Divorce and Your Money

Sunday, May 28, 2017 – Wealth Strategy with Bryan Rigg, Your Wealth Professor
Listen In Every Week: Saturday on WRR from 7:00-8:00 am / Sundays on 570 KLIF

We’re here today to talk about financial strategy, financial wealth management. We’re also talking about what to do today for tomorrow, and what to do tomorrow for the beyond tomorrow later in life.

We’re going to talk simple talk. We’re going to break things down and make them digestible. We wanted to thank you for being with us today, and listening and paying attention. We’ll be around for the next hour.

We’re going to talk about a couple of segments. Topics we’re going to talk about today is divorce. Also, we’re going to tap into early retirement. Is it the right time to enter the stock market? Finally, we’re going to talk about, say you’re in your 40s. What can you do now to save for the future and retire comfortably?

 

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DISCLOSURE:

RIGG Wealth Management offers securities to Broker Dealer Financial Services, Member SIPC and advisory services through Investment Advisors Corp and SCC registered investment advisor. RIGG Wealth Management is not a subsidy area of Broker Dealer Financial Services. Neither RIGG Wealth Management nor Broker Dealer Financial Services offer legal advice. Client should consult their attorney of choice on all legal matters.

Opinions expressed on this program do not necessarily reflect those of Broker Dealer Financial Services. The topics discussed and opinions given are not intended to address the specific needs of any listener. Diversification does not guarantee a profit or protect against a loss in a declining market. It is a method used to help manage investment risk. Examples mentioned are for illustrative purposes only, individual results may vary. Past performance is no guarantee of future results. Investing involves risk including loss of principle. Rebalancing can entail transaction costs and tax consequences that should be considered when determining a rebalancing strategy.

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TRANSCRIPT

Rob:  Welcome, I am Rob Dalton, and with me…

Bryan:  Bryan Rigg.

Rob:  We are “Wealth Strategy with Bryan Rigg.” Bryan is your wealth professor. Thank you for having us on your dial today. You’re part of our day, and you’ve made us part of your day, and we certainly appreciate it.

We’re here today to talk about financial strategy, financial wealth management. We’re also talking about what to do today for tomorrow, and what to do tomorrow for the beyond tomorrow later in life.

We’re going to talk simple talk. We’re going to break things down and make them digestible. We wanted to thank you for being with us today, and listening and paying attention. We’ll be around for the next hour.

We’re going to talk about a couple of segments. Topics we’re going to talk about today is divorce. Also, we’re going to tap into early retirement. Is it the right time to enter the stock market? Finally, we’re going to talk about, say you’re in your 40s. What can you do now to save for the future and retire comfortably?

Bryan, welcome to your weekend. What have you done this weekend?

Bryan:  I’ve been working on my book on a [inaudible 1:57] recipient. He was at Iwo Jima. He was a Marine, World War II story. In one day, he took out seven pillboxes and killed 50 Japanese with a flamethrower. He secured the first airfield which was the reason why we took over Iwo Jima.

This is my fifth book. Right now, the working title is “Honor under Fire,” or “Flamethrower.” I’ve been working on that, interviewing a lot of veterans from that battle, and making sure that I get the facts right and get the story down in hopefully a very Oakland way.

Rob:  That’s going to occupy your weekend beyond the show.

Bryan:  Yeah, it’s been occupying multiple weekends. This weekend, I’ve been working an awful lot.

Rob:  That’s his weekend. We’re going to tap into a topic that some of us have already gone through, many more of us will go through. Bryan and I are actually going through it now. That is the process of a divorce.

I was thinking on the way into the show today, Bryan, that much like having a baby, when you start a family, you think you know what having a baby is going to be about. People tell you what to expect. Your parents tell you what to expect.

Your friends tell you, but until you actually had that baby and become a parent, you really have no idea what to expect. When you live it, finally after two years, you think, “Wow, this is really tough, having a family.”

Divorce is much the same thing. You prepare and you think you know. Every situation’s different. It’s coming out for a lot of people and going through it. Those who go through it try to explain to other people who are going through it, and they just can’t get the grasp of it until you live it.

Bryan:  Yeah, absolutely.

Rob:  One of the things you deal with in helping your clients and managing their retirement and their savings is knowing what to prepare for. What are the financial elements of a divorce?

Bryan:  In general, when you look at the family law code, you’re going to separate your estate 50‑50. Most people who are going to go through a divorce ‑‑ and you just put this back in your brain housing group ‑‑ that is going to be 50‑50 no matter how much your fight.

Sometimes you might be a little more leveraged depending on who is the offender and who is the offendee and so on. Sometimes if you’ve done some really bad things in your marriage, the person who is the victim, so to speak, might get a little bit more than 50, maybe 60, 65, or 70.

Realize that no matter how hard you fight, the information out there shows you’re going to get 50‑50. That’s one thing to think about.

Also, I think a lot of people, they don’t realize when finally someone pulls that rip cord and they have file for divorce, and they have crossed that Rubicon, both parties need to realize that it is a business now.

Rob:  I’ve said the same thing. I’ve exchanged a couple of emails on my side, and I just say simply, this is the business end of the divorce. It’s hard to be unemotional, but when you look at it as the business end of it, it kind of makes it a little bit more black and white.

Bryan:  Yeah. You usually have two different mindsets in a divorce. As a financial advisor, you have to be sensitive to this. One is the person who wants to leave. That person usually is already emotionally checked out. He or she does not care at all.

Then you have the other person who is usually blindsided by this or doesn’t want it, and is emotionally attached to it. That person is actually in a much more vulnerable place when it comes to finances.

The one thing as a financial advisor, you need to sit down, and hopefully, if you’re dealing with the person who is emotionally invested still, to try to help him or her understand things in a very black and white way.

A lot of times, they don’t know exactly what their rights are, how much money they’re entitled to, or assets, and you got help them put on the brakes sometimes in making a decision too quickly because a lot of times, they’re thinking of that other person still as their good friend, somebody they can trust, somebody that maybe will come back.

That’s something a lot of times you got to talk them off the line and say, “You got to look at this…” I’m a military historian, “you got to look at this from a strategic point of view.” That’s hard for people.

Rob:  It is.

Bryan:  It really is. This is something, like you said, we don’t study in high school. We don’t study in college. How do you deal with a divorce? 50 percent of all people go through it in life, and they do on‑the‑job training, which is a horrible time to learn about something.

Rob:  You’ve still got to take care of your future. Let’s say people sold the house and someone’s got cash equity, now what? Can you help them with that?

Bryan:  Yeah. Especially myself being a child of divorce, and my grandmother and mother raised me, they both went through divorces. I have a very sensitive place in my heart for single women and helping them.

A lot of times, women who are in their 50s, 60s, and 70s, a lot of times, they have not focused at all on the finances.

Rob:  No, they don’t.

Bryan:  One thing at Rigg Wealth Management I think we’re very good at is helping women in particular, but anybody who has gone through a divorce that needs to start getting their head around, “What am I entitled to?”

Rob:  What now?

Bryan:  Yeah, what now? How do I plan? What do I do next? Sit down, and help them feel comfortable with taking control of their financial future.

Like you were saying, sometimes people, they look at the equity in the house. They may leave, but they get a windfall. This is called a liquidity event. What I try to tell people with these liquidity events is try to really scale down your expenses. Let’s get control of everything.

Let’s start investing this to see what type of cash flow you can have, and see how that mirrors up with your salary.

Rob:  You may have a one‑year plan, a two‑year and a five‑year plan, but you’ve got to do something with that money.

Bryan:  What I find quite often, a lot of people who go through a divorce, who get a liquidity event or liquidity events, by way of illustration, there’s one of my clients. She got half of her husband’s retirement, and she got half of the equity in the house.

She took all that, and then she started still living the way she had before. I got her as a client about two years into this process, even though we tried to pull back very quickly, it was very hard for her to change her mindset of her living standards.

Rob:  There was no tapping the brakes.

Bryan:  Yeah. That’s something, if you get it down on black and white, and we sat down and we went over it on paper, it started to clue her in to see it visually. Here’s your intake, here’s your outflow. What’s wrong here?

That’s something that’s very important to look at. I encourage people when they go through this, write everything down and look at it. Have spreadsheets. Start doing a monthly budget.

Those liquidity events, quite often, people don’t know what to do with their money.

Rob:  There are so many options when you have an influx of cash. It’s almost analysis paralysis.

Bryan:  One thing that’s really interesting though with a lot of the clients that I get is once they come over, the one thing they had not done, which they should have done immediately, their spouse now is “their enemy.” A person that they don’t have…

Rob:  To a degree.

Bryan:  Yeah, to a degree. Sometimes you have ‑‑ very rare ‑‑ no good marriage ends in divorce. [laughs] There is always a lot of pride. Most times there is a lot of acrimony, there is a lot of bitterness. What they forget to do is to change your beneficiaries on the retirement accounts.

I’ve had people come to me as clients, and they’ve had control of their retirement accounts for a year or two years, and they love their kids. Sometimes they’re even remarried, and they still have the old spouse as a beneficiary in the retirement account.

One thing that we do at Rigg Wealth Management, we help do a lot of the housekeeping. We get things in order. We get the estate planning together, and also hopefully, we take that one thing off their plate.

Usually, according to some of the psychiatrists and psychologists that I’ve talked to about divorce, and also my divorce lawyer, it takes about two years to recover psychologically.

Rob:  It does. You’ve helped me with some of the financial elements in mine. I want to remind people that don’t wait until you get that liquidity event. If you really have an idea what you’re going to get, start planning as soon as you know and start making some of those difficult decisions, or seeking guidance or consultation, or calling someone like yourself at Rigg Wealth Management.

Bryan:  At Rigg Wealth Management, since we’ve gone through so many divorces, I think we bring…

Rob:  As clients, not yours. [laughs]

Bryan:  Yeah, not divorce. I’ve only gone through one divorce. I don’t want to go through another one, ever again, and will not.

We’ve gone through a lot of divorces with our clients. We have a lot of experience with the right questions to ask. We can help people think in the right categories that they need to set up a new estate.

Rob:  You can help neutralize the problem and look at it in their favor. It takes planning.

Bryan:  Yes, absolutely. Get a plan, especially after a divorce. Getting a plan as soon as you can helps alleviate a lot of anxiety.

Rob:  They may get voicemail, but what’s the phone number they can call?

Bryan:  They can call 972‑383‑1210. Please visit our Web page at riggwealthmanagement.com, that’s Rigg with two Gs, R‑I‑G‑G, wealthmanagement.com.

Rob:  Don’t wait till the end. Plan ahead of time, and at least get some of those questions answered because you’re going through a lot right now. Start early and plan.

Coming up next ‑‑ stick around ‑‑ why retirement? What if we don’t want to?