’ve really covered a broad range. You know, Jeff, I know you’ve been part of a lot of the market-analysis-type ones. But I know you and I did an episode together. That was a lot of fun. We’ll recount that a little bit later in this episode. Diana, you and I have worked together on several episodes, on some tax updates…
…and some legislation that’s been passed over the last few years. That’s kept us busy, certainly.
So Andrew, which is your favorite episode?
Yeah, I was thinking about that as we were getting ready for this. One of my favorites I did with Rick Winters on Roth conversions. We had gotten a lot of questions about that topic and it was a fun one to research. That’s been one of my favorite parts of doing these podcasts: The research, putting together the outline and actually really learning a lot through doing these episodes. That’s my favorite, I think. How about the both of you?
My favorite—I really enjoyed the one, Andrew, that you, Patrick and I spoke about with the CARES Act. There’s a lot of really great planning opportunities in that one. And to your point, that was fun to research.
Yeah. You know, I struggle to put my finger on just one. But a couple of them that stand out were one I recorded with Steve Johnson and another one with my colleague Liz Laprade in and around the pandemic. It’s just another means to communicate in real time and try and explain what we’re thinking about in that pretty tumultuous period, both in the markets and in our lives. So those ones stand out to me as just how we’ve responded in real time to a pretty dramatic event in our lives.
Yeah. That’s true. I think over COVID, over those last couple of years, I think we nearly doubled our output of podcasts. So it was a lot of fun to be a part of.
I also want to give a thank you to Kailey Steele, Ashlyn Melvin, our whole comms and marketing department. They are a huge part of why these episodes sound so good. They’re not always as smooth as you might think on the first listen. They help us sound a lot better than we might on our first take. So thank you to them as well for all the work that they’ve put in on these past 100 episodes.
Let’s get into this question now. And it seems kind of basic at the start, but I think it’s going to allow us to unpack some interesting concepts here. So imagine you do acquire this $100,000 suddenly. What do you do with it? You know, where do we even start from a financial planning and an investment lens with this sort of a question? Is it just bitcoin and you’re done?
Well, I was going to say cruise around the world. But Jeff is the director of research.
So if he says bitcoin, bitcoin it is.
Yeah. All right, bitcoin. End of the episode.
Yeah. And cut it right there.
No. I mean, we joke a little bit about that. But we can get into this more deeply. But I think there is an element of emotion and it depends how you acquired that $100,000. It maybe plays into how you think about it. But by all means, for some people, it might make sense to take a piece of that and do something “fun”…
…whether that is bitcoin or that vacation that they’ve always wanted to do. You know, there’s that element that, yeah, probably take some of it and scratch that itch a little bit.
Right. Presumably, this is money that you weren’t counting on, you didn’t have before. So I think a lot of this starts with—from a financial planning bias here—Diana and I feel like it kind of starts with doing some serious planning, hopefully preemptively, but certainly once you receive that money.
Well, I mean, I agree with you, but I’m also biased.
And I think if somebody were to all of a sudden acquire this $100,000, there are really three important questions that they should be asking themselves first.
And to Jeff’s point, the first is: Is this really a true windfall for you? Meaning are you debt-free, cash-flow positive? And do you have that emergency savings account already set aside?
If not, these are three of the first boxes that you need to check before you’re thinking about bitcoin or that cruise around the world. Working with your financial team to create that plan. Maybe that snowball effect to pay off any lingering student loans, credit card debt. Maybe making an extra payment to your mortgage and ensuring that you have at least three to six months’ worth of living expenses before you’re thinking of anything fun.
Maybe the second question is what’s important to you?
So what goals and priorities were included in your financial plan? Were you hoping to purchase a vacation home? Maybe you wanted to put more aside for a college savings fund. Begin a passion project. So if you already have that strong financial foundation, you’re debt-free, have all those things that we’ve talked about, then this really can be fun money that’s used to start to fuel that wish list for you, so to speak.
And then, finally, which Jeff already touched on, the third question that we really can’t overlook is where did this $100,000 come from? Did you win the lottery? Is it inheritance? Did you, I don’t know, sell a painting on “Antiques Roadshow”?
Because that type of asset that you acquire is absolutely going to be a crucial component of your financial plan. So if you won the lottery, that’s going to be considered income. If it’s an inheritance, there may be other requirements associated with it, required minimum distributions, things like that.
So it’s easy to just focus and dream about how you’re going to spend that potential windfall and forget that you also need to peel back the layers of the onion about the tax implications or how to invest it.
Yeah. I mean, I know you both have the financial planning bias. But…
…I agree. I think the theme of this conversation would be that you need the two. They inform each other, financial plan and the investment side.
You know, because from my seat, on the investment side, I’m like, okay, as you said, did you set the foundation?
But if you haven’t paid off credit card debt, do that before you think about investing.
Guaranteed 20% returns.
Pretty darn good.
Hard to beat. But then, yeah, when on the investment side, when it comes to your goals, your risks, your timeline, if it’s: “Hey, this is going to let me make that down payment on a house I’m hoping to buy next year.” Okay, you’re talking about spending it within 12 months. Yeah.
Maybe, unfortunately, it’s kind of in cash and you’re not really investing it. But maybe it’s going to be for a longer-term goal like funding a child’s college fund…
…in which case you’re thinking 10, 15-plus years and that’s going to inform it differently.
I mean, there is the angle of just this question of where to invest your marginal dollar. And to get to that answer: I think international markets are pretty interesting.
A lot of questions we get from clients right now are: “Why buy anything other than the S&P?” So whenever people stop thinking about foreign markets, I think that might be an interesting time. But that’s kind of a short answer to that question.
But I think the more interesting side is where we’ve been talking about, is around the planning, around the emotion that comes with it. If it was an inheritance, maybe you’re going to think about that differently than if it was…
Really good point. Yeah.
…the lottery ticket, where it doesn’t have any emotion or family or whatever tied to it.
But I’m starting to maybe get ahead of myself. So Andrew, where do we want to go? How do we want to focus this?
Well. No, I mean I think you both brought up a lot of good questions to be thinking about. I think the theme here is it’s got to be a comprehensive approach when thinking about coming into money like this. And I think we should also point out $100,000 could mean something very different depending on where you are in your financial planning journey. You know, what you’re…
Oh, it could be life-changing.
It could be life-changing if you’re just starting out, trying to build up that foundation. If you’re someone who’s closer to retirement, maybe that $100,000 could push you over the top to give you some peace of mind to say, “I have enough buffer to stop working.” Or it might not mean as much to you if you’re very high net worth. And I think all of those sorts of different situations will also help inform how to actually treat this money.
I feel like one thing that I’ve taken away from doing a lot of these podcasts is thinking about how to approach money in general and what money can help you accomplish—it is sort of the endgame to all of this, right? It’s thinking about that question first and that sort of informs the rest of your financial plan. Money’s just a tool to help you ultimately accomplish your goals. So you’ve got to get set on those first and then invest accordingly. But I really like a lot of those thoughts.
Yeah. So let’s pull on that a little bit…
…the idea of kind of a goal orientation.
And again, we’re talking about how financial planning and investment management work together…
…and that kind of comprehensive wealth management. So let’s maybe see if we can try and hammer that home a bit, if we haven’t already. You know, Diana, maybe you can talk a little bit more about how it looks when financial planning and investments come together.
Yeah. Well, I know Andrew and myself and the financial planning team, we often use this analogy of your plan being a lot like the GPS in your car.
You know, you’re entering in that destination, so you have that goal in mind of where you want to go. And then the GPS is kind of charting that best course to get there. You know, how am I avoiding traffic and tolls and detours? And the same thing with your financial plan. So we have this goal in mind, this insight. Maybe it’s “I want to be able to contribute X amount to charity. So what’s the best way that I can do that? Which buckets of money am I pulling from to make this work the best for me?”
And then I often think of investments as the engine of the car, right? So that’s what’s fueling you on that financial plan. So to your point, Jeff, one doesn’t work without the other, right? You can have this wonderful map, but if you don’t have that energy to get you there, or if all you have is energy and you’re driving aimlessly, you’ve got to have them together.
Yeah, no, I think that’s really good. On the not having a plan, but the full gas in the tank and driving aimlessly, I couldn’t agree more.
It is. But seriously, if you don’t have that plan of where you’re trying to get to, you might start benchmarking against “I just have to beat the S&P.”
But where does it say that you have to beat the S&P to achieve those goals?
Maybe that’s the wrong target to be holding yourself against.
Or if you’re in a bear market, if stocks are down 20%, 30%, how do you know you’re still on course if you don’t know where you’re trying to get to? So I agree, you need that map alongside the full tank of gas to say it. But again, also you do need that tank of gas. You do need that fuel.
And Andrew, that’s something you and I talked about on a podcast…
…back in 2019. We had a great example in there about how you can’t really save your way to retirement.
Or maybe we can clip in that example from our podcast back in 2019 to put some numbers behind it. But we compared two twins who started out 40-some years ago. They each saved $100. One kept it in cash the whole time. One in the market each time and investing it. And you can really see how harnessing the power of compounding can help you achieve those goals or even exceed them.
That is one of my favorite episodes. And in the spirit of thinking about our last 100, let’s pull up a clip of it.
No, that’s great. I really like that one. And I’m going to try and put some numbers behind it, a little bit of an extreme example. We’ll also, for people who are more visually oriented, we’ll put a link in the episode notes that you can take a look at.
But let’s take two twins, take them back 42 years. They’re age 25 in 1977. They both decide to make a pact. “We’re going to save $100 every month for the rest of our lives.” But one of them is a little more nervous and decides to put all of their savings in a money market fund. The other twin decides that they’re going to put it in the stock market and buy Vanguard 500 Index fund.
So our nervous investor, all in cash, but consistently saving, at the end of the day, after 42 years, has just over $115,000. That’s pretty good.
They’ve done a lot right.
Yeah. It’s better than nothing. That’s for sure.
Yeah. But compare that to their twin, who is investing. Well, they have just under $790,000. So $115,000 versus $790,000. It’s almost seven times. So that’s that power of having the car with the engine driving you toward your destination.
All right. And we’re back to 2021 now. Again, I think it’s just already difficult enough to save your way to retirement. You need to invest your money. Definitely calls back to that prior episode that we did there.
But Jeff, I really liked what you said: Where does it say you need to beat the S&P? We’ve run, Diana, so many financial plans for folks. And speaking of when COVID first hit, the market was taking some pretty big hits early on.
It was a little bit of a scary time. And we ran a lot of financial plan reviews over those several months showing people that, hey, your financial plan is still on track. You know, let’s focus on the long term, make sure that you’re still achieving your long-term goals. And I think that’s why the plan is really the bedrock and where the investment strategy really fits into everything.
I mean, this makes me think about other podcasts, too, where we were speaking about budgeting. And again, if COVID has taught us anything, it’s that emergencies can happen…
…and that you’ve got to have that emergency savings plan.
So to go back to making sure you’ve checked all those initial boxes before thinking about different investment strategies.
Yeah. It’s very hard to invest effectively if you don’t have those foundations set.
So absolutely make sure you’ve got that taken care of if you come into some money suddenly.
Well, we talked about having a really awesome investment strategy with no GPS. What about the opposite? Let’s say you’ve got this great financial plan, but you don’t have that investment strategy? That sort of goes back to you can’t save your way there, right?
Yeah. I mean, I’d say. So if you don’t have that investment strategy—let’s say somebody has a financial planning goal of this pretty elaborate estate plan. That requires a lot of different investment strategies and tax strategies and, again, all of those components working together for somebody. So just making sure that somebody can keep up with the cost-of-living increases and any detours that could happen, an emergency, extra medical bills. You know, you’ve got to have your money working for you to keep up with those goals.
So I guess to bring it back to our original question, you’ve got this $100,000. I think my takeaway with it is—and this is similar to other episodes we’ve done—it’s so individual. There’s not a one-size-fits-all answer here. It comes down to where you are in your journey, really. And I think another thing I’ve learned doing all these episodes and financial plans is that your financial plan goes out of date pretty quickly. And that’s by design. You know, planning is a lifelong process, and it’s supposed to be reviewed.
Yeah. It should be constantly evolving as your goals are changing and pivoting.
Absolutely. Anything else before we wrap things up here?
I think we’ve covered a lot of ground. Maybe just add the thought of the emotional component…
…of receiving this money. Right? If it’s, again, tied to an inheritance or something, you might have a bit of emotion tied to it, and that might lead you to be pretty conservative with that.
So again, that’s where having that financial plan and knowing where it fits in might let you be a little more objective.
And again, if it’s a lottery ticket or you found money you didn’t expect, you might treat it that way and think, okay, I’ll just put it all on black…
…or put it all on bitcoin. But again, maybe bring it back and think about it within the context of your portfolio, your plan and what you’re trying to achieve. Again, trying to rein it in the other way, of having that context. And again, it’s what we’ve been saying all along, and I really hope people get it, is how a financial plan and an investment strategy really go hand in hand.
Yep. They’re certainly perfect complements.
So just to briefly review here. We’ve talked a little bit about our past 100 episodes. Again, thank you for being with us on that journey, to all the listeners. Thanks to everyone here at Adviser Investments who have been part of all these episodes, if you’ve done one.
You know, you need your financial plan and your investment strategy working together. They need to be in alignment so that you can achieve your goals, short-, medium- and long-term goals, and have peace of mind over time.
We will see you for the next 100 episodes, hopefully.
There we go.
Hopefully, Jeff and Diana, we can do some more episodes together…
That’d be great.
…down the road. This was fun. But in the meantime, this has been Andrew Busa, Diana Linn and Jeff DeMaso from Adviser Investments, thanking you for listening to The Adviser You Can Talk To Podcast.
If you enjoyed this conversation, please subscribe, review our show. You can always check us out at www.adviserinvestments.com/podcast. Your feedback is always welcome. And if you have any specific questions or topics you’d like us to explore in more depth, please email us at firstname.lastname@example.org. Thanks for listening.
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