Podcast Episode Transcript

S5E4 Transcript: Mastering the Art of Real Estate Staging & Interior Design with Ruth Krumbhaar

In this episode, host Cathy Curtis and special guest Ruth Krumbhaar discuss real estate design and interior decorating best practices.

[00:03:32] Ruth Krumbhaar: Hi, nice to see you.

[00:03:34] Cathy Curtis: Good to see you again, too. I’m really excited to talk with you again about, this time, all things decorating homes and residences and rentals, etc. For our listeners, you and I spoke a couple weeks ago about buying properties. You have a lot of experience. You started doing it as a single woman and you’ve built a nice portfolio for yourself.

[00:04:00] Ruth shares her decorating philosophy and why she always starts with a blank canvas when designing a space.

[00:04:00] Cathy Curtis: And of course, when you buy properties, you have to decide what you’re going to do with them once you either move in or decide to rent them or flip them or whatever your goal is. So I’m excited to talk to you about how you think about that. In general, an overview how you start thinking about it. And then we can get into the details of each type of property. So why don’t you talk about your philosophy about home decorating?

[00:04:31] Ruth Krumbhaar: It’s come to me over many years and many missteps, and I have a formula at this point of how I approach properties. And the formula is one that’s, it’s easy. It’s basically, I have a particular white paint that I love: Benjamin Moore Cotton Balls. Warm white, it’s got a touch of yellow, so it looks, it’s warm, but you could paint the whole interior of the house that color, and different rooms will take on slightly different feels.

[00:05:03] Ruth Krumbhaar: So I always like to start with a really blank canvas, and just…  

[00:05:08] Cathy Curtis: I’m gonna ask, because this white thing is so important. So truly, the Cotton Balls, even with rooms facing different ways and all that, it looks good? And you don’t have to paint the walls to see what it looks like in different light?

[00:05:23] Ruth Krumbhaar: It always looks good.

[00:05:25] Ruth Krumbhaar: I, at least I think it always looks good. It’s warm, but it’s not cream. It’s white. And so it doesn’t have that cold sort of sterile feeling that sometimes an all white house can have.

[00:05:40] Cathy Curtis: I know exactly what you’re talking about because I’ve picked bad whites before where they look chalk and you do not want that.

[00:05:47] Ruth Krumbhaar: Yeah. So I have found that this one, it just works over and over again. It works in modern houses, it works in old houses, it works upstairs, downstairs, you name it.

[00:05:57] Cathy Curtis: What a great tip, okay.

[00:05:59] Ruth Krumbhaar: So I generally use that everywhere to start off with and then I add color as I get to know the spaces. So maybe I’ll do an accent wall or maybe I’ll paint the powder room in one of my houses.

[00:06:12] Ruth Krumbhaar: I painted the powder room like this dark rich brown, which sounds awful, but it’s so incredible to go in. You feel hugged by the color.

[00:06:22] Cathy Curtis: Nice. Now, do you, and you wait to do that then? You paint it all white. And then you start decorating or? What phase do you start repainting?

[00:06:34] Ruth Krumbhaar: Generally, I like having mostly white walls.

[00:06:37] Ruth Krumbhaar: I’ve learned I’m different, like you’ve got that beautiful red wall behind you. And so that room must be so intense and beautiful. If that’s how you’re approaching the home, and I’ll get to that in a minute. It’s so important to maybe not do the white, not do Ruth’s formula, but to actually go in and pick a series of rich, beautiful colors that are going to be more personal to you.

[00:07:04] Ruth Krumbhaar: And if somebody else has a different formula, they should go with that. And I think in a primary residence, it’s so important to tap into what is truly right for you.

[00:07:16] Cathy Curtis: Yeah, I can see that differentiation where the white makes so much sense for rental.

[00:07:26] Ruth Krumbhaar: Yeah, and we’ll get to the primary residence in a little bit, but I generally love that Cotton Balls.

[00:07:32] Ruth Krumbhaar: I generally like thicker baseboards, nice thick ones. I think it feels, even in an older house, you can do more antiquey ones in a modern home. Just square, boxy one.

[00:07:44] Cathy Curtis: You always add those if a home doesn’t have them?

[00:07:47] Ruth Krumbhaar: I don’t always, but I like to. I find that it’s a really wonderful way to have something feel finished.

[00:07:53] Ruth Krumbhaar: It’s smart. It’s smart. And then, and especially if you can, if you’re doing the whole house, if you just are consistent throughout the whole house, that also makes the house feel more unified. And then I have certain floorings that I love. So for like cheap properties, I have vinyl, kind of wide plank, grayish vinyl flooring that I think most people, at least today, find appealing.

[00:08:18] Ruth Krumbhaar: And then I’m just putting it in one of my houses, a sort of medium plank, like a softer, lighter wood and a kind of more of a tan color, really warm and pretty. And it has a little bit of variation, but it’s also a manufactured wood.

[00:08:33] Cathy Curtis: Okay. And where do you source these kinds of things?

[00:08:38] Ruth Krumbhaar: For the cheaper ones, it’s just Home Depot.

[00:08:40] Ruth Krumbhaar: You can just go there, and they generally have pretty trendy things. You can find a lot of good things at a Home Depot or Lowe’s because they are staying current with the trends. So I wouldn’t be afraid to do that, and especially in a less, less expensive property or a rental property that’s going to have a lot of wear and tear.

[00:09:01] Ruth Krumbhaar: But the house I’m doing right now, it’s a little more high-end, so I’m doing it a really nice manufactured wood, which is easy to install, because it is a rental. And so just in case something happens, I want it to be something that isn’t going to cost an arm and a leg to take out, so I’ve done a floating floor there.

[00:09:25] Cathy Curtis: Describe the floating floor.

[00:09:27] Ruth Krumbhaar: The floating floor is when they don’t actually stick the floor onto your foundation or the base. Okay. They actually float it and they put a liner there and then they put the floor on top and then they put the baseboard around that. Okay. It’s easier because if it gets destroyed or distressed, you can pull it out easily or you can pull out part of it easily and reinstall.

[00:09:53] Cathy Curtis: Okay. And you wouldn’t do this in a residence, you would do this in a… Rental in a rental.

[00:09:58] Ruth Krumbhaar: Yeah. Or I do it in a residence that I wasn’t planning on living on in a long for a long time. Some people, you probably advise some of your clients who are interested in this and keeping something for two years and then selling it and you get the tax deduction.

[00:10:16] Ruth Krumbhaar: For selling the primary residence. I know people who move every two or three years. To upgrade each time because in that case, you would do it. But in a residence that you are going to live in a long time, I would do a different kind of flooring.

[00:10:32] Cathy Curtis: Okay.

[00:10:34] Ruth Krumbhaar: Trying to think what else. I generally I love a colorful front door.

[00:10:41] Ruth Krumbhaar: So I think that’s a place to add some fun and some whimsy and it doesn’t cost a lot. It could be repainted, but it’s great. It’s fun for a primary residence. It’s fun for a little, even a cheap little rental property. I just rented out a place that has a bright blue, turquoisey blue door on it. It’s a white house.

[00:11:01] Ruth Krumbhaar: And the gal who rented it said, I wanted to rent it because I like the front door.

[00:11:05] Cathy Curtis: Yeah. Interesting. We just got our house painted all over outside, and we hired a colorist to help us because I don’t feel confident picking colors and she recommended it’s not red. It’s like a, it’s like a deep burgundy door and the rest of the house is variations in tan.

[00:11:26] Cathy Curtis: It looks fantastic.

[00:11:27] Ruth Krumbhaar: Oh, that’s, and that’s such a great investment that you did because painting the outside of the house is such a, it’s a big deal.

[00:11:36] Cathy Curtis: Oh, it’s a huge deal. And she had an eye, she looked at what we had in landscaping, we have a plum tree, and we have some other plants that are purple in them, and it just tied it all together.

[00:11:48] Ruth Krumbhaar: Oh, that must be gorgeous. I definitely think investing in people like color consultants when you’re when you’ve got a nice property like I’m sure yours is or a primary residence that you want to invest in. That’s a great thing to do.

[00:12:08] Cathy Curtis: I’ll put the name of the woman in the show notes because she’s fantastic and she, I think she’s pretty well known, at least in the East Bay for doing this kind of consulting.

[00:12:19] Ruth Krumbhaar: That’s great. Yeah. Happy with how it turned out?

[00:12:21] Cathy Curtis: Super happy. And you don’t want to make a mistake in our house, we have a big house, lots of square footage to be covered.

[00:12:30] Cathy Curtis: What if we didn’t like it? Then you’re driving up to a house that you don’t like the color. So I didn’t want to chance it. I thought that was a good investment.

[00:12:40] Ruth Krumbhaar: Yeah, other things I love are Grohe fixtures. They’re German and of good quality. They don’t break easily and they’re nice.

[00:12:54] Ruth Krumbhaar: They’re not the nicest, but they feel good in your hands. They feel like good quality and they’re not that expensive. You can buy them sometimes at Costco. They have a lot of deals.

[00:13:06] Cathy Curtis: Okay, which fixtures?

[00:13:07] Ruth Krumbhaar: Faucets for the bathroom or kitchen. And again, they don’t do super trendy or real showstopper pieces. But for a regular house that’s going to have some wear and tear like a rental property or even a primary residence, if you like the design, they’re all right.

[00:13:28] Cathy Curtis: But especially it’s a way to save a few dollars. If you’re not looking to have bold designs in these fixtures. Okay, good to know.

[00:13:38] Ruth Krumbhaar: Yeah, exactly. And I think the other thing that I have a really good friend and we talk about design a lot, is you don’t want to gild the lily.

[00:13:45] Ruth Krumbhaar: You don’t want to have a showstopper here and then a showstopper there. If your kitchen is very simple and beautiful and you want one sort of fancy thing, having that fancy faucet in the kitchen might be a great idea. It can be the showstopper. Everything else can be more quiet.

[00:14:06] Why every room doesn’t necessarily need a showstopper when it comes to home decorating.

[00:14:06] Cathy Curtis: So, do you think every room needs a showstopper?

[00:14:09] Ruth Krumbhaar: Not necessarily. Can it also leave space for fun cushions and rugs and things like that? Not necessarily. And I think I’m trying to think of other formulaic things. I see a lot of houses; the kind of houses that excite me are those like ugly modern houses. They’re modern but they have traditional fixtures in them and they’re beaten up maybe from the ’50s or the ’60s. Those kinds of houses, I love the idea of doing a modern makeover, bringing them back to what they really should be.

[00:14:52] Ruth Krumbhaar: And so a lot of like iron railing, modern iron railings, or even glass railings. A lot of really simple, beautiful sort of planes, lots of texture, but keeping everything very simple and quiet. I love thinking about those kinds of houses.

[00:15:10] Cathy Curtis: Where would you source those things, like the railings, and where do you generally go?

[00:15:15] Ruth Krumbhaar: Usually I’ll go to an iron worker. Have them manufacture something. You can find pictures on Pinterest or online and you can just go to them and make them. There are also, I know I bought some premanufactured ones through a contractor and I forget the, who made them, but they’re beautiful. And they were there at my property on Telegraph Hill.

[00:15:40] Ruth Krumbhaar: They were actually made for marine around marinas. So they’re very durable, they don’t rust, and I’ve had great luck with those. I can get the name.

[00:15:50] Cathy Curtis: Okay, that’d be great. And just a broader question about this, when you decide that you’re going to have something made versus buying something manufactured, and I know some of it is budget.

[00:16:04] Cathy Curtis: But are there certain things that you think are worth having made for you specifically?

[00:16:12] Ruth Krumbhaar: I think railings can be, but you have to be, you have to make sure that they understand really how to do it, that they’ve had experience doing it. Cause I’ve had experience where people get it the first time and it’s perfect.

[00:16:25] Ruth Krumbhaar: And I have experienced people tried three or four times and they keep getting it wrong. So you have to be sure that you’ve, you’re working with someone who really knows what they’re doing. But it can be a really great way to actually save money to do iron railings in a more modern sort of aesthetic. But again, making sure that you have the contractor who knows, really knows how to handle the situation.

[00:16:49] Ruth Krumbhaar: How stairs turn, how they, that they have experience with that.

[00:16:54] Cathy Curtis: Okay. And so do you take out whatever railings there are already and just change it to iron railings?

[00:17:04] Ruth Krumbhaar: I, in almost, not every house, but most of the houses I’ve worked on, I have taken the railings out because I have a thing against those sort of traditional. I love beautiful old railings, stair railings, if it’s in a really old house.

[00:17:20] Ruth Krumbhaar: Newer ones with a nod to the old, the sort of faux colonial ones. I have a thing about those. I can’t stand them. Yeah, they go out.

[00:17:31] Cathy Curtis: So that is part of your formula. I bet that gives an instant boost to the space.

[00:17:36] Ruth Krumbhaar: Really does. Yeah. And even for a space that’s not totally modern having one modern touch like a cool iron railing or cool glass railing can really Add a bit of that modern feel, even if you don’t want to go all the way, maybe a little drama to a space.

[00:17:53] Cathy Curtis: Yeah.

[00:17:55] Ruth Krumbhaar: So it’s just a nice way to take things up a notch. And so I’m thinking about other formulaic things that I do. Or pet peeves that I have. I know that one of the things that I find really important for rental homes, Airbnbs, primary residences, and you spoke to this earlier with your house, having that beautiful front door, a beautiful entrance, a beautiful lid.

[00:18:26] Ruth Krumbhaar: Numbers visible, maintained area when you come up to a home, it makes such a difference.

[00:18:32] Cathy Curtis: Yeah, I agree. It’s like a welcome mat, a nice welcome mat.

[00:18:38] Ruth Krumbhaar: Yeah, yeah. And so having good lighting, having that front door, beautiful color. Having simple and easy to maintain landscaping so that unless you’re a gardener, you can have a ball, but most of us don’t really have a lot of time to upkeep our garden, so keep it a nice, simple, classic design.

[00:19:00] Cathy Curtis: Nice numbers, you can get some cool house numbers that add an instant boost.

[00:19:06] Ruth Krumbhaar: Yeah, yeah, and allow people to find your house more easily. It just. There’s something, and I also think like having a little bit of a wider path up, if possible. Not, it’s not always possible, but having a little bit of a wider path up to your home and an ample space to stand in front of the door if there’s not a big porch.

[00:19:26] Ruth Krumbhaar: Extending that as much as you can, not having it feel crowded and cramped.

[00:19:32] Cathy Curtis: So I think those are great tips. Thank you. Thank you. I want to talk to you about, because I know you think about decorating differently when it comes, of course, when it comes to the space you’re going to live in yourself versus you have rental properties in Indiana.

[00:19:50] Cathy Curtis: And in San Francisco and one, one other. Oh, and Maine. Yeah. And I, and you use some, you use yourself and then you rent part of the time. Others are full time rentals. Generally, though, when you’re thinking about decorating a space, you’re going to, let’s say a full rental. Let’s just break it down.

[00:20:09] How Ruth determines her decorating budget and where she shops to find cost-effective, quality items.

[00:20:09] Cathy Curtis: Residential. We’ll talk about residential first because that’s fun. You get a rental. And of course, the first thing you’re going to think about is, I don’t want to spend a ton of money on this and it’s probably going to get some wear and tear. And so how do you budget for it and where do you go to find good items?

[00:20:28] Ruth Krumbhaar: I recently did that with an Indiana house and really it was, I took a look at the floors, and they just weren’t that great. They were all scratched up. There was a little hole in one area. And I spoke with the contractor and got a good price on installing just the cheap vinyl flooring.

[00:20:46] Cathy Curtis: And when you say cheap, but you’re saying cheap, but you still think it looks good, right?

[00:20:53] Ruth Krumbhaar: It does. Yeah. It looks cute. I don’t think I would want it necessarily for my home, but for a rental house for, say, a young person, the woman who is renting it is getting her PhD, she’s a soccer coach, she’s got a dog, she just wants something that’s easy to maintain and manage, that her dog won’t scratch the floors, and she’s young, so she likes that trendy feel.

[00:21:18] Ruth Krumbhaar: A lot of like light fixtures that were fairly inexpensive that I got at either Ikea or Home Depot that had that farmhouse look. So I tried to make the house fun and appealing and consistent. But not expensive light fixtures for 30 a pop.

[00:21:40] Cathy Curtis: Okay, great. And the, and how, and the flooring, what does it cost?

[00:21:47] Ruth Krumbhaar: The vinyl? I can’t remember, but it was like on super special. I. A friend of mine was also redoing her rental and she picked the tan and I picked the gray. My place rented first, so I was like, we were arguing over should you do tan or gray. I said gray is trendier. Those young kids, they like the gray.

[00:22:06] Ruth Krumbhaar: That’s the, this is their aesthetic.

[00:22:09] Cathy Curtis: How do you keep up with the trends?

[00:22:09] Ruth Krumbhaar: Sometimes I’ll watch HGTV, or I try and look at what, like for this one I was thinking, what do young people like? And so I would, I looked at some of the pictures of HGTV that I thought were more appealing to younger folks And maybe I wasn’t right, but mine did rent first.

[00:22:31] Ruth Krumbhaar: And that’s really about knowing your audience. We’re really looking at what is your goal? My goal was to get in a good, solid renter who was going to stay for a number of years, who’s going to care for the place. So I wanted it to be nice enough that it didn’t feel like a flop house for a bunch of students to mess up.

[00:22:50] Ruth Krumbhaar: I made it as pretty as I could and appealing to this sort of younger demographic.

[00:22:55] Cathy Curtis: Okay. What about windows? Do you ever change out the windows if they’re…

[00:23:04] Ruth Krumbhaar: Yeah, and again, that’s a big budget item. So, my partner is working on a house in Redwood City, which is more high end. It’s a 1960s house that had old windows, and one of the first things we decided to do was replace all the windows.

[00:23:23] Ruth Krumbhaar: Because in that house, it’s going to be a flip. We want to make sure that the windows are really high quality and good enough for that area.

[00:23:31] Cathy Curtis: So, it really depends on a lot of things. For example, the Indiana place, I think you said it’s near a university. So, students are your renters professors or students?  

[00:23:44] Ruth Krumbhaar: Yeah, professors.

[00:23:45] Cathy Curtis: Okay. So, let’s say they’re old sliding windows, but it would cost several thousand dollars to replace them. You don’t necessarily go ahead and replace those in that case.

[00:23:55] Ruth Krumbhaar: No. And the windows that are there are like the cheap vinyl, but they’re new. So, they keep in a place like Indiana where there are big storms and it does get cold, they have to be really good functioning windows, but they don’t have to be fancy or expensive.

[00:24:11] Ruth Krumbhaar: And the ones there were just fine. They worked just fine.

[00:24:14] Cathy Curtis: How do you, because I think it would be easy, especially as a new real estate investor, to rent, to buy a place to rent and then think you’ve got to make it look pristine. Yeah, perfect. Yeah. I could see where you could put a lot of money in that will really hurt it as an investment.

[00:24:32] Cathy Curtis: Do you agree? Have you ever experienced that?

[00:24:34] Ruth Krumbhaar: Yes. Yes. And it also depends on how long you want to hold onto it. So, another friend who just recently did two rental properties and he’s… he just couldn’t help himself. He overinvested. They’re beautiful, they’re so nice. They’re much nicer than any other house in the neighborhood by far.

[00:24:54] Ruth Krumbhaar: But his thinking, his rationale is, “I’m going to have these for a long time.” So for him, it made sense. I, for me, I’m a little more cautious about spending money. And that’s why I say the farmhouse, the cool farmhouse style light fixtures that are $30, are just fine. Cute. And people like them.

[00:25:17] Ruth Krumbhaar: There’s no need to spend more money there.

[00:25:19] Cathy Curtis: Okay. In the case of your friend, do you think he is able to get any more rent because the decor or the surfaces or the windows are nicer? Than in another apartment in the same building, let’s say, that doesn’t have those upgrades?

[00:25:38] Ruth Krumbhaar: I think sometimes that is true. What I think he accomplished is he rented it very quickly. So, it was appealing. Somebody had to have it. And so, then he could just start getting his income going sooner.

[00:25:56] Cathy Curtis: And maybe you keep tenants longer. Yeah, who knows? I know that’s all hypothetical, but it seems like that would make sense.

[00:26:06] Ruth Krumbhaar: And I have to respect that he’s got his formula and I’ve got mine. Mine is more cautionary.

[00:26:12] Cathy Curtis: Plus, don’t you have to crunch the numbers? Like when you go to buy a place, you look at it and you go, “How much money can I afford to put in this place to still get the ROI I want or reach whatever financial goal I want?”

[00:26:28] Ruth Krumbhaar: And I wanted 10%. So I only invested up to that number. I went a little bit over; I went like maybe $5,000 over, but I knew that’s where I had to, I just had to stop things like on that Indiana property. I wanted to make a certain amount of money, and I wanted to spend a certain amount of money, so there are a few things I didn’t do to the house.

[00:26:54] Cathy Curtis: Like for example, what didn’t you do?

[00:26:55] Ruth Krumbhaar: There are some electrical lines that hang a little lower than I would like in the backyard. So, I was going to have an electrician put them up on a pole on the roof to raise them up. Yeah, I didn’t do it. I would have liked to have had a garden crew come in and really do a good job on getting the yard and the garden squared away.

[00:27:18] Ruth Krumbhaar: Didn’t do that either.

[00:27:18] Cathy Curtis: That makes sense. So, sometimes it’s better not to go see the property and just, if it’s a rental and your goal is to create passive income, the numbers have to be right. Like you said, you haven’t been to see the property in Indiana, is that correct?

[00:27:41] Ruth Krumbhaar: That’s correct. I have a video and photos, and a great contractor. And I’m more concerned there with just having a fridge that works, a washer and dryer that work. It just needs to function.

[00:27:51] Tips and tricks for decorating an Airbnb for functionality and style.

[00:27:51] Cathy Curtis: Yes. That really does make sense. Okay, so I’d love to talk about Airbnbs a little bit because they’re so popular. I just went to Europe and we rented three Airbnbs. I’m fascinated with how people decorate them or pay attention to detail, things like that, and not everybody does. Or I have a suspicion that either they don’t pay attention, or they’ve never… I think people should stay in their Airbnb and experience what it’s like.

[00:28:25] Ruth Krumbhaar: Absolutely.

[00:28:27] Cathy Curtis: To know what people really want when they rent an Airbnb because there’s… you don’t have to be perfect, but there are certain things that are going to make people pretty darn happy. Just as an example, we stayed in an Airbnb where the shower had no place to put soap. It’s like, where do you put it?

[00:28:49] Cathy Curtis: Besides, don’t get me started on French showers, but you turn it on and… Anyway, that’s a French thing, but there was no shelf in the shower to put shampoo or soap or anything. Who designed this? Or no towel racks or not enough hooks. But there are so many things about an Airbnb that could make an experience better.

[00:29:16] Ruth Krumbhaar: Yeah, and really there are two things. It’s like form and function, and you’ve got to have both of them. It’s got to be functional in order for people to be comfortable. They’re coming in from a trip, they’re traveling, they want to just land and have everything work and be easy and approachable. They want a little place in the shower to put their shampoo.

[00:29:37] Cathy Curtis: Yeah, I actually have an Airbnb, a Tahoe cabin that is listed on Airbnb and other platforms. One thing that we did is we totally tricked out the kitchen as far as kitchen utensils and gadgets go. It’s like better than a lot of people’s own kitchen. Every comment we get is, “Oh my gosh, the kitchen is so well equipped.” People love that. And now, it is in Tahoe and people barbecue, which is appropriate for that area because people are going to be cooking. It has to be appropriate for where you are, but I’m surprised how many comments we get about that.

[00:30:20] Ruth Krumbhaar: That’s great. That goes back to knowing your audience. People are going to be doing some cooking, so it’s so important to think about that. A little teeny studio apartment in a great old building in Paris. You’re not going to necessarily be wanting to cook all the time. You’re going to be wanting to go out.

[00:30:40] What you really want is a good coffee maker. And if they provide capsules, bonus points. You don’t have to go out to the grocery store your first day. And speak another language and try and find the coffee capsules.

[00:30:55] Ruth Krumbhaar: Yes. Yes. Agreed. That’s so funny.

[00:30:56] Cathy Curtis: Yeah. Have you Airbnb’d any of your places?

[00:31:00] Ruth Krumbhaar: I have. I have. An Airbnb gives us a chance to be a little more whimsical because, yes, the pictures do have to sell the experience, and it is an experience staying in someone’s Airbnb. Maybe the experience is a classic Tahoe home, but maybe the experience is a groovy San Francisco pad with a little neon on the wall where you can take a selfie. It’s a chance and an opportunity to be a little whimsical in whatever way is calling you. And I definitely love to encourage people to be a little fanciful in those.

[00:31:43] Cathy Curtis: I agree with you. It’s more fun for the person renting.

[00:31:48] Ruth Krumbhaar: Yeah, and the pictures will sell it too, more easily. The other thing that I’ve noticed about Airbnb is they get a lot of traffic.

[00:31:57] Cathy Curtis: Yeah. I don’t know if you agree with me, but I think you need to go a little bit higher quality in the decor. Not necessarily the gadgets, but the decor, because it gets used so much—rugs and towels and… Either that or you replace them all the time. I don’t know what the best way to outfit an Airbnb is.

[00:32:18] Ruth Krumbhaar: I think either way is important. You also want it to feel fresh. And I’m definitely environmentally minded, so getting cheaper things and throwing them away isn’t what I would necessarily recommend. But sometimes, maybe with a rug or with little throw pillows or whatever, you do want to be keeping it feeling fresh by doing that. And then have more substantial furniture or something to balance that out so that it does feel fresh and has some pop.

[00:32:55] Cathy Curtis: Yeah, are there any places where you shop that you think are particularly good for that kind of home decor, like pillows or things like that?

[00:33:08] Ruth Krumbhaar: I actually think Home Goods is still pretty good. You don’t want to make sure it doesn’t look like a Home Goods setup, but if you’re careful, they always have fresh-looking, well-priced pillows and little knickknacks and things.

[00:33:27] Ruth Krumbhaar: But again, I wouldn’t do all of that. I would mix that in with some flea market finds or some more character items so that it doesn’t look like you just went to Home Goods.

[00:33:38] Cathy Curtis: Yeah, I love the flea market idea. Or thrift stores, where people give away nice things that you can’t believe they’re giving away, but they work perfectly.

[00:33:49] Cathy Curtis: We do that a lot in our Tahoe place.

[00:33:51] Ruth Krumbhaar: Yeah, in my main house, I have a very low window between two twin beds, and I’ve been looking and looking for the right bedside table to put between the beds. And finally, my friend, who’s a designer, said, “Get two galvanized buckets, turn them upside down and put a plank on top, and you’re done.”

[00:34:12] Ruth Krumbhaar: And I was like, “Yes, of course. That’s perfect. It’ll look cute. It’s a guest room with two single beds. So it’s probably where kids are going to stay, and I think it’ll be a little fun.”

[00:34:24] Cathy Curtis: That’s a great idea. Now, this is the Maine property. Yes, it’s on an island, and you use it sometimes for yourself, and then you rent it word of mouth. Okay. And I bet that was fun to decorate.

[00:34:41] Ruth Krumbhaar: Yeah. So much fun. So much fun. And it’s very eclectic. A lot of old pieces mixed in with new, a lot of paint, painting old furniture and old chairs. We just had a lot of fun with that one and it’s come together.

[00:34:56] Cathy Curtis: What do you think about theme decorating? Is that too cheesy? Like beach house decor or?

[00:35:03] Ruth Krumbhaar: Yeah. In some places, it can be nice. This house is in Maine. I’ve got a sort of a Maine feeling, but it’s also a little bit of being near the water. So it’s got paintings of sailboats and I actually have sailboats on my plates. So there’s a little of that going on. My partner makes sure I don’t go too far in that direction.

[00:35:23] Cathy Curtis: When we bought the Tahoe place, it was a rental, it was a second home for the person that we bought it from. Oh man, she had it outfitted with so many bear motif things. It was… And my husband likes bear motif a lot more than me, but so just systematically over the last couple of years, I removed one bear at a time and replaced it with something else.

[00:35:53] Cathy Curtis: But we still have bears in there. It is Tahoe. It was, it can get overdone.

[00:36:00] Ruth Krumbhaar: It can. It can. And that’s where having some fun is good. But it’s like jewelry. I remember a friend who’s very chic. She said, “Oh, when you go get dressed to go out, put on all the jewelry that you want and then take off one thing.”

[00:36:14] Cathy Curtis: Yeah. I’ve heard that. That’s great advice.

[00:36:18] Ruth Krumbhaar: It’s the same for homes. And also, for your wardrobe, you want a bunch of really tailored, beautiful pieces, and then some sort of cheaper, fun things to toss on with them. And that’s how you can approach your home as well.

[00:36:32] Cathy Curtis: Exactly, that is a good money-saving technique because you invest in quality pieces. And then, if you want to be on trend, which is fun to do, you don’t have to spend as much money. Because those things don’t last as long, like the toss pillow that you decide to go all bright pink. In a year or two, you get sick of that, or whatever.

[00:36:52] Cathy Curtis: Keeping in mind the environmental aspect, I agree with you, I’m not into throwing things away or into fast fashion. But that is a good way to think about decor so that you can make it economical.

[00:37:06] Ruth Krumbhaar: And Facebook Marketplace, Craigslist, you can go to those websites if you’re open to using furniture or furnishings that people have used before. It’s a great way to get some good deals and things that you wouldn’t naturally find in a store.

[00:37:23] Cathy Curtis: Interesting. I’ve never once used Facebook marketplace. Is it good?

[00:37:26] Ruth Krumbhaar: Oh, it’s so good.

[00:37:28] Cathy Curtis: Okay, that’s a good tip. And are you using a local Facebook marketplace or is that… Because I know on Craigslist, you could look in your local area to see if you could pick up something.

[00:37:41] Ruth Krumbhaar: You can do it locally. I think you can do it like Craigslist within a certain amount of miles. Actually, no, Craigslist is more region-specific. Facebook is more about how many miles away.

[00:37:52] Cathy Curtis: Okay. That’s good. So instead of going out on Sunday to garage sales, you could do it from your computer.

[00:38:00] Ruth Krumbhaar: Yeah. I’ve gotten some beautiful things on Facebook.

[00:38:03] Cathy Curtis: Ah, okay. Okay.

[00:38:05] Ruth Krumbhaar: Beautiful old lamps and rugs and various things. Plants.

[00:38:12] Why flipping a property requires a slightly different design approach than decorating a rental property.

[00:38:12] Cathy Curtis: Yeah, because people move, and they don’t want to move their plants. Okay, great. What about, and I don’t know if you’ve done a flip. I think you have, or your partner has.

[00:38:22] Ruth Krumbhaar: My partner does a lot and I help him with the design.

[00:38:26] Cathy Curtis: Okay. So that’s a whole different ballgame.

[00:38:28] Ruth Krumbhaar: Completely different. And it really depends who your audience is. Again, know your audience.

[00:38:35] Cathy Curtis: Okay, how do you approach that?

[00:38:37] Ruth Krumbhaar: We’re doing one right now in Redwood City, which is a very nice suburb here in the Bay Area on the peninsula.

[00:38:45] Ruth Krumbhaar: And the property is gorgeous. It’s an old, actually, the property is beautiful with old trees. The house is basically a square box that no one has done anything with for many years. So there’s an opportunity there. That’s a beautiful swimming pool. We have simplified the landscape by having the trees pruned, some of them taken down because it was a little too oppressive.

[00:39:13] Ruth Krumbhaar: To lighten it up and make it a little more airy. We’re just keeping…

[00:39:17] Cathy Curtis: Which is an expense, right? You had to factor that in.

[00:39:20] Ruth Krumbhaar: We did, but we know that we can sell this for much more than we’ve put in. So we know there’s a profit margin, so it’s worth it. And I think the buyers will feel that difference.

[00:39:33] Ruth Krumbhaar: But we left, we actually ground up a bunch of the trees and we created mulch from the ground-up trees and we spread that all in this whole area under the trees. We didn’t have to buy mulch. We didn’t have to landscape it. It just feels more rugged and rural and, but still nice and polished.

[00:39:55] Ruth Krumbhaar: All of that at the same time. And then it was a very narrow path walking up to the house all alongside the house. You have to turn to get to the front door. So it felt awkward. We think about people wanting a nice wide path that you feel invited in. And we’re going to do a fountain across from the door and do a sort of cutout.

[00:40:19] Cathy Curtis: Okay. So this goes back to your kind of formula: make the entryway really nice and inviting.

[00:40:28] Ruth Krumbhaar: Yes. And in this case, because there are all these trees and the wood chips, I wanted to have water, the sound of water too. So we’ll have a little fountain. We were just talking about that before I came on this call.

[00:40:42] Ruth Krumbhaar: Yeah, we have different ideas about what the fountain should look like, but something modern will be right across from the door. So also when you’re exiting, you see this beautiful fountain, and then the landscape just fades and becomes nature. And so that felt like a really good way to add a feeling of luxury and a feeling of welcome and also something for them to remember when they leave.

[00:41:10] Cathy Curtis: Yeah. Okay. So the fountain, where will you go to source that?

[00:41:15] Ruth Krumbhaar: I just went on Amazon and there are enough decent fountains. This is not a high-end fountain. This is just to sell the house. We’re looking at about 300 for a modern, good-enough fountain. And then creating a little nook for it. And then what we did was we really focused on windows and doors and floors.

[00:41:39] Ruth Krumbhaar: So all the main surfaces of this house.

[00:41:44] Cathy Curtis: Which is totally different when you’re looking at a rental for Airbnb, right? Because you’re looking to make a profit on this place and sell it quickly. And that, people look at those kinds of things.

[00:41:59] Ruth Krumbhaar: Yeah. Because the house is so simple and lacks architectural interest, we felt that we needed to add a little more substance to it. The doors are really cool, modern ones with some cutout windows that will also let light in. We made the same design choice on the garage doors as well.

[00:42:17] Ruth Krumbhaar: So there are some sort of fun design elements that we can bring in through the doors.

[00:42:23] Cathy Curtis: Okay. Where did you find the doors?

[00:42:26] Ruth Krumbhaar: I will let you know, because I did not order them. However, my partner has a great local source for doors, and he has lots of opinions on windows too. So, we really focused on those pieces, the entry, and the landscaping.

[00:42:46] Ruth Krumbhaar: We ensured that we chose good, really good windows and fun, yet substantial doors. A door handle that feels really good and solid in your hand is a wonderful detail that you don’t skimp on.

[00:42:59] Cathy Curtis: Yeah, that makes sense. After all, it’s the entry to the home. It’s the first impression sort of thing, like a handshake.

[00:43:08] Ruth Krumbhaar: Yes, exactly. And then we’re going to paint everything Cotton Balls. Of course, we’re selling this house. We want it to be simple, but warm and inviting.

[00:43:21] Cathy Curtis: Did you use that company, Grohe, for the fixtures?

[00:43:24] Ruth Krumbhaar: We haven’t gotten there yet, but we probably will.

[00:43:26] Cathy Curtis: Okay. Did you spell that as G R O H E?

[00:43:33] Ruth Krumbhaar: Yes, that’s right.

[00:43:49] Ruth Krumbhaar: We’ve noticed some trends, for example, ridged wood surfaces. So, we got two vanities for the two bathrooms with that kind of surface. They weren’t that expensive, but they feel designer. We’re trying to create a theme there. In one part of the house, due to the open floor plan, we’re actually going to mimic that with some floor to ceiling thin pieces of wood.

[00:44:28] Cathy Curtis: Interesting. May I ask where did you source those vanities from?

[00:44:34] Ruth Krumbhaar: We had to hunt and peck for them, and I will again send you where we found them. I think we may have even found them on Houzz or Amazon.

[00:44:45] Cathy Curtis: Okay. Can you buy things on Houzz?

[00:44:49] Ruth Krumbhaar: Yes, you can.

[00:44:53] Cathy Curtis: And a lot of people go to Houzz for ideas, right? It’s like Pinterest but for home decor. Do you rely on it a lot?

[00:45:02] Ruth Krumbhaar: I use Houzz, and I use Pinterest. I also read magazines – everything from watching HGTV to my favorite magazine, which is World of Interiors, a more European and ethereal style.

[00:45:19] Cathy Curtis: I didn’t know about that. Okay, World of Interiors. That’s great.

[00:45:43] Ruth Krumbhaar: In terms of color and choices around tile and counters in this house, we’re doing everything in tans, whites, and a little touch of gray, accented with black. So, all the door handles will be black. It’s almost like the little black touches are like the eyeliner and everything else is more natural.

[00:45:54] Cathy Curtis: Are you using elevated materials for the flooring and things like that?

[00:45:58] Ruth Krumbhaar: Yes, for the floors. When looking at countertops, because we don’t have to live with it, we can just look and see what fits our design, budget, and what’s in stock.

[00:46:18] Ruth Krumbhaar: You get what you get and you don’t get upset is our motto when we’re doing projects like this.

[00:46:27] Cathy Curtis: Where do you go to find countertops and things like that?

[00:46:31] Ruth Krumbhaar: Part of our sourcing happens in South San Francisco. There are also a bunch of places in the Bay Shore area of San Francisco. We basically give ourselves two days, cruise through all of them, and make a decision within that timeframe.

[00:46:49] Cathy Curtis: See, that stresses me out. Some people are better at that than others. Have you heard of Granite Expo? It’s in the East Bay. I have a friend that tells everyone in the East Bay who is doing remodel jobs and needs tiles and things to go to Art and Tile on Broadway. It’s a bit high-end but they do great stuff. However, my friend suggests going to Granite Expo for cheaper prices.

[00:47:22] Ruth Krumbhaar: There is a place in the East Bay that we’ve gone to, I’ll think of all our sources. It’s great to go to the expensive places to get ideas.

[00:47:36] Ruth Krumbhaar: Yeah, really great customer service. If you have the budget and you want to make it easy on yourself, by all means, that’s a good choice. They often have good contractors to recommend. It’s a bit more of a white glove experience. If you want to be a bit scrappier or if you have a great contractor that you know, these other places are where you can find beautiful materials.

[00:48:03] Ruth Krumbhaar: It’s just that you have to look a little harder.

[00:48:05] Cathy Curtis: And do you think you end up spending less when you do it? So, you really can save money by doing some of it yourself and foregoing the total white glove thing?

[00:48:20] Ruth Krumbhaar: For example, in Maine, we ended up getting beautiful marble countertops. I won’t bore you with the story, but we had three places that we were going to go to. We knew that we had to get them within a certain time frame, and our backup was to do wood, like butcher block counters, which are expensive, but still attractive.

[00:48:43] Ruth Krumbhaar: It’s a suitable choice for a summer house or for one part of your kitchen. It saves money.

[00:48:49] Cathy Curtis: That’s interesting. That’s a great idea. A backup, yeah. Yeah, excellent.

[00:48:53] Ruth Krumbhaar: And this place in Redwood City, the owner wanted to fill in the pool because he didn’t want to deal with it. I said he can’t. So, we’re doing some very inexpensive concrete around it. We’re actually creating some patterns within the concrete so that we can have moss growing in between.

[00:49:09] Ruth Krumbhaar: It’ll be a high-end feeling but not super expensive.

[00:49:23] Cathy Curtis: And concrete can be very attractive. It doesn’t have to be the ugly old asphalt or whatever.

[00:49:31] Ruth Krumbhaar: There are techniques where you can put salt on the surface to make it pucker a little bit, and there are different finishes and stains you can use on concrete.

[00:49:42] Cathy Curtis: Interesting. So, what’s the timeline for putting it on the market?

[00:49:49] Ruth Krumbhaar: Hopefully, September.

[00:49:50] Cathy Curtis: Okay. Is that because all this is going to take that much time due to the contractor’s schedule?

[00:49:58] Ruth Krumbhaar: It is, and it’s also because that’s a good time to start selling. That’s when people are ready to focus back on that kind of thing.

[00:50:08] Ruth Krumbhaar: During summer, people are more distracted.

[00:50:11] Cathy Curtis: So, you’re going to put it on sale at peak time to get the best price.

[00:50:17] Ruth Krumbhaar: Hopefully. It’s not a great market right now.

[00:50:20] Ruth’s advice for handling home renovation projects, such as updating a bathroom or kitchen, and why a good contractor can make a world of difference.

[00:50:20] Cathy Curtis: Yeah. I heard prices are dropping a little. Sounds like a fun project. Let’s switch over to residences. I am going to start this because I have a project and I want to hear what you say about how to handle this project.

[00:50:35] Cathy Curtis: I think a lot of people are in the same boat. My master bath has not been redone for years. It really needs to be gutted. It’s a fairly large room. So, I had a contractor come over and look at it and measure. He gave a quote for the gutting. Now, I’ve been advised to find everything, pre-order it all, and have it ready for when they come. Do you agree with that?

[00:51:08] Ruth Krumbhaar: If that’s what your contractor wants, then that’s the way to do it. Some contractors will say, “Give me the list of what you want and I’ll order it,” because they don’t want it sitting around at the job site.

[00:51:22] Ruth Krumbhaar: The con, if you have a good contractor whom you really trust and like, is that they have their process, so working with them in their process is a good thing to do. The other reason why they’re probably saying that is because you’re a homeowner; you’re gonna have an attachment to certain things, like a particular tile or whatever.

[00:51:44] Ruth Krumbhaar: And if he’s halfway through and you’re like, “Oh, but the tile that I wanted isn’t available anymore. I don’t know what to do,” he doesn’t want to have to stop halfway through and wait for you to figure that out.

[00:51:56] Cathy Curtis: Yeah, and in the meantime, your bathroom’s all torn up.

[00:51:59] Ruth Krumbhaar: Yeah, yeah. So he probably has some experience with this and feels like it’s better to have it all there, sitting there and not have to worry about things not coming in on time.

[00:52:09] Cathy Curtis: Okay, that makes sense. And then me, who I love home design and I feel like I’m a creative person. I don’t know what it is, but the thought of redesigning a big bathroom just… and I procrastinate so much. I just cannot get started. So, what is your advice to somebody that is faced with this? That really wants their bathroom to look great. What are the steps you would suggest to come up with ideas and come up with a design?

[00:52:38] Ruth Krumbhaar: I think it all depends on your contractor, actually. Is your contractor someone that you trust their judgment and their sort of direction? Because some contractors, because they’ve done this so many times, they really understand how the bathroom functions.

[00:52:58] Ruth Krumbhaar: And they have actually really good ideas about how you might want to set it up. They’re not going to pick your tile for you and things like that. But they’ll have an idea of if you do the countertops here, you’re going to save a lot of money because you’ve already got your plumbing here and if you do, if you want to walk in, shower, you could do it here and you could actually fit a freestanding bath over here.

[00:53:19] Ruth Krumbhaar: They’ll possibly have some really good ideas. So I think that’s a great place to start. Start that conversation with your contractor, bring them in for a meeting in the space.

[00:53:32] Cathy Curtis: Yeah, and say, “I want a beautiful design that doesn’t cost ridiculous amounts. So I want to use what I can with the space,” like you’re saying, the plumbing.

[00:53:44] Cathy Curtis: Yeah, it makes sense.

[00:53:46] Ruth Krumbhaar: Or where window placements are, doors and things like that. The other thing is that if you have to get a permit, you may need to submit drawings, and so you would need somebody who can do that for you. If that’s the direction you’re going. Some people submit permits, some people don’t.

[00:54:07] Ruth Krumbhaar: It’s generally a good idea to do it.

[00:54:09] Cathy Curtis: Yeah. I know I have that. I debate that with people all the time.

[00:54:12] Ruth Krumbhaar: Yeah. And then the other, in terms of design and function, is what do you want? What is important to use? For some people, it’s important to have the toilet have their own little room. For other people, it’s they must have that double vanity with lots of space.

[00:54:30] Ruth Krumbhaar: For other people, it’s a walk-in shower and a freestanding tub. Thinking about how you want to use that space.

[00:54:36] Cathy Curtis: Okay. What’s important to you. Okay, that makes sense. And then the daunting thing to me is picking out the tiles and things and the countertops, because you’re not, you can’t envision it until it’s done.

[00:54:56] Cathy Curtis: So how do you go about doing that?

[00:54:59] Ruth Krumbhaar: I always, when I’m confused and unsure, I just go classic. You can never do too badly when you choose classic things. Like a sort of a marble, a grey and white marble. It may look, ho-hum, regular, uninspired, but hopefully you’re doing it in such a way that you’re adding in some fun details where you can.

[00:55:27] Ruth Krumbhaar: But classic always looks good. And so I would go on.

[00:55:31] Cathy Curtis: There’s some colors that I know this is true. In the 50s, it was all olive green and pink. I know there’s always trends. And I guess that’s not so important if you’re not planning to sell your house, but are there trends right now in bathroom colors?

[00:55:50] Ruth Krumbhaar: The ones that I see and respond to most are neutrals – just all neutrals. However, I’ve been working with a friend who’s obsessed with Moroccan tiles, which are trendy now. She wants to have the green square Moroccan tiles in her shower. I said, “If you do that, you have to have an arch doorway. Go for it!”

[00:56:18] Ruth Krumbhaar: That approach will get you a Moroccan light fixture. It can be fairly flush to the ceiling. Go for it. Because of that conversation, I’m seeing a lot of green. There are a lot of earth tones, interesting, almost clay-like, kind of pinky-brown clay-colored tiles, and a lot of beautiful tans.

[00:56:42] Cathy Curtis: What about wood-looking tiles? I’ve started to do a little exploring on Houzz and Pinterest, and I love that kind of earthy, outdoorsy feel that you get with wood. But of course, you don’t want wood in the bathroom.

[00:56:57] Ruth Krumbhaar: I think going that way is great. If you want to go earthy, I would take it a step further. Maybe do the pebble floor in the shower, just to bring natural elements or that kind of feel into the whole bathroom.

[00:57:13] Cathy Curtis: Yeah, okay. So maybe start with a theme. I like the natural elements look. It’s like you can make this an outdoor bathroom or something.

[00:57:24] Ruth Krumbhaar: Yes, then go for it. Go from there. And that’s where having a primary residence that you’re going to stay in for a while is important. You want to follow trends and be smart to a certain extent, but it’s also a chance to do something very personal for you. You’re going to create something that you’re going to enjoy for years to come.

[00:57:49] Cathy Curtis: Yeah, okay. From a budget perspective, do you think it’s a good idea to hire a bathroom consultant?

[00:58:07] Ruth Krumbhaar: Yes, I do. It’s like having a color consultant. A bathroom is a big deal and it’s a big expense, so you want to feel confident going in and like you have a plan. You don’t want a lot of changes happening as you’re doing it because your contractor will become more and more expensive.

[00:58:32] Cathy Curtis: So you don’t need an architect when it comes to redesigning?

[00:58:37] Ruth Krumbhaar: It really just depends, but I think getting a bathroom consultant is a good idea. I would speak with your contractor. If you have the budget, get a bathroom consultant who might be able to draw up the plan and make sure that you’re not overspending on your bathrooms. Generally, the projects that I’ve been privy to, and my mother is a landscape designer, she tells me every single project goes one third over budget. My partner is a contractor and it’s the same thing – every single project is one third over budget. So if you can keep in mind, only budget for two thirds of what you can afford. Leave a third extra of your budget for all the things that you’re going to discover along the way.

[00:59:34] Cathy Curtis: Yes, I know. I see it all the time. The clients did a lot of remodeling during COVID because people were at home. Home became a huge priority. I don’t even know if a third covered the overruns. It just got very expensive for people. They’re all very happy with it though. People love remodeling their homes and getting their spaces to reflect who they are. Like you said, if it’s going to be your residence for a long time, and most of my clients are planning to be in their residences, why not? The cost amortizes over time. If you do it well, maybe you won’t have to do it again for another 10, 20 years.

[01:00:17] Ruth Krumbhaar: Yes, exactly. And that’s where getting good fixtures, especially faucets and shower fixtures, comes in. You don’t have to go all the way to the super expensive ones, but you should get a good quality one.

[01:00:32] Cathy Curtis: Right, and knowing what the good quality things are. I guess that’s where you’re going to share some of your resources. You just have to do your research and talk to people. I’m sure bathroom consultants know where to go for good quality.

[01:00:48] Ruth Krumbhaar: Yes, and contractors will know as well. Some contractors are really up on that too.

[01:00:54] Cathy Curtis: Yes, it sounds like a key person is your contractor.

[01:00:59] Ruth Krumbhaar: Yes. So, I would almost speak with them before the bathroom consultant, because they’ll have that kind of understanding of the space, and you can brainstorm. For example, if I wanted to move the vanity over here, how much more would that cost?

[01:01:14] Ruth Krumbhaar: Get a sense for the kinds of choices that you feel prepared to make and pay for.

[01:01:19] Cathy Curtis: Okay. And then just generally speaking about res, so you’ve done a lot of decorating. Do you do decorating with friends too, besides your own? Yeah.

[01:01:27] Ruth Krumbhaar: Yeah. Yeah.

[01:01:32] Tips for updating a space where you’ve grown tired of the décor, and why hiring a style consultant can be a worthwhile investment.

[01:01:32] Cathy Curtis: So any, you’ve talked about your philosophy, general philosophy, but any other tips that you can give when you’re thinking about, let’s say, you’re completely tired of your living room decor? Like my living room decor has been the same, gosh, for 15 years.

[01:01:50] Cathy Curtis: We did it we got some really high-quality core pieces of furniture, but like I have a sisal rug. I’d love to get a real rug. How would you, what do you think about that? Updating like a room, refreshing let’s say.

[01:02:03] Ruth Krumbhaar: Oh, I think it’s great to do. I think it’s great to do. And maybe that sisal rug can find a home somewhere else in your house too.

[01:02:12] Ruth Krumbhaar: Yeah. It doesn’t necessarily have to go on the curb. One of the things that I’ve had a lot of fun with is working with friends doing updating, say, a living room, and they’ll say, maybe they’ll come to my house and be like, “Oh, I love your living room. I really want mine to look like yours.” And then we’ll go to their house.

[01:02:32] Ruth Krumbhaar: And I’ll realize their style is totally different than mine. It’s never going to work. And so it’s fun to help them really home in on your style. What is your style? You want a clubby, cozy, rich feeling. You don’t want an airy, ethereal, bohemian. Or you love that English countryside look. Go for it.

[01:02:56] Ruth Krumbhaar: And it’s so fun for me to explore other people’s tastes. My mother, for example, we’re finding fabric, she’s got a, in her kitchen she’s got this big banquette, like seating area, and a big table, and these big armchairs, and it’s all pink and green. Which, I can’t stand pink and green. Personally, it has been so much fun getting into her head and into her style.

[01:03:22] Ruth Krumbhaar: I have found the best pink and green fabrics for her. It’s been so much fun. I really think it’s important for us to connect to ourselves and connect to what we love and what makes us happy. And if you have a friend who’s good at design to get the design juices going or hire somebody to come in for a consultation.

[01:03:46] Cathy Curtis: Yeah, I know, I have friends that use designers, would never think about, I have a friend doing a refresh right now, has used a designer from the start, but she herself, my friend has really strong ideas of what she wants, and she finds it looking through Houzz and magazines and all that.

[01:04:06] Cathy Curtis: I think she uses a designer mainly for the sourcing. Yeah, and that’s finding these pieces that she really wants because she doesn’t want to have to do that leg work.

[01:04:16] Ruth Krumbhaar: Yeah, and designers are really good for that because they get a discount and so they can either make their money in time or in reselling you the pieces at regular prices and they or both.

[01:04:29] Cathy Curtis: Yeah, which high-end designers do both.

[01:04:32] Cathy Curtis: I know that hourly and getting a cut on whatever pieces are sold.

[01:04:38] Ruth Krumbhaar: Yeah. And that’s where also working with designers, a lot of designers are wonderful, but some of them are going to try and push you to get more expensive things so they can make more money. So really making sure that you stick to your budget and stick to your guns around.

[01:04:53] Cathy Curtis: I had that experience when we first decorated this house. We hired a designer who showed me a dining table that was like a third of our budget for the whole top floor of our house, and I’m like “Were you not listening to anything I said about our budget?” We really had a budget. Yeah. Do you know what she said?

[01:05:14] Cathy Curtis: She said, “Oh, I’m sorry. Most of my clients don’t have a budget.”

[01:05:18] Ruth Krumbhaar: Ooh, that doesn’t sound like the right…

[01:05:22] Cathy Curtis: My husband said, “Let’s not use her.” And I was so deep into the project already. I thought I just couldn’t, but he was right. He was right. That kind of comment clearly indicated she wasn’t the right designer for us.

[01:05:37] Ruth Krumbhaar: Yeah, especially for your profession. You’re helping people manage money.

[01:05:41] Cathy Curtis: Yes. So, you have to find the right person. And then, I decorated our master bedroom at another time, found the perfect person who went out of her way to stay within the budget and found some wonderful things for even lower prices.

[01:06:02] Cathy Curtis: And I… I would have never thought that because she was so focused on that. So, there are all different kinds.

[01:06:10] Ruth Krumbhaar: And it’s just like your contractor. Making sure you have a good contractor. Making sure that if you hire a decorator or designer of any kind, you see eye to eye and they’re creative.

[01:06:22] Ruth Krumbhaar: Some designers are very resourceful. Like the one you mentioned, they go on websites like Cherish, which is a wonderful website. Another tip. There are so many cool websites that have wonderful finds that are unique or antique. And they know how to find these unique things. That make your home really feel…

[01:06:48] Ruth Krumbhaar: Like an extension, an expression…

[01:06:50] Cathy Curtis: Of yourself. Exactly. And what I loved about her, she was more excited than me when she found a great deal. It was fun working with her instead of anxiety provoking like it was with the original people that we worked with. It was extremely anxiety provoking. Oh my gosh.

[01:07:10] Cathy Curtis: Beautiful things. Who doesn’t want a beautiful oak $15,000… But yeah, so I learned my lesson in that one. So speaking of, we’re going to go back to the personal finance aspect of this. There is investing in pieces, and then there’s knowing that you’re buying something that you love, but probably won’t last long.

[01:07:35] What Ruth believes are the most important items to invest in when decorating your home.

[01:07:35] Cathy Curtis: What do you think are the most important things to invest in when you’re decorating your home?

[01:07:41] Ruth Krumbhaar: I was just talking with a designer friend and she said it’s the rugs and the window treatments for her. And for me, I was like, really? I think it’s the sofa.

[01:07:53] Cathy Curtis: I think the sofa is really important too.

[01:07:56] Ruth Krumbhaar: I think… I happen to, I’m looking in my living room right now, I have an expensive sofa that I probably paid way too much for, but I love it, and it is the showpiece of my living room. I’ve got a very inexpensive rug that’s maybe $250, really inexpensive. But it looks good. So sometimes we can find these cheap things that look okay.

[01:08:23] Cathy Curtis: I know. It’s really true. Is it a big rug?

[01:08:28] Ruth Krumbhaar: It’s huge. And I can’t even believe how inexpensive it was. I bought it online on something like rugs.com for another room. And when it arrived, it was so nice. It’s not, if you touch it, it’s not going to feel like a really high-end rug, but it, and then my expensive sofa works very well with it.

 [01:08:50] Cathy Curtis: See, it elevates the whole room. That, I like that.

[01:08:53] Ruth Krumbhaar: So, I think it’s… People have their philosophies about what to invest in. I do think window treatments, good window treatments are… You can really feel the difference between custom curtains and off-the-shelf curtains.

[01:09:09] Cathy Curtis: And other… Not to say that you couldn’t find a good off-the-shelf curtain. Your rug is a great example. It’s just not as easy.

[01:09:18] Ruth Krumbhaar: Exactly. And there’s some… I think Pottery Barn has some like lined linen curtains. This is my go-to for people when they can’t figure out what they want, but they want it to look soft or summery or… It’s just a good standard. This is a good placeholder and you might have it for the next 10 years and it might just be fine.

[01:09:39] Cathy Curtis: Yeah. That’s not expensive. You know what my favorite, one of my favorite pieces in my home that came from working with the original designers is these reed shades in our living room. Oh my gosh, I love… I still love them. I’ve had them for 15 years and I look at them and they make me happy. And they were expensive.

[01:09:58] Cathy Curtis: Yeah. And I just… That was such a good investment.

[01:10:02] Ruth Krumbhaar: Yeah. I have some curtains that I bought years ago for an old house that I lived in a long time ago. And they’ve traveled with me. I make sure that they work in every house that I’m in because the fabric is so beautiful and the… quality of how they were put together is so beautiful. They elevate every room they’re in.

[01:10:21] Cathy Curtis: In fact, I’m going to put the name of the designer of my shades in the show notes because they still… You would probably know the name. I forget it, but… So beautiful. But you know what? Then again, I know that there’s a lot of quality copycats now that you can get a lot cheaper. It just depends on your budget and how much time you have to search out things.

[01:10:45] Ruth Krumbhaar: Yeah, but I do think if you want your house to feel elevated, every room should have something that feels really substantial. Whether it’s a headboard, or in my guest room, I have a beautiful headboard and some beautiful fabric on the bed. Then I have a cheap desk that I might have gotten at Ikea. It’s just a guest room, so it doesn’t need to be super elevated. But I wanted the bed to feel really sumptuous and it has beautiful cushions.

[01:11:15] Cathy Curtis: I agree with you. We’re talking about residential right now, but even Airbnb’s need this. One of the Airbnb’s we stayed in on our trip was a really nice space.

[01:11:25] Cathy Curtis: It was big. It had a kitchen, but it was decorated completely in HomeGoods standard. There was no elevating element to it at all. It was adequate, it was comfortable. It was fine. But, I couldn’t help thinking, “God, I wish they had just spent a little bit more money.” And it was even from the things hanging on the wall, everything.

[01:11:53] Cathy Curtis: I thought, just maybe a few hundred more dollars. I couldn’t help thinking that, to your point, even if they had just picked one nicer element, it would have elevated the whole space.

[01:12:08] Ruth Krumbhaar: Yeah, it makes a difference. People feel it, even if they don’t know what they’re feeling. Like in that Airbnb that you were in.

[01:12:17] Cathy Curtis: Exactly. I think about that with our Tahoe space. I’ll give a good example. We were in Tahoe recently and I went to a shop that had original art. The art wasn’t that expensive. I found a piece and I thought, “Oh my God, that would look so good in one of our bedrooms.”

[01:12:38] Cathy Curtis: And I thought, “Yep, I’m getting it.” We didn’t have the right piece. But, when I put that on the wall, just the fact that it’s an original art piece, even though it’s not that expensive, elevated the whole room.

[01:12:52] Ruth Krumbhaar: That’s an important aspect of decorating. Going back to my little house in Maine, I have the upside-down buckets with a piece of board on it, but on the wall, I have a series of antique floral framed pictures in old frames that are beautiful and have that elevated quality.

[01:13:24] Cathy Curtis: That works because you’ve got both elements. Another thing we noticed in a lot of Airbnb’s, which seems to work, is using baskets for decor like hanging a series of them on a wall. It works if there are other elements that aren’t baskets.

[01:13:51] Ruth Krumbhaar: In fact, I have here something I’ve traveled with. It’s a big rattan kind of basket-like thing.

[01:14:00] Cathy Curtis: Could you bring it a little bit closer? There you go.

[01:14:02] Cathy Curtis: Wait, a little bit back. We could see it at some point, but I see what you did.

[01:14:09] Ruth Krumbhaar: Anyway, it’s something that can go on a coffee table, or it can go on a wall. It was like, I don’t know, $40. Because it’s earthy, it doesn’t feel cheap. It’s like the baskets.

[01:14:24] Cathy Curtis: Exactly. And because it’s earthy, I don’t think people should move away from basketry. It really is a nice design element. Maybe you don’t like that look in your home, but if you have an Airbnb or VRBO, I wouldn’t hesitate to use it as a design element.

[01:14:45] Ruth Krumbhaar: It’s a really inexpensive way to bring a little more design in.

[01:14:50] Cathy Curtis: Juxtapose that with a piece that’s maybe a little bit nicer.

[01:14:54] Ruth Krumbhaar: Yeah, I do have a lot of baskets in my house in Maine, actually.

[01:15:00] Cathy Curtis: Do you? Okay, what’s your resource for that? HomeGoods? I’ve asked you that 20 times already.

[01:15:08] Ruth Krumbhaar: I have to admit, that’s a great place.

[01:15:11] Cathy Curtis: HomeGoods? Yeah, HomeGoods. Okay, that would be a good place for baskets. Remember Cost Plus used to be such a great place.

[01:15:26] Ruth Krumbhaar: I don’t know, I haven’t been there. There was one near here, or are you thinking of Pier 1?

[01:15:32] Cathy Curtis: Oh, Pier 1. I think they’ve shut down too. Those used to be my go-to’s, but you’re giving a lot more ideas for where to look, which I’m excited to see.

[01:15:46] Ruth Krumbhaar: And Etsy is another wonderful place. I just ordered a tablecloth from Etsy, which is beautiful. You can find so many different things of varying quality on Etsy.

[01:15:59] Why practical designs can actually boost your return on investment with an Airbnb property.

[01:15:59] Cathy Curtis: You’ve given some great notes too. I want to make sure we covered some of your main points. Oh, I know, about rental and Airbnb, the practicality. We haven’t really discussed practical designs very much. Designs that are easy to clean, easy to maintain.

[01:16:20] Ruth Krumbhaar: So you don’t want to do something like I did in Maine, unless you’ve sealed it a bunch. Having marble countertops in a rental is probably not a great idea because red wine could spill on it and stain it.

[01:16:35] Cathy Curtis: Oh, okay.

[01:16:37] Ruth Krumbhaar: Want to have surfaces. And oh, I had candles that dripped. You want to have dripless candles. Things like that. You need to consider, imagine messy people being in the space and how the housekeeper is going to clean it easily.

[01:16:58] Ruth Krumbhaar: And how are you going to maintain it easily? So, making choices, whether they’re cheaper things like the board on the galvanized buckets or smooth surfaces that can’t be destroyed, is key. Some of my furniture in Maine, for example, is painted, but it’s also a little bit of that. It can be chipped and a little worn because that’s the sort of feeling of a Maine summer house.

[01:17:24] Ruth Krumbhaar: So, I don’t care. But if it was a different kind of feeling, maybe the painted furniture wouldn’t go so well.

[01:17:31] Cathy Curtis: One of my pet peeves is bathroom surfaces that are dark. I don’t know if it’s slate or what, but it shows all the toothpaste stains. You cannot keep it clean no matter what. It’s a mistake to have in any kind of place that is an occasional rental.

[01:17:51] Cathy Curtis: Yeah, yeah. You really have to think through that kind of thing.

[01:17:54] Ruth Krumbhaar: You really do. And think through what also of yours can you tolerate having other people touch or use.

[01:18:04] Cathy Curtis: Yes. And the cleaning person thing you brought up. So critical to help your cleaning person be able to clean quickly and efficiently, especially if you’ve got a popular place with constant turnover where they’ve got to come in and maybe have someone come in that same evening when someone leaves. Thinking through that, maybe not so many knickknacks or the surfaces you choose for your floors in the kitchen and bathrooms, all those kinds of things are so important.

[01:18:35] Ruth Krumbhaar: It’s so true. That’s so true. Having enough sets of sheets so that if some are in the dryer, the cleaning person can get the other beds ready.

[01:18:44] Cathy Curtis: It’s a real art and a science to run a place. And to run it well.

[01:18:48] Ruth Krumbhaar: Yeah. And that’s why with the Airbnb’s that I’ve had, all the sheets are the same color.

[01:18:55] Ruth Krumbhaar: So if you have a pillowcase here, even if they’re slightly different, you could, everything’s white or everything’s blue or everything is in the same theme so it can be mixed and matched.

[01:19:07] Cathy Curtis: Yeah. I agree. Keeping it as simple as possible is, especially if you have multiple bedrooms, it just makes so much sense. And all the beds being the same size is helpful too. Yeah, if you can do it. But all these things save time, and they save money. They do. You make your cleaner’s job easier, she or he is going to spend less time in the place cleaning it, you’re going to have a lower cleaning fee, things like that.

[01:19:36] Ruth Krumbhaar: And so, I think with those kinds of properties, keeping it again, simple, keeping the design simple, keeping the garden simple as easy to maintain as possible. One of the things at my place in Maine. The front step. It’s an island where there are granite quarries. So it’s got these massive granite slabs as steps, but they were off-kilter and the whole house felt kind of funky. I had a guy just correct it and oh straight and pushed it back into place, which was not an easy thing to do because they’re humongous. The whole house feels different.

[01:20:17] Ruth Krumbhaar: It feels so good. And also, it’s safer. Because if somebody trips on those stairs, if they were a little bit off, maybe they could sue me. So you have to also think about that.  

[01:20:30] The importance of understanding local real estate laws when investing in a rental property.

[01:20:30] Cathy Curtis: Okay, that’s another great topic. So, this is for rentals. You have to know the local laws about keeping the property safe.

[01:20:42] Cathy Curtis: Yes. If you have a tenant especially. Can you talk to that a little bit?

[01:20:46] Ruth Krumbhaar: Yeah, it’s really important. When I owned rental properties in San Francisco as a landlord, I don’t have a lot of rights. I have fewer rights than I would like so that’s something really important to consider. In Indiana, I certainly don’t want to do anything to upset my renter.

[01:21:06] Ruth Krumbhaar: I love my renter, but I have more rights in Indiana than I do here in San Francisco. And that is appealing…

[01:21:13] Cathy Curtis: About that on the first podcast, that you could do a lot more things than you can do in San Francisco. And just how much easier would that be? It’s just so much easier.  

[01:21:24] Ruth Krumbhaar: Yeah. This is less, there’s so many elements that come into this.

[01:21:29] Ruth Krumbhaar: Because you have to make sure your insurance is good for it being a rental and…

[01:21:34] Cathy Curtis: Can you give an example of something you can do in Indiana that you would never be able to do in San Francisco?

[01:21:40] Ruth Krumbhaar: I think I can kick my renter out more easily. And again, not that I would want to, because I love my renter.

[01:21:48] Cathy Curtis: But no, I know, but that’s a real issue for landlords.

[01:21:51] Ruth Krumbhaar: Yes, in San Francisco, I was considering selling my property and approached the renters and it was going to cost a hundred grand to move them out.

[01:22:02] Cathy Curtis: Yeah, that’s happened to friends of mine. It’s horrible.

[01:22:06] Ruth Krumbhaar: Yeah, so it’s important to think about that. And as I go to re-rent my property in San Francisco, I have to consider the renter, if I want to sell it in say three years.

[01:22:19] Ruth Krumbhaar: I either need somebody who I think will leave in three years, or I have to be prepared to buy them out.

[01:22:25] Cathy Curtis: Are there any other, you mentioned knowing other local laws or ordinances and wherever you do buy and rent.

[01:22:35] Ruth Krumbhaar: Yeah. I’ll use Indiana. The mayor of the town where my house is. He’s real estate friendly.

[01:22:43] Ruth Krumbhaar: He’s actually just trying to help the town get back up on its feet. And so he wants people to come in and fix up houses. He wants great rental housing because three new factories are moving in. So he’s trying to make it easy for everybody, the workers and the people who need housing, but also the people who are supplying the housing.

[01:23:05] Ruth Krumbhaar: And I love his attitude. I don’t, I can’t recite all the nuts and bolts, but in listening to him and reading some of the articles about him and the initiatives that he’s got going. He’s really favoring developers, he’ll sit down and meet with you and talk to you about what you want to do in terms of development and try and make it happen.

[01:23:26] Cathy Curtis: Did you know this when you, after you bought or before you bought?

[01:23:31] Ruth Krumbhaar: Before, before. A friend of mine…

[01:23:32] Cathy Curtis: That would be, that’s a really interesting element to know about when you’re going to buy a rental in a city.

[01:23:38] Ruth Krumbhaar: Yes. And so you want to go on any sort of board, even Reddit is a place where you can get some information.

[01:23:47] Ruth Krumbhaar: You don’t want to rely on that solely. You should read the local newspapers. That’s a really good way to learn, talk to some banks about lending practices and what’s going on, and do a drive around the area, talk to your realtor. Look at, I think we talked about a lot of this in our first podcast, look at places like Muncie where my house is, three new factories are coming in.

[01:24:14] Ruth Krumbhaar: Actually, I think it’s really promising for our future. I think that it’s important to do your research around what’s happening locally. You don’t want any surprises.

[01:24:26] Cathy Curtis: Yeah. We want as few as you can manage because there’s always going to be something. Yeah. It’s always going to be something.

[01:24:35] Ruth Krumbhaar: Yeah, you can make a property as pretty as you want and you can have it as buttoned up, but there are always things.

[01:24:43] Ruth Krumbhaar: One thing that I think my partner is running into in Redwood City is when you do a transaction there buying or selling a property, you have to upgrade the sewer lateral, which is a huge expense that a lot of people aren’t aware of. So I think that’s common.

[01:24:55] Cathy Curtis: I hear about that a lot and it’s expensive.

[01:25:03] Ruth Krumbhaar: It is. So just making sure that you do your research.

[01:25:07] Cathy Curtis: Yeah. You need to be like a forensic scientist when you’re digging into all the details. That makes a lot of sense. Great. I have enjoyed this conversation so much. Is there anything else you’d like to add that you think our listeners would enjoy hearing about? When it comes to decor, and I know, just so everyone knows, we’ll share a whole bunch of resources on the podcast page once this is published.

[01:25:37] Ruth Krumbhaar: I think just connecting to what makes you happy, what brings you joy. If you are a maximalist, go for it, at least in your own home. If you are a minimalist, go for it. And then also, I think, just follow your heart, be you. Yeah. Or make your home represent you, make it be an extension of your personality and expression.

[01:26:04] Ruth Krumbhaar: That’s in your own house. And if you have rental properties or you’re interested in doing Airbnbs, see if you can establish a formula because it’ll make it a lot easier. Have one paint color that you always go to, that feels like the safe bet. So you don’t have to scurry around and wonder what color you painted that rental property or that rental property.

[01:26:27] Ruth Krumbhaar: And just have fun with it. Design is fun, and it’s inspiring, and it says a lot. And it’s a great way for us to express ourselves, but it’s also a great way to welcome people and allow other people to feel good. So that, and then in terms of finances, that sort of two thirds, one third is possibly a rule to stick with.

[01:26:52] Ruth Krumbhaar: If you have your budget is, say, $100,000, see if you can whittle it down to somewhere like $75,000 or $70,000. You can work within there knowing that you have a little bit of extra wiggle room if you need it.

[01:27:06] Cathy Curtis: That’s great advice. And then you won’t be so surprised. And hopefully, you’ll have the money to be able to do it.

[01:27:15] Ruth Krumbhaar: Exactly. And then, of course, as we talked about, having every room have that something elevated.

[01:27:22] Cathy Curtis: I think that is really good advice. Yeah. I love it. You can’t go wrong if you do that.

[01:27:31] Ruth Krumbhaar: All right, this has been so much fun. It’s wonderful fun. And I love talking about design and real estate and finances with you.

[01:27:40] Cathy Curtis: I do too. Thank you so much. And we’ll be publishing this very soon. And I’d love to say we’ll do a third one. So maybe we’ll come up with another topic for the future. Yes. Okay, Ruth. Thanks so much. Take care. Bye. Bye.

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S5E4 Transcript: Mastering the Art of Real Estate Staging & Interior Design with Ruth Krumbhaar Read More »

S5E3 Transcript: Real Estate Investing 101 with Property Powerhouse Ruth Krumbhaar

Cathy Curtis, CFP®: Hi, welcome to Financial Finesse, where we bring you insights and experiences from interesting and successful women. Today we have a special guest, Ruth Krumbhaar, who has built a source of passive income through investing in real estate.

Cathy Curtis, CFP®: Many women are curious about investing in real estate but don’t know where to begin. Ruth, I know that your real life and personal experiences and insights will be invaluable. Thank you for sharing your expertise and joining us on the show today. Can you tell us how you got started in real estate investing?

Ruth Krumbhaar: Well, it was a long time ago and I was looking for an apartment to rent in San Francisco. And I answered an ad and went to a beautiful apartment on Dolores Park. I remember it so well. And the woman there had just bought it and she said, you can rent half of this apartment, but I own it and I’m going to be working on it while you live here.

Ruth Krumbhaar: So just wanted to let you know. And I walked away thinking, wait, if she can do it, I can do it. I think I want to buy my own place. What’s going to, what’s stopping me? So I looked at real estate prices, which were very high. Real estate prices were already high in San Francisco.

Ruth Krumbhaar: I looked at my bank account, it was low. So, my stepmother generously, I talked to her and she said, I’ll give you money for a down payment, and it was $20,000. So that’s basically how much I had as a down payment.

Cathy Curtis, CFP®: Was that enough back then?

Ruth Krumbhaar: Well, I looked all over San Francisco, and I couldn’t find anything except in really, really scary places.

Ruth Krumbhaar: So I ended up expanding my search over to Berkeley because I figured that was a community that I believed in, that I knew was solid and I felt like also had little pockets that would appreciate. And I bought my first condo. Which my friends and I called the cheapest condo in the Bay Area in a little pocket of Berkeley that was sort of up and coming.

Cathy Curtis, CFP®: So cool. What was the pocket?

Ruth Krumbhaar: Well, it was, it’s called now the Gourmet Ghetto, but it was south, the southern part of it. And so it was a, it was a conversion from a T I C into a condo building. It was an old, an old building with six units, and it was the perfect opportunity for me. So together with the other owners, we got the building painted, we landscaped it, we all improved our units and I ended up doubling or almost tripling my investment within two and a half years.

Cathy Curtis, CFP®: You bought this to live, right?

Ruth Krumbhaar: I did. I lived in it, but I, I kind of worked on it, like the woman who I had gone to see the rental apartment, I was sort of following her model. And it was great. So that gave me, when I sold it, after a couple years, I had enough money now to move back into San Francisco, which is where I wanted to be.

Ruth Krumbhaar: And then I bought a place in the mission, and another one that I, I lived in, and you could just sort of see the neighborhood slowly changing.

Cathy Curtis, CFP®: What year was that? I’m just trying to get the timeline of when you invested.

Ruth Krumbhaar: Yeah, that was the early two. That was around 2000.

Cathy Curtis, CFP®: Okay, so that was in the dot-com boom.

Cathy Curtis, CFP®: Yeah, and real estate was probably, priced pretty high in the mission, or maybe not yet. Maybe not yet. Okay.

Ruth Krumbhaar: No, no. So again, one of those areas that I had a good sense, it was more of a gut sense than a, than a, than a, a research sense that this was an area where sort of people were wanting to live. It was kind of artsy.

Ruth Krumbhaar: It was eclectic, there’s beautiful architecture, great little cafes and restaurants were sort of popping up and, and so that told me it was a place I wanted to live. And because it was a place I wanted to live, I figured other people would be, would be coming soon.

Cathy Curtis, CFP®: So you’ve got the gut instinct for real estate, it sounds like, from these, just these two examples, which I think is a real thing.

Cathy Curtis, CFP®: I, you know, successful real estate investors go with their gut and yeah, maybe they do some research, but a lot of it is instinct. I want to talk to you a little bit more about that as we keep going. So you’ve now bought another place to live in the mission and what happens from there?

Ruth Krumbhaar: I got married, I had a kid, I moved out, but I kept it as a rental property and that’s when I switched over from having real estate to live in as my sort of home into something that was an investment and something that I generated income from. And, and that’s when everything sort of switched for me.

Ruth Krumbhaar: And then when I sold that, I sold that at the top of the market and was able to put that money aside for a while until the market tanked in 2008. And that’s when I was able to buy a property on Telegraph Hill, which is a two-unit property. And that’s when this seed money, this $20,000 that I got, that’s when it really started to take shape and turn into something bigger.

Ruth Krumbhaar: And I, I think real estate investment, I mean, you can make money right away by having a rental income, but it can also be a sort of longer-term thing. And it could, or it can be a sort of hybrid path. And that’s how I, that’s how I was looking at it.

Cathy Curtis, CFP®: Okay. This is interesting because I have a, a similar experience myself, investing in real estate as a single woman.

Cathy Curtis, CFP®: When, when I realized I could afford to do it, I, like you wanted to start out in San Francisco, quickly realized it was too expensive. So I started looking in Oakland, Berkeley. Even then, it was too high for me. And so I went all the way out to the deep burbs into Dublin.

Cathy Curtis, CFP®: So it happens I had a job in Pleasanton, but I was a, I’m such a city girl, San Francisco, born and raised. It was really hard for me to imagine actually moving there. But I was able to find a condo that was affordable. I bought it. And, but then I turned that I like you, I made a profit on that eventually.

Cathy Curtis, CFP®: Because real estate markets go up and down. I mean, and it, you recognize that, like, it sounds like you waited a long time before you bought your next property in the city because the markets really change over time. When I bought the place in Dublin, it was cheap. The markets crashed, then BART went out there and the prices went way up.

Cathy Curtis, CFP®: And I sold it, moved that money into another home. So, you know, some of it’s lucky timing, you can’t panic, so many things about it. It’s sort of like investing in the stock market in that way that you gotta have a really cool head about you and make smart decisions.

[10:45] Ruth Krumbhaar shares some of the biggest mistakes she’s made as a real estate investor. 

Ruth Krumbhaar: Absolutely. And I think some of the mistakes that I’ve made in, in real estate investing are panicking or a, a sense of scarcity or moving too quickly and not paying enough attention.

Cathy Curtis, CFP®: Can you give an example? People love to hear people’s mistakes. But we also all learn from people’s mistakes. So if you wouldn’t mind sharing one of those.

Ruth Krumbhaar: I think one, one is that I paid too much, I think for a property.

Ruth Krumbhaar: I, I have a, a rental property in Indiana. And, you know, I was so excited to get into this new market and I really knew the area that I wanted. I’d sort of done my research. I knew the, the, the kinds of people that were renting there. I found a property that met my criteria and it was very inexpensive.

Ruth Krumbhaar: So this was not a big, big mistake in terms of dollars, but. It was listed, get this at $95,000. I offered 85 and then we negotiated up to 90. I, I’m kicking myself a little bit because I still think I could have gotten it for 85. Between 80 and 85. Yeah, I really do, which would’ve paid for the improvements that I put into it.

Ruth Krumbhaar: So now, once I got it at 90, I put some improvements into it and, you know, it’s at, it, it’s fine. I, I’m getting income consistently.

Cathy Curtis, CFP®: Oh, you still, so you still own this one?

Ruth Krumbhaar: Yes. Yes.

Cathy Curtis, CFP®: Okay. But okay. So that’s, you think you paid 5,000 or so too much for it. Okay. So you’re, because it’s not cash flowing the way you want it to or the, the return on investment isn’t as big as you want.

Ruth Krumbhaar: It’s more that I think I could have gotten a better deal based on the other transactions that I’m seeing in that area.

Cathy Curtis, CFP®: Okay. Okay. That’s interesting. Yeah. All right.

Ruth Krumbhaar: I think I overpaid. Well, which we do, we make these mistakes when we get excited, you know, and sometimes aren’t thinking clearly or we’re not slowing the process down.

Cathy Curtis, CFP®: Well, I’m going to tell you about over excitement and, and so I’m going to share another story. So I, my husband and I wanted to get into investment real estate. So we right before the credit crisis, you know, in 2006, 2008, of course, we get all excited like everybody else, and we find a place in Utah, Salt Lake City area.

Cathy Curtis, CFP®: We found a rental house. We figured big families there, blah, blah, blah. But the timing was wrong. It was, you know, it, the bubble was about to pop. And so we invested and we ended up selling it. We didn’t make any money. We had a little bit of a loss, so there’s another mistake. And it was because we got caught up in the hype.

Cathy Curtis, CFP®: Like a ton of other people did. We’re very lucky it wasn’t our home. A lot of people, you know, foreclosed during that time, but you have to, so we didn’t have the instinct like it seems like you did for that.

Ruth Krumbhaar: And sometimes we make those mistakes. I made another one recently. I was trying to buy a property and I just didn’t bid high enough.

Ruth Krumbhaar: I knew it was competitive and I knew I also had a financing contingency on this particular one, and I knew. I knew it was a hot location and a great price for this particular house, and it had some architectural integrity, but, you know, it was really cute. It was a little craftsman bungalow.

Cathy Curtis, CFP®: Where was that?

Ruth Krumbhaar: In Richmond, Virginia. In this area called Churchill, which is, which is really happening right now. And so, and the price point was low, so I, it was lower than most properties in that area.

Cathy Curtis, CFP®: The one that got away, it sounds like. That must be disappointing.

Ruth Krumbhaar: Yeah. Yeah.

Ruth Krumbhaar: But we all have those, and, and you know, we have to learn from those.

[15:06] What Ruth Krumbhaar believes is her greatest success so far as a real estate investor.

Cathy Curtis, CFP®: Right, right. So tell us, I asked you about a mistake. What has been your greatest success so far in real estate investing?

Ruth Krumbhaar: Well, I think all my Bay Area properties have been, have been great. The one on Telegraph Hill particularly, because I bought it at the right time when things were really in a slump, and the sellers were really motivated.

Ruth Krumbhaar: They had some family issues and they, they wanted to just break even. And so I got it at a great price. There were no other buyers, the sellers needed to sell. It was helping them, and it was a property that also had some potential to improve. And so it went from a sort of mediocre, you know, ho hum property to something that I developed, into something that’s, it’s really quite beautiful.

Ruth Krumbhaar: And we’ve had people like rent out the patio area for parties and it’s, it’s pretty neat.

Cathy Curtis, CFP®: And so that sounds amazing. What led you to find that property?

Ruth Krumbhaar: Well, I was single again. I’d gotten divorced and I had, my son was five, and we were living in an apartment and we wanted a house. We wanted something with no one above us or below us.

Ruth Krumbhaar: And so this property has a little cottage in the back of the property, and then a courtyard, sort of terrace area in the middle. And then in the front it has a garage with a studio apartment above it. And it felt like the perfect property for us because I was figuring when he was a teenager, he would live in the studio.

Ruth Krumbhaar: He would have his own little zone and be away from his mother. But while he was a little kid, I could rent it out and so we ended up living in the cottage and then Airbnb-ed the studio. Which then I also used as a guest quarter for, you know, friends and family when they came to visit. So I would kind of time, I would block out the Airbnb portal for the weeks that I had people visiting.

Cathy Curtis, CFP®: Okay. And you used the profit from selling the mission property to buy this one? Yes. So, so far each purchase was first meant to live in, and then because of circumstances you rented, like you got married and then you rented the mission, and then this one you bought for rental purpose from the beginning.

Ruth Krumbhaar: Yes. But we, we actually left it because we wanted a bigger home and my son got into surfing, so we had to move out to the beach. So we live in the outer sunset now, but we now rent out both units. It changed from being a residence with an Airbnb to having two full-time renters.

Cathy Curtis, CFP®: And do you own your place in the sunset now, or no?

Ruth Krumbhaar: No. I, and again, another regret is I probably could have gotten into that market right when we were thinking about it, because it was about to take off, another area before Covid. Pre Covid. And some of the signs for that are just the popularity of a lot of the cafes and restaurants and the farmer’s market.

Ruth Krumbhaar: You could kind of tell that this is an area that people were really beginning to invest in. And there’s a whole wonderful culture there of young, kind of artsy people and great yoga studio and, you know, wonderful places to go in the evening.

Cathy Curtis, CFP®: I agree. I grew up on 14th and Rivera, and I’ve lived in the East Bay for a long time now, but I recently drove around that area and I’m amazed at how it’s changed.

Cathy Curtis, CFP®: So if you got into that area at the right time, you would’ve done really well. But, so this is something I want to ask you about in particular about San Francisco or any, any expensive metro area like that. Because, I often have clients ask me about rental, real estate investing. And I’ll say, well, where are you thinking?

Cathy Curtis, CFP®: Well, I’d love to buy something in San Francisco. And I, I always think, gosh, San Francisco, how are you going to be able to buy a rental property in San Francisco and make any money at all? And it always seems like San Francisco is going to be like that, but you were not afraid to dip your toes in, in two different places.

Cathy Curtis, CFP®: And I’m sure they weren’t cheap, I mean, relatively right. They were probably still a stretch, I’m imagining. So you had, you got over the fear or your instincts are really strong, or can you talk about that a little bit?

Ruth Krumbhaar: Yeah, I’m very pragmatic about things and so, you know, when I, one of the things that you may have found when you bought your place in Dublin.

Ruth Krumbhaar: Being a city girl, that I found in Berkeley was that my friends said, why are you living out here? Don’t you want to be in the city? Absolutely. And I have another whole thing going on. Don’t worry about it. And now they’re wishing they had done that.

Cathy Curtis, CFP®: I had a, I was single at the time and I used to go to San Francisco for my social life. When I lived out in Dublin. I had a guy tell me that I’d be a lot more attractive if I lived in San Francisco and not way out in the boonies.

Ruth Krumbhaar: Well, good thing you passed on him.

Cathy Curtis, CFP®: Yeah, and my current husband didn’t care.

Cathy Curtis, CFP®: I was living out there. Then when I first dated him, he drove out there, picked me up, brought me a dozen pink roses, and took me, drove all the way back to Berkeley to have dinner. Tell you what, guess who I got married to.

Ruth Krumbhaar: Oh, that’s great. Yeah, so anyway, the place in the mission, my criteria was I want two bedrooms and at least one and a half bathrooms because I wanted the option of having a roommate. So, and I wanted it so that if one of us was in the shower, the other one could, you know, use the bathroom. So that’s what I found.

Ruth Krumbhaar: And I got a roommate who only lived there part-time.

[22:09] Ruth explains her process for identifying new investment properties.

Cathy Curtis, CFP®: Oh, good. So do you literally, when you’re getting set to buy, right, first you identify, this is a good time, this is a good area for these reasons. And then do you make a like a handwritten list of your criteria and check it off? What, what’s your procedure?

Ruth Krumbhaar: Well, it really depends on the property. So, I think you and I had communicated about three properties that I’m currently working on. And so Muncie Indiana, outside of Indianapolis, is a, is a sort of small city that is on the uptick. Really cheap housing stock, three new factories moving in.

Ruth Krumbhaar: Ball State University is there. It was a, it’s a city where the mayor used to work in real estate, so he’s super real estate friendly. There aren’t many regulations around Airbnb or development. And the local government are really accessible and make development really easy. And what I mean by development, like adding a unit or splitting a lot or things like that where you can actually really maximize your investment.

Cathy Curtis, CFP®: Sounds perfect. I’m going to stop you right there. How did you find Muncie, Indiana, of all the cities in the United States and pinpoint it as a good place to invest?

Ruth Krumbhaar: You know, it’s funny. A friend of mine was who loves real estate was visiting her great-aunt there because she, her family originated from there and she took a look around and realized it was a good investment.

Ruth Krumbhaar: So she sort of set things up for me. I really, the path was well greased. She had a realtor.

Cathy Curtis, CFP®: You’re paying attention because you’re thinking investment. You want to do this, right. You’re all, you’re an investor, you’re a real estate investor. So you’re picking up on cues from everywhere probably.

Ruth Krumbhaar: Exactly. And that’s what we have to do. So Muncie was right for me because I had a good, you know, I knew there was a good contractor available. I knew there was, I had intros to a realtor, a really good realtor and an inspector.

Cathy Curtis, CFP®: And how did you know this contractor? Through your friend.

Cathy Curtis, CFP®: Okay. So personal connection is super important.

Ruth Krumbhaar: Super important, yeah. Especially for someone like a contractor. And he, oh, he’s been wonderful. And he’s also my rental agent, so he shows all my properties, and we’ve formed a really, really good working relationship. I also pay my bills immediately because that relationship is so precious to me.

Ruth Krumbhaar: I want him, I want to be his top client.

Cathy Curtis, CFP®: Okay. That’s, that’s really good advice. So you coddle these relationships and make sure there’s a trust established and all those things.

Ruth Krumbhaar: Yeah, so for Muncie, it was that, and it was also wanting to be in a particular area where I knew there was a good rental base.

Ruth Krumbhaar: So I’m right near Ball State University. And have you been there?

Cathy Curtis, CFP®: You know, I have never been there. This is fascinating. You really don’t have to visit the places you invest in, do you?

Ruth Krumbhaar: You don’t. You don’t. It’s good to, and I want to, but, but you don’t have to.

Cathy Curtis, CFP®: That adds cost too. It, it’s time.

Cathy Curtis, CFP®: It’s the flight.

Ruth Krumbhaar: It’s the flight, getting there. Rental cars, all of it. Yeah. Another, but there’s different criteria that I look at. I bought a vacation rental in Maine that was very different. You know, that was more like, it’s gotta be near a river, a mountain, a lake, or the ocean.

Cathy Curtis, CFP®: And what, where did this idea come from?

Cathy Curtis, CFP®: What, what inspired you to look in Maine?

Ruth Krumbhaar: Well, Maine is a place where I have family and I wanted a vacation, you know, a home for myself close to family living on the West Coast. I wanted something on the East Coast. And so Maine holds a particular place in my heart. And I also knew that my family all over the East Coast would come there to visit.

Ruth Krumbhaar: But I also knew it was an area where real estate was really beginning to take off. Portland has become a pretty trendy, an affordable option for a lot of young people. So there’s a lot of great restaurants. There’s a whole sort of creative community. It’s very artsy. And so I wanted to buy a property that was sort of a spinoff from that hub.

Ruth Krumbhaar: Where people would live who were connected to that kind of energy. And also where people would want to stay on their vacations. And so I layered and layered and layered criteria and ended up buying a home on an island, which has its own sort of community. It ended up sort of not following the model exactly because it was far enough away from Portland that it was really more of a Vacationland kind of.

Cathy Curtis, CFP®: Okay. But this happens, right? You, you have a plan, but it depends on what comes up.

Ruth Krumbhaar: Yeah. Yeah. So what was wonderful is that I had my criteria at my, my price point, and I called my cousin and she had actually just bought a property on the same island that I was looking.

Cathy Curtis, CFP®: Oh my gosh. So, a little serendipity there.

Ruth Krumbhaar: Yeah. So I got a little house in the town because I couldn’t afford something bigger. But the town holds its own sort of allure and it’s a great place for people who want to come for a weekend or a week to rent because they have access to all the amenities in the town and can feel really connected to it.

Cathy Curtis, CFP®: And for you too, it’s a vacation for home for other people, but then you reserve it when you want it.

Ruth Krumbhaar: Exactly. Sort of like what it sounds like you were doing with the Utah property.

Cathy Curtis, CFP®: No, that’s what’s interesting. We bought that strictly for investment. It was in a residential community and yeah.

Cathy Curtis, CFP®: Talking about the different purposes, our purpose was to make a stream of income and then sell it for a profit. I have, we have a place in Tahoe that we are doing what you do. With the Maine property. But no, it, that wasn’t the purpose.

Ruth Krumbhaar: Well, and the Maine property is, you know, just cheap and cheerful.

Cathy Curtis, CFP®: Okay. Did you use Airbnb to rent it or how do you rent it?

Ruth Krumbhaar: Right now I’m just using word of mouth because there’s enough, there’s enough people who would want to rent on that island that word of mouth is sufficient. And also I didn’t, because we had to sort of renovate it and we’ve slowly been, you know, pulling up carpeting and sanding floors or painting them.

Ruth Krumbhaar: While it’s beautiful, it’s not quite to the standard that I think that an Airbnb should be.

Cathy Curtis, CFP®: Okay. And are you doing this work yourself? So this is a place you go to regularly and you’re putting some love into it.

Ruth Krumbhaar: I’m putting a little, a little love into it. And the reason I’m doing that is there aren’t that many, and this is something important to consider, there aren’t that many people there to do that kind of work because it’s a lobster fishing community.

Ruth Krumbhaar: The year-round people are making so much money as lobster fishermen that they don’t want to do building. So while I have people who can do housekeeping, the, the bigger stuff, the, the more construction related stuff is, I don’t, I don’t have help for that. So it’s so important. When you buy a property, if it needs to be improved or it’s going to need some maintenance, let’s say it has decks or pools or things that may over time need to be repaired or taken care of, that it’s within a community where you know you can get help.

[31:17] Ruth explains why it’s so important to research the local area and make sure you can find good help nearby before purchasing an investment property.

Cathy Curtis, CFP®: Yeah. So that’s where sort of the research or having a contact in the local area becomes very important.

Ruth Krumbhaar: It does. And I think that having a really good realtor who understands your goals is one of the most important things that you can do in the very beginning.

Cathy Curtis, CFP®: Okay. Let’s riff on this idea for a little bit.

Cathy Curtis, CFP®: So, a person decides that they want to invest in a town in Tennessee. They discovered through a friend or family that this little town is starting to boom. Our community’s growing and so they don’t want to travel there. It’s not in their budget. And so they start trying to find a team.

Cathy Curtis, CFP®: Like a local first one would be a local realtor, it sounds like. And you can Google and find out who are the best. That’s probably not that difficult.

Ruth Krumbhaar: That’s, that’s fairly easy. And you want to interview them and make sure that you have a rapport with them. And you can, and that they’re responding to your questions in a way that makes you feel comfortable.

Ruth Krumbhaar: And that they are asking you the right questions as well. So, and you’ll know this, this is a sort of a gut thing.

Cathy Curtis, CFP®: Okay. And I’m assuming that local realtors, at least the ones I know here, they are so connected with contractors and, you know, people, decorators, and so many, there’s so many contacts. If they’re a good realtor, they develop their contact list to help their clients.

Cathy Curtis, CFP®: So that could be the first source of many other sources of help in building your team?

Ruth Krumbhaar: Absolutely. And so that’s one of the most critical pieces and they, they will send you leads. They will sometimes send you off market listings. And you should also be doing your own research in addition to that because you may find something that may be outside of your criteria, but that looks interesting enough that you ask them about it. I recently did this in Muncie with my realtor.

Cathy Curtis, CFP®: And so, so you would go on Zillow or some of those sites and just put in your criteria and do your own side search too? And then in finding out things like, like you found out this interesting fact about the mayor in Muncie.

Cathy Curtis, CFP®: That was through a personal contact, but could you also find out what’s going on, like development wise or companies moving to a city, things like that? On a, like a, a local community site?

Ruth Krumbhaar: Yes. I go, so for Muncie, for example. And actually I’m really interested you brought up Tennessee. Chattanooga is an area that I’m interested in.

Cathy Curtis, CFP®: Yeah. I’ve heard that several times. Tennessee has come up in conversations with people.

Ruth Krumbhaar: I think there’s, there’s still a lot of value there, and people are moving there.

[34:40] How Ruth Krumbhaar finds sources of help near her investment properties and researches potential growth factors in new locations.

Cathy Curtis, CFP®: We’re talking about how to find sources of help in the cities you go to, and how do you find out about the growth factors going on in the area?

Cathy Curtis, CFP®: A headquarters moving there, a progressive political scene, what, you know, where they want to build more community spaces, all those things that you can find out.

Ruth Krumbhaar: I think the key word here is to just be obsessive. And just start and just start looking and, and follow, follow the threads, so.

Ruth Krumbhaar: Right after I chose Muncie, I read in Forbes Magazine, there was an article about real estate investing and Muncie happened to be listed in it. I was like, yes, I made a good decision. And then I sort of followed some of the links in that as well, and it led me to understand that while the enrollment in Ball State is actually going down a little bit, which is concerning, these factories are coming in.

Ruth Krumbhaar: I don’t understand yet why Ball State enrollment is going down or what the levers are to improve it. Or, you know, what is exactly going on. I’m curious, so I want to get obsessed about that.

Cathy Curtis, CFP®: Yeah. See, that’s interesting. Is the curiosity, I mean, the fact that you are going to find out about that is fascinating to me.

Cathy Curtis, CFP®: That’s, that’s how deep you have to go to understand an area if you’re going to really do this, right?

Ruth Krumbhaar: Yes. And then you look at what the local government is doing in terms of development and in and investment in the infrastructure of the city. Are there new subway lines going in or bus lines, or is there a new bus terminal or is there an airport being developed?

Ruth Krumbhaar: Which airlines? So in Maine, for example, there’s a teeny tiny airport right near my island. And Cape Air has regular flights between Boston, New York, Nantucket, Cape Cod coming in to where the ferry leaves, an area right near where the ferry leaves to go out to the island. So that is important for me to study those.

Ruth Krumbhaar: You know, the flights, are they adding flights? Are they subtracting flights? What’s happening? How accessible is this area?

Cathy Curtis, CFP®: Also, things like all these natural disasters we’re hearing about now, the flooding and all, I’m sure that must be top of mind wherever you’re looking.

Ruth Krumbhaar: There is a website and I wish I could remember it. Basically, you can put in any address, and it shows you the potential for natural disaster, whether it be fire, severe weather, heat, flooding. I think there are a few other criteria. And they show these maps. Then they assess all the areas I think in the world.

Ruth Krumbhaar: But, I’ve just been looking in the areas. I’ve just been inputting addresses or city names that I’m in. 

Cathy Curtis, CFP®: You know what, we’ll find out what it is, and I’ll put it in the show notes after.

Ruth Krumbhaar: That would be great. And again, this is something if you want to invest in real estate, it’s fun.

Ruth Krumbhaar: If you like this stuff, if you like getting obsessed about these things, it’s really fun.

Cathy Curtis, CFP®: Yeah, I know. It sounds fun if you have the interest. I think that’s key to be successful on this. It can’t be taken lightly. Like, oh, I’m going to find a realtor in a city where I think it’s going to grow and I’m going to rely on them to find me a place. And then I’m just going to buy it and I’m going to make passive income and everything’s going to be fine.

Cathy Curtis, CFP®: It’s, it’s not, it’s not that easy.

Ruth Krumbhaar: No. And that’s, that’s why I think not everyone should do it. Because it is a pain sometimes. I just had a renter give notice, so now I’ve gotta advertise once again and get the place cleaned and check for, you know, it does require work.

Cathy Curtis, CFP®: But yeah, people, well, I know when you’re trying to figure out what the cash flow will be, you always have a vacancy percentage, right?

Cathy Curtis, CFP®: To see if the numbers work. What percent do you assume? 10% or 20%?

Ruth Krumbhaar: yeah, I just assume it’ll be rented 10 months a year.

Cathy Curtis, CFP®: Okay. That’s, that’s good to know.

Ruth Krumbhaar: And then I add in, you know, sort of cleaning, maintenance, landscaping, pest control. For Telegraph Hill, you know, there’s an issue with pests, so you have to have pest control.

Ruth Krumbhaar: Other properties, I don’t have to have that because it’s not an issue.

[39:43] Cathy and Ruth discuss how financing works when investing in real estate. 

Cathy Curtis, CFP®: Yeah. So you need to know all of those things. Let’s switch gears a little bit and talk about financing. Because I think people are going to be really interested in that. Is there a down payment requirement in any, I mean, tell us about your experience in financing these properties.

Ruth Krumbhaar: So it depends how much money you have and what your goals are and what markets you’re looking in. So, for example, in Muncie, I bought my property and I’m in the process of hopefully buying another one with cash. Because it was, it was not an expensive area. It was a good, I felt it was a good place for me to put my cash and just get some monthly income off my cash.

Ruth Krumbhaar: I’m in the process because I called around to some local banks in the Muncie area, and there was, there’s a really good deal going on where I can get a HELOC. So I can pull some money out of my house at just over 5%.

Cathy Curtis, CFP®: Is that variable though? Will that go up?

Ruth Krumbhaar: Yeah, but still it’s a low starting rate. And so that will allow me to free up some money temporarily to say buy the second house. The second house I’m buying from a private seller, and so he isn’t in a rush. So as soon as that HELOC comes through, then I’ll pay for the second house with that.

Cathy Curtis, CFP®: I love it. Okay. And then once there’s equity in the first place for you to pull out whatever cash you need. And is that because of appreciation or was there always the equity?

Ruth Krumbhaar: It’s a little bit of appreciation and there was always the equity because I paid all cash.

Cathy Curtis, CFP®: Yeah. Okay. Okay. All right.

Cathy Curtis, CFP®: So sometimes you have to pay all cash.

Ruth Krumbhaar: Yes. So for example, in Richmond, because it’s kind of a hot market right now with investors. And for people like myself and like probably a lot of your clients, it’s an area where you need to go in with cash. And so that was again, a mistake I made.

Ruth Krumbhaar: I went in too low and I had a financing contingency.  

Cathy Curtis, CFP®: This is what you didn’t get it.  

Ruth Krumbhaar: Yeah. And so you can do all cash by, say, pulling money out of another property if it makes sense. And again, you don’t want to over-leverage yourself. Or you can, if it’s cheap enough and you have enough reserves, you can spend all cash and then finance it later.

Ruth Krumbhaar: Or you can finance it and it’s really good, as you probably know and would tell your clients to have a good mortgage, a good relationship with a mortgage lender.

Cathy Curtis, CFP®: Oh, absolutely. Luckily, my husband was a mortgage broker for years at his own company and I learned a ton about mortgage financing.

Cathy Curtis, CFP®: So I can help my client, I can look over the statements and see if it’s on the up and up and, you know, good rate and all those things. It really pays to have a good mortgage person.

Ruth Krumbhaar: Yeah, it really does. So, and I like to get a local person where I’m buying, because they really know the ins and outs of that market.

Ruth Krumbhaar: And they also have contacts.

Cathy Curtis, CFP®: And you can a lot of times get those referrals from realtors too. They have their favorite mortgage broker because they want the deals to close. That can be a very tight relationship. And I think it’s okay to use the realtor’s reference for mortgage broker.

Cathy Curtis, CFP®: I don’t think that’s a bad thing. I mean, if you can find one yourself, great, through a personal referral. But I don’t think it’s a mistake to use the realtor’s mortgage broker reference. Do you?

Ruth Krumbhaar: I don’t. I think it’s a good idea because they, they’ve kind of gone through the steps together.

Ruth Krumbhaar: And so they kind of know each other’s way of working and communicating. And that way, if there’s any sort of hiccup in the deal, which sometimes there is. Because there may be issues that you discover along the way. They know how to work together to sort of solve the problem with you.

Cathy Curtis, CFP®: Yes. Oh, I want your opinion on this. I have an opinion on getting inspectors. Because you always want to have the property inspected, right? And I think it’s better to find your own independent inspector. A lot of times we all get excited when we’re about to buy a property and the realtor wants the deal to close and they’re very motivated and so they’re, they have all kinds of referrals and, and they could say, oh, I’ve got a great inspector.

[45:11] Why it’s so important for real estate investors to find an inspector they trust.

Cathy Curtis, CFP®: I really think it’s smarter to get your own inspector, not the realtor or seller’s inspector. Get your own. And is that realistic? And what is your experience with that?

Ruth Krumbhaar: I completely agree, and you may or may not have the time to do it, so you always have the realtor’s inspector as a backup.

Ruth Krumbhaar: But if possible I agree because they, you want an independent assessment, especially if you can’t go to the property or if you don’t know a lot about construction issues that might arise.

Cathy Curtis, CFP®: Because I, I know we all want people to be honest and disclose, but the truth is not everything gets disclosed.

Cathy Curtis, CFP®: And you, and an inspector may not do as deep a job as you would want an inspector that’s a referral from a realtor. And I think that’s really something to be careful of. Granted, like you said, a lot of times there’s time pressure. But if you can keep that in mind from the beginning, like when you’re looking in an area, maybe identify an inspector that you might use.

Ruth Krumbhaar: That’s a good idea. You could be ready for it. Yeah, I agree.

Cathy Curtis, CFP®: Okay, so this is, this talk about the financing is really interesting because I have a thought in my head for the listeners of some advice. So let’s say okay, they’ve decided Tennessee, Chattanooga, and so they have to figure out how are they going to finance this property.

Cathy Curtis, CFP®: So they first have to get an idea of the cost of properties there. But then they have to look at their cash reserves, do they have any cash reserves. Let’s say they know they can come up with $30,000. Does it make sense to then look, start there. You, you’ve identified a city, you know, you’ve got $30,000.

Cathy Curtis, CFP®: Look for the price range that, that will support a $30,000 down payment and plus, there’ll be other costs, closing costs and things like that, right? Would that be a good way to go into an investment?

Ruth Krumbhaar: I think it’s, well, I think you also need to consider that the property may need some maintenance.

Ruth Krumbhaar: And as you mentioned, all the closing costs, insurance tax, those numbers as well. And so, I would hesitate if say $30,000 was your number, and you want to put generally 20% down in a not super competitive market, then I would go a little lower than that. I would want to save maybe $10,000 for improvements.

Ruth Krumbhaar: The possibility of improvements, though, if a property is a turnkey property. Let’s say it’s a condo or, or a newly built dwelling, then that’s going to be a lot lower. So you can have a wider range of criteria, but just keep in mind that if it’s an older property, you’ll probably, there probably will be things you’ll want to improve.

Cathy Curtis, CFP®: Okay, great. So all the closing costs, which are roughly 2% of this, I mean, ballpark-ish. So make sure you take those into account, down payment and the state of the property. And estimate improvements if it’s not turnkey. Yeah, because that’s, that’s the confusing part with people.

Cathy Curtis, CFP®: I want to buy investment real estate. I always get that, I want to buy investment real estate. Cathy, can you gimme some advice? And it’s such a big question. It’s like, oh my gosh. Well, where are you thinking about buying is the first one. Why? Why do you think that’s a good market?

Cathy Curtis, CFP®: And this other criteria that you’ve talked about it, are you going to use it yourself and rent it? Is it going to be a full rental? Are you going to hire a management company to manage it if it is outta state? Which you will need to. So you have to have those costs in mind. Do you use management companies for your properties so far?

Ruth Krumbhaar: I have not. Because in Muncie I’ve got this amazing contractor whose wife is a house cleaner. And he and his team also mow lawns. He’s my rental agent. His wife is the cleaner, and he’s the maintenance guy as well. And it’s just a wonderful relationship.

Ruth Krumbhaar: So he’s kind of like my property manager in a sense.

Cathy Curtis, CFP®: Okay. That is fantastic. So you’ve got the maintenance and cleaning taken care of, and then you act as the rent collector, like you have them on auto pay? You do the books?

Ruth Krumbhaar: I do all the books.

Cathy Curtis, CFP®: So this is a huge savings because it is, what is the cut for a manager?

Cathy Curtis, CFP®: Is it 15?

Ruth Krumbhaar: Sometimes it’s 20.

Cathy Curtis, CFP®: Yeah. That’s a lot.

Ruth Krumbhaar: It is. So you want to build that in or find your person, like I’ve got. And I’ve got another person in Maine, and I just pay her a monthly fee to stay, to keep on top of my property, to make sure the pipes aren’t burst, to make sure that there’s, to clean it, you know, at the end of the season. And take, put, sort of take it in for the winter.

Ruth Krumbhaar: And make sure that no tree limbs have fallen and, you know, things like that.

Cathy Curtis, CFP®: Okay. So this begs a question. How much time do you spend on your property portfolio?

Ruth Krumbhaar: Good question. I would say I spend about five hours a week. Managing and thinking, you know, and doing things around them. Because sometimes it’s higher.

Ruth Krumbhaar: So when I have to rent a property, it’s a little bit more. And sometimes there are weeks when I spend no time.

Cathy Curtis, CFP®: Okay. And do you think that is a good use of your time as far as cost benefit return on investment?

Ruth Krumbhaar: I do. I think about, I’m, as you know, I’m also a licensed psychotherapist. And I think about how much money I make per hour doing that work versus how much money I make per hour doing the real estate investing.

Ruth Krumbhaar: And if I was just interested in making money, I would only do the real estate investing. Because I make so much more money per hour that I spend on it.

Cathy Curtis, CFP®: Yeah. Well maybe you, you do that in the future. You start spending more time on it or you know, depending on how many more properties you buy.

[52:30] Why real estate investing can be a great way to build wealth, even if you’re starting small.

Ruth Krumbhaar: Well, and the thing with real estate that’s exciting is you can start small and then just leverage that property and then get another one and then leverage that one and get another one. And it can be sort of, you know, it’s so exciting to see young people buying a property, whether they’re going to live in it or rent it out because you can imagine over time how that’s going to expand and grow.

Ruth Krumbhaar: If that’s what they’re interested in.

Cathy Curtis, CFP®: Well, your example is perfect. The Indiana property, where you’re going to take a loan out, a HELOC against it, to buy another property. That’s what you’re talking about leveraging. And I know that’s how many, many successful real estate investors did it. They started really small.

Cathy Curtis, CFP®: The beginning story is always fascinating. And then they learn that leverage is your friend with real estate investing, right? You don’t, you don’t really want to buy properties for cash.

Ruth Krumbhaar: No. The only reason I did that is because I didn’t know what else to do with that money.

Ruth Krumbhaar: So I figured just get me in here and then, but now that I found this good deal from the local bank, I’m pulling the money out and expanding on that.

Cathy Curtis, CFP®: Right, right. That makes so much sense. And I think people learn that as they go along if they don’t understand it from the very beginning.

Cathy Curtis, CFP®: Did you learn everything on your own through experience? Or did you read books, or do you have any recommendations for someone to get a kind of a broader understanding of real estate investing and financing? Because I think you need that as a base.

Ruth Krumbhaar: I think so too. I’ve attended a couple seminars on real estate investing, and they have lots of them. And there’s also, there’s some great people on YouTube and there’s some really good books that are very sort of simple and straightforward and kind of map out a process. There’s one guy that I particularly like, I don’t have his name right now, but I can send it to you.

Ruth Krumbhaar: And then I have friends who are in the mortgage industry or the real estate industry. And so again, you know, this is something I enjoy. So I like obsessing about it.

Cathy Curtis, CFP®: The curiosity is a big deal, so you ask a lot of questions, and you learn a lot. You know, I know we only have a few more minutes and I just wanted to ask something specific to the time that we’re in right now.

[55:11] How rising interest rates have affected Ruth’s approach to real estate investing.

Cathy Curtis, CFP®: So, interest rates have jumped up quite a bit over the last year, an amazing amount. How does that affect your decision making when it comes to investing in more real estate now?

Ruth Krumbhaar: Well, it certainly makes me more cautious. But really what you have to do is just look at the numbers. The numbers still pan out because less people are able to get loans.

Ruth Krumbhaar: They don’t want to pay the higher interest rates, so there’s potentially more renters in certain markets. And so if, if the numbers work out between the loan that you can get with the down payment that you can put down and all the fees associated with it, and then the rental income that you can manage. Or if you believe, say, in that area in Richmond, Virginia that I was talking about, I believed that even if I broke even, which was my goal, that the house itself would double in value probably. I’m just going to say within five years.

Ruth Krumbhaar: So that’s really why I wanted that property.

Cathy Curtis, CFP®: And so different properties will have different, you’ll be thinking about them in different manners, right? Some would strictly be good passive investments for income. Others will be that, plus really high potential for appreciation.

Cathy Curtis, CFP®: So there’s always those two factors at play. And it sounds like you think about those things in advance. This is why I’m identifying this particular area and property.

Ruth Krumbhaar: Yes. So for Richmond it’s more about the appreciation and breaking even, or hopefully getting some return. For Muncie it’s more about just getting a sort of steady stream of passive income.

Cathy Curtis, CFP®: Oh, the one other thing we didn’t talk about was the tax benefits, depreciation expense. And are you considered a professional real estate investor where you could take the passive losses every year? Or do you have to carry them forward?

Ruth Krumbhaar: I am not considered a professional real estate investor.

Ruth Krumbhaar: I am going to probably set up an LLC in Muncie because I want to avoid liability. But also it’s just a better way of doing business there. And there are tax benefits to it as well that I’m not as familiar with, but I was told it was a good idea for me.

Cathy Curtis, CFP®: Yeah. That, that does sound like a good idea.

Cathy Curtis, CFP®: Boy, we could keep talking forever about this, but I think we got in some good gems for the listeners. I really do.

Ruth Krumbhaar: I think so too.

[58:08] Ruth Krumbhaar’s advice for single women who are interested in getting started in real estate investing.

Cathy Curtis, CFP®: I so appreciate you sharing your experience, but I’m going to ask you one last question. If you were going to give three pieces of advice to a single woman who would like to diversify her portfolio into investment real estate, what would they be?

Ruth Krumbhaar: One is to be curious and a little obsessive, so that you find an area and a type of property that would work for you, and really think about how you’re going to use it. The other is to be brave and know that people who are brave can sometimes make mistakes. They can fail, but they can also be successful. And we can’t be successful unless we make some bold choices.

Ruth Krumbhaar: And then I think that the last is to really have fun with it. Try and talk about it a lot with people. Just gather information. Just, just enjoy it. It’s also an area where you can make good relationships and have a good time and do good business.

Cathy Curtis, CFP®: That’s fantastic. What a great last word. I love it. Well, Ruth, thank you again. This has been a fascinating discussion and I know all the listeners loved it too.

Cathy Curtis, CFP®: And I’d love to do it again. We could do part two so we could talk about that. Alright everyone, there will be show notes to talk about some of the things Ruth discussed, books and websites and things like that. So be sure and come back and look for those.

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S5E3 Transcript: Real Estate Investing 101 with Property Powerhouse Ruth Krumbhaar Read More »

S4E6 Transcript: The Unexpected Benefits of Working with a Private, Professional Fiduciary

Cathy interviews Sara Ecklein, a private, professional fiduciary and founder of Trust and Honor in the San Francisco Bay Area.

[00:03:13] Cathy Curtis: Hi, Sara. Thank you so much for joining me on my podcast, Financial Finesse. This is a topic that I’m really intrigued about as I’m a financial advisor. And I believe you’ve told me that your industry is in its infancy. So, I want to learn as much as I want to share things with our listeners, so thanks.

[00:03:40] Sara Ecklein: Yeah, Cathy, it’s great to be here. Thank you for having me.

[00:03:45] Sara Ecklein describes the role of a private, professional fiduciary.

[00:03:45] Cathy Curtis: Great. So let’s get started with some basics. Can you describe what exactly is a private, professional fiduciary?

[00:03:56] Sara Ecklein: Yeah, so we’re in the state of California. So California is one of few states that has a license, but specifically for private professional fiduciaries that came about, I believe in about 2007.

[00:04:13] Sara Ecklein: Licensing became required in 2009. So that’s where this work has been done for very long. But in terms of licensing, it’s fairly new to the state and we’re one of only few that do have licensing.

[00:04:30] Cathy Curtis: Interesting. So just stepping back, so there’s a distinction here. It’s the private part, right? Because there’s always been corporate professional fiduciaries, is that.

[00:04:42] Sara Ecklein: Yes. And even the term like fiduciary, a family member, a non-professional can be acting in that role. So that’s where we really like to have that professional, the private professional piece in front of the fiduciary name, just making it clear the relationship.

[00:04:58] Cathy Curtis: Okay, that makes sense. And why is it that some states do not have this licensing?

[00:05:07] Sara Ecklein: I really can’t answer that. But California is steps ahead of most. So there’s the National Guardian Association and that I would direct people if they’re looking for a professional fiduciary and they’re not in the state of California, that would be a place to start.

[00:05:26] Cathy Curtis: Okay, great. So tell me your journey to becoming a private, professional fiduciary.

[00:05:34] Sara Ecklein: Yeah, so I came to this work fairly young. My path really started feeling very cold towards serving an end-of-life care. I was with a loved one during her last three days of life, and I just felt this overall sense of calling and leaning into supporting her through the dying process. And so I really considered, I thought I was going to be a hospice nurse. So that’s really where my kind of career began to take shape and form.

[00:06:07] Sara Ecklein: I already had a bachelor’s degree, so it was looking like I was needing to go back to school, and I went and got my nursing assistant license just to get my feet wet. And make sure before going back to school, that would be the right path. And I’m happy I did that because I quickly realized that nursing wasn’t quite the right fit.

[00:06:28] Sara Ecklein: And eventually my path led me to working in a private fiduciary’s office out in Sacramento. And really the rest is history. I fell in love with the work. It really combined a lot of my personal strengths and interests. I really described it as like a head and heart alignment of very engaging work. Every, every client is unique, and there’s absolutely always that piece of being of service and making a difference.

[00:06:56] Sara Ecklein: And of course, there’s always that thread going through every case at the end-of-life care. So even if it’s before someone passes, I work with clients in the planning phase. And so it’s really building the relationship long before they need a professional fiduciary to act. But it’s really supporting families and planning.

[00:07:19] Sara Ecklein: And then of course, I do support clients through that transition, acting as agent for healthcare, also as their trustee power of attorney, and then after they’ve passed, really being the one that’s entrusted to carry out their final wishes.

[00:07:36] Cathy Curtis: This is a major responsibility. It is fascinating to me because that’s, that is a lot of different roles that you take on for the individual.

[00:07:45] Cathy Curtis: It crosses the spectrum. And I’m wondering, so how does a client find you generally speaking?

[00:07:55] Sara Ecklein: For the most part, they’re finding me. They’re either referred to me by their attorney, their estate planning or elder law attorney, or through other professionals like yourself. Occasionally a CPA will send their clients come tax time to me. But for the most part it is through estate planning attorneys is where clients are connected to me.

[00:08:19] Cathy Curtis: Okay. So is your clientele mostly a wealthy clientele?

[00:08:26] Sara Ecklein: Not always. I would say there of course needs to be a certain amount of assets. Otherwise getting connected with the public guardian is usually where I direct people if they really don’t have many assets. But they do need support with managing affairs.

[00:08:43] Sara Ecklein: In the Bay Area, it is hard because middle classes seeming like much larger estates now. But typically, I have a minimum of about $500,000 in assets to engage my services.

[00:09:00] Cathy Curtis: Okay, that makes sense. And then it sounds like you act as a resource for those people who don’t have the asset level, and you refer them to other resources such as the public guardian.

[00:09:16] Sara Ecklein: Yes, absolutely. And a lot of times at that point it might not even be the client themselves reaching out to me. It might be a family member, even an attorney reaching out to me asking, “Who do you know or who can help?”

[00:09:28] Sara shares why and when someone may seek her services as a private fiduciary and what her intake process looks like.  

[00:09:28] Cathy Curtis: Okay. Now, in many cases, family members just take on this role, the roles that you take on, right? So is it mostly single people that contact you, or is it a family member that says, “Oh my gosh, I wouldn’t even know where to begin to do all these things. I need help.” What happens?

[00:09:54] Sara Ecklein: It’s a combination. I do have many clients that they really don’t have any family living. Maybe they never married, they never had children, and now they’re in their eighties and they’re beginning to decline and need some support.

[00:10:11] Sara Ecklein: But I also have plenty of people that have families and are married. And I’m thinking in the situation of planning, I work with a lot of couples where they’re planning in the event that one of them has passed and the other one’s incapacitated. Sometimes they have children and sometimes they don’t. If their children don’t live locally, and we’re seeing this more and more, families are living further.

[00:10:37] Sara Ecklein: That doesn’t really help when you know mom or dad need that hands-on support, setting up bill pay and care management and all of that. It can be really a full-time job.

[00:10:49] Cathy Curtis: Yes, definitely. It really can. Yeah, and, and it’s, in many cases, I’m sure children are busy with their own lives, their own children, careers, and they want the support.

[00:11:01] Sara Ecklein: So that’s, that, and then we’re also seeing divorces and then second or even third marriages and these blended families.

[00:11:09] Sara Ecklein: It can be really helpful to just have a neutral party act in the role of trustee so that no one’s feeling like they’re taking sides or playing favorites. And it can just make things much easier when it is time to administer the trust.

[00:11:27] Cathy Curtis: Okay. So in that case, you do not get involved in the affairs until the trusteeship is triggered, which means someone dies or gets very ill.

[00:11:41] Sara Ecklein: Yeah. Typically, it just depends on the documents, but for the most part it’s at the time of incapacity or death.

[00:11:50] Cathy Curtis: Okay. Depends. Let’s take, I’m gonna just give an example situation. Let’s say there’s a single woman in her eighties, lives alone, is in fairly good health, but is thinking towards the future. Family members have died, and she contacts you and says,

[00:12:11] Cathy Curtis: “I’m not quite sure what’s gonna happen with my health in the next few years. And what can you do to help me make sure my affairs are in order and I’m taken care of?” What would your response be and what’s your process?

[00:12:25] Sara Ecklein: Yeah. When I start working with clients in that phase, I do require that they’re already working with an estate planning attorney.

[00:12:33] Sara Ecklein: Most of them already have, and they are working with their attorney. Their attorney is the one that’s advising them that you really need to get someone in this place. You need to name them in your documents. If they’re not working with an attorney, that’s gonna be my first requirement and step that if they wanna work with me.

[00:12:53] Sara Ecklein: You need to find yourself an estate planning attorney. So in those roles, this scenario you laid out, it sounds like this woman is going to need help, not only with her finances and bill pay and acting if she lacks capacity and is needing support while living. And also needing potentially a trustee if she has enough assets.

[00:13:15] Sara Ecklein: But she’s also going to be needing support with healthcare decision making. So typically, I’m named in all three roles, successor, trustee, durable power of attorney and agent for healthcare in the advanced healthcare directive. So once I have a consultation with a client and we both feel like it’s the right fit, I have a pretty thorough intake process.

[00:13:41] Sara Ecklein: It does include reviewing a draft of their estate planning documents, of course, and getting copies of all signed documents once they have been executed. And then I have my own intake forms that are pretty thorough and in depth that’s not only gaining information from them about the actual trust assets.

[00:14:03] Sara Ecklein: But it’s really gathering information about them as a person. And as a fiduciary, I like to plan in the event of all the scenarios of when I’m going to get involved. And more times than not, I’m getting involved in the event of incapacity. It’s not death. Most people don’t just pass away in their sleep.

[00:14:24] Sara Ecklein: It’s a subtle, slow decline over typically many years. In that situation, I’m really working alongside the client. And supporting them.

[00:14:35] Cathy Curtis: And when you say, just specifically when you say supporting them and working alongside them. So during this phase where they’re still healthy and not incapacitated, do you set up regular meetings with them or touchpoints of some kind?

[00:14:52] Sara Ecklein: Yeah, so I have annual drumbeat that I like to have a check in phone call and just make sure nothing’s changed on their end. I also see it as a time for me to update them on myself and my business. The profession. For professional fiduciaries, we have to be named individually and document as much as I have. A business, Trust and Honor, that business can’t be named in any of those roles that we outlined before.

[00:15:20] Sara Ecklein: Successor trustee, durable power of attorney, agent for healthcare. I think it’s important to continue that relationship and keep them up to date on where am I with the business and also where are. I found that over the years we don’t have that check in. People update their phone number, they move, they even update their estate planning documents, and a lot of times the successor trustee isn’t kept up to date.

[00:15:48] Sara Ecklein: So that’s where I find that’s really crucial and important. And then I really leave it up to the client to book a consultation on an as needed basis. So sometimes, significant change going on in their life, or maybe they’re making significant changes to their estate planning documents. They can always initiate scheduling an hour consultation with me and just going through the changes they’ve made.

[00:16:16] Cathy Curtis: Okay. Now, as far as the licensing, the role you take on is a very personal role. As trustee, it basically gives you complete authority over your clients’ assets and everything. So what kind of, what happens with the licensing? A big background check, all those things. But could you talk to that a little bit?

[00:16:45] Sara Ecklein: Yeah, so we’re licensed through the Professional Fiduciary Bureau. It’s a branch of the Consumer Affairs in the state of California. So our license renews every year, which is I think is much more frequent than most professional licenses. And we have to report how much, how many assets are under management, how much we’re really controlling, and the types of cases and the number of cases.

[00:17:11] Sara Ecklein: So for my practice, I don’t specialize in conservatorships or any kind of court supervised cases. Some fiduciaries that’s really heavy in their practice. So there’s, the bureau really is asking us every year, how many conservatorships do you have? How many powers of attorney do you have? How many probated states do you have?

[00:17:36] Sara Ecklein: How many trusts do you have? And then if you’re managing any funds for those clients, the total of them.

[00:17:44] Cathy Curtis: Okay, let’s talk specifically about managing funds. So in this part I’m really curious about, and I am an investment advisor, a registered investment advisor, and some of my listeners will be other financial advisors and probably will have similar questions.

[00:18:03] Cathy Curtis: Can you actually manage assets, meaning buying and selling securities?

[00:18:10] Sara Ecklein: No, I don’t. I really, my license doesn’t allow for me to give legal advice, tax advice. I’m not a financial professional, so I’m really working alongside a team. Come tax time, I’m working with a CPA to file the trust tax return of the client’s tax return.

[00:18:32] Sara Ecklein: I also am typically working alongside an investment advisor, so they’re the ones that’s really managing the portfolio.

[00:18:41] Cathy Curtis: All right, so let’s take this. This woman, this 80ish woman who did have an estate attorney because she is the one that referred to you, okay? This woman doesn’t have an investment advisor, but she has two million at Vanguard. Let’s say in that case, what happens?

[00:19:06] Sara Ecklein: It depends if the client still has enough capacity to communicate her wishes. Sometimes clients prefer that I continue that relationship and working with the financial advisor of their choosing. If not, if there maybe A) isn’t a preference, or B) I’m fully acting and this person really is not able to communicate their wishes, then I likely will be moving the account to a financial advisor that I work with regularly.

[00:19:35] Sara Ecklein: And I do that for several reasons. One of the pieces is that there is an efficiency to this. And wearing the fiduciary hat, I’m definitely trying to preserve the trust assets. My time does equate to fees. So that’s where, if I’m working with only, if I’m working with a financial advisor and there’s a handful of cases we can go through a quarterly or semi-annual review fairly quickly versus working with 20 different financial advisors, all of my clients choosing.

[00:20:12] Cathy Curtis: So that really makes sense. Okay. In the case of A, let’s say I referred you a client. You have the option to say, “Thank you for referring me the client, Cathy, but I need to run my practice efficiently. And I have a financial advisor that I work with.”

[00:20:33] Sara Ecklein: That is true. I think what helps, the other piece is that, especially with the financial services industry as there’s different types of advisors. And so a lot of clients are working with broker dealers. I find that’s, I end up having a conflict as a private fiduciary because I know that broker dealers are held to a different standard, not to that fiduciary standard that an investment advisor.

[00:21:00] Sara Ecklein: So that’s another reason where my preference is to work with financial advisors that I’ve already vetted and screened and they understand the standard that I’m held to, which private fiduciary are held to the Uniform Prudent Investors Act. We usually just call it the UPI. And so the financial advisors that I work with are familiar with that standard and would be diversifying the portfolio with that in mind and keeping that in mind as I’m acting as trustee or power of attorney.

[00:21:36] Cathy Curtis: Okay, that, that really makes sense to me. I’m a fiduciary advisor, just for example, a CFP, member of NAPFA, which is the National Association of Personal Financial Advisors, and need to be a fiduciary as a registered investment advisor. So I would be the type of advisor that you would probably feel more comfortable working with.

[00:22:00] Cathy Curtis: Because I’m a fiduciary. Versus a broker dealer or a professional from one of the big banks, et cetera, that I’m not saying they’re not good advisors, but they are not held to that same standard.

[00:22:16] Sara Ecklein: That’s correct, yes. I recently had a consult, I believe it was last week, and this client really communicated her wish of continuing that relationship.

[00:22:27] Sara Ecklein: What’s great is we’re again working in the planning phase, and so I’m able to make note of that, that this really is her preference, and I’m also able to ask the questions. Look up this, this person’s license, and it’s very clear she is that kind of fee only fiduciary financial advisor. And so that already brings me some level of comfort just knowing that they, they’re held to that same fiduciary standard.

[00:22:53] Cathy Curtis: Yeah. So interesting. And I’m sure I’m not the only financial advisor that this happens to. Because I, like you, I have long-term relationships with my clients, and I get to know them very well. And some of them don’t have family or family they trust, and so they think that Cathy knows me really well.

[00:23:20] Cathy Curtis: She knows all my financial circumstances. She’s the obvious choice to be trustee and healthcare or financial power of attorney. And in my industry, that is a complete, not a complete, no-no. You can do it, but you have to do, you have to form a different kind of business and be willing to be audited every year and lots of regulatory hoops to go through.

[00:23:47] Cathy Curtis: So I’ve chosen not to do that. I do not want to take on that responsibility. So in my case, I many times need to find somebody for this client who wants a person to act in these roles, and it’s been a challenge for me. And so I was really glad to, I forget now how I was introduced to you.

[00:24:13] Sara Ecklein: I believe it was Ruth connected us.

[00:24:16] Cathy Curtis: Oh, okay. And then I came to find out from you the industry hasn’t been around that long, and then it made sense to me. Maybe that’s why it hasn’t been so easy to find somebody.

[00:24:29] Sara Ecklein: With professional fiduciaries, it’s, it is a pretty, there’s not a ton of us. I believe there’s less than a thousand actively licensed fiduciaries in the state.

[00:24:41] Sara Ecklein: So we’re a pretty small profession. That being said, a CPA, an attorney, their license allows for them to act in this role. So it’s not counting those professions.

[00:24:58] Cathy Curtis: Do you think most want to do that work in addition to their core?

[00:25:10] Sara Ecklein: I find more times than not, they’re not wanting to act in those roles for many different reasons. But yeah, trust administration, it is, there’s a lot of practicalities and things are always changing, so I could see more.

[00:25:26] How working with a private, professional fiduciary can benefit clients when it comes their healthcare.

[00:25:26] Cathy Curtis: Yeah. Not only the trust administration, it sounds like you get involved in healthcare. Talk about that a little bit.

[00:25:32] Sara Ecklein: Yeah. I actually think that’s really one of the benefits of working with a professional fiduciary. Our license allows for us to act in this role. From my understanding, like a corporate trustee, they cannot act in the role of agent for healthcare or even power of attorney.

[00:25:56] Sara Ecklein: If someone, this model client you’re describing, a single woman, really very little family or friend support, and she’s needing someone to act in all those roles. She could name a, like a bank. Let’s just use the example of Wells Fargo as her successor trustee. But that still doesn’t solve the problem of who’s going to act in those other roles.

[00:26:20] Cathy Curtis: So your job is very unique in that way. It really is.

[00:26:24] Sara Ecklein: Yes. And I, for me, I love the kind of blend of the work of working from the financial piece and working with the numbers and the administrative side, but also really working with people and serving people. And that healthcare piece. When you’re acting in all of those roles, I find serving clients, it becomes that much more special of a relationship. Because you really get to know your clients very well.

[00:26:52] Cathy Curtis: Can you describe a situation where you had to get involved with the healthcare situation just to illuminate what you do.

[00:27:03] Sara Ecklein: Yes. So I actually started working with a client about two, two years ago, maybe a year and a half ago. Her attorney referred her to me. She was having a medical crisis.

[00:27:19] Sara Ecklein: Going in and outta the hospital, going home, falling, going back to the hospital, getting discharged 20 days later.

[00:27:29] Cathy Curtis: And not unusual that, and this will happen probably to most of us when we get older. Right?

[00:27:34] Sara Ecklein: Yes, hopefully not, but yes. This is not unusual, unfortunately at this point in time.

[00:27:43] Sara Ecklein: And she’s a lot of kind of what you were describing with this model client or sample client. She really has no family and never married, no children, and she really needed to have someone to step in and quickly figure out what’s going on with her medically and communicate with the medical providers. Because memory loss was beginning to be a factor in in her care.

[00:28:10] Sara Ecklein: Thankfully, she had enough capacity to sign documents, name me her power of attorney for both finance and healthcare. And I really hit the ground running for a while. I was, we were meeting a minimum of once a week, if not twice a week. Because she was having a full on healthcare crisis on top of like a financial crisis because her bills were unpaid for about eight months.

[00:28:35] Sara Ecklein: And so I was figuring out what’s going on. Where are the assets? What does she have, what are the bills that she actually owes? What can I argue and bring down and remove fees? And then beginning to work with her team. At that point, she had been placed at an assisted living facility.

[00:28:58] Sara Ecklein: At least her day to day, she was now much more safe than going back home. But it required a lot, and I don’t wanna share too much about her. But I was working with a lot of specialists and going back, asking for medical records. Because she really didn’t have anything and couldn’t really remember what was being advised.

[00:29:23] Sara Ecklein: So it was a lot of working alongside her primary care physician who was wonderful and going back and figuring out and putting the pieces together and getting her a formal diagnosis, figuring out a care plan. Also beginning to work and figure out what is her budget, because at that point her income was very low, and her expenses were just very high because of the medical.

[00:29:51] Cathy Curtis: That’s incredible. Just think about how many roles you took on just in this situation.

[00:29:58] Sara Ecklein: Yes. No, it was a lot.

[00:30:01] Cathy Curtis: Yeah, it was a lot. And this person waited for a crisis. The crisis triggered hiring you, right? Is that the case a lot of the time, or do people hire you long before they get to that point?

[00:30:20] Sara Ecklein: Yeah. And really, so for me, I’m a very young private fiduciary, and I would say that really stands out for me. I’m in my mid-thirties and there’s very few professional fiduciaries in their thirties and forties. I believe the average age is actually over 60 for the profession. Don’t quote me on that.

[00:30:41] Cathy Curtis: That sounds, I wouldn’t be surprised. That’s like the financial advisor, independent financial advisor, although that’s changing. There’s a lot more younger people coming in now.

[00:30:53] Sara Ecklein: Yes. Yeah, so I work a lot with clients in the planning phase because of my age. Obviously, someone who’s a seasoned fiduciary in their sixties.

[00:31:04] Sara Ecklein: If there’s an immediate need, they can do a great job. But if someone is planning and doesn’t need a fiduciary in 10, 15, 20 years, that doesn’t really help the client. Someone nearing retirement. So that’s where for my practice, I work a lot with clients in the planning phase. I really love it because you build the relationship long before services are needed.

[00:31:32] Sara Ecklein: And so it’s a slow progression, and I find that’s a wonderful way of getting to know people, building that trust in those situations. Because typically, as much as we can do planning, crises still occur. And these situations and these scenarios, it’s hard to navigate. But it makes it so much easier if you’ve built that relationship over the years versus someone that you’re just meeting now.

[00:31:57] Sara Ecklein: And we’re still able to do it, but that, building that trust and building that relationship can take time. And if you’re losing capacity and losing memory loss and so many things can be lost and that can be hard for anyone to just accept and understand.

[00:32:23] Cathy Curtis: I think denial is a normal part of that process. I see that all the time with my older clients. Nobody wants to admit that they’re losing their memory and people clinging on to things like being able to drive and being able to go out independently and all those, they don’t wanna give it up.

[00:32:39] Sara Ecklein: Yeah, I see that a lot. So it does make it easier to have those conversations when we’ve known each other for a long time.  

[00:32:49] Cathy Curtis: Let me, let’s segue to your business, like business model. This, I’m curious about this. So it, it sounds to me like you probably have several clients that are years away from needing you full-time.

[00:33:07] Cathy Curtis: Meaning you’re the trustee. All that’s triggered. And in the meantime, you’ve onboarded them as a client. You have developed a way to touch base with them periodically, but how are you paid during that time and is that an issue for someone with a business like yours?

[00:33:27] Sara Ecklein: Hasn’t presented an issue for me yet.

[00:33:30] Sara Ecklein: For me, I really charge a one-time flat fee of a thousand dollars to go through my intake process. And that’s going over what we discussed before, reviewing a draft of their documents. Sometimes I need a few edits on my end, and so I’m communicating directly with their attorney on those changes that I would require and if they wanted me to act in the role of trustee, power of attorney agent for healthcare.

[00:33:58] Sara Ecklein: And once we get through that, and the intake forms are complete, and then I follow up with a consultation to go over any questions that I may have, or they may have. And that, so that all covers my intake process. And I’m really essentially creating a file for clients long before they need me. But ongoing, I really don’t charge a fee unless, I just leave it as you can book a consultation with me on an as needed basis.

[00:34:30] Sara Ecklein: And I would just charge my hourly rate. But that’s really, if the client has capacity and they’re doing well, I’m not, I’m not initiating. That’s really coming from them.

[00:34:42] Cathy Curtis: Okay. That makes sense. And tell me again, how long have you been doing this for?

[00:34:46] Sara Ecklein: Yeah, I’ve been doing this work, I started working in the profession in 2014, so I’m approaching about nine years. And I went off on my own about two years ago.

[00:35:02] Cathy Curtis: Congratulations. That must have been an exciting moment.

[00:35:05] Sara Ecklein: Yes, it was. It was all during the pandemic. But yes, I worked for two well established fiduciary agencies before going off on my own and really learning from just, I’ve had amazing mentors along the way. So that has definitely helped me and in my practice.

[00:35:24] Cathy Curtis: And it sounds like there’s an association too you can use for mentorship roles and things like that.

[00:35:32] Sara Ecklein: Yeah. The Professional Fiduciary Association of California, we usually just call it PFA. That’s a wonderful place also just for consumers to go if they’re looking to find a professional fiduciary.

[00:35:45] Sara Ecklein: You can search based on location, and you can also search based on what service you might need specifically.

[00:35:56] Cathy Curtis: That brings up another question. And the pandemic changed a lot of things. For example, I, most of my clients prior to the pandemic were local clients, and I would see them in person periodically through the year.

[00:36:08] Cathy Curtis: Then the pandemic hit, and of course we all switched to Zoom. And I’m doing most of my meetings over Zoom now. And I also found that clients from other states started to contact me and I was able to take on those clients because it’s so easy now to build a relationship over Zoom.

[00:36:30] Cathy Curtis: Everyone’s used to it. In your case, how does that work for you? Do you still mostly work locally, or have you expanded into a broader audience?

[00:36:42] Sara Ecklein: Yeah, for the most part. Most of my clients are in the Bay Area,. So I’m based in Silicon Valley. I do have a pretty big reach, I think, throughout the Bay Area, going all the way from Marin County, Alameda Contra, Costa County.

[00:36:58] Sara Ecklein: I do have a few clients where they do live outta state. But I will preface it, it’s not really the client who’s still living. I’m really interfacing with a beneficiary that lives out of state.

[00:37:12] Cathy Curtis: Okay, so that’s different. And do you still meet most of your clients in person in the beginning of the relationship?

[00:37:19] Sara Ecklein: No. More and more now I’m doing phone and Zoom consultations.

[00:37:24] Cathy Curtis: Okay, so similar.

[00:37:26] Sara Ecklein: Yeah, similar and definitely with clients in the planning phase. That’s, my whole intake process is it’s all virtual and if clients want me to come out and do a home visit, then that’s something that would be an additional kind of fee in charging an hourly rate for me to come out to the house.

[00:37:44] Cathy Curtis: Okay, that makes sense. And can you describe who your ideal client would be? I know we all have an ideal client, the kind of person that we like to work with, that we know we have the expertise to help. And you probably have one too, and that fits your business model and all of those things. Could you describe that person?

[00:38:07] Sara Ecklein: Yeah, so there’s, I have a few. So, you know, one ideal kind of client is really a couple and they’re working in the planning phase. So I love this because they’re already working with a, typically a team of professionals. Typically, they already are working with a financial advisor. They’re already working with an estate planning attorney, and now they’re looking for professional fiduciary.

[00:38:32] Sara Ecklein: So I’m just one more kind of professional to add to their team and supporting them with their planning. I love couples like that because I find that they’re proactive in thinking ahead, and that’s really where I love to serve. I also am building the relationship and I’m more of a, almost like a consultant in a way. Because again, it’s long before they need me. And I find that those relationships just become that much more rewarding and enriching when they’re over the years and getting to know them and oftentimes their family.

[00:39:09] Sara Ecklein: Whoever that may include. And then I also specialize in an area called special needs trust. We haven’t really touched on that much during, during this phone call or interview.

[00:39:20] Sara Ecklein and Cathy discuss special needs trusts and why it can be helpful to have a trustee who specializes in this area.

[00:39:20] Cathy Curtis: Oh yeah, let’s talk about that now. That’s an important area.

[00:39:23] Sara Ecklein: Yeah. Special needs trust. The world of private fiduciaries is already pretty niche, and then it just gets that much smaller when it comes to special needs trusts.

[00:39:36] Sara Ecklein: There’s different types, and I don’t want to go down too much of a rabbit hole into detail. But what it tells me is that this, the beneficiary of the special needs trust is most likely receiving some sort of public benefit and for whatever reason, whether it’s the family or this beneficiary is about to receive money out.

[00:40:01] Sara Ecklein: We’re needing to preserve that public benefit. Either family can establish the special needs trust. This is called a third-party special needs trust. Sometimes there’s something like a medical settlement and the special needs trust will be established with a court order. That’s typically considered a first-party special needs trust.

[00:40:23] Sara Ecklein: But anyways, that’s an area that I do specialize in.

[00:40:27] Cathy Curtis: So when you say specialize, so an attorney sets up the special needs trust, right?

[00:40:33] Sara Ecklein: Yes. And then I would be named as trustee for that trust. Yeah, so I, my background, I managed public benefits for the fiduciary agency I worked at prior. So I did that for about six years and I really was the point person interfacing with Department of Social Services, Social Security Administration, and really advocating to maximize the client’s public benefits.

[00:41:04] Cathy Curtis: That’s an excellent and important niche to be in. And would you, how big a part of your business is that?

[00:41:10] Sara Ecklein: It’s about half at the moment. For my active cases, a lot of clients will be named as the families for the revocable living trust. So Mom and Dad’s Trust and then their trust will eventually fund the special needs trust. And so I’ll also be named in that.

[00:41:33] Sara Ecklein: It’s hard for me to say, but I get a lot of referrals also for families with disabilities because they’re planning that their child will most likely always be receiving some sort of public benefit.

[00:41:47] Cathy Curtis: So you must have built up a reputation as an expert in this area.

[00:41:52] Sara Ecklein: Yes, I think so. It really, with administering a special needs trust, there’s a lot of rules and you really need to have a good understanding of public benefits and the specific public benefits that the beneficiary’s receiving. Because that’s going to directly relate to how you administer that trust.

[00:42:12] Cathy Curtis: And can you give an example of a mistake a person can make if they don’t know all the rules?

[00:42:19] Sara Ecklein: Oh yeah. A lot of times I have taken over from non-professionals, or I’ve also come in and provided like a consultant or like case management services alongside like a family member who’s acting as trustee for a special needs trust.

[00:42:37] Sara Ecklein: Typically, a big no-no is giving cash directly to that beneficiary. Because that cash would count as income, and then that could jeopardize and they could lose their public benefits. So that’s, I’ve seen that happen a lot. Typically, there’s a lot of expenses that you’re not supposed to pay for.

[00:43:00] Sara Ecklein: Again, it’s always gonna depend on the type of public benefits that person’s receiving. But generally speaking, you typically don’t wanna pay for rent and food because those things would be counted, and that’s what like a public benefit, like SSI for example. That’s the, I find the most restrictive benefit.

[00:43:22] Sara Ecklein: And Social Security would actually cut back or even cut off that SSI. And really, when you’re wearing the hat of a trustee for a special needs trust, part of your duty is to make sure that beneficiary is maximizing their public benefits.

[00:43:42] Cathy Curtis: Absolutely. And that must be tough, I’m sure, and this probably happens to you. A trustee of one of those trusts may, or a beneficiary, the beneficiary of one of those trusts may come to you and ask you for money.

[00:43:59] Sara Ecklein: Yeah, a couple times.

[00:44:01] Cathy Curtis: Yes. And that takes a certain skill to handle a situation like that.

[00:44:07] Sara Ecklein: Yes. So I worked and provided case management services as well at the former fiduciary agency. And that really is a tool that I have in my tool belt with acting in the role of trustee. Because it’s working with the client and really building that relationship.

[00:44:26] Sara Ecklein: It’s hard depending on what the disability is. A lot of times I do work with clients that have some mental illness or cognitive impairment or developmental disability. And they really aren’t able to understand ever the rules of a special needs trust. I do try my best to explain, but beginning to support them, and then sometimes working with the team so that we can all reinforce what those rules are, that’s typically what that kind of looks like in those scenarios.

[00:44:56] Cathy Curtis: Very interesting. One, a segue to long-term care insurance. Do you ever recommend that your clients buy that type of insurance.

[00:45:08] Sara Ecklein: I don’t, because I can’t give financial advice.

[00:45:13] Cathy Curtis: So you consider that financial advice, not help?

[00:45:15] Sara Ecklein: Yes, I do. Yes. I will say that working with clients with long-term care insurance, I can see when the, if that’s a need, how it can really be such a benefit.

[00:45:32] Sara Ecklein: I think what’s hard is now finding long-term care insurance that’s really going to give you the coverage you need. That’s hard. I don’t know if you have any long-term care insurance agents, but I would love referrals.

[00:45:45] Cathy Curtis: I do actually. I’ll send those to you. Yeah, I do. It is a very complicated area and changes all the time.

[00:45:53] Sara Ecklein: Yeah. And from my understanding, they’re cutting back and back more and more of what they’re covering and shortening how much the time that they’re willing to pay and the amount they’re willing to pay. And a lot of policies don’t provide or don’t cover home care, but it’s only assisted living.

[00:46:12] Cathy Curtis: Yeah, it’s just like the whole public benefits arena.

[00:46:15] Cathy Curtis: You really have to dig into the details and understand what exactly the person is buying. And it’s their situation or not.

[00:46:25] Sara Ecklein: Yes. So that’s where like typically when clients are coming to me in the planning phase, like that’s their choice of whether or not they want to do that. I find that usually if they’re working with a financial advisor, which most of them are, that person would be making the recommendations.

[00:46:41] Sara Ecklein: And then if a client is using my services, I’m working with a client now and they’re still alive. It’s too late to get long-term care insurance.

[00:46:52] Cathy Curtis: So it’s effort to get it when you’re older and a lot of people don’t qualify anymore. It’s very difficult insurance to get actually. Let me ask you one last question about what you do, and then I wanna ask you about some of these amazing personal things you do.

[00:47:09] Cathy Curtis: So are you required as a private, professional fiduciary to do continuing education? Just for example, I’m a CFP®. We have to do so many CEs per year, and I’m just wondering about that in your profession.

[00:47:24] Sara Ecklein: Yes. Oh yeah, absolutely. For our licensing, it requires, I’m also a member of PFA, the Professional Fiduciary Association of California.

[00:47:35] Sara Ecklein: That also has its requirements. So yes, we do have continuing education and that comes due just like with our license every year.

[00:47:46] Cathy Curtis: Yes. Okay. Very similar to my profession.

[00:47:49] Sara Ecklein: Yeah. And it’s 15 hours a year and it must include two hours of ethics.

[00:47:57] Cathy Curtis: Yes. Okay. We have the same. Sara, is there anything else that you would like to share with our audience about what you do that I have not touched on?

[00:48:08] Sara Ecklein: I feel like we’ve covered a good amount. I would be happy if people are interested in potentially working with me or learning more about my services, you can go directly to my website. It’s trustandhonor.co. That’s dot co. There’s no M at the end. And there’s a contact us page so clients can enter their contact information and their unique situation. And I’m always, I offer a 30-minute complimentary consultation.

[00:48:42] Sara Ecklein: If they’d like to book a consult with me, I’m happy to.

[00:48:46] Cathy Curtis: And I’ll add that to the show notes as well. And then what is the name of the association you mentioned earlier in the call? That’s a good resource.

[00:48:55] Sara Ecklein: Yeah, so PFA, it’s the Professional Fiduciary Association of California. And their website is pfac-pro.org.

[00:49:11] Cathy Curtis: Okay, great. Now what I wanna ask you about, this is really fun fact. You completed the John Muir Trail, 213 miles. That’s amazing. When did you do that?

[00:49:28] Sara Ecklein: I actually did it in college. I had no real backpacking experience. I trained with a few friends for a year. We did several small backpacking trips leading up to it, and it ended up being a 20 day.

[00:49:45] Sara Ecklein: And I, it was wonderful. I’m so glad I did it then because getting away completely unplugged. That’s definitely not possible for me at this point in time.

[00:49:55] Cathy Curtis: Yeah, that would be really hard. Did you do it on your own?

[00:49:57] Sara Ecklein: I did it with a group of five people. Yeah, so it was wonderful. All through the High Sierras of California.

[00:50:05] Sara Ecklein: It was beautiful.

[00:50:07] Cathy Curtis: Did you do, what half dome part of that?

[00:50:10] Sara Ecklein: Half dome wasn’t, but actually hiking up half dome, that was the day trip that I did that inspired the John Muir Trail.

[00:50:21] Cathy Curtis: Okay. Yeah, I’ve done half dome twice. I don’t think I’m gonna do that again.

[00:50:25] Sara Ecklein: Yeah, actually when you’re hiking up to half dome, there’s like a junction that says Mount Whitney and 200 some miles from there.

[00:50:33] Sara Ecklein: And so yeah, we all were joking, oh yeah, let’s do it. And then we ended up doing it the next year.

[00:50:39] Cathy Curtis: Yeah, you ended up sevening. That’s amazing. Very. Okay. And then the other fun fact is that you’re a Tango dancer.

[00:50:48] Sara Ecklein: Yes, I met my husband that way. The Bay Area actually has a very active Tango community, so it, yeah, it’s definitely a love and passion of mine and really being embodied and connected is all part of Tango.

[00:51:07] Sara Ecklein: It’s gone away a little bit. It’s coming back, but Covid really stopped our practice.

[00:51:14] Cathy Curtis: No, that’s such a shame.

[00:51:14] Sara Ecklein: Yes, but it is coming back. I’m actually, I’m expecting, so I’m very pregnant. So at the moment I’m not doing much going out and dancing.

[00:51:26] Cathy Curtis: Oh my gosh. Oh, that’s another fun fact. And what’s great is you have your own business so you can probably take some time off, but work through your pregnancy as well, right?

[00:51:40] Sara Ecklein: Yeah, it’s definitely, I’m grateful to have built the business a few years ago. And I’m in a real sweet spot of being home-based and yeah. I’m still able to work and serve with many clients, and I also have an assistant that will be filling in for me by taking a bit of a leave.

[00:52:06] Cathy Curtis: Great. Sara, this has been a really interesting conversation. Thank you so much for taking the time, and I’ll be sure and put the show notes up, so people know how to get in touch with you.

[00:52:17] Sara Ecklein: Wonderful. Cathy, thank you again for having me. It’s been a pleasure.

[00:52:21] Cathy Curtis: You’re welcome. You take care.

[00:52:23] Cathy Curtis: Same to you.

[00:52:25] Sara Ecklein: Bye now.

[00:52:25] Cathy Curtis: Bye-bye.

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S4E6 Transcript: The Unexpected Benefits of Working with a Private, Professional Fiduciary Read More »

S4E5 Transcript: The Insurance Lady Answers Your Biggest Questions About Insurance

[00:02:50] Cathy Curtis: Ruth Stroup, thank you so much for being on my podcast, Financial Finesse. I can’t wait to talk to you about all things insurance.

[00:02:56] Ruth Stroup: I’m so glad to be here. Thanks for inviting me, Cathy.

[00:03:00] Cathy Curtis: So, Ruth, as you being an insurance person, and I know being a financial planner, that many times we prepare for one thing and then something different happens. And so we are gonna talk about things like that and what could go wrong.

[00:03:16] Cathy Curtis: And I’m gonna tell a short, personal story that we could start with. So I live up in the Oakland Hills, which is a beautiful woodsy neighborhood. Very quiet, peaceful. And, but the homes are separate from each other, lots of foliage around the homes, et cetera. And what we worry about most up here is fire.

[00:03:40] Cathy Curtis: And, but unfortunately, I was away on vacation recently and our home got burglarized. So of course we had to make a claim. And even though I am a financial advisor and I know a lot about insurance, when it happens to you, you realize that you don’t know everything. And one of those things is what is covered and what isn’t.

Ruth Stroup explains what’s covered and what isn’t covered by homeowner’s insurance if your home is burglarized.

[00:04:02] Cathy Curtis: So I thought maybe you could talk to that a little bit. I know you have a ton of experience in this area. And give our listeners an idea of what they can expect if this happened to them.

[00:04:14] Ruth Stroup: Great, Cathy, that’s such a great question. I find all the time that people think insurance, when we, when it comes to having a claim, we think insurance covers everything.

[00:04:24] Ruth Stroup: And when it comes to purchasing insurance, we’re trying to find all the ways to save money on our insurance. And those two things can be at odds. So when I work with clients, one of the things that’s the most important to me is to find out what matters to them. For example, if someone has a lot of jewelry or fine art or firearms for that matter, if they have things that they collect, they need special insurance for that.

[00:04:52] Ruth Stroup: And nobody really thinks about it because we don’t go out and buy the full collection at one time. We buy once, this birthdays, anniversaries, a special treat, a celebration of some sort. And so collections don’t come to us fully formed. They’re created over time, and we don’t think about how much they’re growing in value because we’re spending our cash flow on them.

[00:05:18] Ruth Stroup: Years ago, I had a client. This was back when I worked as an investment advisor over at Charles Schwab. He was in Castro Valley, he lived on a cul-de-sac. He was the survivor of three or four brothers, sisters, extended family members had passed away. And in his basement he had multiple sets of silver tea service, silver flatware, golf clubs, hobby things, tools. And somebody broke into his house, filled up the car.

[00:05:51] Ruth Stroup: He had parked in the garage with all the items that were in the basement. Drove away with them to sell them for 10 cents on the dollar, whatever else they were gonna do. He lived on a cul-de-sac. The neighbors saw his car come and go multiple times. But because it was his car, they never questioned it.

[00:06:12] Ruth Stroup: And I think, and he was talking about filing for the insurance claim. But in his case, in the world of what can go wrong around theft, which we’re seeing more and more of here in the east bay and in California, in general, all the items he had were sort of family inheritance. And it’s not like they got to be in the centerpiece of the dining room table.

[00:06:34] Ruth Stroup: They were in the basement. So if he had asked me as an insurance agent today, what I would think about insuring those items, I would ask him, did it have sentimental value? Which means I’ll be sad when it’s gone, but I won’t replace it. Or does it have financial value? Which means I’m gonna wanna replace this.

[00:06:56] Ruth Stroup: And when we have a fire, we have much more of a, of our things that we definitely want to replace.

How to insure different types of jewelry, whether it’s costume, gems and metals, or fine jewelry.

[00:07:03] Cathy Curtis: Yeah. Ruth, let me step back a minute. I wanna share my personal story on a collectible, a collection I had before we go into fire. So in my case, and a lot of women do this. I’ve been collecting jewelry for years and I’m not talking fine gold and gem jewelry.

[00:07:20] Cathy Curtis: I’m talking artisanal. Unique pieces that I find when I’m in Europe or on a weekend getaway in Sonoma or Napa or whatever. And I could tell you every piece I had, where I got it, and the story behind it. So I didn’t insure it because each piece was not a lot of value. And I didn’t worry as much about it as my fine jewelry.

[00:07:46] Cathy Curtis: Again, each piece was, every single piece of that collection was stolen. The thieves dumped out my jewelry chest and stole every single earring, bracelet, necklace that I had been collecting over the years. And that hurts. It really does. And I’m not gonna be able to replace it. It was probably worth about $15,000 in total.

[00:08:07] Cathy Curtis: And insurance doesn’t cover that. Cause I didn’t have any of it appraised. It, it wasn’t worth appraising any of it. So that’s a really good example of something you’re talking about. Now, if I had, if you were, if I had come to you and said, can I insure that? I really wanna insure that collection. Could that have been done?

[00:08:24] Ruth Stroup: It can. People don’t really, I, there’s a way I always ask the difference between is it costume jewelry, which is in the under $100. Is it fine jewelry? So $500 to $2,500. Or is it gems and metals? And I know people who insure none of it. I know people who insure all of it. There’s a way to insure them a little bit differently.

[00:08:49] Ruth Stroup: So a collective amount for smaller items and a, an itemized amount for larger amounts. But the jewelry company we work with. If it’s special enough to add it, it’s inexpensive to have, you can either have your most important pieces insured. Or if you collect stuff, you can insure it all. And then, and then you have to, the thing is to get replacement cost and insurance, you have to replace things.

[00:09:18] Ruth Stroup: And the items you have are more of a what’s the market value than what’s the replacement value. Because there are, they are all artisanal. But I see lots of ladies, I say, do you sparkle? And they do. Then I ask if they have special insurance for that. And most don’t, and then nobody knows what it costs.

[00:09:39] Ruth Stroup: So they don’t know what they’re saying. Yes or no to the men and their watches are exactly the same. Got a bonus, buy myself a $10,000 watch. My stocks vest, got myself a $10,000 watch. Had a baby, got myself a $10,000 watch. And over a decade, somebody might have 3, 4, 5 watches because they had occasions to, to mark with the watch.

[00:10:04] Ruth Stroup: Maybe one watch is not such a big deal, but $50,000, a hundred thousand dollars’ worth of watches. Many men have that much in their closet.

[00:10:11] Cathy Curtis: And it, and insurance does not cover watches. Is that correct?

[00:10:15] Ruth Stroup: It treats them as jewelry.

[00:10:17] Cathy Curtis: Yeah. Okay. What about silver sets of silverware? That’s not covered either, unless you have a rider.

[00:10:24] Ruth Stroup: Silver’s different because silver has limits on the policy.

[00:10:30] Ruth Stroup: But in the old days back when the flea market was the thieves market, what people went to buy back was their family silver. There was definitely a market for it. Today, grandma’s silver, every, every millennial’s, worst nightmare to have grandma’s silver delivered to them. To be the caretaker of dusted tarnished silver.

[00:10:58] Cathy Curtis: Oh man. Yeah, my aunt’s, my favorite relative in the whole world. I cannot believe that they took it because I know what you’re saying. You could find it in any consignment store, flea market.

[00:11:15] Ruth Stroup: And you can insure silver collectively without an appraisal.

[00:11:19] Ruth Stroup: It, it just the issue with the theft of silver, silver tableware, where it’s so much less. Your people either, they were either, they know, like when they get that personal on what they take. They’re looking for something or something bigger. That’s very malicious. And I’m so sorry that happened to you.

[00:11:39] Cathy Curtis: Yeah. I know it was strange to think some of the things that they took for.

[00:11:43] Ruth Stroup: Usually what they do is they go through all your drawers and all your closet and all the known, hiding places that people think that thieves don’t know about. And they look for cash, especially cultures that keep cash at home.

[00:11:59] Ruth Stroup: Yeah. They look for things that they can sell easily. So they like shoes and they like, they love handbags. They also like handbags because the handbags can hold stuff as they’re taking things away. Uh, I got broken in two years ago. They used my luggage to steal my stuff. Yeah.

[00:12:18] Cathy Curtis: Yeah, they, I got several bags stolen that were obviously used to carry, cart things.

[00:12:24] Cathy Curtis: But they knew to take my nicest bags though.

[00:12:27] Ruth Stroup: Yeah. These were designer shoppers. Oh my gosh.

What people can do to mitigate the damage if they get burgled or their home is destroyed by fire.

[00:12:31] Cathy Curtis: Oh, given that, let’s, what is some good? You can’t prevent everything, but what, what are a few things people can do to try and mitigate the damage if they do get burgled?

[00:12:44] Ruth Stroup: So in any kind of claim you wanna do almost like a fire drill for your claim.

[00:12:52] Ruth Stroup: And the first question is, would I replace that? So believe it or not, most people have more money in clothes than anything else and most of us could pair our closets down by half. The first thing to say is if the insurance company did not pay me for this, would my life be the same? Like I might be sad.

[00:13:16] Ruth Stroup: but would my, would I change? Would it, would I be able to pay my housing or rent? Would I be able to pay my taxes? Or would I be able to eat the same way I ate? Will I have enough cash reserve for the long term? And I get very existential about things because if your quality of life wouldn’t change, if you don’t have the item and if you would not replace.

[00:13:42] Ruth Stroup: It’s terrible that someone took it, but it doesn’t have any financial value. It only has very high sentimental value, like your silver set from your aunt. And so I tell people that I really focus my insurance dollars on things that I want to replace. Okay, because then it has real financial value.

[00:14:06] Ruth Stroup: So for example, most people’s wedding rings, they would really want to replace. But an inherited wedding ring, hard to know. A wedding ring that has value after a divorce, hard to know.

[00:14:18] Cathy Curtis: Let’s take example, eBikes, which mine was going by the way. So Rob and I love eBikes. And it does enhance the quality of our life in a big way.

[00:14:32] Cathy Curtis: We take road trips with them, et cetera. So those were stolen. We definitely wanna replace those. So that’s a good example. Whereas my leather coat collection, am I gonna miss it? Yes, but am I, do I have to have all those? No, it’s a really good distinction because a lot of the stuff is just material stuff that you’ve collected that is not gonna change your life in any way.

[00:14:58] Cathy Curtis: So I, I think that’s a really excellent way to think about what to insure and to use your dollars wisely when you’re buying insurance. Yeah.

[00:15:06] Ruth Stroup: And I segue then, Cathy, too, people who are having a hard time getting insurance because they live in a location that’s now difficult to insure due to the wildfires we’ve seen over the last five years, since 2017. And with those policies, what should I, my first question to the people is would you rebuild?

[00:15:26] Ruth Stroup: I’ve worked with lots of seniors who are 70+ years old. They don’t wanna build another house. I talked to other people, they’re like, we love where we live. We would absolutely wanna rebuild. And so we set up the insurance based on what they expect the outcome to be. So sometimes I ask people what’s your next house and how soon in the future is it?

[00:15:51] Ruth Stroup: And for somebody who lives, let’s say in a house with a couple of stories worth of stairs and their next house is something with no stairs, potentially in an area with much less fire risk or closer to family or closer to medical, then a fire might only accelerate that move. What you want in a fire insurance policy is replacement cost, but that means you replaced your home.

[00:16:20] Ruth Stroup: You’re not required to rebuild it.

What to do if your insurance policy goes into non-renewal because you live in a high-risk zone for wildfires.

[00:16:22] Cathy Curtis: Okay. Now the insurance world in California has changed a lot because of the fires. So what in, especially in areas like Napa or here in Oakland and other areas, and some people’s insurance policies have been canceled due to that. What do you, what do you do in that case?

[00:16:45] Ruth Stroup: In the insurance business, we call it non-renewal. Canceled is like when I don’t make a payment and then they cancel me midterm.

[00:16:53] Cathy Curtis: Okay. Thank you for correcting me. Non-renewal.

[00:16:55] Ruth Stroup: Super important distinction because of the timeframe. If the insurance company is going, the insurance cycle if a policy is issued.

[00:17:04] Ruth Stroup: The insurance company does an inspection in the first 60 days. And if they find deficits in the property condition, they give you 30 days to remediate that. And at the end of that 30 days, if you don’t show proof of the updates, then the policy will cancel at any time until the next renewal. The only reason the insurance company could cancel coverage is if there is a, is if there’s non-payment. So assuming the payments have been made, then when it comes up to renewal, that’s the only time the insurance company can evaluate the risk and decide if it fits their current profile or not.

[00:17:47] Ruth Stroup: And this will change year by year, carrier by carrier. And it’s con, it creates a lot of confusion and a lot of bad feelings.

[00:18:04] Cathy Curtis: But I brought this up because that is definitely a distinction. So policies cannot be canceled just one day. They say, sorry, we can’t insure you anymore.

[00:18:19] Ruth Stroup: Nope. Insurance companies have to wait till the renewal date, and they must give you 90 days to shop for your new coverage. So if they miss the win, so if this is not taken lightly, insurance companies are, they wanna grow just like any other business. And they have lots of masters. They have to have a certain amount of reserve to be able to issue a new policy.

[00:18:42] Ruth Stroup: And the regulators really watch the insurance company’s capacity to pay claims. And some of the way we get that capacity is we buy insurance on our book of business in the industry. We call this reinsurance, right, that’s a big business. The reinsurance companies for years, they would collect money every year.

[00:19:05] Ruth Stroup: And then once in about 20 years, something really terrible would happen and they’d have a big payout. They’ve had record payouts in four of the last five years, they have changed their criteria. And if an insurance company needs the reinsurance in order to have capacity to pay, we don’t just have to pay by the regulator’s rules.

[00:19:27] Ruth Stroup: Now we don’t have to just pay by trying to run a good business rules, our own internal things. We also have to pay by the rules of the reinsurance. And it’s that number of constituencies that get involved in things that make insurance complex and that make insurance companies sometimes have to change their guidelines more quickly than you might expect.

How reinsurance companies impact the insurance industry.

[00:19:51] Cathy Curtis: So the reinsurance companies are really dictating a lot of what’s going on.

[00:19:56] Ruth Stroup: They have a pretty big impact. But you have to understand that it’s not just, they don’t just pull a lever and say, hey, insurance company, make a change. It’s, we go to them to get capacity. We have to have capacity to pay in order to maintain a certain book of clients.

[00:20:15] Ruth Stroup: The regulators look at the reinsurance companies for years, it was a very profitable business on the idea that you’d pay out big every once in a while. But every once in a while has become every year. And so they’re looking for their, the comp, their clients, the insurance companies to qualify for reinsurance.

[00:20:34] Ruth Stroup: We have to do, we have to do things a little bit differently in terms of our, the big data. And what’s in our book of businesses and we have to pay more for it too.

[00:20:44] Cathy Curtis: Okay. So let’s, let me just give an example. Let’s say in your book of business, whoever does this, I identify five homes in your book of business that are fire, big fire risk.

[00:20:56] Cathy Curtis: And so you notify at the renewal date, you notify the homeowner. These are the things they need to do to mitigate fire danger?

[00:21:09] Ruth Stroup: No, sometimes it’s this location no longer qualifies, hard and fast.

[00:21:13] Cathy Curtis: Ah, okay.

[00:21:14] Ruth Stroup: So in, and it could be a client that just signed up last year. It could be a client who’s been with you for 40 years.

[00:21:21] Ruth Stroup: We don’t get to pick his agents.

[00:21:22] Cathy Curtis: Okay. So then that homeowner by law has 90 days to shop for new coverage.

[00:21:32] Ruth Stroup: Correct. And the marketplace is everchanging and every insurance company has their own data modeling for risk. So you might be with an insurance company that can’t shop for other policies for you.

[00:21:48] Ruth Stroup: So you need to find both a new agent or broker. And a new carrier. And then as well as a new policy, other people you might be with the agent or broker may be able to place you somewhere else within their suite of carriers that they offer. So the shopping experience is different for everybody.

[00:22:07] Cathy Curtis: I’ve had clients experience both of those ways that you’re describing. Okay, so that, and then what is the average rate increase in that case? Is it quite large?

[00:22:19] Ruth Stroup: It, when people are non-renewed due to wildfire risk, the new policy can cost between two, two times to five times more than the current policy.

Ruth Stroup shares the reasons besides wildfire danger that an insurance policy may be non-renewed.

[00:22:29] Cathy Curtis: Okay. Okay. Are there any other reasons besides fire danger that a policy would not be.

[00:22:37] Ruth Stroup: Absolutely. Okay. And unfortunately, and claims is a major reason that insurance companies will non-renew clients. So yeah, some clients like whenever somebody has a potential claim, I’m like, let’s look at this and make sure it’s worth it to file this claim.

[00:22:59] Ruth Stroup: And worth it means things like how much will impact my. And will it impact whether or not I can get insurance with you? And if I’m going to sell my house in the next five years, will it impact the new buyer’s ability to get insurance?

[00:23:16] Cathy Curtis: Oh, that’s really critical. So let’s dig into these a little bit. So do you know, you can tell how much more it will cost on the next renewal date. If they make a claim of so much dollars?

[00:23:32] Ruth Stroup: I have an idea. So every carrier has its formula for rate surcharges. And I get Farmers. We have a surcharge for a claim as well as we have a discount, if your claim’s free. So I tell, my formula for whether or not to consider filing a claim is your current deductible plus your current premium. And if it’s less than that, you shouldn’t file a claim.

[00:24:02] Cathy Curtis: Okay. All right. But that doesn’t sound like it could be, like let’s say your deductible’s $2,500 and your current premium’s $3,000.

[00:24:12] Ruth Stroup: You wouldn’t even consider reporting it until it’s $5,500 or higher there.

[00:24:19] Cathy Curtis: Okay. All right.

[00:24:20] Ruth Stroup: Now, a lot of people, the number one, you know, we’ve talked about theft. We’ve talked a little bit about fire. But the real, most common claim we see in the home insurance industry is water damage. And water damage is one of those things, like what was the source of the water?

[00:24:38] Ruth Stroup: How long was the water damage? How long, was it a slow leak or a burst pipe? There are so many variables in water damage that I invite all my clients to call me if there’s anything going on with water in their house. Because just like that example where I said, even a former owner can impact the insurability of the house.

[00:24:58] Ruth Stroup: It’s those water damage claims. And what happens is someone calls to say, oh, we need to get the house ready for the market. So let’s send it to Oz and get, give it a good fluff and, and a contractor. Will we need to replace his pipes or here’s this old leak? And they tell the owner, who’s usually a retired person downsizing.

[00:25:20] Ruth Stroup: Oh, let’s see if your insurance company will pay for some of this. But oh, it’s wear and tear, old routine maintenance. So the homeowner calls the insurance company. And the insurance company declines the claim, but it’s water. So it’s given a red flag to the next insurance company that there’s a water, a potential water loss at this property because somebody called in and had a concern about water damage.

[00:25:47] Ruth Stroup: And since water damage is the number one cause of loss, some insurance companies won’t even touch a $0 claim.

[00:25:56] Cathy Curtis: Whoa. So I’ve often I know this, that you have to be really thoughtful and careful about when and why you call your insurance company. This is a perfect example.

[00:26:06] Ruth Stroup: And you also have to understand who you’re speaking to at the insurance company.

[00:26:12] Ruth Stroup: So I’m an agent. If somebody calls me and says, hypothetically, how will the policy respond? We can run through all the hypotheticals, but if you have insurance with a company where you call directly into an 800 number all in, they say, let’s have you talk to claims. Every claims call is recorded.

[00:26:32] Cathy Curtis: Okay. So am I right on this, that you as an agent and not just you, even though I know you’re great are an advocate for the client.

What Ruth can and can’t do as an insurance agent when helping her clients navigate claims.

[00:26:45] Ruth Stroup: I’m a navigator. So I can’t tell claims to pay or not to pay. I can’t tell them how much to pay. I can’t do any of that, but. And every carrier has its rules. In my carrier, Farmers, I’m allowed to review hypotheticals with anybody, any time. Will it make, how will the insurance company respond to this set of circumstances?

[00:27:09] Ruth Stroup: And I cannot tell them not to file. Like I sometimes I’m like, I personally think that the insurance company is likely to decline this claim. But the only way you’ll know if it will be declined is if you, it’s up to you. People are regularly asking me in the name of optimizing their insurance. What’s that little magic dollar limit where yes, I absolutely should file a claim.

[00:27:34] Ruth Stroup: What I find is many people think that they won’t file a claim until it’s say, over $50,000. And it might be in their best interest to file a claim for $20,000. And so in this market where insurance rates have become so high, the folks sometimes just give me the highest deductible. But the price difference between the highest deductible and something that’s a little more user friendly may not be very much. So in the sales process, when reviewing the coverage and getting ready to purchase or to renew, I use this formula I call bank the difference.

[00:28:08] Ruth Stroup: And so if there’s a difference in deductible, let’s say between I’m gonna use numbers so I can do the easy math. Between $5,000 and $10,000, right? That’s a $5,000 difference. Now let’s say I save $500 for taking additional $5,000 of risk. It would take me 10 years, $5,000 divided by 500, to bank the difference if I took the savings.

[00:28:39] Ruth Stroup: In the difference of the cost of the insurance policy and put it in the bank every year. It doesn’t in my world. My, I tell people in home insurance, the average claim is about once a decade. So if you can bank the difference in five to, and under five years, absolutely take the higher deductible.

[00:29:00] Ruth Stroup: Five to seven years, maybe seven years or more, consider the lower deductible. Ten years, absolutely. The lower deductible is giving better value. And in car I have a little shorter timeframe, three years for absolutely take the higher, three years where you absolutely take the savings. In about five years where you probably are be, get better value with the lower deductible.

[00:29:28] Cathy Curtis: I love it. That you have all these formulas you use. I’m sure you’ve developed those over the years of being.

[00:29:35] Ruth Stroup: I’m terrible at math. It’s what I call chunky math. It helps me. Describe a concept without getting too technical.

[00:29:44] Cathy Curtis: Yeah. Ruth let’s, I wanna just segue just a tiny bit and just ask you, you’ve been doing this for a long time.

[00:29:50] Cathy Curtis: Just talk a little bit about yourself for a minute.

[00:29:53] Ruth Stroup: Sure. I am 16 years in the business now. My agency is with Farmer’s Insurance. We do Farmer’s Insurance, and then we broker things that Farmer’s doesn’t offer. So that’s one of the reasons why we’ve become such experts in the high fire risk. Because farmers doesn’t offer that.

[00:30:12] Ruth Stroup: So I’m not in a compete situation. This is my third career. I was a cook for a decade. I worked for Charles Schwab for a decade. And now I’ve been doing insurance for longer than anything else. I love it because the insurance is pretty much the same day in and day out. You could think it was boring, but the people are all special and unique and different.

[00:30:36] Ruth Stroup: And I just love all the different people I get to meet when I was at Schwab. We slowly but surely, we’re only serving the more and more affluent. It’s a great American dream to own a home and more people participate in that than might use services like yours, Cathy, like a financial advisor. Because it’s just a more ordinary thing people do.

[00:30:57] Ruth Stroup: So I serve a much broader clientele than I had exposure to at Schwab. Which means that I get to work with a much more diverse clientele and I get to be Oakland-based and really serve this community. We serve the entire state of California, but the lion’s share of our clients are here in Oakland.

[00:31:16] Cathy Curtis: Okay. Well, I wanna make one comment about the insurance thing as far as I’m concerned as a financial advisor. I am an investment advisor, but I’m also a financial planner, and insurance is absolutely the bedrock of any good financial plan. And yes. People, I think people make a mistake thinking it’s boring. When I talk to you about it, it certainly doesn’t seem boring.

[00:31:37] Cathy Curtis: And it is so important to know all the different layers of your insurance policy. And I think people, when they’re talking to their agent, like you, they’re getting the information they need and their questions answered. But then they get the policy, they file it away. They never read it. And they’re not really aware of their coverages until they have to make a claim.

[00:31:57] Cathy Curtis: And maybe not, all of them have good insurance. You called it navigator. So I’ll call it navigator. I like to think of it as an advocate too, but they may not have that.

[00:32:08] Ruth Stroup: So most people, their first insurance, they buy on the internet or an 800 number where they don’t have anybody that advises them.

[00:32:17] Ruth Stroup: And then from watching your own clients that most people, especially if they’re planning and they have goals, their life expands and they have more money and more at stake. And sometimes they also have more in terms of debt because they use debt in order to build their assets, especially if they’re investing in real estate.

[00:32:37] Ruth Stroup: So. We, I regularly see people who have just the bare minimum limits for liability on their car insurance, because they bought it when they had nothing, and they just renew it. And nobody says, hey, what is your job today? What do you earn today? Do you have savings and money in the bank? Do you own real estate?

[00:33:00] Ruth Stroup: And so people will have just the bare minimum limits and not think twice about it because it’s a bill they pay. It’s not a policy they count on.

Cathy asks Ruth Stroup to give a mini tutorial on liability and umbrella insurance.

[00:33:11] Cathy Curtis: Let’s talk liability now that you’ve brought it up. In particular, buying an umbrella policy. Can you do like a mini tutorial on that? Because I have to explain umbrella quite often.

[00:33:22] Ruth Stroup: Sure. So with umbrella we see that the most common misunderstanding about umbrella is that people think it covers gaps in their coverage for their own personal property. And that’s the one thing it doesn’t cover is your personal property. What umbrella does is it provides money for a legal settlement.

[00:33:46] Ruth Stroup: And the attorney that comes with it in the event that you’re sued usually for an injury to a third party, the most common use of the umbrella policy is a car accident. For a business, the most common use for any kind of liability coverage is just a simple slip. And there are, what people don’t realize is that they can host a social gathering in their home or in a restaurant or a rented facility, like a country club or a social hall and their guests.

[00:34:24] Ruth Stroup: Any one guest could have a terrible accident on the way home. And if they had alcohol at your event, you can be added to the number of people who are named in a lawsuit for the person who was injured. That’s big. So the four categories I look at for where your money is to see, do you need more protection for your money?

[00:34:48] Ruth Stroup: So the umbrella insurance impacts, it protects your assets. So the first is anything not in a retirement account. So if you’ve got somebody at a company that’s getting company stock, if you’ve got somebody that’s always saved and has a couple of CDs that, no matter what it is, the non-retirement. Stocks bonds, mutual funds, CDs, bank accounts.

[00:35:12] Ruth Stroup: That’s the first layer of things we wanna make sure we protect.

[00:35:15] Cathy Curtis: That’s all the non-retirement things that I call them. Taxable accounts. They beat people’s brokerage accounts, things like that. Okay.

[00:35:24] Ruth Stroup: And then the next thing that people have no idea about is that their wages could be garnished.

[00:35:29] Ruth Stroup: So you can be fresh outta school, have a big student loan, have a big career in front of you. And maybe you’re making $150,000 a year, but you’re still driving on minimum car limits, like $15,000 per person injured. And if you had an accident that you couldn’t pay for, they could garnish your wages even for as much as a decade.

[00:35:53] Ruth Stroup: And that would change your quality of life forever. So even people who don’t have stuff, if they have wages, they need better coverage. And I really like the umbrella policy for them.

[00:36:04] Cathy Curtis: Okay. Let me clarify something. Are IRAs at risk to judgment, to creditors in California?

[00:36:11] Ruth Stroup: They are not technically, nothing in the retirement suite is technically at risk of creditors.

[00:36:18] Ruth Stroup: How I always look at the OJ Simpson case, civil case. OJ’s money was primarily in the NFL pension, every pension payment could be garnished. Every, like it’s not technically at risk. But if that’s where your money is and you have to pay a settlement, you may end up taking the money out plus taxes, potentially plus a penalty in order to do that.

[00:36:48] Ruth Stroup: So I always round up. And if a person has significant retirement assets, I wanna at least think about them. And then I feel the same way about home.

[00:36:59] Cathy Curtis: It’s up to the judge in some cases, right?

[00:37:01] Ruth Stroup: If they, or they might say the judgment is half a million dollars and you have a hundred thousand in coverage.

[00:37:08] Ruth Stroup: So now you have to figure out where to get the other 400, and you make an arrangement with the, I will liquidate assets and pay a hundred thousand. I will accept wage garnishment for this period of time. I will this or that. And the insurance company wants so much to settle within your policy limits, but you have to give them some tools to be able to do that.

[00:37:33] Cathy Curtis: Is this a really common claim? What percent?

[00:37:37] Ruth Stroup: It’s not a, so this is one of those funny insurance things where it’s, you don’t wanna play the odds. You don’t wanna gamble with it. If you have the assets at risk, you want to have coverage. Because here’s what happens. An attorney in the bay area costs about $500 an hour.

[00:37:57] Ruth Stroup: A $1 million liability policy with the attorney coverage that comes with it costs, depending on what you have to cover, plus or minus $500. So it’s like having an attorney on retainer, right? It’s some of the best, and it’s inexpensive because it’s rarely used. But do you wanna be the poor soul who needs it and doesn’t have it?

[00:38:22] Cathy Curtis: I sure don’t. Now let me ask you this. There are some technical things like you have to have so much in your liability limits on your auto and home before you can add umbrella. Is that correct?

[00:38:35] Ruth Stroup: That’s correct. So one of the reasons umbrella is expensive is because the small things are handled by the underlying policy. The cars, the motorcycles, the boats, the houses, the income, the rental property, the vacation house. All of it needs to have a certain level of coverage.

Ruth Stroup shares what she believes is the best kept secret in the insurance business.

[00:38:54] Ruth Stroup: And it’s normal to, to like to have those coverages. It’s not high coverage. And then for my high earners, I like to add an, I have the opportunity to add an additional $1 million, uninsured/underinsured motorist coverage to their policy. And this is the best kept secret in the insurance business.

[00:39:22] Ruth Stroup: Most of my clients who are going to be in a terrible accident. It’s not going to be their fault. They’re not going to be the one paying. They’re gonna be the party that’s injured. And the person who injures them is likely to have terrible insurance because they’re expensive to insure. They’re a new driver, bad driving record, possibly a DUI record, maybe even uninsured, maybe stolen car they didn’t have a right to drive.

[00:39:53] Ruth Stroup: And your policy can, the uninsured motorist pays when your loss is above the amount of coverage available in that other party’s policy. So if that other policy is only paying $15,000 per person, or maybe the boiler plate policy is paying a hundred thousand per person, but your combination of medical loss wages and lingering effects is more than a million dollars.

[00:40:27] Ruth Stroup: It makes a big difference to have uninsured motorist on your umbrella policy. And it’s very inexpensive and it’s a really good protection for people who have a high income, because it’s that wages piece.

[00:40:43] Cathy Curtis: Yeah. That’s so important. Now, why is this such a secret?

[00:40:44] Ruth Stroup: Because it’s inexpensive. I regularly see policies where the insurance companies sold the client, less uninsured motorists from the regular liability.

[00:40:56] Ruth Stroup: Maybe a lease required 100, 300 limits of liability, the person was trying to control costs or cut a corner. The agent sold them $30,000, $60,000 and the insurance company only has to pay out if your coverage is greater than that, of the party that injured you. So it’s a very inexpensive coverage.

[00:41:19] Ruth Stroup: It’s misunderstood if you’re in a car accident and you’re a pedestrian. A bicyclist. A passenger of any vehicle or a driver of any vehicle. And it’s another driver’s fault. You can use this coverage if their insurance is inadequate for what your needs are.

[00:41:38] Cathy Curtis: Do all carriers offer this option? Do you know?

[00:41:41] Ruth Stroup: It’s required by law to, it’s required by law to offer it. And we have to make, you have you sign a disclosure if you take less than what we give, the way people DocuSign these days that do it blind. They don’t even know they’re being offered less.

[00:41:55] Cathy Curtis: No, it’s true. Thank you. That is an awesome tip, Ruth. Thank you so much for that one.

Cathy and Ruth talk earthquake insurance.

[00:42:02] Cathy Curtis: Let’s talk earthquake insurance. Now, most of the people I think that listen to this podcast are in California. They may not, but everyone knows the risk of earthquake in California. So what could go wrong there?

[00:42:15] Ruth Stroup: Most people don’t buy earthquake insurance. And they don’t realize what their responsibilities might be to their lender.

[00:42:25] Ruth Stroup: And in order to, if their house has severe damage from earthquake coverage, most people also don’t realize that they can shop around for earthquake coverage. That there’s more carriers than the earthquake authority. And lastly, most people think the earthquake authority is part of the California state government and receive funding from the state.

[00:42:46] Ruth Stroup: And they do not. They receive funding from policy holders and insurance companies. And then lastly, many people have the belief that FEMA or some other federal organization will help them after an earthquake loss. And they do not realize how limited those funds are and that they shouldn’t be relying on them.

[00:43:09] Cathy Curtis: Okay. So, what do you advise your clients to do in California?

[00:43:15] Ruth Stroup: There are several profiles of clients who I feel really need to buy earthquake insurance. What we learned during the mortgage crisis back in 2008 to 2010 is many people walked away from a mortgage, took a break and restarted their lives.

[00:43:34] Ruth Stroup: And they did not. If anything, they, they didn’t experience a big financial loss. They may have hurt their credit for a while, but it wasn’t impossible in our agency. The people we see who really care about having an earthquake policy are people who have over a quarter million dollars in home equity. For a lot of people, that’s a down payment the bank would not let them walk away from.

[00:44:06] Ruth Stroup: Their loan, even if the house was severely damaged and uninhabitable, that’s. People, if your income is so high there, you’re not gonna be able to do, to just walk away the way people walked away in the mortgage crisis. Because the people who walked away in the mortgage crisis didn’t have that much skin in the game.

[00:44:24] Ruth Stroup: They like, they may not have had the high paying jobs.

[00:44:29] Cathy Curtis: Well, yeah, they may not have had income. You didn’t have to document income on a lot of those loans that were done in those days.

[00:44:36] Ruth Stroup: But today’s buyers go in and buy a house over a million dollars very often and with 20% down or more. So they start with quite a bit of skin in the game.

[00:44:47] Ruth Stroup: Many of those people to afford their mortgage have a very high income. Too high to be able to justify a quick claim on a property that still owes hundreds of thousands of dollars. The third is a category that has more to do with you and me, Cathy. There are some professions where you could pick up and move and go live somewhere else.

[00:45:11] Ruth Stroup: But if you don’t have good credit, you can’t get a job. So we both work in financial services, and if I hurt my credit rating, because a bankruptcy or a quick claim on a house after an earthquake, I might not be able to be employed. Some people in the federal government have the same issue. So people who need to keep clean and good whose employment requires good credit.

[00:45:37] Ruth Stroup: They absolutely wanna make sure with an earthquake policy that they won’t lose their credit because they had to walk away from a house that was badly damaged in an earthquake. And so those are the three money reasons. And then there’s site specific issues. There’s some houses that the type of construction they are, they’re top.

[00:45:58] Ruth Stroup: And the more top-heavy your house is, the more you need really good retrofitting so your house doesn’t come separate from your foundation. And the more potential you have for damage. So the earthquake carriers set the rates based on the site specific risk, proximity to fault lines, and then the, the configuration of the house and the age of the home.

[00:46:23] Ruth Stroup: If the policy is expensive, the bad news is you probably need it because you’re a higher risk client. Or your property, your location is higher risk. And I have clients who do one of the three following things, they retrofit and skip the insurance. They feel like they’ve done enough site improvement to feel safe and secure.

[00:46:47] Ruth Stroup: And that’s what they, how they wanna spend their money by mitigating risk. Some people buy the insurance and don’t do the retrofit because they have insurance. Some people do both. The majority of people by and large don’t buy earthquake insurance. And the challenge we’re gonna have in the bay area is if we have a serious earthquake, we will have very local, highly localized changes to our economy.

[00:47:16] Ruth Stroup: The bay is one of the largest economies, not just in the country, but in the world. Being prepared for an earthquake is really important.

[00:47:25] Cathy Curtis: Yes. One of the arguments I hear about buying earthquake or not is, oh, the deductible’s so high. It just doesn’t make sense to buy it. What is your response to that?

[00:47:33] Ruth Stroup: I always, whenever anybody says something’s expensive, I always say compared to what? Right?

[00:47:37] Ruth Stroup: And then you could even plan for a high deductible, and people will take money from places they might not ordinarily take money from if they need to pay its deductible. So for example, you won’t be able to get a home equity line. If your home is badly damaged from an earthquake, but you would be able to borrow from cash value, life insurance, maybe take an unexpected 401k loan. Maybe take an actual withdrawal from your, from an IRA account.

[00:48:10] Cathy Curtis: Or a margin loan on your investment portfolio.

[00:48:12] Ruth Stroup: A margin loan on the investments. People will have money from places they didn’t expect. You might get a family loan.

[00:48:18] Ruth Stroup: So the question I have for people who have, let’s say a hundred thousand dollars deductible, is what they still will have up to $700,000 of insurance. After they exceed the deductible, what’s their plan to access a hundred thousand dollars? And the people have money in their house.

[00:48:40] Ruth Stroup: Have good incomes who need to keep good credit. Those people have more access to money than they might realize if they sat down and thought about it. And people like you, Cathy, will be super important to those folks when it’s okay. If I had to come up, if you’re like, what could go wrong? Let’s find out like, where do we have a hundred thousand dollars squirreled away for an emergency?

[00:49:05] Ruth Stroup: Is it a margin loan? Is it a loan against cash value life insurance? Is it a family member? Let’s just assume it’s a not a traditional source.

[00:49:14] Cathy Curtis: Yes. So I, what you’re saying about earthquake, and I agree with you a hundred percent is again, like a lot of things. You look at each person’s situation, financial details, and you determine whether financially it makes sense.

[00:49:30] Cathy Curtis: The risk/reward to buy earthquake or not, basically.

[00:49:34] Ruth Stroup: Well insurance doesn’t have a risk reward, Cathy. It never gets you a reward. It only gets you back to where you were at the time of loss. So we don’t think about it this way. I think about it very simply in terms of what would your life look like if this asset wasn’t contributing to your long-term financial goals?

[00:49:54] Ruth Stroup: And if you’re comfortable not having that, then insurance is less of an issue for you than the next person.

[00:50:03] Cathy Curtis: Yeah. When you’re putting it that way, in the case of a total loss of a house in an earthquake, it’s pretty clear the decision you should make.

[00:50:13] Ruth Stroup: And what people wanna do is they wanna negotiate with the possibility of the risk or the potential loss.

[00:50:22] Ruth Stroup: I have a friend who lives up in Napa and he said his neighbor just bought earthquake insurance the month before the earthquake. Didn’t that guy get lucky. He only had to pay for a month of insurance before you actually got a payout.

[00:50:39] Ruth Stroup: The day people buy the earthquake insurance or any insurance is the day when the thought of loss of the entire asset is a, puts a bigger pit in their stomach than the guaranteed loss of writing a check to the insurance company and maybe never getting that money back.

[00:50:51] Cathy Curtis: Okay. Gosh, Ruth, great info on earthquake. What other, is there anything else that you’d like to add to this podcast thus far?

[00:51:01] Cathy Curtis: Important things that could go wrong? Any gems that you like? You’ve already shared with us a few real gems on insurance. I’ll give you the floor.

[00:51:12] Ruth Stroup: Sure. My, the thing I know the most about insurance is that you have to have a policy in force to be able to make a claim. That’s car insurance, home insurance, life insurance, business insurance.

[00:51:26] Ruth Stroup: So you want to test drive that insurance. And say, how will this benefit me at the time of loss? You’d never base this on return on investment. I think about it a little bit like the way I think about when I go to a casino. Will the money I put in that I spend in this casino provide me enough fun that I won’t be sad that I don’t have that money at the end of the night?

[00:51:55] Ruth Stroup: And so the money I spend on insurance needs to me, give me the confidence that if something happens, I have financial support to solve problems. And so I would say most people underinsure. Most people see insurance at, we hear all the time. People think insurance is just a racket. And I’ve lived a life where I’ve seen large claims fade out and where insurance made a meaningful difference to somebody.

[00:52:26] Ruth Stroup: And that’s been, insurance does its best work when it’s able to make a meaningful difference in your life or the life of your family.

[00:52:39] Cathy Curtis: Okay, Ruth. That’s great. And like I said earlier in the podcast. I really believe that having the right insurance is the bedrock of any good financial plan. And Ruth, you’ve offered an amazing amount of great information.

[00:52:55] Cathy Curtis: Can you share with the listeners where you can be reached and whether you write a blog or any information about you that we could share? And I’ll put it in the show notes.

[00:53:06] Ruth Stroup: Fantastic. So I serve the state of California. Most people reach me with a simple phone call at 510-874-5700. If you Google Ruth and the word Oakland, you will find me.

[00:53:25] Ruth Stroup: I am not hard to find. And on purpose, we are working on a soon-to-be-released newsletter that will be called Tuesday Tidbits. It will be 100 to 250 words of a sort of insurance focused life hack, really focusing on people who are looking to, who are in a growth mindset and wanna make sure that they have the matching protection to their assets as they grow.

[00:53:52] Ruth Stroup: It will answer those simple questions. Do I have to take the insurance with the rental car or is it a waste of money? And then it will also talk about things like creating legacy with life insurance, thinking about, you know, how philanthropic you want to be. What does your, I’m 60 years old. So I think about, I think a lot more about legacy and meaning. But I still think a ton about growth.

[00:54:12] Ruth Stroup: So we’ll have that. And I have a team here that works with me. I spend the majority of my day training my team. And so if you can’t reach me for any reason, I have great people who work with me, and any one of them would be happy to help.

[00:54:29] Cathy Curtis: Okay, Ruth. Thank you again for taking the time to talk with me on my podcast.

[00:54:34] Cathy Curtis: It’s been an invaluable discussion.

[00:54:37] Ruth Stroup: Thanks, Cathy. It was really fun.

[00:54:38] Cathy Curtis: It was fun. I’d love to do it again.

[00:54:42] Ruth Stroup: Okay. Thank you so much. We’ll talk to you.

[00:54:43] Cathy Curtis: All right. Okay. Bye bye.

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S4E5 Transcript: The Insurance Lady Answers Your Biggest Questions About Insurance Read More »

S4E4 Transcript: How to Thrive in the Digital World with Susan Reynolds

Cathy Curtis: Susan Reynolds, thanks so much for joining me on my podcast. I’m excited to talk to you about LookUp.Live.

Susan Reynolds: It’s great to be here, and chat to a different audience. Because I’m usually speaking to teachers and students themselves. But I think speaking to those in the workforce, but as well as any parents or people that work with gen z. It’ll be really relevant.

Cathy Curtis: Susan, you’re making such a good point, thank you for bringing that up. So my audience is other financial advisors like me, mostly independent advisors who run their own businesses. And then also, my clientele is mostly women.

Cathy Curtis: And I have to say that a lot of us advisors use social media in a big way, including me. I started using it back in 2008 to market myself, that was important for me because of my age. It wasn’t to connect with my friends necessarily, it was to market myself.

Cathy Curtis: And I have to admit, as I was getting ready for this podcast, I can relate to so many of the things that those kids are talking about. Because I’ve been using social media for so long. So I know my audience is going to have a genuine interest in what you have to say.

Cathy Curtis: So with that, can you tell us a little bit about yourself? How you founded your nonprofit? And I think it was with your mother, is that right?

Susan Reynolds: Yes. So going back quite a while, I was a middle school English and social studies teacher for 20 years. And sort of, I mean I started self-admittedly my age, but I started teaching in 1986, and ended teaching in 2006. So if we look at what happened in the middle there, technology came on the scene. And I had never really known anything about technology, but I was a curriculum developer.

Susan Reynolds: And so when the headmaster said we hired this director of technology, he’s crawling around in the attic, wiring the school, I need a tech plan. And I said okay, what’s a tech plan? He said go talk to Michael. And Michael was the director who was crawling in the attic. He said go on the internet, and I literally said, and this is 1997, what is the internet? He sent me to the internet, and the interesting thing that happened was I actually felt my brain speed up. I felt this change. So I dug into all this research, and the research literally was saying that, was predicting internet addiction. It was predicting the promise in peril in education for youth. So right off the bat.

Cathy Curtis: This was 1997?

Susan Reynolds: 1997.

Cathy Curtis: Okay.

Susan Reynolds: Tapscott wrote a book growing up digital.

Cathy Curtis: Okay.

Susan Reynolds: So right off the bat. I worked with it, I watched the change as technology came on the scene and the distractibility of it. And I would say that really started watching my students use AOLIM. So they were working on a computer, a word processor, writing a paper with the little box in the corner. And kids weren’t doing their homework. So that gives you a framework of the longevity of this.

Susan Reynolds: I ended up leaving teaching. I wrote a young adult novel, I became a yoga teacher, I became very interested in mindfulness. And I noticed that when I had my phone in my hand, I was not mindful, right? So I started digging in, what is going on? Like why can’t I teach yoga and meditate? But then if my phone is around, I’m totally out of focus, not in the present moment. And at the same time, I learned about the mental health crisis on college campuses.

Susan Reynolds: And for whatever reason I’d sort of missed it. And this was in 2014, and there was a sentence from the Stanford provost that said, college students have never been more anxious, depressed, addicted. I mean self-harming, lonely, isolated, I mean this really tragic sentence. And as I began to dig into this, no one was really talking about what it meant to live in the digital age. No one was really talking about the impact of social media in any causative way.

Susan Reynolds: There was correlative data out there, but there wasn’t anything specifically targeting it. It was just noticing patterns. And so I started how I think a lot of people in my field who were working on these issues start. You start talking to teachers, you start talking to parents, and you start talking from an adult perspective, what students, what youth should be doing.

Susan Reynolds: And I went along like that until I started really talking to college students themselves, and what I recognized is their lives on social media are really very different than our lives on social media. And the reason for that is as they’re developing their identity, their digital identity is woven right into who they are, and I’ll give you an example.

Susan Reynolds: A young woman at Princeton, she’s an athlete, she said Susan I’ve had my Instagram since sixth grade. And so if you tell me to put my phone down, I feel like I’m losing a piece of myself, right? Like I’m somewhat invisible, and that was this recognition of wow, adults are trying to solve the problem for youth, but who’s asking youth about their pain points and what their solutions are?

Cathy Curtis: She was a gen z age person, right?

Susan Reynolds: Yes, this was in 2018. I’m trying to think when I started really working on lookup gen z was really kids born after 1997. So 1995-97. So these youth are now out of college, so around 25. But at the time, it was really focused in on college students and high school students. The only reason I focused in on college students first was I felt like at least high school students had some sort of gatekeeper of their technology, whether parents, whether teachers, the structure of school with such that they could be told you can’t have your phone in a classroom, a parent could take a phone away to sleep.

Susan Reynolds: Now this is not across the board, this is not all parents, we are all teachers. But I felt like if students hadn’t had any sort of training or even thought about regulating their own technology. We were seeing at this time a lot of college students weren’t making it out of freshman year. So it wasn’t really common, but boys might play Minecraft and stay up all night and not do their work.

Susan Reynolds: And I heard about boys in that category coming home, not having have made it through the freshman year. Girls on the other hand, and these are very stereotypical but very general. Social media tended to be what captured girls, and so they could stay up too late. I mean, it interfered with sleep, and then we can get into all of the things that can happen on social media. But just the fact that there was this distraction that was very hard to control.

Cathy Curtis: And this is college-age students like you’re saying, they grew up with it. Maybe they had some parental control maybe as teenagers. But then they get to college and there’s no one supervising them. It’s almost like an extension of themselves, and they’re full on into it.

Susan Reynolds: Right.

[12:04] Why technology is so addictive and how it’s contributing to our mental health crisis.

Cathy Curtis: And it is addictive, right? I mean, if there’s research science whatever that says yes this is an addictive behavior.

Susan Reynolds: Well, and it’s an addictive behavior because more and more research has come out of the algorithmic design of it. And this is a big piece of the whole issue around this is tech companies concerned more about profit than the impact on people. And the algorithms being designed by brilliant neuroscientists.

Cathy Curtis: Right.

Susan Reynolds: But it’s just gotten more and more, the algorithms are smarter.

Cathy Curtis: Well yes, and there’s been leaps and bounds made in brain research in the last decade or two as well. And all those firms are appropriating research to create profit.

Susan Reynolds: Absolutely.

Cathy Curtis: I mean, wouldn’t it be great if they could turn the algorithms around where it created a good healthy environment, instead of the environment we’re in? And I’m sure that’s possible too.

Susan Reynolds: There is a call for it. There is. I don’t think a profit-based model, which I think is why regulation is so needed. Because I mean, tech companies well, any company, right? I mean, any public or private company needs to have earnings. And so the problem, there’s that conflict between the business model. And it’s become, some people call it the attention economy, where our attention is actually the commodity.

Cathy Curtis: So yes, and unfortunately us humans are attracted to scary, sensational things more than we are happy, benign things. Look at the evening news, why did they do that? Ten stories about crime and bad things, before they ever get to one good story, there’s a reason for that.

Susan Reynolds: Right, absolutely.

Cathy Curtis: That’s the way our brains work, and how detrimental when it comes to young people who’s they don’t have the maturity level. But I have to say it’s not just young people, I think older people can get just as addicted.

Susan Reynolds: Absolutely. And I think the question, I mean in looking at the mental health crisis, I mean there’s a mental health crisis across the board, so it’s not saying just youth. But the specifics and the statistics of the mental health crisis among college students is really frightening, and it was frightening in 2014, it was frightening in 2018, and now, this was all before the pandemic. So the pandemic just added to an existing problem. But it also raised the awareness around the impact of living in the digital world, and digital overload was not something I needed to explain. Whereas before, I might need to explain what digital overload and digital addiction was.

Cathy Curtis: Right, no, everybody knows that now. When did you start your non-profit then, in what time frame?

Susan Reynolds: So the example I gave you of the young woman who said Susan, our identities are woven into our phone, it isn’t. It isn’t sort of something outside.

Susan Reynolds: And because if you think about all the socialization in the community and everything that teenagers go through to create a network, to create their friends’ groups, peer pressure and their self-esteem all woven into the digital. So that was a big clue to me. And at the same time my mom, Anne Reynolds have been very involved in non-profits in the bay area around education and mental health.

Cathy Curtis: Okay.

Susan Reynolds: And we have many conversations about this, and so when I said I think I have this idea that what I’m doing educating teachers and parents isn’t really what I want to be doing, I want to be working directly with college students. And I went to Dartmouth college, and Dartmouth’s entrepreneurship center, the Magnuson center for entrepreneurship at Dartmouth, they are open to alumni as well as students and faculty.

Susan Reynolds: And so I spent some time there talking about the issue, talking to students at Dartmouth, hearing their pain points of what it was like living in the digital age, as well as framing it around the mental health issues that they saw on campus. And it was then that Jamie Coughlin, he was the director, he said well, we give founders grants, why don’t we give a grant with a specific question around solving this problem.

Susan Reynolds: And so it all sort of came together, and we used human-centered design and design thinking, and actually ran a design-a-thon at Dartmouth, which asks for identifying the problem and creating solutions. And that’s really where it came about that we offered a grant to students who could solve for digital addiction, digital overload to create more tech life balance.

Cathy Curtis: Oh, that’s fascinating.

Susan Reynolds: Yes, really fascinating. And then we reached out to other universities, and we ended up working with university of Arizona and San Diego University, and the universities worked with us, ran this different design, challenges. Had this big plan to bring all the youth together at BlackRock in San Francisco, because I had given a talk there and voila, the pandemic hit. So we did what everybody else did, right? We brought the whole idea of look up to the digital world.

Cathy Curtis: Okay. And now you have a summit in October, right?

Susan Reynolds: Yes. So it was one of these, I mean it’s sort of any career path or any company or decision you make, all these things just lined up. So the pandemic hit, which made our plans to do everything in person impossible. But we could reach a lot more youth being virtual and we could bring experts and sort of what we call adult allies together with the students, to hear their ideas and give suggestions.

Cathy Curtis: Because the positive side of the internet and digital connection.

Susan Reynolds: Absolutely. And there’s this promise in peril and tech life balance, and it’s not all bad, right? I mean, there’s so many positive aspects of social media and living in the digital world. And I think for students themselves, that was a really important point for us to make.

Cathy Curtis: Yes.

Susan Reynolds: We’re not saying it’s bad. But it’s this constant message and task of how do we take advantage of all the positive aspects, and mitigate the negative.

[20:04] How digital wellbeing relates to self-care.

Cathy Curtis: So, it’s kind of like defining what is digital well-being.

Susan Reynolds: Well, I think it’s in multiple arenas if we just take sort of the work environment right now, the virtual work environment. Digital well-being is managing the digital world in a balanced way. And I mean, it can fold over right into self-care, right?

Susan Reynolds: Some people schedule meetings where they have a 15-minute break. And they don’t use that 15-minute break to check up on emails or check their phone. But they get up and they walk outside and do all these things that boost resilience, boost happiness. And actually, in the long run, make you more productive. So that’s an example.

Cathy Curtis: You can turn on your internet. You can tell your phone let me know if I’ve been on here for too long.

Susan Reynolds: Exactly.

Cathy Curtis: There are tools, I want to tell you a little personal anthem here. So I use Instagram, I have a personal account and a business account. I didn’t know there was an upgrade, because I guess I don’t pay that much attention. So I was using the old version of Instagram for a long time. And I noticed the app got kind of funky, it was hard to use. I thought there’s something wrong here, there’s got to be an upgrade. So I upgraded. And I upgraded to this weird new format that you click on something and then you get all these videos all of a sudden.

Cathy Curtis: And I said oh my gosh, this is what everybody’s talking about. The old platform all you saw was who you wanted to see, this new platform you see who and also all these other people and it scrolls and scrolls and scrolls, that’s done on purpose, right?

Susan Reynolds: Oh, absolutely.

Cathy Curtis: And probably the other app didn’t work, because they really wanted you to switch over to the new app, and now I’m wondering is there any way to turn that off and I just found out there is from another Instagram user that’s frustrated by this new interface. So I mean, I’ve personally experienced this, and I found myself watching these videos, just getting entranced by them. Some of them are really funny, and you it’s an addictive thing, there’s no doubt it.

Susan Reynolds: Well, it’s interesting too, because this is where the profit model comes in. So Instagram is miming itself after Tik-Tok. And one of the problems of these videos is they’re getting shorter and shorter and shorter, and so we’re not able to attend to lengthier videos conversations, right? Because the brain gets trained in needing to switch all the time. So that knowledge of what you can do, what?

Cathy Curtis: Do kids read books anymore? I mean, do they have the attention?

Susan Reynolds: It’s really hard, it’s really hard. And then yes, and if you think about everything being online, your textbooks and reading. I mean, one of the common digital well-being tasks is print out a reading and pick up a pencil and take notes on that hard copy, because that physical act increases your comprehension and ability to focus.

Susan Reynolds: So part of digital well-being is knowing these strategies that help with attention and focus and productivity, so that’s one whole side of digital well-being. And then there’s the whole mental health aspect of it, is not just how long you’re on social media or Netflix or whatever is grabbing your attention, that you don’t intend to be grabbed, I think is one way to think about it. But then what you’re actually seeing on Instagram and Tik-Tok and social media.

Susan Reynolds: And I think for youth, the comparative culture is huge. And even thinking about comparing a curated, right? Totally altered photo of a friend, because a celebrity is one thing, but if it’s of a friend. And then if someone just turns around and looks at themselves in the mirror no makeup, right? No curation, that just that feeling is, so youth don’t feel as good about themselves.

Susan Reynolds: Their self-esteem is really severely impacted. And the other piece that’s really very interesting and probably we haven’t heard of before is quantified personality. So quantified popularity and personality. So what you think is you’re popular by how many likes and followers you have, which is going to lead to more comparison culture, right?

Susan Reynolds: And more not feeling good enough, and FOMO and fear of missing out, keeping you on the devices longer. So that all of the things that you would be doing if you weren’t on the device that would make you feel better is not really happening.

Cathy Curtis: Right. And then the influencer culture, which I’m sure a lot of you think that’s easy to get to and it’s not, and it takes tremendous amount of hours online. But everyone’s following those people.

Susan Reynolds: Right. So what’s been interesting for us with, because this is our third year. The first year, we worked specifically in colleges and then we had sort of an open call for solutions from students, and during the pandemic, it was a little different. We still had digital overload and tech life balance as a question, how might we solve for. But we really asked the other questions where how might we solve for social isolation and loneliness.

Susan Reynolds: Because of the pandemic, so much of this was such a big problem, but also digital activism. So more on that positive side of how might we use these devices, and this was really during the whole Black Lives Matter movement and youth were really feeling very empowered. Because you could be a change agent and you didn’t need transportation, you didn’t need funds necessarily.

Susan Reynolds: So really, listening to students and what they saw were the struggles, and then also talking about what they were doing. And I think it’s very interesting if we look at gen z as a group, they’re very committed to social change and political change, and creating solutions for climate change.

Cathy Curtis: In my work, they’re ESG investors, environmental social governance investors almost 100 percent, they really care.

Susan Reynolds: Right. And gen z is really, they’re also growing up in an era where there are a lot of problems to solve. So it’s so many choices, and they really feel committed to do that. And some leaders, because it’s not everybody, but these amazing leaders out there say it’s really not cool if you don’t have a cause. So there’s a positive, it’s always this positive and the negative.

Susan Reynolds: So the new change agents because we’ve really seen is a potential for regulation and legislation. Because when I started this work, people would sort of say oh yes right. Legislation, you’re not going to get in, that’s not possible.

[28:33] The pending legislation around digital wellbeing at the state and federal levels.

Cathy Curtis: Yes. Didn’t Francis Haugen cause a big shift in that? Because I know legislation has been proposed for years, and there’s been some past, but nothing about this issue. But since she testified, it seems like there’s more and more, and there is a bill pending right now. I would love you to talk a little bit about the legislation that’s pending in California and at the federal level.

Susan Reynolds: Yes, absolutely. So what Francis Haugen’s research did, and the research all the way up into that point. There was a lot of correlative data. But there was arguments or disagreement on whether it was really truly causative. Like whether social media was actually causing harms.

Susan Reynolds: Francis’s data because it was research done by Facebook secretly within Facebook. Where they came out and it was a direct causative relation, that a third of teenage girls were suffering from self-esteem issues, and body image issues from Instagram. So there it was, it was directed. And I think the other thing that happened was in the UK, they passed a bill, an appropriate design code, which I can talk about.

Cathy Curtis: Yes.

Susan Reynolds: They passed it in the UK, the arguments from tech companies was always or often number one, it won’t make a change, and number two, it will take away innovation.

Cathy Curtis: Okay.

Susan Reynolds: What happened in the UK was they found that it did not take away innovation.

Cathy Curtis: In what way? What did they mean by that?

Susan Reynolds: So that those regulations and those strict rules around design, would sort of hamper technological process, and would actually hamper the ability to create better platforms for people’s well-being.

Cathy Curtis: Okay.

Susan Reynolds: But in the UK, they actually saw that it increased innovation, and the changes were having an impact. And so Google let’s say would have to change something, the way they designed it for the UK. But it would fold over into the other design aspects.

Susan Reynolds: And one of the big things is, social media let’s say is designed for a 12-year-old the same way it is designed for a 40-year-old. And so if we think about other products and other regulated laws in the U.S or in the world, that’s not the case. And so the call really was to change the way things were designed for children.

Cathy Curtis: Under the age of?

Susan Reynolds: Under the age of 18.

Cathy Curtis: Okay.

Susan Reynolds: It started with under the age of 13, and these bills are calling for under the age of 18 saying they’re still minors. And a lot of it is privacy, children’s privacy. And what they call the dark box of the algorithm, that there’s no transparency, the companies don’t say how these algorithms are working it.

Susan Reynolds: So the baroness diver came to the U.S herself and helped write a California bill, it’s called the California age appropriate design code. Based on the same issues of designing technology that a child would be likely to use. So likely to use, so even though a 12-year-old is not supposed to be using Instagram, because it’s 13 and up, they are. So how might we design these platforms to be safer.

Cathy Curtis: So let me ask, so in the UK, 12 years and under aren’t supposed to be using Instagram?

Susan Reynolds: That’s across the board, social media is 13 and up.

Cathy Curtis: Okay, that’s it.

Susan Reynolds: I mean, that’s the rule, it’s not followed. And it’s becoming increasingly younger and younger, I mean eight and nine-year-old are on Instagram and Snapchat, and they’re not designed for youth brains. So that’s a big piece of this.

Susan Reynolds: So the California age-appropriate design code has made it through the assembly, two committees in the assembly, the assembly floor, and it just passed through the senate judiciary, and is on its way to the senate appropriations, and then the floor. And this was the first time we as LookUp was asked for youth advocates.

Susan Reynolds: So in our third iteration of the work we’re doing with LookUp, we now have a question about advocacy solutions. And some of the student’s advocacy solutions are involved with storytelling and filmmaking and podcasting, to raise awareness and reach forward. But we actually had youth testify in committee, as well as write petitions and get their peers to sign petitions. And recently, so that’s one California bill.

Cathy Curtis: Is that called the kids online safety act or is that different?

Susan Reynolds: So that’s the senate bill, that’s the federal bill.

Cathy Curtis: Okay.

Susan Reynolds: There’s another California one called the social media platform duty to children act. I mean, we walked around calling them 2273 and 2408.

Cathy Curtis: I bet.

Susan Reynolds: But that one’s very different, that one allows parents to sue the companies for the addictive nature of social media.

Cathy Curtis: That is a very serious bill, isn’t it? Will that pass? I just can’t imagine that, but what are the chances.

Susan Reynolds: Well, they both made it all the way through senate judiciary, and now they’re going on to appropriations. I think they’re both going on to appropriations. But the interesting thing about these bills, not in the assembly floor, but in committee, they’ve passed unanimously. And they’re bipartisan bills as well, that’s really exciting.

Cathy Curtis: Authored by both republican and democrats initially, right? Yes.

Susan Reynolds: Absolutely, yes. So it’s not a polarized issue, it’s coming across both parties. The big opponent is the tech companies themselves, because they don’t want this. But from LookUp’s perspective, it’s a whole new arena for us that youth are really powerful.

Cathy Curtis: It must be so exciting, for you, your organization and everyone else involved in this.

Susan Reynolds: Yes, it is.

Cathy Curtis: It must be, because it’s kind of coming to a head in a way.

Susan Reynolds: We think it is, and the idea of California, is if California passes these bills, it just leads the way, not only for other states to pass it, but internationally. Because a lot of countries the European union, Australia, a lot of countries have bills pending. So all it’s going to take is a certain amount, and then the tech companies it’s just going to make sense to just do it across the board.

Cathy Curtis: Right. Going back to the California bill, describe it briefly the main points in that bill. If it passed, what would happen? What would change?

Susan Reynolds: So it would require tech companies to design social media differently.

Cathy Curtis: Okay.

Susan Reynolds: It would, to work on the algorithmic design and explain, to work on taking away some of the addictive nature. Not to save data of youth, not to provide, to keep adults who youth don’t know away from them. So it’s really thinking about the health and safety of children

Cathy Curtis: Okay. So taking an example of a young girl for example, that in this Instagram thing, where their self-esteem gets affected by what they see. Will anything in that bill help that situation? As for in the algorithms or what would happen then?

Susan Reynolds: Well, I think the first thing they would have to do is be transparent about how the algorithms work, and change what youth see. So more body positivity. But also, I mean there’s a whole sexuality piece and sextortion, and the ability for adult predators to contact youth. I can’t tell you how many, particularly young women say they have been propositioned or contacted by men seeking.

Cathy Curtis: If you don’t have a private Instagram account as a woman.

Susan Reynolds: It’s shifting those things and putting pressures on the companies.

Cathy Curtis: Okay, gosh and August 1 is the vote, is that correct?

Susan Reynolds: The appropriation, it might be next Tuesday, for the appropriations.

Cathy Curtis: Could be in August one, yes. Could be August on the articles, but that’s already passed.

Susan Reynolds: Yes. Up until appropriations Cosa, the kids online safety act, that’s the national bill with similar privacy laws. Again, from my perspective, the fun thing was there were 28 senators, so 28 states. What we’ve started to do is build a database of youth in California, trying to figure out what counties they’re in. So that was a piece of it. We as adults learned this whole legislative process, but youth are learning it too. And seeing that it matters and that they can actually make a difference.

Cathy Curtis: And when you say youth, these are your staff [Inaudible 00:37:21.06]

Susan Reynolds: So youth I would say is anywhere from 13 to 25. I think in some situations, an op-ed written by a 16- or 17-year-old is even more desirable. But a 24- or 25-year-old talking about their former self, and talking about the harms to them and mental health issues or other issues that have come up is very powerful.

Cathy Curtis: It is, I’ve watched several of them. I’m really intrigued by this your staff, your executive director is very young, right?

Susan Reynolds: She’s pretty young, she’s in her 30s.

Cathy Curtis: Okay, she looks younger than that, okay. But still, you have an extremely youthful stuff.

[41:38] Susan Reynolds describes some of the work her nonprofit LookUp.Live is involved with.

Susan Reynolds: Absolutely, and that’s really a real mission of ours. My executive director before was a friend, we’ll just say in the baby boomer generation. And what we really see look up is this infrastructure to empower, embolden, support financially and with mentorship their innovations, their advocacy, their campaigns for a healthy and safe digital world. I mean, that’s sort of the framework we really look at. And actually, all of their innovations are advocacy. A lot of, well, when the Netflix documentary the social dilemma came out, we were really lucky to have a contact and partner with them.

Susan Reynolds: So our first as we were mentioning our youth for youth summit, we’re coming up our on our third one in October, was partnered with the social dilemma. And so the social dilemma was one of the, was sort of the precursor to Francis Haugen. It revealed a lot of the harms in a documentary that just in a viral way went all over the world. And in our summit, we had the director, Jeff Orlowski, he was the keynote and he really spoke specifically to the youth, and really talked to them about how important they were to the movement, and how to be a change agent.

Susan Reynolds: So it’s been this constant life events happening that really coincided with what we were doing, and brought us in many ways to the next level, [Inaudible 00:40:02.09]

Cathy Curtis: You’re really focusing on that now.

Susan Reynolds: On the advocacy?

Cathy Curtis: Yes.

Susan Reynolds: I think in the beginning, we had a lot of students from an entrepreneurship standpoint create an app, a digital well-being app. We have moved, it’s very difficult to get a startup like that off the ground, and our programs are.

Cathy Curtis: Nobody would know about that have got off the ground, that were developed?

Susan Reynolds: By us, no. What ends up happening is, so we have had this amazing group of young women at Stanford, they created an app called ASMBL, they created it during the pandemic. It was to be a non-addictive platform for all types of social change agents. So they worked on it, got their MVP, their most viable product out.

Susan Reynolds: And just they were going to Stanford, they were competing tasks. And what ended up happening to two of these young women is they said we have to put ASMBL on the shelf, but they are advocates for the movement. And Chloe Schrager was able to go to class with Barrack Obama. So Barrack Obama came and spoke at Stanford and he really spoke about the digital movement in general, and Chloe was able to sit in a class with him, they chose 10 students.

Susan Reynolds: And so she is still a spokesperson for a safer and healthier digital world. So from an app perspective, I don’t think any have really gotten off the ground. And one of the problems with it as well is there are companies working on these digital well-being platforms, and they’re having a hard time as well, right? Just from again because you’re in that profit model.

Susan Reynolds: So an example of an innovation that’s continuing to grow is a young woman Maddie Freeman interviewed Jeff Orlowski, she made her own 15-minute documentary and tied it to a digital detox program called no-so November, so no social media in November, she’s in Colorado. She started this because she saw so many friends and peers die of suicide, so it’s a very mental health focus. But she has developed this campaign that she is promoting and schools are taking it on.

Susan Reynolds: And she learned very quickly that no so November doesn’t mean no social media November. You could take the whole month off from social media. But she gives tips for different ways to take a break from social media. So that’s an example of yes, it’s using a technical platform in the sense of she’s made a film that’s embedded in a website. So it’s a digital solution to spread the message, but it’s not a specific app.

Cathy Curtis: Right, yes. I can imagine developing an app will be tremendously hard.

Susan Reynolds: Well, and I think the other thing they’re finding is, particularly the students that started during the pandemic, that all of a sudden, these apps aren’t needed as much. Because they were developing them for a need that was occurring because we were living through a pandemic.

[47:29] The effect the pandemic has had on technology and social media habits.

Cathy Curtis: Now that the pandemic is waning a bit, what do you see trends changes happening? I’m sure kids were on social media more over the last few years, right? I mean, it didn’t spike in some tremendous amount, thirty percent usage or something?

Susan Reynolds: Yes, and so the problem is changing that habit, getting back in person, getting back outside. I do think one of the debates has been what do you do about schools? Like do you allow phones in schools, how do you do it? How do you regulate it? And I was just speaking with a school in Massachusetts, who it’s a K through nine school, five through nine, has some boarding students, and they’re actually instituting the yondr pouch, which is way y-o-n-d-r.

Susan Reynolds: Which is a pouch that you put your phone in and it locks it up during the day, and then it unlocks it when you leave school. And I was speaking to another middle school teacher, which is really interesting the way it circles back to teaching middle school. She said Susan that is so draconian, don’t you think that they should be learning to regulate it, and I said not in middle school, no. Because if nobody has their phone, no one has their phone, you’re not missing out on anything. One person has their phone and is checking social media, then the rest of them, you’re missing out.

Susan Reynolds: And I also think one of the reasons this is so powerful is when kids go to camp, they go to camp and there’s no phones, many camps say just absolutely no phones. I asked a group of seventh graders, and have any of you gone to camp without phones, a bunch of them raised their hand and tell me about it, oh so much better, so much less stressful. I had so much more fun with my friends, I had better relationships with my friends, and this is middle school and high school.

Cathy Curtis: Yes, so I believe that.

Susan Reynolds: I mean, we can’t live like that, so the trick of digital well-being so to speak is how do we create an environment enough, so that we don’t lose those in-person activities, right? The things that actually boost our mental health I mean.

[50:08] Susan Reynolds shares her vision for the next five years.

Cathy Curtis: Yes. And you don’t develop those addictive behaviors where you don’t even want to talk to your parents at night because you have to be on your phone, I’m sure that happens in a lot of families, very painful. So well, a lot of what you’re saying is very positive. What do you see, I mean as far as the work being done. What do you see, like what’s your vision for the next five years, and what could change and happen?

Susan Reynolds: Well, someone had said what’s your vision for LookUp? I mean it’s not very realistic, one of them is that they don’t need us anymore, right? I mean, I think it’s growing a movement, and allowing more youth, when I say youth, really we work with 18 to 25. High school is just more difficult, because under 18 requires different types of parental permission. And so we’re working, actually we are, youth catalyst is another nonprofit in Oakland, and seven of their youth from actually seven bay area high schools have an internship with us, and they are our marketing company. Are the marketing firm so to speak for the youth for youth summit, that this will be October 15.

Susan Reynolds: And the youth for youth summit is a great way for adults to see what youth are doing, because it’s all run by youth, moderated by youth, youth panels. And it’s really exciting to hear what they’re doing around advocacy, their solutions for mental health. And so one of the things that’s really new that we’re doing this year is we’re bringing in speakers, these amazing sort of awarded mental health advocates in high school and college, to have them discuss the mental health issue, introduce the concept of digital well-being in the digital age, to this group of youth, bringing in that perspective.

Susan Reynolds: Because mental health advocacy has been around longer than digital well-being advocacy, or just because. And so what can these youth learn? What can our youth who are just beginning this advocacy work, particularly when we think about legislation. What can they learn from the mental health advocates? So as we move forward, I keep coming back to my original concern, right? The mental health crisis among college students.

Susan Reynolds: The only reason I say college students and not middle school and high school students, is that’s a population that we can work with in providing solutions and innovations. And they are the biggest speakers for high school students.

Cathy Curtis: Okay.

Susan Reynolds: Sort of this trickle down the peer mentor, right? Just a couple years younger is easier to listen to than someone much older.

Cathy Curtis: Yes, that makes so much sense to me. So how do you define the mental health crisis with college students, talk about that just a little bit.

Susan Reynolds: So it was interesting. I was just listening earlier today to a webinar by Laurie Santos, Professor Laurie Santos who has the happiness lab, that some of you may have heard of, she’s out of Yale. I hadn’t heard statistics recently. But the concern is that, many colleges, I mean over 50 percent, I didn’t write down her current statistics, feel stressed and overwhelmed. Many feel depressed and anxious so much that they can’t get up and do their work.

Susan Reynolds: One in 10 college students has contemplated suicide. So there’s just a trend of having a really hard time in day-to-day life. And so Laurie’s came from college students from schools like Yale, but it’s not specific to high-powered universities, it’s pretty much across the board. So this sort of lack of hope, and I do find in working with students who are working on a problem, they are more hopeful. But all of the self-care processes of exercise, right? Spending time face to face with friends without devices, spending time in nature, right? All of these things that we know we’re good for us, they’re really good for us.

Susan Reynolds: And so youth and adults who spend time on technology, we sort of like we still have this human body. We still have the ancient brain, we still need people. We still need our tribe, we still need our in-person community. And keeping that alive for the next generations and providing that is just so important to being a human being. Because interestingly enough, our brains have not really changed. We still live in, with the sympathetic nervous system and a parasympathetic nervous system, and our sympathetic nervous system goes into fight, flight or freeze. Technology creates fight, flight or freeze.

Cathy Curtis: Well, what you just said was so beautiful. I think that’s a good time to end our podcast, that statement about how to live life with friends, nature, giving attention to things that make you feel good is so important.

Susan Reynolds: Yes, it’s so important. And so people who say what do I do first? I said well, I just call it the three S’s. Can you study without your phone? Can you sleep without your phone? And can you socialize without your phone and try one. Like the sleeping without your phone just changes everything, especially for kids.

[57:30] How people can get in touch with Susan Reynolds and become more involved with the digital wellness movement.

Cathy Curtis: Yes, that’s good. The three S’s. I like that, perfect. Share with the audience, well, how can we as adults help your advocacy in this movement for digital wellness.

Susan Reynolds: Well, I mean, right here with this group, I mean mentorship for, because each team that gets a grant from us, we provide them with a mentor. And it’s interesting, one of our mentors is a life coach, and it’s been really helpful for her to help them prioritize, they are working on an advocacy campaign, and organizing youth that are interested in working with them. Different types of financial support, project management support. So mentorship is just a one-on-one.

Cathy Curtis: Okay. So tell us how that would work, what would someone need to do to become a mentor?

Susan Reynolds: So they would just reach out to me, Susan@LookUp.Live. I mean, we have a newsletter. Our website is LookUp.Live, which was interesting when you’re getting a website, I mean LookUp is the white pages and the yellow pages, right? So it was hard to get a URL for that. But it really sort of is Look Up and live your life. I mean, it’s the first step of looking up from your phone or your device, or your technology.

Cathy Curtis: Okay, excellent.

Susan Reynolds: And I think the other, we have been really lucky in getting grants from some family foundations.

Cathy Curtis: When you say lucky, I bet it’s not all luck. I bet it’s not all luck, I’m sure you write a really good proposal with really good reasons why you should have grant money.

Susan Reynolds: Well, I mean, we got a grant for advocacy and it just coincided beautifully that we could articulate a real need for it, because of these bills in California. But introductions in knowing organizations that give out grants for youth mental health. The digital piece is new, but it coincides so beautifully with any organizations that support youth, underserved youth just example of providing internships for high school students in the bay area from under-resourced schools.

Cathy Curtis: Right. And then the summit, talk about how you can attend the summit.

Susan Reynolds: So I believe the registration link is live on our website, it’s the Y for Y summit, and it is on October 15th. And it’s a great event that you can come to for one panel or you can hang out all day.

Cathy Curtis: Okay. Do you ever think you’ll go back to live, have you talked about that?

Susan Reynolds: The summit, probably not. But we did have an event in June where we brought five of our leaders together in the bay area, to meet other advocates. And then they spent the day lobbying in Sacramento together, meeting with different senators. So face-to-face is the best, I mean it’s absolutely the best. And so working on more local regional meetups.

Susan Reynolds: It’s amazing though when you bring youth together virtually, and it doesn’t cost any money. I mean, probably across the board for companies finding the profit margin, right? I mean, a virtual versus in person, because if you think about it, we flew five youth to the bay area. We had two others who lived here, but flew them to the bay area and housed them, and so really figuring out how to create more in-person events and locally.

Cathy Curtis: You mentioned BlackRock, were they going to sponsor?

Susan Reynolds: They were going to sponsor our collaborative summit. Yes, you’re right, that’s another example that we, I gave a talk to the women of BlackRock organization, and her name is Diana Angelini.

Susan Reynolds: She invited women from other companies, and I spoke in, they have a, BlackRock in San Francisco and maybe in New York too has as a floor that is like a WeWork. And so it was a perfect collaborative space to bring youth together with mentors, and have them share their ideas. So that’s another great, right? Providing a meeting space.

Cathy Curtis: Yes, I know that space in San Francisco, that’s a great space. Good for them for sponsoring.

Susan Reynolds: I know, unfortunately, the date was April 2020.

Cathy Curtis: Oh dear, well, maybe next year, right?

Susan Reynolds: Absolutely.

Cathy Curtis: We don’t know, we still don’t know when this thing’s going to stop.

Susan Reynolds: Exactly.

Cathy Curtis: It really would be nice to have a live event, considering what you do.

Susan Reynolds: Very much so.

Cathy Curtis: Well Susan, thank you so much. Fascinating topic, and thank you for what you’re doing. I know my listeners are going to just enjoy this so much, and hopefully, sign up for the summit or somehow otherwise get involved.

Susan Reynolds: Yes. And if you have a 16- to 25-year-old that’s really fascinated with this topic, we would love for them to join. I mean, and our grant applications will be up soon and so there’s a lot of ways to get involved.

Cathy Curtis: Okay. Now what does that mean to join for our youth?

Susan Reynolds: So coming to the youth for youth summit, definitely. And we will be opening the 2023 applications to come up with solutions, we’ll be opening that up in September.

Cathy Curtis: Okay, good to know.

Susan Reynolds: And we are also building an advocacy branch that’ll be on the website probably in the next month, to create a database of youth who say I want to participate in the advocacy, I’ll write a letter to my senator, I’ll sign a petition. I want to do a little thing, maybe not a big thing, to be part of that.

Susan Reynolds: And the other thing we’re adding is community service hours for high school students, any work done with Look Up. So there’s another avenue as well.

Cathy Curtis: Perfect. By the way, I was on your website and there was a pop-up to contact your senator, you could fill out a form to contact your senator about this coming up bill in California. So that’s another way.

Susan Reynolds: Yes, that’s another way, absolutely.

Cathy Curtis: Yes, okay great. All right Susan, I could talk to you all day about this, we had a lot of things, but hopefully we got the message across odd and clear about what you do, and frame the problem and hopefully solutions will come.

Susan Reynolds: Absolutely.

Cathy Curtis: Yes. Okay, have a good.

Susan Reynolds: Okay, you too.

Cathy Curtis: All right, bye.

Susan Reynolds: Bye.

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S4E4 Transcript: How to Thrive in the Digital World with Susan Reynolds Read More »

S4E3 Transcript: Simple Strategies for Improving Your Grief Literacy with Kathi Balasek

In this episode, Cathy interviews Kathi Balasek, an empathy and grief communications coach.

Cathy Curtis: Hi Kathi, welcome to Financial Finesse. I’m really happy you could do this podcast with me.

Kathi Balasek: Well, hello Cathy. It’s a privilege to be here. I’m honored that you asked.

Cathy Curtis: Great. I thought we’d start by you telling us your story about widowhood, just to get started.

Kathi Balasek: Absolutely. So my life, I had it all, once upon a time. A wonderful husband, beautiful children, a career and until I didn’t. And in my 30s, I became a widow faced with raising five children on my own. My husband died of a long battle of brain cancer. And so, I basically went from soccer mom, to caregiver, to widow and really facing a whole lot of years ahead of me.

Cathy Curtis: So let me step back, so you were married very young?

Kathi Balasek: I was married, and three of my children were my step children.

Cathy Curtis: Okay.

Kathi Balasek: From my late husband. And the icing on the cake is that after he died, I was so afraid that I was going to lose those children, and I actually gained those children. So I raised five kids. I’m happy to know that they all graduated from college. Now I’m an empty nester.

Cathy Curtis: Congratulations.

Kathi Balasek: Life is good, but it wasn’t always good.

Cathy Curtis: Gosh, first off, so sorry that happened to you, that sounds absolutely devastating. But obviously, you’ve thrived.

Kathi Balasek: I did, because I did the work. I think anybody listening to your podcast who’s gone through grief, number one you have to do the work. You have to get into group support, grief support, counseling whatever you can do and whatever you can afford, because that process was one, two or three years.

Cathy Curtis: Did you know that you needed that back then? I mean, you were young. So did you right away join a group?

Kathi Balasek: No. Right away, I probably spent a year just getting my kids off to school and going back and going to bed, and then setting an alarm to go pick them up. That first year is just really difficult to even face, and the reality and things still need to get done, so it’s exhausting.

Kathi Balasek: But there came a point, I had a wonderful support system, I have just the rock star parents that gave me some tough love. And they said he’s not coming back, and you have to show up for these five kids. And we will help you, but you got to get some help, you’ve got to get counseling and it was what I needed to hear.

Kathi Balasek: Because when you’re grieving, the memories, you kind of wear this little grief cloak around and it’s comfortable. And the memories are comfortable, and the pictures are comfortable, and then pretty soon, it’s not comfortable, it’s debilitating. And so there comes a time where I had to face that the grief, it was okay to move forward, I wasn’t losing the relationship with my husband, that will never end. I just had to release the pain.

Cathy Curtis: Yes. And I’m sure having those children, maybe forced you a little bit more to face reality. Because you can’t be grieving, prolonged grieving around young children either?

Kathi Balasek: No, and they’re not your grief buddy. They’re dealing with their own grief. And we did a ton of counseling with my children, because they were all different ages.

Kathi Balasek: And I’m telling you, grief psychologists and counselors, especially ones who work with children, they know what they’re doing. And the one thing that I always remember from them, and I still think about now, is children will only ask what they’re ready to hear. And so, so many adults say I bet you miss your dad or I bet you do this, that’s not helpful.

Cathy Curtis: Yes. You’re talking grief language now.

Kathi Balasek: Yes.

Cathy Curtis: Which is so difficult for people.

Kathi Balasek: It’s very difficult.

Cathy Curtis: Do you miss your dad? Yes, that would be.

Kathi Balasek: Yes, like no kidding, thanks Einstein for the question.

[08:16] What people don’t always know about grieving families, and how they can talk about death better—especially with children.

Cathy Curtis: Yes. What would be the appropriate question to ask a child in that case?

Kathi Balasek: What’s really important for people to know in grieving families is to keep their dad’s name alive, talk about I loved your dad. I remember a story about your dad, I remember when you were born. Because it’s been 15 years since my husband passed away, and my adult children still love to hear people tell them about their father, and tell a memory and that never goes away. We learn to walk alongside grief, it never goes away.

Cathy Curtis: Yes. So really, what you’re saying is don’t ask questions?

Kathi Balasek: Well, don’t ask questions unless you know what to ask. I mean, you’re not allowed to ask my child an emotional question about the death of their father.

Cathy Curtis: But people don’t know that, so that’s where okay, so this is where what you do comes in. You’re a grief communications specialist or what other term would you call?

[09:36] Kathi Balasek describes her work as a grief communications coach.

Kathi Balasek: You could call it coach, consultant. I work with companies and professionals, specifically in the financial realm, who really help widows and I help them learn to communicate correctly with grieving people, what to say, what not to say. How to prepare your practice up front, before the catastrophe happens.

Kathi Balasek: All of those things, I work with companies because grief literacy is normalizing conversations surrounding grief and loss, because we live in this death denying culture where we don’t want to talk about it. We don’t want to ignore it. It makes people uncomfortable, because we don’t want to put ourselves in my shoes, because that’s somewhere that nobody ever would want to go.

Cathy Curtis: Yes. So they’re so much a part of life, it so strange that our culture has that aversion to facing up to it, it’s facing up that it’s part of life.

Kathi Balasek: Yes. I mean, I don’t remember the exact quote that Margaret Mead said something about when somebody is born, it’s like this elation. When they’re married, it’s jubilation, when they die, we ignore it. And it’s true. It’s what happens. And when somebody’s grieving, it can be very isolating, okay.

Kathi Balasek: Because their whole life changed, especially if it’s the surviving spouse, their whole life changed, their income changed, housing decisions, all of those things. Social, their routine changes, all of these secondary losses. And what happens is that becomes very isolating. And so when people don’t acknowledge someone’s pain, grief or loss, it’s even more isolating.

Cathy Curtis: Yes, and that’s where joining the groups, finding groups that are of people going through the same thing, it’s valuable, because then you won’t feel as isolated.

Kathi Balasek: Right. And being in groups, that’s like side-by-side understanding. But where grief literacy is, the overall population learning where to connect with the griever, and that’s in the language of knowing what to say.

Cathy Curtis: Is grief literacy your term?

Kathi Balasek: No, it came from Kenneth Daca, who is a famous researcher writer on grief.

[12:37] What is grief literacy?

Cathy Curtis: Tell us a little bit more about grief literacy, explain the premise and some of the terminology.

Kathi Balasek: Okay. So grief literacy, it’s. How I help professionals with grief literacy, is I kind of give them like a grief 101 course. When you don’t acknowledge people’s pain, that’s disenfranchised grief. It wasn’t acknowledged by you, by your company, in our conversations, it was just dismissed.

Kathi Balasek: We also talk about anticipatory grief. So many financial advisors that I work with have clients that are experiencing a health diagnosis, putting somebody in long-term care, being the caregiver. Well, even though the death hasn’t happened, they’re experiencing grief, and it’s called anticipatory grief.

Kathi Balasek: So a lot of things we go over is just learning about what types of grief your clients may be experiencing, and what you can do to help them.

Cathy Curtis: So valuable. I’m a financial advisor, and I work with individuals primarily. And I have many clients that have gone through these various grief stages either through death, or like you said, severe illness of a spouse, going into long-term care and it is very hard, it’s a very hard time for them.

Cathy Curtis: And I think that I’m very empathetic and I have great communication skills and all that, but this is a specialized area, it really is. So I welcome that I found you, that you offer this kind of training.

Kathi Balasek: Well, I think it’s very specific, and I think it’s very needed. And as career professionals, you’ve been doing this forever, I’ve been a teacher and educator forever. We start to see the gaps, and we start to see the needs, and when over 70% of widows leave the financial advisor within the first year, and the number one trait that widows want is communication skills, our communication skills.

Kathi Balasek: So you start to see okay, how can we help advisors become grief literate? So that they can retain clients, attract new ones, build a reputation of that great bedside manner so to speak with people, and really get prepared for what we know is coming.

Cathy Curtis: I have to say, I’ve heard that stat many times. That 70% of widows leave their advisor. And I have to say, I think it starts way before. The communication starts way before the death of a spouse, where they need to be more inclusive of the spouse in the conversation, so that they don’t want to leave after the death, right?

[16:00] Kathi Balasek explains why it’s so important for women to take an active role in their financial lives, even if their partner takes the lead.

Kathi Balasek: Absolutely. I was in that type of marriage where I didn’t really show up to the meetings with the financial advisor. I was in that, a traditional sense where I completely trusted my husband to do that. It wasn’t really what I wanted to do, so I didn’t. And then, once he died, I felt such guilt that I hadn’t taken a role. I was ashamed that I didn’t understand financial terms, which made it really difficult to show up to my advisor.

Cathy Curtis: This is not an untypical situation.

Kathi Balasek: No. Especially in the like boomer age women, that had this traditional approach, and there’s so many things that advisors can do to start having these conversations up front. Several ways to invite both parties to the party, basically. Both parties to the meetings, the events, there really should be equal representation.

Cathy Curtis: Yes. And this isn’t just for heterosexual couples, any couples, both parties.

Kathi Balasek: No, any couple.

Cathy Curtis: It is so important that they participate in the finances, and know where the money is. I can see where one person may be stronger financially than the other, maybe takes on a little bit more of a role.

Cathy Curtis: But I don’t think that’s an excuse for the other person to completely ignore everything. And I mean, that’s good while you’re living, but it can be completely devastating if you’re not prepared when one person dies. There is no doubt about it.

Kathi Balasek: Exactly. And I get a lot of questions from advisors like how do I make that happen? I’ve invited them to the meeting. Well, you have to continue inviting in a variety of different ways. Maybe it’s a phone call, maybe it’s talking to the one client one-on-one that I really want the other partner here. Maybe it’s an email, maybe it’s a women’s event. It’s not a one and done hey, I took the shot, I missed, didn’t happen.

Kathi Balasek: You have to really look at how women relate, and they’re very rapport driven, very conversational and they’re not driven by numbers, goals, data. They’re driven by how can my long-term planning affect my life and my experiences and what I want to do with this money.

Kathi Balasek: And so, it’s a different conversation, and you have to really develop those conversational topics with women, because the reality is, and the statistics say eighty percent of men die married. So the longest advisor, relationship you’re going to have is going to be with a woman and most likely they’ll be a widow.

[19:15] The current state of widowhood in the United States.

Cathy Curtis: Interesting. So give us the statistics on widowhood right now in America.

Kathi Balasek: So over a million widows per year in America, and the average age is 59.

Cathy Curtis: That’s unbelievable.

Kathi Balasek: So you’re really looking at a lot of years ahead. So you think if their average is 59, they’re probably still working, they probably have children in the home. So we have to modernize the face of widowhood, it’s not our grandmother who’s 95 knitting in a rocking chair.

Kathi Balasek: So the sooner professionals can start really thinking about this is a way I can help, but this is a huge opportunity. Huge opportunity because of this huge wealth transfer that’s coming, and widows are going to be first in mind, for that intergenerational wealth transfer, and they’re going to be dual inheritors.

Kathi Balasek: They inherited from a parent and then they’re also inheriting from a spouse. And people are like oh, that’s kind of like the Fox in the hen house, no, it isn’t. It’s being honest, looking at the numbers and you’re in the best opportunity as an advisor to champion widows.

Cathy Curtis: I agree, you can be of huge help to a woman that is, knows that they need help and does have a financial advisor. Not all people have financial advisors, not all widows do. So I mean, do you ever counsel women individually or do you do more of the professional training?

Kathi Balasek: I do two things. I work with financial or insurance professionals, somewhere in that realm and I do group trainings of both men and women. Like these are the financial advisors, I’m going to teach you how to be grief literate. And I also train with webinars and companies where we train your team.

Cathy Curtis: Okay.

Kathi Balasek: So I love opportunities where I can work one-on-one. I currently have a group course going with eight students, because I like the small group, and they’re independent financial advisors and they’re just killing it. They’re getting more clients; they’re becoming known for working with bereaved clients and they’re just building a confidence and competence of knowing what to say.

Cathy Curtis: So let us know about one of your lessons. So you’re training an advisor to become more grief literate, or maybe to prepare their women clients for the possibility that could happen, right?

Kathi Balasek: Okay.

[22:33] Kathi Balasek shares an example of how she’d train a financial advisor to prepare their women clients for widowhood.

Cathy Curtis: So give us an example of what you would tell a financial advisor to do to prepare their women clients.

Kathi Balasek: Okay, excellent. So I think I believe in preparation in everything, okay. That’s the controllable piece, right? So one thing I work with a lot with advisors of really getting a system and organizational process for all of the tasks and paperwork that you know your client is going to need to do that first year, okay. That can be set up.

Kathi Balasek: What’s in the first column, what’s in the later, what’s in the middle. And having those processes all set up, what does the surviving spouse do? And their family, which tasks do they do? Which ones need a professional help?

Kathi Balasek: And so it’s a checks and balance so we have that set up. I have them set up protocols for exactly what you would say on the phone, because you’re going to be the one of the first calls, right? So what do you say if they don’t answer the phone? What do you leave on the message? Do you go to the service? Do you not go?

Cathy Curtis: Interesting. What do you say to that? What is your advice?

Kathi Balasek: Go. So if they were your client, you go. And you can find out through either an obituary or a funeral or service home, if it’s a certain specific religion, or if they’re only taking friends and family. You can do some homework to figure out if they don’t want you there.

Kathi Balasek: But much if they were your client, you’ve reached out to them, they’ve reached out to you, go, and know exactly what to say. You say three things, you mentioned the person’s name, I’m so sorry for your loss, I loved and appreciated your husband, James. He was such a light when we would come to our meetings, and I remember a story of and then you’re just going on.

Kathi Balasek: Nothing to do with finances, right? But you you’re preparing that. Because this is very awkward, it’s like Bambi standing up for the first time, a baby deer, it’s awkward. So we have to practice and script it. So a lot of my work is practicing, scripting what you would say so it sounds authentic.

Cathy Curtis: And you know there’s nothing wrong with scripting. If it’s helpful to the client and the person, I believe in that too, I really do.

Kathi Balasek: It’s fundamental to communication, like any fundamental. I mean, Steph Curry who’s one of the best basketball players as you know because we’re in the Bay Area, he still works on fundamentals, he’s no different.

Cathy Curtis: How many free throws does he do a day.

Kathi Balasek: Exactly. So if you want to sound authentic, you have to write it in words that you would say. You have to practice it in the mirror, or try it with the family member, and really watch about your eye contact, your body language, because when you meet with a bereaved client, they’re going to remember 10% of what you say, 90% of how you made them feel.

Kathi Balasek: And when you can show up authentically, and you’re saying the right things, and you’re listening to learn not listening to solve, you’re going to get that safe space created initially with your client, and that’s really what you want.

Cathy Curtis: That’s a beautiful thing, so well said.

Kathi Balasek: Thank you. Trying to think other things, we set up some protocols for the first office visit, that’s another thing you can prepare up front, is not all people want to come to your office, okay. Give them some choices.

Kathi Balasek: We could meet at your home, we could meet at a neutral space, all of those things. Set up a protocol of this is what you could expect, send them out an email of really how that first meeting will look, you follow it up with an email of the next steps.

Cathy Curtis: Because that’s going to be the first meeting you have alone, right? With this person?

Kathi Balasek: Yes.

Cathy Curtis: Who may or may not know the details of the family finances?

Kathi Balasek: Absolutely. So it’s important to build trust, to build a safe space. Simple things that we don’t think about, when I’m meeting somebody for the first time, just eye contact and me writing notes builds trust. It’s the little things that ounce by ounce by ounce pretty soon you have a client that trusts you.

Cathy Curtis: What do you think the advent of Zoom meetings is doing to this process? Do you still think you can convey your feelings and thoughts and emotions across the screen to a grieving person?

Kathi Balasek: I think, number one, if it’s the mode of communication that your client desires, then that’s where you start. And ideally, I mean, I don’t love Zoom, I’m a college professor, I like to be with students out and I’m animated. However, I have to go where my clients need me. And so, I think that message needs to be first. The mode of communication is based on what your client needs.

Cathy Curtis: Right. Well, and also a lot of advisors now have clients all over the place, because of the pandemic, and people seem, it’s easier for clients to hire advisors anywhere.

Cathy Curtis: So they find an advisor that specializes in what they want, they hire them, it could be across the country. So you’ll have to communicate in that way. So I guess it’s learning the skills to work with the bereaving person over an electronic media.

Kathi Balasek: Well, and to be real Cathy, is like you and I just met.

Cathy Curtis: Yes.

Kathi Balasek: And yet, we spent four or five minutes getting to know one another, we already found connections, similarities, shared purposes. We care about what each other are doing, and that was done on Zoom.

Cathy Curtis: Yes, women are really good at this, what you just described though.

[29:54] The differences in how women and men communicate and why they matter for grief literacy.

Kathi Balasek: Right. Men communicate differently. There are different communication styles. One is not better or the other. I mean, I think it as the Ying and the Yang, we need both, okay. And communication styles, women are more conversational, they add more personal information, they’re very rapport relationship driven.

Kathi Balasek: Where men are very report driven, data, facts, processes, goals, vary in order. And this is not all men or women, but this is general communication style. So it’s really recognizing in an advisor scenario where your client resonates, and really talking to them in their language.

Kathi Balasek: Because I think back of your question about grief literacy, and grief is like a universal experience, but it’s not a universal language, it’s a foreign language to many of us. And so when we say things that divide, like we try to justify somebody’s death or we say oh, at least they lived a long life, or it’s it was God’s plan or all of these things that just.

Cathy Curtis: What about the, I’m so sorry for your loss.

Kathi Balasek: Okay, that’s been done, right? I mean, if you are going to be, I’m just going to put it in terms that makes sense to me. It’s I don’t take offense to what people say, people don’t know any better yet, because they haven’t met me yet.

Kathi Balasek: My charge is I’m going to make everybody grief literate. When they say I’m sorry for your loss, that is not going to encourage a conversation, and what we want is we want to say things that build connection, and further the conversation.

Kathi Balasek: And so, saying I’m sorry, that’s a sentence starter, okay. It’s not an envy, I’m sorry for your loss, it’s been said. And if you want to stand out from the crowd in your life and in your industry, you got to do more.

[32:36] Alternative phrases to “I’m sorry for your loss.”

Cathy Curtis: Tell us an alternative phrase or phrases.

Kathi Balasek: Okay. Saying things like I was sorry to hear about your mother’s death. I didn’t know her well, but I can imagine knowing you, that you had a lot of qualities that she possessed. What’s one thing that you really loved about your mother? You see I’m pulling you in, I’m showing that I care. I’m acknowledging that I didn’t know your mother. Or you say something like if you want to start, I’m sorry for your loss, because that’s a sentence starter.

Kathi Balasek: I’m so sorry for your loss. I read about your husband’s passing, and I knew him on a couple occasions. And what I really appreciated about John, was that he always put what I wanted to say first. He always made the conversation about me, even though I was there for him, and that selflessness I will never forget. You see how I am actually saying their name, I’m acknowledging the person’s loss, and I’m telling a memory. What will be remembered, that is what is supportive and it’s soothing.

Cathy Curtis: Yes. Just taking it out of the realm of the client advisor thing for a minute, even people use social media now to announce the death of somebody, Facebook, for example. And you’ll see all the responses, and a lot of them are I’m so sorry for your loss.

[34:22] How to respond when you learn about someone’s death indirectly, like through a Facebook post.

Cathy Curtis: What would be a better way to respond when somebody, because obviously they’re posting it on social media, so they want people to know and they know people are going to respond in some way, right? What would be a better way to respond in that instance?

Kathi Balasek: So when somebody dies, not everybody knows. I mean 20, 30 years ago if you didn’t read it in the obituary, you didn’t know. But now somebody dies, and that evening it’s on Facebook. So when you see something on social media, you have some options.

Kathi Balasek: The best option is if you knew that person, write them a card. Call them, private message them, okay. Grief and sending these condolence messages out in the world, it’s not a true representation of truly how you feel. So why don’t you take that opportunity of I just read that information I have this news, how about I make a phone call? How about I write a letter? How would I drop something off?

Kathi Balasek: How would I send something? It comes back to we have the information; the receiver wants to know that you actually spent some time really thinking about their loss and really doing something that was meaningful.

Kathi Balasek: We think we can just go to the sympathy card aisle, grab a card, sign our name. Well, it’s so much richer if you write from a blank note card, and you write three heartfelt sentences, sign your name. I have a whole box of my cards that I got, the ones I re-read were the personal messages.

Cathy Curtis: I so agree with you. I’ve had death in my family, and I saved the cards that someone wrote something that really touched me, and they really do help.

Kathi Balasek: They help. I mean, as fundamental as that sounds, that’s something I teach my students in my class. My advisors they don’t know what to write or if a client lost a child, or if a client got a cancer diagnosis, they don’t know what to write.

Kathi Balasek: That’s the piece of my curriculum. It’s the simple fundamental human processes that are missing that is leaving this gap in between a griever and somebody who truly wants to help them but doesn’t know how.

Cathy Curtis: Right. And it’s not, I mean, it’s not to say sending a card that already has a grief message in it is okay, but you’re losing such an opportunity to make somebody feel better and really let them know that you care.

Kathi Balasek: Yes.

Cathy Curtis: The time to do that in a deeper way, and your message is loud and clear, and I so agree with you.

Kathi Balasek: Well, when you think about it, when advisors are working with really this family’s whole life savings, can’t you spend about 15 minutes to write a heartfelt card? Because a sympathy card, nothing really nails it, okay. Nothing really does.

Cathy Curtis: It’s because we don’t know what to say, we don’t know what to say. So the sympathy card makes it easy to check that box off. But it’s uncomfortable, because we’re uncomfortable with death, it’s true.

Kathi Balasek: And completely normal, right? That is completely normal to feel awkward, uncomfortable, don’t know what to say.

Cathy Curtis: Even procrastinate on sending something. Beyond the point that you’re embarrassed to even send it.

Kathi Balasek: Yes. And so our hearts are wired for compassion, but our head gets in the way and we’re like oh, I shouldn’t say this or I shouldn’t do that or that might be helpful then pretty soon we talked ourselves out of it.

Cathy Curtis: Exactly.

Kathi Balasek: If you think they need something, like I bet they would love a case of beer. I bet they would love some juice boxes, because they have kids, just go buy it and drop it off at their house.

Cathy Curtis: I just had a client who lost his wife, and I know the casserole thing, but people need food, they don’t want to cook for themselves after somebody dies.

Kathi Balasek: No. It is kind of a running joke in our household, but it’s so helpful and practical. And I can remember one of my teenagers, this was way after John died and somebody else had had a death in the neighborhood. And my teenager said yes, wait till the casserole starts showing up, it’s true.

Cathy Curtis: Do people still do that?

Kathi Balasek: Yes.

Cathy Curtis: Okay.

Kathi Balasek: There’s a ton of like apps and websites where you can do meal trade, and you can plan on who’s giving what and all of that.

Cathy Curtis: Okay.

[40:24] Why food and practical gifts are better than flowers when someone dies.

Kathi Balasek: Food is very helpful, it’s comforting. It’s a gift card to order out, stamps and blank note cards, just practical things that people don’t think about. I recently pulled a group of widows, and I’m in several widows group, but I’m also on the advisory board for modern widow’s club. And the number one thing that widows did not want were flowers, what did we all send them?

Cathy Curtis: Flowers.

Kathi Balasek: Not only did I just see my husband die, but now you said your flowers, they’re going to die, now I got to throw them away.

Cathy Curtis: Yes. And you have to take care of flowers.

Kathi Balasek: Exactly.

Cathy Curtis: At a time when you probably don’t want to take care of anything else but yourself. You have to change the water and make sure it’s not stinky, and all that stuff you have to do with flowers.

Kathi Balasek: I think people they genuinely mean well. There are so many caring individuals, there are so many people that do things in the death and grief area that they know what they’re talking about. And I’ve learned so much from people I’ve met, research I’ve done, that that’s truly supportive to a family. And it’s basic things that you don’t really think about.

Kathi Balasek: As an advisor, you should be the best resource on the planet for your bereaved client. Who am I going to call if I have a broken pipe in the middle of the night? When you are solo suddenly, alone, female, you don’t want a stranger coming to your house.

Cathy Curtis: Yes. Your door all of a sudden won’t open, which just happened to me this morning. My husband’s away.

Kathi Balasek: Exactly. I didn’t know how to buy a car, okay. I want to come to my advisor and say who could you send me to. Who could I give your name to that would not take me at the car place?

Cathy Curtis: No. I know with my own experience that being a resource, having vetted resources for your client, as vetted as you can, is so important to clients in so many areas of their life and not just financial.

[43:07] Kathi Balasek shares her tips when it comes to recommending other professionals to their widowed clients.

Kathi Balasek: It is. So that’s a piece of my program that we really work on is that curated list, of vetted professionals that you could recommend to your bereaved clients, because it’s an overlooked thing but it’s something you could do right now in the preparation phase.

Cathy Curtis: Yes. And carry that through to all other aspects of your financial planning too, vetting professionals for your clients, but particularly in this area it would be so welcome and needed.

Kathi Balasek: Yes. I think of caregiving, okay. So how many people come to you and they need caregivers, or they need advice or professional. This is an opportunity for you to find the best caregiving professionals in your community.

Cathy Curtis: Best practices in vetting professionals?

Kathi Balasek: For me, I don’t have that a piece of my program. But my recommendation is whoever you recommend, you should have called or known first.

Kathi Balasek: And so that when you say to your client, I would like you to use my name when you call, because I know this person, and I’m referring you to this person that I trust. That’s the biggest recommendation. I mean, I have people I know, but I have people I wouldn’t recommend. And we know people in our community and we know who would be a better fit for somebody else.

Cathy Curtis: Right. What I do typically is if I don’t know the professional personally, or they haven’t worked with the client, I will refer them, because usually they’re referred to me by somebody I trust, and I’ll make sure my client knows that. I have not worked with this person before, but they were referred to me by somebody I really trust, and let them know, so they’re aware that I don’t specifically know their work.

Kathi Balasek: Right. I just think honesty, and I think women are very much a word-of-mouth type of community. I’m reminded when my kids were young, I didn’t have to go see which teachers I wanted for my children or which hairdresser to go to, I just asked around and it gets around, okay.

Kathi Balasek: If you want to go to this restaurant, this is what they’re known for, this teacher is what they’re known for and it gets around. I didn’t have to go google it or research it, we talk. And when you are an advisor, if you can get dialed in to your community of who’s the best, I mean, why wouldn’t you recommend that.

[46:05] The biggest mistake Kathi sees her clients make and the one thing she wishes people understood about grief.

Cathy Curtis: Yes, exactly. So it sounds like you’ve worked with quite a few financial professionals, what would you say is the biggest mistake that they make with a grieving client?

Kathi Balasek: I think the biggest mistake they make is they don’t invest the personal side up front. They think about all the things that have to be done, and the financial things that have to be done. And those first couple meetings really need to be just about building a safe space, listening to your client, learning about your client, helping them get organized.

Kathi Balasek: And I think they rush in with too many like we’ve got to get this done, we’ve got to get that done, what do you think about, what will you do next year. It’s like widowhood is like a thousand-piece puzzle, putting back the pieces where you don’t even know the picture on the box, okay. You can’t even picture that, okay.

Kathi Balasek: And going in with too much information, financial information up front, because grief fog is that cognitive impairment that grievers feel and it can show up in forgetfulness, confusion, overwhelm so they’re not going to remember it anyway.

Kathi Balasek: And so really invest in the trust, the communication, knowing the players. Who’s at home taking care of all of these things? Who in the family is communicating with what? And really helping them so that nothing falls through the cracks.

Cathy Curtis: Kathi, what would you say is the one thing that you wish more financial professionals or even people in general understood about grief?

Kathi Balasek: That’s a tough question, but I love that you asked it. I think the number one thing that every human needs to understand is that grief has no timeline. It’s not linear, and in all these stages, it is all over. And one person’s grief, some of the signs and symptoms might be several years, some might be shorter.

Kathi Balasek: And I think as people, we tend to go into a little bit of disillusioned expectation like hey it’s been three years, aren’t you over it yet? And it really tends to disenfranchise somebody’s grief and work, and grief never leaves us. It’s not a hurdle we get over. It was the end of a life, not an end of a relationship and grievers learn to walk alongside.

Cathy Curtis: That’s a good perspective, thank you for that. So I’m sure listeners would, I mean you have so much knowledge in this area, it’s obvious. And you’ve done a lot of research, and I’m sure you’ve got some resources that widows or advisors of widows could use. Do you mind sharing a few?

Kathi Balasek: I would love to. So again, there’s just so many people doing great things out there, it’s unbelievable. I feel privileged to be a part of the puzzle. And so number one, if you have widow clients, the best resource you can give them is send them to modern widows club.

Kathi Balasek: It is an international, non-profit, I’m actually on the advisory board, which that was a whole honor. And it’s the only widow group that is actually doing research on this demographic. And so they have research supported evidence of what helps widows move forward, helps them thrive, and they have community outreach groups all across the world, and so that you can get connected with other widows.

Kathi Balasek: You get all different types for financial, emotional, social all these things that will help you move forward as a widow. So it’s awesome, I highly recommend that. And the person who created it, Carolyn Moore is a widow herself and she and I actually shared a stage speaking at a financial advisory convention, and she’s just remarkable what she’s done.

Cathy Curtis: Thank you for that. You yourself have a resource I believe?

Kathi Balasek: Yes, I have a couple. Like if you’re a financial advisor too is anything by Cathy Sikorski on caregiving, and she talks a lot about how to talk about these difficult conversations, she’s great. Grief literacy, Megan DeVine, it’s okay that you’re not okay. These are excellent books.

Kathi Balasek: And I believe that if you get to know me and work with me, I’m going to help you grow your business. I have programs, I have coaching programs, I have an online course. I can do a webinar for your team and we can train your team of really getting grief literate, so that you can connect and engage with bereaved clients.

Kathi Balasek: I really enjoy seeing the advisors and the companies that I’ve worked with because they’re seeing success. They’re truly knowing how to show up with their bereaved clients, because it’s happening all around us. This is what we will never avoid. And we have to not practice it during the fire drill, we have to do it up front. And it’s just been a ton of fun getting great resources out to my clients that can truly support them in becoming the best advisor they can for their clients.

Cathy Curtis: So I’m going to add this to my show notes, but in case people don’t read the show notes, how do they reach you?

Kathi Balasek: So my website is KathiBalasek.com, and if you just want to email me, it’s Kathi@KathiBalasek.com.

Cathy Curtis: And that’s Kathi?

Kathi Balasek: Yes.

Cathy Curtis: Okay.

Kathi Balasek: And if they have widow clients, I also run a podcast called One Well Widow, where I help widows moving forward.

Cathy Curtis: I’ve listened to it, some of the stories are so sad, but really great podcast.

Kathi Balasek: Thank you. So that’s my kind of advocacy of helping widows.

Cathy Curtis: Okay, excellent. Thank you. I’ve really enjoyed talking with you, Kathi. And I look forward to re-listening to this podcast myself because I learned many things. So thank you for your time and what you do.

Kathi Balasek: Well, you’re welcome. It’s a privilege. I’m just so excited to meet women like you who are forging ahead and leading us all. So, thank you.

Cathy Curtis: Okay Kathi, take care.

Kathi Balasek: You too. Cheers.

Cathy Curtis: Cheers.

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S4E3 Transcript: Simple Strategies for Improving Your Grief Literacy with Kathi Balasek Read More »

S4E2 Transcript: Estate Planning with Heart with Patricia De Fonte

Cathy Curtis: Welcome to my podcast, Financial Finesse. I’m thrilled to have you here to talk about estate planning.

Patricia De Fonte: Thank you so much for having me. I love estate planning. I’m a big nerd about it, and I will talk about it anywhere to anyone.

Cathy Curtis: Okay, great. Well, I’m sure you’re in the minority about loving estate planning. But maybe you can help our listeners love it too. And so that’s going to be our goal for this podcast.

Patricia De Fonte: I love it. I love it.

Cathy Curtis: Tell us briefly what do you want the listeners to know about you?

Patricia De Fonte: Sure. So, my name is Patricia De Fonte. And I am the founder of De Fonte Law, where my team and I practice estate planning with heart. My hashtags are love is love, families belong together, Black Lives Matter, stop Asian hate, ruthless. Why do you care? You care because when you’re trying to find the right estate planning lawyer for yourself, you have to share values, you have to have a good certain vibe with that person. Maybe you don’t mind telling the person all about your own worries and troubles.

Patricia De Fonte: But you also have to tell the estate planner about the alcoholism [inaudible] You have to tell the estate planning lawyer that you’re really afraid about your mom’s spending habits. You have to put it all on the table. Otherwise, a good lawyer cannot craft a plan that doesn’t just say where your stuff goes when you die, but really takes care of the people that are counting on you now, that would be beyond bereft if they lost you, your death will have a financial impact on them. And things need to be set up properly, so we don’t inadvertently hurt somebody [inaudible].

[04:30] Patricia De Fonte explains what an estate plan is in plain English and what documents a comprehensive estate plan typically includes.

Cathy Curtis: Great. Thank you for that. So, now you’re describing what an estate plan is right there in a few sentences. But I’m going to have you step back in an even simpler language for somebody who always hears this, you need an estate plan. They may even have an estate plan, but they don’t understand it. So, what exactly is an estate plan? And I was talking to you before we started that I wish the word estate could go away because it conjures up English manners and stuff. And it’s not. It’s what you own when you die and where’s it going to go? So, let me let you take it from here.

Patricia De Fonte: Yeah. It’s so much more than that. So, estate planning, from my perspective, I have an LLM in Estate Planning, Probate, and Trust Administration. I went to night school, it’s a master’s degree. It’s a whole big deal. And this area of the law touches on every other area of the law. So, we worry about family law, and corporate law, and intellectual property law, it’s endless. But from your perspective, from a client’s perspective, from a consumer perspective, it’s really just three things. What about me? What kind of documents do I have to put in place to make sure people know how to take care of me if I can’t take care of myself if I hit my head? Or if I slide into incapacity? How do I let people pay my rent, collect my wages, make sure I don’t get thrown out of my apartment, talk to my landlord, call my employer for my disability payments if I’m incapacitated?

Patricia De Fonte: So, what about me, that’s advanced healthcare directives. You can get one free doctor, you can do it for free, do it now. You can Google it. Whatever state you’re in, Statutory Advanced Health Care Directive. Go to it, print it out, fill it out. If you’re confused by it, ask your doctor, they will be so happy to have this conversation with you. Then you just get it notarized and you give it to the people that you love and you tell them what is supposed to happen so that there is no confusion. When it comes to your stuff, it’s a little more complicated. You need a power of attorney, there are lots of different kinds. I want you to do that with a lawyer. And the reason for that is that if you don’t do it with a lawyer, it’ll probably get rejected.

Cathy Curtis: Hmm. Talk about that just a little bit, if you don’t mind.

Patricia De Fonte: Well, imagine being on the receiving end, you work at the bank or you — the bank is a good example. You work at the bank and a person comes in with a durable power of attorney and it’s not signed by a lawyer because most of them are assigned by the lawyer who prepared them. How would you feel? Wouldn’t you be a little bit afraid to give this person the money that’s in the account? You’d probably want to see more documentation, you’re probably going to [inaudible] up to legal. So, then once it goes up to the legal department, that’s a black hole. I don’t know how long it’s going to be in there. So, if you were trying, like, let’s say you’re a married couple, and you’re trying to get into your spouse’s bank account, to get the money to pay the mortgage, you’re locked out. You’re locked out.

Cathy Curtis: Yeah. This is such an important point because you’re stressed out at that point in your life, right? The last thing you want to do is deal with paperwork and then you run into a roadblock like that.

Patricia De Fonte: Exactly.

Cathy Curtis: So, that’s such a real-life situation that you just described for people.

Patricia De Fonte: And you know what? You can ask your investor advisor, your bank, your employer, hey, do you guys have a power of attorney that you guys use? Do you guys have permission slips if I hit my head to let certain people and to do certain things? How does it work with your company? How can I do this? Sometimes they have stuff. I know that when I work with clients, sometimes they bring to the signing meeting forms that their financial advisor has provided for them allowing — because their financial advisor doesn’t want our form. They want their own specific form. So, that’s number one.

Cathy Curtis: Right. [inaudible] custodians, right?

Patricia De Fonte: Yeah.

Cathy Curtis: Custodians want to use their own form sometimes.

Patricia De Fonte: Exactly, exactly. So, that’s number one, what about me? Number two is, what about my stuff? So, there are basically three ways for your stuff to pass on to someone else after you die. Number one is the laws [inaudible]. What they use as the table of consanguinity. Those are ridiculous words, sounds like a vampire branch. All it means is that in every state, there is a statute that says when you die, this is who gets your money. And it can be a little bit more complicated than that. But there is a statute that says when you die, this is the person or the people who will get your stuff. So, if you do nothing, there’s a plan for you. Oh, by the way [crosstalk]

Cathy Curtis: [inaudible] want it to be that may not be who you want it to be.

Patricia De Fonte: Right. Yeah. That’s just the rule. And by the way, there’s — Well, on what about me, if you don’t take care of this, you might have to be conserved. So, the government does have a plan for you, if you don’t make your own plan. And that plan is hopefully it’s somebody who really loves you and not somebody who just wants to take all your stuff, goes to a court and convinces a judge to put them in charge. Conservatorship, which now everybody has heard about because of Britney Spears. That’s an extreme example, but these things happen all the time. So, if you don’t take care of what about me, Advanced Health Care Directive, durable power of attorney, you might wind up being conserved. And we don’t know what that means because you don’t have your own documents, you don’t leave instructions [inaudible].

Patricia De Fonte: So, what about my stuff? Intestacy, you haven’t done anything. You could use a will. So, now you’re going to say I don’t like what the statute says. I don’t want everything to go to whoever I want my stuff to go to Jordan. Great. So, when you die, that will, and I’m a California lawyer. So, in California, when you die, the will is brought to the courthouse and the judge stamps it, and then anybody who wants to look at it and come and look at it. They all wind up on the dark web, all of them.

Cathy Curtis: It’s not private. That’s a — [crosstalk]

Patricia De Fonte: It’s not private. And so poor Jordan who is thrilled to learn that they are in line to inherit whatever from you, starts getting calls, people start coming around, grifters, everybody’s got their hands out because everybody knows not only that Jordan is going to get something, but exactly what Jordan is going to get. It puts Jordan in a terrible position. Now what if Jordan is terrible with money? Too bad. What if Jordan’s on drugs? Too bad. What if Jordan is receiving Social Services? And now you’ve kicked Jordan into an economic level where he no longer gets his services. Now you’ve ruined his life. So, you really have to be careful when you’re giving people money through a will, that you are really, really thinking about what it’s like for them to receive those assets that way. [crosstalk] At my firm, we just don’t do that.

[11:32] What Patricia De Fonte recommends using to direct your assets instead of a will.

Cathy Curtis: Right. On your website it says you don’t divvy up — You don’t advise people to use a will for doing this purpose. And you just described some very scary reasons why not? Yeah.

Patricia De Fonte: Yeah, they make me nervous.

Cathy Curtis: And so what is your preferred way, and what do you recommend?

Patricia De Fonte: Yeah. So, the third way is using a living or revocable trust. By the way, there are other mechanisms. If you have piles and piles and piles and piles of money. There are all kinds of tricky, interesting, irrevocable trusts that you can use that’s way beyond what we’re talking about. We’re talking about the basics. So, a revocable, or living trust is a terrific tool. For a married couple, or for an unmarried couple two trusts drafted correctly. When one partner or spouse dies, that survivor gets privacy, they don’t have to go to the courthouse, all their deceased spouse or partner’s assets aren’t listed for everyone to see. Nobody knows what they’re going to get.

Patricia De Fonte: They also, if it’s drafted properly, they get to do some asset protection planning, right? Maybe they’re nervous about some creditor stuff. Maybe the surviving spouse is a contractor or in a high litigation profession. They get to do some tax planning. We don’t know what Congress is going to do, we don’t know what your local state assembly is going to do, and we don’t know what the voters are going to do that is going to result in big tax problems for you down the road. So, it’s really important to have a document that’s really flexible for that surviving spouse to make really good decisions on the ground when that first spouse dies.

Patricia De Fonte: Now, when the second spouse dies, what we’re really looking at is who are the beneficiaries? And how do we best take care of them? But we also have to think about this poor person who loves you, probably, or is getting paid to do this who is the successor trustee, the person in charge of giving everybody this stuff. We need to make sure that the trust is drafted in a way that it honors them, that doesn’t say the trustee has to give everybody money right away. How about a little holding period? How about a little time for them to marshal the assets, wiggle out of paying any bills that might be doue,deal with that last tax return. Just get their sea legs because you know, it’s probably someone you’re close to and they’re grieving. And they don’t need everybody calling them and yelling at them about stuff and money.

Cathy Curtis: And by law you have time to close an — [crosstalk]

Patricia De Fonte: Yep, you have time.

Cathy Curtis: How much time do people usually take and is there an amount of time that’s not okay?

Patricia De Fonte: I think generally a year-ish. And it would depend on really like, what assets are we worried about? And was everything in the trust? Or are there all the outlying things, but I would say generally about a year. And so I like to draft a trust that says whoever’s getting anything, you’ll get it about a year after I die. Because I want to give my person who loves me and is doing this job for me some time to get organized so that they can do this.

Cathy Curtis: Do you actually put that language in the trust?

Patricia De Fonte: I do.

Cathy Curtis: Oh, okay.

Patricia De Fonte: I do. Yes.

Cathy Curtis: I haven’t seen that before.

Patricia De Fonte: And then when we think about the children, or anybody that you’re leaving really big amounts to, there’s a statistic that says that 33% of people who inherit lose it within three years. Why? Not because they’re dumb. Because people come around, because they’re vulnerable, because they’re grieving because they don’t understand what it means to have that kind of money. So, it’s really important to work with a lawyer who knows about this statistic, recognizes it and sets your beneficiaries up for success. I like to draft a trust — [crosstalk]

Cathy Curtis: I want to step in and just say something here, because it’s not only because they’re grieving, or they get taken advantage of. I don’t think people realize how fast even a relatively large sum of money can be spent down without really thoughtful planning. So, someone in here, it’s 500,000. It’s almost like they think they’ve got millions and all of a sudden they’re quitting their job. I see that happen all the time. Inherit money, quit job.

Patricia De Fonte: Yes. And it makes no sense.

Cathy Curtis: Then they think they’re going to go back to work and they don’t. And before you know what they’ve spent on half of their inheritance, and they’re starting to feel really guilty.

Patricia De Fonte: Yep. Now they’re back in therapy for guilt for not taking care of the money.

Cathy Curtis: Yeah. Yeah. [crosstalk] I’m sorry. You work with people to try and prevent that from happening, right?

Patricia De Fonte: Yes, yes. So, our trust contains a provision that says the beneficiary can use money from the trust to pay their CPA, their financial advisor and their lawyer. So, before they start taking out big sums of money, let’s help them build a good professional team, so that they understand what it means to pull money out of the trust which can be a little tax bomb, and so that they understand what they’re doing with the money. And I never like to draft a trust that says, you get your money when you’re — a really typical scenario is 25, 30 and 35.

Patricia De Fonte: Well, what if you’re getting RSUs? What if your company just went IPO, there’s a big tax black eye, and it’s a wonderful thing, but it’s a lot of tax. And then if money also has to come out of the trust, you’re not actually getting to keep a whole lot of that money, you’re going to be thrown into a very high tax bracket. It’s really important to have a trust that says, listen, at certain ages, certain intervals, the beneficiary can pull money out. I generally like to do 15% at first, and then maybe 50% four years later, and then another four years later, you can have the rest of it as kind of a…

Cathy Curtis: Okay. Let me ask. Is this just for young beneficiaries or do you recommend this for…

Patricia De Fonte: Nobody’s ever ready to lose their mother. 50 year olds will quit their job if they inherit $750,000.

Cathy Curtis: Yes, I know. Okay. I want to delve into this a little bit. So, I know you have to have standard language and all estate planning documents, wills, trusts, you know. But attorneys can craft their own documents to a degree, right? And it sounds like that’s what you do. You really thought through your client’s needs and what may happen and you’re instilling language in there — they have to agree to what you’re suggesting. But you have these documents that you’ve crafted yourself with your team to suit each client’s needs. Is that right? I mean, I don’t know if you’d call them customized, but it kind of sounds like it.

Patricia De Fonte: So, I think it’s really important to say this, we use drafting software. And I think it’s critical for attorneys unless they are at a very large firm, to use drafting software, and good drafting software. The reason for this is that the law is alive. There might be a case in a bankruptcy court in Fresno that has a direct impact on the way that we draft gifts and estate planning. So, the software company that I use, they have an online community forum, they’re constantly doing education. When a new case comes out, we get a memo. And then when they update the software, they send us an email and show us where in the software it was changed and what that means. So, we stay abreast of the law. If you talk to a lawyer, and they say, oh, I have my own forms, well, how many people work for you? And they say, no one did not work with them. It’s just not a good idea. It’s not a good idea. And the software is expensive, but it is the cost of doing business. It’s an investment.

Cathy Curtis: Okay. What percent of estate attorneys do you think use drafting software?

Patricia De Fonte: I would say a huge percentage use drafting software, a huge percentage.

Cathy Curtis: All right. You’re saying that’s a red flag if they don’t?

Patricia De Fonte: Yeah, unless it’s a really big firm where they actually part of the team is tasked with that type of work. They have paralegals and junior associates, who it’s part of their work to keep up with the law and making [inaudible].

Cathy Curtis: So, in other words, don’t hire a solo attorney that doesn’t use drafting… I mean, I know you [inaudible] but it sounds like that — [crosstalk].

Patricia De Fonte: I think it’s a good bright line rule.

Cathy Curtis: Yeah, okay. Be careful.

Patricia De Fonte: I wouldn’t do it.

Cathy Curtis: Okay. So, I’m going to step back one minute, and we’re going to revert back to what is an estate plan. So, part of it is the me stuff, part of it is what I do with my stuff. And the me stuff has more to do with when you’re still alive. You want your health care plan, and you want someone to take over if you can’t take care of your own finances. That’s the me part, the durable power of attorney, and that health care… What’s the name of it now, health care proxy?

Patricia De Fonte: The Advanced Health Care Directive.

Cathy Curtis: Advanced health care, okay, those. And then the stuff is, you still do a will, right? Even though you don’t use it as…

Patricia De Fonte: Yeah, you do.

Cathy Curtis: You still have a will and a trust, and that designates what happens with the stuff and also who does that for you too.

Patricia De Fonte: [inaudible] in charge. Right, exactly.

[20:36] The importance of choosing an executor or trustee you can trust to manage the distribution of your estate according to your wishes. 

Cathy Curtis: Yeah. One question about what you’re saying about a will not being private, which it’s not, it’s public, and a trust being private. So, there are certain protections in the public process because there’s court of law, checking off all the boxes, right? In a trust, there’s really nobody supervising that executor. So, how important is it that you pick somebody that you really trust?

Patricia De Fonte: I know, I know. It is so much fun, the first meeting with clients because they have to fill out intake forms. And in my firm, before we even really look at those forms, other than cursory, we’re asking tell me about yourselves, your parents, we want to hear about about your siblings, who do you love, who do you trust, who’s in your life, who’s the inner circle, who are your people. Oh, let’s look at your list of stuff, [inaudible] your stuff. And then towards the end of the meeting, then we start talking about, well, who’s in charge in various scenarios. And sometimes, again, we put that together, and then we say, okay, now we’re going to look at that document that you filled out, where you took your first stab at who should be in charge of different things.

Patricia De Fonte: So, many times I look at that document, like who are these people that you neither love nor trust? Oh, that’s my cousin. They’re a hedge fund manager. But while we were talking, I realized, they don’t know me, they don’t know my children, they’re not… I thought because they were money, people, that they’d be the perfect person. But once you explain that, there will be a lawyer, that the trust can pay for that, that they’ll have help, that what they really need at core is to be a really decent human being that I trust completely, who’s going to do things in my best interest because of our relationship? And if you don’t have that person, then we have to talk about a private fiduciary, then we hire a professional who, with errors and omissions insurance and you know, all of that. So, we make sure that we have that correct person.

Cathy Curtis: Right. Because it really is a private process. There is nobody telling you you have to give that 50,000 to Aunt Mary. You just do it because that’s what the deceased person [inaudible].

Patricia De Fonte: I mean, if you don’t do it you’re going to get sued. Once you die your trust is supposed to be given to everybody who’s named in the trust, all of the beneficiaries, all the charities, all the people.

Cathy Curtis: Who is responsible to do that, though?

Patricia De Fonte: The trustee.

Cathy Curtis: Yeah. Who’s…

Patricia De Fonte: But generally if someone has died and nobody’s doing anything, people will start… If they don’t do it, someone will go to the courthouse and say, well, clearly, there’s no trust. I’m going to open a probate. So, there are ways to force the issue to flush the document.

Cathy Curtis: Okay. But I still think it’s really important to drive home, you have to choose somebody that you trust and also probably detail-oriented. Although if you write the trust right, you can let the executor know they can hire people to help them, right. And you probably make that really clear. Because most people are so busy, and they have to take care of an estate and it’s hard. I’ve done it in my family, it’s a lot of detailed work. And I do detailed work so it’s easier for me. But not everybody… [crosstalk]

Patricia De Fonte: Let me tell you about my favorite. My favorite, favorite provision is the ancillary or special independent trustee. So, your person is happy, they’re doing the work, they’re working with the lawyer and the CPA and the financial advisor. It’s all happening. But then, let’s say your kids start going crazy. They start showing up at Thanksgiving demanding their money, they’re on drugs, different things are happening. So, your person, your successor trustee might say, you know, I’m happy doing all this technical work, but I can’t deal with these kids. They can not only hire somebody to do that, but if you hire someone to do it, you’re still ultimately responsible.

Cathy Curtis: Right. Right.

Patricia De Fonte: In the trust I draft, you can appoint someone to take on the fiduciary obligation for that task. So, let’s say that all of a sudden the beneficiary is on drugs. Well, that’s really a difficult scenario. You want a professional who knows how to deal with that. And so you do that. Or maybe they’ve had something happening in their own lives, and they just need to reel back. Like, oh, it’s all been going great. But now I have to take care of a sick family member. So, for six months, I’m handing this over to someone else. There have to be pressure release valves in the documents because if the worst thing happens, you die young and your children are very young, this trust can go on for decades.

Cathy Curtis: Yeah. How many trusts do you think have all of those different clauses and think through all those different scenarios that could happen?

Patricia De Fonte: I wonder, I do see a lot of trusts that were drafted by other lawyers. And I always say why didn’t you go back to that lawyer? Most of the time, it’s the person is retired, right? And they don’t have these provisions. It is kind of a new wave of thinking. I also see in the older truss, a lot of you get your money when you’re 25, 30, and 35, which is very old thinking, we don’t do that anymore. We let them pull it out. If you’re fine, and you’re not on drugs, and you’re not — if you’re okay, then you can pull out up to this amount of money. We never want to give somebody money if it’s going to hurt them, either financially, or like, physically. We just don’t want to hurt somebody with money.

Cathy Curtis: Right. It sounds to me that you really get to know your clients. So, can you just describe, someone hires you, what is the process like? They don’t have an estate plan? Let’s say they’ve not done any estate planning. They have beneficiaries on their IRAs, but that’s about it. What happens?

Patricia De Fonte: Yes. Can I jump — I just want to jump back to number three, which is what about my kids and then all due process. Okay. So, the third part of estate planning we did, what about me, what about my stuff, the trust, what about my kids? It is very typical for a lawyer, and you’ll see this on any DIY form and you’ll see it in the statutory forms that you’ll have in various states, you’d name the children and put their birth dates, sometimes social security number, [inaudible], and then the names of the guardians and their home address and their phone number. We established that will is a public document, it’s going to wind up on the dark web, bad people are going to get their hands on it.

Patricia De Fonte: Here in California, we don’t have to provide that information in the will, we can use a side document. It’s not permitted in every jurisdiction, but in ours it is. So, at my firm we have — it starts out at six pages. Who are the emergency contacts? Because your children might have to go live with someone else if you’re incapacitated. Guardianship is not only about death. And then who’s in… So, we want to list emergency contacts, who are very short-term and we want to list who are the guardians in the event of a long-term incapacity or death. And then education, religion, firearm, social media, other really important family members, other people who carry your stories. Who are the people that you don’t want your kids around ever? Maybe it’s your ex, maybe it’s their other biological parent, and you have sole custody.

Patricia De Fonte: We have to provide all this information because just you writing it down, doesn’t make it. So, a judge is always going to step in and look at the situation on the ground and say what is in the best interest of these children? You may have chosen Pat and Chris and they were perfect. But at the time that you are no longer available, Pat and Chris are getting a divorce, or Pat has three DUIs or Chris’s parents is living with them, and terminally ill, it’s basically a hospice. So, we’re not putting children in that home. So, you really have… Or maybe the person that you like doesn’t look good on paper. I’ve worked with clients where they wanted the children to live with a family member who had lupus. Well, it doesn’t look good on paper. So, we wrote pages and pages and pages about she has her own children. We are well aware of her diagnoses. We know, without saying, we know the other brother looks better on paper, we don’t like him for this.

Cathy Curtis: This is amazing. Okay. So, you do… [crosstalk]

Patricia De Fonte: That’s number three; what about my kids?

Cathy Curtis: You don’t — Yeah, that’s so important, number three. Okay. You’re saying that the will does not have to be the document that names the guardian of the children?

Patricia De Fonte: In California. In other states, I don’t know.

Cathy Curtis: And that is really good to know. Because like we said before, it’s public knowledge. And there’s all kinds of really personal info on there. And instead, what is this doc… Is there an official name for this document?

Patricia De Fonte: There is not an official document that you have to fill out. My firm, just… When I had my estate plan done about 10 years ago, the lawyer gave it to us and I wasn’t an estate planning attorney at that time. I thought oh, this is so nice. And I just thought it was difficult. I just thought that’s what everyone did. And then I started my firm, got the master’s degree, started my firm, and nobody was doing it. And now all of my friends are doing it because I keep giving my form to other lawyers saying, oh, did you know about this? Do this, I didn’t invent it. It’s not proprietary to me. It’s wonderful. Do this. And what’s really fun about that document is that it keeps growing.

Patricia De Fonte: So, I work with a therapist. And now there’s a paragraph about access to mental health. I work with a family whose child has come out and said, I’m transitioning. Great. Now we have language about that. So, every scenario…  I had a client who’s stepmother dragged them into a cult. So, our paragraph on the client’s feelings about religion, do we want religious instruction, we don’t, this, that, there’s a whole paragraph about pseudoscience that he wrote, and then it’s so many other clients, it resonates with them. So, it can really be if you just write from your heart, you can just do that, you can do this one on your own, just have it notarized.

Cathy Curtis: Be interesting to see what other states do this. I’m going to have to look that up. So, one small technical question, which ties into what we’re talking about. So, you do do a will and a trust, someone dies, does that will become a public –min the public domain?

Patricia De Fonte: It will.

Cathy Curtis: Always?

Patricia De Fonte: Yeah.

Cathy Curtis: So, it really is important to pay attention to what you put in that document and no personal… Social security number, oh my gosh.

Patricia De Fonte: Madness.

Cathy Curtis: And as little personal info as you can in, other words, and do most of it in the trust instead.

Patricia De Fonte: Yeah. Hi, my name is Patricia. I’m married. I have two children with my spouse, I have no other children. I have a trust. And then eight pages of technical instruction from the probate [inaudible].

Cathy Curtis: Yeah. Okay. Can you just see all… And then this is probably happening for decades, people combing the newspaper for who died and what public documents can I look for, blah, blah, blah.

Patricia De Fonte: One of my professors told the story of his mother in rural Alabama. Every Friday, one of her girlfriends would go to the courthouse and get all the wills that had been lodged that week with the county state. And Sunday after church, they would sit around and talk about who was getting what and who left so and so out of their… Because everybody knew everybody.

Cathy Curtis: Oh, my gosh.

Patricia De Fonte: Oh, yes.

Cathy Curtis: People’s worst…

Patricia De Fonte: This has been going on forever.

Cathy Curtis: Yeah, yeah.

Patricia De Fonte: And it used to be harmless gossip over brunch. It’s not harmless gossip over brunch anymore. Now it’s dangerous. Now it’s dangerous.

Cathy Curtis: Interesting. Okay. So, you sound like a really good estate planning attorney.

Patricia De Fonte: I’m a really happy, enthusiastic estate planning attorney.

[32:44] How to find an estate planning attorney you can trust and who is well suited to your needs and objectives.

Cathy Curtis: So, let me ask you, someone needs an estate planning attorney, what is the very best way, and smartest way to go about finding one?

Patricia De Fonte: I love this. If you have a really good financial advisor, they should have a really broad team of estate planning lawyers that they work with, lawyers who work with different types of clients and have different types of specialties and expertise. And so that’s a great place to start, is talk to your financial adviser and really tell them what you’re looking for. What kind of experience you want to have if you don’t have a really great financial advisor? Sometimes if you have a wonderful insurance person, they can also, they should also have good connections.

Patricia De Fonte: Ask your most organized friends. Ask the people in your life who really, really have it together, who have an estate plan, who have a financial advisor, who don’t DIY their insurance, they probably have good people for you. So, now you’ve probably got a list of names. I really like using your personal network so you get a flavor of, okay, who worked with who and how did it work? And then go online and take a look. Then start booking some calls. And you really, you don’t need to talk to the lawyer for more than 15-20 minutes. Because what you’re looking for is that feeling. And then you want to ask them about their process. And then there’s some questions that I want you to ask all of them all the time.

Patricia De Fonte: The first thing I want you to ask is do you use software? And I talked about that earlier why that is so important. And if they don’t, how do they make sure their documents are up to date? The next thing I want you to ask them is about other practice areas. It can be a big red flag if an estate planning lawyer, because remember, estate planning touches on so many other areas of the law. And it’s huge. There are not that many areas of law where you can get a master’s degree. That’s how epic and serious this can be. So, we want to be very careful that we’re not working with someone who does estate planning and bankruptcy and family law and real estate and on and on and on and on. Some firms see estate planning as a profit center. Oh, you buy the software, and tippy tappy, tippy…documents and money. No, that’s not estate planning. It’s just infuriating.

Patricia De Fonte: So, you really want to work with somebody that really dedicates their practice to this. It can be fine if they also… I have wonderful colleagues who dedicate part of the practice to real estate, because they’ve been doing this for so long and they’ve worked with so many real estate investors that they also know how to do the LLCs and they also have a broker’s license because it made sense. Or they also do bankruptcy because they worked with so many people who have gone through that. And so there can be natural add-ons. And you just want to ask, why do you also do that? How does that tie into your practice?

Cathy Curtis: Right. Can I go back one thing on the documents again, the software?

Patricia De Fonte: Yeah.

Cathy Curtis: If they don’t have the software, and you should ask how are they updating your documents? But how often are the documents updated? Isn’t it only and this is something I don’t know, isn’t it only when the client comes and says, I need to make a revision, can you update… [crosstalk].

Patricia De Fonte: So, those are two different things. So, you want to make sure the law firm that you’re working with has the most up-to-date documents. That their documents are right up to date [inaudible] of the law today for you.

Cathy Curtis: Right. And that’s how [inaudible].

Patricia De Fonte: Now, if things change after you sign, that’s why estate planning is not a one and done, you have to keep coming back. Every three years, you have to come back and say how are we doing? How’s it looking?

Cathy Curtis: Yeah. And also has anything changed that [inaudible] that you need to update, or you need [inaudible]. Okay. Good. Thank you. Sorry, I just wanted to clarify that.

Patricia De Fonte: So, we want to ask about software, we want to make sure they’re not doing a bunch of other different types of law, we want to make sure we have a good vibe. And we definitely want to talk about how much time are we going to spend together? My firm, four hours. Not all in a row, nobody wants to be in a four-hour meeting. But there should be a really long meeting where the lawyer learns a lot about you and you’re really not learning anything. You’re just wondering, why don’t they stop asking me so many impertinent questions?

Cathy Curtis: Yeah, that’s hard.

Patricia De Fonte: We can’t stop because we have to get to the bottom of everything, we need to know all of it.

Cathy Curtis: Do you warn them that it’s going to be a four-hour brain dump.

Patricia De Fonte: No, no, no. No, we don’t do four hours all at once. I can’t be in a four-hour meeting.

Cathy Curtis: Okay, good.

Patricia De Fonte: No, no, no. No meetings should ever be more than two hours. There should be a really good long, at least 90-minute substantive meeting about the lawyer getting to know you and your people and your staff and your philosophies. The lawyer should always send you drafts of every single document you’re going to sign. A lot of them will just send you the summary of the trust, because I swear to God, they think you don’t understand the documents. You understand the documents just fine. I promise you. If the lawyers get to drafting documents, they should be really good at explaining them to you and you should be able to read them.

Cathy Curtis: And if they’re really good draft, they’re probably in more plain English than a lot of them.

Patricia De Fonte: Exactly, exactly, exactly. I think it’s a scam if you get a document that has no headers and is single spaced. What is that? I can’t even read that. My eyes just close, it’s just depressing. So, you want to make sure you’re going to get full drafts of all the documents and an opportunity to meet with a lawyer to go over them. And not, here are the drafts, let me know if you have any questions. How rude. Of course you have questions, but you don’t even know where to start. At my firm, what we do is we highlight the parts that we really want you to look at, the personalization. And you know, start out easy. Did we spell all the names, right? Does this…

Patricia De Fonte: When we talked about what’s supposed to happen if you’re in a coma, did we get the flavor? Did we talk about your Catholicism the way that you wanted it talked about in your Advanced Health Care Directive? Did we talk about that, and we want to go over all that in the meeting, and more. We’re going to take you right through the documents and say, this is what this document does. Here’s who you put in charge. Now let’s look at all the responsibilities. Now, let’s go back to the person, is that person? Does that feel good? Okay, good. We’re done. Forget that we even did that next [inaudible]. You don’t have to hold on to it forever, but you have to hold on to it during that meeting. Right?

Patricia De Fonte: Then we let clients sign their documents, either online or in-person with a notary. So, they have that option. And you know, we’re still in the time of COVID. Many of my clients have very, very young children, a lot of older people have a lot of health concerns, they don’t want a notary in their house. I’m sure the notary is fine, but the notary goes from place to place to place to place. We don’t know what happens in these places. So, online notarization is a really wonderful tool. There needs to be a third meeting. And the third meeting is, okay, you signed your documents.

Patricia De Fonte: Now, you have this trust, and it says all your stuff is going to go to this person, you have to put your stuff in that trust. How do you do that? So, you need written instructions, your lawyer should have made you before you met with them the first time provided a full list of all of your assets. You need that list, because at the end, after you sign your document, you’re going to use that list, and you’re going to check off, oh, I put that in my trust, I put that in my trust and it’s going to make you feel [inaudible].

[40:11] Cathy and Patricia discuss some of the most common mistakes people make with their estate planning documents.

Cathy Curtis: Let me make a really clear point here that estate planning attorneys don’t necessarily do that for you, right? And they can’t do that in some cases. So, this is a step that I know gets missed because I see it with clients, they don’t put their accounts or whatever in their trust after they leave the attorney’s office.

Patricia De Fonte: You know, some firms, especially firms that work with elderly clients, they do, they will work with the clients, and they’ll get this done. My clients are younger and what I’m afraid of is if I don’t force them through this meat grinder, if I don’t make them do this, and then follow up with them relentlessly, to make sure they did it, that a few years out, they’re going to buy a house, they’re going to open a new bank account, they’re going to get a new job, and they’re going to forget, they’re just going to forget about it completely. So, another way that I like to build some structure around that is we send copies of the certification of trust, which is just a little short document that you signed under penalty of perjury, and it’s notarized. It says here’s the name of my trust and here’s the date that I signed it, and I’m the person who created it. Just very simple document.

Patricia De Fonte: And your financial adviser can use that, your insurance broker can use that for your casualty insurance, your life insurance broker can use that who give it to the CPA, also, because they see all your stuff every year. They get to see every single account that you have. And they can say, look, you own all these things as trustee, but not this one checking account at the credit union. Why is this? You need to call your estate planning lawyer. And so we write to all of our clients’ advisors, with permission, and provide this document and also a copy of the funding instructions that goes asset by asset by asset type, to provide really robust instructions.

Cathy Curtis: [inaudible] what happens if you don’t fund your trust? It’s called fund your trust, putting stuff in your trust. What happens if you die?

Patricia De Fonte: Well, if you haven’t changed the beneficiary designations on your bank accounts, whoever’s listed there gets the money. If you haven’t changed the beneficiary designation on your life insurance policy, and it’s still your ex spouse, guess who gets the money? They do. They get the money. If you forget about real estate, there are petitions that you can do your person, your successor trustee, the person who’s in charge of your stuff after you die, they can approach the court and say, Your Honor, they forgot to… But the problem with that is okay, it’ll eventually go where you want it to go to the person you want it to go to. Stressful, super expensive, and it doesn’t avoid a really expensive court process where there are all these legal fees that come out to tens of thousands of dollars, just by statute. It’s really, really wasteful.

Cathy Curtis: And time consuming, right? These things don’t…

Patricia De Fonte: Really time-consuming. Really, really time-consuming. So, I think it’s critical to work with a lawyer who’s going to spend three or four — about four hours with you, learning about you, teaching you about the documents, showing you how to make sure that your trust has everything in it that needs to be in it. And then there should be follow up. We send our clients, I think there are nine emails that go out after that final meeting, don’t forget about your digital assets. Don’t forget to share your best health care directive. Here’s a quiz for your digital assets. Here’s how… Think about sharing. There’s four different levels of sharing. What’s comfortable for you, how do you want to do it? And remember, you have your documents on paper, so you have to take care of those, and you have them electronically, so you gotta take care of that. And then we follow up every year. It’s just automated. [inaudible] is everything, okay? Call us if you are not done putting your stuff in your trust and call us if there’s been a change.

Patricia De Fonte: We offer every three years, we want to see you for free for one-hour. That’s how paranoid we are. And we catch things all the time and I want to talk about what we caught. Clients came to me, they just wanted to make a couple changes, because she had inherited some beautiful [inaudible]. Okay, fine. We’ll talk about that, but I have my agenda that I want to do first, and it turned out, how are your parents? Oh, my mother, she’s going to pass away, she was doing some estate work, she gave me $500,000. I said where’s the money? I don’t see it in your account, I don’t see an account on here with that money in it. Oh, no, we put it in this other account. I said, but that’s your stuff. Why is it in his? So, we cleaned that up. They were underinsured because their house had increased a lot in value and they hadn’t been doing their insurance audits. There were like two or three other things that we caught that have nothing to do with the documents.

Cathy Curtis: You check on that too, the insurance levels?

Patricia De Fonte: Well, I ask them, when is the last time you talk to your broker? And they say, oh, probably not since the last time we talked to you. I’m like I told you, here in the Bay Area, you have to talk to your broker every year because property values go up. Oh, we forgot. Okay. But you got that email telling you to do it. So, we know that life is busy and hectic, and it’s easy to forget. And so we really feel a responsibility to our clients to create a lifelong relationship.

[45:28] Patricia De Fonte shares some of the biggest misconceptions people have about estate planning based on her experience.

Cathy Curtis: That’s wonderful. That’s really, really great. I want to talk to you about some typical perceptions of people and estate planning. One is, people think it’s very expensive and I think that’s one reason that people put it off. Right? They think they’re just paying to get some documents. And I hate to say it, some attorneys, that’s what they do, they give the document and not a lot of personal attention and follow-up and all those things. You get that big giant binder that no — I don’t know, if you do those big… Do you have to do a big giant binder? Is that… Okay.

Patricia De Fonte: We want a big giant binder because whoever’s in charge, if you’re not in charge, they need it. They’re going to want one big giant binder that they can throw on a lawyer’s desk and say, what do I do? It’s not good if your whole estate plan is just trapped on your laptop. Nobody knows that it’s there, they don’t know how to get to it. Even if they can now they’ve printed it all out. But it’s a mess. You want this.

Cathy Curtis: A binder.

Patricia De Fonte: You want a big binder.

Cathy Curtis: Okay, I love it.

Patricia De Fonte: A big colorful one that’s easy to spot.

Cathy Curtis: That is good.

Patricia De Fonte: I had clients, their lawyer gave them documents in a manila envelope, the originals, didn’t scan them, just handed them the originals. They moved, and they could not find their documents. They had to redo everything in an emergency situation so that they could close on a house.

Cathy Curtis: Oh, dear. [crosstalk] And so how long do you keep client… Well, it sounds like you don’t disengage from your clients.

Patricia De Fonte: I do officially and legally disengage. I am not obligated to call my clients every time there’s a change in the law. Because otherwise that would be my whole job and I would go insane. But I do offer them as a courtesy, every three years I will give you, with me, one hour of my time. As the firm founder, I will give you one hour with me because [crosstalk] I love you and I want to take care of you.

Cathy Curtis: Is that something you actively engage about? Like three years, you send them an email… [crosstalk].

Patricia De Fonte: Yes, [inaudible] right to them. Yep. We chase them.

Cathy Curtis: Okay, good.

Patricia De Fonte: Because we worry.

Cathy Curtis: Yeah, yeah. Okay. So, back to this misperception about hiring an attorney.

Patricia De Fonte: Yeah, let’s talk about it. Okay. So, if estate planning is about what about me, what about my stuff, what about my kids? If you think about what about me, you’re an adult at 18. So, estate planning is not always 500 pieces of paper in a giant binder. Sometimes it’s somebody’s graduating from high school, they need an Advanced Health Care Directive. They need a durable power of attorney and maybe they need a little will. Because they have some things, they have some nice things that have been given to them by their family. Right? And it was just going to go to the parents and it’s just some stuff, it’s fine. You can just do that.

Cathy Curtis: Oh, talk about that, that parents can’t get access to health care records after what age?

Patricia De Fonte: I know definitely after 18. I don’t know if it’s sooner than that. I know I’m blocked out from my teenage son’s at the pediatricians from some things already.

Cathy Curtis: Yeah. So, they need that advanced care directive.

Patricia De Fonte: Yes. You absolutely. Everybody, 18 years old, it should be part of graduating from high school. Here’s your diploma, go sit with that lawyer, do your Advance Health Care Directive. Yes. Yeah. So, really… So, it’s not just for rich people, and it’s not for old people, and you don’t have to wait until you have a baby. It’s for everybody. And if you are a single person, you don’t have that other person who’s automatically going to go out and hustle and make more money if you become incapacitated. You don’t have that automatic other. So, you really need to create a plan that’s not just the documents. Work with a lawyer who’s going to help you figure out, oh, if I can’t work, then what happens? Well, let’s talk to your financial advisor. I’m sure she’s already talked to you about disability insurance, but let’s really push that button now. Let’s get into that.

Patricia De Fonte: If you’re an unmarried couple, you guys are legal strangers. If you don’t have documents, one of you is living in the other one’s house, the homeowner dies, I don’t know where you’re going to live, probably not there. Family might throw you out. You have to protect yourself, you have to protect each other. And that starts whether or not you have kids, whether or not you have money, and whether or not you have a house. Because people always think I have to be old, rich, own real estate, or have a baby. Sure. Those are all natural triggers. But no, you don’t. And I work with a bunch of absolutely lovely, proactive, single people who want to really feel in control and know that if they hit their head, if they’re in an accident, they know that the right people are going to step in and take charge.

Cathy Curtis: Yep. Okay. And you’re talking about a subject that’s near and dear to my heart. So, I wouldn’t mind spending a few minutes on this, single people in estate planning. Because I work with a lot of single women, that’s kind of my specialty. And one of the challenges that comes up is if they’re not married, they don’t have children, they’re an older adult sometimes so a lot of relatives have passed on. Maybe their parents are gone, and they feel a lot of anxiety, sometimes shame, all these different emotions around the fact that they don’t have, right away, specific people that they want to give their stuff to, and it creates so much anxiety. How do you counsel somebody through that process?

Patricia De Fonte: It’s really difficult. Refusing to talk about it in the first instance, because clients will come to that first meeting, and they just want to talk about who’s going to be in charge and all this stuff. And I just say, I have no idea who any of these people are, I don’t know what your stuff is. So, you, please let me do this the way that I do this so that I can understand.

Cathy Curtis: Your process.

Patricia De Fonte: And then you can shorthand everything. And then you can tell me that Francine is in charge, and Joseph gets everyday because right now I have no idea who they are. For all I know, they’re your two cats. I don’t know. And so really getting them, you know, tell me about — Tell me about your parents. What was it like growing up with them? Do you have siblings? Have they passed on? Are their nieces and nephews? Who’s the inner circle? Who are your closest friends, who do you spend time with? Who do you spend the holidays with? Really getting to a point because very often people will say I don’t have anyone. It’s incredibly rare. It’s really, really, really rare that people don’t have anyone. But because they put this… [crosstalk]

Cathy Curtis: [inaudible] they have to give to relatives, that they…

Patricia De Fonte: No. No. So, I was thinking more of like who’s in charge, right? And they always think about, I always ask, well, so what do you do with your time? Where do you hang out? Are you involved with nonprofits? Where did you go to school? You know, what’s the fabric of your life? What’s important to you? Because who are you going to leave your stuff to? Your family. You either like them or you don’t. You don’t have to leave your stuff to your family, you either love them or you do not. Or they’re rich and you don’t care and so you don’t have to do that. Your friends, you could change a friend’s life, you could pay off their student loans, you could eliminate their terror of dying without enough money, you could leave your friends money and say we always said we were going to take that cruise to the South Pole, go do it. You can do whatever you want with this money, but go to the South Pole, right? And take a picture of me with you.

Patricia De Fonte: And then charities, charitable organizations, religious organizations. And when we get to that part of the meeting, I’m saying, so you know, you talked about this person and that person, and we talked about these charities. So, that’s kind of like, there’s the bubble. Now, let’s talk about your house, let’s talk about your car, let’s talk about your stuff. Let’s talk about the cash. Let’s talk about your retirement account. So, we’ve kind of got the people, and we got the stuff and let’s start matching things up. And then we need to go fast, because otherwise the wheels start spinning. No, but maybe this, that… I’m like, no, no, we don’t do 4.2%. We’re not going to do that.

Cathy Curtis: Yeah. Okay. Let me go back to the beginning question, because sorry, I messed up a little. The first time you were talking about who’s going to be your executor, successor, trustee. That’s a biggie, and you were describing, you find out who their…

Patricia De Fonte: Who the people are.

Cathy Curtis: People are and then you get to where does this stuff go? Because both…

Patricia De Fonte: Yeah. But within who the people are, that’s also who’s going to be in charge? And who’s going to get all this stuff? And that’s what I want to know. Oh, your best friend, she have kids? Because you probably love your best friend’s kids. I love my best friend’s kids like they’re mine.

[54:42] What to do if you don’t know who to appoint as executor of your estate.

Cathy Curtis: Well, let me give you — Let me just ask you one other. So, what if they truly cannot come up with somebody that they would trust and know would do it? Because you know, a person appointed as an executor doesn’t have to say yes, right, because [inaudible]. Do you ever recommend that people hire independent fiduciaries and does that work?

Patricia De Fonte: I have had exactly one client pull the trigger on that. I’ve had lots of clients interview them, but I’ve had one client do it.

Cathy Curtis: Yeah. Okay, so…

Patricia De Fonte: But one thing that does come up is, and it’s funny, because I’ve worked sometimes with, like a little group of friends and they’re all naming each other, and not necessarily giving each other their stuff, but they are relying on each other. Often what we’ll do is we’ll say okay, so Francine is going to be the successor trustee. And you know, the trust has language, she can have this independent special ancillary person to do things. But you know what? If she just can’t deal at all, if she doesn’t want to do it, she can appoint a private fiduciary. So, at that point, I’ve died. She’s sitting with the lawyer, the lawyer will have, a good trust administration lawyer will know about your private fiduciaries; [crosstalk] can introduce Francine to a few, and she can pass the baton.

Cathy Curtis: [inaudible] down the road.

Patricia De Fonte: Yeah. Well, she’s not… Yeah, you just kick it down a little bit, but you have to ask them, are you okay with this? Are you okay if name you and then when the time comes, you can pass the baton. And so as people are because often that’s where there’s all of a sudden, real money to deal with this. Because there’s a life insurance policy, right, that just all of a sudden, there’s all this liquidity and the lawyer’s happy to deal with it and the fiduciary is getting paid and it’s all very real. Because it’s hard, especially if you’re 40 or 50, you could have years and years and years. And who is this private fiduciary? And what if they die and [inaudible] stressful.

Cathy Curtis: It is stressful. So, I am asked often by my clients to take on this role, right? And you know I can’t. It’s [inaudible] 100% conflict of interest. But they trust me, I know every single detail about [inaudible] I mean, it makes sense. Right? I would be the logical person. And so I have had to come up with ideas for them that I tell them no I can’t. So, this comes up for me a lot. Who ends up being…

Patricia De Fonte: It’s common.

Cathy Curtis: Yeah, it’s a tough one. So, I’ve done online searches for independent fiduciaries. I haven’t nailed that area yet at all.

Patricia De Fonte: Yeah. There is the Private Fiduciaries Association of California. They have a website. And you know, they come in different flavors, because also we kind of don’t know what the issues are going to be. Especially if it’s a private fiduciary in the event of an incapacity, like sliding into dementia. You want someone who knows how to navigate that. Which is very different from liquidating an estate and handing out money. [inaudible] completely different skills. So, I like the idea of let Francine figure it out. Let Francine work with the lawyer to find the right person for whatever that scenario is going to be.

Cathy Curtis: Yeah. And you put a clause in the document saying that Francine has the ability and the [inaudible].

Patricia De Fonte: Yes.

Cathy Curtis: …to be able to do that. I think that’s so key. Yeah. Okay. I want to segue to how you work. So, you do the trust and deal with the house and the taxable assets. How do you coordinate in the client’s retirement accounts in the designated beneficiary situation? You look at that whole picture, right?

Patricia De Fonte: We look at everything.

Cathy Curtis: Okay. All right. Because that’s tricky and it’s so important.

Patricia De Fonte: It’s so important. So, as I said, before, we send all of our client’s advisors copies of this certification of trust, for the beneficiary designation changes. And we talked to every client about the life insurance, and we talked to every client about because… Let me back up. So, when you have the stuff that’s going to go in your trust, you can absolutely transfer your pets, your pants, your pots, your real estate, easy. Your intellectual property assets, fine. Some things you just cannot own as a trustee, you just can’t, by law. You can’t own your retirement account as a trustee. And usually, when you have a living trust, you’re not owning your insurance policy as a trustee, you’re just owning it as a person. And then you name a beneficiary, often the beneficiary is the trust, not always, but often.

Patricia De Fonte: Retirement accounts are special and tricky and difficult. It depends. And your lawyer really has to spend time with you to figure out who’s going to get this money. And it can be, sometimes it’s obvious, it’s my spouse, and when I die, it’s my kids. But if it’s not obvious that way, then you really have to look at the current strange laws that are in place and figure out who is this going to be best for. Who can I help the most with this money? And for clients who have charitable inclinations I really like using a retirement account because there’s no taxes paid by the charity. They just get the money, it’s clean, and it keeps them out of the trust. Because remember everybody who’s a beneficiary of the trust gets to see the trust.

Patricia De Fonte: And if you start saying things in your trust, like I want 20% to go to the SPCA, and the other 80% to Francine. I don’t know, Francine’s very busy today. The trust can force — No, let’s say that France is in charge and the person who’s going to get all the money is Jordan. So, there’s the SPCA and Jordan. The SPCA can force Francine to sell every pillowcase, every knife, every fork, every spoon in that house, and get it all the way, like distill everything and monetize every little thing, and then split it.

Cathy Curtis: Oh, wow.

Patricia De Fonte: It’s horrible. The SPCA is a powerful organization, but they have to do this. And that’s why you see those estate sales. That’s why you see them. If you want to leave money to a charity and your trustee, either leave them a specific dollar amount, or you give the trustee very clear permission to say, when I die, let people who love me into my house, you choose who they are, let them take stuff. Anything that people don’t take, donate it. You can donate my car if it’s not easy to sell. If I have a business, you figure out if it’s worth selling, or you just shut it down. Let the trustee do whatever it is that they need to do without having to monetize everything. Because once you get charities in the mix in a trust, they have an obligation. They are required to push for every penny.

Cathy Curtis: Yeah. They’re not being greedy. It’s just what they have to do.

Patricia De Fonte: No. Yeah, they’re not trying to be unreasonable.

Cathy Curtis: Yeah. No, that makes total sense. Okay. Stepping back on that, it is still fine to give percentages to family members?

Patricia De Fonte: Yeah.

Cathy Curtis: It’s this charity…

Patricia De Fonte: It’s a charity that’s the problem.

Cathy Curtis: Fascinating. Okay. Okay. And what about people who say, I just want to give my IRA to my estate? Can you do that?

Patricia De Fonte: You can, and a lot of people do. And let’s go back to, like, the classic nuclear family, right, it’s going to go to my spouse, but if I die, then I want everything to go to my children. Right now, that’s complicated. It used to be that you could leave your retirement account to a baby. And when that baby grew up, they would start taking the money out, whatever their required minimum distribution age would be at that time. The laws have changed dramatically. So, now, a younger person only has 10 years, 10 years from when they become an adult, to take that money out. So, now, putting it through a trust, just… There were mechanisms that we used to use that made sense.

Patricia De Fonte: Now the mechanism that we use, if we’re trying to protect people from the perils of inheritance, if we’re trying to protect people from liquidating a retirement account, and spending it all in a frenzy, it has to flow through the trust. But there are all these sometimes negative tax consequences. It is a sticky, tricky area. If you have large retirement accounts, you might want to think about having a completely separate trust just for those accounts. And you really have to think about the beneficiaries. You really… Because if you already have these massive life insurance policies that would take care of your kids, maybe the retirement accounts can go to your siblings who don’t have the money that you do. [inaudible] different way to think about retirement accounts now.

Cathy Curtis: Yeah, it’s a… [crosstalk].

Patricia De Fonte: Or you can just keep changing it. As life changes, you just keep changing.

Cathy Curtis: Yeah, yeah. So, and as part of your practice, do you help people work through that new wrinkle of having — [crosstalk].

Patricia De Fonte: What I do is I spot the issue. If they don’t have a financial advisor, I make them, I drag them to talk to a few people. And I think they really do understand that we spent these four hours together over six to 12 weeks. I want to see you every three years, and I’m here if you run into a snag related to your estate plan, but there’s so many things I can’t help you with. And the law is alive and Congress is crazy and this is a lot of money. And you might feel like I can do my own investments. It’s beyond your investments, you have to have an advisor.

Patricia De Fonte: And what if you’re in a couple, and you’re the one doing it, and you die, your surviving spouse, they’re lost and vulnerable. They don’t have someone to turn to. They don’t know how to find a financial advisor. So, I really do push my clients to interview and start some kind of a relationship with someone, so that if and when things start happening, you have your person, and someone that you can turn to with all this crazy stuff that comes out of DC. Not to mention, if you’re in California, it’s even worse. And if you’re in San Francisco, it’s even worse. So, you really need that person who has the overview of everything and can tell you oh my gosh, this article came out you better call your estate planning lawyer. Oh, my gosh, I read this, you better call your CPA. Or I want to see you.

Cathy Curtis: Yeah, this brings up a really good point. I am sure that you get asked all kinds of questions from your clients about things that you do not do.

Patricia De Fonte: Oh, yeah.

[1:05:06] Patricia De Fonte shares additional questions you should ask any estate planning attorney you’re considering engaging.

Cathy Curtis: Especially because you’ve got your fingers in everything, right? You really are talking about every aspect of their finances. But if you’re not an investment advisor, you’re not a CPA, you’re not a… So, what are the most common things that the listeners should know that estate planning attorneys do not do, and that they…

Patricia De Fonte: Yes. Yeah, we’re… Okay. Another thing that I want you to ask when you’re interviewing estate planning lawyers is, do you have a large professional network, people you know really well that you refer your clients to for other things that you won’t be able to help me with? If they don’t say yes, just walk away, because you might think you have it all handled, but it’s complicated. You might need a real estate lawyer, a family law attorney, you might need umbrella insurance through a broker, not DIY, you might need a financial advisor, you might need a money coach, you might need an organizer, you might need somebody who is a Medicare specialist. It goes on and on and on and on. You might need an intellectual property lawyer, you might need a corporate counsel, because you created a business on LegalZoom. That’s not allowed at my firm. No, we don’t do DIY anything here. We pay other people to take care of us.

Patricia De Fonte: So, you really do need an advisor. If your lawyer gives you a referral, say why this person. And your lawyer should be able to say, oh, because when you said this, or I see this in your asset profile, and when I send you the email of tips on the questions I want you to ask that person, I’ll put it in there. And you can even forward it to them. If you really want to look for a well-connected lawyer, because estate planning clients need so much, and we say estate planning lawyer, we tend to stay in our lane. We do estate planning, but we really can’t talk about all the other things. And we can spot an issue like, oh, I’m not sure about your insurance, I want you to go talk to a professional because it just doesn’t feel right that you have been doing all your own insurance, and it’s at all different companies and you’re not sure how much it is. And even if you knew how much it is. I don’t know if that’s enough, because I don’t know anything about insurance.

Cathy Curtis: Yeah. By the way, it’s similar for financial advisors. I can give only so much advice about estate planning, and then it stops because I am not an estate planning professional. Same with tax advising. I can do tax planning and I do. I know a lot about the tax law, but I don’t do tax preparation. So, everything is really, really specialized. And thankfully, there are a lot of specialists out there for people to utilize.

Patricia De Fonte: I really like thinking about building a team, creating a team. We all have a team. Whether it’s your hair, nails and makeup team. Whether it’s the team that helps you get your kid to and from school and soccer, like you know, that mom’s squad that everybody has. You’re grown, you’re 18 and up. If you need to have a good insurance person, you need to have somebody to talk to you about money, you should have a lawyer that you know so that maybe you’re going to have a landlord tenant issue.

Patricia De Fonte: Well, if you have a really good estate planning lawyer, they’ll know somebody, because they have to know real estate lawyers who know all the landlord tenant lawyers. So, we’ll get your issue, narrow it down for you and bring you to that person. We can be your hub, just like your financial adviser can be your hub. We’re going to help. And we’re all friends with each other, and we all talk all the time, and we learn from each other. So, whatever it is that you bring to your financial advisor, I’m eventually going to hear about it over lunch, and it’s going to help seven other people.

Cathy Curtis: Yeah, very good point. So, this has been so really interesting to me.

Patricia De Fonte: So much fun.

Cathy Curtis: Yeah, so much fun. You’ve given out so many gems. Tell the listeners where you are, how you can be notified if they need it, and all [inaudible].

Patricia De Fonte: Sure. Yes. And if I could, so here I am. I’m an estate planning lawyer and I’ve got a pie. And this is a little glass of champagne [inaudible] and I have this necklace, which is the apple pie tree of life. So, when I was little asked my dad, what happens to us when we die. And he said don’t worry about it. We just walk past the sun, pass the moon until we get to the apple pie tree. So, all of my clients, all my branding, here’s the pie on the binders, all my clients receive a pie. I wear my necklace almost every day.

Cathy Curtis: Oh, my God, they receive a pie?

Patricia De Fonte: Yeah.

Cathy Curtis: Where do you get the pies from?

Patricia De Fonte: Three Babes.

Cathy Curtis: Oh. Oh, I love Three Babes.

Patricia De Fonte: Three Babes. Yes.

Cathy Curtis: Oh, that’s great. [crosstalk] When do you give them the pie? First meeting, second meeting, when they get [inaudible].

Patricia De Fonte: After signing because you’ve done all the hard work, we did your estate plan, you cleaned up your insurance, I made you stop using your stupid LegalZoom LLC and get serious. Like, you had to go ask the guardians if they would do it, you talk to your parents, like you’ve done so many things. I have tortured you 18 different ways. But you haven’t felt it because everybody at my firm we deliver with heart. Right? So, it’s all been very sweet and nice. But we know it’s hard and so we always finish with pie. And you get the binder… [crosstalk]

Cathy Curtis: Were you delivering pies during COVID? Or did you — You didn’t see clients during COVID, did you?

Patricia De Fonte: No. I do not see clients at all.

Cathy Curtis: Yeah, okay.

Patricia De Fonte: Most of my clients have babies, so we do not get together.

Cathy Curtis: So, you ship the pies?

Patricia De Fonte: Babes ship the pies. Yeah.

Cathy Curtis: Yeah, okay. Great.

Patricia De Fonte: The Three Babes. My law firm is called De Fonte Law. If you ever meet a De Fonte, they are either related to me or married to someone who is related to me. So, I’m easy to find.

Patricia De Fonte: So, you can always just Google De Fonte Estate planning and I pop right up. I do a lot of workshops, so you can find me on Eventbrite and on Facebook. Come to a workshop, come learn with me. Maybe you hate the sound of my voice. Maybe you could just go one more hour and really dig into some basics. And we’ll talk more about low cost options and how to find a lawyer and like international issues. We can dig into that kind of stuff. De Fonte Law PC where we practice Estate Planning with Heart. Thank you so much for having me here today. I love talking about this stuff.

Cathy Curtis: I know. It was fantastic. Thank you so much.

Patricia De Fonte: Thank you.

Cathy Curtis: Okay, take care.

For more information related to this episode, please visit the show notes.

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S4E2 Transcript: Estate Planning with Heart with Patricia De Fonte Read More »

S3E8 Transcript: Can’t Stick to Your Budget? Try These Money Saving Tips Instead

Hi, I’m Cathy Curtis. Thank you for joining me on my podcast, Financial Finesse. Lately on the podcast, we’ve been talking a lot about awareness, mindfulness, and creating space for what’s most important in our lives. I think these topics are so important because of how they relate to our finances, and specifically, our spending habits. When we’re not aware of where our money’s going, it’s easy to get off track when it comes to budgeting and long-term financial goals. So, in this episode, I want to focus on a few strategies to keep yourself on track that don’t involve traditional budgeting. Instead, they’re going to require you to be more self-aware, mindful of your spending, and intentional with where your money goes.

[01:37] #1: Identify Your Values to Reach Your Financial Goals

The key to better budgeting is to make it feel less like deprivation and more like prioritization. Understanding your core values, financial and otherwise, and aligning your spending with them can be really motivating. And when you feel more aligned, it tends to lead to greater fulfillment and better habits.

Here’s a few suggestions to align your new budget and spending plan with your values.

  • Create a financial plan that emphasizes your goals, whether that’s early retirement, buying a house, or taking a long, expensive vacation.
  • When you’re estimating costs, it’s always better to be conservative. Everything always costs more than we think it will.
  • Link your spending to things that you value. This may require some self-reflection work, but it will be really worth it.
  • Use visuals to maintain your motivation. Pop some pictures up on the wall over your desk or create a vision board on Pinterest.
  • Revisit your goals regularly.
  • Give yourself grace and a chance to rework the numbers or try again if you fall off track.

[02:47] #2: Budget for Your Future, Not Your Past

According to a recent Bank of America survey, 64% of Americans say their spending habits have changed since the pandemic started. In addition, 46% of affluent Americans have been getting their financial lives in order during the last 12-18 months and expect to reach their key financial goals a lot sooner than they thought they would.

That means that many of us not only changed how we spend our money, but we also developed more financial discipline during the pandemic. I think it’d be fantastic if some of us could maintain those money habits we developed, let’s face it, when we had fewer options. And creating a spending plan that reflects those habits can be a great way to keep the momentum going in the right direction.

Remember that small consistent actions over time often lead to the best results. And if you start to revert to your pre-pandemic spending habits, that’s okay. We’re only human. But here are some tips for getting back on track if that happens.

  • Print out a copy of your plan and post it somewhere that it’s visible to you, so it stays top of mind.
  • Track your spending. It’s something that none of us like to do, but it really does help. You can use apps like Mint.com, or there’s another one called YNAB that people like.
  • Try the envelope system. This may seem really old fashioned, but it works. Take an item, whether it be clothing or dining out, and put the cash that you have budgeted to spend on it in the envelope. When the cash is gone, you can’t spend any more until the next month.
  • Leave the credit cards at home. Well, that’s easier said than done because now you can pay with your phone. And who is going to leave their phone at home? No one. Try paying with cash or using your ATM card whenever possible so that you’re not buying on credit.
  • Walk away. If you’re tempted to buy an item you don’t really need, simply leave the store, walk around the block and think about it. I’ll bet nine times out of 10 you won’t buy the item.
  • Reward yourself each month that you stay within budget. Reward yourself in some small but significant way, for example, indulge in a nice lunch out, get a pedicure, order a glass of wine with a meal.

[05:06] #3: Get Your Shopping Habit Under Control

Here’s an area that I’m going to talk about, and it’s clothes shopping. But everybody has budget busters. Mine happens to be clothing, so I’ve developed a bunch of tips for myself to keep my habit under control. And I think you’ll find them useful whether you clothes shop or not.

  • Number one. Try very hard to intentionally schedule shopping trips instead of spontaneously dropping into stores just to see what’s new.
  • Number two. Don’t shop when you’re lonely, tired, frustrated, anxious, or bored. When you’re emotional, you tend to make bad decisions.
  • Avoid shopping immediately after a setback or a major victory. Again, emotions.
  • When the adrenaline kicks in, you know that feeling when you catch yourself in a shopping frenzy. Leave the store before you buy anything. Focus on centering yourself first.
  • Number five. Don’t let friends, shop owners, or salespeople convince you that something looks great on you when you know it doesn’t or you don’t like it or it’s not your style.
  • Decide what you need in your wardrobe and make a list. Take the list with you when you go shopping.
  • Number seven. Before you buy anything on sale, ask yourself whether you would buy it at full price. How many of us have gotten in the sales trap?
  • Number eight. Think quality, not quantity. Not only will the item of clothing last longer, you’ll love it longer. And this is a great way to save money on clothing over the long term.
  • Stop rationalizing. You really do not need a whole new wardrobe because you got a new job or because you now work at home.
  • Number 10. Buy things that you’re going to wear now, not for a far-off occasion or event that may never happen. Who wants to have something hanging in their closet for two years without getting to wear it?
  • Number 11. Buy clothing for the way you live now, not for the way you wish you were living. For example, buying fancy dresses when you never go to fancy parties.
  • Number 12. Avoid buying one-off pieces of clothing that don’t go with anything in your wardrobe. We all have those.
  • Don’t buy clothing in the wrong size thinking you’ll lose weight or have it taken in. Although I have to say, having a good tailor is worth its weight in gold if you do find something really great, and you can have it taken in. Either that or buy yourself a sewing machine.
  • Fourteen. Try shopping with cash, not credit cards. It’s much easier to set limits.
  • Fifteen. Limit the number of trendy items you buy to just a small percentage of your wardrobe.
  • I love this one. Number 16. Think number 10. Everything you buy should be as close to a 10 as possible. It’s a great visual.
  • Realize that a new dress, skirt, blouse, piece of jewelry are not going to make you more beautiful or change your life, unfortunately.
  • To help make better buying decisions, analyze your wardrobe to understand what your favorite go-to pieces are. What are the common themes?
  • Home in on what colors and styles look best on you to limit your choices. Remember all those women that did colors for side work? It was kind of fun.
  • Instead of going shopping with girlfriends, do something else like going for a hike, to a museum, or out to lunch.  
  • Twenty-one. The one in, one out rule. And if your wardrobe is really large, you may want to release two or three pieces for each new one that you buy. Added benefit, somebody else gets to wear your discarded piece of clothing and enjoy it.
  • Think like an economist and analyze cost per wear before buying.
  • And lastly, track your clothing and accessory spending to hold yourself accountable.

Okay, so those are my tips to try and rein in a clothing shopping habit or another habit that you have. Things that you buy too much of.

[09:34] #4: Find Your Personal Style to Reach Your Financial Goals

This next part I’m going to talk about also relates to clothing, and it’s developing a personal style, which can really help to not buy in quantity and things that you never wear. Because a lot of women buy things that they never wear. They hang in the closet with the tags on.

So, here’s some tips to identify your style.

  • Go into your closet and pull out pieces that you wear over and over again. Maybe even put them on a separate rack. This gives you really strong clues about how you like to look. And at the same time, if you have time, set aside stuff that you haven’t worn in a year.  
  • Get inspired. Go through magazines, tear pictures of outfits that appeal to you. Go on Pinterest and pin things. And you’ll start getting an idea of what you’re really attracted to.
  • Tip number three, revisit your routine. What are you doing now? What’s your life like now? Are you working at home? Are you dining out with friends? Did you join a new gym? What is your current lifestyle? And our lives have changed, so this could look completely different than it did two years ago.
  • Here’s a great tip. It’ll cost you money, but it will save you money. Hire a professional stylist. If you find it really hard to go into that closet and do it, have somebody else go in there and help you. I’ve done it. It’s great. And it’s a lot of fun too. You can also employ somebody to help you shop. I think it’s worth it. This is sometimes. Where it’s worth it to spend the money.

All right, there’s how you’re going to figure out your style and save some money that way.

[11:17] #5: Go on a Decision Detox to Reach Your Financial Goals

Another way to keep yourself on track financially and reach your financial goals is to give yourself a little bit of a break. Sometimes it’s difficult to stick to good habits, and it may be because of decision fatigue. When you get there, your ability to consider the long-term impact of a decision goes out the window.

So, there’s nothing wrong with you if you have trouble accomplishing your goals. It just means you may need to go on a break. So again, here’s some strategies for reducing decision fatigue and boosting your mental energy.

Number one, anticipate routine decisions. Do you find yourself wasting time on similar decisions every day and get really bored with them? Like what to wear, or what to eat for breakfast, or what to eat for dinner? The fewer decisions you make earlier in the day, the more energy you’ll have for later.

So, the solution is to plan. Choose the outfit the night before, plan your meals on Sunday night. Paying bills. So automation is key here. Put all your monthly bills on automation and also your transfers, like transferring to an emergency fund or retirement savings or even to your financial goals account, like if you’re saving to buy a house. Automate everything.

Another tip: set healthy boundaries and learn to say no. This can sometimes be referred to as people-pleasing. If you tend to agonize about how to respond to invitations or requests, this is tiring. And what it really means is setting healthier boundaries. It’s totally not easy. So many people suffer from it. But it can save you valuable mental energy.

There’s a great book about this called Essentialism. And I highly recommend reading it. It will get you focused and thinking about what’s most important.

Another tip, and we talked about this within the clothes shopping area. Avoid making decisions when you’re tired, hungry, stressed, etc. When you’re feeling emotional, just don’t make any decisions. It’s just not good. You’re in survival mode, and you’re likely to make a bad decision. So instead, spend a few minutes meditating, go for a walk, take a few deep breaths, connect with a friend.

Tip number four. Designate times to check email, texts, and social media. I don’t know how many times I’ve tried to do this, but I think it’s so important. We’re bombarded all day long with communication. And it’ll surprise you how much more you can get done when your phone isn’t distracting you. Even just turning off the pings and dings that you get when an email or text comes in could be really helpful.

Number five, don’t be afraid to delegate. Just because you can do it all doesn’t mean you have to. Our time and energy are finite. So sometimes reaching your goals means asking for help. And it can be at work, at home, in your financial life. Wherever you feel like you could delegate and afford to delegate it, do it. It’ll bring you more joy, it’ll be worth it.

So, there you have it, my five strategies for making better financial decisions without creating a traditional budget or tracking your spending. And if you want to go deeper into these strategies and create a spending plan that’s aligned with your values and financial goals, please visit curtisfinancialplanning.com/resources and download The Happiness Spreadsheet, a fresh inspiring approach to budgeting.

And as always, I’m available at Cathy@curtisfinancialplanning.com. And please look at my website, curtisfinancialplanning.com. Thanks for listening. See you the next time.

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S3E8 Transcript: Can’t Stick to Your Budget? Try These Money Saving Tips Instead Read More »

S3E6 Transcript: How to Calm Your Mind and Experience Life More Fully

Cathy Hi, Nichole.

Nichole Hey, Cathy. It’s good to see you.

Cathy Welcome to Financial Finesse. It’s great to see you too.

Vanessa Yeah, I’m so happy to be here.

Cathy Yeah, it’s been a couple of months in the planning, but I’m glad we connected. So, Nichole and I met by serendipity. She was looking for professionals, right? Financial advisors that work with women to support her clients if they needed it. Is that right?

Nichole Yeah, exactly. I was looking to build up my own referral list of women who are working in really powerful ways to support my clients. And I work with women who are working on, you know, learning to live in powerful ways. So, I met you, I found you on the internet, and I really loved your website. And I was like, I want to talk to that lady. So here we are.

Cathy The power of a good website. And good SEO.

Nichole Yeah.

Cathy You Googled and found me, and so I’m very, very grateful for that. So, to get into today a little bit. I want to bring up your website tagline because that is, some of the things you do are so interesting and so important to living a more fulfilling life. And your tagline is: Present. Embodied. Empowered. Because your life is worth showing up for. And I’m sure you took a lot of time to pick those exact words.

Nichole Yeah, well, I labored over them many sleepless nights, actually.

Cathy I’m sure. I know that it’s, just to come up with the right words, to really let people know what you’re about is not an easy task.

Nichole Yeah.

[04:57] What it means to be present.

Cathy And one of the words that really resonates with me, and I want to talk about, is present. Being present. That present word, and which I’ve had so many people tell me live in, why don’t you live in the moment, be present. And personally, I find it really hard to do that. I find myself looking towards the past or worrying about the future. It usually involves worrying too.

Cathy That’s the problem. Because I think there can be positive spins on revisiting your past in the future. But a lot of it can be worrying, which is not good. And I want to ask you, what do you, what is it to you to be present? And do you think it’s hard to reach that state?

Nichole Yeah. That’s such a good question, Cathy. And I have a few answers. So, is it hard to be present? Yes. And no. So like, right now, for example. Can you just feel your feet touching the ground? And can you feel the feeling of your feet touching the ground, or the floor? Probably, unless you’re sitting outside.

Nichole And so right now, you can be present, feeling that present moment feeling of your feet connecting with the floor. So in that sense, it’s pretty simple. Or it could be that like, oh, I just touched my hands together. And like, oh, yeah, my fingertips, feel my fingertips. So that’s bringing me into the present moment. And that’s really useful, because as you know, and probably lots of the women who are going to be listening to this, it’s so easy to not be present.

Nichole And so that really is the next part of your question. You know, how do we get there? And is it easy to stay there? And I think, you know, we live in a world where our attention is commanded by so many things all at the same time. Whether it’s, you know, the mothers who are listening, are thinking of their various children and all the things that they have to be tracking to take care of their family. Or maybe it’s the businesswomen out there who are like, oh, well, my direct reports need to get to me about these things. And I need to go talk to my supervisor. And all of these things.

Nichole And so we’re constantly tracking so many things. And then with the advent of technology, which is great that we can be here. But let’s say, you know, we pick up our phones, for example, and we just scroll and scroll and scroll. What it’s doing is it’s overloading us with information. And, you know, that’s in addition to just the normal things that we would be attending to just because we’re living our lives. And so, when there’s so many things commanding our attention, we’re really not present. We’re not here. We’re not feeling our feet on the ground.

[07:58] The importance of being more present in our daily lives.

Cathy Okay. I know that feeling your feet on the ground is a metaphor for it. But why? Why is it better to be? What benefit do you get?

Nichole I mean, sometimes people say like, I don’t want to be present because I don’t want to have to feel my feelings. And that’s a really legitimate reason for not wanting to be present, especially if you are dealing with anxiety or stress or grief. Like, they’re uncomfortable feelings. So on the flip side of that, the question is, so what’s the value of being present? Well, think about all the beautiful moments of life that we miss because we’re so busy thinking about the future, or we’re so consumed fretting about what went wrong in the past.

Cathy Or looking at our phone. You should be looking at the beautiful forest, not thinking, oh, that would be a great picture.

Nichole Yeah. And what comes to mind is this. I don’t remember where I saw this. But it was this image that I saw on social media, and it was this picture of a big crowd. And I think it was this crowd was watching either a competition or a race, or maybe they were watching an important figure pass by. Everybody was taking pictures. And then there’s this one, and they’re all facing looking. I don’t know what it was that was going on over here. And then there’s this one woman in the foreground of the picture., and she’s just there.

Nichole And I thought, wow, that image is so telling of all these people are busy taking pictures of it. And being with it. Or, for example, when I was in Paris a couple of summers ago, I went to the Louvre. I remember getting to see the Mona Lisa, which is this just divine, like masterpiece of artwork. And everybody was taking pictures. And I looked around, and there was like me, and maybe like one other person who were actually just looking at the Mona Lisa. Because of the way it’s set up, we only had like, five minutes, and then they usher us out so the next group can come in. And so, I think of like those, those divine masterpiece moments of life.

Cathy Yes. And they’re in there everywhere. My husband, I don’t know how he, he has learned this art of being in the moment and being present. When we travel, he doesn’t, guess who takes the pictures? I do. And, if I can’t think of any other way of not being in the moment, it’s always thinking you have to take a photo of something. He doesn’t. He just takes it all in. And when we’ve traveled in groups. And I’ve noticed, that’s always the case. There’s some people that that’s all they do is take pictures, and others that just soak in every moment. And I’m always very envious of the people that just soak in every moment.

Nichole And I don’t want to dismiss taking pictures, because I’ll tell you, I took lots of pictures in Paris. But you get the point. And I just want to add one more thing to this part that feels really essential, is it’s not just about being there for the beautiful moments. It’s also about being there for the difficult moments. So, if I’m, let’s say in a moment of grief, if I’m choosing to be present with my grief, it’s more likely that I will go through a full and complete grief process, allowing that grief to actually heal.

Nichole And then to also really connect with, for example, what is it that I’m missing? So, if it’s the loss of a loved one, by being present with the grief, but also being present with the love that we had for that person. And so it allows us this, this present moment, awareness, this cultivation of being in the present. It allows us to have a richer relationship with our lives. So whether it’s feeling grief and sadness, or joy and pleasure, by being there, we’re really there.

Cathy That makes so much sense to me. And that’s really different from living in the past or focusing on the future. That’s truly experiencing, not shoving down the difficult emotions that come up at certain parts of life. Yeah, yeah. So, when you work with women, do you recognize right away if that is their issue? Or do most people that come to you not struggle with that?

Nichole Yeah, that’s an interesting question. So a lot of women have already determined for themselves, like, yeah, I really struggle with being present. I’m really distracted by the past and really anxious about the future. So they’re able to self-report like, yeah, I’m needing help with this.

Nichole And then other women, you know, when they come in, they’re not maybe as able to articulate exactly that. Often, they’ll report things like struggling to feel their feelings or feeling anxious about all the things that they need to do. And so that, to me, will often signal we might need to do some work around building a new relationship with the present moment. So how can I support them in learning to be with the experiences of their lives as those experiences are rising?

Nichole And sometimes that does include saying, yeah, I think these emotions might be a little too big right now. Let’s put them on hold and come back to them. And maybe just start with basic level mindfulness. How to begin to feel the sensations of the body or the breath or whatever it is that’s appropriate to them and where they are.

[13:39] How to manage anxiety through mindfulness and acceptance.

Cathy Okay. So, I’ll give you a good example. I’m in a mastermind group with some other advisors. In fact, we just met this morning. And one of the women was talking about this exact thing, how anxious she’s feeling. And you were describing some of the women and their struggle. She’s a mom and a business owner. You know, working with clients and juggling all these things, just came off a vacation, is feeling overwhelmed.

Cathy So, let’s just roleplay. So let’s say I’m that woman, which I have to admit, that happens to me. Because I am a business owner. And I’m not a mom. I’m not a mom. But being a business owner is like having a baby. Continually. And I told you that I’m struggling with this anxiety that I’m never doing quite enough. That’s a typical thing for me. Am I doing enough for the people that are relying on me in my life? And what are some tools to overcome that feeling and become more calm about it? And then do something about it, but in a really calm way? Reasonable way?

Nichole Yeah. Well, often what I really like to begin with is just recognizing that anxiety is there. And so oftentimes, what I noticed is that people come in, and they say, I’m anxious, and I want it to go away. And I say, yeah, I totally support in building, in growing tools and resources to support you in alleviating the anxiety. But we also want to spend some time exploring just the simple fact that it’s there.

Nichole And so this, this acceptance is a really important piece of the work that we do. And so, okay, so anxiety is here. Well, how is it showing up in your life? So, I might ask you to identify, you know, what are the ways that you notice anxiety showing up in your life? How is it affecting you? And so we’d begin to unpack it a little bit. And as I then get to know you and get to know, like, what are some of the stressors in your life or some of the things that are causing or exacerbating the anxiety. From there, we would work together to then grow or do practices or cultivate different tools that would help support you in managing the anxiety or in learning how to work with it.

[16:15] How Nichole’s training in somatic experiencing helps clients alleviate the effects of nervous system trauma.

Nichole Also a big part of what I help women with, in addition to doing a lot of work in the mindfulness realm, I’ve also been trained in a modality called somatic experiencing. It’s a modality that has been designed to alleviate the effects of trauma on the nervous system. And anxiety is a very, can be a very, can be a source of trauma, as well as result from trauma, and it can be very uncomfortable. So what I would also be helping someone like you do is, you know, explore ways of creating our nervous system regulation.

Nichole So looking at like, what are the bigger questions of your life that’s leading to the anxiety? What are the conditions of your life, where maybe there’s not enough resource, where maybe we need to build and grow more resources? And then bring in this element of nervous system regulation to support your nervous system in navigating what’s occurring in your experience? And then also, you know, this is where some of the coaching would come in. Is like, how do we ask some of these bigger questions that may be in the direction of, are the things you’re doing in your life ultimately supportive of a better quality of living? And do some decisions need to be made about how life is being lived? Or how work is being conducted? So, you know.

Cathy There’s very many disciplines, isn’t it? It’s not, this is not simple, in black and white, and it’s very individual.

Nichole It’s very individual. And what I’d say is it’s simple, but it’s also complex. It’s simple in the sense that it doesn’t need to be this big, massive undertaking of radically restructuring your life. It’s simple in the sense that it begins by asking the question, you know, what is happening in this moment right now? How am I relating to it? How is my nervous system responding to this?

Nichole But it’s complex in the sense that it might lead to a lot of deeper questions. And my hope is that as we dig into these deeper questions, that the women that I work with really become willing and interested in exploring deeper answers.

[18:28] Why Nichole believes meditation is key for building a life that feels useful and manageable.

Cathy One way that I found that I get present is through meditation. I’d imagine that’s one, a powerful tool that you use. In fact, I read on your website that you do a Monday morning meditation session, right, is that true? You can log in, yeah, I want to do that.

Nichole Yeah. And everybody’s welcome. It’s free. I do it by donation. And it’s Monday morning at 9am. And I’m happy to send you the link.

Cathy Yeah, please do. And so, I love being led in meditation. I do do it on my own. It’s one of the commitments to myself. I’ll do it for at least, even just five minutes. I don’t care how little, I always feel more grounded after I shut, you know, slow down my breath. The thoughts are flying around, but I do manage to have a few moments of peace. And it feels so good. Just that short little moment of peace is a big deal.

Nichole Yeah, yeah, I think meditation is a really key component to building out a life that feels useful and manageable. I know for a lot of people, meditation or getting started in meditation is really challenging. And I think there’s a lot of misconceptions in the meditation world that like our minds should be totally calm and clear. My take on meditation, after many years of my own practice, and many years of working with students, is that it’s not so much that the mind needs to be clear. And that if it’s not clear and calm, you’re doing something wrong.

Nichole It’s more that in the practice of meditation, even if thoughts come, can we just practice bringing the attention back to what’s real. Maybe you’re focusing on that sensation of the breath. Maybe you’re feeling your feet on the ground. And so, we’re just practicing building that strength and capacity of the mind to come back to the present moment and come back to the present moment.

Nichole And I think the net result for many people is that even though there might be thoughts, many people, myself included, have that experience of feeling more calm and restored through that ongoing cultivation. And then there’s also just the breathing, the diaphragmatic breathing. Breathing in and breathing out does actually help create a little bit more calm in the nervous system.

[20:51] Nichole explains the “right” way to meditate.

Cathy Oh, it does, just simple breathing alone. I so agree with you. Well, I’ve read enough books about meditation and articles about it and practiced it enough, where I forgive myself if I don’t reach that perfect moment of Zen. Because it is hard to get there. For me, it’s enough that I actually sit. And I feel, I’m happy about that. I’m not beating myself up over doing it.

Cathy And I really believe that’s the way that you have to go into anything like that. It’s like building muscle, you know, you don’t go to the gym and get big muscles, it takes a lot of hard work. It seems to be very simple. And the reward is so great to have more peace of mind.

Nichole Yeah. And one thing that I say to every person that I work with when we start is that there’s no right way, and there’s no wrong way. There is just simply the opportunity to be curious about what’s happening in our minds, and to be willing over and over to come back to that present moment. And then over time, most people find that it does yield a greater sense of overall well-being.

Cathy And it brings you back to the present, like looping back to our original discussion. What a great way to bring you back right into the present moment. If your mind is wandering, if you get control over your breath and your mind, you get right back there. It’s an amazing tool.

[22:24] The relationship between being present and having presence.

Cathy So, and another thing, reading through the work that you do, you also talk about presence. So being present and having presence. And I imagine they’re related. Because how can you really have presence if you’re not in the moment. That would be kind of a powerful way of being present. I’ve always thought and admire people that walk into a room, and you feel them. They are confident, or they’re standing tall, or whatever it is. And I think that’s part of your practice, too. Talk about that a little bit.

Nichole Yeah, that’s a great question. So I think of mindfulness in three ways. Initially, it’s a practice. So I practice mindfulness, I practice being present. And then it becomes a state. So the more I practice states of mindfulness, or sorry, the more I practice the practice, I experience more states of mindfulness. Or states of being present. And over time, when people practice enough, it becomes more of a trait. So they just have that general quality of presence about them.

Nichole And like you said, like, we all know that we’ve all had that experience, or we all know that person where we walk into a room and we’re like, they’re just so present. They’re just so, like, there’s a quality of real presence about them. And I think some people just have that very naturally. You know, like some people just are really talented at sports, people just have that quality. And then other people through practicing mindfulness and practicing cultivating ongoing states of being present. They cultivate that trait. And it is, it’s very much that quality of like, they’re just, they’re there with you. Like the kind of person that maybe when you’re talking to them, you really feel them with you.

Nichole Or, or I think about a lot, especially, you know, in the work that I do with women. Many of the women that I work with have either some history of abuse or trauma in their background, or maybe they’ve lived with chronic sickness or illness. And so they are not as embodied physically in their body anymore. So there’s maybe some way or, through the stress and anxiety, there’s maybe some way that they have, maybe not fully, don’t live in a fully embodied way. So in some disconnection, either emotionally, spiritually, or physically.

Nichole And so what we’re doing is working together to help them create that sense of presence. So that sense of like, really being there and showing up in their own lives or really occupying the ground that they stand on. Like, oh, here I am in my body. And obviously, this is an ongoing cultivation. And you’re right, we don’t have that experience from the very beginning. We grow it over time.

Nichole But just like you, in your own work, have developed a certain acumen, you have developed a sense of really knowing what you do. I think it can be kind of saying like, that sense of presence is that knowing I’m allowed to be here in my life. Knowing I’m allowed to take up space. And then choosing to take up that space in a way that acknowledges yes, here I am.

[26:00] How to cultivate more presence and truly connect with others.

Cathy Yeah. What a powerful thing for women in particular, who, many of us didn’t learn how to own our own space when we were going through life. It is kind of like an alien concept in some way. I’m sure the training, the combined training that you have with somatics and then the mindfulness is really important to that helping women, especially that have experienced physical trauma or illness or whatever, into having, developing that presence and feeling good in their own bodies.

Nichole Yeah, they’ve been extremely helpful. I think primarily, they’ve been helpful in the sense that, through these same modalities and practices, I have actually cultivated more presence in my own experience. Now that allows me to be really present and available to them. Have you ever had that experience or that feeling when you’re in the presence of someone who just has a lot of presence, like someone who’s really there with you? And have you had that feeling of feeling strangely at ease, or sociable, or like you matter, because they’re so fully there with you?

Cathy Exactly. That’s the quality I admire most about people like that. You feel like you’re the only person in the room. They’re paying attention to you. They’re listening. They’re not looking over their shoulder for the next person. You’re connecting. It’s really powerful when you meet someone like that. It’s not that common. And they tend to be better listeners because they’re okay with not doing all the talking. That seems to be part of that person as well.

Nichole I think being really present definitely aims, or yields, like being a good listener. Or a better listener.

[27:55] Nichole’s personal journey that led to her becoming a mindfulness coach.

Cathy Yeah. Tell us a little bit more. I’m curious myself on what your personal journey was in getting to this place of being a mindfulness coach.

Nichole Yeah, that’s a really thoughtful question. And thanks for asking. A journey it has been for sure. So I’m now in my mid 40s, and I started on this, I’d say the first real moment of inspiration, I think, really struck when I was probably in adolescence somewhere. I think there was just this, like, very early sense in me of just seeing the harm that was caused in society and family and culture when people weren’t present. And really, whether it’s, you know, seeing people who were harmed through other people’s addictions or people who were harmed by other people’s just unavailability, just not physically being there.

Cathy Yes. Workaholism.

Nichole Yeah. And I think what I saw from a very young age is a lot of harm and grief are caused by not being present. And so, and then I think that paired with I had a very strong like call to spirituality from a very young age. Like, I think I was like, 10. And I was like, Mom, will you please take me to church? And she’s like, ugh. But, okay.

Nichole And that was what I knew of spirituality. And over time, what I found later in my teens, when I was in my late teens, I was much more drawn toward Buddhism. And more like, historical European, like wisewoman spiritual traditions.

Cathy Where were you exposed to that? Because I wasn’t. I was raised in a Catholic environment, and I wasn’t exposed to other religions very early.

Nichole You know, that’s a really good question. Where was I exposed to it? I had an aunt, who, she was really into yoga. She taught yoga throughout my childhood. And then my mom, she actually was really good at, she had a very diverse friend group. And I remember going to like spiritual channeling events and like, weird, strange stuff. So that really planted that. And my grandmother was also, she was reading books about, like, past life stuff. So it was just in the air.

Cathy Yeah, all the women in your life.

Nichole All the women in my life. Yeah. There was also a lot of, you know, like, Judeo Christian influence, as well. And in my early childhood, so I had a lot of just influence in a lot of different ways. I have, my mom is one of five sisters. And they all have very diverse and different spiritual beliefs. So that was my imprint from a very young age.

Nichole And then so, by my late teens, I think what I realized, I found myself very drawn into Buddhist practice. There was also, you know, I think the reality why a lot of people go in the direction of spirituality or meditation, in my case, is there’s a lot of suffering. And there was also, you know, I experienced a degree of, you know, difficult experiences in my childhood and teen years. And I saw, you know, kids I grew up with getting into drugs and alcohol, and that just didn’t feel like a very good option for me.

Nichole And so I went pretty heavy into a meditation practice, and throughout my 20s, that really grew quite a bit. I found myself going on meditation retreats at a pretty young, early point in my 20s. And they lived, I lived in a community of people where we were all engaging in some spiritual practice. I had the privilege of traveling to India several times in my 20s and 30s.

Cathy Did you practice yoga there when you went?

Nichole You know, surprisingly, I didn’t actually do much yoga. I was doing more practice at Buddhist monasteries in Bodh Gaya, which is where, was known for the Buddha to have attained enlightenment. Bodh Gaya is up in northern India. And then I spent, I’ve traveled a lot through Thailand going to Buddhist monasteries. It just, it really, like the fire was lit, and it raged powerfully in my life for a lot of years.

Cathy Did you do your travels on your own?

Nichole I did most of it on my own. I did a fair amount of it with other people. But it was all like my own inspiration, my own desire. And then, you know, there is a, I think, another stretch in my 20s, where I experienced some pretty challenging life experiences. And I knew that my meditation practice was such a refuge.

Nichole And so in my later 20s, I actually dove in even more deeply. And I lived at a Buddhist meditation center for many years—not many years—for a stretch of time.

Cathy And that’s more communal living, right?

Nichole It was more communal living. Yeah. And then even at one point, I spent a year and a half traveling. This is in my early 30s. I spent about a year and a half doing extensive ongoing retreats to just continue to deepen my practice.

Cathy I am like, surprised to hear this. I’m so glad I asked you this. I had no idea. But you know what, I’m not surprised. Because you have that presence we were talking about. You really do. Even though I haven’t met you in person, I feel it over Zoom.

Nichole Thank you. That’s a really, that’s a lovely reflection. But to wrap up the response to that question, how did I get to this point of coaching? You know, I think, you know, when I moved to the Bay Area, there was the big question of what am I going to do for work? And I actually moved to the Bay Area right on the heels of this year and a half long meditation sabbatical. And there was this question of what am I going to do for work?

Nichole And I thought, well, I know how to teach because I’ve worked in teaching capacities. I know how to facilitate because I’ve been facilitating groups all of my 20s. And I know meditation, and I know mindfulness. And so I first landed a really fantastic opportunity at UCSF to teach Mindfulness Based Stress Reduction, which I’m still teaching many years later.

Cathy I saw that on your website.

Nichole Yeah. And, and then from there, I pursued the somatic experiencing trauma, trauma therapy training. The two then really solidified in how I work with women, I really integrate the two. So that has led to, you know, just a lot of opportunities to facilitate programs, where I’m teaching trauma awareness skills, as well as mindfulness skills. And a lot of my initial early clients came out of my MBSR programs.

Cathy And now, what does that stand for?

Nichole Mindfulness Based Stress Reduction.

Cathy Okay.

Nichole Yeah, sorry, I didn’t clarify that earlier.

Cathy Oh, no, that’s okay.

Nichole And so very, not to say unintentionally, because I certainly, like, had aspiration and ambition. But very organically, I’d say this practice of coaching has, it’s just grown very organically. And it’s grown very much from my love of these disciplines and my love and deep commitment and passion for supporting women in their own growth and awakening. So now I do one-on-one coaching and counseling and mindfulness work, but I also do a lot of group programs. And that’s really like my love. I mean, I love doing one-on-one work, don’t get me wrong. But I love group programs a lot. And I have a few of them happening.

[36:00] The group coaching programs Nichole offers clients and newcomers.

Cathy Tell me. Describe a group program and what a day would be like, if they are a couple of days, or a day, or?

Nichole Yeah, most of the group programs that I teach are either six or eight-week programs. So we meet weekly for a few hours. And then one, for example. So one is the Mindfulness Based Stress Reduction classes where we meet every week. And I’m, you know, walking them through a curriculum that I didn’t create myself. Jon Kabat-Zinn created it, and I teach it through UCSF. But there’s another curriculum that I have created, which is more of a trauma awareness and mindfulness-based program for women who are wanting to go through kind of their own healing and awakening process.

Nichole And so we’re looking at mindfulness practices through a trauma informed lens. And then another one, which I’m really excited about, which I’m going to be launching in the fall. It’s called purpose and presence. And it’s geared more for entrepreneur, entrepreneurial women, or just high achieving professional women who are wanting to learn just self-regulation skills, mindfulness skills, emotion regulation. But to also use these to explore, what is my purpose? How do I be of service in this entrepreneurial or professional capacity in a way that’s in alignment with what feels right and true? But also utilizing their powerful skills and their, the things that they know and do really well in the world?

Nichole And one of the things that I hear most common from women who are working in these capacities is like, I feel overwhelmed, I feel anxiety. I feel like I need to constantly be good enough for constantly achieving. And so what I’m hoping will yield from this is women who feel in alignment and in integrity with their work and their values, and feel that sense of presence, but also feel very connected to their purpose.

Cathy Yeah. Because you know, it’s very human to have those feelings of anxiety. It’s common and there’s nothing wrong with you if you have them. If you can learn to manage them, think just how much more joyful whatever you’re doing will be. That’s extremely valuable. That sounds, your programs sound really wonderful.  

Cathy So if someone wanted to reach you, let’s share your, whatever you would like to share. Your email, your website, are you on social media, do you have a Facebook group? Any of those things, and then I’m going to ask you one more question after that.

Nichole Yeah, sure. So um, you know, the usual social media suspects. So you can reach me on Facebook at Presence Mindfulness Coaching and Counseling for Women, or on Instagram, it’s @presencemindfulness, or my website is presencemindfulness.com. That said, I actually have a new website in the works, which should be released in August, and it’s going to be NicholeProffitt.com. But my current website will direct over to the new website when it’s up and running. And then as far as email, you can reach me at nicholeproffittpresence@gmail.com.

Cathy I’ll include all of these in the show notes, which I’ll post on my website, so people will know where to go. Okay, so I have one last question. If a woman has never done any kind of like, if this is all new. It’s so common now. But what if you’ve never even tried to meditate or get mindful at all? What do you recommend would be a first step?

Nichole Yeah. That’s a great question. Well, I have new people come into my programs all the time, who have never done anything in the way of mindfulness or meditation. But they just have that sense that they need to try it. And I love, so I love working with people who’ve never done this before. You know, one way to begin is, I like to do what I call a meditation walk or a mindful walk, which is just to take a walk through your neighborhood. And what I recommend you do is just take a stop every 10 feet or so and just stop and look around. See what you see. Hear what you hear, feel what you feel. Feel your feet on the ground, take a breath, and then take another, you know, 10 to 15 steps, and repeat that.

Nichole So feel your feet on the ground, take a breath, see what you see. And what I mean by that is like really see it. Not just like, oh, yeah, I know what that fern looks like. But like, no, really see it, the colors, the shapes. Hear what you hear, oh, I know, it’s just a car, but no, what is the sound? What’s the sound of the car, and so on. And feel what you feel. What is the feeling of delight, joy, relief feeling like?

Nichole So that’s a beautiful place to start. And I also really, I say to allow them to keep it simple. So five minutes. And for some people, five minutes can feel like torture. I remember in the early days of my meditation practice, in my like late teens and early 20s, sitting down for five minutes felt like torture.

Cathy It is a long time when you’re just sitting there.

Nichole And all you have to do, all we have to do is just note that in these five minutes, you don’t need to do anything. You don’t need to be anywhere. You get to be here with your breath, feeling the inflow, feeling the outflow. And then in five minutes, you can go back to what you’re doing.

Cathy Right. Great, thank you. Those are two perfectly powerful tips.

Nichole And I promise you it, the torture diminishes over time. At one point in my practice, when I was really like just exclusively devoted to meditation, I was sitting for about two hours at a time.

Cathy Oh my gosh, I was going to ask you that. How long do you sit for now?

Nichole You know, these days, my meditation practice is really varied. It depends on the day, it depends on what’s going on, how my body feels. Some days, I’ll just go on a mindful walk. Some days, I’ll do a practice outside where I sit with my eyes open and I see what I see, hear what I hear, feel what I feel, etc. And then other days, I’ll do a formal meditation practice where I’ll sit anywhere from 30 to 45 minutes.

Cathy Oh, gosh, that must be, that must feel amazing when you open your eyes.

Nichole I mean, this is, I just want to normalize it. Like even for me, I’ve been doing this for years. It’s still challenging sometimes. And that’s the point. It isn’t so much that we want the challenge to go away as, can I grow the ability to be with the challenge? So if grief or sadness come up, the idea is not to always feel happy. But can I grow the capacity to be with the grief or the sadness as equally as the joy and the happiness? Which is why we call this a practice. We are constantly practicing.

Cathy Right. You’re never done.

Nichole Yeah. We’re always growing, we’re always learning, and we’re always practicing.

Cathy Okay, well, thank you, Nichole. I totally enjoyed this conversation.

Nichole Yeah. Cathy, I just want to say thank you so much. I’m so grateful to be invited on, and I’m really excited to do some work together.

Cathy Definitely, Nichole. You have a nice weekend.

Nichole You, too. Take care. Bye.

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S3E6 Transcript: How to Calm Your Mind and Experience Life More Fully Read More »

S3E5 Transcript: How to Make Room in Your Life for What Matters

Cathy Hi, Lis. Welcome to Financial Finesse.

Lis Hi, Cathy, I’m delighted to be here. Great to see you.

Cathy It’s so good to see you too. I know we saw each other pre COVID, maybe two years ago or so. That seems like 100 years ago.

Lis It really does. Such a different world.

Cathy Yeah, thank God, things are changing. We’ll have to see each other in person soon. Because I know you’re in Oakland too.

Lis I would love that.

Cathy Yes. So um, let’s get into it. I want to ask you some questions about what you do. You provide a very valuable service to people in your organizing business. And I know you do way more than just organizing. But for somebody who has a very short amount of time to listen to this podcast and just tunes in because they are not organized, and they really want to know how to get organized, what would be your top three words of wisdom for somebody who wants to be a more organized person?

Lis Oh, that’s a great question. Well, the first thing I would say is, don’t organize your life based on what you see in a magazine or on Instagram or on TV. You should really organize your life for your real life, for your real habits. And if you’ve been struggling with disorganization your whole life, don’t expect things to change overnight. New habits take time to develop. So being patient with yourself and forgiving with yourself, it’s, you know, learning to organize and learning to develop organizing habits is not unlike learning any other habit. It takes time to assimilate them.

Lis And then for a lot of people, they’re under the belief that sorting and categorizing is organizing. It’s not. It’s an important part of it. But it’s only the first part. It’s only the part that needs to happen to make everything else fall into place. But it’s all that sorting and categorizing that people do in place of true organizing. They make piles. People make piles. They make lots of piles, and then nothing ever gets done with the pile. So the hardest part in organizing is not sorting and categorizing as much as it’s important.

Lis The hardest part in organizing, especially if you’ve got more stuff than you have space for, is what I call curating. It’s making those tough decisions about what you want to keep and what you’re willing to let go of. And if it was all about putting things in pretty containers, I’d be out of a job and, you know, everybody would be able to do this so easily.

Lis So it’s, you know, there’s a saying in my industry that clutter is nothing more than delayed decision making. But I’ve often asked myself, well, why? Why is it delayed? And this doesn’t seem to get addressed very much. But it’s delayed because people don’t know what questions to ask themselves to help them decide whether they want this pen or not. And that’s where my experience comes in as a professional organizer, is that I don’t have an opinion about what they keep or toss. You know, I really don’t, but I have a very strong opinion about helping them meet their goals.

Cathy Yeah, so I’ll just chime in here because you’ve got a great blog post about how to be organized, you don’t have to be the perfect Instagram post or this beautiful home. It’s really more how you are with your life. And you gave a really great example of people who want to put all their recipes in a binder, laminate them and have it all organized.

Cathy And you know, I know how much time that would take. And your point is really well taken. I know me, I have a laminated recipe folder. Do I ever get it? No, I go to the internet, or I go to my array of cookbooks. And I have a lot of books. And I get a lot of joy in going to my cookbooks because I feel like I’m using them. That gives me a lot of pleasure. So, just think of the time wasted in doing that collating and everything else.

Lis Exactly. It’s, you know, there’s so many things that we want to do in life and there’s so many, you know, competing priorities. If I hear clients say to me that they are wanting to, you know, go through this big process of, you know, pulling out the three-hole punch and putting things in sheet protectors and finding the binder.

Lis I’ll ask them. You know, that’s a lot of homework for you. Is that really worth your time? And a lot of my clients know that this is something I will ask them over and over again. Is this really worth your time? Now, for some it may be. I’m not the one to make that decision. But I am going to ask that question. Because people confuse their real lives with this kind of Instagram life that they imagine having.

Cathy Or the Martha Stewart image, right? And everything has to be perfect, and you do these intricate little projects, and it’s very satisfying. Really, they take a lot of time.

Lis They do. And if you have the time. And you don’t, you know, and it’s something that gives you joy and pleasure. You know, and you’re not, you have to be careful not to let this small stuff get in the way of the big stuff. So if you’re surrounded with, you know, by a house full of clutter, and you’re spending your time doing little chalkboard labels, you know, it’s gonna be a challenge for you to get through all the other things.

Cathy I’ll give you another great example, in my own life. I used to collect business cards, like we all did, right? I don’t even do business cards anymore. Nobody does it. Isn’t that interesting? That’s a thing of the past.

Lis For some people. Some people still have quite a collection.

Cathy Okay. Interesting. So then I started when I, I would ask my assistant, enter this contact into my contact management system, right. And then I realized a lot of the time when I’m trying to find someone’s contact information again, I do a Google search. So now I’m not having them all entered. I’d have my clients entered, because I use my tools in a way to communicate with clients. I’m talking about random people I meet; I don’t even do that anymore.

Lis That’s a perfect example. Yeah, that’s an example of, so what do you do in real life? So people will save the business card. But in real life, what you do, Cathy, is you go on Google. So that’s part of my role as an organizer is to help people connect the dots between, you know, the object and what they do in real life.

Cathy Exactly. I love that. That’s just the perfect concept. So, I just want to get into the mechanics of what you do just a little because this fascinates me. So you go into someone’s space, right? And there’s all this stuff to be organized. Do you literally pick up everything and go, “Is this really useful to you?” I mean, how long do sessions last for and how do you get through it when someone has a lot of clutter?

Lis One piece at a time. So here, here’s what happens. It doesn’t really matter if it’s a junk drawer or your garage or your entire home, the process is going to be the same. So what we do, for example, we’ve got a client coming up who has an attic that you know, full of things. It’s an attic that takes up the entire floor plan of her home. So it’s a big attic, and it’s stuffable. And she’s moving and she has to go through all of those things.

Lis So what we do is we’ll have some of the items, she’s going to take care of having all the items brought down from the attic and stage them in her backyard. We’re gonna go in, and we bring all of our own tools and tables and bags and boxes. And we basically set up like a reverse shopping trip. We throw everything out and we sort like with like. So stuffed animals with stuffed animals. Christmas items with Christmas items. Office supplies with office supplies. Wedding paraphernalia, you know, everything is, you know, friends with friends, or like with like.

Cathy Kind of like the Marie Kondo approach, but you did it before her, right?

Lis Marie Kondo was not even a concept in her mother’s womb when a lot of my colleagues got started. You know, but all credit to her for having a great marketing team. But the sorting is very important because I can tell you, it’s very difficult to make decisions about things when they’re all jumbled together in boxes. It’s much easier to say, oh, I have 16 pairs of black pants and I don’t need 16 pairs of black pants. You know, I like these, but I don’t like these. Are these ripped or not, you know.

Lis So it’s an opportunity. It’s also kind of a wakeup call for clients when they see all of their stuff spread out in, you know, a large space. It’s kind of a wakeup call to them like, oh my God, look at all of this stuff I’ve accumulated and never even looked at or used.

Cathy Or I really do have 20 white t-shirts that look exactly the same. It’s, I know, I believe me. So do you do a lot of closet work too?

Lis We do any space where the clients are really wanting to have, you know, make it more functional. We don’t do installations, you know, but we might recommend, depending upon a client’s preferences, aesthetic budget, we might recommend a different closet system. But what we will do is advise them along the way on how to make that work.

Lis So for example, you know, if they produce a particular closet system, we can tell them how much long hang space they need, how much short hang space they need. And that comes from sorting. So we sort everything, like I said earlier, sorting or categorizing is not organizing. But it’s critical to get to the next step, which is purging or parting with, or what I call curating.

Cathy I love the word curating so much better than purging.

Lis Yeah, because curating is about having a vision for your stuff or your life, that, you know, everything fits. It’s like having a personal mission statement. If every time you come up with something, if it doesn’t fit your personal mission statement, you can let it go. If something doesn’t fit your vision of how you want to live your life, you can let it go. And what you end up left with are the things that really are meaningful, useful.

Lis I mean, you know, I can’t say that everything’s going to spark joy in your life. You know, your Clorox is not going to spark joy, but you’re going to use it, right? So they’re going to be things that you use, they’re going to be things that you love, they’re going to be things that you’re sentimentally attached to, and can’t let go of, or don’t want to let go.

Lis You know, there’s a whole series of reasons that people hold on to stuff. But there’s also a whole series of reasons that people can let go. And that’s what happens during the curate or purge process. And then it’s about assigning a home to everything. Just like you live in your home, you don’t go to the home next door. Everything in your home should ideally have a home.

Lis And if you have kids, this is a particularly appealing concept for kids, because it’s a way to get kids involved in the whole process of organizing. When you ask your child, for example, you know, where does this doll live? Let’s bring him or her back to his home. And so everything in your home has a home. And if you don’t, if it doesn’t, what ends up happening is it just gets dropped on the first horizontal space that’s available, which is what a lot of people do. So one of the habits that I try to impart to my clients is the concept of assigning a home to things, not based on conventional wisdom, but based on how they really live.

Cathy One concept you talked about that I find really interesting is the personal mission statement. What if someone doesn’t know what their personal mission statement is? And maybe that’s the reason that they’re not organized in the first place. This is where all the psychological and emotional components of being organized come in, right? I mean, it’s not just the physical act of organizing, it’s what’s in someone’s head, and then how can they turn it into a habit, right?

Lis Yes, well, you know, I use the example of a personal mission statement because that’s a piece of the other work I do. The work that I’m doing more one on one with folks, but it’s a great metaphor. For helping people decide, you know, let’s say your kids have all grown and they’ve left, and you don’t really do a big Christmas decoration anymore. That’s not part of your current life. Then when you come across all the Christmas decorations, it’s a lot easier to say, oh, well, this, I’m not going to do this. I’m not going to put up all these 8 million decorations because that’s not my life now. It may have been my life before, but it’s not my life now.

Cathy And there may be some grieving around that too, right? There may be a little grieving process and things like that, but people can let go.

Lis Trust me, there’s a lot of grief that comes up in this relationship. I work with clients who’ve just lost, you know, who’ve recently lost family members, spouses. And, you know, this is the point where you really have to stop and give time for the client to grieve. Because every item, every piece of paper, every object is going to elicit a memory. But just because it elicits a memory does not necessarily mean it honors the person’s memory.

Lis So there’s a very gentle process that has to take place for the client to decide, is this going to be part of my life now? Am I going to, does this honor the memory of my loved one by keeping this? Would they want me to keep it? Would I use it? Or would I just, you know, how is it going to honor them if I just stick it in a container and stuff it in my basement somewhere?

Cathy Right. This is where your clinical psychology and therapy background probably really comes in with the work you do with clients, right?

Lis Yeah. And my experience just doing this for 12 plus years.

Cathy Talk a little bit about I know you’re pivoting to a little bit different way of doing business, or you’re adding on a business. Talk about that a little bit, because it seems to me the two would really work well together.

Lis Well, you know, I’ve been doing this for 12 years, now. I have a team of six employees and six contractors, and most of the work that we’ve been doing has been these kind of large scale projects that are prompted primarily by something like a move. And so we have to get in there and in a short, relatively short amount of time, downsize and, you know, get somebody all packed or manage their moves.

Lis And I had found over the past couple of years that I was really missing the chance to work more interpersonally with my clients, like I had when I first started and like I had years and years ago, when I trained a marriage and family therapist. And I was really missing that. But I knew I didn’t want to do, you know, clinical work or weren’t going to work in mental health anymore. I wanted to work with people, you know, who might have come to a point in their lives where they wanted to make some changes, but they were, you know, they couldn’t get the clarity that they needed. Or, you know, things were kind of still out of focus.

Lis And they, you know, wanted to work with someone who could ask them the right questions and help them get some clarity on, on not maybe just future dreams, but how to deal with day-to-day situations. I had a client who was holding on to some, you know, uncomfortable thoughts about a family member, and it was really kind of bothering them. And it was. And so we worked on how to objectify that voice in their head and helped them work with how to sort of shift their perspective on it, you know, if you will, because the work I do is really perspective work. And it’s about helping people look differently, kind of shifting the view of things so that they can kind of be freed up to see things differently.

Cathy And so working with the client on a typical organizing project, would you find yourself getting into these conversations?

Lis Not really, no. Because it took me some time to figure out that that was where I wanted to go. And it’s really funny that you should ask that question because what this trend, what this new service I’m offering, which is really more about helping create more joy in people’s lives, came out of my own, I would say, my own impatience over what I was missing and what I couldn’t initially kind of get some clarity on. So I sought the help of a coach, and over time, got very clear about what the work was that I wanted to add on to my existing business.

Lis So it’s basically the focus of where I’m going next with Let’s Make Room because I found that after 12 years of doing onsite work and managing these large-scale jobs, I was really missing more of the interpersonal work. And I wanted to work with people who had goals and dreams that they wanted to achieve and help them find their way towards them. So that was, I call myself a personal advocate. And this kind of brings in both my background in psychology and consulting and a newfound interest in mindfulness. So I’m not a therapist, and I don’t pretend to be, but, you know, often people experience this work as therapeutic.

Cathy Yes. And you know, you don’t have to change the name of your company. Let’s Make Room can be taken so many different ways. Let’s make room in your home through organizing. But let’s make room in your mind for what you want to bring into your life and so many, it’s just a great name for the business. It really is.

Lis Thank you. Yeah, well, that’s why right now, it’s actually as part of my website, as part of my overall business model. It’s, you know, I didn’t get into this business because I was a born organizer. I got into this business because I started to see the value of how making room in one’s life enabled them to discover or untap parts of themselves. So in a way, I’ve sort of come full circle. But initially, it was very tangible in terms of, you know, stuff in space. But now it’s kind of coming more around to the person. And that’s very, very gratifying to me.

Lis And you know, before I forget, I just wanted to mention, you had asked me in the beginning of our conversation about tips. The one tip that I didn’t mention, that I think is really important, is don’t make your stuff more important than you are.

Cathy Hmm, that’s a great one.

Lis I’ve seen this happen. People have pushed themselves out of their own home offices or out of their own rooms because they haven’t been able to let go of things. And they can’t actually get in there. They’ve made their stuff more important than they are.

Cathy Yeah. And well, I guess the extreme is the hoarder. Right? Where stuff takes over your home. But do you find there’s lots of iterations in between?

Lis Absolutely. We all have a little bit of that in us. Everyone does. It’s just, it’s on steroids for someone with chronic hoarding disorder. I don’t work with that population because it is a mental health issue. And it takes a really specialized, interdisciplinary approach to work with people who’ve got that mental health issue. But when it does come up, yeah, I can recommend people.

Cathy Let me ask you. I know this is a podcast that interviews women. I think I have a lot of women listeners. I love having men listeners, too, by the way. But I’m just curious, because I know in my practice as a financial advisor, women clients communicate differently than men, for example. And they have, for me, they’re more open. They let me know about themselves earlier on in the process, so that I can help them. You know, the more I know about my clients, the better when it comes to creating financial plans. And I’m wondering, you probably work with a mix, right? You work with men and women? And is there any difference in in the way they interact with you?

Lis You know, strangely enough, not really. But the differences is that often men don’t ask for help. It’s their spouses that will ask on their behalf. I will say, well, is this for you? Or is this for your spouse or your husband? And they’ll say, well, my husband’s the one with the clutter issue. And I’ll say, well, is it a problem for him? And if it is, if it is a problem for them and they want to talk to me, that’s fine. But if it’s not a problem for them, and it’s only a problem for the wife, there is nothing I can do.

Lis Because, you know, why would you want to change something that’s not a problem for you? So it’s, they get their motivation from, you know, wanting to please. So if they’re, often, you know, a man will come to me because his wife is very frustrated and they’ll want to make things better. Or because they recognize that there’s a cost to themselves that they really care about. But it’s actually, you know, the model that we use is very straightforward. It’s, we can get into the emotional content of things. But often it’s just, you know, it can be a very simple process.

Cathy Yeah, it’s very systematized, I’m sure. You probably have a checklist: we start here, we do this, we do this, we do this, right?

Lis Yeah. And I, you know, find that when I demonstrate the process that we use in our initial meetings, there’s a lot of, there’s sort of a, I can almost feel in the air the sense of relief that comes from, you know, the spouses of, you know, the husbands of the clients. Because they go, oh, this makes sense. This, I can do this. And they’re often, you know, great advocates if their wives or their partners are struggling. Sometimes one person in the couple can help influence the situation.

Lis Now, that being said, I have a very strong rule, which is that if you were the owner of the decision on, you know, this stapler, you don’t get to tell the other person, oh, I want that stapler. Or why wouldn’t you keep that stapler, you’ve had that stapler your whole life? It’s like, no, that’s where my therapy background comes in. You don’t get to, there’s no crosstalk. Whoever owns the stapler gets to make the decision about the stapler.

Cathy I’m sure you run into that a lot.

Lis Yeah. So I just set that rule up from the start.

Cathy And do people follow it?

Lis Yes. I find it a relief actually. Because I think they’re sort of, you know, they realize that they don’t have to take control of that situation, too.

Cathy Right. I’m sure you’ve got some real success stories with clients that what you do is transformational for them. Can you share any of those?

Lis Well, you know, of course, they would be the best ones to judge that. But, you know, there are very pragmatic sort of transformations that happen. So for example, we recently worked with a senior couple, who after 30 plus years of living their home in Oakland had decided to move to the East Coast where both of their children lived. Especially because one of their daughters was about to have a baby. And so there was a time, there was some time sensitivity. That baby was going to be coming in mid-May. And we met this couple, I think, at the end of February. Maybe the beginning of March.

Lis So what we did for them was we first, you know, basically decluttered and downsized their home, room by room. And then we set up an online sale of all the things that they didn’t want. And we sold them through a platform called Max Sold. If you’re familiar with Max Sold, it’s an online auction sale for selling really everyday items. It’s not for super high-value, although sometimes there are high-value items, but it’s a great way for our clients to minimize the cost of moving and hauling and that sort of thing.

Cathy I’ll add that to the show notes. Do they buy like old China sets and old silver sets and things like that? That’s always an issue with people.

Lis Well individual people bid on things. So Max Sold puts it online, not unlike eBay, and people bid on them. So somebody might get a beautiful China set for $1. But it depends on what the competition is, especially close to the end of the sale. We made our client about, well, the sale made almost $8,000, of which more than $5,000 went to the client.

Cathy Was this on this website that you’re talking about that?

Lis Yeah, it is. And it’s used by a lot of professional organizers like myself, who want to help clients downsize their homes but really are uncomfortable with the idea of donating everything and would prefer it getting in the hands of somebody who can use them, even if they don’t end up spending that much.

Cathy Yeah, and who uploads all the, who does all that work? That’s a lot of work.

Lis Yours truly. Yours truly and my crew. We create lots of things, so like items like collectibles or China, or it might just be individual pieces of furniture. We photograph them, we describe them, we catalog them in Max Sold’s app, and then the sale goes live. And a week later, the sale closes, and all the buyers come to us with my team. And they’re there to come pick them up. And they’re all scheduled, you know, and it goes fairly smoothly. And the things that don’t get picked up, often we give away for free, or we find a way to find homes for them on the same day.

Lis Yeah. So it’s a great situation. So this couple, we did this for them. And then afterwards, I managed their move back-to-back to the East Coast.

Cathy Describe that. What did you do for them?

Lis I had to research and find the right movers for them and negotiate the contracts, make sure they weren’t going to get ripped off. And, you know, working with movers, especially interstate movers is really, can be a challenging situation.

Cathy I hear that all the time.

Lis Yeah, and it really all comes down to two things. It comes down to the driver, and it comes down to the local agent, because the local agents are the ones who do the packing and bring in the interstate company. And so it’s knowing how all of this works behind the scenes and knowing how to make sure that things get done. And that, you know, I mean, I had to negotiate the, I went to two different movers, and had to kind of get the best situation for my clients.

Lis And then once that’s done, then the movers come and I’m there on pack and move day to make sure everything gets done according to plan. And the funny thing was in this particular situation, the load day, the actual load on the truck day, happened the same day I was scheduled for my second vaccine. So I had to get it. It had to be done. I literally ran out of there to go get my second vaccine and then came back to the house to just make sure, you know, there wasn’t any lingering issues.

Cathy Which vaccine did you get?

Lis Pfizer.

Cathy Okay. That had, I think that had less side effects on the second. I got Moderna and the day of it, I was fine. That evening, I went down. So I did things all day long until the evening, and then I was sick the whole next day.

Lis Right. That’s fairly common. So anyway, I just, so the upshot of this client was that they are now back east, their daughter had the baby, and they’re getting ready to move into their new home.

Cathy That’s an incredible story. So you handled the whole thing from start to finish. You and your team. That’s really a service that a lot of people would find valuable. Just switching a little bit. I know these are the big situations, right? Like, they’re one-time big situations. You’re helping somebody move. They got a new job that’s in another state, they’re moving to be closer to their grandkids or things like that.

Cathy So you work with people who like, they want you to do an organizing project in their home because it’s out of control, somewhere their kitchen or their office, or maybe many rooms, and they hire you for an engagement. And I’m sure it’s some time frame that you have that you work with people. How do you know that they’re not falling back into old habits? And do you check in with them? Do you have some kind of ongoing service? Or how does that work?

Lis It’s a really good question. And I would like to say that yes, we do check in. I do check in as part of my, I mean, that’s just part of who I am. There are certain, you know, my clients are very special to me. And I often find myself thinking about them and just shooting them an email and saying, just thinking about you, how’s everything been since we were there?

Lis But I recognize that for a lot of people, this is a big behavior change. And when we come in and do the organizing, as much as we’re, we try to impart what we know. It’s not as if I’m working with them one on one on a long-term basis and teaching them. So what often happens is people do slide back and, you know, imagine you’ve lost, you know, some huge amount of weight or something, which I can speak very personally about this, and you gain it back. And so there’s a lot of shame you feel about it, and you may not want to bring somebody back in again.

Lis I really do try to minimize the amount of feelings around that. But people just feel that way. And so we offer an opportunity to do maintenance if they wish. You know, it depends on the client. There’s some clients who hire us sort of on a long-term, you know, weekly or monthly basis to help them with different projects. And I would say those clients learn the most from this experience.

Lis So long-term relationships are so valuable because you have a chance to get to know one another. You can help them create habits, because, you know, habits are hard to develop. And you can flop but you can get right back on the bandwagon and keep trying. But you need to, you need to have some catalyst to remind you of that.

Lis And that’s actually sort of what got me into this new work that I’m doing. You know, to help people take more of a deeper look into what’s keeping them stuck in the same habits, whether it’s an organizing habit, or, you know, they’re not getting enough done, or they are just frustrated with some aspect of their lives. But you know, my business model primarily, up until recently has been more like a contractor. Get in there, do the work and get out.

Cathy Yeah, I think your pivot is going to be really valuable for people. It makes so much sense with all the background, all the experience, that you’re going to do that, it really does.

Lis It’s been a challenge, because I’ve also had to shift a lot of the way I have been working. Because when I’m working with clients on like, get in there, get it done, get out projects, I’m much more directive. Whereas when I’m working with clients one on one, who are dealing with, you know, trying to sort of clear the weeds out of their lives, and we’re more of a field guide, if you will, I’m more about eliciting from them what’s getting in their way so much. It’s more of an exploratory or a collaborative relationship, where I’m reflecting back to them what I’m hearing and helping them gain clarity themselves, rather than me saying, you know, being more, you know, directive.

Cathy There’s so many parallels to what I do and what you do. Doing a one-time planning engagement, it’s almost like you have to be directive. Because, you know, they’re going away, and you’ve got to impart everything you want them to know in that short amount of time, right? Whereas a relationship, it can develop over time, and you can really help change habits and things over time. It’s so, so similar. And I find the ongoing so much more satisfying than the short-term, where you’re done and then you’re kind of left wondering, what happened? Did they implement these changes, did they not? You don’t really know unless you have a way to check back in or re-engage. Right?

Lis For me, it’s a different level of satisfaction, it’s very satisfying to go into a person’s home, you know, this is why I got into the business originally, because I wanted to do tangible change. So it’s wonderful to go in and be able to organize, you know, a space, a closet, whatever it is, a kitchen, and know that when you left, it was beautiful. Right? So it’s a different level of satisfaction. But then the kind of satisfaction I get from working more interpersonally with clients and not so much about their physical stuff, but more about their, you know, I don’t want to even say psychological stuff, but the thing is, their thoughts and dreams. That’s a whole different level of satisfaction.

Cathy We all evolve in our work and sometimes you get bored, you do one thing too many times. You want to branch out and test your skills and do other things, too. And it sounds like that’s what you’re on the path to do.

Lis Exactly. Yes, exactly. There’s a, you know, we all grow in our work in some way. And for me, this was the logical next step.

Cathy Yes, it sounds, definitely. So, let me ask you this. Do you think that people who are organized, who have reached some level of, you know, organization in their lives are more successful than other people? And conversely, do you think a disorganized person can reach their goals and be successful?

Lis You know, that’s a really interesting question. I think it certainly doesn’t hurt. It helps a lot. It depends upon the person. Sometimes a person’s environment is a reflection of their inner environment, of their inner world of what’s going on inside. So, it may be that, you know, therapists tend to work from the inside out, organizers tend to work from the outside in. And this new kind of work that I’m doing is working kind of alongside, you know, at this sort of parallel.

Lis You know, there are lots of different ways to get to the same result. I’ve known plenty of very successful people who were very cluttered and disorganized. And, you know, it’s not a problem for them. Maybe they have a system, or maybe they just, that’s what sparks their creativity or their productivity. I think that it’s when it becomes a problem for them that it becomes a problem, you know. You can be an extremely organized person and still be dealing with life issues. It’s just that you, it might just be that at that point in your life, you have the space, the room in your head, so to speak, to maybe finally, you know, confront or look at, or explore those things.

Lis So I can’t really say that, you know, across the board that if you’re organized, you’re going to be healthier. If you’re disorganized, it’s gonna be problems for you. Like anything, I think it’ll help in certain situations, it’ll facilitate you getting to the next step of what you want.

Cathy But it’s a lot less stressful. Like, I even think, just an example, if I clear off my desk at night, you know, make everything neat and clean, put the papers away. When I go in my office in the morning and look at that it feels worlds different than when I’ve left everything out, you know, an old coffee cup with coffee in it and papers all over the place. It just is, mentally, it’s not as motivating. And it adds a little bit of stress early in the morning.

Lis Right. And for you and for many people, that’s true. And I would say for, you know, a cohort of people there are, you know, they’re used to a certain degree of clutter. But I would say if you find it uncomfortable, then yes, it’s always great to come up with new habits and new behaviors and ways to minimize. I mean, life is stressful anyway. But there’s this tug of war that happens between wanting order and needing peace in our lives and needing to feel the sense of calm that comes from things not being all in disarray. And the struggle, you know, that’s balanced against the people who, either they’re overwhelmed, or they want to hold on to things or they have too much, there’s too strong a relationship. They’re too identified with stuff. So it’s not a cut and dried situation.

Cathy And you’re making the point: everyone’s so unique. There are general principles about organizing, that makes sense, but how we apply them is, you know, all up to our own unique selves. You know, we’ve been through you know, the COVID year. I’m wondering, did your business blossom more?

Lis You know, it didn’t because we couldn’t work, we couldn’t work in people’s homes. Here was the silver lining that came out of it, though. I discovered through this very early on that if I wanted to survive, in addition to benefiting from, you know, PPP loans and so forth, that I had to make it available to people virtually in any way I could.

Lis So I actually discovered through the pandemic that virtual work, a way of working with people virtually, was something that I could do, although I wasn’t sure how it was going to eventually look. And that’s how my personal advocacy work, you know, helping people with their life issues, suddenly there was an opportunity created for this.

Cathy That makes so much sense. So that was a silver lining for you. It kind of pushed you into something that you were already interested in anyway.

Lis Exactly, exactly. And I have actually worked with people around organizing virtually. Often it works very well with people who are stuck in paper clutter. So people who are really challenged by paper piles is something I can do virtually, as well as in person.

Cathy How do you do that? They hold up the paper?

Lis No, I don’t even have to know what’s on the paper. That’s the beauty of it. I have my own system that I teach, called the ACT system. It stands for action, contain, and toss. And it’s basically a decision tree. So I don’t even have to know what’s on the piece of paper. I just made up, you know, I asked the client, you know, is there an action you have to take with this? Is there something you have to do with it that doesn’t include filing or reading? And if not, is it likely you could find this information again somewhere else? And if you could, you know, if you could find it online, you know, how easy would it be?

Lis And if it’s easy, then I ask them, so what do you want to do with it? I never make a decision for them. They come to that on their own conclusion. And often what I’ll do is I’ll have them take the piece of paper and put it behind their backs. And I’ll say, okay, imagine that piece of paper just disappeared. Could you find the information on it again, if you needed to easily, and they would think about it. And so you’re activating a problem-solving part of their brain. And then they would go, oh, yeah, I think I can. I said, well, great, then well, what do you want to do with it? And they usually say, well, I can let it go. And ca-ching, every single time a piece of paper goes into the recycle bag, it’s like, virtual money in their pocket.

Cathy Oh, yeah. That’s great. And so do you do that on an hourly basis?

Lis Yeah. Virtually somebody could schedule through my website at letsmakeroom.com. There’s, I have a calendaring link where people can schedule both a free initial 30-minute chat with me as well as one, two, and three-hour work sessions, either to work on organizing or to work on more interpersonal things that are coming up.

Cathy Okay, yes. So I love that. So what if somebody had a bookcase full of, okay, I’m talking about me. Okay, I love books. And I have a really hard time letting go of books, even books that I’ve never read. And then I have ones that I’ve read and I’ve loved. Do you? Would you do that? Would that be something you would do virtually? Go through books and find out why are you keeping that book?

Lis I would never ask the question, why are you keeping that book? I would want to know, first of all, I would want to know, what your intent was. Like, what your goal was in trying to curate the books that you had. Some people have to do that, like my clients who moved back east, they had thousands of books, literally thousands. And they couldn’t take them with them.

Lis So it has to, you know, why are you, what’s in it for you? I would identify that. And, you know, books. You know, I come from a family of readers and writers, and books are very meaningful to people. So we have to create what I call decision tools. A decision tool basically works like a sieve, you know, like a strainer. And the decision tools are the things that help you decide whether the thing comes through the strainer or stays in the strainer.

Lis So for you, all of those decision tools are going to be very personal. So you mentioned a moment ago, it’s a book that I loved, and I can’t imagine parting with it. So that’s a decision tool right there. That’s okay. If you can’t imagine parting with it and you love it, well, then that’s there’s no decision. I mean, it’s obvious. Then there’s going to be the books where you’re like on the fence, I don’t know.  

Cathy Oh, good example. So someone recommended a book and said, oh my god, this is the best book I ever read. And I read a few pages and could just not get into it. I put it on the bookcase. And I can’t get rid of it because it’s supposed to be such a great book and I’m supposed to love it. So it sits there. That’s a good example.

Lis Well, given what you know about yourself in your life, what’s the probability that you would pick up that book again?

Cathy Probably not a good one. I’ve got so many things to read for my work and everything. So very unlikely.

Lis Okay, so in that case, what would you want to do with it?

Cathy Probably give it up.

Lis Give it up to somebody specific?

Cathy Oh, well, usually I donate books, or I trade them at the local bookstore.

Lis Is that worth your time?

Cathy Good question. I get a lot of pleasure out of it. I like doing it, yeah. So that counts, right?

Lis So there are a lot of options. You’ve determined already that it’s not likely you’re going to read it or look at it again. But you would like to find a new home for it, where somebody else could appreciate it. And there are different ways of doing that depending upon what’s worth your time. You could have a box or a bag ready for all of the books that you’ve decided to discard. And, you know, put them by your front door. And next time you are on a, you know, out running an errand, take them outside with you and drop them off.

Lis If you have an enormous collection, you might, you know, arrange for a pickup of them, right? Because there are a lot of charities that will take books, most Friends of the Library of various libraries want books. Goodwill will take books, though, as well. Salvation Army will take books. But if you want something that’s more personal, if you want to get it to a specific place, if that would make it easier for you to let go of, then you know, is it a senior center that your thinking, is it a friend? And so, a lot of people what they do is they get hung up on not so much do I want it or not, but where should it go? But you’ve clearly made the decision like, nope, I have lots of other books I would rather read and this one I think would be appreciated by someone else.

Cathy But I do feel guilty that I’m not reading it. You know, there’s so many, there’s so many things.

Lis Ok. And then I would probably, so you feel guilty. You know, I’d probably want to explore that with you. Because it came from a friend who recommended it.

Cathy And, you know, yeah, or maybe I’m not intellectual enough to get this book. You know, there’s so many, so many things in there.

Lis Yes. And we probably have to unpack that a little bit. And so, because you’ve got some emotional attachments for why you’re holding on to it that have nothing to do with the book. I mean, absolutely nothing. The fact that you feel guilty, or you’re questioning your own intellectual capacity, that has nothing to do with the book. That’s a deeper dive.

Cathy So, you know, this is a perfect little mini microcosm of what you do, right?

Lis Exactly. Right.

Cathy That was great. I love it.

Lis So what’s your decision about the book?

Cathy Oh, um. I think what I would do after talking to you is I would think about another person that might enjoy it. And I’d try and get it to them. And really do that thoughtfully, not just want to give the book away. Really think about, who would love this book?

Lis And that’s worth your time.

Cathy Yeah.

Lis Ok. Done. If you had to do that, for all your books, though, that could take some time. So that’s the decision tool that I was talking about. There’s going to be books that will be like that. That’ll be like, the decision tool will be called, I want to get it to the right person, versus I just want to donate it. And so there’ll be two piles. I want to get it to the right person. Just plain old donate.

Cathy Yeah, I love the idea of putting the bag or box right next to the bookcase. And every once in a while, going in and starting the sorting process. That’s a great tool.

Lis Good. Yeah. And there has to be a motivation. Because if you don’t do it, is there any cost to you right now? If you know, moving is one of the reasons people do this.

Cathy No, the cost though, is that books are all over the place now in my house. I keep finding new places to put books. Something’s gotta give.  

Lis That falls under what I said earlier about don’t make your stuff more important than you are.

Cathy Very good. You’re hired.

Lis Anytime. Call me up.

Cathy You know, unfortunately, I could talk to you so long about this. I love this topic. I really do. But we got to cut it.

Lis Me too.

Cathy Yeah, I know. It’s great talking to you. But I want to make sure, you’ve mentioned already your website name but let’s repeat these things so people can find you, and I’ll also add them to show notes. I noticed that you’re not on Twitter, right? You don’t do social media marketing, right?

Lis I don’t do a lot of it, you know, for better or for worse. A lot of people, most people find me through Google, strangely enough, and through word of mouth. Because most of my clients tend to be, I would say, not all of them, but most of them tend to be in their like 40s to 70s. And those folks are more likely to get recommendations from going online or from asking friends. If they’re going to use any social media at all, they’re going to use Facebook. They don’t, they’re not big Twitter users. They’re not big LinkedIn users necessarily.

Cathy And so you are a Facebook user? Do you have a business page?

Lis Yeah, there’s a business page for my company on Facebook. So my company is called Let’s Make Room. And I’m at letsmakeroom.com, and my email is info@letsmakeroom.com. And I spell Lis with an s not a z. Rhymes with his and spelled the same way. It’s short for Lisbeth. So Lis McKinley.

Cathy Okay, great. And I know one other question people are probably thinking about. We won’t go into it too much now, but the fees, are they based on hourly, project? Or how do you do that?

Lis For the big projects, it’s based on the project. So it might be a daily fee or a flat rate. For working individually with me, it’s an hourly rate. I do charge for my initial on-site consultations because it usually takes about two to two and a half hours, because it includes a demonstration of how I work.

Lis If it’s physical organizing, or if it’s paper organizing, I’ll take them through a demo. And it’s a way for them to actually, it’s a way for clients to actually see how I work and get a sense viscerally of like, this is somebody I would trust to be in my home. It’s also a way for me to see how they make decisions.

Cathy So it’s kind of, you want to see if you want to work with them, and you want them to see if they want to work with you type thing.

Lis Yeah, more the latter. Yes, I want them to really understand what this is about. And that it’s not just, like I said, putting things in pretty containers. Although that’s fine, too. We’ll do that if they want it.

Cathy Yeah. Okay, great. Well, it’s been a pleasure. Thank you so much. And I think our listeners are gonna find this to be really interesting and engaging. So thank you for being here.

Lis Thank you. It’s been so wonderful for me as well. It’s been great to see you again. And, you know, if there’s anything I can do to help, for your listeners, please feel free to, you know, reach out.

Cathy I will. Like if you have any published tip sheets or anything, I might ask for those and I’ll put them in the show notes.

Lis My brochure is available for downloading and a free downloadable moving guide that came right out of my head. It’s not the typical one that you see on like, you know, licensed moving sites where it’s the obvious, but it’s things that I know from my own experience of the other things that nobody would consider.

Cathy That’s invaluable. Thank you.

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Curtis Financial Planning