What do eating twinkies and Financial plan have in common?Today, we’re asking the question: What does it take to survive a catastrophe or apocalypse scenario?
If you’re a Twinkie, you’re very likely to survive a zombie apocalypse and maybe even a nuclear apocalypse.
Eating Twinkies – and only Twinkies – isn’t a great idea. Loaded with sugar, preservatives, artificial colors and flavors, Twinkies are best kept off your shelves if you want to live a healthy life.
And the same applies to your finances.
What about your financial plan? What disasters can it withstand?
Sure, you’ve got car and home insurance to replace those if they’re lost.
Does your financial plan stand up if you get cancer or dementia? What if you get fired from your job? What if you need to take time off to care for a loved one who’s sick?
We’re talking about disasters that happen to too many people each and every day.
Surely, none of us are exempt from having something happen to us as well.
Thus, we need a financial plan that prepares for something like this to happen and yet our savings survives.
In today’s episode we share a 3-step process for creating a financial plan that could survive (and maybe even thrive!) during these sorts of scenarios
Today, we’re going to cover three simple-to-follow steps you can use right now to create a ‘healthy’ financial plan that will be your foundation for years to come.
Here Are The Show Highlights:
– The night-and-day difference between a budget and a ‘healthy’ financial plan ([5:10])
– How to create a life-long financial plan ([8:10])
– Best practices for ‘stress testing’ your new financial plan ([11:00])
– Actionable steps to instantly put your financial plan into play ([12:45])
– Our number one piece of advice when it comes to creating your financial plan ([13:10])
Eating Twinkies all day will kill you, but having a healthy financial plan for your money might just bring you more wealth than you could ever have thought possible.
Remember to download Grandma’s free wholesome wealth recipes book by dropping into http://www.grandmaswealth.com. Time-honored wealth strategies served with a helping of balance and trust.
If you’d like to see how Grandma’s timeless wealth strategies can work in your life, schedule your free 15-minute coffee chat with us by visiting https://www.grandmaswealthwisdom.com/call…just like Grandma would want us to do.
A hearty welcome to Grandma’s Wealth Wisdom with your hospitable hosts, Brandon and Amanda Neely. This is the only podcast for strategies to grow your wealth simply and sustainably like grandma used to. Without further ado here are your hosts.
Brandon: Hey everybody, I'm Brandon and welcome to Grandma's Wealth Wisdom where we help you build grandma would be proud of.
Amanda: And I'm Amanda. Today's podcast is titled, "Eating Twinkies All Day Will Kill You." It's something I have to say to Brandon quite frequently.
Brandon: I mean I love, well, maybe not Twinkies but I love ...
Brandon: Sweet things.
Amanda: He eats a lot of them.
Brandon: But I do go to the gym to make it at least counteract it a little bit; the stair stepper that we mentioned a few episodes back.
Amanda: But the battle is really won in the nutrition.
Brandon: Yes, but anyway. The title, what is it? Why are we talking about Twinkies?
Amanda: Right, "Eating Twinkies All Day Will Kill You", it's grandma's little reminder to eat healthy and to take care of yourself. You have the power to choose what you eat and how you live your life. But let's talk a little bit more about Twinkies.
Brandon: Wait, wait, so I have the power to choose those things? My willpower is...
Amanda: Or not choose those things.
Brandon: ... is kind of low sometimes.
Amanda: Sometimes too much. Anyway, Twinkies, the topic of today, Twinkies could probably survive a nuclear apocalypse. They would
definitely survive a zombie apocalypse, you get it – because the zombies would not be eating Twinkies.
Brandon: Oh yeah, they wouldn't touch those. I mean they are going after other humans or something.
Amanda: Yeah, eating Twinkies and only Twinkies is not a good idea especially if you want to survive to play with your grandchildren.
Brandon: Yeah, I mean, actually in researching some of this I read and also it makes me not want to eat Twinkies. I read that to burn off the calories in a Twinkie, you need to walk for 70 minutes. So then that whole working out at the gym, I need to be there a lot longer, Amanda.
Brandon: So maybe I should eat Twinkies so I stay at the gym longer.
Brandon: Probably not.
Amanda: You have to work too.
Brandon: Plus I can't imagine when some of the main ingredients do to someone's health. So I just want to read a few and then sometimes these ingredients are in a lot of things. So anyway, just thinking about what you put in your mouth has consequences. So it has enriched bleached wheat flour, of course water, sugar, of course we have to have sugar in that that's what makes it taste really good, corn syrup, high fructose corn syrup, so corn twice.
Amanda: Yeah, two different kinds of corn syrup.
Brandon: Partially hydrogenated vegetable and/or animal shortening so there is animal product, beef fat specifically, is in your Twinkie.
Amanda: It is not vegan.
Brandon: Yeah, it's definitely not vegan. It also has eggs and it has dextrose; whatever dextrose is.
Brandon: So that's in a Twinkie so if you're thinking you're going to have a healthy, not a healthy Twinkie that is vegan, there is no such
Amanda: Yup. So I think we all know that we should avoid Twinkies as a major part of our nutritional strategy. Maybe have one every once in awhile but not all day, every day.
Brandon: Now I don't know if I'm going to have them ever.
Amanda: Well, that's your choice to make. But we are trying to survive then being a Twinkie would be a great thing. If we are what we eat then being a Twinkie would be great thing if we're trying to survive any kind of catastrophes or apocalypse.
Brandon: Zombie apocalypse.
Amanda: Yeah, any of those. Today, we're going to be talking about how to create a financial plan that's like a Twinkie, it survives. But
unlike a Twinkie it's super good for you. We'll be asking types of question like can our financial plan survive a disaster; when facing a disaster what does it take for our money to survive? We have to affirm you from the beginning here; you are stronger than you think when it comes to putting together a financial plan, it's a little easier than you might think and it's easier to stick to than you might think. Just like you might surprise yourself with a well thought out nutrition plan, you might surprise yourself with how well you can do financially too especially just like health, nutrition, dieting, exercising, if you get a personal trainer, a dietician that's going to help you do even better; same thing financially if you work with a financial professional that you can help you too so we're going to be talking about that as well.
Brandon: Get setting up a routine like for me I go to the gym regularly and that really helps with that kind of thing. It's also kind of just second nature now. So before we get into the practical how-to's of building a financial plan that lasts, we should answer the question of why. Why build a financial plan at all, let alone a financial plan that can withstand catastrophes like that zombie apocalypse?
Amanda: That's a great question, Brandon. How would you answer it?
Brandon: Well, building a financial plan is very different than building a budget. So a budget is really just a short term spending plan. You're saying here is how I'm going to spend the money I have. A financial plan is a strategy on how you're going to reach your financial goals over the long term. It's important to have both; both a budget and a financial plan. With a budget, you know how you're going to be able to afford groceries and gasoline while meeting your obligations like rent or that mortgage payment otherwise you may be homeless and we don't want that. With a financial plan, you know how you're going to buy a home or a car or a send your kids to college or never run out of money in retirement. So you're setting up a plan for those future things that are coming up.
Amanda: Okay, so there's a difference between financial planning and budgeting. Budgeting being more short term and financial planning being more long term but why do we need a financial plan that can withstand a catastrophe?
Brandon: It's a great question. It's because financial catastrophes are statistically likely occur; again, financial catastrophes are statistically likely occur.
Amanda: Give me some examples.
Brandon: For example, someone turning age 65 today has almost 70% chance of getting struck by lightening, just kidding.
Brandon: Almost a 70% chance of needing some type of long term care services due to health issues like cancer or dementia or Alzheimer's or things like that, 70%. And too many seniors needing long term care end up spending down all of their assets to cover the cost and then depend on Medicaid to cover the rest. What about the chance of being fired from your job in your 40s or 50s and it takes a long time to get that new job; that has happened to a lot of people? That's probable sometimes. What about a child who develops a life threatening disease? What about a parent that needs a caregiver? What if you want to stop working awhile to care for your parents or the child or other family members because it just happens? Here is another sad thing, what if your house burns down? What if you hurt yourself in an accident and have huge medical bills? That actually happened to my cousin and it was not expected. He didn't expect to fall off a ladder but it happened. We're talking about financial disasters that happen to too many people each and every day. Surely, none of us are exempt from having some thing happen to us as well. Thus we need a financial plan that prepares us for something like this to happen and yet our savings survives through those crises.
Amanda: Okay so to condense, we need a financial plan beyond just a budget, how do we make it happen? Lucky for you, we've made it into a three-step process; as easy as one, two, three. Here we go. Step one: create a plan. So many people don't have plans. Actually there is a saying, poor people plan for Saturday night, rich people plan for three generations. This is grandma, she is thinking generationally. Keep this in mind. We're not talking about budgets or spending plans. We're talking about a life long or may be even a generations long financial road map that hopes for the best yet prepares for the worst. So this step one is to create a plan, how do you do it?
Brandon: Well, first I do want to say, we create business plans and every entrepreneur has to have a business plan before they start their business. I think in this same vein, if we are going through life, we should have some kind of financial plan. I mean it seems like it would be a no brainer. So what you want to do is start with getting clear on your goals and prioritize them. Do you want to buy a home? Do you want to send your kids to college? Have a solid emergency fund? Travel the world? Maybe buy a new car? Which of these goals should happen first? Like those things are important. You want to put that in a plan.
Amanda: Yeah, so you take your goals, you prioritize them, and then add some numbers to your goals. For example, if you're number one goal is to buy a home, how much do you want for a down payment? When do you want to have that down payment ready? What does that mean in terms of how much to set aside monthly or annually so that you can reach that goal?
Brandon: You also want to consult a professional to help you see and consider things you might not see on your own. This is not your uncle or your aunt; maybe they are financial professionals but not just your aunt who is a plumber or maybe uncle. For example, if you get a tax refund each year would it be smarter to have less withheld so that you have more money monthly in cash flow or to continue getting the refund by putting it towards your plan; these professional can help you think through strategically what's best for you.
Amanda: Absolutely. So that's step one; create your plan.
Grandma always said, “Eat your vegetables.” She loved making home-cooked meals with healthy food and from-scratch desserts. Would you create a diet of fast food or cookie cutter financial products that made you fat and bloated with fees or would you like wholesome time-honored wealth strategies served with balance and trust. Get started with your healthy money planning by downloading wholesome wealthy recipes; your moola cookbook is waiting for you at grandmaswealth.com.
Amanda: Step two is to stress test the plan. You're going to run through as many scenarios as you like. What if you get cancer? What if the dollar is replaced by Bitcoin? What if the stock market crashes? What if you lose your job or your business closes? What if you have another kid? What if taxes go through the roof? Does your plan help you navigate these types of scenarios?
Brandon: Again I’m going to hit on this. You might want a professional to help you with this especially someone to do the math for you because doing that math, thinking through strategically some of those things will help you to then to be able to overcome those obstacles if they are to happen.
Amanda: There is a lot of math involved and it's good to have a professional to do that math for you even if you like math maybe you can nerd out with the professional and do it together and that might be lots of fun. But if you hate math, even better just have the professional do it for you. So now, you have a plan and you've stress tested it and you might find that it holds up to some stress tests and it doesn't hold up under others. Most plans are not going to hold up under every single stress test but do what you can, prioritize what is likely. For example, you might think that taxes are certainly going to increase in the future but you think it might be highly unlikely that you're going to have a kid or another kid. So make sure that your plan can survive if taxes increase.
Brandon: Which they are going to increase.
Amanda: No one knows that for certain, it's highly likely. You can't say that they are but it's highly likely.
Brandon: Yeah, highly likely around 2025, 2026. It will probably happen.
Amanda: That has been warned by people like the Congress people or whoever. But anyway, stress test, figure out what stress test is most important and that your plan can withstand those kinds of stress tests; step two.
Brandon: So step three then is to do something with that plan. You need to enact and work out the plan and give yourself though grace to make carefully thought out changes if those things happen. If those things happen, you want to be able to adapt with the change or with the plan.
Amanda: Yup so my number one piece of advice as you go to an active financial plan is to make it as automated as possible. If you're going to start saving, have your savings automatically transfer without you thinking about it. If you're going to start repaying your debt more quickly, make any debt repayment reoccur without any intervention. Now grandma, we were talking to her, she said that she wishes she could have done this; that she could have automated things but instead she didn't have that opportunity. She had to use checks and go to the bank branches and make transfers and actually talk to tellers and all that kind of thing.
Brandon: Which is still good to do that.
Amanda: Right, if you want to, you can do that, but it's also awesome that you have the power to automate so much of your financial life, all you have to do is set up the systems.
Brandon: Yeah, she didn't have that whole thing called the internet and automations like we do.
Amanda: Yup, you can even do a lot of it from your smart phone.
Brandon: Yeah, crazy. And again, I'm going to hit on this one more time, have your professional who is going to check in with you on a
regular basis to help you adjust as life changes. Again for us, our life changed when we had our baby just five almost six months ago. So we reached out to our advisor and said, "Hey look, life changed, what do we do now?" So having somebody to talk through those life changes. For us, we actually do a six-month review with our clients and discuss what's changed and how to change the plan accordingly plus a great financial professional will not charge you for these meetings.
Amanda: Yeah, it would be a really bad thing if every six months you had to take your checkbook out or your credit card out and pay for someone to just check in with you about how your plan is going and help you make adjustments. A good financial advisor won't do that. They will continue to check in with you regularly without actually charging you any money. And of course another word of caution, don't change on a whim; carefully think through the changes you're thinking about making to your plan and talk them over with those that are important to you like your significant other and with your chosen financial professional and then only move forward if it makes sense to your overall strategy, to the big picture of your entire financial plan.
Brandon: So that's it; three steps to have a financial plan that last through disasters, through emergencies and catastrophes and some kind of crazy apocalypse; hopefully not the zombie apocalypse and maybe it will even last for generations. So create the plan, stress the plan, and then actually enact the plan. So the reality is eating Twinkies all day will kill you but having a healthy plan for your money might just bring you more wealth than you though possible.
Amanda: Budgeting is fairly simple to do on your own but planning your financial future and creating that road map is even better when you work with a financial professional. So interview a few and choose the one you jive with the most and whose strategies fit with your goals.
Brandon: Of course, if you want to interview us, we would love your consideration. All you have to do is go to grandmawealthwisdom.com and click request a meeting. Right, Amanda? We love to talk with our listeners.
Amanda: Yeah, but I can imagine some people might be asking what does a financial analysis look in order to help someone develop a financial road map.
Brandon: I mean it's actually not that hard. It's just takes two hours. One hour to gather the info like the 30,000 foot view that we would do the analysis and one hour to present the personalized ideas and maybe a little homework in advance of the first hour, a little bit before just so you understand your plan. Then you can go into implementation mode and that's really easy from there.
Amanda: Yeah, so that sounds easy why do so many people avoid financial planning?
Brandon: So there are two reasons. One, they don't trust financial professionals. Again we talked about that a couple of episodes back which means I shared about my trust issues. Which means you actually have to find someone that you trust and number two, they keep putting it off till tomorrow because it's not something they want to actually talk about or think about; so putting it off, kicking the can. The one thing I would say about putting it off until tomorrow is this, if you want to reach your goals, you might need to do something different than what you're currently doing now. I mean you can't expect different results if you keep doing the same thing over and over and over again. So again, you want to break the pattern and develop a new plan, a different plan, one that is not going to keep the same results. It starts again by visiting our website, grandmaswealthwisdom.com and clicking request a meeting.
Amanda: So go do that now and then next week we're going to be doing a deep dive on student debt.
Brandon: Oh man.
Amanda: We're going to be sharing a story of how we helped a client develop a plan to overcome six figures of student debt on a very small salary. No matter how much student debt you have, the next episode will have golden wisdom for getting out of that debt.
Brandon: Or not getting into that debt in the first place.
Brandon: My niece actually is having some those challenges now so I'm helping her a little bit.
Amanda: So we're going to tell that story for you or if you have kids that are approaching college, we'll be talking about how to avoid debt as well.
Brandon: So until next time, keep building your wealth simply and sustainably for your own future and the future of your grandchildren's generation.