Paul Winkler: Welcome to “The Investor Coaching Show,” where we talk about that money topic. I think this is going to be one of those free-flowing hours.
I’m dragging Michael Sharpnack from the Goodlettsville office on with me. No telling what he’s going to say. There’s just no telling ever.
Michael Sharpnack: Could get wild.
PW: But I think it’s going to be good.
MS: That’s right.
PW: Yeah. So there he is.
Black Friday Sales
PW: Okay, so we were having a conversation, and Michael, I was just talking about how it’s Thanksgiving weekend, and you’re in that period of time when people are spending money on things for Christmas, and they’re looking at all the sales. I don’t know about you, but when I look at the ads online for Black Friday, there’s something about it; I just get excited about life. I don’t know why.
MS: Interesting.
PW: Is it going back to when you were a kid and you knew Christmas was coming, or whatever on earth it is? I know some people just absolutely dread Christmas and have a totally different approach to it, and it’s because of family dysfunction or whatever. But for me, it’s just like there’s a feeling of hopefulness that comes out.
You think, “Okay, what am I thankful about?” One of the best exercises out there is on an app that you can get, I think it’s called Three Good Things.
Your daily habit is to think of three things that you’re thankful for. I tell people, “Don’t just wait until Thanksgiving, do it all year long.”
We’re talking about how so many times what we do is we look for hope in these times, and we look for somebody that tells us, “You’re going to be great and everything’s going to be great. You’re going to be super prosperous, and all you have to do is think positive, and everything’s going to be awesome.” And I think, Well,Paul the Apostle said he was okay with everything not necessarily being great.
I made a comment to you in the office about how a lot of times depression is excessive self-focus.
We get focused on ourselves rather than focused on serving as being served.
An old mentor of mine — good grief, this was a long, long time ago — would often talk about seeking to serve, not to be served. He was just this old school teacher that turned financial guy, and he was an insurance guy. It’s where I started — the insurance business and selling insurance, and then I got into mutual funds and all those tough things.
But I always thought, Isn’t that interesting? That’s just so upside down. You think, Man, what do I want as a person? I want to be served, not to serve, necessarily. But I think he’s so right about that.
MS: Absolutely.
Escaping Twin Flames
PW: Now, you made a comment about somebody you had seen — because we want to get rich — go ahead and get rich.
MS: Yeah. You were saying how people are desperate for hope in relation to that.
And I said I was watching a little docuseries that just came out on Netflix — it’s probably pretty popular right now — Escaping Twin Flames. It’s one of those cults.
PW: And I don’t see anything.
It’s funny, I’m one of those people who has a subscription to Netflix but never watches it. I should be the person that goes and cancels that thing in a heartbeat. I should go through my subscriptions and do it, but I’m too lazy sometimes to do that. Don’t be lazy like me. “Do as I say, not as I do,” as my dad used to say.
But anyway, it’s a popular series on Netflix. What on Earth is it?
MS: It’s about this guy, Jeff Ayan, I think. He essentially went and started an online business, saying that he could promise people that they would be able to find their true love, and he called it their twin flame.
PW: It’s not a dating service?
MS: Not a dating service, no. It’s not like Tinder or something like that in that way. It’s like a course, like a training process, a coaching process. He had different products like that.
PW: So he’s coaching people to find their true love.
MS: Their twin flame.
Then he had some multilevel marketing aspects in there as well, where you could then become a coach and help other people, but you have to pay him tons and tons of money to be a coach. And he takes a bunch of the money that you make from coaching.
It started off pretty innocent. Some of the stuff, I was like, “Okay, sure.” And then, it just continually progressed and got really weird, really domineering, controlling, abusive, taking advantage of people. Just a horrible, horrible situation.
PW: Now, was this by accident, or did he know that it was going to go in that direction?
MS: I think he knew, yeah.
His story is pretty interesting. He went to business school or something, and he tried all these business ideas. They had some old social media tweet of his that said, “What if I just started a cult one day?”
PW: You’re kidding me. That’s insane.
MS: Yeah, yeah.
PW: So he’s actually not going in innocently, necessarily.
MS: It doesn’t seem like it.
PW: Doesn’t sound like it.
MS: He was trying to make money. I mean, it’s very clear he was just trying to take advantage of people and make money.
PW: Ew.
MS: Yeah.
PW: Ew.
MS: Yeah. Just really disgusting, honestly.
PW: So basically, this guy went in there and studied business. I could see where people would do that. They go, “Oh, wow.” Because I’ll look at companies in general, and how they use marketing, and how they use media.
They know exactly how to push your buttons.
That reminds me of a story going back to the 1950s. It was literally the 40s, 50s, yeah. So you look back to that period in time.
Success by Association
This is so often the period in the year when people get into some serious financial trouble, and this is why I thought this would be an interesting topic. When you just made that comment to me, I thought, “Oh, this could be really, really interesting.”
People get in a lot of trouble. And what I find so often with older people, I saw something yesterday that said 60% of people live paycheck to paycheck. The finding that I have come across is that people get into their older age, and they have regrets. They look back on life and go, “Man, I wish I were better with money.”
Because literally, they end up dependent on their kids to take care of them is what I find. Then, they say, “Man, I would just love to be able to have a place here. I would love to be able to afford the care that I need,” because their health starts to decline.
And you just ask them, “Well, what was going on back at that point in your life? When you spent money, what did you spend it on?”
Invariably, they say, “I got cars that were nicer than I probably should have gotten. I lived in a house that was maybe better than I should have had.” I’ve heard people say that they spent too much money on clothes or they spent too much money on decor for their homes. I tried to get them not to beat up themselves too much because quite often what people do — this is really what’s going on in their minds — is want to connect with other people.
They think that they’re going to connect through things because people will look at them and go, “There’s a successful person. There’s a person that made it. There’s a person that I want to be like, and I want to spend time with them.”
Think about how we’re attracted to successful people, people that have maybe done really, really well in the music business or in sports or in Hollywood or whatever. People are like, “I just want to be around them,” like there’s some kind of an aura to pick up. Right? Have you ever thought about that much?
MS: Yeah, yeah, for sure. I mean, I think we look up to those people, and maybe we want their success. So, we then try to put on some sort of front ourselves, to say, “We have this level of success, and we want other people to think that of us.”
PW: Well, it’s like guilt by association, but it’s success by association. It’s almost like that type of thing happening. So what happens is that people end up spending themselves into oblivion just because of the fact that they’re trying to connect with other people.
Thinking of Your Future Self
PW: Sometimes with spending, you hear terms like shopaholic and retail therapy, those types of things. And it is therapeutic because maybe they don’t have a lot else going on. Boredom kicks in, so they go out and shop and do those types of things.
MS: We talked about hope. I mean, it can create hope. “This next thing that I’m going to buy, these things are going to …”
PW: Oh, that’s a good point.
MS: It’s something to look forward to, something to be excited about, right?
PW: Yeah. So with this person doing this particular kind of cult type of thing, they’re hoping that they’re going to get something out of it.
But I think in terms of where you’re getting to this point in a year, you start thinking about how much you’re going to be spending on things. And you think, “Maybe I just ought to think of myself — my future self — a little bit more, and what things are going to look like in the future. Am I going to be looking back at this with regret?”
So sometimes what people will do is they’ll just wait. It’s like, my wife will say, “Why do you have to have that now?” She was great at that, and still is.
Sometimes people — myself included, because if you point fingers, I got three pointing back at me — can be a little bit impulsive. If you just wait, you go, “You know what? That thing isn’t going to make me happier. It’s not necessarily going to do what I think it’s going to do.”
So this guy, it’s just interesting to me that he set out, kind of knowing people’s weaknesses. And where I was going with this is I think back to marketing in the 1950s. You go back to marketing in the 1940s and 1950s, and it hasn’t changed a lot.
We get our base desires marketed to.
A Common Purpose
PW: At the end of World War II, we were spending a ton of money in the war on tanks and airplanes and ships, and we were all coming together.
It was a period in time, and I think this is instructive, where people were coming together for a common cause.
They had a common enemy, so to speak, or a common purpose.
I think back to It’s a Wonderful Life, where they had the tire drives and they were trying to collect things. They were trying to collect items that were going to be used in the war effort, and they were rationing. People didn’t worry about rationing because they knew what they were doing it for, that there was something that they were doing that for.
Now, when that war ended, what ended up happening is companies were sitting there, going, “Okay, what’s act two? What are we going to make right now?
“We don’t need to make tanks anymore. We don’t need to make airplanes anymore. We don’t need to make battleships anymore.
“What are we going to do? We’re going to go back to consumer products.
“Well, you got this thing called the TV, and it’s pretty cool. Radio is actually doing quite well. There’s a lot going on there — people were hunkering around the radio during the war to listen to what’s going on and what’s the latest update about what is happening and how we’re doing. We got to capitalize on this.
“We got refrigerators, we got stoves, we got a lot of things that we need to produce, and you know what? We got this baby boom that is just getting started because the fellows are back from the war. And now, we need to market. We need to create a desire around how your life is going to be better.”
What’s the Collective Goal?
PW: Then what happens is that we study psychology. They were studying the psychology of people and what makes them tick in order to sell them more things. And then, what happens is that people start buying, and the economy goes gangbusters.
I mean, it’s almost like post-COVID-19. Think about it.
When people were coming out of COVID, they were thinking, “Whoa, man, that was a rough period of time we just went through. Now I want to go to concerts. I want to do all those things.”
I think back, and though I wasn’t around at that point in time, in post-World War II, I have to think that the same thing was happening in people’s minds.
MS: Sure. Yeah, yeah. It’s interesting that you said that they were able to ration because they had that goal in mind, like this collective goal of: “We’re going to make it through the war.”
We were talking about how we have all these marketing messages bombarding us constantly, and there’s this pressure to suspend and to be more. And it’s almost like — I was just thinking — what is it that we have that that can make us think in that ration mindset? What is it that we have that can drive us to the goal in the future to maybe tighten up a little bit? What do we have that’s balancing all of these marketing messages that we’re being bombarded with?
That’s hard for people to do. We talked about thinking of your future self as a stranger, right? It’s hard to put off those things and to find little things where you can say, “Okay, this is what I want in the future, so I can tighten up now a little bit.”
PW: Yeah.
What are we fighting collectively right now?
I think it’s not necessarily that we need to ration rubber or need to ration metal right now, but I think it’s a point worth thinking about.
Put the Phone Away
PW: Some people will say, “There’s a decay going on in society, and now we need to actually come together because we’ve been hiding from each other for so long.” I think that’s the thing that we are starting to recognize.
We’re hiding from each other, through getting on social media, getting on our phones and turning on the TV.
I was talking to somebody the other day, and I made the comment, I said, “So you’re just overwhelmed?”
It reminds me of an interview I did a little while back, where I talked to this therapist, and I said, “So what do you think people ought to be doing?” She said, “Put the phone away. Get the phone away.”
And she had this exercise that I called the Saturday exercise. You’re going to put the phone away. The phone doesn’t work, the phone’s broken, the internet’s down, your cellular service is down, the TV’s not working today, nothing’s working. What are you doing?
And I’ve had this conversation with so many people just to see what they say.
This one young kid said, “Well, I’d go play my video game.” And I said, “No, no, no, no. It’s broken. What are you going to do?”
And he goes, “Oh yeah, that’s right. You did say that. I don’t know.” We’ve lost track of that to some extent.
But nine times out of 10, Michael, what I find that people come back with is something that doesn’t cost anything. “I’m going to go out to the park. I’m going to take a walk, I’m going to go ride my bike, I’m going to go hiking, or I’m going to go visit a friend of mine down in the nursing home.”
During the summer, it’s “I’m going to go canoeing.” They talk about something that absolutely costs zip, zero. And then, they recognize, when you bring them through that exercise, the reason they were getting on the video game — the kids — the reason they’re picking up the phone, the reason they were going on Facebook, the reason that they were going and watching TV, for example, is they didn’t know who to talk to.
The Need for Connection
It’s like, “Well, there are some artificial people on the other side of a piece of glass that I can feel like I’m connected to in some way.” To me, that is really the thing that we fight against right now.
That’s the common enemy: disconnection.
MS: I think if anything good has come out of COVID and a lot of these things we’ve been through in the very recent time, I think people are more aware than ever of the need for connection.
Maybe the struggle is, “How do we connect?” And that’s where a lot of the disconnect comes from. But I see that people see the need for real connection with others.
PW: If you want a good book about this, somebody recommended this book to me over at Trevecca. She made a comment, because I was talking about picking on computer dating. She goes, “No, no, no, Paul, it can be a thing. It can be a thing.”
I said, “Okay, I’ll keep an open mind.” But there was a guy who had written a book, it was called How to Find a Date Worth Keeping. And it was really, really interesting. A little part of what it covers is computer dating.
MS: This one wasn’t a cult, right?
PW: No, this was not a cult.
MS: Okay.
PW: This is actually really good. This guy was a dating coach, and it was really eye-opening. It was literally all of the things that he would coach people through in the process of getting them inside a relationship in like six months.
I mean, that was his deal. “I can get you in a relationship in six months.” It was like guaranteed, but maybe somewhat. It’s up to you a lot.
Its ideas are a dime a dozen, but the people who actually will do them are priceless, right? It was really good.
But that’s so fascinating, what people will do. They will spend so much money. I think it’s pertinent to talk about that on a show about money.
What Happens to Debt After Death
PW: So an interesting question was asked in MarketWatch: “What happens to credit card debt after you die? My mother’s IRA will be used to pay off her personal loans, and apparently she had a handful of credit cards and had an IRA, and I’m wondering what happens in that particular instance.” Michael?
MS: Generally, it’s going to be the responsibility of the estate to pay those out, and you have to notify the creditors in a period of time. But Scott in here was saying that he had a situation where maybe he didn’t have to pay some of that back.
PW: The credit card-based company said, “You can pay it if you want to.” He ended up paying it because he felt like it needed to be paid, but they gave him the option. That was really interesting.
Now, in this particular case, you have an IRA. And with an IRA, this is one of the good reasons to make sure you have your beneficiary designations on your IRAs. If your estate is your beneficiary for your IRA, now it’s part of your estate and then those assets will have to be used, in most cases — unless she has a weird situation like what Michael was just talking about — to pay off the debts of the estate. Technically, it bypasses the probate process if you’re actually setting this thing up and have a beneficiary for your IRA.
He made a comment in this article that said, “Doesn’t mean the creditors won’t try.” He said, “Generally, debts are paid out of the estate.”
He said, “But technically what you ought to do is get ahold of any creditors, let them know. But if you’re not responsible for the debt, debt collectors may still contact you. They may try to give it a shot. However, state law may require a surviving spouse to pay a particular type of debt, or require that the executor administrator of the estate pay debt jointly by a surviving spouse.”
So if you have an IRA and the spouse is a beneficiary, that could be a different deal. If a retirement account has a beneficiary who’s living, that account will not go through probate, it’s going to pass through that, as I was saying.
But it’s actually illegal for them to go after your assets. It’s probably a question that I’ve gotten from time to time. “Well, what if my mom had debt and she had no assets, do I have to pay for it?” No.
MS: Right.
PW: As long as you’re a joint creditor on there.
MS: Right. It’s just her estate that’s responsible for it. And if there’s nothing in there, then…
PW: Yeah.
.
MS: And like you said, it also varies by state. So it’s something to watch out for.
PW:
This is why it’s good to have an attorney.
People ask me all the time about setting up wills and estates and trusts and things like that, and what to do. I like attorneys who specialize in that and working with them in regard to these things.
Advisory services offered through Paul Winkler, Inc an SEC registered investment advisor. The opinions voiced and information provided in this material are for general informational purposes only and not intended to provide specific advice or recommendations for any individual. To determine what investments are appropriate for you, please consult with a financial advisor. PWI does not provide tax or legal advice. Please consult your tax or legal advisor regarding your particular situation.