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Crisis-Proof Your Finances 🚨 | What Police Training Teaches About Money | Future of Finance S2 Ep. 26
35 Plays1 month ago
What does a former undercover police officer know about financial planning? More than you’d think.
In this episode of The Future of Finance, Marissa Wood sits down with Chris Wood, financial advisor and former narcotics detective, to break down how crisis response, risk management, and preparation translate directly into your financial life.
From emergency funds to market crashes, taxes, and life’s unexpected moments—this episode shows why the best financial plans aren’t reactive… they’re prepared.
🚨 Learn how to build a crisis-ready financial plan
📉 Understand the risks that can quietly destroy your future
🧠 Discover why staying calm (not reacting) is your biggest advantage
🚨 What You’ll Learn
- How to build a financial plan that can handle real-life emergencies
- The biggest risks most people don’t plan for (but should)
- Why income planning > account balance
- The difference between reacting emotionally vs responding strategically
- The first step everyone should take this week to improve their finances
💬 Which tip are you starting with this week? Drop a comment and let us know.
👍 Like, subscribe, and share if you want more money strategies made simple.
⏱️ Episode Timestamps
00:00 – Intro: Crisis response meets financial planning
00:45 – Meet Chris Wood: From police officer to financial advisor
01:39 – Serving people in different ways: protection in life vs finance
02:11 – What undercover police work teaches about planning for risk
03:10 – Why you can’t plan for everything—but you still must prepare
04:14 – Markets, life events, and “things going wonky”
05:00 – Staying calm: why emotional reactions destroy plans
06:02 – Confidence comes from preparation and repetition
06:46 – The role of financial advisors: risk managers, not just investors
07:08 – Biggest risks: legislation, markets, and black swan events
07:56 – Sequence of returns risk explained (and why timing matters)
08:56 – Longevity risk: the longer you live, the more can go wrong
09:46 – Real-life financial emergencies (and why planning ahead matters)
11:30 – When it’s too late: procrastination and missed opportunities
12:21 – What a “crisis-ready” financial plan actually includes
14:28 – Why every financial plan must be personalized
14:42 – Emergency funds: your first line of defense
15:19 – Life insurance: protection against the unexpected
16:20 – Beneficiaries, power of attorney, and planning basics
17:50 – Why income planning matters more than account balances
18:54 – Social Security myths and income gaps
20:04 – The “widow’s trap” most couples overlook
22:02 – Done is better than perfect: take action now
23:02 – Financial blind spots: lifestyle creep in retirement
24:53 – Taxes: the silent drain on your wealth
27:24 – Reacting vs responding: the mindset shift that changes everything
29:13 – The #1 action step: know your monthly expenses
30:21 – Emergency fund goal: 6 months of expenses
31:03 – Debt management and reducing financial stress
32:23 – Final takeaway: don’t wait for urgency to force action
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Transcript
Introduction: From Law Enforcement to Finance
00:00:09
Speaker
Hi, everyone. Welcome to the Future of Finance podcast, where we break down investment strategies to help you live a better financial future. I'm your host, Marissa Wood, financial advisor and one of the owners of Union Financial Services. And today I'm joined by Chris Wood.
00:00:24
Speaker
Chris is a financial advisor a business consultant with Asset Marketing Systems. And Chris previously spent over 12 years as a police officer. And so today we're going to unpack What crisis response looks like in financial planning as well as just life. Because in both policing and finance, the goal isn't just to react well, it's to prevent the call in the first place.
Crisis Management in Finance and Law Enforcement
00:00:48
Speaker
But before we get started, I'd love if you could subscribe to our channel, it really does help us. Now, welcome, Chris. I would say the shift from police force to financial advisor and business consultant seems like a massive shift, but I think really you just changed the way you're offering protection.
00:01:08
Speaker
Yeah, in a lot of ways. It's ah ah definitely a big deviation from being a police officer and working shift work and holidays and weekends to one big change is is being in finance. A benefit is not working holidays and weekends if I don't want to. right um But yes, definitely a big deviation. um But I look at it as another way of serving. And it is a truly a service because you're trying to help people and give clarity and and kind of be that guide in in situations where they may not really know everything in terms of what the best path forward is. So I still look at it as kind of a way of a public service in a way. So that's nice. I agree. And I mean, we spoke a little bit prior to this about that emergency response when it comes to finance. And then, of course, you've experienced tons of emergency situations throughout your time in the police force. Tell me a little bit about what that looks like and how do we prepare for the unexpected or
00:02:07
Speaker
you know potentially dangerous risks that you could be walking into. Yeah. So I actually was an undercover narcotics detective at one point in my career. And ah one of the interesting things about that is is I can't always obviously divulge a whole lot of how we operate, but I can share with you that when we're we're going to go do an operation, for example, go and actually execute a search warrant at a suspected drug house, There's a lot of planning that goes into that. And, you know, there's an interesting correlation to financial planning because, you know, we didn't know we we did all of our due diligence and the best of our ability to come up with every contingency, every bad what if that could happen.
00:02:45
Speaker
We would obviously diligently plan based on all the information we had, um but there's obviously unknown. So for example, a lot of these drug houses would have cages that were barricades, both to you know protect them from being robbed by other rival drug dealers.
00:03:02
Speaker
um Because obviously that's ah that's a risk for them, but also from us, the police officers that are coming into ah run in run and search warrants, they wanted the barricades there to slow down the process so they could destroy their drugs and get rid
Financial Contingencies and Market Calmness
00:03:15
Speaker
of their evidence. And so we had to plan for those contingencies, ah large DAWs strategically placed around. the The drug house, guns, obviously, are something we encountered almost nearly in every search warrant, one form, fashion, or another. And so we had to plan for all those contingencies. And what we would do is do our proper due diligence. And then we would have very elaborate planning sessions where we would come up for any and all contingencies. What's the nearest hospital? What are we going to do if this happens or that happens?
00:03:43
Speaker
But the problem is just like in finance, you can make a plan and then things go ah wonky. Life happens. Yeah. Yeah. The the markets change. ah Black Swan events like COVID could happen. I mean, any number of risks happen. And at the end of the day, what I like is is financial planning really is much like being a detective and trying to achieve a certain goal and account for certain risks, but you can't account for all of them. And you ultimately do need to be flexible, but it is very comforting to at least know that you've checked all the boxes and you've done your due diligence and you've done everything you can to ensure that if this happens,
00:04:22
Speaker
Not ideal potentially, but we have ah a contingency. We have a plan. We know where the nearest hospital is or stay the course. We've already made the plan. It works. Don't let those outside influences, you know, distract from the actual goal. That is another, you know, for example, someone might fall down as we're approaching that. You just got to keep going. You know, you got to overcome like the little obstacles that might happen.
00:04:46
Speaker
ah that aren't necessarily major, but you just have to stay the course because the show must go on kind of thing. And really what I mean by that is sometimes I think in financial planning, half of the the role of us as financial professionals is to keep our clients and the consumers um calm in in rough waters because it's natural to try to react. And that isn't always necessarily the best thing, meaning you don't need to completely change the plan.
00:05:10
Speaker
Exactly. Stock market will drop at some point. ah Sometimes people can lose a job. Sometimes people can become disabled. ah Things happen and and we have to either stick to the plan or make those small changes to make sure we get you to your proper destination.
Risks in Financial Planning
00:05:29
Speaker
um Yeah, I'm sure that... your life as a police officer was high adrenaline and always being ready for that emergency situation. Did you feel like the more planning you did ahead of time, the better and safer you felt in those emergency moments?
00:05:46
Speaker
Yeah, I think so. Obviously, that's a big component of it. But also, I think, you know, doing an an actual, like the the act of making a plan, confidence comes from doing, right? So the more you do it, the more you talk about something, as it relates to your plan. and And when I say talk about something like a risk, you're more apt to react to it in a better, more calm way. And I think that's just the the goal for, you know, as a police officer, you want the more repetitions you get, the more calm you're going to be when things go wrong. And you'll react accordingly. And I think that correlates to, you know, financial planning too, to not emotionally react, react with, you know, ah remembering what your plan is and and looking at things objectively and saying, here are my options.
00:06:32
Speaker
Is a change necessary? Maybe or maybe not. And yet just taking it one One day, one week, one month or one annual review at a time. base Yeah, that is true. What would you say some risks are that can erode a plan essentially in finances? You know, ultimately, too, I think that's what's interesting. I think in this industry is we are actually risk managers more than anything. Right. There's a long laundry list of risks. I was talking to the other day, I was helping an advisor talk to a client about legislative risk. What's that mean? That means, you know, the people in D.C., they can make changes to laws, taxation, different things, Social Security, obviously. I mean, they have their thumb on the scale on a lot of things, and that's a a consistent and persistent risk. I mentioned earlier Black Swan events, obviously, like COVID or something, wars, you know, um different things. More specifically and granular, I think, are you know market sequence of return risk, withdrawal order, meaning you know there's there's the tale of two brothers that I think a lot of us like to tell our two sisters, where you know one person one brother retires with a certain amount of money and the other brother retires same amount of money, different decades, and based on the market sequence of returns,
00:07:46
Speaker
If you have losses in the early part of your retirement plan, that can really, truly blow up your overall plan. and That's just math. yeah If you're already taking money out of your accounts and then on top of, you know, let's just say you take 4% or 5% out of your accounts to live on, um in addition to Social Security and other other means of of income,
00:08:04
Speaker
And you exacerbate that downturn with 15, 20% drawback or whatever it is. And that happens consecutively. It's very problematic. It's just the math. it It's such a hard thing to react
Preparing for the Unexpected: Client Scenarios
00:08:15
Speaker
or overcome. You need such major gains. You know, people also don't think that if you lose 50%, you need to earn 50% to get back to even. Wrong. You actually need 100%.
00:08:25
Speaker
hundred percent You have to double like to get back just to even. Yeah. And so i like a financial plan that, you know, builds a strong moat around your, you know, when you, as you get closer and closer to retirement, you should probably look be looking at taking less and less risk. And I won't get into the nuances of that, but um what other risks I, you know, I think that a lot of people, longevity is actually the big one because we're living longer.
00:08:50
Speaker
And we say it sounds corny, but it's true. It's actually a risk multiplier. The longer you live, the more opportunities there are for something to go wrong. Inflation, taxes, market losses. All the things we just talked about.
00:09:03
Speaker
The longer you live, the higher probability something like that could happen. Healthcare events. Anything. if you're living long. Yes. You're going to need money to take care of yourself. Things are going to start failing with your body. Right. Yeah. So i was going to say with it with longevity too, there's a big question as what's longevity just because you're alive, how healthy are you? Are you physically able to get around? Can you take care of yourself? If you don't, then you have to pay for, you know, maybe a home healthcare nurse to come in. There's obviously absorbent costs with that.
00:09:29
Speaker
I mean, at the end of the day, what I don't want is, you know, when I meet with clients, because obviously you have my own ah clients that I work with that are primarily first responders, they understand risk, but they don't understand the financial, like the laundry list of things that I said, but I don't want to scare people either.
00:09:45
Speaker
Because one good thing about the market is, is if you look at the charts, it always goes one direction in the long run, right? Up and to the right, which is a good thing. So you just can't panic assuming you've had a good plan.
00:09:59
Speaker
you know a failure to plan is is really not i think this is where if i think people go it alone and they're like i'll be fine and then when things go bad um the the concern there is is as we mentioned already you don't have a lot of time to recover you need such massive gains to overcome those losses that I would encourage people to at least just think about that perspective. Like I need someone to at least give me in a second opinion, absolutely much like a doctor. If ah you know you go and you have a plan and maybe you want a second opinion, but you might think that, hey, I'm a pretty smart person financially, but there's a lot of things like Irma, ah or you know the sequence of return risk that probably people just haven't necessarily thought of, right? Because as you're working and as you're going you know from 25, 30 years old to 60, 65, when the market takes massive downturns or whatever, you're not incredibly concerned per se, right? Because you're always, you're 401k every, you're know you're adding more money and you're not retired.
00:10:54
Speaker
But when you're in that five to 10 year window, ah pre-retirement and your first five to 10 years in retirement are the most crucial. That's when you have to have an advisor. You have to. we have to have some protection strategies in place to address those risks. And we have to put that emergency response plan in place too.
Building a Crisis-Ready Financial Plan
00:11:14
Speaker
I've had – of course, these are not as adrenaline pumping as your emergency stories, but I've had clients call me – in panic saying, you know, my wife now needs long-term care. And oh my gosh, we didn't do that plan that you suggested to us three years ago. Can we get it now?
00:11:34
Speaker
Well, now it's too late. She won't qualify. um Or a young couple of mine that are clients, you know, someone got a diagnosis at the doctor for skin condition that was not favorable. And They hadn't taken that step to get the life insurance yet.
00:11:54
Speaker
It was on the back burner. It was in that procrastination mode. And then it becomes an emergency situation. And you have to do it before it's an emergency, before you need things or before you think you need something. Let's get it in place. Let's have that emergency response plan there so that when those things happen,
00:12:15
Speaker
It's just a matter of, OK, well, we have this already taken care of if something does happen or we have money to pay for long term care. Remember that income that you're getting? It's going to double now. yeah What a sigh of relief. um And so tell me a little bit more about what a crisis ready plan can look like. What are some of the components inside of that plan?
00:12:35
Speaker
um I think the the hard part about our job too, and I think this is just interesting how it correlates both with law enforcement and and financial planning is, and I tell people all the time, my least favorite financial advice is general advice. So I'm not trying to be hypocritical here, but what I want to impress upon the people listening is,
00:12:54
Speaker
Everybody's different, right? So what I'm about to say, these are high level ideas and things that we want, but everyone is so nuanced. Like every search warrant we ran, there's different challenges, right? There's, you know, for example, I remember one instance we ran a search warrant And the the home was really odd. it was obviously not to code or whatever. It's a drug house. um But we literally had to put a ladder on the backside of the structure to get into the home, into the structure. There
Agreeing on Financial Philosophies
00:13:23
Speaker
was no actual way into that home. There was front door? No. Well, it was heavily, barred it was basically bricked off and barricaded. So we knew, and based on the intel that we did, we knew that wasn't a viable way into the home. And in fact, once the it was done with quick DV... It we got into that portion and it was just an empty portion of the home.
00:13:41
Speaker
The only part that was actually occupied and being used by the drug dealers was the upper part that you could only get to again by putting our own ladder to. So that's a really wild and off the. But my point is, is.
00:13:54
Speaker
That's unique. yeah Every other warrant for the most part had its challenges, but whatever. But my point is, is every family, every couple, single person, it doesn't matter who you are, you have a very unique situation. And so your financial plan, what's that going to look like? That's for you and your advisor to come up with and determine as to what's best for you, your family. And again, what risks you think you're most likely to encounter. If you have, if your wife, for example, is mom is 104 old. you probably are going to have a good chance at longevity. um but But to break it down quite simply, you know, there's certain things that every search warrant needed. We needed ah a route to get there. We needed a plan of what we were going to do and who was going to do what and how and where. So on the financial side, I think it's ideal to always have an emergency fund. You hear that a lot. um I've been through Dave Ramsey's training as it relates to just personal finance and stuff. And that's one thing I agree with him wholeheartedly on. We all have our differences in in the financial industry as well as it relates to our opinions. um And that's something that I think real quick you should have with a financial advisor is a conversation on what is your philosophy as an advisor?
00:14:59
Speaker
what planned ah what What is your philosophy on what kind of plan you think is based on my situation is best for me? Mm-hmm. And I think you need to come to an agreement, the client and you, the advisor, that I agree with. I subscribe to your investment philosophy. I like that you laid out that you want me to have an emergency fund. Then we have a discussion about life insurance. That's a protection against the what ifs. And I'll be vulnerable. I recently had, ah luckily it wasn't a scary, it was a basal cell skin cancer diagnosis. is Getting the C word thrown at you is quite scary no matter what. um But I'm fortunate. I'm fine. Thank god But that is just the word that, you know, I never thought – we always say that, right? It's not going to happen to me. That happens to people on the news or whatever. So life insurance is a very important defensive thing to have because there are those what-ifs. The tragedies, the car accidents, the healthcare diagnosis. You just never know.
00:15:53
Speaker
And it's a labor of love to really not procrastinate. And, you know, at the end of the day, life insurance isn't fun. I understand that a lot of these conversations aren't exciting as running a search warrant or yeah whatever you see on TV or think about ah that kind of idea. But it it isn't fun. But it is nice when bad things do happen that you don't have that. Oh, my gosh, we didn't have a plan or we didn't take action when we should have. You'll have that regret. Yeah. um Obviously, too, updated, you know, part of why having ah a good financial advisor in those annual or biannual reviews is a simple thing of a lot happens in six months or a year, you know, reviewing your beneficiaries, making sure all of your health care financial powers of attorney that everybody should have, by the way. yeah Those are simple documents that you have in place should you end up incapacitated. I mean, even college kids, I tell my clients and I've talked to other advisors to encourage their clients,
00:16:48
Speaker
If you have a child in college, having a healthcare power of attorney for them and just so there's no issues, God forbid they end up in a hospital and they can't speak or talk for themselves, that's already been taken care of. That's great point because they're 18. 18 or older. But yet they're really not an adult yet. Correct. In most cases. I mean, legally they're an adult, but yeah. They're on their mom and dad's insurance more than likely up to 26 or whatever. But they also, they're probably not married. They need some, their guardian to be there. And they just, yes, and dad will more than likely have cooperation. But why even open the door for any kind of issues?
00:17:22
Speaker
um Beneficiary designations obviously are important as as life changes. People get married. Things happen. um i also am a huge proponent of looking at – this is my investment philosophy.
Guaranteed Income and Longevity Risks
00:17:35
Speaker
So kind of going back to it is I like to approach my clients from ah an an income perspective. Mm-hmm. At the end of the day, you can have ah half a million, a million, two million, whatever you have saved up in your portfolio, that's great. And then you can have some people that say, yeah, you could take 4% or 5% and you'll be fine. But what's that really mean to the and to the client, right? On a tangible perspective,
00:17:57
Speaker
I think most me, when I'm retired, I want to know how much can I spend each month and will I run out of money spending that much? What do I do if things change? How much do I have to, you know, in terms of um going on fun trips? Surplus, yeah. Yeah, surplus. What can I, you know, go see grandkids or go do go to Italy or go wherever? But also i just want to know on a month-to-month basis what I can spend comfortably. And more importantly, I work hard with my clients to have ah multiple streams of guaranteed income.
00:18:27
Speaker
What does that mean? Absolutely. Social security is one that most people are common with, but social security isn't designed and never was. I i don't believe it was designed to be your full and only. It wasn't. It's turned into something that it was not designed to be. And no wonder it doesn't have any money left. Right. Yeah. And, you know, I've heard I'm in currently in the and the in a designation getting my RICP designation, and and that's a retirement income certified professional designation. And in that class, they talk about the fact that Social Security was is really designed to cover about 30 to 40, 50 percent of your your income. So from that perspective, where do we get the rest? assuming you're Assuming your quality of life hasn't changed, right? You know, you still have certain bills, electricity, phone, water.
00:19:09
Speaker
mean, recently had winter storms. My electric bill gave me a near heart attack. i'm sure it did. We're going to get through it. But, ah you know, so over and above Social Security, some pensions aren't as common. Obviously, i work a lot with first responders, so we do have that component teachers, things like that have pensions sometimes. But that's just parts of the puzzle. There's other opportunities like fixed indexed annuities that have income riders. At the end of the day, there's ah multiple ways to construct a plan that we give you a floor is what we tip some people call it, right? A baseline amount of income that you're going to have and ideally,
00:19:42
Speaker
That will be there for the rest of your lives. Now, Social Security poses a problem because if one spouse passes away, that Social Security benefit is reduced to the bigger of the two. yeah And that's a problem. Now we're getting into another risk that we haven't talked about, which is a widow, the widow's trap. Right. That's a big one that a lot of people oftentimes overlook.
00:20:00
Speaker
I'm seven years older than my wife. not even just the financial aspect of it with with income, but also sometimes the lack of knowledge. one One spouse did all of the planning and all of the investment management with the advisor or themselves. And then all of a sudden,
00:20:18
Speaker
If they pass away, now not only is one Social Security check gone, but the knowledge of the plan is gone. right And so we have to have both spouses in the loop, at least on a baseline level of what's going on. Here's your accounts. Having that guaranteed income, I agree with that philosophy. And like you said, not every advisor is a good fit for every client. no We believe in having some form of guaranteed income to cover basic living expenses and then to have surplus and excess withdrawals coming from market-based accounts sometimes. right We agree on on that blend, but sometimes people don't agree on that. And then, you know, it might not be a good fit. But it is it's so individual. And i think that guaranteed income does help with at least least the longevity risk. A hundred percent. And it's important if if you're a married couple to make sure that that guaranteed income covers both lives. And there are ways to do that. And that way, if, you know, like I was saying before, I'm seven years older than my wife. So God willing, I'm going to pre-decease her. And, and, but she will still, I'm going to have a plan in place to where her lifestyle doesn't change. yeah When I pass away, she is now a single tax filer just by virtue of me dying. Her taxes go up.
00:21:36
Speaker
She now is going to rely on one, not two social security checks. yeah there's There's a lot of ramifications that that go into that.
Identifying Financial Blind Spots
00:21:44
Speaker
And so, yeah, I think it's imperative. My wife and I are in complete lockstep. We have each other. She knows the password. She at least knows where to find everything. um But, yeah, I agree 100 percent. You have to have that.
00:21:57
Speaker
you look at it as a team. I understand there's more than likely you're going to, in rare scenario, maybe they're both financially yeah excited or whatever, like but usually it doesn't seem to be the case, right? It's usually one or the other that kind of enjoys it more. I know my mom personally just, it makes her just, and my wife too, like she, she likes finance, but like as soon as I start talking finance, her eyes glaze over, she gets super bored. yeah um So, you know, that's a challenge too. Mm-hmm.
00:22:22
Speaker
I would encourage people to fight the fact that this isn't interesting. Totally get it. But it's important. It is. And action is key. You know, a lot of people get overwhelmed by even just some of those risks that we just addressed and think, oh how am I ever going to get all of that done? Well, done is better than perfect. Get it started.
00:22:43
Speaker
Get some of those things done, such as the life insurance, your beneficiaries, somewhat of an estate plan. Get that done. and over time will improve it. right you know Don't wait until life is perfect and you have a million hours in the day because it's never going to happen. We've got to take action now. um Now, another thing I wanted to talk to you about, because it does kind of parallel to some of the car accidents you might have seen over over time and in the police force, and that is the blind spots. We've all gone to change a lane while we're driving and almost hit the car next to us because they were in our blind spot. Luckily, now most of the cars have the thing that beeps. those help. Thank God. I love that. um But what are some financial blind spots that people might not even know exist and it can create havoc in their plan?
00:23:36
Speaker
Trying to think that think some of the bigger things that will surprise people. um you know I think in retirement, you've probably heard the phrase or the joke, every day is a Saturday, right? So that's where lifestyle creep can come into it. you know You have the ability to go and have fun every day, right? You don't have to go to work where you're earning money, and not spending money. So you know you have the possibility of, you know oh man, I have all this money. I wanna go travel or whatever, totally fine. And by all means, i hope you do in retirement. um But you got to be cognizant of what the plan is, what you can actually afford and not let that lifestyle creep, you know, put you in peril to where you're you're struggling later in retirement. I think the ultimate goal is comfortability and clarity throughout, right? Because if you really think about retirement, depending upon when you retire –
00:24:20
Speaker
My parents, for example, were fortunate, worked hard, saved a lot, and they retired quite young. They retired at 60, 62, something around there. great. Yeah. so But if you think if they – let's just say on a conservative basis, they're going to live to 85. That's a 25-year plan that they have to account for. So lifestyle management creeping, especially in the early go-go years of retirement, a little Tom Hegner reference, shout out. You know, when you're younger and you're doing the traveling and seeing the grandbabies and whatever, you got to you be cognizant at least. So that's one thing. um Tax management is another thing that I, it's hard because we aren't CPAs and tax professionals, but obviously this is one of those areas where there's overlap, right?
00:24:59
Speaker
I was a police officer, but I still had to go to calls that no crime was committed. I had to go deal with, you know, mental health situations or civil situations that no crime was committed, but there was some issues. And so my my point on that is, is It's important to work with your financial planner to at least talk about tax mitigation strategy, not evasion. to Big difference. Yes. One's legal, one's not. um But you do have control over, again, maybe we talk about Roth conversions and paying taxes now and and juxtapose what that plan looks like and how that affects your future, what your overall tax basis is going to be.
00:25:33
Speaker
That's one thing we have control over. Once again, is it fun? No, we can't control. It can be fun. Well, it's fun. Tax-free money is fun. Amen. Yeah, I agree on that. I think when i'm you know the the work itself may not be fun. The result is definitely fun. Tax-free money is great.
00:25:48
Speaker
um It relieves all that stress of having to give a... you know The government at the end of the day, if you have a 401k, 403b, 457 is your actual investment
Budgeting and Emergency Funds
00:25:56
Speaker
partner. a lot of people don't think about that. Why? Because you haven't paid taxes on any of those money, any of those accounts. And so every time you go to take money out, Uncle Sam's over there going...
00:26:06
Speaker
Give me my piece and understandably so. But tax mitigate, I always tell people that's the one thing that we actually have control over to some degree that we can put our thumb on the scale. And even if it's a 3% savings, I look at that as a 3% gain of protecting your money that you're not giving it to the government. I'd much rather keep it. I paid enough taxes over my life, right? I don't know about the ah ROI on the taxes anyway either. We won't get into that. yeah um Just ignoring it, I think, is another thing. A lot of people like to play ostrich and just just ignore it like it's going to go away.
00:26:37
Speaker
And again, that's where I encourage people i to set aside time, like doing the workout, right? If you're going to go try to lose weight and eat healthier, you got to go to the gym, you got to move your body. Is it, again, necessarily fun? Eventually, it probably gets to be fun. And I think this stuff can be fun once you dive in and you're talking strategy and you're seeing the end results. And I think that's where, at least for you and I, I know it gets us excited. yeah Not near as fun as a car chase or a search warrant. Yeah.
00:27:02
Speaker
But it's nice to have that like, oh, okay, this is kind of cool. Like we're going to do this. We're going to do that. And then because we're doing this, we can go and do this or we don't have to worry about this anymore. Like there's a lot of cool stuff that actually comes from financial planning and you're fun. So you'll make it more fun. But also, again, it goes back to, i think as it relates to just a blind spot too, is emotion. Like you're you're in retirement, you're you're seeing the news and the, you know, it's mostly all bad.
00:27:27
Speaker
Um, How do you not let that affect you and make a bad decision as your overall financial plan? Again, that goes back. It sounds repetitive. But, you know, you live in ah Florida here, right? yeah So hurricanes, right? yeah We all have – I'm sure everybody here in Florida has at least a plan. Yeah. and so We have a hurricane shutters and, you know, my husband has the generator ready to go before every storm. um So that, yeah, we don't panic. You're not making an emotional decision and going buying four generators, even though you only need one, which is bonkers. Or, you know, yeah you're making smart, rational, yeah non-emotional decisions. One thing me and my wife always talk about is reacting, I'm sorry, responding and not reacting. Mm-hmm.
00:28:09
Speaker
Big difference. If you react, it's usually flash in a pan quick. Like, you know, if I threw something at you, you react, right? Like understandable. But you respond, it's typically with a little bit more gumption, a little more composure. You remove the emotions to the best of your ability out of the response as opposed to reaction. So I think that's important. And that's where, again, we are in the risk management business. You and I as financial advisors, we're also in emotional management because we want to keep you.
00:28:39
Speaker
as our client, grounded and and removed because we're we're kind of in essence ah a therapist of a third party point of view, right? Like, hey, I understand you're concerned, you're worried. This isn't going to according to plan. But remember, we or you make incremental changes or or small changes, as you alluded to earlier. This isn't something you get done and and in 25 years using my parents example, things are going to come up that you didn't See, so not emotionally reacting in a way that causes, that exacerbates the problem, I think is super important. I agree. And yeah, just having that advisor to keep you on track and to keep you grounded and take the emotion out of it when possible um and ultimately just help you take action. We do not want to wait until pain to take action.
00:29:25
Speaker
It's all about preparing ahead of time, like you said, so we can respond and not react. um What would you say if if someone listening took one action this week to improve their financial plan and their crisis-ready plan? What should that be?
00:29:41
Speaker
This is isn't fun. um the The biggest thing that I think is important is knowing your budget, exactly what your expenses are. I mean, not to the penny or the dollar. Obviously, I understand you know electricity bills, as I already mentioned, I didn't expect that one um to be, you know gosh, four or five times what it normally is. um But start with your budget. Everything in finance begins with the budget. If you don't know what your bills are on a month-to-month basis, And you don't know what your income in in excess is, then where do we really start a basis of a plan? so My wife and I actually meet every month and we look at exactly where our accounts are. We know good, bad or otherwise are we ahead? Did we spend more? Did we get hit with a winter storm and we're a little lighter on on what our normal excesses are? But everything is predicated on we know we need X amount, you know, five, six grand a month just to pay our bills and live. And in in in that budget, I would encourage people to buffer in or or have a buffer for ah expenditures, fun, right? Of course. But you need to know what that is so that we can build your income plan in retirement going forward. And I think that will also give you clarity on, you know, maybe you have more money than you thought you did on a um monthly basis and you can invest more or, you know, properly have an emergency fund if you don't have it. And I would say probably those two go together. A proper budget and an and with the goal of establishing that emergency fund, six months is i like to be. your expenses. Of your expenses for that what if you can't work. A spouse ends up in a major ICU hospital just stay situation that you didn't anticipate and you have to miss work, for example. Fortunately, had a personal friend dealing with a legitimate and and more serious cancer situation.
00:31:27
Speaker
While you're getting treatment and going to doctor's appointments and things like that, work becomes a challenge. yeah So having a six-month buffer certainly at the end of the day just removes that adding so more stress, the financial stress onto an already stressful situation. So start with a budget, get that emergency plan in place. And then the rest we can discuss, right? Life insurance, income planning, what investments we want to put our money in and where and how and what the pros and cons are. That's kind of the fun part.
00:31:56
Speaker
in ah In a way, you got to get the hard part out of the way, which is knowing exactly how much it costs to live each month. And then in debt elimination as well, too. I think it's important to, you know, it's tough. And again, everybody's situation is different. um There's good debt. There's bad debt. We won't go down that rabbit hole. But try to minimize your debt as well, I think is important because that just minimizes the opportunities for things to spiral out of control and put a lot of stress on you and your overall financial plan. It kind goes without saying, but needs to be said. No, I agree. And i so, I mean, here's the challenge. Don't wait for urgency to force your
Proactive Financial Planning: A Call to Action
00:32:29
Speaker
hand. Review that budget. If you don't have a budget or you don't know where to start, send me an email at mgreen at union-financial.com. Just put budget in the subject line and I'll send you our free template so that you can sit down with your spouse or if it's just you, you can sit down and start plugging in those numbers to see where you stand And then we can review that emergency fund, revisit the insurance policies, stress test your plan for the risks that you might face. um And of course, if you have other specific questions you want answered, feel free to go to our website, union-financial.com. You can click schedule a meeting. It'll take you right to our personal calendar where you can book a complimentary phone call, Zoom call, or in-person meeting and start getting this crisis-ready plan taken care of. So, Chris, thank you so much for joining us today and addressing these very important topics. It was very interesting as well, I got to say. You've lived quite a long life in your short years. I've done a lot of of crazy things. And, yeah, looking back, I guess to me it doesn't seem wild. But when I start talking about – and there's more to this story. I'm sure. People are like, you lived where? You've done what? and Yeah. um It's fun. You know, like you get one life to live. And I think that's kind of where I look at this perspective is i want it. We work so hard, have a proper financial plan. It's important. That way you can enjoy life and not worry. But yeah, thank you so much for having me. It's been a lot of fun. And for everyone else, thank you for tuning in to another episode of the Future of Finance podcast. I'm your host, Marissa Wood. We look forward to helping you live a better financial future.
00:34:07
Speaker
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