Money and marriange

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Money and marriange

[podcast src=” andard/autonext/no/thumbnail/yes/autoplay/no/preload/no/no_addthis/no/direction/forward/” height=”360″ width=”450″]How do you talk with your spouse about money? Have you ever stopped to think about how money can have a negative, or positive, effect on your marriage? Join Karl Susman and guests this week a they discuss money and marriage. Transcript follows.

JADE: With 50% of marriages ending in divorce, we’ve all seen how difficult a breakup can be – especially when it comes to finance. We invited Tiana Ronstadt, owner of Power Women Investing, to talk about how you can stay on your feet financially whether you’re in a marriage or ending one.

JIM: Welcome, Tiana.


TIANA: Thanks, Jim. It’s great to be here today.


JIM: Just for the audience, I think we met maybe 20, 25 years ago. Does that sound about right?


TIANA: It does, it’s awful I think that I’m not that old.


JIM: Well, I know I’m not, but anyway, we were on a committee together, an advisory committee and Tiana, you’ve always impressed me. You’ve been very successful in your practice, and I know being a female advisor you’ve really focused to a lot of female issues, and I think me being a male I can’t always relate, so I thought it would be great to have you come on and share, and I know you’ve been featured in a lot of things nationally for some of the work that you’ve done, the speaking that you’ve done. You’re a real inspiration I think to a lot of women, and some of us guys too.


TIANA: Thank you, Jim.


JIM: At any rate, for today’s topic we are going to talk about some of the issues, especially with divorce and some of the pitfalls that come with divorce, so I know you’ve dealt with a lot of issues, especially with divorce and single women, and some of the things that face them, so what are some of the pitfalls of divorce that people should be thinking about if they’re going through that?


TIANA: One of the things that I find is obviously we know 50% of all marriages end in divorce, and we also, you know, we can all know the statistics but what I think is interesting is that all the information or pitfalls, Jim, that you have in divorce or contemplating of divorce, are the pitfalls in financial planning, and so I tell folks really the information is great for everyone, but when you are teeing up or looking at I might want to be separated, or this really isn’t working out, or I don’t really underst and what’s going on financially, some of the key pitfalls are important to really look at.

One I would say, really one of the biggest is not enough cash, and don’t we find that even in our own clients, when the difference between a net worth statement and actually what we call cash flow or how you’re actually able to pay for things, and so to have a real good grasp on how are things paid for now in your house, and if you were to separate and now there are two households, is there really enough cash flow to support two households.


JIM: That’s a great point, and one thing I think is just exasperated, usually we see one spouse or the other is usually the one that takes care of paying the bills.


TIANA: Exactly.


JIM: Yes, so for the one that isn’t doing, especially if they’re instigating the divorce and maybe they’re doing it out of total emotion and haven’t prepared themselves, and I think that’s another thing that people need to really prepare themselves for, my hope is after people listen to this and maybe work on a little bit more, maybe they can save that marriage, but I know finance is usually right up there as one of the top reasons, if not the top reason that people are get divorced, and we’ve had another guest on that’s been on several times and she talks about spouses have the money talk, and I find in my practice, I almost make it obligatory to have both spouses involved in the planning meetings.

One can take care of all the stuff after we get it all done, but it really is important that both spouses have their input in the planning and feel part of that, and at least have a general underst anding of where things are at because whether it’s divorce or death or disability, if you get thrown into this without having the time to prepare when the emotions aren’t running high, it’s just that much harder to get on top of things when you’re not thinking clearly.


TIANA: I couldn’t agree more, and I talk a lot about that there isn’t a national financial planning day or a national day that you have to actually sit down and talk about this, because it is the conversation that most couples do not want to have, and so I help folks, one, I think that they at least should have a money conversation on their anniversary, see where you’ve been, where you want to go, and then have it on each of your birthdays, so now I’m up to three times, Jim, that they’re going to talk about it, and lastly try and only talk about one topic.

I will say, and again gender bias, that as females I feel like, you know, sometimes we have a big agenda and then we might go on and on, and our male counterpart husb ands traditionally will kind of check out, and there’s not negative, it’s just fact, and so I try and encourage women to say, okay, if you’re not familiar with what the life insurance coverage is, make that a topic and say, you know, what we’re just going to talk about this one thing. I’m not going to try and underst and everything else, because it is an overwhelming task and I do agree with you that one person traditionally does the budgeting and pays the bills, and the other one traditionally does the long term planning, but everyone needs to know the basics.

That whole philosophy of ignorance is bliss really is not true anymore. You at least need to have an idea of what the plan is and have input in the plan so that you’re empowered to help save, first of all, and to underst and where that money is going for your long term goals, so that is definitely true.

The other thing I just want to piggyback too that you mentioned was emotion. One of the big jokes I have is that it’s a lot cheaper to cry in my office than it is at the attorney’s, and so one thing that I really try and do is talk about can you afford to get divorced. Is that really what it’s about, and if you can’t afford it and it’s just, you just really don’t like each other right now, maybe let’s try and work that out. It’s been very successful in allowing folks just to be in my office and for the first time they’re really just talking about money, trying to work that out, because it is a tough topic. We come with all our history, you know, and how we were raised, and all those values and all of the sudden we marry someone that potentially has completely different values and different way that they were raised around money, and that causes a lot of anxiety.


JIM: I see that all the time, and it’s not been since my last client meeting where I’ve seen some of that anxiety, because you’ve got one spouse that has taken care of this check or that income source or made this decision on an investment. I’ve got some spouses, they keep their own social security checks and that’s their money, and you’ve got all this kind of hiding from each other, and one spouse might buy a bunch of stuff and not really discuss it, and it could be big ticket items, and you just see the stress that creates on the relationship because they’ve gotten so used to doing things their way when it comes to money and not being as a team, and that can really stress out a marriage.


TIANA: Absolutely. I use the word interdependent, that it’s fine that you want to have some independence in some of this, and definitely we don’t want someone in the relationship that’s dependent, so we’re striving for an interdependent relationship in finances, because you’re two independent people and my goal is that you’re going to both contribute to the pot and we want to have that be interdependent.

When we talk about pitfalls too, specifically in divorce, one of the things I also find is traditionally one of the partners will also take the lead on the tax planning, and actually filing the taxes, and the other person just signs, and so I always say that if you’re kind of like, where is everything, the tax return, Jim, is one of your greatest assets that you can find that and you can uncover assets in that tax return.

It also tells a great story, doesn’t it, you know, what’s going on in the house, if you will, so I find that a lot of folks, they don’t underst and tax returns, they’ve never dealt with it, they’ve only signed it, and yet it’s really kind of the go-to thing, and when you’re really again starting to contemplate, I want to see if I want to leave this relationship.


JIM: So what are some of the other pitfalls that you see, Tiana? Because we’ve been talking about a lot of the issues while someone is married and kind of transitioning to a divorce, so let’s say divorce is inevitable. What are some of the other considerations that someone is going to want to think about to make sure that they come out of it as best they can?


TIANA: I would say, and it kind of goes, it’s going to have some three steps, if you will, but not getting professional advice, and when we say professional advice that’s in the legal community, the financial community, as well as the tax planning community, and really a couple of key things are, I find a lot of folks might fight for, they’ll be arguing over alimony, Jim, and the thing to remember is that if you’re the one paying the alimony, that’s a deduction for you on your side, and the person receiving the alimony, it’s taxable to you, so we want to make sure we are fighting for the right things at the right time.

The same with retirement plans. If I’m looking at all the assets and you say, well I want half your retirement plan, and then your spouse ends up with the equity in the home, that might not be equitable because again from a tax st andpoint, so it’s just really important, I find a lot of folks gets exhausted in the process and yet don’t end up with what’s rightfully theirs because of taxes, so that’s a huge thing to just, I think to remember that, wait a minute, I want to make sure I’m always asking about taxes, and how it’s going to affect me today as well as how potentially it could affect me down the road.


JIM: I think that’s a great point. I’ve got a friend of mine in the business and what he does when he shows people their IRAs, he takes out an estimated tax amount to show them what it’s really worth, so for example if someone’s got $450,000 in their retirement accounts, if they’re Traditional retirement accounts that will be taxed later, and let’s say that couple has been in, between state and federal they’re in a 30% tax bracket, well that’s basically a third is going to be to Uncle Sam, so if you’ve got $450 it’s really only worth $300 when you take taxes out, but people like you said will look at that $450 and say that’s what it’s worth.

The other thing is too that I see, when you look at the cost of liquidating an asset, you’re looking at a home, if you’ve got to liquidate a home there’s a whole bunch of issues with that, might be paying realtors, attorneys, all these other costs that might be involved in selling a home, and is that included versus the stock portfolio that you can do a transaction fairly inexpensively today, so as you said all assets are not equal.


TIANA: Right, right, very true, and under covering those assets too, because we know that everything obviously isn’t on the tax return.

I think the other thing that I find is that a lot of folks knee-jerk into it and then they’re in it, and it’s a long process. I don’t care who you are and how much assets you have, it’s a long process, and it’s going to be effect every aspect of your life, and we don’t recognize that. Unless you’ve been through it, you really don’t recognize how everything changes, everything, and so be prepared for that and make sure that you have, I always say your closest network, those one or two or three people that really you can lean on and cry.

I kind of meant that literally because crying in front of the judge and crying in front of the attorney and crying in front of the accountant, in other words we’ve got to, once we’re in the process, we’ve got to hold it together at the moments that you’re on the clock. I had a divorce attorney recently say to me, my goal is when I see the total assets, I get a third and each of the spouses get a third, and I said, well that is an interesting philosophy, because what that’s telling me is his or her goal as a divorce attorney in this case is not really to quickly make it work out. It’s really to complicate it more, and so I say the more that the spouses can be calm, and yes, you might not like that person but bringing all that emotion forward blurs your vision and blurs the decision making power for your best interest.


JIM: Yes, I’ve seen it already too, with spouses that are fighting and each of their attorneys, oh, yeah, we’re going to stick it to them, we’re going to stick it to them, and they just feed on those emotions and at the end of the day the attorneys stuck it to them.

At any rate, let’s take a short break. When we come back let’s talk about someone’s gone through the divorce and what things they need to prioritize to get back on their feet, so please stay tuned.



JIM: Welcome back as we continue to visit with Tiana Ronstadt, and Tiana has had a lot of experience with her practice dealing with folks going through a divorce and then also dealing with women and women’s issues as a female advisor. She’s well respected in the industry, and she’s come up with a lot of different life experiences which she’s able to help a lot of people with.

Tiana, before the break we were talking about all the pitfalls of a divorce, and I think we both can agree, if there’s any way to save the marriage that’s usually the best way to go about it, right?


TIANA: Agreed.


JIM: But let’s say they can’t work it out, they got the irreconcilable differences, and they’ve gone through the divorce and now they’ve settled on what they’re coming out of that marriage with, what are the priorities that you’re looking at for people as they go forward?


TIANA: I love that question, Jim, because it’s exactly what I talk about, and the first that I always say is family first, meaning, okay so how are you going to now function in this new you, whether there’s children involved and joint custody, I mean, how are you going to function? Because the more you can focus and feel some control on your new schedule and your new life, that then can lead us to the next two, so really there are three things.

One, family first. The second thing is looking at your budget, looking at what you do have, what your expenses are, what your old habits, possibly you might have to break some of those. You might have to, you know, leave some things, and/or you might have to get a job. If you don’t already have a career, and then that’s really number three, how do you figure out what you can do, what are your talents, what are you good at, what would you like to do, what do you have to offer, and it might not be, Jim, a lot of times that they need to work but they want to work. They want to do something else that’s outside of themselves, so those are really my three.

Family first, look at how does this new you, this new role and new schedule work. Two, look at the budget, look at how is the cash flow now in your household, and then three, finding a career or a job to help sustain your living or just sustain yourself.


JIM: I find a lot of people who have gone through a divorce, it really has a devastating impact on their finances, and it’s really a step back for people, and you see a lot of divorces and I’ve talked to a lot of couples and they’re under a lot of stress. They raise the kids and they’re busy raising the kids, and the last one leaves for college and all the sudden they look at each other and it’s like, okay now what, and you see a lot of people getting divorced at a later stage of life, so how does that impact their retirement planning?


TIANA: Recently I just read an article about the graying divorce, talking about that it’s devastating, and it’s devastating to the fixed income, it’s devastating to the lifestyle that you thought you were planning for, so I always say you want to plan for the worst and hope for the best, and so I’m telling clients now, I try and work in when we’re talking about retirement planning and what you’re saving for, what does that actually look like? What are you going to be doing? What are things that you like doing together now? Because you are right, Jim, there’s a lot of folks that they’re in the same house and they’re focused on those kids and the kids is the primary thing that they’re interested in, if you will. It’s the one thing they enjoy doing together, and when that’s gone, what now? What do we enjoy doing together? And it is, it’s devastating.


JIM: I have come across a lot of widows, widowers, divorcees, and they don’t know that they may be eligible for an ex-spouse’s or deceased spouse’s social security, so I’ve seen a lot of them get into social security age and let’s say it’s the female that decided to be a stay-at-home mom, she doesn’t have a lot of credit towards social security, and she’s trying to live on maybe $1000 a month where she may be eligible to go on the ex-spouse’s social security, get half of it if they’re still alive, or potentially get all of it if they’re deceased, because if they’ve been married for 10 years or more they may be eligible for that spouse’s social security check.

Do you find the same thing when you’re counseling clients, that they’re really not aware of some of these resources available to them?


TIANA: I do, Jim, all the time, and I also in counseling, if I’ve got somebody that’s been married nine years or nine and a half, you know, I encourage them to stick it out. I mean, I really do because that is a benefit that is not well known, and I think depending upon when you got divorced too, you might have forgotten. I have a client that was in recently. She lost her first husb and. They were married over 10 years, but he also passed. She’s now lost her third husb and and so she’s been married three times, never divorced, but widowed. I mean, it’s devastating, and she didn’t even know that she would be eligible. I’m like, it’s amazing to me, so, you know, it’s something that I do think that this independent idea, be strong, and those are all great, but do know that you have some valuable resources that are out there that, no, I don’t think folks know.

Now with the great web site that SSA has done as well as you can set appointments at the local one all over, it’s becoming more and more known that at least you can have a conversation with Social Security.


JIM: The other thing that I would mention too that I don’t think people are aware of, because I see this all the time with widows and widowers, we do a lot of legacy planning for the surviving spouse. Well, you could also say the surviving spouse from the st andpoint of someone who just got divorced, and when you’re filing jointly, a lot of people, your deductions, your exemptions are twice as high as a married couple. Your brackets, you could make twice as much before you get into the higher brackets, and a lot of people, they become single and all the sudden they don’t realize how much more their income taxes will be as a single person, especially if they got divorced right after the kids moved out and all those deductions and exemptions moved out, they’re used to all these years of paying very little in tax and all the sudden they might have been getting big refunds, now they’ve gone from big refunds to owing big checks, and they’re barely getting by. Do you see people getting shocked by that too?


TIANA: Oh, absolutely. We do know that the statistics tell us that the female traditionally, the wife’s st andard of livingly drop by 27% whereas the male st andard of living will actually go up by 10% in the divorce, and that’s for the taxes is one, the actual spending of potentially the spouse that’s factored in there as well, and more importantly all those extras that we’ve talked about.

One of the things that I tell folks during divorce negotiations is who’s going to pay for the kids’ extracurricular activities, the sporting events, all the sporting equipment. I find that that’s not really talked about a lot, and then all of the sudden you need new soccer shoes and that really wasn’t in your budget, and yet your spouse doesn’t have to pay for that, so all those things, Jim, that, yes, are going to factor in to how am I going to be an independent woman, and is that really what I want, or can we try and just talk about this financial piece going back to the beginning.

I always say, money gets the bad break. Everyone blames money for the reason that they’re fighting and the reason, when really I think it’s that we’re just not having better conversations around money because there’s fear, there’s anxiety, there’s all those, why would I want to jump in a conversation about that, so try and find somebody that can talk with you and help guide that conversation just so you’re able to communicate.


JIM: Tiana, this has been great, and my piece of advice out there, if you decide you’re going to go it alone, don’t go it alone.


TIANA: That’s right.


JIM: So if you’re getting divorced, make sure you have a team of advisors, it’s well thought out, because nobody comes out of a divorce a winner. At least not financially, and if you’re contemplating that there are so many issues you want to be prepared for, I think the point that you made, someone getting divorced nine and a half years into a marriage, I mean if you live somewhere separately and stay married to get to that tenth year, financially that might be a really good decision.

Tiana, thanks a lot.


TIANA: Thank you, Jim.

What is your story?

[podcast src=” andard/autonext/no/thumbnail/yes/autoplay/no/preload/no/no_addthis/no/direction/forward/” height=”360″ width=”450″]Transcript to follow

JIM: I’ve really been looking forward to today’s guest for a long time, and that is Bo Eason, and many of you might recognize that name because he was a former NFL st andout, has played many years very successfully and I think maybe I’d like to hear your story, Bo, and our listeners would like to hear your story because you were a pretty unlikely NFL player, and what really impressed me about it all is we hear the stories of a lot of professional athletes that once their time runs out, shortly afterwards they don’t know what to do with themselves and they’re broke, but you had a successful transition from retiring from football to your next phase in life, and I think this is going to be helpful for our listeners because with all of transition in the world today it’s good to always come out on top when change happens, and I think you do a great job of coaching people on how to do that, so with that welcome, Bo.


BO EASON: Thank you, Jim, thanks for having me, and yeah you’re right. I saw something on, I don’t know if it was on the news or a study the other day that was saying that our parents’ generation got a job when they were 18 and they retired when they were 65, one job, and if you think back of your parents that’s how you remember them and then they say the generations now, even us, we’re going to have, and the kids coming up are going to have five to eight jobs, different occupations in their lifetime rather than one.


JIM: It’s just amazing, and it’s such a fast paced world today it’s easy to get left behind, but you teach people on how to stay on top. I think a lot of the myths that are out there are the NFL players or the NBA players or Major League players, they all were walking around with a silver spoon, they just had this natural ability and they just walked into it, but I think you came from a much different background. Can you share that story with our listeners?


BO EASON: Yes, I sure will. As ESPN would have you believe or the media in general will have you believe that elite athletes were always elite, and that is the biggest myth. If you can think of the best athlete that you’ve seen lately or in the past, whether it’s Michael Jordan or Stef Curry or whatever it is, these guys have all had to struggle, and ESPN will not tell you that because they don’t want to give any credit to hard work. They want to give credit to like hey they’re gifted, I’m not; hey, they’re gifted, you’re not. That is a myth, that is a lie.

My story is really similar, Jim, to every other elite athlete that I’ve ever met, and it is, when I was 9 years old I drew up a 20-year plan. It was a dream that I had to be the best safety in the NFL, and I drew up the plan with school paper and cray, and I still have that plan. It’s 45 years old, and I followed that plan for years.

Now look, the whole 20 years leading up to that day it never looked like it was going to happen because no college ever recruited me, I didn’t get a scholarship to college, and by the way neither did my brother. We went to high school together and grammar school together. We didn’t get scholarships. We both had these dreams of playing pro football. He went to a junior college. I went to a division two college called UC Davis in northern California that doesn’t give any football scholarships, basically football is played there for fun, and cut to two four years later my brother is a first round pick to the New Engl and Patriots and I’m a second around pick to the Houston Oilers.

There are bumps in the road the whole time. The whole time people are saying you’re no good, you can’t do it, you can’t achieve it, but if you stay true to your dream and stay loyal to your plan instead of what other people are saying, then it works out. It works out every time. Jim, if we thought of like who’s the greatest football players of all time, like Jerry Rice, Joe Montana, Earl Campbell, and those are just three that I mentioned, but those are three of the best to ever play the game, and by the way all three of those guys were teammates of mine. Those guys all have the same exact story as me and my brother have. The only reason you don’t know about it is because ESPN and those sports media shows, they won’t tell you that. They will not say it. If you talk to Joe Montana or Jerry Rice, they would tell you.


JIM: I just found it fascinating how you broke on to your division two team, because you were pretty much warming the bench. How did you break through that the coach noticed you?


BO EASON: I snuck on to the field. I talked the equipment managers into giving me a jersey so that I could at least run on the field and wave to my mom and dad who drove three ours to come see me play, and I wasn’t, I practiced with the team, they let me practice kind of like as a joke because they thought I was funny and they thought I was a freshman that was little and kind of like a little mascot for them, and so I practiced and then it came game time and I talked the equipment managers into giving me a game uniform so that I could get out on that field. Well, as fate would have it they gave me the same jersey, the same jersey number as our best player, the captain of our team, so he wore number two and they gave me a duplicate of the best player on our team’s number, number two, so they told me to sit on the bench and don’t get in the way of the coaches and stay out of the way of the real players, and I did, the whole game, until about a minute 20 left in the game, and we’re kicking this team’s butt, we were just beating them like 34 to nothing, and I keep looking up at the clock as it’s ticking down. I keep looking up at my parents in the gr andst ands who are sitting there wondering why they came all this way to watch their boy sit on the bench, and I said this is my chance right now, and Darrell Goss who was the best player on our team, the captain, number two was on the field and I talked him in to letting me step on the field for him and he stepped off, so he stepped off, I stepped on, and I ran down on a kick-off team and I made the tackle on a kick-off team and the crowd went crazy, right, when I made this big tackle on the kick-off team.

Well, right as I tackled him I put my arms up in the air and I’m cheering with the crowd. I hear over the loud speaker this, tackle made by number two, Darrell Goss, and so I dropped my h ands Jim and I ran off the field as fast as I could trying to be investible because the part that I haven’t told you yet is Darrell Goss is a 250-pound black dude on our team, the best player on our team. I at this time weigh 145 pounds and I’m a white guy, so that’s how I broke through. I thought I was going to get kicked off the team after I did that, and lo and behold that wasn’t the case. They kept me on the team. They kept me forever and I ended up being probably the first or second best player to ever come out of that college.


JIM: You know, even before that point you were kind of kicked off the team because you certainly didn’t make the team, but your perseverance, you just kept showing up and they let you stay and practice.


BO EASON: That’s the thing I found out, Jim, the one ability that I have that takes no talent at all, by the way. I just have one ability, and I always teach my kids this. I go, look, I’m not going away, that’s my only, that’s the only talent I have. I am not leaving. If you cut me from Little League which happened when I was in Little League, I just came back to practice the next day, and they cut me again. I said, no, no, I’m just going to practice, and then eventually I just keep showing up to Little League or showing up to college, to UC Davis, eventually they go, hey you know what, I guess this guy is not going to go away, let’s just give him a uniform, let him just be out there, and eventually they let me be out there and eventually I got into the games, and just imagine every listener on this podcast right now. If you had one ability and that ability was you weren’t going away, just think how successful you’d be.


JIM: It’s unbelievable. I think Winston Churchill said it best when he said, never, never, never, never, never give up, right.


BO EASON: Boy, it is so true, and you know what’s attractive about it, Jim, is that people respond to that kind of person. That kind of person who just is like no, I want to play, and they’re going no, you’re actually not on the team, and you go no, no, I just think I’ll stick around and just practice, and they’re like you want to practice? Yes, I want to practice. They never even heard of anybody wanting to practice.


JIM: Well, that’s fantastic. Hey, we’ve got to take a short break. When we come back, let’s transition that now to how you’ve transitioned from football. We’ll spend a couple minutes talking about your NFL career, but how you transitioned from that NFL career being very successful and had something to retire to. Please stay tuned.



JIM: Welcome back as we continue to visit with Bo Eason. Many of you will know him as an NFL player but I know him as a very motivational coach and speaker and presenter and author. I was just enamored by your presentation several months ago that I just had to get you here to share. It was such an inspiring story to me because there are so many people out there that they just give up, you know, I’m not good enough for this, I’m not good enough for that, and you are a walking living example of how staying the course can produce big results.

Before the break you talked about how you just stayed there and you made the college team, so how did you go from somebody who was invited not to participate on the team to someone who was a second around draft pick?


BO EASON: Yes, well, once they allowed me to play I started to excel. I had been training myself for many, many years before that and my body just want mature, you know, it never, like I didn’t have to shave in college. I don’t even think I had hair under my arms when I went to college, and so I grew kind of late, so I developed in college and got bigger and stronger and faster, and so all that work ethic of being a mutt so to speak, all of that work ethic that I put in because I got cut and stayed home finally caught up to my body by the time I was a senior in college, you know, I was best safety in the country and those dreams that I had way back when I was a kid and that plan that I followed came true.

What I’ve learned, Jim, is I’ve just done that same thing, talk about transition, I’ve done that same thing over and over and over again, so whatever occupation I’m any want to be the best in the world at that occupation, that’s my, that’s how I operate, and then I switch occupations and take the same principles that made me the best safety and channel it right over into being the best playwright or stage performer. It’s the same exact principles. It doesn’t matter.

The problem is most elite athletes don’t do that. Most elite athletes, they end their career in pro sports at the very top and then they don’t want to start over at the bottom again. They don’t want to apply those same principles that made them the best at their sport, so it never works out for them. You have to be willing to start at the bottom of the next mountain and work your way up, but if you apply the same principles that got you to the top in the first place, your journey is much shorter.


JIM: So let’s fast forward, you’re an NFL player. You know your days are numbered as you get older and the injuries crop up, what was your plan as you were winding down your NFL career? What steps did you take to have a successful transition that you’ve had?


BO EASON: Yes, I did exactly what I did when I was 9, so now I was 29, right, so at first I drew up the plan when I was 9 and then 20 years later I’m 29 and I created a new 20-year plan when I was 29. The only thing I had in my head when I was a little kid was I want to be the best safety in the world, so I just took that same wording and I changed the word safety and I exchanged it for this. I want to be the best stage performer in the world, and that was it, Jim. I mean, that’s how simple it is.

I drew up that plan, I moved to New York City and I started getting my feet and my butt on a stage and taking every class that I possibly could and learn how to be the best in the world at being on stage, so this is what I did. I went to every kid that was? My classes, and I was 29, already had a career. These kids were like 18 years old. I went to all those classmates of mine in all the theater classes and acting classes and improv classes and writing classes, I went to those kids and I say, hey, who’s the best stage performer of our time, who is that, and at that time this was about 1990, they all said oh, that’s Al Pacino, and I said cool, where he is? Where is this Al Pacino guy, and they all said well, he’s a movie star, he’s probably on a movie set or he’s in his mansion offer whatever. I said, okay, I got to talk to him because if he’s the best then he’s the only one who can tell me how to take that mantle because what I’ve learned is that people who are mediocre and people who are second best, for one they don’t have the information to help you, and two, they won’t share the information to help you. You’ve got to go to the top dog.

I had my agent from football, Jim, I called him up, I said man, can you get me a meeting with this guy Al Pacino, he’s in the Godfather, he’s in Goodfellas, you know, Serpico. After about three or four days, Jim, my agent got me a meeting at Al Pacino’s house, and I went to Al Pacino’s house and there was snow all over the ground, because it was Thanksgiving and it was in New York, and he knew why I was there and he said Bo come on back, I have a room back here where I play pool, and he had a room back there with his cool pool table, and I’m back there with Al Pacino, and he goes I underst and why you’re here, and I said yeah, man, I’d really like to be the best and everyone tells me you’re the best, and he’s a very humble guy. He said, well if you want me to break that down for you I can do that. You can tell you exactly how to do that, but it will probably take you 12, 15 years to get there, and I said that’s great because I work well in those kind of time lines.

Basically, Jim, for three hours he answered every question. He told me who to work with, how to work with them, basically if you took what Al Pacino said and you narrow it down to a sentence, he basically told me that if I wanted to be the best stage performer of my time then I was going to have to have my feet on a stage more than anyone else has their foot on a stage for the next 12, 15 years, and if I do that then no one will be able to keep up with me, and he said your ability to put your feet and your butt on a stage, that’s up to you, that’s in your control. You can’t control your height or how you look or your talent level, but you can control how much effort you’re going to put by being on a stage more than anyone else and I said, I got it, I know what to do.

I followed that plan for about 15 years, and I did everything he told me to do. I worked with the teachers he told me to work with. I put my butt on a stage more than any other human being on the planet, and because that was up to my control, and I did it. Listen, during those 15 years Jim I never saw Al Pacino again except on movies and stuff. I never like visited with him. I spent three hours with the guy, he told me exactly what to do and I did it, 15 years later, Jim, I’m back stage on Broadway, New York City, opening night of a play that I wrote that I’m the only guy in, and I’m back stage about to die because I’m so nervous to face the New York critics and the New York audience, and I run out there and I begin the play, and I begin to do it and I am nervous. I mean, you know, I’m having like an out of body experience, but about five minutes, 10 minutes into the play I make eye contact with a guy sitting in about row 5 right on the aisle and it’s Al Pacino, sitting in the audience. We make eye contact, and he nods his head at me, and that was it.


JIM: Wow.


BO EASON: Now, I never saw Al Pacino again after that. All I know is I did what he said and he gave me the head nod, and so I did that performance, Jim, 1300 times, one performance 1300 times, and when you do something that many times you get to be pretty good at h andling audiences and dealing with mal functions and, imagine that play, I had done that play for 17 years, imagine what has happened in those audiences while 17 years goes by. People having heart attacks in the audience, people leaving, people throwing stuff, people loving it, people hating it, you know what I mean.

Once you go through that kind of gauntlet, people started to come to me, owners of businesses started to come to me. They came to the play to see a play. They would come to me back stage and they would say hey, Bo, can you bring this to my company, can you come talk to my company, and I go, I don’t know what you’re talking about. This is a play, I don’t go to companies. I didn’t even know there was a speaking world out there at this time, and they kept asking and they kept asking, and finally one guy says to me, Bo, can you bring what you do to my company, and I said no, and then, Jim, he told me oh, that’s too bad that you don’t do that because we’d love to bring your whole family to Hawaii and you do this, and I go, well maybe I do do this, so that’s how the whole speaking world then began, how I started to speak to companies and to audiences.

We didn’t know why people were attracted to this play and to my speaking. We started asking them, and what we found is people want to be able to learn to do what I do, and that is be able to speak their dreams in front of other people and tell their story in front of would-be business associates or customers or audience members. If they have the ability to share themselves in front of an audience, in front of people whether it’s one on one or one to a thous and, then you have the ability to build something, to share something, and to break down this barrier of trust that has been demolished as you can see in our country and in our world. There’s such an erosion of trust. Just turn on the news, turn on politics, turn on Hollywood. There is no trust anymore. The people who have the ability to share themselves in front of other people, tell their story, they break down those trust barriers so fast because story connects you to other human beings. This is what we found out what other people wanted to do to learn from me to build their business and that’s why we started speaking in front of them, and then training them to do exactly what I do.


JIM: Let’s just exp and on that just a little bit, because I think this is the best part of everything that you talk about. So many people are so full of here’s all my credentials, I spoke here, I wrote these books, I’m wonderful, I’m wonderful, I’m wonderful, I’m wonderful, and they’re really missing the connection. You do a coaching program where you’re teaching people how to make these connections. In today’s world whether you’re transitioning to a new job, you’re applying to get into a college, you’re looking to start a business, you’re looking to gain a customer, it’s all about being connected in today’s world. Your connections got you to Al Pacino to get to this point, but it’s all about being connected and the quicker you can make those connections the better you’re going to be. Talk about that personal story and where you put it.


BO EASON: Yes, we have some people in the finance world on this podcast and then a lot of people that own their own businesses or entrepreneurs or solopreneurs. It doesn’t matter your occupation. What matters is your personal story. Your personal story is the key to the kingdom for you because people cannot follow a vision that talks about a resume, so if I got on this podcast this morning, Jim, and I say hey everybody, I went to Harvard which I didn’t but say somebody says that, I want to Harvard University, I got straight A’s and blah blah blah and I start listing all my accomplishments, people don’t care. There’s nothing to connect to. All that is is information.

If I tell them that when I was 9 years old I had a dream and as soon as I made that dream I got cut from the Little League team, that is a personal story that people connect to immediately, so now every listener, every audience member, every person you ever run into, if they hear your personal story, something simple like I just said, the couple of sentences like that, they now are connected to you as a human being and they will help you build whatever vision you have for your company, but they can’t help you build if you tell them a resume. They don’t know how to help you. They do know how to help you if you have human connection, which is a lost art in our world as you can see. This restoration of trust is huge right now.

Gallop started doing a study, a survey in 19 I think 72 was the first year they did it, and they asked people, do you trust your neighbor, and one-third of the people surveyed, one-third said no, one-third, so now that’s 1972, so now today Gallop still does the same survey. Now it’s two-thirds of the people do not trust their own neighbor. The trust has never fallen since they’ve been doing the survey. They’ve never fallen this low. You can see if, if you turn on the news tonight you see it, you go oh, they’re lying. You see a politician you go, oh, I don’t trust them. You see, you know, somebody on TV trying to be an advertiser or a speaker speaking on stage you’re going like this, wow, you’re really not trusting them unless they authentically tell you their story, and I’m not talking about the story of the greatest moment of their life, I’m talking about the story of the darkest moment of their life. That’s what we’re interested in as human beings. That’s what we connect to.

I’ll give you another example just to people can get their heads around this. Let’s say all of us on this podcast today are going to make a movie about climbing Mt. Everest, conquering Mt. Everest, just think right now if we’re going to start that movie, what is the first frame of film we are going to show that audience? What is the first thing we’re going to show the audience to get this movie started? How are we get to get our audience to connect with the characters in the movie? Do we start them on the top of Mt. Everest, putting the flag in the mountain and waving and being happy? No, that does not connect you to your audience.

I’ll tell you what connects you to your audience. You start your characters at the bottom of the mountain looking up two miles into the ski going, how in the heck, how are we ever going to conquer that? There’s no way, it’s impossible. That is what the audience connects to. They connect to the climb, to the against all odds. They do not connect to success. They connect to what it takes to be successful, the climb, always, so all start your story, always start your meetings or your date or your presentations with a personal story, one that shows you starting at the bottom and busting your butt to get to the top. That’s what people connect to.

Now, once you do that, Jim, now you’re in a whole different place than every other competitor out there, because what’s every other competitor going to do? They’re going to talk about oh, I’m so smart, I’m so great, I’m going to make you 20% on your money. People don’t even underst and what that even means, only thing they can underst and is this, I got dumped at the senior prom, I got cut from Little League. I entered a dance contest and I was the first one to be kicked off. That’s what people connect to, that’s what people love. If you’re not doing that, I want all, everybody to start doing that and then you watch your business grow. You watch people start to build your business for you because they’re involved with you and they help you. That’s what I want everybody to do.


JIM: You need a big room to bring Bo in because he’s going to be bouncing off the walls with excitement, and he’s passionate and it’s fantastic. I just have to test, because after hearing your speech I went back and changed some things. I do professional speaking. I was told awhile ago I’m kind of modest, I don’t like bragging about myself or any of that stuff, and you’re told you’ve got to put your credentials up there and all that, and I started incorporating the stories and I get a lot more people coming up to me afterwards and they’re not asking about the tax section that you talked about. They’re saying, hey, you know, I did the same thing when I was younger and I had the same issues, and those connections are unbelievable, how much easier they are when you’re willing to be a little bit vulnerable. You open yourself up and you let people know, hey, I’m real.


BO EASON: Yes, story begets story, so once I tell my story everything else is thinking about their upbringing and their life, and then they start to share. That is the human connection that is missing in business, and it’s so simple that it’s almost silly to even talk about, but if you think about the people like the generation before us that were so successful, I guarantee you think about your gr andpa right now or your gr andma who was really successful, the reason they were is they knew how to tell stories. These generations coming up, they don’t know how to tell stories because they’re stuck on electronics all the time, so they don’t have that human element, that human connection, but it’s what we all crave the most. It’s what we are missing the most in this world.

If you can be the solution to that problem, then you are going to build your business and people are going to follow you and they’re going to help you.


JIM: If people want to get more information, Bo, I know you’ve got a web site, you do training programs. How do people connect with you to go through this process?


BO EASON: Yes, the best way to do that everyone is go to and my first name is Bo, B-o, and my last name is Eason, E-a-s-o-n, dot com. If you go there there’s a lot of training that we offer. The three-day event that we do, we do it twice a year in La Jolla, California, which is done in San Diego in a beautiful state of the art theater and we teach entrepreneurs, we teach business owners, we teach financial advisors, elite athletes. You know what else, who we teach a lot, it’s funny, elite military, like Green Berets, Navy SEALs, a lot of them because they’re coming out of the military and they want to be able to speak and share their story so they can be a civilian and work on the outside of the military. It’s a really great three days. What I do is I bring in the people who trained me for 15 years.

The number one thing that people get from this, Jim, is they physically embody, because that’s how I was trained to physically embody your story so that your story is walking around with you all day every day, and it makes you so that people cannot dismiss you. They have to deal with you.


JIM: Again that web site is?


BO EASON: The web site is


JIM: All right. I really appreciate this, and I trust that we have inspired some people there to make some changes and take advantage of being the best they can be. Hopefully a few of them will go through your training program. I know I picked up a lot from the session that I was at and it was fantastic. It’s such an inspirational story, Bo, I appreciate you sharing.


BO EASON: Yes, thank you, Jim. It was great you having me, and it was great to catch up again.

Stressed out

[podcast src=” andard/autonext/no/thumbnail/yes/autoplay/no/preload/no/no_addthis/no/direction/forward/” height=”360″ width=”450″]Feeling a little bit stressed out? Do you often turn to food at times like this? Join Karl Susman and guests on this week’s show as they talk about what to eat and what not to eat when you’re feeling stressed! Transcript to follow.

JIM: Hi, Ramona.


RAMONA FASULA: Hi. How you doing?


JIM: Fantastic. I am so glad to have you. We had a guest on awhile back and he talked about having a wellness coach and I had never heard of that before. In our industry, I’ve heard it said that, and I’m sure it’s kind of common between both of our industries that people will spend all of their health gaining their wealth and then they’ll spend all of their wealth trying to get back their health. Our guest that we had on talked about how important he saw having a healthy lifestyle can play in people’s financial success, especially later in life, so when he talked about he personally used a wellness coach and he used your name, I said, you know what, do you think she’d be interested in being a guest, and he says I’m sure she would and you’re here. I’m so glad to have you, Ramona.


RAMONA FASULA: Thank you so much. I am so excited and, you know what, you said before your health effects every aspect of your life and your finances are no different. The reason that I became a health coach is I watched my dad pass away from complications of diabetes. I don’t want to have to see anybody ever go through what my dad had gone through. It really started to take its toll on my mom who was his sole caretaker and it doesn’t have to be. There are people out there that are educated on wellness and nutrition that are readily available that can help people make the right decisions when it come3s to their health.


JIM: And that’s awesome. You described how you got into be a wellness coach. Now, exactly what is it that a wellness coach does? I’ve heard of personal trainers. Isn’t that just a personal trainer or what do you do that differentiates yourself?


RAMONA FASULA: Well, now, what I do as a wellness coach, a wellness coach is someone who’s very educated on nutrition and our primary job is really to motivate people to get well. People know they have to get healthy but I think motivation is a big issue with a lot of people. They know they need to do it but they just need that extra push to get them there and that’s where health coaches come in. We’re also trained to figure out what the blocks are that are preventing people from reaching their health goals and then we help them to get over that so that motivation and that accountability is there when you’re working with a health coach.


JIM: Is this something that’s kind of new because I’ve been in the business a long time and never heard of this before? Are there a lot of you out there?


RAMONA FASULA: It’s becoming very popular now. I would say health coaches started emerging about, I would say about five or six years ago. We’re fortunate enough that we have people like Dr. Oz that are endorsing how important it is to work with a health coach. There was actually a senator in Ohio that actually recognized National Health Coaches Day in January and he wrote a very nice letter supporting this profession and stating how important it is for what we do and how it’s important to work with coaches to help solve this health crisis that we’re dealing with and it’s getting really scary with the number of people with diabetes going up, obesity, you name it. It’s just really, really terrible and, believe me, I’ve seen diabetes. I’ve seen what it can do to people and I do not want to see anybody having to go through that when they don’t have to.


JIM: I’ve seen the statistics. We’ve had people on before that have shared this with us. The big three, which is cancer and heart disease are both at something like an average expenditure per family I saw was like $180,000 and then long-term care, which can incorporate any number of illnesses, was the number one at $270,000. Not taking care of yourself can wipe out everything that you worked so hard for your entire life so I think it is important. Just as important as picking the right mutual fund is picking the right healthy living st andard. I know in my business, I have a coach that helps me see things I can’t see in front of my face. They can take an outside look, give an objective option, and help guide me in the right path with areas I need to fine-tune, and I’ve got a lot of clients that have business coaches that are in business for themselves so why not a health coach. Let’s start out with what are the biggest issues that you hear people complain about when it comes to healthy living? I know, for me, I hate diets.


RAMONA FASULA: Well, you know, believe it or not, the biggest issue that people always complain to me about is the fact that they have no energy. Well, let’s face it. I mean we’re not eating the right foods, we’re stressed out. We’re not getting enough sleep. These are major energy zappers and when you don’t have the energy, you’re not going to perform at optimal levels in anything you do throughout the day. It’s pretty scary. Food effects everything. It effects your mood. It just effects everything so we have to make sure that we’re eating the right types of foods day in and day out and what I do, Jim, I make it super easy for people to get healthy. I have a client who she has a sugar addiction. By the second session, she was off sugar and she said I’ve followed your advice to a tee and I cannot believe how quickly my body responded. The cravings went away. She read my book on underst anding sugar and she saw what sugar could potentially do to the body. She’s off sugar now. She’s doing great after only two sessions but she needed that motivation. She knew that she needed to get off the sugar but she wasn’t quite sure how to get the motivation to do it and then someone had referred her to me and, after two sessions, she’s doing fantastic.


JIM: Now, I’m really busy. I go back to back to back meetings. Sometimes, I barely even have time to have lunch or even dinner for that matter and I know I’m probably not eating right or at the right time. It seems like the way most of us are living, we’re running a million miles an hour, barely have time. How would we even find time to engage a coach like you? I’m sure it’s a time consuming thing that people have got to invest in. How do you overcome that?


RAMONA FASULA: It’s an investment in yourself so it’s not like you’re investing in a mutual fund or a stock. It’s an investment in yourself and, to me, that’s the most important investment. You’re worth it. Do you know what I mean? You’re worth it so just taking time throughout the day. Put it in your schedule, going to the gym, and I always tell people this. You have your planner. You know what meetings you have during the day so, as you’re planning your week out, plan to go to the gym. Say, if you’re a morning person and you like to get up early, 6 a.m., Monday, Wednesday, Friday, I’m going to the gym. You see it on your planner, you’re going to do it.


JIM: It’s kind of like in the investment world. We always say pay yourself first because, if you pay all your bills and do everything else and then whatever is left you save, you’re probably going to have a very meager retirement savings account so it’s probably the same thing with your health. If you don’t invest in your health first, you won’t live long enough to enjoy whatever it is that’s dragging you around a million miles an hour. Would that be a safe assessment?


RAMONA FASULA: Exactly, exactly. Like I said earlier, Jim, health really does affect every aspect of your life. It effects your work, it effects your moods, it effects your relationships. It’s just really scary. I mean I see on a daily basis what people are eating and I underst and the effects that food, both good food and bad food, have on the body but I tell people you know how you feel. When you eat that c andy bar, you know how you feel afterwards. Your body is going to tell you whether you’re putting something good into it or whether you’re putting something bad into it so listen to your body. It’s going to tell you exactly what you need and you know when something is off. You absolutely know when something is off. Listen to your body and just talk to someone like a health coach that can work with you and help you figure out what’s wrong. That’s what we do.


JIM: Hey, we’re going to take a short break and we’re going to continue to dive into what it takes to have a healthy life and how having a wellness coach can really help you achieve your goals. Please stay tuned.


JIM: Welcome, as we continue to visit with Ramona Fasula who is a wellness coach and author. She’s a certified holistic health coach and is the owner of Wellness by Ramona. Before the break, we were talking about what’s different about having a wellness coach versus just having a personal trainer. It’s really having someone on your right shoulder kind of saying, okay, you need to do this, you need to do this. If nothing else, maybe being accountable and also having a plan that’s workable for you and is right for you so let’s talk a little bit about stress. Ramona, I think all of us are feeling stressed. It’s a rat race today. We have sometimes people working two jobs or working two jobs for one company, people working a lot of hours, and I hear a lot of people talk about how they don’t have time to deal with their finances, people don’t have time to deal with their health and, some day, they’re going to get around to it. I’ve seen somebody h and those out, these round tuits, or a little round chip that said TUIT on there and, unfortunately, people aren’t getting those so how do we deal with all of this stress and how do we fit in being well at the same time?


RAMONA FASULA: Well, you know what, Jim, everything I do centers around food. I firmly believe that food is medicine. When you talk about stress, okay, yeah, it would be great to take a yoga class or to do meditation. I believe in all of that stuff. I think it’s wonderful. It should be part of everybody’s routine but, also, I look at food when it comes to stress so there are foods that aggravate stress and there are foods that actually help to alleviate stress and I just think this is so, so interesting. I was talking about sugar before. Sugar brings on stress. There’s a lot of people out there that have sugar addictions. You know I mentioned one of my clients earlier. Sugar leads to fluctuations in blood sugar and, in turn, that’s going to lead to mood swings. That places a lot of stress on the body so trying to stay away from sugar I would say is the number one thing I would recommend to everybody. It causes chronic inflammation, which is going to bring stress on as well. We’re hearing a lot now about gluten so gluten negatively impacts food and brain health. It also effects the gut. There are transmitters like serotonin, which are found in the gut as well as the brain. These control your mood, it controls depression, and it controls aggression, believe it or not, but these types of things we really need to look at. These things are going to aggravate stress. We’re eating a ton of processed foods. They promote irritability and bad moods so, in processed foods, you’re getting gluten, you’re getting sugar, you’re getting MSG, you’re getting Trans fats, which we’re hearing a lot about, and all kinds of artificial sweeteners as well. These are things that we need to be staying away from. People don’t realize these type of things bring on more stress in the body. We have enough stress in your lives, right, but if you’re not eating the right type of foods that’s going to add another layer of stress as well.


JIM: Let’s talk about one other issue and that’s sleep. I’ve talked to a lot of people, they’re barely sleeping through the night. They’re dragging through the day. They have their eight cups of coffee to keep them going. Comment on that.


RAMONA FASULA: Well, nearly 50% of Americans say that they’re sleep-deprived and sleep is another major cause of stress on the body and, again, as I said before, I relate everything to food so there’s actually foods that help to induce sleep and I’ll name a few for you right now. My favorite, cherries. Tart cherries, they have significant quantities of melatonin, which is a hormone that influences the sleep process. Cherries, who would have thought that, right, Jim?


JIM: Absolutely. I have never thought of that.


RAMONA FASULA: Yeah, things like nutmeg. Nutmeg is a sedative so how about before you go to sleep, make yourself nutmeg tea. Crush some nutmeg in hot water for 10 minutes and drink it right before bedtime. Nutmeg is a great sleep inducer. Things like yogurt and figs. A lot of times people are having trouble sleeping because they have a magnesium deficiency so, if you have a magnesium deficiency, eat things like figs with yogurt. It’s great, great, great for inducing sleep. Things like bananas as well. Bananas, the B6 that’s found in bananas converts tryptophan into serotonin, which is a mood relaxer, which will help you get to sleep faster. People don’t realize that these foods can help you sleep quicker and better.


JIM: Let’s talk a little bit about the solutions then. I’m hearing all of this and, if I’m somebody listening, it’s like, oh my god, I’ve got to learn so much stuff. How am I ever going to get started? Take us through the process. What do you do? If someone reaches out to you, what do you recommend? How do they get started? You said in just two sessions, this one gal had a transformation. What kind of time commitment does it take and do you build up to something or how do you do that?


RAMONA FASULA: It’s going to vary. My website is and what they would do is go to my website and just contact me, send me an email, and then the first step in the process would be to set up a consultation. In that consultation, we’re really going to look at what your goals are. Everybody has them. Everybody has goals, financial goals, wellness goals. We all have some type of goal. We look at what the goals are and then we look at your health history. We look at the health history of your parents as well because that’s something that’s super important. If heart disease runs in the family, you may not have it but it needs to be something that you need to look at. I really make sure I cover all the bases. We talk about everything and, really, I want people to get to know me and feel comfortable with me because just like with a financial advisor, you have to feel comfortable with the person that you’re working with so I take an hour and I really get into a great conversation with them and get to know them, get to know their health history, what their goals are, and then I kind of put a plan in place from there. The length of the program is entirely up to them. I will not push them into anything. If people have chronic conditions, I usually recommend they work with me for a six month period so we would talk twice a month and I either meet with them in-person, we could do a phone session, we can do a Skype session, and we can even do a session via email. What I like to do also in between sessions, I do accountability phone calls or emails so, if someone had a rough week and they maybe fell off track, then I work with them to get them back on track but they need to know that I’m always there for them. Even when the program ends, if they have questions for me, I’m always there for them. I have clients texting me at 11 o’clock at night. Some people text me from the supermarket. Hey, I’m looking at this label and I’m not sure if this is healthy for me to buy. Do you mind taking a look at it and letting me know? If it’s okay to buy, then I’m going to toss it in my cart right now, and I’ll get back to them right away, so I really make it a process where I hold their h and throughout the entire process because I think that’s so important. They’re not alone. I’m there for them. I’m there to help them reach their health goals and, by the end of that period, I will help them to reach their goals. I have gotten results with every client that I’ve worked within the past six years. I love what I do, Jim. I love what I do. I think that passion motivates people and everyone can tell just by talking to me how passionate I am about health and wellness and how passionate I am about getting people healthy because I just don’t want to see people suffer and there’s millions of people in this country that are suffering and they don’t have to.


JIM: That’s awesome. Now, I’ve got a tough question for you. I’m from Wisconsin and we’re known for beer and cheese. Does that mean I’ve got to give that up?


RAMONA FASULA: Interestingly enough, I’m glad you mentioned cheese. I don’t really eat cheese at all anymore. There’s a lot of saturated fat in cheese. However, there are vegan cheeses that are on the market. In fact, interestingly, there’s a woman who started a company. She was actually on Shark Tank and that’s one of my favorite shows. I love Shark Tank. She’s got a company called Heidi Ho because her name is Heidi. It’s vegan cheese. She became a vegan. She had a lot of health issues and she became a vegan and she started this company and she’s doing amazing with it and they’re exp anding throughout the company but try it. I’m not sure if they have it in Wisconsin yet but I know that she’s launching it around the company but there are always healthy alternatives to things that may not be healthy. As far as beer, it’s okay to have a drink every now and again. I’ll admit I’ll have a glass of wine every now and again but in moderation. I don’t ask people to give u things that they really, really like.


JIM: So you don’t have to give everything up. It’s just give up some of the bad stuff and you’re going to enjoy your health and your wealth in retirement. I make that comment to my clients all the time. You’ve got your health and your wealth, go out and enjoy it, and that health thing is usually pretty fleeting for people in retirement so if you’re not taking care of it now, get on the horse and start taking care of it so you can enjoy your gr andchildren. Hey, Ramona, I know you mentioned to me before we got on the air that you’ve got some resources for people. I know you published a book. Can you share with people what that book is and then you’ve got some eBooks as well.


RAMONA FASULA: I do. I love to write as well. That’s one of my passions and I’m going to be writing more books and e-courses and eBooks. I’m really excited about that but my first book is called “A Health Coach’s Guide to Heart Health”. It’s available on Amazon. Heart disease is still the number one killer of men and women in this country and it’s largely preventable so I take you through 11 steps to prevent heart disease so that was my first book. I also have some eBooks that I recently launched. The first one is Healthy Food Shopping 101, Healthy Living for the Busy Professional, and also Underst anding Sugar and Its Effects on the Body. You can go to to purchase any of those books and I also have a special offer for your listeners. If they’re interested in my coaching, I will give them a free copy of any eBook of their choosing so there’s three out right now and I’m actually getting ready to launch a fourth one on Living Well with Diabetes so the choice is theirs and I’d love to talk to your listeners and learn more about what their health goals are and talk about how I can help them.


JIM: One more time, if they want to reach out to you, they can do that by email or by phone.


RAMONA FASULA: Yes. They can go to and I’m going to spell my name because everyone spells it wrong. My name is R-a-m-o-n-a. If they want to email me directly, they can email me at and I’ll get back to them right away.


JIM: Well, Ramona, this has been awesome. I really appreciate you sharing. I know this is a little bit off the normal financial topics that we have but health sure plays a huge role in someone’s financial wellbeing. I really appreciate you taking the time to visit and teach us a little bit about something that I didn’t know existed until just a couple of months ago. Frank spoke very, very highly of you and you’re his personal wellness coach. I look forward to you helping others and I’m sure that if someone reaches out, then you could help refer them to other wellness coaches as well, right?


RAMONA FASULA: Absolutely.


JIM: That’s awesome. Well, thanks again, Ramona.


RAMONA FASULA: Thank you so much, Jim. Have a great day.

Time to travel

[podcast src=” andard/autonext/no/thumbnail/yes/autoplay/no/preload/no/no_addthis/no/direction/forward/” height=”360″ width=”450″]Travel time! Everybody loves to travel, the question is how do we pay for the trips we want to take? Join Karl Susman and guests on this week’s Susman Insurance Agency podcast to hear how. Transcript below.

JIM: Welcome to this week’s show and I’m really excited with our guest that we have today. As a matter of fact, we have Scott Lopez who used to own a little radio station WTKM in Hartford and it’s actually where I got my start in having this show so he has some strong roots in our program but Scott is out of the radio business and he started a tour company called Kettle Moraine Tours and he’s been running that for, what, 10 or 15 years, Scott?


SCOTT LOPEZ: Well, yes. In fact, we started, and good morning. I shouldn’t say good morning. I should say hello to you, Jim. I don’t know what time you’re listening to this so whatever time of the day, good day to you, and thank you for allowing me to share the microphones with you. This is a bit of a role reversal for us. In early years, I was the interviewer and, today, I’m the interviewee so I’ll do my best to adapt to that new role. The tour company actually started a couple of years after I purchased the radio stations I had been working at for almost 20 years. I was a high school sophomore when I was offered the opportunity to take a part-time position at the local radio station. A high school friend of mine worked there and advised me there was an opening and I almost really fell into it by accident. I had kind of put it aside because I didn’t have my radio/telephone operators license, which, in those days, required some knowledge and a little Morse code and a little of this, and it sounded too much like work. Today, to get a radio operators license, you need to be able to sign your name so it has changed a little bit but, in that timeframe, I just happened to be walking by the door where the radio station was located on the second floor of a building in downtown Hartford and I said, oh, that’s where it is. I walked up and asked if my friend was in the office and they said, no, no, he’s only here on weekends, and I said, yeah, he mentioned there was an opening recently. Oh, we still have that opening. Here’s an application to fill out. I said, well, I don’t have this radio/telephone operators thingy and they said, oh, you can always get that later, so, ah ha, alright, I filled it out. Low and behold, they asked me to come in the next night because I’d be starting the day after and it was baptism by fire back in 1971. In 1990, I had the opportunity to purchase the station from the folks who had hired me and owned it for a little over 20 years and sold it just the end of 2011. I had the opportunity earlier that year to celebrate. I think you were at the 20, 40, 60 celebration, Jim, 60 years for the radio station, 40 years that I had been an employee or at worked there, and 20 years of ownership, so that was kind of a fun milestone to celebrate with all the folks that helped us to get that far. But, along the way, shortly after purchasing the radio stations, within two years we started a group travel company. We worked with a manager who had helped us. We had done trips before through other local travel agencies but, now, we had the opportunity to bring someone onboard to specifically manage those opportunities to take folks places and we called it WTKM Tours, coinciding with the radio station call letters. When the now owners of the radio station had been temping me, prompting me, coercing me that it’s a good time for you to sell the stations and, after about a year of deliberations, decided, well, if I can carve out the tour company and let them have fun with the radio stations and I’ll have fun with the tours. My tour manager who helped get it started in 1992 actually retired in 2007 and, when she retired, I didn’t replace her. I kind of assumed some of that responsibility, delegated the rest, and so my focus was little-by-little shifting over in that direction and so it was kind of fun to be able to take that little piece of the business and run with it. We’ve just been having a great time. I have one other fulltime person, Robin, my Office Manager, and she takes care of all of the details from day-to-day and, when I’m off on a tour having fun, she gets to sit back in the office and get the work done so, boy, I’ll tell you that was more of my life story than I’m sure you wanted to hear, Jim.


JIM: No, it’s very interesting, Scott, and, as an outsider looking in, it’s been fun watching you transition because I think the key operative word there is fun. The reason I have you on is I think a lot of times retirement planning, I see some of the ads, what’s your number, what’s this, what’s that, and people don’t really have a plan of what they’re retiring to. They know what they’re retiring from but they don’t know what they’re retiring to. I’ve seen statistics where somebody will spend an average of five minutes planning their retirement but they’ll spend hours planning a vacation and having worked with a lot of clients that end up becoming mutual clients of your tour company, I see what your tours do, having everything planned out, and for someone who wants to travel and see the sites that they never had the freedom or the flexibility to do before because they could only get off a week a year or they had to be on-call in case something happened on the job, a lot of times thinking about a trip overseas or to Alaska or some of these trips, it was unreal to them. Now that they have the freedom of retirement and, if they’ve planned appropriately financially, this could be one of the things you’re retiring to so talk a little bit about some of the trips that you have and, as we talk about on this program, I always tell people don’t go it alone and, unless you’re a professional planner when it comes to travel, the benefits of working with a tour company such as Scott’s is they can take care of all the details and you can see multiple sites and figure out what you have interest in and maybe you do that by yourself if you want to go back and spend more time but it’s really a great way to open somebody’s eyes and I know that your company does everything from day trips to several country/multiple country European tours to Alaska and all these things so why don’t we just talk a little bit about, from soup to nuts, you have basic day trips and talk about what’s involved with that and what I’d really like our listeners to hear is what some of this stuff costs so, as they’re planning their retirement and if they want to take some of these trips and maybe it’s not every year, maybe it’s every other year, or some of the other things that you offer, what kind of things should they be budgeting for?


SCOTT LOPEZ: Well, thank, you, Jim. Really, it truly is a pleasure for me to be able to share what I do. I have developed a love for travel ever since my first trip overseas when I was a young man attending a wedding celebration in Switzerl and back in the early 80s so I kind of caught the travel bug then and, then, we started our own little tour division as I mentioned in 1992 and, now, that’s my glorified hobby these days as I inch my way toward retirement. The thing, and our slogan for KM or Kettle Moraine Tours, is, you can see we shortened WTKM to KM and cut that right in half, but Come Join the Fun is our mantra and that really is what we are looking to accomplish for the folks that travel with us. We have had a number of people who have told us I’ve stayed away from traveling with groups, I didn’t want to lose the flexibility of doing what I wanted to do, when I wanted to do it, and now that I’ve experienced this, I can see where this is the way to go and then that’s really gratifying for me to hear that. We’ve created a new impression on someone who maybe had some trepidation about doing a group tour program and the real key to it is, yes, you get to sit back, relax, and let it happen. Just enjoy the journey and isn’t that what life is all about, just to sit back and just let someone else take control. If you put your faith in your god, let them guide your life, well, we try to maybe emulate a little bit of that same spirit when we take people on a tour. We like to just involve them and let them experience the different things that we may build into a tour. Typically, we like to work in, if not all, a majority of the meals so that we can make sure that it’s going to be something that they’ll enjoy. We try to leave as little to chance as we possibly can. They can enjoy the scenery if it’s a motor coach tour. They can just kick back and relax. We’ll provide a little onboard entertainment as we go. Again, on a motor coach, a longer trip, we try to make the time go a little faster, things that, if you were behind the wheel, you wouldn’t be able to experience. From that st andpoint, if we can incorporate accommodations, the lodging, and then, of course, try to work in some special things. We just did a mystery tour, Jim, in May of this year. We did a few mystery day tours to kind of wet people’s appetites and a number of tour companies do this but we hadn’t done a lot of it so we thought we’d try it. This last one we did was a three-day mystery tour. We thought, well, we’ll see how many people are willing to put down $345 for a three-day getaway without any idea as to what we’re going to do or where they’re going to go other than it may be out of state for part of it. You don’t need a passport, we’ll include your meals, and that’s basically all the direction we gave them. We were hoping to fill a bus. We ended up taking 90 people, two busses, to our destination, which turned out to be a little German village in Minnesota, New Ulm. We, from my past experience, were able to leverage certain things like some of my musician friends provided a little welcome reception at our welcome dinner the first evening and then we hired a male chorus, the Concord Singers, to perform for a group at another dinner, so we did a lot of little special things that, if they would have planned this on their own, of course, those little added attractions would never have come about so we try to do those special little things to really add a little extra flavor to the tour, maybe use some of our past connections to leverage some exciting things along the way.


JIM: Let me just comment on that real quickly because I know I’ve gone on a couple of the day trips with you. One thing we did, we saw the Oakridge Boys at a Christmas concert. It was a little bit of a ways away from where we live but you had a motor coach so it was really comfortable, you had the meals covered, and we had a couple stops along the way, and it ended up being a real fun trip and I didn’t have to deal with driving myself there or back and worrying about parking and all that stuff. Dropped off right at the front door. It was fantastic. I think about another Christmas tour I did. You had a Christmas lights tour in the city of Milwaukie, which is close to where we are. We did that tour and I’ll tell you what, when I’m driving, when I took my kids to look at Christmas lights, it’s hard to be driving when there’s a lot of traffic because people are looking at that stuff and stopping and starting and also enjoying the lights for myself but, sitting in a motor coach where we actually got off the bus, we stopped at a couple places for some hot chocolate and Christmas cookies, the experience is not something I could have really duplicated myself. I see this in my business. I’ve taken some tours through some companies I’ve been involved with. Arranging talent to get together and being able to take on shows and things like that, if you’re an individual just kind of winging it, a lot of these shows are sold out but, when you have the group and if there’s a problem, you have someone else taking care of them and you have leverage because, if you’re dealing with 90 people, people are going to listen a little bit more if you have a bone to pick than one person that’s doing a one-off trip the first time in five years. You’re a group that’s doing it on a regular basis so there’s a lot of advantages. Hey, we’ve got to take a short break. When we come back, let’s get into some more details of what to expect on some of these trips so please stay tuned.



11:09 JIM: Thanks for joining us. We’re visiting with Scott Lopez and he runs a tour company. He’s been doing it for a lot of years. I know I’ve had a lot of clients that I’ve counseled and we’re talking about what to retire to. I always talk to them about what their travel plans are and most people haven’t really had the time to think about it and they don’t really even have the perspective that they need because this is so outside their box. When raising kids, as long as you can dump them in the minivan and take them somewhere that was a vacation and maybe you tent camped but being pampered on a tour trip and there’s many price ranges. You can find tour companies that will take you to five-star hotels and you fly first class and all that but most of us probably don’t have the budget for that. I know Scott runs a tour company where most of the people are just everyday folks that have saved a little bit of money for retirement, are enjoying life, and enjoy comradery. The more people having fun together, the better the experience, and I think that’s something that you provide. I know you’ve done things like, for example, day trips that will incorporate an away game for our local baseball team. Sometimes it’s the home games, sometimes it’s going to the casinos and having a day at the casino, so let’s start out with what should people be budgeting for? If they want to do one of your day trips, what’s kind of the price range of that?


SCOTT LOPEZ: Sure. I would say that, on average, the day trips will range anywhere from $50 to, depending on what kind, you might have a Broadway show or something you’re going to, but, generally, between $50 and say $150 on the top side. We’ve got a couple of trips just basically simple, we’ll provide the transportation to get you there like to the Warrens Cranberry Fest at the end of September. That’s one where, basically, we’re getting you there because there are so many options for food up there, there’s so many options to do other things, so, for $49, you’ve got a chauffeur-driven motor coach. You can travel up in comfort, don’t have to worry about the drive or the traffic, and it gets busy up there during cranberry time, so that’s a nice little getaway that you can budget for just under $50. We’re doing a Timber Rattlers game. Because it’s our first one, a little Class A baseball, the farm team for the Milwaukie Brewers up in Appleton, and we’ve really put a dynamite price on this for $50 even though, yes, the ride, of course, is included with our local area pickups around the Hartford/Oconomowoc/West Bend.


JIM: And for those of you that are listening, we’re talking about some small towns in Wisconsin


SCOTT LOPEZ: Yes, Southeast Wisconsin.


JIM: Where Scott is going is probably about a 60 to 75 mile drive. Today, in our program, we’re not trying to necessarily look at well this is Wisconsin. There’s tour companies like this all over the country that do similar type trips, similar type price ranges, so our goal today is, first of all, open your eyes to the possibilities and have some fun traveling if you’ve never had the opportunity to do it. Test it out with a group in your area. It could be fantastic although I do know, Scott, when you do the European tours, I know you’ve shared with me you’ve got people from all over the United States because of friends and family. They all want to join in and it can be accommodating for that as well so, at any rate, go back to yours. I didn’t mean to interrupt.


SCOTT LOPEZ: All right, no, no problem. I’m glad you did and I have to refocus that we’re not on a local radio station here. We’re dealing with a nationwide audience and then some, so, right. We got to this baseball game, including a tailgate meal, including the ride, including refreshments onboard and peanuts at the game for a $50 bill so we’re kind of putting that one out there as first time grab it while you can until we fill the bus and let’s go have some fun. From that side on the day trips to extended tours, multiple day tours can range, I’m thinking of our getaway to Clevel and this fall, we’re going to, again, a little of a baseball theme. We’ll catch a Brewers/Clevel and Indians interleague game, the Rock and Roll Hall of Fame, the house where Christmas Story was filmed, it’s the façade of the house and a museum inside so if you want to get one of those leg lamps, you know what I’m talking about, and a few other little features along with that, that’s a three-day trip and that is about $450. I would say that the multiple day trips, if you figure in the range of, if meals are included and your lodging and so forth, about $125 to $150 a day is a good rule of thumb for the multi-day trips.


JIM: So, if you think about this, let’s say you’ve got someone who is planning. You’re in retirement. You’ve got all the time in the world. Let’s say you do a couple day trips a month, you know, just something to get out and have fun and keep active in the community, explore a place you haven’t explored before, you might be spending $100 or $150 so you’re looking at $1800 a year. Then, you look at maybe one of these multi-day trips, maybe you do one of those a quarter. Okay, so maybe that’s another $2000 so we’re up to maybe $3200, maybe $4000 a year. That’s budgeting $350 or $400 a month. That isn’t a lot in a retirement budget and you’re getting a lot of activity and being able to see things that you didn’t have time to do before, and you can really get a lot of travel just doing that. Now, let’s take it a step further because I know you do these European vacations. I’m planning on going on one of your Alaskan trips. I’ve getting sick of hearing how awesome they are and that’s a place I’ve always wanted to go to.


SCOTT LOPEZ: That’s our next big venture here and we’ll have 44 people going with us in June, another 34, who knows, maybe a few more by the time we leave August 2 for a second trip. We had to do a double feature this year, if you will, to Alaska and the Yukon. We’ve been doing this trip, and this was one of the favorites of my former tour manager. She said you can host any of the tours you want but I’ll take out Alaska. The last thing she did when she retired was the Alaska trip in 2007. When I got to go the following year, it dawned on me why she said this is the one trip I want to do every year and it’s just been a blast. In 11 days, we have refined this, we work with Holl and America. We’ve got the best of Alaska and the Yukon by l and, by domed railcar, by air. We have a quick flight from Fairbanks to Dawson City as part of the program now. Narrow gauge train through the White Pass Mountains on down to Skagway. After a week on l and, we’ve got four more days cruising so this 11 day trip is, I think, you really get, you can spend more time, you certainly could spend a lot more time up in Alaska, but to really get a good feel for it, and we always kind of look at some of these tours as a sampler. We want to kind of give you as much as we can in whatever timeframe, whatever window of opportunity we have, and, then, if you want to come back on your own and just explore this part of it or that part of it, you’ve got the opportunity. Now, you know where the hot spots are, where the things are that really interest you, so we look at it as kind of a buffet of as much as we can package into that timeframe and for a reasonable price. The Alaska trip, you know, that’s a little more of a price tag now, Jim, and we’re talking cruise ship, we’re talking where you have all your meals included. That’s a big plus on that last leg and we like to make that the last leg of the tour after that week on l and. You’re moving around, you’re hustling a little bit. We never like to overtax anybody but it’s a little bit, you’re moving around. Four days, then, where you don’t have to worry about packing and unpacking and you’ve got all your meals covered. It’s kind of a nice end to the rest of the trip so that’s why we tag that on the end. You can do it the other way around but we’ve found from experience this was the way to go. You can be looking at anywhere from $4300 up to a little over $5000, especially depending on what you want for a stateroom on the cruise portion of the tour. If you want the balcony room, yeah, you’re going to pay a little more for that but, on a trip like this, it’s kind of nice to have that opportunity to look out when you’ve got some marine life rolling along the side of the ship and you’ve got whales jumping at 2 o’clock, it’s just nice to be able to walk out on your ver anda and enjoy that, so Alaska and the Yukon, that’s kind of the price point per person, based on double occupancy. What is that about? Well, double occupancy, you’ll see that on any extended tour where you have hotel accommodations or cruise accommodations, and what that means is the price is based on two people to a room. Now, what about a single? What about a single who wants to travel? Does that mean you can’t do it? No, you certainly can but you will pay what they call a single supplement because, now, it’s just you in that room and that room costs the same whether you’ve got one person or two, so if you’re not sharing that cost with somebody, then you have to pony up a little more to pay for that. That can range, on our Europe tips, which, typically, are 9 or 10 days in length, the single supplement might be a few hundred dollars. It isn’t that serious.


JIM: And I know before my mom passed away, she went on a trip with you to Hawaii and she was on a very limited budget and she always wanted to go there, never had a chance to go there, and you actually arranged for her to have a roommate and she ended up becoming great friends with this gal that she shared accommodations with so there are some other possibilities. You’re not stuck just because you’re single with those higher fees.


SCOTT LOPEZ: Exactly. That’s kind of the direction I was going is, if you want someone to share a room with you, we can put out the call, hey, we’ve got a single looking for a partner and then, if we find a potential person, we like to encourage them go have coffee, go do something. Make sure if you’re going to spend 10 or 11 days with this person that, at least, there’s some compatibility before you go out on this trip because that can make or break a tour, I’ll be honest with you, so, yeah, take at least some conversation so that you can kind of get a feel for who the other person is and if you can, not that you’re going to be spending every minute with this person, but, typically, you are going to be closely connected for the trip so that is another interest and I’m glad to hear that. I guess you had told me that before but we’ve heard that. I had a trip on this mystery tour, we had two ladies that we had put together and they found out they knew people. Even though they were from different communities, they knew some of the same people and they’ve gotten to be close friends as a result of that three day trip so that’s kind of cool. We had one lady, if I can digress further yet, on the mystery tour, and the daughter of this lady had confided that being a recent widow, she had kind of gone into a bit of a depression, let’s put it that way. She just wasn’t herself. She didn’t have any desire to do anything on her own being alone. Got together with a family member and the family member was trying to talk her into coming along on this tour and the daughter encouraged her. She finally relented and decided to come along. The daughter came back to me after the trip and said I don’t know what happened on that tour but mom is a changed woman and I think sometimes it just takes that little extra impetus to get somebody out the door, back into circulation, if you will, back into some socialization to kind of pull them out of whatever malaise they might be in and, to me, that’s probably the, that made my day to be sure, just to have that opportunity to share experiences. Somebody said don’t you get tired of going to Alaska every summer and Europe in the fall and Hawaii in the winter? No, no, no. It’s always a different experience. You’ve got a new group of people to take with you. You’ve got a new opportunity to share these experiences and to do it with a new group of folks, it’s always different. It’s always a different experience. For me, I feel so blessed to be able to have the opportunity to take people on these tours. I know we’re running long here, Jim, I apologize. You should never bring a radio person in here to try to maintain a time limit, but I miss the radio station aspect but I still get to hold a microphone on the tours and get over that withdrawal and share my love for travel and my love for seeing smiles on people’s faces. How do you measure your success? We like to measure it by the smiles per mile, I guess we call it, and just to enjoy that atmosphere of good fun. I mean how can you go wrong when you’re out on a trip enjoying scenery, enjoying experiences, enjoying people. For me, it’s a dream job. I look forward to sharing it with new folks, new friends. In your neighborhood, I’m sure there’s probably a company with similar aspirations to take you out. We work with other groups like Mayflower Tours and they’re available at least through the Midwest and I think, now, almost nationwide, and they have a neat program where if you don’t have a partner, if you sign up for the guaranteed share program and they’re unable to find somebody to partner with you, you still pay the rate based on double occupancy so that’s kind of a neat future that they’ve incorporated into their tours so there’s a lot of opportunity out there. Just go through the experience and realize that while the tour operators don’t have control over all of the variables, if we could control the weather and traffic, those are some of the things that you’ve got to be a little flexible on a tour because even the best laid plans can change due to unforeseen circumstances, but if you can roll with that and realize, well, hey, that’s part of the adventure, you’ve got it made. You’ll have a blast.


JIM: I’ve got to share with you, Scott. I know a lot of clients, and you talked about the widows, a lot of times widows or widowers, they might have had a spouse that they were caregiving for and were kind of trapped in the home. It’s a great way to get back out. The other thing I say is someone who’s in retirement, the fact that all of the details are taken care of for you allow people to travel, I think, much later in life. I think about you take people to these sporting events and other things. You try to do that yourself, you’re in traffic, dealing with an unfamiliar area that you don’t drive to on a regular basis, and then you might be parking a mile away to get there. I’ll tell you, the door-to-door service, I mean they treat you like a king or queen when you’re dealing with a tour company so one thing I’d encourage everybody out there to do, if you haven’t built this into your retirement planning, think about the possibilities there and prepare for your retirement so you know that you have the money to be able to do some of those things. Make sure you’re retiring to maybe a new adventure somewhere with a tour company.


SCOTT LOPEZ: It’s a great big beautiful world out there that God has created for us. When we can take you out to experience some of that, boy, I’ll tell you that is really gratifying. A lot of times, a group company can kind of build in some extra opportunity for you to get better seating for something or better accommodations than you would on your own and that’s always through the clout of having a group. When you’re buying 110 tickets to something, you’ve got a little more clout than somebody looking for a group of four somewhere. Things like that, I think, are neat to be able to put people kind of in the front row situations. If you do want to jump on and kind of get an idea for what we do,, if you don’t mind me doing the commercial here, Jim, kmtours1, the number 1, numeral 1, don’t forget that, otherwise, you’ll end up in Asia somewhere,, and just take a look at what we’ve got going on. If you have questions about anything we’re doing, even if you’re not a potential traveler, feel free to give us a call at any of the numbers there and we’ll see what we can figure out for you and maybe find somebody in your neighborhood.


JIM: Absolutely, so do some planning, sit down with your financial or insurance professional. Make sure you’ve put this into your plan and, I’ll tell you what, I’ve done a few of the day tours with Scott, I’ve done group tours, I’ve seen Europe that way. In my estimation, it’s the way to go. You get a chance to get the flavor of things, where things are taken care of, and, if there’s a place that just really, really interests you, that is a place you go back to on your own because, now, you know what you’re doing but it’s a great way to find new adventure and find new places and new challenges and it’s just a great way to spend retirement. I know the clients that I have that retire on a regular basis are my happiest clients so thanks for joining us, Scott. This has been enlightening. I hope everybody was able to pick something up. I know we went a little bit long but this is interesting stuff. Having fun, you can’t have too much of that so thanks, Scott.


SCOTT LOPEZ: Thank you, Jim. God bless.

Truth about Elder Financial Abuse

[podcast src=” andard/autonext/no/thumbnail/yes/autoplay/no/preload/no/no_addthis/no/direction/forward/” height=”360″ width=”450″]There are unscrupulous people in every industry. Insurance and financial planning is no exception. Join Karl Susman on this week’s Susman Insurance Agency podcast as they discuss the truth about Elder Financial Abuse. Transcript to follow.

JIM: Welcome everybody, and today we have a fantastic program for you. When people go into retirement there are many risks that they face. The American College I know listed a lot of different risks that people face like inflation and healthcare and all those things, but one of the things you don’t see too often is elder abuse. Joining us today is Carolyn Rosenblatt, who has over 45 years of experience in her combined professions of nursing and legal practice, and she spent a lot of time recently, as a matter of fact she’s written a couple books on the subject and that is elder abuse and how to protect people and protect ourselves as we age, and we’re looking forward to you sharing with us. Welcome Carolyn.


CAROLYN: Thank you so much Jim.


JIM: First of all, I’m always curious, what got you involved going from nursing to the legal profession and now helping with elder issues and retirement planning, how did you make that journey, what got you on that path?


CAROLYN: I’ve been asked that question so many times because it’s not usual for a nurse to become a lawyer. But really, nursing at the time, this is back in the 60s when I graduated, the end of the 60s, early 70s, when I graduated from nursing school, nurses were not well paid. We were doing a tremendous amount of work, and I was doing about the same as a checker at the grocery store, so I realized it was just unfair. I love nursing, Jim. I love taking care of patients. I was out in the community visiting people at home, thous ands of home visits to many, many elders and their families and a lot of other people too, gives you a perspective, but with a bachelor of science in nursing, a public health nurse certificate, and being able to excel in my field, I was not being paid properly, we didn’t have benefits, it was terrible, so I started looking around and thinking what else can I do. I was always comfortable with words and speaking and writing and I thought well these are some of the tools of the trade of the law, so I put myself through law school while working as a nurse, and when I got out I worked a couple years for other firms and then started my own practice in my home town, and it turned out to be a great way to raise kids, to have my own business and work near my husb and, Dr. Michel (SP?) Davis, who is a psychologist and is a now a geriatric psychologist. When the kids were done with all that and went through college and I looked at what I would do next, because litigation which I did for 27 years is being on the battle field, I didn’t want to stay there the rest of my life. I looked at what else I loved to do, and I created an encore career consulting with people who have aging parents or who are professionals with aging clients. That’s what I’ve been doing for about the last 10 years, I really enjoy it, and I am on a mission to see what we can do to thwart elder abuse.


JIM: You know and that’s a tough one. One of the things that as a financial myself, you’ve got this privacy issue, and then you see a situation where you think someone is being abused, and it is really a tight rope that you walk on as a professional as to whether or not you can even blow the whistle. Do you see that?


CAROLYN: I see that as a common refrain among financial professionals, and I say look folks, it doesn’t need to be this way. Financial advising historically started with families, and if you are engaged with the families of your clients, however flawed those families may be, you’ve got to have someone that your client, who is aging, can rely on to help with decision making in the event that the older person begins to lose the ability to safely make decisions. The first problem is a lack of connection from the get-go when you have a new client, to engaging their family members and getting the client’s permission to share that financial information with them. That privacy consideration can be dealt with immediately. It can be dealt with in many ways, but it is not and should not be a barrier to keeping the elder safe.


JIM: I’m in Wisconsin. I had a planning attorney that I work with design a document with the estate planning documents, where when everybody is of their sound mind they sign off a permission slip for me that if I feel that they’re in danger or something is happening that I have the right to go consult with some of their other family members, because I’ve had situations where clients just get very upset and say no you’re not to talk to anybody about this. It really puts you in a dilemma because of the privacy rules and everything else. Do you have something similar to that that you’ve seen out in California?


CAROLYN: Absolutely. We see it all over the country, because I speak across the country and I deal with financial advisors and clients all over the place. I’m speaking to a guy today from Brazil whose mother is in Ohio, so this is a universal problem, okay. I think that it takes a legally sufficient document for that privacy, let’s call it a privacy waiver. Because the rules are in place but you can get around those rules by getting permission. That’s the basic concept and it’s quite simple. However, a lot of people are not clear, a lot of people who are the client and a lot of people who are the advisor are not clear about how to make that document happen, what does it mean that it’s legally sufficient? If you have a lawyer drafting it for you Jim, great, but a lot of other people in your kind of profession don’t do that, and then they think that they’re just going to get some letter after the fact, hastily drafted by themselves, that’s easily questioned. It’s not uniform; it doesn’t have the right language. If you don’t know the law you might not know what to put in it, but it’s a very, very important step in keeping clients safe, because a lot of people don’t underst and when they are losing their capacity to make safe financial decisions.


JIM: There’s probably nobody better than a trusted financial professional that’s dealing with a lot of your planning, when they see something out of whack, you know all of a sudden extra money being drawn out or other issues that might affect it, making big changes that there was nothing discussed. Usually we can see the warning signs, and that’s a good person to have, but it’s always good to have a team. You want to have the attorneys, the accountants. You might want to have your financial planner, maybe any number of those folks, or if you have a trusted person at the bank, some different people that you give the right to that if the warning bell goes off they could do something. We’ve talked about this financial abuse of elders, which I unfortunately see way too often. How big of a problem is it?


CAROLYN: Enormous. The government studies this a long time ago, the National Center on Elder Abuse, and they came up with a statistic that it was $2.9 billion a year stolen from elders; however, much more recently a private company, which has some very good things in it, including a credit card that you can limit for anyone who is at risk, they did a study, a much more comprehensive study, with researchers from Stanford University on their team, they came up with a figure of $36.4 billion a year stolen from elders in this country. That’s every year, so indeed the problem is enormous. Some people call it the crime of the century. Everyone needs to be aware of it, and financial planners, as you say, are in a unique position because you know the client. You see what’s happening to their money. Very few other people have that kind of knowledge of the client, and it’s a very important relationship, and I think a unique opportunity for the financial professional to sound the alarm as you say, but no everybody knows how to look for those warning signs in the same way. We do have a tool for advisors or for anybody to use, and it’s a diminished capacity checklist. It’s on my website at, it’s free, and I recommend that families, as well as advisors use that so that you have a uniform way of describing the problem and that you can then justify making that call to the third party, because you have evidence that it was necessary.


JIM: So who have you found to be the most common financial abusers of elders?


CAROLYN: There’s no question, and all of the research data is the same, that by far the most common abusers are family members. Typically the adult children of the elder, adult children know the elder, know their vulnerabilities, have a relationship of trust, and it’s easy for them to exercise what we call undue influence over the elder and take things from them. Some of them feel entitled, some of them are resentful because they don’t have a good relationship with the parent and it’s payback, sometimes they’re just greedy, Jim. I mean there are a lot of reasons. No one has really identified to all of them, but I say it all boils down to greed and opportunity, because older people are trusting and vulnerable, they need the help, they’re victimized readily, and they’re too embarrassed to report it.


JIM: Well let’s take a short break and when we come back, let’s talk about some of the solutions that families can implement. Please stay tuned.




JIM: Welcome back as we continue to visit with Carolyn Rosenblatt; nurse, attorney, and now advisor around the country to help families avoid elder abuse, especially when it comes to financial elder abuse, which is a much bigger problem, I think, than what most people realize. One thing I found a while back, I had a client, she just had Medicare supplement insurance with me. You know I tried to talk to her about investing money with me and she was really content with where she was at. She was pretty much stubborn, she didn’t want to consider anything I talked about having, family members to look at it, because I really felt I could improve her situation. I was just shocked to find out that she was taken for about $15,000 with some scam saying that there was some kind of fraud at the bank with social security checks and we want you to withdraw some cash to see and then bring it out and all that, and somehow she fell for this scam. It went around the town that I was in and quite a few people got taken for this. Now she actually admitted that this happened, but I think a lot of them are too embarrassed to admit that it’s happening. Do you find that a lot?


CAROLYN: Yes, very much so. When it’s a family member the aging parent feels guilty. This is the son I raised, this is the daughter I raised, how could they do this. I remember, Jim, looking a 93-year-old woman in the eye, saying to her after I learned what had happened. She had already been ripped off by somebody else before, but now her son, who was her designated agent on the power of attorney, a son that she loved and trusted very much, he had taken money out of her account, and it was over $10,000, and that was just the beginning. He had designs on getting her house too. I looked her in the eye and I said look, your son has stolen money from your account. You told me he did that without your permission. I said that is a crime, it could be reported. She looked me in the eye and said I don’t want my son prosecuted. Okay, so we have a willing victim, and that is often the case with elders. They say that only one out of eleven, or four out of fifty, I mean you can look at different statistics, are actually reported to authorities and even fewer of those are prosecuted. People are getting away with this crime because of the population they’re stealing from and that’s why they keep doing it, it’s so easy.


JIM: I come from a German heritage, and the community that we’re from, for years it was everything was held close to the vest. Parents did not talk to their kids, everything was private, you didn’t find out what they had until the reading of the will, and we’re a very conservative community so we have people living in rags with millions of dollars sometimes and it’s very common. We get very involved in the estate planning process with the client’s attorney, we work with their CPA, we go through all this as kind of a team, and we implemented a process a while back of family meetings, so there’s open communication, the whole family gets to hear what’s going on, because I look at those as the soldiers, the eyes and ears on the ground so to speak. I think that’s one way that you can help prevent maybe somewhat of theft by having some communication with all the family members so everybody knows what’s going on. What are some of the other things? You talk about a checklist and having their financial professional maybe step in if they see some kind of warning sign. What are some of the other steps that you see that families can use to protect themselves?


CAROLYN: Well first let me comment on your concept of family meetings, which is excellent. Not everyone does that. A lot of people don’t do that; don’t know how to do it. At we have a video course on how to do a successful family meeting, so I encourage any advisors or families who have advisors listening to get on with that, and it’s a great thing you’re doing and I appreciate hearing it. To the question of what other people can do, I think a lot of people in our society have a kind of denial going on about the aging process. It’s unfortunate, but we have a very negative bias about aging in all part of our media. Everything is about turn back the clock, defeat aging, defy aging, on and on and on as if aging itself were so terrible. It’s not. It’s a natural part of life, it can be very enriched and enriching for the families of people who are older, but because of this sort of negative mindset, we are in denial ourselves, the adult children and family members of elders, about the fact that they may be declining, so we treat them at 85 as if they were 65 or 55 and they’re not. Even if they do not suffer from cognitive impairment, if their brains are not suffering from the beginnings of dementia, they still need more close watching by us. I have a 94 year old mother-in-law. Fortunately for my husb and, a psychologist, and me, she’s very open, but she has been taken advantage of before by her own financial advisor. We stopped that, got rid of the advisor, got the money back, but we pay attention. My husb and looks at her statements every month online, and even if your parent does not have computer skills or isn’t comfortable going online, the adult child can gain access to the account and watch it every week to see what’s going on. That’s something I strongly encourage families to do because it is just another way to keeping your parents safe. They don’t have to give you access to the money, but giving you access to the information is usually something that they’re willing to accept, because first of all they don’t underst and how that works if they use a computer, but if they do they may be comfortable letting you kind of watch over them. If you have a less than ideal relationship with your aging parent, I think the approach to allowing access is really best pitched by saying look, I know you don’t want to be a burden to me mom, dad, gr andma, and it would be a burden to me if you were harmed and I had to try to fix that after the fact. If you let me see what’s there at least I can try to protect you and that’s not making a burden for me. That pitch sometimes is much more successful than saying hey what if you get dementia, gee, you know, people don’t want to hear that.


JIM: Yeah, amen to that. I know it’s always a difficult situation, but I find if people care enough, you got to be persistent maybe a little bit, but I found with clients, and when I engage with them, I said look I’m going to let you know right now there’s going to be a family meeting. It may not be right away but at some point in time when we feel the timing’s right we’ll discuss just how much detail we get into, whatever you feel comfortable with and we’re going to do this. We’ve been doing that for a number of years now and it’s really paid big dividends. The best part about it is I do have those eyes and ears on the ground, and I’ll have some of the kids come hey I think this is happening or that’s happening, and we can get together with the parents and kind of talk through things and figure it out, and a lot of times thwart what could have been a serious offense against them of someone taking advantage of their situation.


CAROLYN: Yes, that’s very, very good. I think it’s important that there be, as you say, a team approach because sometimes the abuser is the favored child, the beloved daughter or son, the nephew, the cousin, somebody who has access, and the other family members are suspicious of that person but they need to be empowered with information so that they can stop the elder from getting ripped off. I mean there’ve been daughters who have taken money and bought a house for cash and the elder is going to need more healthcare and more homecare, and there is no more money because it’s been tied up by this unscrupulous child who’s greedily taking it and making themselves rich. No, I mean other family members need to know what’s there so that they can protect this person from any no so upst anding family member who might try to help themselves to the wealth.


JIM: Recently I read or was at a seminar, I can’t remember where I heard it, but they talked about the age on average where people start diminishing capacity for dealing with financial issues, and it’s like in the early to mid-60s, you know, and I know a lot of people that seem sharp as a whip even at 80 or 90, but if we know that this could be happening or would be happening, when would be the time to do this, probably as you’re getting into the 60s and the kids are now getting to the age where they at least have a good head on their shoulders.


CAROLYN: Yeah, and I say pick a date, pick a birthdate, pick an occasion. If you want to bring this subject up and say when will we have this family meeting, when we will have this discussion, when will we share the information about the assets that exist within the parents portfolios, say it’s at 60 on their birthday, or it’s the date that they retire, or it’s the date that they celebrate a certain anniversary, or the birth of a gr andchild, some occasion it will serve as a h andy excuse to do it, but it should be done consistently with all clients. Families ought to expect to do that by a certain time. It’s not that everybody is losing their marbles starting at 60. I’m in my late 60s myself, but what I will say is that we know that the risk of Alzheimer’s disease, which will destroy a person’s ability to make sound financial decisions, that risk begins to double about every five years starting at age 65. By the time we reach the age of 85 and many, many people are living past 85 these days, the risk of Alzheimer’s disease is one in three. Those are pretty high odds that something is wrong, and financial judgement, Jim, is eroded first. Of all the things that we have as capabilities of the intellect, financial ability goes first with this brain disease. We can just be more watchful, be more compassionate, be kinder, and be vigilant to try to protect the loved one from every nefarious person who’s out there trying to rip them off.


JIM: I had a gr andmother pass away with Alzheimer’s, I had a gr andfather on the other side pass away with Alzheimer’s, and here just a couple days ago we learned at the recording of this, we learned of Gene Wilder, who was from my home time, died of Alzheimer’s, President Regan died of Alzheimer’s, I mean if people think it’s not going to happen to them they need to wake up. The possibilities are there and you need to protect yourself. This has been great, Carolyn. Share with the audience before we wrap up the books that you’ve written as resources and how can people get them.


CAROLYN: Sure, thank you. For families I have a book called The Family Guide to Aging Parents, it’s published by Familius Press, it is available on my website. I have two sites, and, it’s also on Amazon, and the title is The Family Guide to Aging Parents. That covers the topic of how to approach the subject with your aging loved ones, what you need to talk about. It covers a lot of things including the care needs of elders and how much they cost and what we can do to protect everyone from abuse, so that’s a pretty comprehensive thing that is easy for people to get. It’s $29.95. Then we have for professionals, especially financially advisor, Succeed with Senior Clients, and it’s a financial advisors guide to best practices, and it talks about some of these same subjects from the professional’s point of view. What do we say to our clients? What do we need to do when we see abuse? How do we get around this privacy problem? What kind of document do I need if I’m trying to break past this problem of privacy? Then we deal with the other problem which is really everybody can get impaired, including financial professionals, so how do we address this among our own colleagues. That is also available at That’s my website, and it’s available on Amazon as well.


JIM: Well Carolyn, this has been fantastic, and it’s a subject that none of us want to talk about. It’s the big elephant in the room, but it needs to be talked about, and when you see the staggering statistics of how many people are affected by this, and I think they’re probably even short on that. I’ve seen it so many times. I heard a story of a gentleman that was suffering from dementia when his wife died, the kids brought him home and closed all the bank accounts, you know they had ten different accounts, just closed them all, didn’t really look at the records, and then when he passed away they were going through cleaning his stuff and found out that he had $500,000 death benefit on his life insurance that lapsed because they terminated all the bank accounts, there was no forwarding address, and it was just timing that they weren’t made aware of that. That’s just another example. I had another client who two years before needing nursing insisted he was going to cancel his nursing home policy because he was healthy and he wasn’t going to live in a nursing home, and here he had paid premiums for 15 years and decided to quit and wouldn’t let me talk to his kids. I mean who knows if his mind was right or not, I don’t know, but man if I would have had a permission slip signed early I could have talked to his kids. His kids were all in a position they would have paid for it for him, and then to see how they dealt with it afterwards it just pulls on the heartstrings. It’s important for everybody listening out here, planning goes beyond just investing in an account and setting up your estate plan, you need to make sure that you’ve got a Plan B in place to help protect yourself when you’re not able to protect yourself. Thanks again, Carolyn.


CAROLYN: You are welcome. I’ll leave you with several watch words Jim. First of all for your audience, be watchful, be vigilant, our elders need protection. Next one, communicate more. The third saying, include the financial professional; it’s an invaluable help to all of you.


JIM: Thanks Carolyn, appreciate that, we’ll have to have you back again soon.


CAROLYN: Alright, take good care, bye bye now.

Gift that gives back

[podcast src=” andard/autonext/no/thumbnail/yes/autoplay/no/preload/no/no_addthis/no/direction/forward/” height=”360″ width=”450″]What is better than giving? Receiving you say? How about a gift that gives you back! Join Karl Susman and guests this week as they discuss ways to give and get back! Transcript below.

JIM: Welcome to today’s program. Today I’m flying solo and talking about a subject that’s near and dear to my heart which is charitable giving. With this being the holiday season, many of us are in a giving mood whether it’s Christmas or Hanukah or Festivus or whatever holidays that we’re celebrating over this season, it’s generally regarded as a time of giving and whether we’re giving to our family members or those that we care about or to our favorite charities, it’s important to underst and the benefits of planning with your giving to get the most impact that not only can benefit your favorite charity but can come back to benefit you which might in turn mean you can do more for your favorite charities so today I’m going to cover some of the planning options that are available to you and it’s something that we as advisors a lot of times fail to bring up. With some of the changes that have happened in the tax code you really want to be aware of these opportunities for you because it can save you a lot of money in taxes. I remember reading a book a while back and it’s called Tax Planning From The Heart. To sum up that book in just a couple sentences, it basically says you have you and your family, you have charities, and you have Uncle Sam. Pick two of the three because with charitable planning we can control where our money is going whereas when we pay taxes we really don’t have a lot of say as to how that money is being spent so before I talk about the tax benefits, I think it’s important that people underst and the taxes so then you can better underst and how to plan and how to benefit from your charitable giving. Our tax system is set up into brackets and I know when I ask people what their bracket is most people look at me like a deer in headlights. Talk to your accountant, to your tax advisor, your insurance professional, your financial advisor, talk to whoever you’re working with to help you underst and what bracket you’re in so the way the brackets work is the first few dollars that you earn you have deductions and exemptions that offset any tax on the first few dollars of taxes that you earn so that’s a 0% bracket. Then your taxable income starts and the first few dollars of your taxable income will be taxed at 10%. Then it goes to 15%, then it goes to 25%, and it keeps bracketing up all the way to 39.6 and that’s just the federal tax. You have the same thing on the state level and there might be things like the Affordable Healthcare Act taxes. There are other taxes, capital gain taxes, all of these different things go on to your final tax return and they determine what your bracket is for your ordinary income so the things like interest income, your wages, your distributions from IRAs, they all go into your ordinary income that are affected by all of these brackets. One thing that’s really important to underst and is where your brackets are. Now we’ve had a couple of changes in the tax code over the last few years. One affects itemized deductions so what goes into itemized deductions is money that you’ve paid for your property tax, state income tax, your medical expense, and your charitable contributions, and one of the big changes that happened here is it used to be your medical expenses, your non-reimbursed medical expenses, anything that exceeded 7.5% of your income could qualify toward going to those itemized deductions while a few years ago they changed the rule and made it 10% so less of your medical expenses can go toward itemized deductions and if you’re over 65 this will be the last year that you can use the 7.5% because starting next year in 2017 the itemized portion of your medical expense goes to 10% like it is for the rest of us right now so why is that important. I talk to a lot of clients, they take in all of these receipts, and they think they’re itemizing on their taxes but they don’t have enough of these deductions and they end up getting the st andard deduction so it’s real easy to look at your tax return and you can see whether or not you’re getting the st andard deduction. Now every year that changes and it depends on your age, whether you’re disabled or whatever, what you get for st andard deduction so it’s different for everybody but you just want to look at your tax return and see if you’re qualifying for that because if you end up just defaulting the st andard deduction it means you’re not getting any additional deductions for your charitable contributions so it’s really important to underst and that when doing charitable planning.

Let’s talk about some of the options that are available to you. First of all, for those of you that are over 70-1/2 and are subject to required minimum distributions from your retirement accounts, when you reach 70-1/2 for traditional retirement accounts the government says you have to start taking money out. It doesn’t matter whether you need the money or not, you have to start taking distributions and that percentage that you have to take is determined based on your year-end account value and applying the percentage based on your age and basically it starts out at 3.6% and every year it’s a little bit of a higher percentage so let’s say for the sake of discussion you have a couple hundred thous and dollars in an IRA and when you get to 70-1/2 your required distribution is going to be around $7000. Now let’s say you don’t need that money and let’s say for the sake of discussion you’re giving $5000 to your favorite charity or charities every year. Well, what happened at year-end last year, 2015, they passed a law and it had been a temporary law that they kept kicking down the road and passing a temporary law, temporary law, and, unfortunately, they didn’t pass that until very end of the year so it was very difficult to do planning. Well, at the very end of the last year they made this law permanent so it gives us some real opportunities to do some meaningful giving so what happens with the charitable contributions is if I’m already giving $5000 let’s say to my church and I have a 7000 required minimum distribution, I can contact my IRA holder and have them make the check directly to my charity and they have to be registered as a registered charity, a 501(c)(3) or some other qualified charity, they have to pay the check directly to the charity so instead of you donating money let’s say every week when you go to church, you would probably want to make it easy on yourself and just do it once and have it done. Now by doing that the money that comes out does not get included in your taxable income and if you’re just getting the st andard deduction that’s like reducing your taxable income by $5000 and you save the taxes on that so that’s something you definitely, for anybody over 70-1/2 that is giving money to any charity, you want to work with your professionals to make sure that you’re taking advantage of that so in a $5000 let’s say donation to charity, if you’re in a 15% bracket that means you would save $750 in taxes and then if you’re in a state that has an income tax you would add that savings to that as well so that is an important tool that I see a lot of people aren’t made aware of that, that you should be looking to take advantage of for those of you that are turning over 70-1/2. Now we’re going to take a short break and when we come back we’re going to talk about some other planning techniques that you don’t need to be 70-1/2 to take advantage of. Please stay tuned.



JIM: Welcome back as we’re exploring some real benefits to doing charitable planning. I know many clients that give to charities on a regular basis because it’s the right thing to do. They want to make a difference and they want to help out those causes that are near and dear to their heart and they don’t really think about the tax impacts so something that you want to do though is if you look at this and you say, geez if I could save $2000 on taxes, well that’s either $2000 in your pocket that you control or maybe you could do another $2000 of giving and it doesn’t cost you any additional money, you’re just reallocating money that you would’ve been sending to Uncle Sam and now controlling where that money is spent by giving it to your favorite charity. Let’s talk about a couple of different things you can look at. One thing is there are donor-advised funds in which you can make contributions to a fund. It’s kind of like setting up a family foundation and you get a charitable deduction today and you can advance payments so let’s say again, for example, you’re giving money to your favorite charity every year and you’re not getting a deduction. Well, if you’re sitting on some cash you might be able to make the gift for let’s say the next 15 years, lump-sum it one of these donor-advised funds, and then give the money out over years and still have control of that money. There are different mutual fund companies that have these type of things available and you want to talk to your financial advisor as to what opportunities might be there but that’s something you can do. The disadvantage of this is they don’t offer a lot of flexibility and ultimately all of the money has to go to charity so one of the solutions that we look at that could possibly fill this void and give you a little bit more control is the charitable lead trust and what a charitable lead trust is, it’s something where you put money in a trust for the purpose of charitable giving and then money every year gets doled out to a charity over a specified period of years. Now I know you can do a lot of different options with this and depending on what options you pick will determine what the deduction is but what we’ve done is we look at a charitable lead trust with a lot of my clients and we’ve looked at a 20-year charitable lead trust. It just seems like that’s an efficient way to do it and what happens is each year, whatever we put in that charitable lead trust, then we have to have 5% of what we put in be donated to charity each year so what I do is let’s say, for example, I have a client giving away $3000 to the church every year, I look at their tax return, they’re not getting any deductions, and then we look and see they have maybe $60,000, $70,000, $80,000 somewhere that they’re not using for other purposes and I say, well let’s take $60,000 and put it in a charitable lead trust. Well, if I have someone that’s let’s say in their late 50s/early 60s, they’re not able to itemize anymore, they’re empty-nesters, they lost the child deductions, and the interest on their mortgage is lower now, so we get to the point where they’re not really able to get much of a deduction. If we put that money in a charitable lead trust what determines the deduction is the current interest rates and the period of time that the money is being paid out. Right now with very low interest rates what ends up happening we actually get fairly high deductions so in a case like that if we put $60,000 in we might get a deduction around $55,000 as a charitable deduction. Now we’re able to itemize. Now in today’s program I don’t have a lot of time to go through all of the numbers plus it’d be pretty confusing but if you’re in a position where you’re giving money regularly to charity and you’re going to continue doing it in the future and if you have a little bit of cash laying around there’s an opportunity to maybe accelerate those gifts and drive a deduction where you’re not getting any now and all we’re really doing is taking economic benefit of an asset and committing toward giving to charity every year. Now one of the big advantages of that charitable lead trust is we can set it up at the end of those 20 years to go to the kids, we can set it to come back to us so if we feel we want to relook at it, maybe do it again, we could drive another deduction or maybe we need money back to supplement our retirement income, whatever the case may be, but it’s something that you want to sit down with your accountant, your financial advisor to figure out if that’s something that could work for you but we’re seeing a lot of clients taken advantage of because most of them didn’t even realize they weren’t able to get those deductions that they had gotten for so many years but now they had lost them and didn’t realize it so that’s something you may want to look at. Another type of charitable planning that’s real popular is the charitable remainder trust. This is pretty complicated and I could take a couple of hours explaining it but it’s exactly the opposite of a charitable lead trust so what happens is we give money to the trust, the trust pays us income, and whatever is left goes to charity. In a nutshell where these are really popular is if we have people that, let’s say they have rental properties that they’ve depreciated, they’re in a business, they have equipment that’s depreciated or maybe they have real estate that’s appreciated or a stock portfolio that’s appreciated, and they want to reposition that. Well, when you do that a lot of times you trigger some pretty high capital gains and if it’s a once-in-a-lifetime-type event where you might have several hundred thous and or several million dollars that are all subject to taxes, I know here in my state if I look at the federal income tax, the state tax, ObamaCare tax, in some instances some of those dollars might be taxed at over 50%. Well, one of the big advantages of a charitable remainder trust is it is tax exempt. We can donate items into it, sell them, and reposition them, no tax. Now when we get the income from it we’re going to have to pay income tax as the money comes to us but we’re avoiding the big hit all at once because that income obviously is probably going to be coming in and we’re going to be in a much lower bracket by spreading out that income over our lifetime. When all is said and done money is going to charity, whatever is left in there, so if we have charitable intentions that fits very nicely. If we don’t have charitable intentions or don’t have that strong of charitable intentions there’s going to be a problem with the family because that money goes to charity and according to the IRS rules charity does not begin at home. One thing that we find is if we’re getting income from an asset that has not been taxed, okay so let’s just say we are avoiding a 20% capital gain rate. Now some rates might be higher, some might be lower, and we don’t really have time to go into it in today’s program but let’s just say our average tax is 20%. Well, if we had a $500,000 asset, paid a 20% tax, that means we have 400,000 let to invest. Well, if we have 500,000 paying us income because we avoided the tax, that income is going to be much greater than 400,000 of income and what we do with some families if they’re important on taking care of the family we look at replacing what we gave to charity by using life insurance and it’s just a numbers game. I’m not here to sell life insurance necessarily but it’s a tool in the toolbox so let’s say the family decides, well if we were going to sell it anyway that means we took 400,000 out from what our family would get, we’d buy 400,000 of life insurance. I’ve had some clients where the numbers worked to replace the whole 500,000. I’ve had other clients where they’re in an estate tax situation where they look at it and because the charitable trust is tax exempt the family does not have to pay any federal estate tax on that money and let’s just say we’re at a 40% rate, I know it’s a little bit more than 40%, but for simple math that’s $160,000. If I take $160,000 off what was remaining of the 400,000, what would the family have actually gotten. Now we’re looking at 240,000 so I’ve had some families just replace what ultimately would go to those kids so there are ways to solve the problem. One of the other benefits of a charitable remainder trust is what do we get when we give money to charity. We get a tax deduction. Now being that this is the opposite of a charitable lead trust, we talked about some pretty rich deductions in the charitable lead trust and what drives a charitable remainder trust is the age of the clients and the interest rates and with the low interest rates it actually drives the charitable trust deductions down and right now if we have somebody in retirement we’re seeing deductions in the 10% to 15%, maybe a little bit higher percentage range but if you’re dealing with a $500,000 asset and let’s say you get a 10% deduction, hey you just avoided the capital gain, you’re getting more income in retirement. The deduction a lot of times is icing on the cake. Lots of opportunities in charitable planning. Talk to your advisors about charitable planning and see if it fits for you, especially if you are charitably inclined anyway, you want to take a look at what you’re doing, are you getting deductions for it. If not might there be a way of taking advantage of one of these tools and driving a deduction. The other thing that I want to emphasize, too, even if you’re not charitably inclined, if you’re looking at a significant capital gain event, you might want to look at the charitable remainder trust. You might be able to accomplish what you want to accomplish anyway and by structuring that create some tremendous tax advantages for yourself and your family but don’t go this alone, you need a team to help guide you through this, go to your insurance professional, your financial advisor; they’re typically a good lead because they probably have the best underst anding of your total circumstances and they’re going to want to team up with a CPA that underst and this as well as an attorney and do the math, see if it makes sense, but during this holiday season evaluate the gifting that you’re doing and seeing if there’s a way to take advantage of it. Thanks for joining us this week and tune in again next week as we explore another phase of the Real Wealth process and remember if anything you heard in today’s show you’d like to get more information about contact your Real Wealth advisor. Also if you feel that any of this information would be helpful to a friend or family member, just click the forward to a friend button.

JADE: The opinions voiced are for general information only. They are not intended to provide specific advice or recommendations for any individual and do not constitute an endorsement by any registered representative. A registered representative is not a tax advisor and does not provide tax advice. Before taking any specific action, be sure to consult with your tax professional.

How to retire strong and live long

[podcast src=” andard/autonext/no/thumbnail/yes/autoplay/no/preload/no/no_addthis/no/direction/forward/” height=”360″ width=”450″]Do you want to retire strong and live long? Do you want to be able to rhyme that well, too? Join Karl Susman this week on the Susman Insurance Agency podcast to discuss some good way to plan to retire. Transcript to follow.

JIM: I have been looking forward again to today’s show, especially with National Senior Citizen Day, we decided we would have Kelly Ferrin (SP?). She’s been a regular guest on our program. What’s unique about Kelly, her profession is probably something you’ve never heard of before, which is gerontologist, and she has made it her focus to study longevity and the effects of people living longer and longer and the type of planning that you need to do because of it. I want to start out the program, Kelly, I know you got a golf scholarship, and you were studying gerontology in the classroom and how that was different than golf practice. Can you share that a little bit.


KELLY FERRIN: Well you know Jim, it’s a delight to always talk with you. I so enjoy your passion and your message that you are just so interested in sharing in. For me I think that that’s why we have this connection. We’re very passionate about the work that we do, and oftentimes I do work predominantly in the financial industry and I ask my audience all the time, how many of you have ever met a gerontologist before. Most of them just kind of look at me dumbfounded, a couple of h ands will go up. I say, okay how many of you even know what a gerontologist is. Again, dumbfoundedness, and I said well if I show you a bottle of Geritol would that help you go in the right direction. Gerontology is a study of aging, and I say you know we are in the same line of work. Financial advisors do it from a different perspective than I do, but we have the privilege and the pleasure to help people make the right choices in their lives. Probably like many of them wondering how in the world they got to their point in their lives or their careers to be listening to a gerontologist, I too had no idea I would be a gerontologist when I grew up. Like you said I was fortunate to go to the University of Southern California on a golf scholarship and came out a gerontologist. Most people can see the connection between golf and gerontology. Certainly the fact that I competed with kids my own age, the majority of time I spent on the golf course, however, was with older adults. At a very early age subconsciously I started looking at aging in a very different way. I saw healthy, active, working, traveling, volunteering. The interesting thing was when I got into the academic side of aging, now this is the top school in the nation for the field of gerontological study, it’s a university with hundreds, if not thous ands of graduates in other disciplines, there were five people in my graduating class. That’s why most people have probably never met a gerontologist before, there are not very many of us around, but when we take a look at the coming demographics in this country, obviously we can see there’s going to be a tremendous need for this. There has been really kind of a fun way of transferring this knowledge and working in the financial industry as well, but that’s pretty much how that whole thing got started, and I think that this industry is at a crossroads, the financial industry in my opinion, professionally. The new model is going to be more about longevity planning. I think that’s something that’s an exciting time because we’re starting to take a look at longevity and retirement and financial in a very different way. My industry had to change as well. I think it’s an evolutionary time. When I started in the field of aging, up until the last maybe 30 years ago, all the studies on aging were done in nursing home. All of them. Now that may be a very convenient plan to study one side of aging but it’s not the only way of looking at aging. As a society I think one of the challenges is that a lot of people have been conditioned to believe that age is time of decline. People may age because they expect to age. Which brings up some interesting challenges in the financial industry, because if you’re talking about people sacrificing for a phase of life that they don’t underst and, let alone have a negative image of, it’s not going to work. We really do have to kind of engage people into a new style of financial retirement longevity planning because of bringing them current on what’s going on in the longevity sphere.


JIM: I know the big thing is people are living longer, medical technology is keeping us alive longer, and as someone who counsels people on retirement planning, they talk about what date do they want to retire, and you still have these people saying love to retire by 60 or sooner if I can, and I find myself more and more often telling people even though I’m not telling them what they want to hear, I’m telling them you really should plan on working until you are 60 or more ideally 65 and then have a transition to where maybe you slow down a little bit, but you still should be trying to earn some income instead of being completely dependent on what you’ve been able to save and social security for what might amount to longer than they did accumulating. They might be working for 30 to 35 year and then be 40 years in retirement. Is that what you’re saying?


KELLY FERRIN: Well yeah, absolutely. I think that when we talk about retirement planning versus longevity planning, the concept of retirement has changed. The word, no, but the concept yes. As a result of that we’re kind of looking at retirement in phases where people are living longer, so logically it’s likely they’re going to be working longer, but there are so many important elements that work brings to life with longevity, like engagement, looking at the life stages that we’re in. We’re in a place where we’ve never seen not only people living longer but living the way that they’re living. For example, the life stages, you know there’s no sequential order to the life stages of marriage, child, divorce, gr andparent, widowhood, retirement, whatever, nor is there any rule you’re not going to revisit some of these ideas more than once. We have some very interesting trends new occurring now as a result of longevity. For example, we have this concept of the family bank, where the majority of the Americans have become the family bank, where they’re supporting adult children, nieces, nephews, siblings, aunts, uncles, I mean it’s all over the place. We have another phenomena called grey divorce, which is something we’ve never seen before, where we’ve seen a 50% increase in divorce rate after the age of 50 in the last 20 years. The good news is they’re getting remarried. The bad news is they’re getting remarried, which means they’ve added another layer of financial responsibility. What about the affect divorce has on a woman’s household income, or gr andparents who certainly hope that they can contribute to the gr andchildren’s college fund, little did they know they probably are the college fun. There is just all these very interesting things that are happening dynamically which is really changing the look of retirement like you started off by saying, people are going to have to change their thinking about how they look at their life and how they look at their life in retirement and how they’re preparing financially, that’ s just the way it’s going to be.


JIM: Now I’ve heard you first coin the word Financial Sherpa as opposed to being just another financial advisor or professional. Talk to our audience about what you mean by that.


KELLY FERRIN: Well I love that, and it kind of falls under the umbrella of financial gerontology. I’ve been working in the financial industry space for the last 12 years. I am a retirement specialist, longevity expert, and one of the things that we’re starting to see is this connection now between financial and retirement and financial gerontology. There really is such a concept. It’s a blending of our two industries to help better underst and the financial ramifications of this longevity. I think when we talk about a financial advisor versus a financial sherpa, one of the slides that I show when I open up my talk is this 80-year-old at the top of Mount Everest with his sherpa. I said not only is this extraordinary, it wasn’t the first time but the third consecutive time this guy scaled Mount Everest. Did it at 70, 75, and again at 80. If that’s not extraordinary enough, he started his 80th year off with his fourth heart surgery, so as you said earlier, clearly the medical technology is enabling people to live very long lives. How they live these lives, how they finance these lives, how they plan these lives obviously is very different. What I share with people is that, and if it wasn’t for the gentleman on the left, the sherpa, would he have ever gotten up or down. The sherpa plays an extraordinary roll, navigating people through unchartered territory, very treacherous terrain. What I share with people now is that consumers today feel very much like they too are scaling Mount Everest as they prepare financially for this retirement and this new longevity. I ask financial advisors just to take off that hat and to look at their roll now as more of a financial sherpa, because people very much need this help in navigating their way through and preparing for it.


JIM: Now let’s bring up another challenge, and that is okay not only are people living longer, but now we see things like the social security which most people are depending on, they’re telling us there’s not enough money and changes are going to have to happen. We have low interest rates, we have a lot of people out of work, a lot of people don’t have pensions anymore because companies have done away with those and now people are dependent on themselves to save for retirement and we don’t see them saving the way they should. What do you say about that?


KELLY FERRIN: Well here again, I think the financial advisors play one of the most important roles in this country, and I think that this industry has done a phenomenal job of really enlightening people about what’s going on. There’s not one company out there that’s not got some gimmick whether it’s the number, whether it’s the line, whatever it is, but there definitely has created an awareness of the fact that people have got to start planning better for financial, for longevity and for retirement. For one of the things that I try and share with people is that when we’re talking about financial planning, we really need to underst and that we live in a financially illiterate country. I just read in the USA Today, Jim, one of those statistics that they have where they said 80% of older adults feel challenged in financial preparation in retirement and for retirement, this was an American College study. Even as later in life. I think when we start underst anding that, particularly in this industry, this is not the consumer and the public’s comfort zone, this is not their world. This is the financial industries world and we conversate with them in a way addressing financial issues, which I think we need to really shift that back and underst and it needs to be life planning and longevity planning and how then we position products and discussions with that in mind. Because clearly this is a realty, there was a study that was done not too long ago where it said 80% expect to see their dentist on an annual basis, yet less than half, 46 will see their financial advisor, that’s if they even have one; 65% of the American public view money and finances as complex, and as a result 65% procrastinate over financial matters. Two-thirds of Americans between the age of 35 and 70 have not prepared a retirement plan. You and I know people don’t plan to fail, they fail to plan. They really don’t even know where to start. When we start looking at probably the most important part is to have effective communication and listening skills, that’s what consumers are really looking for and helping navigate them through this longevity journey. Does that answer the question?


JIM: Absolutely. We’re going to take a short break. When we come back let’s focus on what role the client should have in working with their financial professional. Please stay tuned.




JIM: Welcome back as we continue to visit with Kelly Ferrin, who is a gerontologist, who is a student of the longevity issue that’s going to affect many of us Americans as we dive into retirement, especially us Baby Boomers at the rate of 10,000 a day, are we prepared. Kelly, before the break we were talking about the sherpa that you used, and I look at it while the sherpa was doing a lot of lifting, that 80-year-old gentleman still had to take the steps up the hill and then back down the hill, so there’s work involved, it’s a team effort. The people that are listening to this program they have a professional that has distributed this program to them as a way of helping to educate them, and I know I encourage all my clients to have regular meetings, regular checkups, and we don’t have the time to chase them down. It takes the effort of them responding to the phone call or a letter or an email that says it’s time to come in and actually schedule that appointment. What would you suggest that as a client what should they be proactively going to their financial professional, when should they be calling them, should they be responding to all these invitations for whether it’s seminars or come in for an Annual Review or whatever the case may be, what do you say to clients?


KELLY FERRIN: Well for me, I try and position the financial advisor team as their most important confidant. The relationship that clients have with their financial advisors is probably some of the most important and maybe even comes in a completely different perspective than that with their family. I think if they can just get over the fact that they’re probably not prepared and be straightforward and upfront with their advisors about where they really are financially, then we can start laying down the right path. I don’t think most people are willing to admit the fact that when we look at the current retirement boomer studies and their income sources, 50% are planning on social security as their primary source of income, 25% will come from traditional pension plans, 23% will come from a 401(k), 19% may be personal investments, and then 17% from an IRA. We really need to educate people and make them feel comfortable. I really do, Jim, I’ve said this from the very beginning, I don’t think it should be discussed with clients from a financial planning focus as much as it should be coming from a life planning focus. Helping people underst and that longevity, where they are in the life stages where they’re headed, what maybe is coming up that we need to be looking at in preparation financially for this life journey that we’re on, that’s really where it comes down to, so it’s never just the clients need to be coming in this way or the advisors need to be talking about, it’s a partnership and that’s why we talk about the sherpa. Because each of them brings a different element to the table. When we look at today’s studies of retiree priorities of their financial advisor, the advisors are usually quite surprised when I share this information with them, that 82% of consumers say peace of mind is the goal, six times more important than accumulating wealth. Yet when they’re sitting down and having client discussions, they’re probably focusing more on the accumulation of wealth, the aggressive investing and those types of things. That’s not necessarily what the clients are looking for today. Protecting assets is actually five times more important than aggressive investing to a consumer, an 80% are looking for education and advice on saving for retirement because they’re looking for this partnership, but again how the conversations are being held I think is where we need to remember always that the financial world is not their world. It is our world and it’s our job to help them look at their life and figure out how to put the financial pieces with it. When they’re asked what the ideal financial advisor is, they talk about effective communication and listening skills far more important than returns.


JIM: I know a lot of advisors that are out there are very sharp people, they underst and and they’re well-skilled in their profession. Sometimes, like you said, I heard a story a while back about the tappers and the listeners. They did a study where they had this group of tappers and they gave them a bunch of songs to tap out like Mary Had A Little Lamb, well-recognized songs, and they asked these tappers, this audience that you’re going to be tapping to how many songs do you think the audience can correctly identify, and they said probably half and would end up being is 2%, because they knew what they were tapping out but the listeners didn’t hear it, they’re trying to figure it out because they’re in their realm, and one thing as a client that I emphasize that you should take from this message is you got to be willing to speak up. I always tell people the only dumb question is one that doesn’t get asked. You’re dealing with a professional right now, but if you have to take a role, if you don’t feel that you’re getting what you need to be getting from that conversation, you maybe need to just say timeout and let them know what’s important to you, what your priorities are, because they’re skilled to help you reach that, but if you don’t speak up they’re just assuming that this is the direction you want to go.


KELLY FERRIN: But I’m not sure, Jim, that most people are comfortable doing that. Consumers don’t want to feel like they’re some schmuck and they don’t really underst and the terminology or the language or the presentation that’s being made, so they just kind of nod their heads and go along. I frankly think that’s one of the reasons why we have a financial illiterate country. We certainly have great professionals as you’ve talked about who are very well-versed and educated in how to help people, but that industry also needs to take another additional step, and this industry listen has been playing with this idea of life planning for a long time. I do think that it is getting more incorporated and they underst and the fact that talking with consumers needs to be different than talking with one of their financial advisor associates. You have to speak a completely different language to them. The ones who are effective at doing that are the ones that have the growth in their business and the continued referrals and the multi-generational planning abilities.


JIM: That’s absolutely, and I agree wholeheartedly, and that’s why I tell clients because at the end of the day if you’re not making sure you feel comfortable in the direction that you’re going, who is going to fix that for you? You have to take charge when it comes to these issues and making sure you’re on the right path. The other thing is that you mentioned that I just have to reiterate, sometimes it’s clients take an us and them mentality, you know I don’t know if I want to tell my advisor about this or that, I better keep this secret, and the thing is it’s just like going to your doctor. If you keep it a secret that you’ve got this lump that’s been growing for the last three months, because he might want to do surgery and he’s got kids going to college I might be paying for that, well you might have a life-threatening disease that might not be life-threatening if it’s caught soon enough. Well you talk about life planning versus retirement planning and making sure people have a quality of life that they want and expect, well if you’re not fully honest with your financial doctor you may not get the best results.


KELLY FERRIN: I agree, 100%, and that’s a great scenario to share, because it is dead on with where we have so many challenges. We are getting there, but you know it’s funny, you know I talk about the fact that as a gerontologist and a specialist in retirement, I can’t talk about successful aging, successful retirement without talking about financial planning. Nor do I think this industry can be as effective in the work that they do without really incorporating this longevity planning, life planning scenario in their conversations with products and the investments that they are recommending. They do have to step away and look at it from a different lens and that’s where we end up getting to have some pretty significant results, and like I said this industry has done a great job. There’s a lot more work to do but they definitely stepped, definitely stepped up.


JIM: Well Kelly, it’s always awesome to have you onboard. You are a wealth of information, and one thing I just got to bring up the one story that really sticks in my head is the gentleman that you had, the retired, I think it was a GM exec that retired a couple years shy of being vested in his pension because of a heart condition, thought he was going to die, he lived, and I think if I remember right he was a gold medal winner in the senior Olympics, over 90 in the hurdles or something like that, and that story will always stick with me, so the thing is we have to be prepared for our future, so if there are any parting thoughts what would you say that it would be?


KELLY FERRIN: Yeah, no I think that we do, and the reality here, Jim, is that the majority of Americans guesstimate how long they’re going to live and how much it’s going to cost them to do so. The probable with that is that they generally underestimate how long they’re going to live, so when you’re basing your finances on a low ball number that’s going to be a problem. We seem to be in a place now where we are keeping people alive sometimes longer than they want to be, and we’ve got to start recognizing that this longevity planning is here. I think at the same time too we are experiencing perhaps one of the most extraordinary revolutionary events ever where we’re seeing this mass longevity. People are living not only longer but they’re living healthier lives. This idea of retirement has changed dramatically. It is no longer and nor has it been for years in the front porch and tiddlywinks, this is just a whole new life phase and stage and it can be what we make it to be. I can introduce you to 80-year-olds who act and look like their 50, and 50-year-olds who act and look like they’re 80. When people often ask me, when they hear I’m a gerontologist and I specialize in longevity, what would be the number one thing. The number one thing I tell people all the time is attitude. Feeling good about yourself, feeling good about your life. When we can get people to think differently about their life and their longevity, then they’re much more likely to incorporate the lifestyle behaviors that will enable that to happen. If they think it’s an automatic to decline, they’ve got no control over it, they give it up, they go to the barker-lounger and they blame all their problems on age. We are in a very new place and it’s an exciting time to be living long. But there are some tremendous challenges that go with it and the preparation financially, physically, mentally, socially that’s all going to be a part of this. We need to look into longevity planning and life planning as part of the umbrella of financial planning, and I think that’s why this financial gerontology is such an exciting time for this industry.


JIM: I’m going to quote the boy scouts to finish it, “Be Prepared.”


KELLY FERRIN: Be Prepared, that’s good, that’s right, or as Spock says, “Live long and prosper.”


JIM: Absolutely. Well it’s always a pleasure, Kelly; I really appreciate it and look forward to having you on again soon sometime.


KELLY FERRIN: Right back at you Jim. We’ll look forward to that, Jim. Thank you so much and thank you so much for the work that you do, it’s fabulous.


JIM: Have a good one.


KELLY FERRIN: Alright, take care, bye.


JIM: Bye.

How to protect your family when life happens

[podcast src=” andard/autonext/no/thumbnail/yes/autoplay/no/preload/no/no_addthis/no/direction/forward/” height=”360″ width=”450″]S*it happens. Let’s face it, that is part of life. If you’re old enough to be reading this, and listening to our Susman Insurance Agency weekly podcast, then you know it. This week, join Karl Susman and friends as they talk about how to best protect your family when the worst happens. Transcript follows.

JIM: Today we have with us the CEO of, it’s a nonprofit organization whose mission is really to educate people on the importance of insurance, and Marv, we’ve become good friends and we’ve shared the stage a few times on speaking engagements, and I really appreciate all the work that you’ve done for the industry. You’ve been a life long insurance agent, insurance professional, and now you’re giving back to the industry. I know you served as president of the Top of the Table in MBRT and you’ve been very involved in a lot of different things, but I think the most important thing you’ve been involved in with the industry is this, and Marv Feldman, I just want to thank you for being with us and I appreciate all you do for the industry.


MARVIN FELDMAN: Jim, thank you very much. It’s my measure and my honor to be able to share and give back, and hopefully we’ll come up with some good ideas for the people who are listening.


JIM: The scary thing for me when I see some of the stats is the number of people out there, I know Limber has done a bunch of studies about Americans that are uninsured or under insured when it comes to life insurance, and it always affects us. There’s always those people that you see that you think they’re the epitome of good health and somebody happens to them health-wise and they unfortunately pass away or a car accident or something tragic like 9/11, none of us know when that day comes but only some of us know how our family is going to be taken care of, and a lot of us are out there leaving things to chance.

Can you just first of all just share what is and how some of our listeners might be able to tap into some of the resources that they have?


MARVIN FELDMAN: Absolutely. The web site as Jim mentioned earlier is We were formed approximately 22 years ago for the express purpose of educating the consumer about what the products in our industry do, not just what they are, about motivating consumers to make informed educated guesses in their overall financial planning while utilizing the agents, and to reinforce the value proposition and the trust level between the consumers and the industry, because that’s something that the media continues to attack because we’re a big target, and they think we have relatively thick skin, but the reality is we have thin skin and it hurts our feelings just like everybody else. Our job is to reinforce that trust and confidence with the consumers.


JIM: The insurance industry, it’s amazing when I hear how much in claims are being paid out, and it’s amazing. It’s a really important part of people’s overall planning, and I know this is September so we’re focused on life insurance this month. It’s live insurance awareness month. You’ve been doing something every September by having a national spokesperson, so talk about a little bit.


MARVIN FELDMAN: One of the things that we try to do is to bring somebody to the front who is a nationally recognized individual who is also willing to share their personal story as it pertains to some type of loss, typically involving either life insurance or whether there was no life insurance. This year we’ve done something a little bit different, and that is that we’ve looked for somebody who is in a risky profession and has the chance of incurring some type of accident, injury, or death as a result of what they do, because in reality everybody is involved in some type of risk, even if you’re just getting in your car, driving down the road to go to the grocery store. You’re at risk of somebody running into or having an accident.

This year we reached out and chose Danica Patrick who is a professional race car driver, both Indianapolis type cars and NASCAR, currently running in the NASCAR circuit, and it’s interesting that when we reached out to her we were only thinking in terms of her sharing why she might want life insurance because of her profession, but then we found out that one of her gr andparents had died, they owned a farm, and when the gr andfather died the gr andmother had to sell a good portion of the farm to pay for taxes and expenses. We didn’t know that she had that story, so actually we have a two-fer. We have a story of loss and we have a story of protecting against the future risk that you might be incurring. She’s a tremendous, tremendous spokesperson and is being exceptionally well received by the industry and the consumers.


JIM: Marv, another thing that you do is you have the Life Lessons scholarships, where you award scholarships to kids who suffered a loss, and I’ve got to say I’ve been the judge for that a couple of times over the years, and I think if everybody had the chance to read those stories, first of all you don’t get through them without shedding some tears, but it is amazing, some of those tragedies that these families would have been maybe just a little bit better off had there been some planning in place, but those are all kids who lost parents with little or no life insurance. Share that with us a little bit, how that works.


MARVIN FELDMAN: We open it up February and allow people to submit their requests for scholarships and grants. During a 30-day period we have several thous and kids who will submit applications either written or video application which they can also submit. We then have to boil that down to a very few because last year or this year we only gave out about 34 scholarships total, but we’ve given over $1 million worth of funding in the last few years so it does add up to significant numbers, but it’s surprising when you read these scholarships about how many children were in a situation where there was a loss because of shooting, of drugs, of alcohol, of accidents, of illness, where the people were totally unprepared. They had no planning in place. They had little or no life insurance in place, and the trials and the tribulations that the families have gone through to try to maintain a family life, and for these kids to say, well how do I better myself going forward, so we’re looking for the stories where the children have really struggled to do well and are doing all the things that they need to do to better themselves and allow us to help them along the way, and it’s really significant.


JIM: Yes, you’re dealing with kids that are approaching college, so you’re talking about young adults and the parents of these young adults are fairly young by today’s st andards, and you would think there would be one or two out there but you literally get hundreds if not thous ands of applications, so it’s a reality of life today that life might end at the wrong time for the wrong reasons, but it’s still important to do planning.


MARVIN FELDMAN: It’s very important to do planning. One of the things that we’ve learned through our barometer study which we do in conjunction with Limber the research group for the industry, this are approximately a hundred million people in the United States who have no life insurance of any type. One of the problems today is that you look at the millennials who are deferring the life changing decisions, so they’re deferring getting married, they’re deferring buying a house, they’re deferring having children until they’re five or 10 years older than what it was during our time when we were doing those things.

I was married at 21, today the kids don’t get married in their 30s. I had children in my 20s. They don’t have children now until they’re in their 30s, so those life changing decisions are being delayed and because they’re being delayed they’re not learning early on what needs to be done, and for some of these millennials they’re far enough along in their life that now they’ve developed a few medical impairments and sometimes they can’t get insurance or can’t get it at a reasonable rate, so by delaying they cause other problems that they’re not thinking about, but it’s the old saying of it’s not going to happen to me so I don’t need to deal with it today, and what we do at Life Happens is to try to make sure that they underst and what are the possibilities that something could happen. They really need to take care of it today, and it’s not near as expensive to do what they need to do as they think it is.


JIM: Let’s take a quick break. When we come back let’s just talk about that a little bit, about what it really costs, because I think that’s one of the biggest myths. People think this insurance is really, really expensive but it is something that you can do by maybe giving up maybe a cup of coffee a couple times a week might be the difference between protecting your family and not, so please stay tuned.



JIM: Welcome back as we continue to visit with Marv Feldman who is the CEO of, a nonprofit organization that helps educate Americans on the importance of preparing and planning for their families, and also puts the money where the mouth is by offering scholarships for kids who have come from families who didn’t do proper planning with their Life Lessons scholarships.

Marv, before the break we were talking about how many people are ill prepared. You talked about the barometer, the insurance barometer where people are putting off starting families, buying homes, and things like that, and unfortunately they’re also putting off the important planning process and as people get older, having access to life insurance due to ailments, illnesses, maybe some bad hobbies that they might get into like race car driving like Danica Patrick which might make it unaffordable or unattainable to do the proper planning.

Before the break, one of the things we were talking about is the price of insurance, and I know this is probably one of the biggest myths out there. People think it’s ungodly expensive and they can’t afford it without actually checking in to what the price might be for them. Comment on what the cost of insurance is today.


MARVIN FELDMAN: One of the things that we’ve done in our research is to ask people of various ages what they think it would cost for them to buy just a quarter of a million dollars of term insurance at their age assuming they’re healthy. We get estimates of anywhere from two times to seven times what the actual cost is, so for a 30-year-old who is healthy, $250,000 policy is only approximately $200 per year, and a 40-year-old it’s only about $300 per year, and that’s for a 20-year level term policy.

Now, term is not necessarily always the right answer but it’s the least expensive solution, and people have to underst and that for less than a dollar a day they can protect their family, and people waste more than a dollar a day in all of things that they do. A cup of coffee, even if you use a Keurig machine a cup of coffee costs 50 cents to a buck a day, and if you go to Starbucks you’re talking about $2, $3, $4 a day, so when you put it into perspective the cost of buying life insurance is very, very inexpensive and what you do is create money where none existed before at a time when your family is going to need it the most, and that provides you a great sense of confidence and security, and provides dignity for your family.


JIM: Now, I know, your main mission is education and you’ve been trying different ways to reach the public to help them become aware that this is important for them and it’s not as bad as you might think it is. Talk about some of the new alternative distribution systems that are being developed to help the consumer.


MARVIN FELDMAN: There are a number of companies out there that are developing programs to make it much easier for the consumer to buy, and even the old multi-line companies and the old mutual companies, they’re all looking at things that can make it easier for the insurance to buy, so the research can now be done on line. They can look to see what they want. They can choose whether or not they would like to work with an advisor or an agent, whether they want to talk with somebody, whether they want to meet with somebody, and in many cases the actual application process can be done on line electronically, so there’s no need to sit there and fill out a bunch of paperwork.

It’s much easier than it used to be to buy. It’s not near as onerous as it once was. The system still does require some medical information but for many people it’s just a questionnaire. There’s really not much more that needs to be completed, so people are afraid to do anything because they think it’s very difficult and very hard to arrange it and to buy and very expensive, but those are myths that are no longer accurate, and it just takes a little bit of effort on their part to take care of it. If they are looking for a company that they can go to, go to, look at the list of our supporting companies. We have 150 or 160 companies that are listed on the site.

Jim, one of the things that people don’t underst and is sometimes you can go on to a site and you’ll get quoted a preferred best rate and they think that’s what they’re going to get, but they forget that they’ve got a little bit of blood pressure, they’ve got a little bit of diabetes, they’ve got a little bit of too much weight. They have all these little things that will impact their underwriting and that’s where an agent can really help guide them through the proper company.


JIM: I always tell people the internet has all the information in the world you need, but it lacks the wisdom, and what I find when it comes to insurance, I know you guys have great tools and if people want to get access to your tools, what’s that web site again?




JIM: As a consumer they can navigate through all those tools, and there are a lot of helpful things there, articles that have been written. There are real life stories. There are different things that they can access that can help them make an informed decision or at least get on the right track and formulate what questions they should be asking their insurance professional. It’s a great resource. People should be looking into it, and the last thing I would say it you touched on this, how important it is to work with an insurance professional, but I also look at that as when you make the decision to buy the insurance, they can help guide you to have the right coverage but even more importantly if there’s a claim they can help your family guide through it because let’s face it, if you lose a loved one you might not be thinking clearly, you don’t know which way to turn. There’s a lot of stress involved. An agent can really help you at that time.

Then in between, making sure you don’t make the mistake of letting that insurance lapse just before you need it, I think an agent plays a very important role in making sure that insurance does what it’s intended to do, and that is provide security for that family when it’s needed the most.

Any other points that you’d like to make, Marv?


MARVIN FELDMAN: No. Your point about the agent is good. When you’re going through a lot of stress and strain in what’s happening in your life, you don’t want to be calling 800-agent to find somebody to help you. You want to be able to go to somebody you trust that you know can walk them through the process.


JIM: My underst anding too is I have not seen any policies that are priced less just because you avoid the agent. The policies are fixed, it’s just a matter of whether or not you want the agent or not. Is that true?


MARVIN FELDMAN: That is true. A lot of people think that if they’re buying over the internet and they’re buying direct that they’re saving a lot of money. There are no fees, there are no commissions involved. Those are all regulated by the state. It doesn’t matter whether you’re buying through the internet or you’re buying through an agent. The cost for the policy, the premiums are exactly the same, so if you want to look at it that way, when you work with the professional agents and advisors you’re getting their advice and their wisdom for free.


JIM: Marv, always a pleasure to have you. Again, I really appreciate what you do for the industry, especially helping to educate the consumer, and hopefully we’ve reached a couple of people where it’s going to end up making a big difference that they make the decision to take care of their families and it’s there when they need it, so thank you, Marv.


MARVIN FELDMAN: Jim, thank you very much.

Is Life Insurance an asset?

[podcast src=” andard/autonext/no/thumbnail/yes/autoplay/no/preload/no/no_addthis/no/direction/forward/” height=”360″ width=”450″]Is Life Insurance an asset? Is it a plus or minus in your overall financial picture? This week, join Karl Susman and guests as they discuss and explain whether life insurance is an asset or not! Transcript follows.

JIM: When you think of life insurance, what do you think of? For most people, they just look at it as an expense, a bill that you have to pay, a liability. Well, did you ever think of it as an asset, part of a diversified portfolio? Well today, we have John Wheeler, a 40-year veteran of the insurance industry that might put a new perspective on the way you look at life insurance in the future, and the importance that it provides you and your family. Even though we’ve always known that insurance can be an asset, listening to John Wheeler’s insight might have you thinking about life insurance in a whole new way. Welcome, John.


JOHN WHEELER: Good morning.


JIM: Good morning. I’m really looking forward to our discussion. I heard you speak a little while back where you put some new perspective in the way that I look at things, especially when it comes to the area of life insurance. Why don’t we just start out with what is the real need for life insurance for someone today?


JOHN WHEELER: When I’m talking to a client, the way that I explain the need for life insurance is basically dollars walk in, if you walk out, for whatever purpose it’s needed for without delay, so whatever you had planned to do with your income and/or assets is what life insurance can either replace or preserve.


JADE: Hi John, I got a question for you – can you help clarify the different between term and whole life insurance?


JOHN WHEELER: Basically term insurance is the lowest initial cost life insurance available, but long term, has the highest cost. In almost every situation, if you live too long, you’re going to pay more in premiums than you would receive in a death benefit, and typically, that’s going to occur well before any normal life expectancy would’ve been reached, so it’s very much like renting. If can be a good, viable, short-term solution, but at some point in time, it’s going to be more expensive than if a purchase had occurred at the same time you started to rent, so statistically, it’s also important to underst and that less than 7% of the term policies issued ever pay a death benefit. Now whole life, on the other h and, is an asset that you actually own that builds equity, so it’s like owning versus renting. It normally has a fixed acquisition cost, provides a guaranteed asset growth, which can then be used during the insured’s lifetime, and still provide a guaranteed death benefit, and unless the insured is either very old at the time of purchase or has poor health at the time of purchase, it’s almost impossible to ever pay more than the death benefit would be received, especially if it’s purchased from a strong mutual company that also pays dividends, because then the dividend could actually provide an increasing death benefit as time goes on, even though the premium stays the same.


JIM: And you know John, a lot of times people look at just the cheapest coverage out there. What’s really important is when they sit down with their insurance professional, is determine for how long they’re going to need coverage. Now while those coverage amounts may decrease over time as they build up their net worth statement and build up their savings and things like that, there should be a permanent amount of coverage, because one thing people don’t even consider is they think, well, once I’m at retirement, I’m okay. Well, I know sitting down with people on a regular basis and looking at where their sources of income are going to be, many Americans today are dependent on their social security checks, and for a married couple, if one of them dies, they’re going to lose one of those checks, so how do they replace that income, and a lot of times, people don’t think that far ahead, and while term insurance is a great way to get started and get the appropriate amount of coverage that you need, and if that’s the only thing you can afford to have the proper coverage, one thing you want to make sure is that you have decent conversion privileges and you’re able to convert to some permanent coverage for some of those permanent needs, would you agree?


JOHN WHEELER: That’s absolutely correct; because the first thing to be considered is making sure that there is an appropriate amount of coverage, if at all possible. Everything else is secondary beyond that point, but a lot of times people look at that initial cost and there’s such a significant difference, especially when you’re younger, that it just looks like, well, this is just so much cheaper, it makes so much more sense, and then you always hear about the buy term and invest the difference philosophy and we’ve recently been reminded that some of those investments don’t always just go up at the same time, as well as are you really going to continue that savings pattern and leave it alone? America is the worst saving country of the industrialized nations and our famous last words is I’ll put it back, so sometimes that doesn’t occur, and, as we’ll discuss a little bit later, the other issue with the whole life, if you’re in a position that that is a cash flow possibility, can also be leveraged as well.


JIM: And it’s interesting, too. I just met with a couple this last week and we were talking about amounts of coverage and I showed them permanent coverage and I showed them term and quite honestly, the permanent coverage gave them a little bit of sticker shock. As we discussed it a little further, they opened up and said boy that seems like a lot of insurance and when you think about it, how much coverage should somebody have? Well, if you’ve got someone who is the main breadwinner and maybe all the health insurance is provided through that breadwinner, many people don’t think about how are they going to pay for health insurance if all of a sudden, it’s not provided through that employer? They look at the income. They say money is really tight, yet, they seem to think that money won’t be so tight when someone passes away with a policy that might pay a quarter million, well, if you’ve got someone 30 years old making $50,000 a year, if you’ve got a quarter million, that’s five years worth of income replacement, and that doesn’t even include the cost of the benefits that are being provided, so the amounts of coverage that we’re showing people today, a lot of times that gives them sticker shock, how do you deal with the amount of coverage, or what are you telling people they should be looking at?


JOHN WHEELER: The easiest way that I get a client to underst and really what we’re talking about first of all, is I’ll ask a simple question. Would you be willing to give me all your future paychecks for the amount of life insurance and assets that you currently own, and 99% of the time they’re going to, in seconds, say well, no, and then I’ll just ask the question, are you aware that’s what you’re asking your family to do? Because at the end of the day, we have the concept that as I replace debt with wealth, I no longer need life insurance. Well, if you’re taking a term insurance approach or some type of insurance that is not going to increase in value as time goes on, you’d better hope you’re right for the simple fact that inflation is going to tear away those dollars, and then a lot of people say, well, we really don’t have inflation now. Well, go to the gas pump and explain that to me. Look at your healthcare costs. Explain that to me. Look at the cost of education, so even at a time where today’s economy we say, well, there’s really no inflation, well, there is in a lot of the things that we have to deal with each and every day, so the bottom line of it is, my son taught me a long time ago, it’s always better to use other people’s money. When he was spending my money, he looks at it all together different than when he’s spending his, and likewise, we want dollars that are going to walk in if we walk out that are still going to be able to provide what we would’ve if we were still there, and if the cost of providing some of those things from a security st andpoint to our family, is still going to be increasing in cost, we need something that is going to help keep pace with that, like anything else, whether we’re looking at retirement or whatever, it still takes more dollars to do the same thing as time goes on.


JADE: I really like at how you kind of looked at term insurance as renting and whole life as ownership. Why do you refer to whole life as an asset class?


JIM WHEELER: Because it is, in fact, an asset that has equity value. That equity value is guaranteed to grow every year you own it. Very few assets you can make that statement about, and the equity also can be used for a multitude of purposes, whether it’s emergencies, education, retirement income, or even to capitalize on other opportunities that may arise. Life insurance cash value is normally the second or third line on a personal financial statement in the asset column. It has asset value that you don’t have to die to receive, and it’s one of the only assets that you can own where they will never see red ink on their annual statement showing a loss in value from previous years.


JADE: Let’s go back to the comment you made, too, of a little bit earlier in the show as far as the cash value component again. How can you view that as an asset, because you mentioned the term leverage?


JOHN WHEELER: The issue of the cash value is, like I say, this is a living benefit. People often look at life insurance, well that is only for someone if I’m gone. Well, if you have a permanent type of insurance, like whole life that has asset value as well, most of the time, at least 90% of that value is accessible just upon request, so that could be used for whatever purpose that you chose to, whether that is to take advantage of opportunities from a leveraging st andpoint, or whatever, very much like real estate, or something of that nature.


JADE: John, we’re going to take a quick break and when we come back, let’s talk about the asset class maybe that’s closest to whole life to kind of put things into perspective, so please stay tuned.




JADE: Welcome back as we continue our conversation today with 40-year-plus experienced insurance planner, John Wheeler. John, prior to the break, we were talking about the importance of life insurance, the differentiation between term and whole life, and you commented how life insurance or whole life insurance can be considered an asset class, so let’s continue on with that and talk a little bit about what’s the closest asset class to whole life insurance today?


JOHN WHEELER: Well, there could be a lot of differences of opinion on this, but I liken it more to real estate and the reason I do so is because real estate can either be rented or owned, whereas whole life, as we said, is an asset whereas if I’m buying term insurance, that’s like renting, and it’s always more expensive to buy initially, but there’s no asset value unless you buy, so you might think in terms of CDs, things of that nature, as far as safety, but in how it actually works as an asset, I actually feel real estate is closer.


JIM: Well, let’s talk a little bit more about how they compare, Johnny. I know when I heard you talk a few months ago, you went through a real detailed analysis of really how closely it does compare to real estate, and in many instances, can have more favorably comparisons to real estate.


JOHN WHEELER: Sure, see real estate value increases or decreases the same amount, whether there’s a mortgage on the property or not. We’ve recently been reminded that real estate can go down as well as go up, and whole life insurance, guaranteed cash value on the other h and, will increase the same amount every year, whether there’s a loan on the policy or not, and some mutual companies then will even credit the same dividend, whether there’s a loan against the policy at the time the dividend is declared or not, so whole life insurance cash value will never decrease, but is guaranteed to increase every year to maturity, which is typically age 100 or 121, in some cases, depending upon the carrier. Now owning real estate can also have tax advantages, such as deductible interest payments, property taxes being deducted, improvement increasing basis, and in some situation, may be even depreciation deductions if it’s for rental property, but most of the deductions are still, however, we have to remember, out-of-pocket costs, so at the time of the sale more than one year later, we might also get capital gains treatment, or if it were a primary residence, possible capital gain exclusion up to a certain amount. Now whole life insurance also has tax-deferred accumulation and can also provide tax-favored income and, in some cases, even tax free if you’re using loans and the contract is not a modified endowment. It also provides a tax-free death benefit income tax wise, in most situations, and the dividends are going to be received income tax free until the dividends received exceed the premiums paid in. Now real estate can, perhaps, also provide leveraging by using the equity in some form of secured loans, providing that the bank is willing to do so. Now the secured credit loan or a credit line, you still have financial st andards that have to be met. You basically need to prove you don’t need the loan for the bank to really want to give it to you. Now real estate equity can also, as we’ve recently been reminded, decrease as well, so that makes future accessibility even more difficult, and possibly having the credit line either reduced or closed all together. Now, obviously, if you have a loan, interest is also payable on that loan, but if a loan exists at the time of the purchaser’s death, it’s also important to remember it’s still owed by the estate, so that loan still has to be paid off. It isn’t forgiven, and if the purchaser were to become disabled, any payments are still required by the lender. Now, even after the mortgage is paid off, there are also costs to keep it, which people don’t take into account sometimes. We still have to pay insurance, property taxes, upkeep, etc., so in essence, you never really completely own it. Try not paying your real estate tax for a few years and see if you really own it, even if the mortgage is paid off. Now, in contrast, normally in the range, as I indicated earlier, about 90% of a whole life policy’s equity is available upon request, with no repayment requirements whatsoever, other than typically you’re going to be billed annually for the interest and the payoff amount then would be subtracted from the death benefit in the event of death. No further payments are required after death, and the death benefit is normally going to be received income tax free, and if the policy includes a disability waiver of premium, then any future payments would also be waived, if you’re disabled before a certain age, usually 60 or 65. Now future dividends, if a mutual contract, could also be used to pay off that loan interest, or even the loan itself over a period of time, and remember, whole life is also guaranteed to increase in value every year you own it. Wouldn’t it be nice if you could say the same thing about real estate?


JIM: The other thing I know that you mentioned that I find of interesting perspective is when you borrow against life insurance; you can choose to come have that deducted off the death benefit, or the proceeds to your family. You can’t just take money out of the equity of your house and choose to tell the bank, hey, look, when I die, just forgive the loan at that point and take if off what my kids get, you’d probably be living somewhere else because they would make procedures to have you find a new place to live.


JOHN WHEELER: Even paying the interest for that matter, because try not paying the interest if you have a credit line, and they’re not just going to add the interest on to the credit line normally if you’re anywhere close to what that limit is, and, as you just mentioned and I mentioned earlier, a lot of those credit lines today have decreased. You didn’t do anything wrong. You never missed a payment, but just because of overall debt that’s in existence or real estate values declining, and unless you had a major down payment at purchase, you may be upside down on the loan.


JIM: A couple years ago, took an equity line, because I’ve got three kids college age right now. Two of them are attending college and I had an equity line just kind of as my backup to have some extra funds available, and the bank wrote me a letter and said your equity line is frozen, but thank you for keeping making those payments, so what I thought was going to be a line of cash that I’d have access to, has not been there, but I do have a permanent life policy which I’ve accessed several times over the years as I needed to, and it’s been a great way of having some access to some funds when my IRAs, if I pull that money out, I’m not 59-1/2 yet, so there are penalties and taxes involved, it’s nice to be able to borrow that money and not have another financial impact out there, and then I could pick my own loan repayment schedule. If I had a little extra money, I could throw it in there. If I was a little short or wanted to skip a payment, that wasn’t really a problem. I was able to structure the loan that way, so it is a fantastic tool.


JOHN WHEELER: It’s also important to realize that that whole life guaranteed cash value increase still occurs, whether there’s a loan or not, so you’re actually building additional equity guaranteed every year, and it provides more flexibility than almost any asset in the marketplace today. A lot of people’s 401(k)s have become 201(k)s. Credit lines have dried up. I’ve had clients that own businesses that have used cash values of their life insurance to help meet payroll, or because they couldn’t get the loan from the bank or their credit line was cut to be able to make up for the fact that their receivables were slow coming in, or we have clients that do have college-age kids and maybe they bought a 529 plan and that tax free income they were looking forward to if it was used for education, is wonderful as long as there’s gain. Many of them don’t even have any gain, so having that cash value of the life insurance that they could utilize allowing that 529 plan possibly to come back and get some gain, provides flexibility, or even at the time of retirement. We’ve had clients that having an asset that they can dip into whenever they wish, as opposed to many other scenarios, that when you turn the spicket on, you can’t turn it off, the only time I’m going to totally lose in the market is if I sell at a loss, whereas the market will go up and the market will go down, but if I have the flexibility to where I’ve got another well that I can draw water from when I’m thirsty, as opposed to continuing to sell at a loss, provides a lot of initial security.


JIM: Having a diversified portfolio makes sense and permanent life insurance certainly is a good part of that overall diversified portfolio. John, one other thing I’d like to ask you about, and that is, we’ve had accelerated death benefits for awhile, and recently, what’s been added to the different options available with that, has been linked benefits for things like long-term care. You want to just comment on that a little bit?


JOHN WHEELER: The key advantage to those type of linked benefits is again, the taxation, not paying tax for that and being able to access, in certain situations, even more than what the cash value was, so if it’s just one other way of providing additional flexibility in the event that it’s needed, but the key thing is, is it an absolute replacement for some of those things? You have to still be sure that you underst and that life insurance death benefit was decided upon normally for a specific purpose, and if I spend that death benefit early, then it isn’t going to be there for the other purpose as well, so it isn’t an absolute substitute, but it certainly can provide some additional flexibility, if nothing else, for the unexpected in life. That preferential tax treatment is always a good thing.


JIM: I know we’ve had cases where we’ve worked with clients where that accelerated death benefit, sometimes what’ll happen is the majority of that death benefit can be made available for the family if someone’s terminally ill, for example, and instead of waiting until that person dies, it actually allows the family to take care of some things and have that person be part of the decision making on how that’s done and can really be a powerful tool.


JOHN WHEELER: Exactly right. The whole issue is being sure that your planning and whatever area that it is, provides enough flexibility for the unexpected, because if a client will commit to me exactly what what’s going to happen, we’ll tell them exactly what’s going to do, but none of us know that. None of us know the type of situation that we’re going to encounter before we leave this world, so providing that additional flexibility to where I have another source that I can provide for my needs, whatever those needs entail, can provide a lot of extra security.


JADE: Can you share a story or two as far as how that’s made a difference in a family’s life?


JOHN WHEELER: I’ve seen families that because the home equity went away for whatever reasons or education planning never got quite to the point that it was, any number of scenarios like that where when they didn’t even realize sometimes that this value could be used in advance, that can make a big difference. One of the best stories of all time wasn’t a personal client, unfortunately, was Walt Disney. He had this vision of Disneyl and and he couldn’t get enough loans and so on and so forth at that time, for this cockamamie idea that he had, but still yet he had the foresight to purchase quite a lot of permanent life insurance and loans on his life insurance helped start Disneyl and, but I’ve had families that because of that planning, the unexpected occurred. I had one client who was a real health nut. When he took off his shirt, even guys looked. He had a twelve-pack, I mean, he looked like someone that was just perfectly in physical health, came down with lymphoma, lived less than three years after that. He could’ve been the type of individual that had said, look, I’m healthy, I’m relatively young, because he died in his early 40s, there’s really no reason for any of this. Well, we got to see how disability waiver of premium worked because there was a period of time that he got, before he passed, that there was no way that he could continue working, so disability waiver continued to have these contract values continue to build, even while he was disabled, and then when he passed, his kids got to stay in the same school, the house was paid for, a large portion of the income that he would’ve been bringing home was still provided for, and his kids still talk today about the real love letter that he left and showing how he did truly care because of the foresight that just in the event something might happen, I want to be sure that my promises were kept. See, in the life insurance industry, we were the original promise keepers. Everybody else comes to the wake with sympathy and good wishes for the family and expressions, feelings of sympathy. We’re the only ones that walk in with a check instead of bills, and it’s very, very important to remember, the bank may tell you no, but a life insurance company won’t if you have value in that contract. It’s like the Good Book says, ask and you shall receive. We’re the only ones that will do that beyond question. Otherwise, if I’m looking to be able to get a loan, my equity value may go away, rules may change and regulations may change and so on, and it’s the unexpected that we also provide for at the same time. Life insurance I’ve often, permanent life insurance, in particular whole life, I’ve often referred to as the Eighth Wonder of the World.


JADE: Well you’ve made a very compelling argument as far as how to view life insurance as a protection tool. You’ve touched on some amazing stories that really allows you to look at life insurance in many different ways, and you’ve done a great job of helping us underst and how life insurance really is a comparable asset class to other assets, and actually in many cases, more favorable, but, at the same time as we kind of walk through today, I feel sometimes that the listener might think there are just so many choices and options, so maybe as we wrap up here, just talk about the importance of not going these decisions alone and working with a qualified insurance professional to really underst and the needs and determine the best approach to take.


JOHN WHEELER: Well, like anything else. I might start having chest pains and I could always go on the internet and I could see, well, let’s see, it could be gas, it could be a heart attack. Are you felling lucky, as Clint Eastwood would say? As most other situation, the average individual spends more time planning a family vacation that they do their financial future. Doesn’t it make sense with something as uncertain as life is, that it would make sense to sit down and get an opinion of someone who that is their specialty and that can help explain the various different types of coverage according to what you’re feeling is important to you and what you’re concerned about, to help put the right situation on it. If I went to a car dealer and I said, well, I want to buy a car. That doesn’t give a lot of direction. There’s a wide variety of cars to choose from. All of them have advantages and disadvantages. Our field is no different. So, sitting down with a qualified professional that can help explain to you the differences to where you, the consumer, can make an educated decision, and basically at that point, what we do is put price tags on those solutions. Not everybody feels that certain things are the same advantage or disadvantage that other people do. Even though I may see an advantage in some solutions, it may at this time, no necessarily be affordable. I may have champagne need and a beer pocketbook, but at the end of the day, underst anding what I’m dealing with and various different ways to approach that, is ultimately the key, so getting that assistance and walking through the maze of decision making process and trying to fit something specifically for me, is, by far, the best approach.


JADE: Oh yeah, and I appreciate that perspective. It’s an area sometimes that people think it’s just the word life insurance already kind of puts up that wall and gosh, it’s too complex, I don’t underst and it, it’s too expensive, there are just a lot of misconceptions out there, and working with that person who has devoted their career to focusing on this area of planning is definitely wise advice. We really appreciate your time today and your perspective, and hopefully this inspires listeners to go back to their insurance professional and really sit down and take a new look at life insurance. Again, term is appropriate in some cases; permanent, of course, in other cases. Viewing it as an asset class and realizing all the powerful benefits that life insurance can provide, working with quality insurance professionals, working with a quality company, obviously evaluating their claims paying ability, all those things are important considerations, so thanks again for joining us and sharing your wisdom today, John.


JOHN WHEELER: Well, thank you.


JIM: Thanks for joining us this week, and tune in again next week as we explore another phase of the Real Wealth process, and remember, if anything you heard in today’s show you’d like to get more information about, contact your Real Wealth advisor. Also, if you feel that any of this information will be helpful to a friend or family member, just click the forward to a friend button.

JADE: Please be advised that a taxable event may occur if a permanent life insurance policy is allowed to lapse and a loan on the policy is outst anding. Policy loans reduce the death benefit dollar for dollar. Life insurance guarantees are based on the claims paying ability of the issuing company.

High Deductibles?

[podcast src=” andard/autonext/no/thumbnail/yes/autoplay/no/preload/no/no_addthis/no/direction/forward/” height=”360″ width=”450″]Do you have high insurance deductibles? Lisen to the Susman Insurance Agency podcast this week with Karl Susman as he and his guests discuss how to avoid high deductibles. Transcript to follow.

JIM: About 15 years ago, I was at a meeting for insurance agents and financial advisors and had the opportunity to hear Dr. Marius Barnard speak and Dr. Marius Barnard and his brother Christian are known as pioneers in heart surgery. They had the first successful artificial heart transplant, very involved with heart treatment, and I know Dr. Marius Barnard, he would see his patients and how he could basically bring them back from the brink of passing away and solve their medical issues, at least for a pretty good period of time, but created huge financial issues for those families because what a lot of people didn’t realize, until they were in the situation, things like health insurance, pay the bill, things like disability insurance give you a weekly check, but a lot of time, with these serious illnesses, you have the whole family rallying together and you may have a spouse that is losing time at work. You may have family that’s needing to travel a lot for services so what he did is he went to the insurance industry and the companies and said you’ve got to do something about this. Joining me today is Don Hanson, and Don Hanson has been very involved in a new type of insurance that really isn’t so new anymore but it is kind of new in the United States, which is called critical illness insurance, and he’s actually been part of the process in designing some of these products for companies with ObamaCare creating much higher deductibles for families than they’ve ever seen before as we go to a new system. In other parts of the world, this has been a very popular insurance but it’s something that really hasn’t caught on yet in the United States and I wanted to give people a chance to be aware that this type of insurance even exists so welcome, Don, one of the creators of some of these types of policies. Welcome, Don.


DON HANSON: Thanks, Jim, pleasure to be on the show. Thank you.


JIM: In my intro, I kind of talk a little bit about critical illness insurance but why don’t you exp and on that. What is critical illness insurance?


DON HANSON: That’s a good question. You had mentioned Dr. Marius Barnard just a couple moments ago and, really, critical illness insurance is the brainchild of Dr. Marius Barnard. He realized, like you mentioned, that, my guess, he would take people and basically bring them back from the brink of passing away to, oh my gosh, look at what their finances are looking like. In fact, he had kind of an offh anded joke he would tell to people. He said, hey, I’ve successfully transplanted your liver but we’re going to have to remove your bank account. Unfortunately, that really reigned true with most of his clients. He would see them a year later or a couple of years later and they would say I don’t have any money left so critical illness insurance was his idea to help provide money to a person who would have a life altering event that, up until that point in time, would literally put them into bankruptcy.


JIM: Now, I thought, and maybe I’m wrong, that this stuff has been around or created, I believe it was 1993. Do you know exactly when it started?


DON HANSON: Dr. Marius Barnard actually starting getting the insurance companies interested back in the 70s but it’s my underst anding the first critical illness policy in South Africa was established in 1981 or 1982.


JIM: Okay, so I’m way off on that so it’s been around a long time. When I heard him speak, this was probably in the mid to late 90s and I know he passed away maybe three years after I heard him speak so I feel so fortunate to having met one of the pioneers in transplants and he was passionate about it. I mean he was going around the country speaking about this type of insurance. Obviously, being the one that created the idea of it, it was, back then, the number one fastest growing insurance product all over the United States. I thought this is something I should be aware of for my clients. I went through a whole bunch of education and started talking to my clients and then nothing so why is critical illness so popular in other countries where it wasn’t popular, in my experience, here in the United States?


DON HANSON: Well, that’s a good question. I think the first answer to that is, in other countries, they’ve got socialized medicine. That can be a real issue for people to get quality care, emergency care, long-term life altering diagnosis. People want to be able to have options and having a tax-free amount of money is one of the best ways of giving people options in their healthcare.


JIM: There was a Mackinaw Center of Public Policy and back when we were first toying with the idea of socialized medicine with the Clintons, they did a study that compared the United States to Canada and I’ll never forget because it was around this time that my father-in-law had heart surgery and I remember he went into his doctor and the doctor said you need to have bypass surgery. You have blockage. This was on a Thursday so, literally, they were going to put him under the knife on Friday, and they said, otherwise, we’ll wait until after the weekend and do it on Monday. I remember looking at this and it kind of struck me because, in Canada, the average wait was over six months. Now, that average wait is for the people that actually had the surgery. I don’t know if people might have died or people might have been denied the benefits but I know that’s something that you hear as people get older, they just aren’t eligible for that type of care, so something like critical illness creates a pool of cash and, if they want to go off the grid so to speak and still get the surgery, they can move to the front of the line and I think that’s what we saw happening in other parts of the world is why it caught on. Would you agree?


DON HANSON: Absolutely.


JIM: So, now, here in the United States, most people don’t know what critical illness is, they’ve never heard of it, and you’ve been involved with some insurance companies in developing some products so what makes you think and what makes the insurance companies think that all of a sudden the United States, they’re going to think differently about it in the years to come?


DON HANSON: It sure has caught on a little slower than what was anticipated but I do believe that it really has begun to pick up momentum and a lot of the reason is because people, really, up until now, the average American, they don’t even know that this type of insurance even exits so it helps with a little bit more awareness. More agents are underst anding that this is even available. For the longest time, even insurance agents didn’t know that critical illness insurance was available or even what it was if they did.


JIM: I just did a talk with several agents, a couple different groups that I talked to in the last week or two, and there was over 100 agents in each of the talks that I was speaking to and I did ask the audience, how many people are aware of critical illness insurance, and only about 20% of them were aware of it. Then, I asked how many of you could adequately explain what it is and how it works, and there was only one or two h ands that went up. One thing is, when it comes to critical illness insurance, if this is something that interests you, go back to your insurance agent and your insurance professional and, maybe, you might have to be a little bit patient because this is something that’s fairly new and they might have to do a little background research for you to adequately counsel you on how this might fit into your overall plan. We’re going to take a short break and when we come back, let’s dig in a little bit deeper. Let’s talk about some of the benefits that might be available and, also, how do people get this insurance, so please stay tuned.




JIM: Welcome back as we continue to visit with Don Hanson and, Don, as we mentioned, has actually been involved with several different insurance companies and he’s actually worked in the area of critical illness and helping companies develop product so I thought who better to talk about this with than someone who has been on the inside actually creating these types of policies to have a deep underst anding of how these policies even work and what it takes to qualify, so let’s talk a little bit deeper about the benefits. We’ve heard of the policies, you know the duck, I won’t mention any names, but they have cancer policies, sometimes you see accident policies, and while those have a place, critical illness is so much more broad-ranged in the benefits that they provide, so talk about some of the illnesses that might trigger a benefit with critical illness.


DON HANSON: Absolutely, and I think one of the things that even insurance agents can sometimes get confused with here is that this is not meant to be a policy for hangnails. This is really a policy for critical illness diagnosis, a life-altering diagnosis that’s happened. A good example of some of the covered conditions would be, right off the bat, heart attack, cancer, and stroke. We look at the overwhelming majority of the population, male and female, we look at the top four killers of both genders, and heart attack, cancer, and stroke are in those top four. Those three are part of the top four so those three conditions alone account for nearly 80% of the claims on these policies and that doesn’t mention Lou Gehrig’s or ALS that is also covered on some policies, major organ transplants. I have an aunt that actually went through a double lung transplant and, my gosh, she was on the waiting list for two and a half years and not all the time was she on that list because somebody didn’t have the lungs, it was because she needed to be healthy at the time they did the transplant. There were a couple times she missed out because she just wasn’t healthy enough to do the surgery.


JIM: My underst anding is there’s maybe as many as 21 different diagnoses that result in a claim and the way those claims work, it’s basically a lump sum check and you can have a small policy that might help cover the gaps with deductibles. I don’t think people fully even appreciate, now, those higher deductibles until they get sick and then it causes financial hardship even to cover those deductibles but what I’m hearing, what some of the increases for health insurance might be over the next year or two as more of the Affordable Care Act gets implemented, I think we’re going to see high increases is what I’m hearing and the way to combat high increases is go with higher deductibles and people are going to be exposed to a lot more risk so talk about how those benefits work. What does it take to get a check and is it paid out over a couple of months or how does that work?


DON HANSON: Sure, that’s a good question. One of the unique things about critical illness insurance is that it’s a lump sum one-time payout. There are certain insurance policies that will have multiple diagnosis payouts available but, really, if somebody is diagnosed with a heart attack, they get a tax-free lump sum check after the diagnosis has been established and, really, that money is completely, it’s up to them what they do with it. There is no control from the insurance company as to how they use that money.


JIM: That’s interesting because you go back 30, 40, or 50 years, and medical technology has come a long ways so the things that used to kill us, now, we’re able to recover from it but, financially, that’s always the challenge and I know I’ve been involved in some circumstances with some business partnerships where a partner wasn’t supposed to make it and they recovered and here they had a buy/sell relationship with life insurance but they had to still go to the bank and borrow the money to buy the partner out because they had an illness that wouldn’t allow them to return to work so I can imagine that in the buy/sell arena for business owners or key man, the things you would think about for life insurance, you need to think about for this because, if you have someone survive a life-threatening thing where they can’t go back to work, obviously, there’s disability insurance to maybe help with the monthly bills but there’s usually a lot of costs that go well beyond it so something like buying out a partner, can you get enough coverage? My underst anding is you can get maybe as much as $1 million of coverage or how does that work for, say, a buy/sell situation?


DON HANSON: Well, that’s a good question. As far as benefit amounts, benefits can be as low as $5000 in a policy and it can be as high as $1.25 million. Now, one insurance company doesn’t cover the full $1.25 million. In those particular cases, very unique, would require multiple insurance companies to be involved but, yeah, we can get up to $1.25 million, depending on the circumstance. Correct.


JIM: So, it’s quite a wide range. Now, I know life insurance has gotten a lot easier to get people insured. I’m a pilot and I remember when I first got in the business, if a company would take you, they would charge you a flat extra of $2, $3, or $4 per thous and dollars of death benefit or they wouldn’t even consider taking you and, now, there’s companies that will take you st andard. I look at things like cancer. Someone got diagnosed with cancer and you could just forget about getting life insurance and, now, after a couple of years, they’ll go and insure somebody. Is this as easy to get as life insurance or how does that work?


DON HANSON: You know, that’s a good question. I would say that getting underwritten in critical illness insurance, there’s a combination of some mortality and some morbidity because, really, with critical illness, it doesn’t matter what happens after the diagnosis so whether a person is now deceased or whether they’ve survived and now they’ve got a long road to recovery, the critical illness insurance company, they don’t take any of that into consideration. The only thing they take into consideration is the fact that there was the diagnosis to begin with so it is a unique underwriting experience. With family history, it’s a very important piece of underwriting. As far as previous diagnosis in critical illness, if somebody has already had a heart attack, cancer, or stroke, most of the insurance companies that offer critical illness insurance would not be willing to issue a policy on that individual although there are insurance companies that do have 10 year previous diagnosis so if there has been no cancer diagnosis in the last 10 years, then they would issue a policy. It has gotten a little bit easier with new insurance companies getting into the business but, for the most part, it isn’t as simple as life insurance but it’s not quite as difficult as disability in some circumstances, such as financial underwriting. Critical illness insurance doesn’t have near the financial underwriting that disability does.


JIM: So, really, what we’re looking at is people that would be motivated to buy it probably don’t qualify because they probably have something but it is something you really want to think about because who among us doesn’t know somebody in our family or friends that haven’t been diagnosed with something like heart attack, cancer, or stroke, and then there’s a whole myriad of other things that are also covered on a lot of these policies. Don’t decide from this program, well, I don’t know if I can get it or I don’t know if I want it. When you’re looking at your health insurance and you’re seeing $5000 and $10,000 deductibles, that can be a lot for a family to h andle and, boy, if someone gets sick with something like that, now, you’re making that deductible maybe year after year after year so it is something that can help fill the gap. There’s also something that you can couple with critical illness because it’s only covering the illnesses so, if someone is looking to help maybe mitigate some of the risk of these high deductibles, they might also consider an accident policy, and how do those work, Don?


DON HANSON: Well, there’s really two different types of accident policies. There’s one that’s considered a schedule of benefits and it’s a very straightforward accident plan where you can go to your policy and it will say exactly what your dollar benefit will be dependent upon the type of accident that happens and then the second kind of accident insurance is what’s called an actual expense reimbursement and what that does is the insurance company asks you to submit what the charges, what’s been billed to you, and they’ll reimburse what’s been billed to you.


JIM: With those accident policies, do they pay one and done or is that something that you can keep going and, if something else happens, you can collect again?


DON HANSON: That’s a great question. It’s actually an annual basis so, hypothetically, a person can claim on an accident every year up until the time they get rid of the policy or, normally, accident plans are done at age 65 to 69 range.


JIM: All right, and then the last question I’d ask you, how expensive are these policies? Do you find people can afford these or are they only for someone who’s got money falling out of their pockets?


DON HANSON: That’s a good question. Really, I hate to say, it depends upon the face amount or benefit that’s wanted but, really, that’s what it comes down to, a person’s age and the benefit that they’re looking for but, really, critical illness insurance policies can be very affordable. If we’re trying to buy $1 million, of course, that’s going to come with a cost but, when we look at average benefit amounts of $25,000 in face amount being sold, those are really, really affordable. For the most part, the average American, $25,000 of tax-free money is going to help pay their deductible and, if they have some sort of long-term disability, it will at least help pay for maybe the first 90 days of their waiting period before they start getting a disability benefit.


JIM: Well, I know the one thing I’ve found from personal experience and working with clients is when they get something like that, it usually involves a spouse or other family member carting them to follow-up visits, therapy, rehab., chemotherapy treatments, kidney dialysis. All of those things require a family member typically driving them to and from the office because a lot of times after those treatments people aren’t even supposed to drive. We had a guest on a while back that was in Canada and one of the things he talked about in Canada with his cancer, he was fortunate. He lived about three miles from the cancer facility where people were traveling 300 miles to go to that facility and one of the things we’re seeing in the United States is with the state exchanges, if you’re in a border area and your doctor is across the border in a different state, now, you may have to go for getting treatment, it might have to be in some other city where you were used to being close by so it’s definitely something worth considering. You should talk to your insurance professional about it. Now, I will say, you’ve got to cut them some slack on this one because most of them are just starting to learn about it. I know I’m just starting to learn about it but maybe have them look into it for you and be your advocate to help determine whether or not this would be a good thing to help mitigate some of the risk as we’re going with higher and higher deductibles with our health insurance. Thanks, again, for joining us, Don.


DON HANSON: Thanks, Jim.