How Family Conversations Shield You from Financial Under-Preparedness with Andrew Van Alstyne - 135

[00:00:00] How can we avoid financial under-preparedness? Well, talking about is a great place to start and we're going to learn how to do that in today's episode. Welcome to Money Talk with Skyler Fleming, where your money makes dollars and cents. Let's get talking.

[00:00:14] Welcome to today's episode of Money Talk with Skyler Fleming. We'll be discussing the importance of family conversations when it comes to financial planning. Our guest Andrew Van Alstyne shares his insights on how open discussions can prevent under-preparedness when it comes to our finances.

[00:00:29] We're also going to talk about the role of family and wealth management, the benefits of intergenerational wealth transfer, and how to overcome the tension of talking about money with families with difficult financial histories. The money-talking points for today's episode are, what was your first money-memoring?

[00:00:46] Two, what are the benefits of transferring wealth to the younger generation before someone passes? And three, how can families overcome the tension of discussing money, especially when there's a difficult financial history? With the Money Talking Points in mind, let's get right into today's episode.

[00:01:01] Hello everybody, welcome to today's interview on Money Talk with Skyler Fleming. Joining me today, I have Andrew Van Alstyne and we're talking today about family conversations and financial under-preparedness.

[00:01:20] And this is a conversation that stemmed from me reading and learning a little bit more about Andrew, so I'm excited to talk about this one today. But Andrew, would you go ahead and introduce yourself for everyone?

[00:01:29] Absolutely, Skyler. Thank you so much for having me today. Again, Andrew Van Alstyne. I'm located out of Charlotte, North Carolina. I help clients nationally, though, my firm, I'm with a registered investment advisor, an investment advisor, so we're feed-based. Our home office is out of Grand Rapids, Michigan.

[00:01:48] The practice that I'm running is a multifamily office practice, so it's something where we take care of pretty much anything that touches finances for our clients from budgeting to state planning, tax planning, tax preparing, and obviously investment management as well.

[00:02:06] Awesome, financial preparedness, financial under-preparedness. Sorry, I'm going to have to remember that specification, but financial under-preparedness is something that a lot of people face. I'm going to encourage you to want to help people to avoid this.

[00:02:18] Absolutely, so from me, it's something that really stemmed from personal issue going up where both set of grandparents on both my mothers and fathers side.

[00:02:27] They were doing what the American dream was, which was work hard, saved more than you spend, and everything else will just kind of fall into place. And for the most part, it was, they had great lives, they had great careers, they had great success.

[00:02:42] But later in life, due to poor financial planning, when their health started to deteriorate, obviously that sucked a lot of the financial resources at the head-added.

[00:02:52] Not that at the end of the day, that's everything, but when something that someone works so hard to have that accomplishment in life just sucked away from them, it's something that left the market and it's something that it's always something that I look to help other people, not be faced with that situation, we'll throw themselves or their family.

[00:03:10] That makes sense, yeah. And for those who maybe are approaching that stage where they're under-prepared, how does that feel as someone who, you are a grandchild at the time?

[00:03:18] So maybe you didn't have a lot of feelings that maybe your parents would have had about the situation, but how does that feel as someone who's dealing with the financial under-preparedness of maybe a loved one who's getting older and things like that?

[00:03:31] Yeah, so we were fortunate where a lot of the work ethics and a lot of the general beliefs that they had were passed onto my parent.

[00:03:38] So as far as needing any of those resources that they had, not either of my parents nor their siblings, when necessarily in need of those financial assets at the head, but it's something where you see your parents entire life that they work so hard to build up this financial asset just kind of get ripped away from them.

[00:04:03] It was the more analyzing for a little bit. It's something that left the scar on the family and it left a lot of questions as far as why, how and what do we do now?

[00:04:15] So it comes back to a lot of the concerns that people face with all financial issues where you're kind of left floating out at sea and really have no sense of direction.

[00:04:24] And you just want to know that you're doing the right thing at the end of the day, and sometimes it just takes a little on the other to push the head there.

[00:04:31] Awesome, I love that and I love that diving in a little deeper to how it would feel as the people who were maybe facing the impact after a map.

[00:04:39] But awesome, I've been recently listened to Diois Zero by Bill Perkins. It's a pretty popular book in the financial space, but he talks about how family can benefit from using the money now.

[00:04:49] Instead of just waiting to pass it on and making sure that you're enjoying the money now. What do you think of people spending the money now instead of waiting just to pass it on to family members?

[00:04:59] Yeah, so there's a couple different components to that. So obviously, first off it stems from how much assets we're talking about and what theory are your notion at worth goes.

[00:05:12] If we're talking ultra high net worth then it's a little bit different conversation where yes you want to have those experiential interactions with family members now that obviously come out of cost.

[00:05:23] You don't want to spend too liberally. You don't want to just spend money for the sake of saying that I used it while I was here.

[00:05:31] The one thing that I talked to a lot of higher net worth individuals about though is looking as far as transferring assets while they're still alive and it's too full in that capacity where if you offer family loans.

[00:05:43] So obviously with any investor as you get up in age usually want to take a little bit low or risk approach with how you're investing your assets.

[00:05:51] And if you're doing a family loan with the applicable federal rate being lower than what most people can get for a business loan or for a personal loan, it's something where that person that

[00:06:03] Page your worker, major worker the family that has that large asset can then transfer those assets to the next generation. They can still get a rate of return on their money and let that next generation

[00:06:13] Start to obtain more of those assets where they can then take more risk your adventures. They can invest it in something that's more geared towards their age bracket. And it's also something where it makes sense to also look at philanthropic ventures as well.

[00:06:31] Where is something where that's especially for high net worth individuals and high net worth families. It's a great opportunity to share in philosophical ideologies as far as what you're looking to accomplish, have your looking to be good stewards of the money.

[00:06:49] And it's really creating those bonding relationships between multiple generations within a family.

[00:06:54] So it's not necessarily that you're spending the money just for the sake of spending it, but you're utilizing it as a tool to share philosophy's mentalities and make sure that it's something that lasts three four five six generations.

[00:07:12] Awesome. And that making sure at last part that's the that's the thing that I hear so often where. Millionaires there wealth's usually gone by like the second or third generation sort of thing.

[00:07:23] So if you can get ahead of it a little bit and I think maybe that stems from people don't know how much money is coming.

[00:07:28] And people don't know that they don't obviously don't know when it's coming someone's going to die eventually and then that money's just going to balloon to a bunch of people.

[00:07:36] But that can be really intimidating so that's where conversations come in and that's really what we want to talk about today is how conversations help get ahead of this financial under preparedness.

[00:07:45] But when it comes to those high net worth individuals, how can talking about it ahead of time help them and help everyone in the family financially. Talking is really everything when it comes to high net worth individuals and high net worth families. Oftentimes if you get into.

[00:08:01] Sometimes a second but definitely by the third and fourth generation. It's something that they oftentimes don't understand the work that went into accumulating this asset. They don't understand the hardships that were faced with building up this level of net worth.

[00:08:18] So it's something we're having those conversations where they understand the struggles that when they understand, stand the hard work that went to that. They then get a better appreciation for what that actually means.

[00:08:29] It's not just a dollar amount that they're just looking to spend on anything that their heart desires. It actually then ties into the person that created this asset for the family.

[00:08:40] It's something that and I'm touched on this briefly earlier the more that they can verse about money matters. And even just family matters in general, the better understanding they'll have of the philosophies that the family embraces so that when the transfer of net worth does occur.

[00:08:55] Second third fourth generation. If then won't be a burden because they're not then strapped with trying to figure out a where do I put all this money and be.

[00:09:06] What does it really mean? What am I supposed to be doing with this if you have those conversations beforehand it's much more smooth or transition.

[00:09:15] Yeah, that totally makes sense the conversation helps smooth it out and we're talking a little bit right now about people with high wealth and I think that's something that people definitely need to consider.

[00:09:24] But as we get into this a little further I want to talk about maybe people who have financial struggles so maybe they're someone listening who's like oh yeah that's great for people who have hundreds of millions of dollars or whatever but what will get to that.

[00:09:35] And just a moment but I also want to talk about what is there to lose if you don't talk about money when it comes to wealth like what's up for what's up for stakes. It's losing it all.

[00:09:46] You know there's every society has a saying on it but the most famous one is Chinese have it's called shirt sleeves to shirt sleeves, proper where you know one generation works hard to accumulate all this wealth.

[00:10:00] And then by the time you get to the third generation it's all squandered and then you're just back to. Working class middle class maybe if you're fortunate to stay upper middle class but again it's because those conversations don't take place so it as quickly as you can grow.

[00:10:17] A family asset when it comes to finances you can squander just as quickly if not quicker so it's extremely important to have these conversations is because. Another saying and I probably rely on them a little bit too heavily but easy company's you go it's something where.

[00:10:34] As much work went in to accumulating that wealth in a short period of time it can dissipate just as quickly.

[00:10:42] Yeah and how do people bring this conversation up because I'm imagining this in my mind maybe you're the child or grandchild so you're maybe the grandchild that doesn't want to lose the wealth that you know your grandparents have like you.

[00:10:55] You know they're well off and they're doing well for themselves how do you.

[00:10:59] Bring that up because that can be a little awkward where it's like I don't have a lot of money and I guess I'm looking forward to your money if you if when you really think about it in a sense but.

[00:11:08] How do you bring that up and start that conversation as a hey how do we plan this down properly so that it's not going to get just destroyed once it starts moving around.

[00:11:17] So I would say that in that circumstance I think a lot of the responsibility does fall on the more senior members of the family. To start having those conversations.

[00:11:29] There doesn't need to be a level of family governance and again I know a lot of this conversation ends with ultra high net worth individuals but even with the mass affluent this is something that's becoming more applicable day to day.

[00:11:41] And where they should take lead it shouldn't be a conversation that they feel uncomfortable having or and again I'm a little bias on this one but if you have financial advisor someone that's.

[00:11:52] In a trusted circle in the financial world talk to them as far as having those conversations one thing that I offer for my clients is you know having a younger generation summit with a learn proper handling of money at a younger age cool.

[00:12:06] So it is something where getting those people involved at a younger age in finances and financial discussions and feeling more comfortable themselves. Skyler to use what you were saying though if it is something where the younger generation is the one that's having to start this conversation.

[00:12:24] I would even start with saying how did how did this happen how did you accumulate this well what did you do.

[00:12:31] Yeah see to understand and then be understood I mean that's the heart of just about everything that I do and I think that it's applicable in a lot of aspects of life.

[00:12:40] And I think when you're talking about a younger generation seeking to understand how we got to where we are today that's the best way is just looking at and getting them to explain the pathway that they talk to accomplish what they haven't.

[00:12:54] Yeah because like you said that's why the third and fourth generation often lose the money is because they don't understand the sacrifice it took to gain it.

[00:13:01] But also one thing I took from your conversation is if someone's in their early 20s and they just restrate to their grandparents and throw this conversation down on them it's going to be awkward quick.

[00:13:10] It's going to be uncomfortable quick and maybe you get yourself a road out of the will maybe not that far hopefully not that far.

[00:13:16] But these are definitely things that even once you establish a baseline of where we were and where we are these are ongoing conversations these are one time events these aren't things that are short snippets and time these are frequent check ins.

[00:13:30] Family meetings making sure that every one's day is on the same page and not everyone in the family needs to do the same thing that the senior member of the family did to accumulate this well.

[00:13:40] In fact, just the opposite you want to diversify you know just like when you're investing and you want to diversify your assets same thing goes with family. And labor and what the families able to do as far as outputs you want someone that has strong business.

[00:13:56] You may want somebody who has. More of an inclination to get into medical fields or practices but you want to spread out what your family's able to do obviously working is the important you may not necessarily need it.

[00:14:10] But it is something that's important to have a purpose in life and to continue to accumulate knowledge when you had the financial assets the most important thing becomes knowledge.

[00:14:18] Yeah, and if you can prepare yourself with those regular conversations and when you said have the meetings regularly I'm thinking about what are what are key events where you know financial stuff's taking place let's think.

[00:14:29] Maybe after covid the house value went up a lot so you need to talk about hey what are we going to do with this house that's now a large chunk of our parents network things like that like think of those moments where hey this would be a good opportunity to check in and then.

[00:14:44] conversation going takes some notes so that people don't feel like people are making things up and stuff like that because they can get tens really quick when you're talking about maybe someone maybe each person's going to get a million dollars and you obviously want to be careful of that.

[00:14:56] So, and I love your idea of getting a mediator in terms of a financial advisor. Yeah, and it is something that you should have a close network of various professionals whether finance to legal.

[00:15:08] But again as far as the family meetings it is something where you should get all generations together at least one of once a year.

[00:15:13] You should obviously if you're having outside professionals they can assist with this we should have a family member that almost operates at secretary and takes family meeting notes. This way can refer back to those on an annual basis to see where you've come from.

[00:15:26] Back to what we were talking about earlier as far as having those conversations that can be tricky if you have an entire book of every meeting that the family had and the discussions that took place.

[00:15:36] And what you're looking to accomplish as a family and you have notes that can be referenced by every generation for generations that haven't even been born yet it's something that will help with those conversations as well.

[00:15:48] But ideally you want to have it around conversations that if you're establishing either different family trusts and you're looking to do distributions from that you should have that those conversations.

[00:15:59] And that family meeting around the time you're that you're looking to do those so somewhere between when taxes are being done for the family.

[00:16:08] As well as when distributions are being done so if you can kind of time it can be between those and thread the needle on those times that would work ideal.

[00:16:16] Awesome that's a that's a very helpful him for people to take away from this but let's turn a little bit now to the people who may be are listening to this and saying yeah, but not everyone has that kind of wealth and things like that.

[00:16:27] And let's say maybe they have financial difficulties they have a hard time a difficult financial history and that's leading to tension how do people overcome the difficult history and their family with money in order to talk about it more.

[00:16:40] The point is is to not approach money conversations like it's a dirty topic. I think we can probably speak for hours on end as far as how we've gotten here as a society.

[00:16:51] I don't think that there's any singular root cause there's a lot of issues at play as far as why we've gotten here. But especially with loved ones it's important to open up and be very candid as far as money.

[00:17:04] And it doesn't necessarily need to be about income or expenses just asking the why. Why do you look at money this way? How do you approach money? You know when it's family I get it it can be hard the first conversations for anything great usually art.

[00:17:24] But it's important to know what the long term goal is and what you're looking to achieve at the end which is peace of mind for yourself for your loved ones for their loved ones. And it's important to start the conversation you don't need to be complex start simple.

[00:17:42] Carl Richards another gentleman that I listen to that operates a lot in behavior finance. You know the one conversation that he starts with everyone is just even asking what their first memory of money is. That's a great one.

[00:17:55] Some people remember something when there are four or five years old that their parents didn't had an impact on life. Other people was the first time they go away to a camp and some kids tried to take money out of someone else's lock box.

[00:18:09] So everyone has a different understanding of money but that first memory got core memory. Actually says a lot about having look at finances and how they treat finances and their adult. Young adult adult and older adult life.

[00:18:23] Yeah and that first memory you brought that up and I started to think a story I often tell is that going into the gas station with a $20 bill and not necessarily always filling up the gas tank.

[00:18:34] And for me that left an impression of I always want to have enough money to fill up the gas tank like it that's my that's my baseline.

[00:18:40] I don't want to be below that and then another one that came to mind is when I went to Disneyland for the first time as a kid I saved up all my core money so that and then when I got there I bought one big thing instead of a bunch of little things.

[00:18:50] So like that's that's a fantastic question to ask yourself and it'll probably be one of the main talking points from today's episode is what was your first money memory.

[00:18:58] I love that that's a fantastic conversation starter but how can it be beneficial to talk about money as a family even if there isn't the millions of dollars a wealth the pass on if it's just hey I need help getting out of

[00:19:09] credit card debt and that's hard to stuff how can that even be beneficial for families. Yeah because it's it's only an understanding that why again it's he can understand where they are so you know someone needs help with managing debt in the family or someone needs assistance or.

[00:19:26] You're in a position now we're now you can offer that assistance. If you're just throwing the money at an underlying concern you're never going to solve the problem so if you're helping someone out with that or someone needs help with that.

[00:19:40] Just the transfer of assets in that capacity isn't solving anything other than taking care of your hand. Yeah it's a bandaid on a gun shop if you're actually having a discussion as far as how did we get here.

[00:19:52] What are we going to do to remediate this going forward why did this happen. The initial major reaction that a lot of individuals in that situation have is well I don't make enough and I can't make enough. Hmm.

[00:20:06] Well there's always ways around that and again some involve more sacrifices than others but even when you're talking about those ultra high network families someone along the line made a sacrifice.

[00:20:16] Yeah so are you willing to make that sacrifice to get to where you want to be no okay then we need to cut expenses.

[00:20:23] Or is something where do we consolidate our resources down you know do you live under my roof for six months while you figure it out.

[00:20:30] You know do we carpool into work in switch cars every day so that not putting the warranty on our vehicles or we can only go down to one car or whatever the case may be but it's having the conversation as far as how did we get here.

[00:20:42] And then putting everything on the table as far as options until we figure out what we actually need to do going forward and what makes sense for all parties.

[00:20:50] Yeah I like the idea of having the conversation of how did we get here because that's fantastic because like we were saying if maybe you're maybe you're the one sibling in the family that has a good amount of money in your well off and you could just pay it off or give a good chunk to pay it down.

[00:21:05] But you're going to be very frustrated when it's eight years down the road and they're in a worse off financial situation because they didn't really learn so that could be really tricky to bring up.

[00:21:15] But how do you be someone who let's say you're the person with the money that could help and you know how to handle money and things like that how do you be the person to ease into that conversation and make it helpful and maybe not judgmental.

[00:21:28] So something in that situation especially for an a lot of this conversation right now is revolving around managing debt because that seems to be the underlying issue with a lot of people that fall below the mass affluent level.

[00:21:40] And even with those individuals that's something where that family loan rate can come in handy because you can ease the burden as far as. What they're having to pay to service that debt.

[00:21:54] And then you can do personal consumer whatever type of that it may be you can offer much lower interest rate for that.

[00:22:00] And then what you're almost doing is again it's having those frequent meetings as far as okay, how are we paying this out now what are we doing next. What's the next steps to make sure that we're not falling back on these bad habits.

[00:22:10] Hey by the way, since we now have this established one we put those credit cards in the back of the safe for six months and just pretend they don't exist so that we can get back on solid footing learn how to live within our means.

[00:22:22] I actually had this conversation with someone this week in different personal last week, but there's many people that are age the US and even balance a checkbook. First off, you're lucky if you think know what you're talking about.

[00:22:33] Secondly, they a majority of them can't people don't know how to make sure that their. Expenses don't exceed their income by just doing simple addition and subtraction so it's long people down to get to that stage.

[00:22:48] That's honestly in this conversation with being an ideal place to start once you get over that one.

[00:22:54] Yeah, and I often start even before budgeting is tracking your expenses like you said you got to know hey what's that am I actually living below my means things like that and I think maybe we need to we need to invent a new term because I think people here checkbook and they think.

[00:23:08] Many many years ago, so they think oh balancing my checkbook isn't the thing I have to do anymore, but it's a principle like it's in it's a core idea that you have to do you have to make sure you can say here's what I made here's what I spent does that equal out.

[00:23:21] Are you keeping track of it somewhere else or there. Or does the bank line up like do your numbers match things like that like you got to double check that sort of stuff whether it's in a checkbook or spreadsheet.

[00:23:30] It's it's a lot like when you're learning math in school you learn how to do addition, subtraction, multiplication and division before you ever introduce the calculator.

[00:23:39] The same applies for finances you need to learn how to make sure you're getting the numbers to balance out manually before you introduce technology that can take over that system for you.

[00:23:48] Yes, yeah that's fantastic I like that we mean we got all the way back from high network individuals down to people who. You need to learn the foundational things and how to balance checkbook or balance a spreadsheet or whatever it might be.

[00:24:00] I had one more question come to mind of how do you avoid the feeling like you're being a bank to your family because that's what came to my mind that when you're doing these family loans and things like that it's like oh you're becoming.

[00:24:11] A family bank co or something like that how do you avoid those feeling. I wouldn't necessarily even say that it's a feeling that you would need to run away from.

[00:24:22] The transfer of asset is going to take place at some point, you know whether they're siblings whether they're the children whether they're the grandchildren there's going there's a high probability that the transfer of asset is going to take place at some point.

[00:24:42] Oftentimes you're able to have these family loans at a lower rate than any tax burden that they're going to have from having a transfer of assets in your passing.

[00:24:54] So and again this gets back even when I was saying earlier where especially if you are that older generation or that more senior individual you want to become less risky with your investments anyway.

[00:25:06] So as long as you pass on that philosophy then transfer those assets through that loan.

[00:25:11] They're paying you back at a lower rate if they're younger they can then take a more risky investment whether that is in the market in themselves whatever it is but it is a higher risk venture that they are then utilizing that money for.

[00:25:25] That is then going to net a greater return so it's having the understanding that the transfers going to take place.

[00:25:33] We're just staying ahead of the curve so I can be here and help student shepherd and answer any questions or help you overcome any hurdles to the best of my ability while I am still walking this earth.

[00:25:43] Yeah, and it's just laying that groundwork so taking taking the standpoint of almost being a family bank I wouldn't. I definitely wouldn't run away from it and I probably wouldn't even shy away from it.

[00:25:56] I would want to lean into it and say that yes this is where we are and this is how we're going to approach this going forward as a family.

[00:26:04] I wouldn't use it as leverage against other family members but it's you having the understanding that this is how I can best serve you and best help you moving forward.

[00:26:15] Yeah, and I think the initial concern stems from so many horror stories I guess of family learning out money and things like that but I guess you're able to kind of coach through and talk through with those meetings to a level of maturity where you're able to.

[00:26:29] be able to comfortably manage money together as a family so it really all stems back to having conversations early half conversations before you make the loan that way you can you can coach you can help educate things like that makes your stuff in place before you're saying.

[00:26:43] Here's 500,000 dollars at one percent or whatever the terms might be that because if you just throw that on I'm now you're really worried about what they're going to do with it things like that so.

[00:26:52] I'm going to head of it with conversation the one thing I would mention to is that before issuing this loan is actually have them right up a detailed almost business plan as far as how this money is going to be utilized.

[00:27:03] Yeah, make them actually show that there's at least a intellectual proof of concept.

[00:27:10] So that this money's being utilized and this goes for any ages as far as this transfer taking place whether it is another adult or in adolescent child that is using this for a family philanthropic venture that they want to potentially start initiating a grant or whatever it's have the machine right up a plan.

[00:27:28] That is almost as if you're going to a bank with a business plan looking for this loan as well. So it's something where you're not just throwing money hand over fist at problems that don't need to be solved with finance with cash.

[00:27:41] Make them actually articulate how this money is going to be put to best use the best serve not only again, but the family.

[00:27:48] Yeah, and I can speak highly to how that helps out because when my wife and I got married we didn't have this big super expensive wedding but we wanted some financial help and we wrote out everything like hey here's our costs.

[00:27:58] And then I went to my grandma and said hey we're looking I'm looking to ask for some money for help with our wedding, but here is the breakdown of how we're planning to spend it and she's like sure you didn't need to show me that like your my grand kid.

[00:28:09] I would have gave you the money it wasn't a big number, but like it was very helpful to say hey here's what we're planning to do and I almost think it made her more confident to just write the check immediately sort of things so that helps in a big way.

[00:28:20] So I really like that two final questions to wrap us up here first we'll talk about how people can get in contact with you and then second to let you think about it is what do you wish you would have known sooner when it comes to money, but we'll wrap up with that one.

[00:28:32] But first how can people get in touch with you.

[00:28:34] So I'm on most major social media so Facebook, Instagram, LinkedIn, and Javanolston if you search me on all of those there's only one other gentleman with my name in the country that has any video person so I should be pretty easy to find on there.

[00:28:50] My firm is fiduciary financial advisors so for fiduciary.com if you go there meet the team Andrew Vanolston right as right now. Top center in the top three just alphabetically on some of that's the best way to find me.

[00:29:05] Fantastic, Newman Andrew what do you wish you would have known sooner when it comes to money? Much of what we even talked about today is that it's okay to talk about money.

[00:29:15] It doesn't need to be a scary conversation it doesn't need to be something that we shy away from we should actually lean in and be more opening as individuals as families as a society to discussing financial matters of one another.

[00:29:28] Fantastic so it's easier than you think it is it's better than you think it is and go ahead and get started talking about money with your family Andrew thank you so much for joining this is a really fantastic conversation. Thank you guys.

[00:29:49] Thank you so much to Andrew for coming on today's episode and that great interview there's a lot of things that could impact you but a couple that I want to talk about real quick are how important family conversations are when it comes to preserving wealth.

[00:30:01] You need to make sure you understand the strategies to initiate and navigate these discussions.

[00:30:05] I made sure to ask the question of how does maybe a grandchild or someone else like that bring up the financial conversation because I know a lot of my listeners are in a younger demographic and maybe you're learning more about money and you want to bring up conversation to help your family do better with money.

[00:30:19] So make sure you know how to bring it up that's something that's going to be very important and something that's going to help a lot when it comes to bringing up these conversations and having them in a healthy manner.

[00:30:28] I hope you are also able to take away the importance of actually having these conversations and avoiding maybe the really difficult financial situation where nobody is aware of what's going on with the finances and nobody wants to talk about it.

[00:30:40] So make sure you consider the impact that today's interview could have on you, but let's talk about the money talking points next. The first money talking point is what is your first money memory?

[00:30:59] One of my first money memories and I've shared it on this podcast before is that often my parents would send me in with just a $20 bill to put whatever they could in the gas tank.

[00:31:08] And sure gas was cheaper back then, but I tend to notice the gas tank was never really filled.

[00:31:14] And that left a mark on me that I wanted to always make sure to have savings to make sure I could fill up a gas tank whenever I needed to get somewhere.

[00:31:21] So what I always wanted to make sure to have money to be able to get wherever I needed to go. So what's your first money memory? This would be a great one to leave on a social media comment.

[00:31:29] So please share with me, I'd love to hear what you think is the first time you recollect something with money because it's often an interesting starting point for your financial journey.

[00:31:38] And you can often tie back quite a few things that you do with money to that initial starting point. The second money talking point is what are the benefits of transferring wealth to younger generations before passing?

[00:31:47] And this comes right on the heels of me finishing listening to Diavazeero by Bill Perkins. In that book, he talks a lot about passing your money on before you actually die and enjoying the money now because if you're waiting till your 80, 90, and you die to pass money on,

[00:32:01] it's likely your children are going to be in their 50s and 60s and already through the hard financial times that your money could really help them get through.

[00:32:09] So think about when you were in your 20s and 30s and maybe you needed a little bit extra money for a down payment. Or you needed a little bit of money to float maybe two or three months rent because you just had a kid. Things like that.

[00:32:21] Think about the benefits of transferring the money you've accumulated as you get older, two younger generations in your family before you pass away. And if this gets some thoughts stirring in your mind, go listen to or borrow or buy the book Diavazeero.

[00:32:34] It can really help transfer your mindset around some of the ways we think about money and it can change it up for the better. The third money talking point is how can families overcome the tension of discussing money,

[00:32:44] especially with difficult financial histories. I think this is going to be a fun one for you to have a conversation with a friend or a coworker. You can ask them, hey, I think how do you even start a financial conversation with your family?

[00:32:55] Because money can tend to be one of those topics that you don't talk about around the dinner tables. So how do you even start the conversation? Do you bring up a financial struggle? Do you bring up a financial win?

[00:33:04] Maybe you don't want to bring up a struggle because you're maybe a little ashamed or you're afraid you're going to get judged by your family.

[00:33:10] But you also don't want to bring up a success story because then maybe you're going to be looked at as boastful or bragging or things like that.

[00:33:16] And you want to avoid that as well, so there can be something that's hard to bring up. This would be a great discussion as well to have on social media. So let me know how do you think families can overcome the tension of discussing money, especially when there's maybe a difficult financial past.

[00:33:29] Next, let's talk about the money talk mastery. So in today's money talk mastery segment, I want to explore the concept of a family loan rate as Andrew called it in today's episode.

[00:33:47] And what is this? The family loan rate is a concept where family members loan out money to each other. And it's upon agreed upon terms, lower rates, lower interest rates, and it could allow you to get ahead.

[00:33:58] It could allow you to get ahead without the other family member looking like they're going to lose all their money.

[00:34:03] It's a little bit back because of a very small interest rate. But it's much cheaper money than going and borrowing from bank or payday lender or things like that. This family loan rate system can provide financial support within the family without creating dependencies or feelings of entitlement.

[00:34:17] It can also help facilitate that transfer of wealth while keeping money in the family unit instead of passing it out to some bank or payday lender or things like that.

[00:34:26] This family loan rate can be particularly beneficial for young family members who might struggle to secure loans because of no credit or they might be trying to get essentially screwed over with a high interest rate.

[00:34:37] When a family member has the kind of money to be able to loan it at a low rate, they trust their family member and if they don't get the money back, it'll be okay.

[00:34:44] I'm certainly not a huge advocate of loans among family members but it's something that could be considered. It's an idea that's worth talking about and trying. And key emphasis on talking about it. Make sure that everyone's aware of what's going to happen.

[00:34:57] And also if you are the one-loaning money, there should maybe be a little bit of thought in your mind about what if this doesn't get paid back because maybe there's not a real collections process or you don't want to send your grandchild to a collections agency over a family loan.

[00:35:10] Something like that. That sounds a little bit silly. But be aware of some of the consequences that this could have and it's essential to establish clear repayment terms and expectations to avoid a misunderstanding or potential conflicts in the future.

[00:35:24] This family loan rate can also be something that's a great tool to teach about how loans work, how interest works and things like that because often I think young adults get into student loans, credit card debt without actually understanding how interest even works.

[00:35:37] So a low family rate can start to get that thought process going and help money move to the younger members who need it a little bit more. So it's definitely something to consider.

[00:35:46] So make sure if you're interested in it reach out to me and love to have a conversation with if this is something you want to walk through on the podcast I'd be happy to have you on or go and look up family loan rate, look up family loans, how to properly structure it and things like that ask around.

[00:36:01] Let me know if you have any questions I'd love to dive into this topic a little bit deeper and help anyone who is maybe looking in towards lending to their family or asking to borrow money from their family.

[00:36:11] This is something that can be really a big deal but it also I could say, I could see having a huge helping hand for younger members trying to get ahead. Maybe they don't have credit and things like that.

[00:36:22] So that's today's money talk mastery. The family loan rate is something that I heard that I wanted to dive a little bit deeper into. Let's wrap up today's episode next. Thank you for sticking around to the end. Thank you so much for listening to today's episode.

[00:36:43] Having open family conversations it's absolutely essential so that we can avoid financial under preparedness. It aids in that smooth transfer of wealth between older generations and younger generations, which I think need to happen earlier and earlier.

[00:36:55] Think about being someone who is wealthy in your super, you're getting super old or something like that and you see your grandkids struggling financially.

[00:37:02] Think about the happiness that you can enjoy now being able to pass on some of that money as opposed to when you're dead and you won't really be able to fully enjoy it in this life because you're gone.

[00:37:12] So consider thinking about passing on money earlier and really talk about it with your family, have regular meetings like we talked about in our interview, have regular meetings.

[00:37:20] Have someone who's kind of a secretary to keep track of that so that the family later down the road knows how hard everyone worked to manage the money together. But one thing I wanted to mention is I have a new website which is super exciting. It's moneytalkwithscannerflamming.com

[00:37:34] And of course you can find it in the show notes, but it's just the name of this podcast.com and it's brand new. Brand completely new. It's not just a new domain, things like that so please go and check it out.

[00:37:44] Let me know what you think. There's a lot of forms on there that you can contact me really quickly. So if you want to get in touch head over to moneytalkwithscannerflamming.com slash contact and let me know what you think about today's episode.

[00:37:55] But thank you for joining us for this insightful discussion with Andrew and I hope it encourages more open and productive financial conversations with your family. But thank you for listening to Moneytalkwithscannerflamming. I'm your host Skatterflamming. Have a great week.

[00:38:07] Thank you for listening to Moneytalkwithscannerflamming. This show is provided for information and entertainment purposes and may not be specific to your unique situation. Please be sure to do additional research before making any financial decisions.