Episode 37: Sudden Money: How a Windfall Changes You and Everyone Around You
At some point in midlife a financial windfall may show up: a business sale, an inheritance, a severance package, a bonus bigger than expected. Rob and Brent walk through what actually happens next, using the five rings of the Midlife Circus to look past the dollar amount at the parts nobody plans for. They get into how a windfall changes your relationships, why 75% of business owners regret selling within a year, the grief that can come attached to an inheritance, and the number one financial mistake that quietly drains it all away.
Links, resources, books mentioned:
Topics we are covering in this episode:
Expected vs unexpected windfalls and why the difference matters
How sudden money amplifies whatever was already there
The money conversation to have with your spouse before it arrives
When an inheritance brings grief instead of a gain
How a financial windfall changes friends, family, and you
Why 75% of business owners regret selling their company
Transcript:
Transcript Disclaimer - May contain the occasional confusing, inaccurate, or unintentionally funny transcription moment. It’s all part of the show.
Rob: 00:01
Brent, if you won the Powerball tomorrow, and when I'm talking Powerball, I'm talking about like the life-changing dollar amount. I think right now we're around 500 million, 700 million dollars. If you won the Powerball, what would the first 48 hours look like for you?
Brent: 00:34
Oh, this is a good one. Because I clearly thought about this because I've played the lotto over the years, and it's like just a dreaming experience of like what could happen. And so I know exactly what I would do. I'm glad you asked me this question. So I believe it's the comedian Chris Rock that said there's rich and there's jet rich. I would now be jet rich. So therefore, I would be shopping for a jet. And I have to say, Rob, you would be a benefactor of this.
Rob: 01:07
Thank you very much.
Brent: 01:08
I would be taking people to a lot of cool places. Because behind me, if you're you know watching this on YouTube or Apple Podcasts, you can see the video, is all these places that I've visited. I would double triple that. But here's one thing I would do on the airplane when I'd have all my friends. I would make them sign an agreement that would they would never ask me for money. Because I don't want the relationships to blow up. That's my biggest concern. So I would have all this joy and excitement, but then I'd be like, oh my gosh, all these people are going to reach for handouts and my life is going to change. And oh my gosh, what am I going to do? But to go with the positive of this is jet rich. So I think there'd be a jet in order. Whether I join NetJets or buy a jet, who knows? But I would be working towards a jet.
Rob: 01:56
I'd like uh I like that answer, especially since I got to partake in that. I definitely wouldn't ask you for any money. I just want to join you on some flights from time to time. That'd be an easy, easy jump for me to want to do.
Brent: 02:06
Well, you're very kind, you know, but if it was $500 million, you'd be like, hey, you know, Brent, uh, I've been thinking of this uh idea.
Rob: 02:16
I'll let anybody want to start. You want to make an investment in it? Exactly.
Brent: 02:21
Yeah, exactly. Yeah, it'd be a ton of fun though. I think I play the Powerball once every maybe once a year. And I do it purely because that 10 minutes of just dreaming about like, oh my gosh. The downside a lot of that is that it's like so material. It's like, I want to buy this and this and this. None of it makes my life simpler. It just adds more complexity, but it could be fun for sure.
Rob: 02:46
You would actually be a benefactor in mine. And if I because I do the same thing as you do, Brent, as I do every once in a while gets to be huge. I'll go buy a ticket just for the 10 minutes in the car on the way home that I get to dream about what to do. And I would want to throw a big party. And I but I when I say big party, it would be an extravagant party for the closest of our friends. It wouldn't be, you know, thousands of people at this party. It might be a hundred people at this type of a party, but a nice small party, but really an extravagant party to celebrate. But I like your idea. I'm probably going to steal it. At the time, there would be a signature on the way in saying, don't ask for money. Now, I'd likely give money away to other people, but I wouldn't, I wouldn't want to have people asking me for a handout.
Brent: 03:28
So the biggest question if you're going to throw a blowout party, who is going to headline the party?
Rob: 03:35
Well, that's easy. I get the biggest headliner in the world right now. I get a little Tay Tay. You would go for Taylor Swift? Why not? Could you imagine seeing a hundred-person menu watching Taylor Swift perform? That that would be so much more than a good idea.
Brent: 03:47
I don't know if she would go for the midlifers. I don't know if she would go for it, but there's probably a price to everything. But she also has done quite well, so she might just be like, uh no. But that's a good one.
Rob: 04:01
It would be great. 100 people at a show watching Taylor perform, that'd be fantastic.
Brent: 04:05
So I have a story similar to this. So a good friend of mine is in the party planning business, and he does these big corporate kind of events, but he also does some private events, and this is his company's quite large. And so this is several years ago. And this gentleman, I think he was turning 60, and he wanted to have his big party, and I think it was in Las Vegas, and he had three acts that were going to perform at his party. So the opening act was the comedian Robin Williams. So this one when Robin Williams was still alive. The next act was John Cougar Mellencamp. Okay. And the final act, the main headliner, was The Rolling Stones. The Stones. Wow. Yeah. Yeah. And he paid, and I from my understanding, a lot of these big artists, they're not going to just do it, but he actually did quite a significant contribution, from my understanding, to a nonprofit uh to on behalf of the stones. And so, and my buddy said the shows, all three of them, were off the charts, like so, so good. I mean, that would be I had another friend that I recently learned that uh got invited to uh a private showing, and the headliner for that private showing was 200 people for somebody's birthday. Guns and Roses. What? Yes, guns and roses. I'm like, I asked her, I said, How did you get on the list? And she just looked at me like, Are you kidding me? I get on these lists. I'm like, I don't even want to know what it takes to get on the Guns N' Roses list, but I'm a huge GNR fan, so if it ever happens again, I'm a phone call away. Nice, and I'll get there in my jet, so no problem.
Rob: 05:46
There you go. Yeah, because you're going to win this lottery. And I so I okay, I'm going to brag a little bit. I saw Snoop in a group of about a hundred people and he performed for like an hour and a half. Yeah. Ludacris opened for him. So I got to see Ludacris, then Snoop. I didn't realize how much how much music I knew of Ludacris, but it was a it was a night that just kept going and going and going, and saw Snoop perform, and it was so cool.
Brent: 06:10
Had to be epic.
Rob: 06:11
It was great. Yeah, such the best concerts.
Brent: 06:14
He's such a great entertainer. That is fun. Well, that's some fun storytelling back and forth.
Rob: 06:19
Yeah. And so today's topic, Brent, is not going to be about winning the lottery. It could be winning the lottery, but we're going to talk about financial windfalls. And that topic puts us kind of in the context, or the opening question gave us some of the highlights of how you and I would treat a large financial windfall a little bit. But the odds of winning the lottery are one in 290 million. So it's not going to happen for either one of us. Brent, you have a higher likelihood of getting hit by lightning twice. So just to give some context, and luckily we live in an area where we could get hit by lightning, probably not twice, but we could get hit by lightning, uh, but it's not going to happen. But the financial windfalls we're going to talk about today are things like a sale of a business, the um an inheritance that you might receive, a large, unexpected, or small or medium-sized unexpected bonus from work, or that severance package that kind of came out of nowhere that maybe lets you step away and actually retire. And this topic came from quite a few people actually suggested this topic to us. They actually either messaged the show, my financial advisor Christy mentioned this topic to me a while ago, actually three or four months ago. And we just had a friend recently of yours, Brent, that suggested this episode as well as a topic to this to cover. And so we're going to talk both about the expected windfall, so a uh a sale of a business or a potential inheritance, but also the unexpected ones that I mentioned. So a surprise extra bonus or that severance package that you got through work. When I talk about uh inheritances, there is an estimated $37 trillion that is going to pass from the older baby boomer generation to Generation X. That's almost $1.5 trillion every year over the next 25 years. Now, it may not be a large inheritance, it may be a modest inheritance, but that's a lot of money that's going to transition over the next 25 years. The other stat, Brent, that I looked up as in preparation for this episode is between 40 and 45% of small business owners today are Gen Xers. And so they're going to be going into their midlife and looking at selling their business, which could create a pretty substantial windfall that they get to take with them into retirement. So the way we're going to approach this topic is through the lens of the five rings of our circus: relationship, purpose, health, adventure, and finance. And you're going to want to stick around to the end of the episode because I'm going to talk about the number one mistake that people make when they do receive a financial windfall. As I mentioned, this episode came as a recommendation from a number of people. And if you have a suggestion for an episode you'd like to hear us do, please go ahead and message the show. You can do it directly through the app that you're listening to our episode on. So if it's on Apple, you just hit the link at the top of the show notes and you can leave us a message, either a voice message or you can leave us a text message to the show on an episode of this nature that we might be able to do in the future. And Brent, our show recently got a message, actually, a text message into the show. I don't know if you've had a chance to look at it yet or not. It came in just this week.
Brent: 09:28
No, I don't, I don't actually.
Rob: 09:30
All right, good. It's a surprise because it's directed directly towards you. I think you're going to be really excited about this message.
Brent: 09:35
All right, the anticipation. I like that. So, Rob, you mentioned a statistic, and I'm just curious, I want to expand on it. You said that of Gen Xers, about 40 to 45 percent of small businesses are owned by Gen Xers. So that's a large population of people in the United States alone. That's like 60, 65 million people. How about baby boomers, the generation that is ahead of you and I? Do you have any statistics related to how many baby boomers own small businesses?
Rob: 10:04
About 20 to 25% currently.
Brent: 10:07
Wow. Okay, so you put that together. That's a large number. So when we think of wealth transfer at one point in time, it's going to be quite significant, whether it's through a business, whether it's through inheritance, whatever it might be. One thing I want to point out a part of this show is us being pretty candid about some of the things that we talk about. Inheritance is a tough topic for many people because it involves losing a loved one. That is a fact of life. And we're going to talk about it through a lens today that let's say your mom or dad or both your parents pass away. There's something that usually comes with that. And it could be an inheritance on the positive side, it could be inheritance on the negative side, meaning there were some debt involved. It's an estate that has to be dealt with. I've lost both my parents, Rob, and I know exactly what that is like. So we just don't want to sugarcoat this part of this experience of a windfall. Sometimes it's money you don't really want because you lost your parents. And so we just have to learn how to navigate it. So part of our journey today is just talking about, as Rob alluded to, is through the lens of the five rings of the midlife circus. And the first one is relationships. So, Rob, something that happened to you is that you've had bonuses in your career, and some of them were probably expected, and some of them maybe weren't as expected, or maybe they're a little bit more than what you planned for. And we're not talking like hundreds of thousands of dollars. Sometimes it could be a $10,000 bonus or a $5,000 bonus. How have you approached the relationship element for things that are planned or unplanned as it relates to a windfall?
Rob: 11:45
Not very well. Um I wish I had actually spent more time in advance of some of those windfalls, Brent, talking with my spouse, Tara. And actually, not and well, let's talk about the inheritance piece a little bit. And both of us still have our parents alive. We hope both sets of parents actually live a really long period of time. And we hope they spend every penny of what they have before they pass away. They worked hard for it, they've earned it, they should be able to spend it. We want them to spend all of it. But it likely is going to be less, something's going to be left over that we're going to inherit. And the thing that we're starting to do now is really talk about where we're aligned from a spending and lifestyle standpoint and where we're not. And how we're going to feel when this money comes in, or if we do have money coming in, how we're going to feel about it and what we're going to want to do with it. I might feel that this money is now extra so we can go and spend it, where my wife thinks it now just provides some safety and security and she wants to just hold on to it and save it. So the first step, I think, before a windfall shows up is you and your significant other, your partner, your spouse, sitting and talking about how you're going to approach it, finding out where you're aligned and where you're not aligned. But the biggest thing is identifying what you're going to do when there is misalignment and talking about that in advance of receiving the money when there's no emotion on the table, you can't spend it, you can't use it. Talk about how you'll make decisions when there is a misalignment and what process you're going to follow when you're not aligned. The other thing I would say is get really true on the relationship that you have, what your values are. So what are your family values, what's important to you before any dollars come in the door? Those are two key things is what's the process you're going to follow when there is misalignment. And the second thing is what are your values? Because that's going to define a lot of how you treat that windfall when it does come in.
Brent: 13:35
I like how you started this because you want to really be closely aligned with your spouse, your significant other, because that's the greatest starting point. Let's talk about extending it a little bit into relationships outside of your household. So how would you approach the we'll get friend network next, but maybe your next layer of family. So siblings, parents, and I know we talked about an inheritance, so the parents aren't in the equation at that point in time. But let's just think of the next layer, maybe some close cousins. Like, how would you approach that? Because that to me could be incredibly complex. Have you given much thought to that before?
Rob: 14:14
Money is a topic that most people just don't talk about. And so it's hard to understand what somebody might receive in inheritance. If you get a bonus, you're not going to go and brag. I know most people around me don't go brag about what the dollar amount of that bonus was. So a lot of people don't know what it is. They know you're doing okay, but they're going to start watching, people might see some of the decisions that you make and start to make judgment on the decisions that you're making financially. So the new car you're buying, the house that you have, the clothes that you wear, people might start making judgments on those purchases and some of the financial spending decisions that you make. Because just being aware of that, I doubt they'll ever put a voice to it, but just be aware that your next layer of family might be close. When I was when at where I thought you were going, Brent, was asking about kids. And I don't have any kids. I think that next layer behind the spouse being children. When you think about an inheritance or a let's just use windfall. Let's just start talking about financial windfalls. When there's a financial windfall that comes into the house, obviously, I don't know if you have you sat down your kids and talked about what that dollar amount is or what the windfall is. How do you approach your children or how do you communicate with your children around a financial windfall?
Brent: 15:19
I think it's really complex, just from my own experience. I think it's complex in a way that let's just use it as going into retirement. And sometimes children can look at you saying, Well, you know, I get a part of that, right? And it's like, no, not necessarily. You know, you'll be the benefactor of some of the cool trips we do. Yep, I'm going to help pay for college. Maybe that's part of the process. The downside of a windfall to me is I haven't seen great examples where when that money is directly passed on to the children at a young age, that it goes well. Because the kids then operate as if they've already made it. So I look at it as almost protecting them because they can be their own, their own enemy in this one. Because then they might lose sense of purpose and drive and desire and contribution to society because everything's taken care of. So I use that more as an example and having open and honest conversations that I still expect my children to go contribute to society. But it's complex in a way that it has a dependency on how you raised your children and what was the conversation that you had about money with your kids all the way growing up. If it was loose, then it's going to be even looser. If it was tight, it's probably going to have an element of that. So that's what I think about. But everything you talked about, this is probably my biggest concern is my children, because I just don't have, as I talked about, I just don't have a lot of great examples where I know plenty of extremely wealthy families, and I find that that struggle is so significant between parent and child, even when they're in their 30s, 40s, 50s. It's like that's just a really tough, tough situation to navigate. One thing I want to mention too, Rob, is you had said let's say you have a nice windfall and you start to buy a few things for yourself, you make a few upgrades, you change, you travel a little different. Guess what? You're now starting to show up different for other people. And your friend group may change because of that. Because now you're you're the guy who shows up with the fancy car, and you're the person who shows up and doing all these crazy trips and kind of just showing everybody up, and people may look at that as a negative. So you have to be very aware on how you show up, and guess what? You may have changed. And guess what? They will change with you, and they may like it or they may not. And that's something that I want to point out with relationships because I've seen this happen before where people have big windfalls and they're like, everybody's changing around me. And I I see it more on business transactions, somebody sells their company. I'm like, well, guess what? Wake up. You actually changed a ton. You changed your house, you bought a couple of houses, you changed all your cars, you changed your trips. You no longer do inexpensive trips that all your buddies could go on. You're now the one trying to promote the big trips. You've changed. So you got to be aware of that.
Rob: 18:23
It's easy to point the finger and look outside at all the other people that changed around you, and you're the one that actually maybe changed the most.
Brent: 18:29
Absolutely. Totally agree.
Rob: 18:31
So the other ring of the circus we talk quite a bit about, Brent, is purpose and how purpose relates into a financial windfall. How do you think about purpose and I both identifying and working through your purpose when there's a financial windfall that does come in?
Brent: 18:46
And once again, another complex one. Because if your life was lacking purpose before a windfall, example, like you're kind of frustrated with your work, you want to do something different, all those things almost magnify with more money. And so your purpose takes a significant hit. But here's a statistic that not many people are aware of. And when I was in the buying and selling of companies, this statistic is pretty well known 75% of business owners who sell their company regret it within one year of actually selling it because they don't have anything to do. They sold it, they made a bunch of money, they checked out, or it's people that take an early retirement package. We see that all the time, Rob, in our network. People take an early retirement package and they're so excited, and yeah, the first three to six months are fantastic because they're living their life. But now they're like, Well, what am I going to do every day? Like, who do I hang out with? What do I do? Like, it's a it's a strange feeling. So I think the whole purpose piece is something you have to be planful for. And you have to start thinking about it. Take the money out of the equation, think about how you want to spend your time and who you want to spend your time with. And if it's intellectual stimulation you need, then go pursue that intellectual stimulation. Maybe you become working with nonprofits and you're going to help founders of nonprofits or leaders of nonprofits, you know, coaching them. Maybe it's getting involved in just volunteering, you know, labor type work. I mean, there's a lot of things you can do, but be aware is money only amplifies things, especially when it comes to purpose. It gets really challenging because now you got a bunch of money, and most people try to address the deficiencies they have with their internal kind of how they're feeling and stuff with buying things. And that usually doesn't solve it. It's a very, very short road on that one. If you think money's going to solve your lack of direction, lack of inspiration, lack of purpose.
Rob: 20:51
It's really hollow in just going and purchasing things. And I I heard on a podcast recently, Brent, that you don't find your purpose, you actually build your purpose. And it's something you build towards and you help it grow. You have to be very deliberate with it. So, with an expected windfall coming, you mentioned selling a business, you mentioned we've talked about inheritance. So when there is an expected windfall, how would you suggest somebody go about building purpose in their life before the money shows up? Right? We're talking about the expected. It's going to be here in a year, it's going to be here in two months, it's going to be here sometime in the future. How do you go about building purpose in advance of that?
Brent: 21:27
I think it's there's so many cool avenues that you can go at this. So there's a lot of great programs that you can go to that are for people that have like they're trying to identify their purpose. So it's like weekend workshops. That's one route. You can obviously read a lot of books, watch a lot of YouTube videos. But to me, it's more about trial and error. Now try things. And you and I talk about it a lot on this podcast. Get out and try. Like, we're trying more volunteering, we're trying more. This podcast is a great example of that. Like, this is something new for it's not new now, but it was new and we started over a year ago. And it's just you're trying new things to see if that piques your interest and so forth. But the last thing that I recommend people do is just try to sit idle and think it'll come to them. Uh-uh. You said it right at the onset of this. Like you got to go build your purpose. You got to go out there and try. You can take a class, you can get it. I think there's a lot of really good coaches that help people in life transitions. I think that's another great avenue. If you've got the resources, maybe that's something that you do is you spend time with somebody who's a pro at helping people navigate significant transitions. That's a route. Any other thoughts come to your mind, Rob?
Rob: 22:39
It's something you want to address in advance of the money showing up. You said it, Brent. The money being here isn't going to solve the problem. They're just going to amplify it. Now you have all the time in the world and all the money to go do anything you want, but you don't know what you want to go and do. You don't know how to spend your time or invest your time. And so finding and building it in advance of the windfall is important. And trying things. I mean, you said it. You just got to try stuff. Try and fail. Try something that you think you might like to do before you sell the business to see if it's something you're going to do after you sell the business. People that, you know, I think the stat you just said, Brent, was 75% regret selling their business a year later is because they didn't have anything to do. They were the business. They put their heart and soul, blood, sweat, and tears into building a business. Now that's gone. And it's there's nothing to replace it. So I would suggest starting to replace it in advance of the money coming in. And then once the money shows up, now it becomes an accelerator. You can actually accelerate the things you've already found versus trying to find it because you'll waste a lot of money at just throwing it out there, trying to find purpose if you haven't defined it in advance.
Brent: 23:42
Great, great recommendation.
Rob: 23:45
So the next area is health that we're going to talk about, Brent. And I've had a lot of people share with me, I wish I could afford to take better care of myself. I wish I could invest in this next piece of exercise equipment that's going to help me lose weight or help me get in shape. And at this point in our lives, investing in health and spending money in health is not an indulgence. It's a necessity. So when this windfall shows up, Brent, how do you suggest people approach their health after the windfall or after the money's here?
Brent: 24:15
I think you have to break it into two camps, Rob. I think you've got this mental health and this physical health. I can't say this enough is when you have a windfall, there's typically a tremendous amount of emotion that comes with that windfall. If you lose a parent, I went through it. You may need to seek some help to navigate the magnitude of that change in your life. And that might be working with a therapist and working with a coach and somebody to help you through the mental aspect because it's exhausting. Let's say you sell a business, I've done it multiple times. That is one of the most challenging, demanding things to do. And it usually takes a year, year and a half to sell a company, sometimes less, sometimes more. And it's going to drain you mentally and physically. So you've got to be cognizant of that. Your body needs some time to decompress and really process the magnitude of change. So that's one thing. But then on the physical side is let's start investing into our health. Start planning for that. Let's say that you know that most people I know when they go through a big transition, their health has actually kind of taken a setback because they put all their attention towards this wealth transfer, whatever it might be. And we're not talking sometimes it's big and sometimes it's small, but it physically wears you down. So maybe you need to get a personal trainer. Maybe you've been really eating very poorly. So maybe you get a meal delivery service. Like maybe spend a little bit of money on a few of those things that can be indulgences. But then you alluded to maybe you get some new workout equipment or I've been through that process, Rob, and it's some of it's laughable now because it's like, why did I buy that piece of equipment? I don't even use it. But I thought it was I have all this time. I'm just going to start working out, you know, seven hours a day. No, I still work out, you know, an hour to two hours a day, and that's it. But there's certain things that you can do, invest into, and I have to say it, even though you're going to give me a lot of crap for this. Invest in your sleep, Rob.
Rob: 26:15
Get the nice mattress, get the nice bedding.
Brent: 26:18
Yes, yes. I can't, I don't know how I have to I have to hit sleep on almost every one of our episodes, or at least one out of three. So far. I had to bring it up. So there's a lot of things that you can do to really help yourself through this process. And this is also like everything else we're going to talk about. There's a planning component that comes with it. And the planning is if you know that you're going to have some sort of bonus, and let's say it's a $10,000 bonus, maybe you take a little bit of that, 10% of it. Maybe you take $1,000 and you invest it into something that's going to enhance your health. Maybe it's that, you know, retreat that you wanted to do, a yoga retreat, or maybe it's that get away and do some cool trip. So those are a lot of things. I think health can be a big topic here, but we want to highlight the important things that you should be doing with your health because you will be mentally and physically drained on almost any of these windfall scenarios. And it's how can you take care of yourself and those around you?
Rob: 27:17
I really like how you started with talking about mental health as the first thing to look at, Brent. And I know an upcoming episode we're going to have, we're going to talk about you having lost your parents and kind of the impact that it had on you there. But I think the emotion that's going to come around, whether it's selling the business or the loss of a loved one, focusing on mental health quick and early is key to actually navigating that period of time in your life. And the physical health component, Brent, I think about looking, you know, 20 years from now. So when I'm in my 70s, what investments can I make today? If I have the financial resources today, what investments can I make today from a health standpoint, they're going to help 70-year-old Rob have a healthier life. It's not about getting healthier today necessarily. Yes, I want to get healthier today, but I want to be very vibrant when I'm in my 70s and 80s, and I need to make investments now to be able to do that. And so as people are thinking about it, I mentioned it's not an indulgence, it's a necessity. If you want a long, healthy, vibrant life, now is the time to take advantage of some of those things from a diet, an exercise standpoint. If you need to hire a trainer because you need the discipline, go and do that. You're going to get that, it's going to reap rewards for the next 20 years of your life if you take those steps today.
Brent: 28:32
Absolutely. So this brings us to our next ring of the midlife five rings of the midlife circus is adventure. And Rob, I've always looked vicariously and lived vicariously through you. So I put you at the as an expert level of adventure. So now you've got this windfall, big or small. How would you approach adventure in life, knowing that this is coming or it's already arrived?
Rob: 28:59
There's a lot of things that people say, I wish I could afford to do that trip. I wish I could afford to take the class. And I put learning in the category with adventure. Okay. I think because learning to me is an adventure. I have fun learning new things. So a lot of people put off those things until they say, I can afford it, or they wait until they feel like they can afford it. This financial windfall may allow you to afford something that you've been putting off for a long time. And so if you know it's coming, start planning it. If you know you're going to sell your business, plan that big trip to celebrate the sale of that business. Plan the trip you've wanted to plan for the last 20 years. I would recommend it as you think about financial windfalls. I said, start with your spouse. What are some of the things and what are some of the adventures and what are the experiences that you want to have in your life? Prioritize which ones are the most important. We actually have an Excel spreadsheet that Tara and I use, Brent, because we have a list of places we want to go. We categorize them and we actually ranked them, you know, put numbers next to each one of them, one through five, how excited we were about that trip. And that gave us some priority to which trip should we go on sooner rather than later, because they ranked higher for both of us. So both Tara and I having a level four score on a trip, that's eight points, versus I have a five and Tara has a one is only six. And so we would do the eight-point trip first. And so listing out those trips, listing out the experiences you want to have, prioritize them with your spouse, and then go and take them. And I said in our episode around Costa Rica, think of adventure as an investment. And it's an investment in the experience and the stories you're going to get to tell for a long time going forward. And so it's not necessarily the I just lost my train of thought. It's an investment in the experience going forward. So it's an investment in the stories that you'll get to tell going forward.
Brent: 30:47
You know what I like about this is you started out as like you have this list, and I have to kind of poke fun at this list because I never knew that you guys had a list that you would force rank, and you took all of your experience in financial services, and now you're making this a quantitative exercise of each person has votes and things like that. So but it is working. So I started this section saying, hey, I live vicariously through you and Tara. So very cool that you're doing this. But what you did is a lot of times we've got this bucket list of adventures that we want to do, and we had an excuse for it. And the excuse often could be money. But there's another avenue I want to I want to ask you how you approach this, is sometimes people don't take adventures because of the logistics and the challenge associated with that. So, what could people do to maybe ease the actual level of effort on planning a trip? Let's say you want to do a trip to Europe and you've been thinking about this for years, but you're like, oh my gosh, that's a lot of work to do that. How are you approaching? How have you approached that? Or do you have any ideas for people?
Rob: 31:52
I think of actually two things. There's the there's the work around in Brent or the fear involved with the trip. I think there's part of it has to be the fear of the unknown on doing some of the big adventure travel that Tara and I do. With a financial windfall, when it comes to doing and taking an adventure, you may have the resources now to actually outsource a lot of the steps to actually help plan that trip for you. And we've actually used a travel agent for years. She keeps threatening to retire and we keep waiting for her successor to help us. But every time we reach out, she says, I'm just going to help you anyway, because she loves the types of trips that we do and she sets up great trips. And she actually helped us in a lot of ways learn how to travel better. And it took away a lot of the fear for us in our travels. And so we it cost us a little bit extra money to have her help plan it. But when I get off the plane in Africa, there's a person holding a sign with my name on it. We have a private driver taking us to the lodge or taking us to the tented camps. And so you can invest in a travel agent that's going to help make that experience a little bit easier for you to take, take away some of that risk or some of the perceived risk and fear that you might have, as well as actually work through all the logistics. They've gone to a lot of these places or they know other people that have traveled to these places, so they can help reduce the list of items that you may want to go and see and do and actually hit the highlights of a geography. But travel agents, I know you can use AI, and I've used AI to help plan a trip, but nothing beats a really good travel agent in helping you take that next step easier.
Brent: 33:21
And there's those concierge travel, you know, companies that are really like that white glove, they're going to do everything for you. Yeah, you're going to pay for that. But then there's also the traditional travel agent that maybe they're actually their incentive is they're getting paid by the airlines or they're getting paid by the hotels and things like that. So it may balance itself out. But what we're trying to encourage is try to remove the barriers that you have for adventure. Because a lot of times the barriers are going to be more psychological in your head, like that's just a lot of work. I don't really want to do that. Or I'm a little bit nervous going to that part of the world. Well, let's see if we can get some expertise that can help us through it. And I know for me, I've personally experienced that because most of my travel throughout time has always been like, we'll plan it. And I'll just, I'll look up hotels and I'll look up, you know, flights and I'll do that. Part of that is the controlling side of me, which is annoying because I somebody can do it so much better than me. But as somebody that's traveled so much from a work perspective, I'm always like, efficiency, efficiency, but sometimes I got to let that go a little bit. But maybe there's somebody that can help you with it. But one other adventure I want to throw out there is a good friend of mine, and this is a really, really cool example is a good friend of mine sold his company, did really well, and he actually planned an adventure for his close family and friends. And they rented a boat down in the Caribbean. I think it was maybe a week or 10 days, something like that. They had the chef on board, they had the captain, and it was a really cool boat, and they got to do all sorts of things in the water. And it was something that he reached out and said, He and his wife were like, We're going to pay for this trip for everybody because we are going to celebrate this windfall, and we want to celebrate it with you. And I thought that was one of the coolest ways to make a memory and really just let loose a little bit and do something super special. So kudos to them because I heard about it. I was like, wow, that sounded amazing.
Rob: 35:23
When I heard that story, I was I was jealous of the people that were there because it sounded like it was an incredible trip. But I thought it was one of the coolest things that you can do with a windfall is just bring the closest people in your life together to go have an experience together.
Brent: 35:39
Absolutely. And those are the things you always remember. So let's transition into the last ring of the five ring circus is financial. And we did this intentionally for this episode, is to do this last because most people start with the money and be like, I got to just figure out how I'm going to spend all my money and do all the things associated with that. But we actually wanted to do it last, but there's some nuts and bolts kind of that happens with the finance. So why don't you walk us through some of the basics? And let's say, let's use a simple example, Rob, that let's say you do have an inheritance. How should somebody approach an inheritance? And I won't say a dollar amount, let's not use that, but what should they think about if there's a windfall and it's inheritance related?
Rob: 36:22
I'm going to take us back to the very beginning of our episode, Brent, and talk about relationships here. And it's the from a financial standpoint, the most important thing that a couple can do is actually get very aligned on values, get very aligned on decision making, because the money is only going to make all of your problems worse if there's problems in the relationship. So get aligned early first and foremost before you go in and meet with the professionals. And when a windfall does come in, there's likely going to be tax ramifications, some legal ramifications, and it may allow you to actually retire or do something different financially. So I think about the trifecta of people that you need to meet with. You need to meet with a tax person, you need to meet with an attorney, you need to meet with a financial advisor. All three of those people need to help bring to the table after you and your spouse have had the alignment conversation.
Brent: 37:09
Absolutely. And I and I've learned that along the way from some people that have had windfalls and how they leverage you, as you alluded to, this trifecta is they each are going to have something to share that's really important. Let's say you do have an inheritance. Well, you need an attorney to help you navigate the estate. Did they have a will? Do they have things in place that help you navigate the mechanics associated with an inheritance? Or let's say you sold a company, those are really complex. So your attorney is going to help you navigate that, but then you get into your CPA because you want to pay as little taxes as possible by staying within the law, of course, but that's an important thing that your CPA and then your financial advisor is going to have a tremendous amount of input and you build a team. And those that build a team and they just get so much more out of it. And I think it's an important step. And that to me is an important part of this process on the finances. If you try to do this all on your own, the probabilities you might miss out on a lot of what you could have gotten from this windfall, but also it could be very painful. So, Rob, that was like the mechanics, but I want to talk about something fun. So if you have a windfall, here's one thing that Rob and I recommend buy something nice for yourself and maybe your spouse or your family. And here's an example, and I can I can share with you some things that I've done. I've sold a few companies in the past, and I I don't recommend this something when I say buy something nice. I'm not the one saying go buy a house or a car or something, unless that's what you want to do. I bought a fly fishing rod. I was so excited about that. It was a small amount of money, and I was so excited because every time I use that fly rod when I go fishing, and that that reminder of the reward that came with it. So I always recommend something small. I know people that have bought a nice watch, I know some people that actually upgrade maybe some of their clothes, like they just do something small that is not so extravagant. It's just purely a reminder. And I think when you look back at something you did and you smile, then you've done right.
Rob: 39:24
Yeah. Yeah, I love how you said that, Brent. And I think that little memento that you purchased puts that smile on your face. It also may be something that you actually can use to help remember the loved one that you lost is that one item, that one thing, that one tangible thing. So it's not just investing in a trip or something like that, but it's something tangible to actually honor what you just went through and what you experienced or the person that may have passed it on to you.
Brent: 39:49
Yeah. So when my mother passed away a summer or two before, she was staying at uh our house for a little while up in the mountains. And she went off and went to the Sunday brunch at this um nice golf club nearby, but they have this really pretty Sunday brunch, and she uh we weren't at the house at the time, and so she left a brochure for that place and she said, You should consider joining this someday because I really like it. So actually, when she passed away, we joined that club, and it's a very fond memory of my mom kind of nudging us, like, hey, you need to have some fun here and you guys work, work, work, work, work, and like do that. But it was a way we're like, oh, let's do that. I'm glad you mentioned that you know, when you lose a loved one, that was something we did to kind of say, you know what, she was pushing us on this one, maybe we should do that. And we did it. Unfortunately, we didn't do it while she was still alive because she probably would have taken more advantage of it. But I didn't know that we did. I just remember because she left the brochure with a sticky note on it of just saying, I really like this, you need to join it. And I at the time I was like, whatever, mom, if you want to pay for it.
Rob: 40:55
But every time now you go to the club, there might be that little remembrance of your mom leaving the brochure, which is really cool.
Brent: 41:01
Yeah, 100%.
Rob: 41:02
All right. I teased this at the beginning of the episode around the biggest mistake people make. Uh, and it actually is a financial mistake that they make when there is a windfall that comes in. And it's lifestyle creep. That's the number one mistake people make when there is a financial windfall. And what lifestyle creep is, it's the it's the unconscious change in your lifestyle to match whatever level of income or whatever level of assets that you have. And I say unconscious because it's not planned. And this is interesting because it's something that all of us have done throughout our working careers. As we've moved into different jobs and as we've been promoted, we've actually adjusted our lifestyles a little bit to that next level of income. I know as my income has gone up, I think about the first job out of college, what I was earning at that point in time, living in an apartment, the types of food I was eating, is vastly different than the type of house that I live in and the type of food that I eat today and the restaurants that we go to. That's what lifestyle creep is. It's the small little changes that happen in your day-to-day that are unplanned. And well, with a big financial windfall, that lifestyle creep could actually become very costly. And because the jumps are a little bit more significant, and oftentimes they're at a point in your life when you can't replace it by working or actually generating more income. And so that's a finite number. It shows up in your bank account, it doesn't keep coming into your bank account necessarily. And so if you start to overspend, you may actually deplete that a little faster than you would anticipate it and miss a little bit of opportunity. Now, I'm not saying you should not indulge and not have fun with it, but just be very planful and very mindful about the changes that you're making in your lifestyle because they come at a cost. They come at a cost of that big vacation. They come at a cost of taking all of your friends, getting a Vrbo, and taking all of your friends on a big ski trip. It comes at a cost. What would you rather do? Go out to a nicer restaurant every single month or take all of your friends on a trip. I'm not saying one is better than the other. I'm saying be conscious of that choice because there is a cost that does start to take away at that asset.
Brent: 43:08
So I have a real life example of this. So when I was, I haven't shared the story often. When I was uh in middle school and high school, my neighbors that lived right behind us, they won the lottery. No way. Yeah. So they won the lottery, and they had two kids, and one of their sons was my age, and so we hung out a ton. But I remember the transition that they went through when they won the lottery. So this is back in the 80s. They started making big purchases. They quit jobs, mom and dad quit their jobs, cars, all sorts of stuff happened, and they weren't doing a whole lot outside of just kind of hanging around, and they burned through it all. Really? Pretty quickly. Yeah. Wow. Within a couple of years, I think they've burned through all of it. And uh there was no planning. So it takes us back to everything we talked about today. I don't think it impacted the kids. Like, I don't think the kids were all sent. Change their world. It was just the parents really both retired and they were really young at the time. So they retired. They didn't really have the financial means. It would have worked probably if they were very planful and they kind of walked through some of the things that we talked about. But it was quit job, buy some cars, do some other things, and here we are. So I actually that's funny as you were describing that is uh it is something the lifestyle creep certainly showed up, and then they had to both go back to work and go back to their life that it used to be.
Rob: 44:30
Oh, any final thoughts on our discussion today, Brent?
Brent: 44:34
I think how we started out is this is going to happen in your lifetime, whether it's small or big, and maybe it's already happened. And what we really want to encourage people to do is the main theme through today's conversation is be planful. Be planful how you want to approach relationships, be planful on how you think about your purpose and your health and adventures and your the whole financial component of it. Be planful. It'll just make that transition that much more palatable for you. So congratulations to those that do have a windfall. Uh, I'm not saying congratulations because you just got an inheritance, because I know that's a different side of it. But let's say you did get that early retirement package. Congratulations. We're just encouraging you to think about a little bit and enjoy it. Absolutely.
Rob: 45:20
So, as I mentioned early, Brent, uh, this episode came as a recommendation from a number of different people. And if you have an idea for an episode in the future, you can message our show directly. So I want to thank the people that actually gave us the messages about this topic. I want to thank your friend that suggested this when we were in person with her a few weeks ago. And I want to thank my financial advisor, Christy, who suggested this topic way back early this year. But if you have an idea for a topic, please message the show through the app that you're currently listening to the podcast. It's in the top of the show notes. It says message the show. You can either leave us a voice message or you can leave us a text message. And Brent, I have a special text message for you now.
Brent: 46:00
Let's hear it. You said this at the beginning, so I'm curious because I haven't looked at the message that I've come across recently. So fire away.
Rob: 46:08
All right. This comes from Brandon from Winter Garden, Florida. And Brandon started his message with I have a Knox top hat from my grandfather as well. Still in the original box and was a gift from Fred Waring.
Brent: 46:23
First of all, what I mean, who else has one of these old uh old top hats? But tell me, I don't know, I'm not familiar with Fred Waring, so who is that?
Rob: 46:34
Fred Waring, I had to look him up. He's an entertainer. Think about like Fred Astaire and Frank Sinatra days, and he was a dancing uh dancer, a singer, he was a television personality, he was all of those things.
Brent: 46:48
So I'm now buddies through Top Hats with Brandon. So, Brandon, thanks for sharing that. I think that is so cool.
Rob: 46:56
So, we're referencing an episode that came out a few weeks ago, actually a little while ago, around the things that we keep. And Brent has a top hat that he's been holding from his grandfather from years. It sounds like Brandon has one of these as well. And so, Brandon, thanks for your message. I'm actually going to read the rest of the message. It says, Keep up the great work, gentlemen. Really love this podcast. Also, if either of you like Bloody Mary’s, I'm happy to send a couple of bottles of Mix Your Way. And Brandon, I do love a spicy Bloody Mary, so I'll definitely be connecting directly with you so I can get a bottle or two from you. So thanks everybody from listening. Until next time.
Lena: 47:30
That's it for this episode of Midlife Circus. Visit midlifecircus.fm for show notes, transcripts, and all the latest happenings. And be sure to join us in the Midlife Circus community on Substack. Follow Midlife Circus on Apple Podcasts, YouTube, and wherever you get your podcasts so you never miss your next great act. Quick reminder the opinions and stories shared here are personal reflections, not professional advice. This show is for entertainment and inspiration only. Thanks for listening, and we'll see you under the Big Top next time. Midlife Circus is a Burning Matches Media production.