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March 29, 2007

Take Care of You First, Then the Money

On March 20, I shared the story of Jane, a Snider Investment Method™ workshop graduate who ran into an unfortunate situation when her mother passed away unexpectedly. Jane wrote me today to tell me the situation had been resolved and to share what she learned:

 

I just got good news this morning.  Wachovia got Hartford to give us a new  free look period on that variable annuity so my dad is going to get  the money back plus a $2000 gain.  The man who investigated our complaint found that the first papers my dad signed were only to surrender the annuities that came due at my mothers death.  We thought that was the "investment" contract.  The variable annuity contract wasn't signed until three weeks later when the money arrived in the bridge account.  I wasn't there then and Daddy did not receive a copy of the contract.  This was well after the agent knew that we wanted to disclaim the money.  That discrepancy made the bank see our point and it acted quickly. 

 

Thanks for your advice.  I hope my problem helps others see that most things can wait awhile after someone dies.  You don't have to act right away and probably shouldn't.  AND you should get a copy of every piece of paper you sign! I had thought I was smarter than signing papers without asking specific questions but you don't know how you will act when you are shell-shocked and grieving. 

 

That is good advice. I want to thank Jane for sharing so others could learn.

 

Sometimes fortunately, and sometimes unfortunately, life is full of changes. Financial planners call these transition events and they include: marriage, retirement, career change, divorce, loss of a spouse or parent, a windfall or settlement, the sale of a business and inheritance. Almost all of these events will have both a financial and an emotional component.

 

You must take time to deal with the emotional component before dealing with the financial. I was mentored for awhile by a psychologist who worked with traders at hedge funds. He told me, "Whatever unresolved issues you have in your life will play themselves out in your trading."

 

At the time, I dismissed his statement as a bunch of psycho-babble. Probably because I had unresolved issues I couldn't face at the time! Imagine that! But years later, I was able to see that he was absolutely right. And it wasn't just in my trading, it was how I handled every aspect of my money - from the investments I chose, the house I chose to live in, the car I drove, even the people I chose to hang out with.

 

When we face a life transition, such as the death of a spouse or death of a parent, there are always going to be a tangled mess of unresolved emotions immediately following. You will probably feel hurt, grieving, angry, confused or needy. Who knows. Emotions are a complex thing. But you need to take care of those first, before making any decisions about advisors, investments, gifts or purchases.

 

Also, and this is going to sound cynical, beware of anyone who suddenly "appears" in your life after a transition event, especially one that involves a lot of money. Long lost friends and relatives who suddenly appear can only have one thing in mind - to get something from you.

 

Same thing with new relationships. We often try to fill holes in our life, especially freshly created holes, by stuffing something or someone in them. Give yourself the gift of time.

 

A good rule of thumb is six months. Try not to make any decisions about anything, for at least that long, if you can possibly help it. If that means money sits in a bank account or a money market fund for awhile, so be it. If that means you stick close to old friends and loved ones for awhile, that is probably a wise move. Decisions made within that six month window have a high likelihood they'll be bad ones.

 

Only after you take care of you, will you be in a place where you can take care of the money.

 

Kim Snider, Kim Snider Financial Communications, Chronim Investments and/or Snider Advisors make no representation that the information and opinions expressed are accurate, complete or current. The opinions expressed should not be construed as financial, legal, tax, or other advice and are provided for informational purposes only. Call 866-952-0100 to request the Snider Investment Method™ Owner's Manual, which includes a description of the Snider Investment Method, investment objectives, risks, suitability and other information. Please read and consider carefully before investing. All investments are subject to risk including possible loss of principal.

 

Tags: life transitions, variable annuities

Posted by Kim Snider on March 29, 2007 | Permalink

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