5 (Better) Questions To Ask

Transcript

John Stillman: Welcome once again to Wright Money Tips. I'm John Stillman alongside Isaac Wright. That's Wright with a W in case you haven't figured out, that's where Wright Money Tips comes from. They're not only correct money tips, their tips about money from Isaac Wright. You can find out more online at wrightmoneytips.com you can call or text either way the number is the same. 804-777-9999.

Isaac Wright: Is that like a Confucius saying or something that was really like a Haiku or something, I don't know where that came from.

John Stillman: Well, I've been trying to speak in Haiku as much as possible. That's one of the changes I've made in my life speaking in stanzas like that, but yes, you can call or text that number, whichever you prefer. 804-777-9999. Isaac is a Chartered Financial Consultant and the President of Financial Dynamics and Associates.

John Stillman: Today we're talking about not just questions you should ask Isaac because everybody has questions about their retirement and their financial plan. What we're talking about today is taking the questions that you're probably already asking and making them better questions that you should be asking instead. I'm going to give you the questions that people tend to ask and you can tell us what would be a better question to ask in that situation and just explain why.

Isaac Wright: Absolutely, this will be good. I think I follow you completely.

John Stillman: So let's say if somebody says, well, how much money do I need to have saved in order to retire? What's a better question they should be asking?

Isaac Wright: Very I would, say extremely popular question to ask. I don't know if it really hits as hard as what I've about to reply with, but probably a better question you really want to know is this, is how much income will I need and how much will my savings provide me towards that income? So that way you can understand what that retirement lifestyle is going to look like.

Isaac Wright: So again, instead of worrying about what I say the lump sum amount is going to provide in the big scheme of it all, more importantly is how much money are you going to be able to take distributions off of that and feel comfortable, confident about your retirement.

Isaac Wright: So to me, one thing to keep in mind, especially in today's interest rate environment, is focusing on that. Because no matter what the lump sum is, if you run out of money, you run out of options. So a distribution strategy of how much income can you provide me from that lump sum is going to be under most circumstances, a whole lot more hard hitting question to ask somebody, especially if you're working with somebody and helping them along the lines of how they're going to help you with your retirement.

John Stillman: I can't tell you how many times I hear people say something like, "Well, I heard you can't retire unless you have at least a million dollars."

Isaac Wright: You know what this reminds me of John is, well, I guess it's Voya now, but the old ING commercials, most people will remember this where everybody's walking around in the commercial with a bubble above their head with a certain amount of money and it's a great little way to get your attention, but it's by no means going to be the way of understanding how you're going to live your life in retirement for sure.

John Stillman: So be sure you're asking the right question. How about this, Isaac, should I get longterm care insurance or just roll the dice?

Isaac Wright: Here's what I would ask is Mr. and Mrs. Smith, or if you're talking to an advisor and you're in the position of asking how to be able to take care of yourself, is what are all of my options for covering longterm care expenses?

Isaac Wright: I think that's a whole lot of a more impactful question to ask is what are all of my options to be able to take care of longterm care expenses? Longterm care insurance is one of those options obviously, but I don't think you want to go down the path and a lot of times people don't know what they don't know and if you have been either propositioned or maybe your company offers some group longterm care plan, however you've been introduced to the insurance side of longterm care, it's a very viable option.

Isaac Wright: But please note that they are other options that are out there including either everything from being self-insured. You can leverage life insurance today that has accelerated benefits towards taking care of longterm care needs. You may, in addition to that have cashflow coming in from your investments that can be leveraged for longterm care needs.

Isaac Wright: Maybe the best thing to say is it may be a combination of all of that, but the thing is do you have an advisor that you're talking to on the other side of the table that understands maybe the combination of all of that.

Isaac Wright: So to me, better question is what are all of my options? If you're going to be working with somebody that's a retirement professional, that's definitely going to be the way you want to go.

John Stillman: It just occurs to me. I went to journalism school and we talked about how to ask better questions when it comes to being a journalist.

John Stillman: In fact, I remember one of my sports writing teachers talking about how much he hates it when you hear reporters say something like, "Coach, talk about your defense today." Well, that's not a question that's putting the onus on the coach to come up with whatever he wants to say. Or the statement question of, "Hey, coach, really rough day for the defense today." No, you have an opportunity to ask the coach a question, ask a better question and get out of my face with the, "What was going through your mind when this happened?" All those cliche questions.

John Stillman: So this actually really hits home with me now that I think about it, asking better questions. What are better questions to ask? What are better ways to phrase the questions maybe that are running through your mind as it relates to your financial planning and retirement?

John Stillman: How about this question we hear a lot, Isaac, how can I get the highest possible return on my money? What might be a better question to ask in that situation?

Isaac Wright: Probably we'll frame this through the quote that Will Rogers was pretty famous for saying is maybe it's less about the return on my money and more about the return of my money.

Isaac Wright: Especially in today's world with the market being so bullish for many years in a row now, it's easy to get swept up into the fact of trying to take advantage of as much as you can because everybody feels like at some point the market's not going to continue to do what it has been doing and that's where you really can get hurt.

Isaac Wright: So don't get me wrong, I think everybody deserves to try to make as much money as they can, but you've got to understand the amount of money you're willing to lose in that equation. So from there, I think you can be very honest with somebody. I know at our firm we have a very specific process in our investments cents review that can get to the truth of that.

Isaac Wright: So for all of you on the show, if you have any concerns about how to manage money relative to a return and more importantly about how much money you would be willing to lose in case if things don't go so well in the market, I think we can communicate with you pretty effectively on that. So again, that's how I would come about it versus just trying to arbitrarily say, how much money can I make?

John Stillman: All right. This question is in the same vein, but instead of asking where can they get the highest return, the question is where can I pay the lowest fees for financial advice? What might be a better question to ask there?

Isaac Wright: Well, that's pretty straightforward. We covered that also on our radio show almost every week. Better question, way better question is where do I get the best value for the fees that I'm paying?

Isaac Wright: So there's going to be fees involved in any type of relationship you have, whether it's with or without a financial advisor, including the investments that you own. You have custodial fees and investment fees. You may have investment and planning fees on top of that. So just keep in mind that going on a witch hunt for fees in some degree, you want to understand what those fees are and somebody needs to be transparent with you and that's what we do.

Isaac Wright: But what is, once you understand what the fee is, really the question is, what value are you receiving for the fees that you're paying? That's where we come in. So that's a way better question. I think that's the way I've always gone about it.

John Stillman: All right. So yes, our last question that could be asked better is what can I do to pay less in taxes this year? Well that seems like a perfectly legitimate question, but what might be a better question?

Isaac Wright: Yeah, that's probably been the mentality though up until, I would almost call it over the last year, two with the new tax law changes. So I think a better question that we're addressing with the families we serve is how can I save on taxes in future years? Maybe even for the rest of my life?

Isaac Wright: Better question to ask is instead of worrying about taxes for just one year, better question is, how are you going to help me save taxes this year, in the future and potentially for the rest of my life?

Isaac Wright: So just expand that question. I'm not saying that question is wrong. I think a better question is to what I call increase the scope of that question to include things that are likely going to happen in the future. Again, that's what you're going to have a relationship with an advisor for anyway, is to be able to provide a future monitoring and maintaining of your situation.

Isaac Wright: So if you're going to work with somebody, ask them in that fashion. So John I think those are great five talking points today. I think hopefully everybody got a little value out of that. But I just want to know that we get a lot of people that ask what I would call those simplistic side of the questions. We try to bring a little bit more value to people on how to maybe redefine what those questions really mean.

John Stillman: So make sure not only that you're asking a lot of questions, but you're asking the right questions and really getting the best answer, instead of maybe what your knee jerk reaction says is the question to ask.

John Stillman: So there's some better questions to ask as it relates to your financial and retirement planning. Isaac Wright, again, Chartered Financial Consultant and President of Financial Dynamics and Associates.

John Stillman: Reach out if you'd like 804-777-9999. You can call that number or you can text, so that's the main office number 804-777-9999.

John Stillman: If you call, obviously during business hours you'll get an answer. If you text, be sure to include your first and last name. We'll get back in touch with you that way and help however we can.

John Stillman: Maybe you're in a situation right now where you can't call, but you say, I'm not going to remember later. Well, just fire off a text saying, "Hey, I'd like some help with X." Then we can reach out to you later. It's like your way of raising your hand now while it's on your mind, and then we'll catch up at another time. 804-777-9999. This has been Wright Money Tips with Isaac Wright. We'll talk to you again soon.

Announcer: Information is for illustrative purposes only and does not constitute tax investment or legal advice. Always consult with a qualified investment, legal or tax professional before taking any action. Advisory services offered through JW Cole Advisors Inc., JWCA, Financial Dynamics and Associates Inc., and JWCA are unaffiliated entities.