Video: Expect The Unexpected Your Contingency Plan
Saturday, July 10th, 2021

Hello and welcome to another episode of the Smart Money Show. I’m your host, Stephen Rischall and today we’re going to be talking about planning for the unexpected.

By now, you’ve probably heard about the condominium collapse that happened in Surfside, Florida. In fact, just the other day, they called off the search and rescue efforts. Unfortunately, it’s now become more of a recovery effort.

Shortly after 1:00 AM on June 24th, the 12 story Champlain Towers South, the South tower, partially came down. We know of at least 36 confirmed deaths and well over 100 people that are still unaccounted for.

I think a big part of this horror is that when you think about it, it’s just the suddenness of the tragedy. The victims, they couldn’t have really done anything to prevent it, but they and their families have now paid the ultimate price.

Now, as horrific as this is, I think it’s normal for most people at some point to start thinking about how something like this might impact their own family. I know I did. Like what would my family do? What would my business partners do? Heaven forbid, if something like this happened to me?

I don’t wanna be morbid, but just like that building collapse was totally unexpected, we live in a world where terrible things can just come out of left field. Over the past better part of a year, a year and a half, we’ve had the COVID-19 pandemic that’s certainly taken a toll on a lot of people, and here in Southern California, we have earthquakes.

Look, if something like that happens to us, we don’t want our families to have to deal with both the emotional and the devastation and financial chaos or worse, so we may not be able to avoid some of these risks, but we can definitely take steps to make sure we have a plan or that our family has a plan just in case something does happen.

We all need a continuation plan. And I also think of course, there are steps we can take to reduce the odds of certain risks, potentially certain types of catastrophic events from happening.

Just like that building, some people are asking if deferred maintenance, repairs that should have been done, but were not, if that’s what really contributed to the collapse. I think it probably did. And in a similar way, we have to ask ourselves if we’ve ignored or overlooked some important repair work in our own situation, in our own financial lives.

First of course, there’s your health, diet and exercise, making sure that you and your family are living a safe and healthy lifestyle. Certainly a lot of that’s within our control. And in the financial realm, this really means making sure your financial house is in order. Now, I’m referring to having a healthy relationship between income and expenses, automating your monthly savings, if that’s appropriate for your situation. The right investment or mix. We talk about balancing risk and reward, making sure that fits your situation. And of course, having a solid and up-to-date estate plan, which might include things like life insurance and other important strategies, and other important people involved like your successor trustees that need to know how to operate that estate plan.

Now look, what it really boils down to for clients, for our clients, is having a financial checkup. Because we go over all these types of things and more during our review meetings. We’re kind of like proactive financial planning building inspectors in a way. And I guess that’s why all of us here at Navalign continue to harp on the need for clients to have that financial checkup every single year or more often, if your situation changes.

For sure, taking care of deferred maintenance or deferred financial maintenance is important because it can help prevent certain types of financial disasters. But even with a financial checkup, you still need a plan B, a contingency plan, an emergency plan. Call it what you will, but we’re talking about the same thing here. As in, what would my family do if something terrible and unexpected happened to me? The good news is that creating a plan B, it’s actually not that difficult.

You can take very simple steps today to make this a reality for you. It can really be as simple as making sure your significant other, your loved ones, your family, other responsible adults, your children, they could join you in your financial review meeting, if you’re comfortable with that.

Consider creating a notebook or some sort of a binder with all these important documents. And of course, let your loved ones know where that notebook is. Or at least have open communication because this way, they have the data, they have the understanding, they have all the information they need to keep going if you aren’t able to do that and if you aren’t with us anymore.

Now, joint meetings are a great idea, it’s not for everybody, but clearly communicating and discussing these uncomfortable topics with loved ones, that’s a really smart idea. And the notebook, that’s also really wise, just get a notebook and put a copy of recent investment statements, bank statements, other important financial documents like your deed of trust for real estate, life insurance, of course, your estate plan and even bills, your monthly bills, so your family would easily be able to continue on financially should something happen to you.

Yeah, seriously, having copies of bills is really smart because if you think about that, it keeps the lights on, so to speak, and it tells your family who needs to get paid in order for the household to run smoothly. And if they know where your financial and bank accounts are, they can access the money they need to pay those bills and keep their financial life moving forward.

You can build this notebook over time, it doesn’t have to be overnight. Some statements or bills, maybe they only come quarterly or annually. So when you get the new one, just swap out the old one with the new one, add a copy of that to your notebook. Within a year’s time, you’re going to have this full contingency plan that’s set up and readily available for your family.

Now, not many people do this, and it’s easy to understand why. It’s not a lot of fun to think about the things I’m talking about right now, but this is real talk. These are things that unfortunately happen and they’re out of our control. So taking the steps today to avoid the extra stress for your family in the future is a really, really wise move.

Recently, I actually had a meeting with a really nice couple, a client of ours, and we were reviewing their estate plan. She sent me an email the other day and she said, “Hey, Stephen, can you send me some of your business cards?”, she wanted to make these little financial packets for her children so that way they would know to contact us and other important people in their financial lives, and just other loved ones, so their kids had a game plan heaven forbid, something happened to them.

This probably doesn’t come as much surprise, but after the fact, the headline here, “After Surfside Condo Collapse, Changes Proposed in Miami-Dade Building Regulations”. Yeah, heaven only knows how many people, how many lives could have been saved if they were more proactive!

But I get it, we’re human. We like to kick the can down the road. We’ll think about it or deal with it later. What’s that saying? We wait until the horse leaves before we close the barn door, I think is how they say it. And we’re good at reacting to things, but we’re not so good at being proactive, and especially when it comes to uncomfortable topics just like this.

But when it comes to our financial situation, why wait for something to happen, that we hope never does, but actually could, in order to take action. And by the way, some of these things that could happen, maybe it’s too late and you don’t even have a choice and there’s no action that you can take.

So here’s how easy it is. All you need to do is send us an email right now and schedule a review meeting. If it’s been a little while since we’ve had a review meeting, it’s time to schedule a review meeting with your advisor. Let’s take care of this. We’ll help you put this together.

We can give you some other really good tools. And by the way, I should mention, this financial binder doesn’t need to be a physical binder. You could do this in digital form through our eMoney client website. We have a vault feature where we keep a lot of these documents, important documents digitally, for your family and loved ones to access. At the very least we can have access, or another trusted advisor can have access to it.

You can also go out and get yourself that notebook, start collecting your statements and your bills and make sure your family knows where this notebook is. It’s easy to take care of these things. And the good news is it’s not going to take a lot of time. It’s not going to cause you a lot of grief, I promise. Just start putting this together. You’ll be happy that you did it, and you’ll never really have to worry about it again.

So look, if you learned something new here, if you think that your friends and loved ones should hear something like this and they need to get their contingency plan in order, be sure to share this with them and remember to like, subscribe and follow.

Until next time, this is the Smart Money Show and we’re helping you get smart with money.