Ep # 82: How Would Your Life Change If You Won The Lottery?
If money wasn’t an obstacle, would you change anything about your life? Then the most important follow up question: WHY? This podcast is not only for those living in the lottery world. If we truly believe that money is the tool that's going to help you live the life you want to live, then we need to think about what you value most. In our planning process we will ask questions to get you thinking about what you value. This may go outside your comfort zone, but our goal is to help you figure out how to align your money with your values, so you can live a fulfilled life.
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Benjamin Haas 00:03
Hi everyone and welcome to A/B Conversations, where we will help you CFP your way out of it. A podcast where you get into the minds of a couple of Certified Financial Planners on how we think and feel about everyday financial planning questions and what should really matter most to you. A healthier financial life starts... now! Hey Adam! Welcome back. How are you today?
Adam Werner 00:30
I'm doing great. Hey, thanks for having me back. I know I got kicked off the last one but it's good to be back.
Benjamin Haas 00:37
Well, when you have an opportunity to speak with a celebrity, you have to be kicked out for a week.
Adam Werner 00:42
I completely get it.
Benjamin Haas 00:45
You are going to be the expert on this one. I know you were so super excited about this topic. So, I'm along for the ride. Why don't you introduce it?
Adam Werner 00:56
So as people are listening to this. We're probably now a few weeks removed from the whole Mega Millions lottery hysteria, as that jackpot grew and grew and grew and you know, it crossed the $1 billion market and of course, it was headlines all over the news. You just happened to pop into my office and it was on the TV and you said to me, what would you do if you won the lottery? And it's such a natural thought process, right? I'm going back years ago, back to Ameriprise office in the big cubicle farm and at that point, whatever the jackpot was then, it was probably like $500 million which felt like, I mean it is, but it felt like the all the money in the world. We were going through that exercise as a group of okay, well, what would we do if we really had what would feel like a limitless pile of money? What would you do with your life? And then very, for us through the planning work that we do, very natural segue into well, that's a perfect exercise to go through to help people figure out: if money was not an option, what would you do? What would you change about your life? Where would you place focus? What are the things that you value? It's something that we're trying to implement in our own practice, way more commonly. But it was a great combination of headlines in the news, I shouldn't say everyone, most people are kind of captured by that hope is not a strong enough word, desire to just to win the lottery and now you have this pool of money.
Benjamin Haas 02:37
Yeah, and I think I like this as a topic. I think I might have given you some pushback and you're like, hey, we should do a podcast on that. I think I probably fit the mold, like many of the listeners going, yeah, but the odds of winning, like the realist in you doesn't even really want to play because what are the odds of winning? It was one
Adam Werner 02:55
They say it's one in 302 million. So, the ratio struck by lightning are way more common than that and I know you heard. Apparently it's one in 15,000.
Benjamin Haas 03:13
Adam Werner 03:16
When you think of, do I buy a ticket and play the lottery, knowing that I have a one in 302 million chance or if I go outside when there's a lightning storm, I have a one in 15,000 chance of getting struck by lightning. I think I'll stay inside and not buy a lottery ticket.
Benjamin Haas 03:30
Yeah, or not interact with a vending machine, which I found on my notes.
Adam Werner 03:37
I found this crazy statistic. Apparently, there is a not zero chance, one in 112 million that you will be crushed to death by a vending machine. So put all those things together, put them in a blender. Yeah.
Benjamin Haas 03:53
And here's the point and kind of getting into podcast world where we really want to use this as a good exercise. That's what it is. The point in saying, all right, what if it's just to put you through that thought exercise and I think you tee'd it up pretty nicely. If we truly believe that money is the tool that's going to help people live the life they want to live, then we really need to think about what do they value most? We're going to ask questions that will get you to the heart of thinking about that and it is to get you outside of the comfort zone. It is to get you out of reality. I mean, what dreams come true unless you're willing to kind of extend your mind past what's right in front of you. So, there's a couple different variations of that question but I think that's maybe the meat of the podcast today. Let's talk about that so that anybody listening, whether you think lottery world or not, you get your mind kind of in that space where you're willing to go, alright, this is truly what matters to me.
Adam Werner 04:53
Yeah, there's a gentleman by the name of George Kinder, who kind of pioneered this side of our profession, this side of the planning world that is focused, I guess, I don't want to misquote or misrepresent, I think he was part of like the life planning side of our business.
Benjamin Haas 05:12
Adam Werner 05:13
Yeah. There are essentially three questions that are designed to remove those limitations because that is the natural human tendency is to live within these boundaries that either we create in ourselves or just society in general. You're just benchmarking to other people and it's very natural to just kind of fall into these tropes of what do you want out of life? Well, I want to retire at some point. Well, sure. Because maybe you do, maybe you don't but that's what you think should be the answer to that question. That's where we kind of want to remove those boundaries from the equation. Knowing that, in particular, that first question, where the odds of any of us listening to this, hitting the lottery and having a limitless amount of money, is basically zero. But the exercise is still worthwhile, let's pretend and I'll use the words exactly. So imagine that you are financially secure, you have enough money to take care of your needs both now and in the future - how would you live your life? What would you do with the money and would you change anything in your life?
Benjamin Haas 06:22
So, what's beautiful about that and I know I can tie a lot of financial planning interactions back to parenting as you've probably can too. It's the surface reactions that is, you know, well, I would go buy this or maybe I would stop work and I actually looking back on it, I think that's why I asked you the question when I came into your office. If you won the lottery, you're not going to stop working, right? You're not just going to leave here.
Adam Werner 06:48
I'll become a bigger client.
Benjamin Haas 06:49
There you go. But tying it back to interactions, the surface reaction to okay, I'm going to buy this or I'm going to change this, usually comes with a follow up question for us - but why? And then you go deeper. But why? And you can get to this whole like, well, I want to take this vacation, but why? It's probably to spend meaningful time with certain people in your life. All right, I want to buy this boat. Well, why? Because it meant a lot to me to have that interaction with my grandfather and I want that for my grandkids. You dive into like, the things that really matter and like you said earlier, you're removing money as, that's the tool but that's not my purpose.
Adam Werner 07:31
Yeah, I think it is. And it's incredibly natural. I think the first thing that pops into a lot of people's minds that I'll throw a number out because it's nice and round and say it's $50 million. Like you said, it's, well, I'll pay off the house, maybe we'll move or buy this, I'll buy that. Great. Now you have $47 million. Now what? Unless, I mean, there's a TV show, you know, a lottery ruined my life. So clearly, having enough money doesn't necessarily fit the spending problem. But the thought process here is that you could clearly spend that money. But for most people that we work with, it's you could check some boxes on some things. But having that pool of money still only gets things. That's where we want to kind of turn that conversation to the life side of things, the values. Making sure that you now take these funds and allocate them to what really feels meaningful in somebody's life. Those examples you gave are perfect connections to, well, we're going to buy a vacation home, not because I want to buy a vacation home, but because of what that will allow me to do in my life. It's spending time with your family, spending time with grandkids, whatever that may be. That's just the conduit to that end result.
Benjamin Haas 08:51
Yeah, what makes you feel fulfilled? So, I think that's maybe the positive way to look at it. That second Kinder question is actually the more negative way to look at it. I realized that even posing this question in our conference room can be really somewhat uncomfortable because I think we've all had people in our lives that were told, hey, you're now sick and all likelihood, you may only have five to 10 years to live. In our scenario here and asking the question, that Kinder question, the good part is, you're not going to feel sick. The bad news is, you know when that endpoint is, so what will you do with the time you have remaining? How would you change your life? If you actually knew when that end was coming and recognize that question is supposed to get to somewhat of a similar result. If now money's not the variable, the time is the ticking thing. I think people would probably prioritize things differently.
Adam Werner 09:52
Yep, and I'm glad you use that word because that's the first thing that pops into my mind. Now you remove the money part of the equation, pretend you have everything that you need, fine. But now that time constraint added to it, it forces you to really evaluate and prioritize what matters and how you're going to spend your time. That in and of itself is just a hugely powerful thought exercise to go through. As you said, it's not the easiest process to go through and for many people and myself included, it's not something that you think about on a very regular basis in the busyness of life. And I, maybe I'm projecting, but I can very easily
Benjamin Haas 10:37
This could be therapy, go ahead.
Adam Werner 10:39
Great for our 10’s of listeners, put those things in a box, life is going to happen. We'll worry about that stuff later. But yeah, going through this exercise, it really does kind of force you to really start to dig a little bit deeper into what are your values? And this question, in particular, if time was a constraint, how would you prioritize the things that you're doing and where you're spending your time before the end?
Benjamin Haas 11:07
Because it's like reverse engineering. The answer to the first question may be things that provide you that freedom of time, so that you now can spend it. But how many other conversations do we have? Let's take the sickness, the health out of it, where somebody is transitioning to retirement and that big daunting question is, like, gosh, what am I going to do all day? It forces you to think about how you're going to feel fulfilled and how you're going to spend time if money's not a variable. So, I think this is a tougher question for us to ask but it's equally important because if you can put yourself in that position and mentally think about what that would mean to you, I think you're going to have some really good raw information to share about who you are and what you value.
Adam Werner 11:54
Yeah, absolutely and ultimately, for us going through this process it helps us in working with clients, if they are going through this exercise and helping prioritize what's important to them, then our job is to try to align what they're doing financially to either help make that happen or at least evaluate the tradeoffs. But ultimately, when any decision point comes down the line, if we know what those values are, we can either quickly eliminate things that don't fit or at least start to talk through those different options and feel like we're leading them in a direction or at least giving education on what may fit by having that additional context. I don't know, it's just incredibly interesting to me that our profession is slowly going this way and focusing on the value side of what actually matters to people and not just, you know, I have an IRA, how should I invest it? Well, I don't know. What matters? We're not just growing it for the same sake of growing it, all is well and good but what's the point?
Benjamin Haas 13:10
Yeah, and maybe this is where we can segue into just a couple of examples because it seems fitting to go through it here and let's not forget the third Kinder question. You hit the nail on the head with how we advise people really just does need to come back to these questions because it's not just trying to align things, but we need to motivate people into action then. I think part of the trouble for us sometimes, is that we deal with people that are fiscally responsible. That's probably why they're hiring us in the first place and they almost prevent themselves from doing certain things that I think would be really meaningful to them because they are so responsible and they don't want to run out of money and they want to feel like they're doing the right thing. So, recent situation is traveling to family in Georgia, by the way the country not the state. You know, it's not cheap to go see their granddaughter now. But it's something that in the absence of being able to do it in the future time, right. Granddaughter's only going to be so little for so long. You just want to encourage them to figure out with us like, okay, what makes that work? It's not our job to tell people that they can't do things. It's our job to say, here are the tradeoffs and planning we can do to make this work for you because this is what you prioritize. Just one example.
Adam Werner 14:28
Yeah, I love that one. It's somebody we met with recently. Just started going through this process and was able to kind of articulate I don't need anything grandiose but my dream is to have a cabin in the woods with my dog, with my family, drinking a cup of coffee in the morning. Peace and quiet. By the way, I need a large SUV so that we can all pile into it and get there at a moment's notice. If that's what I get, great. But even just having that as kind of, maybe not necessarily the focal point, but as a kind of guiding light that, if that is the end result, let's figure out what that needs to look like. Then as decisions come up, let's make sure that you're making the decisions that fit that as the priority, knowing that priorities may change over time, too. So, we've talked about this in different iterations, financial planning is not a static, let's set the course and we're just going to blindly follow that forever twists and turns are going to come, priorities may change, goals may change in the future. But at least having something gives you direction, even if you don't know what that final end result is. Just heading in the right directions oftentimes is good enough.
Benjamin Haas 15:46
Yeah, I think about these two scenarios that we've now shared and going through the bear market that we went through. Inflation is still uber high. People still have their anxieties. It puts us in the spot where if we're going to have a review with these two specific situations we are talking about, it's not, hey, portfolios down, here's what this now means we're giving all this market commentary. It's, hey, that cup of coffee on this front porch is not affected. Your ability to travel over to Georgia, not affected. I know this isn't fun to see over here but you're still where you need to be. It helps us a lot keep people where I think they need to be both mentally and emotionally with what ends up being the financial planning side of things. It needs to be that context.
Adam Werner 16:33
So, are we good? Let's go to question number three.
Benjamin Haas 16:38
Yes. So question number 3 I'm going to ask you to do it because I'm actually trying to remember what phraseology it was.
Adam Werner 16:39
Well, I have it in front of me. So right, first question, you have all the money you need. Second question, you still have all the money you need but you only have five to 10 years, somewhere in that range. The last question is you talk to your doctor again and it's worse than they had anticipated. You have one day. You've got 24 hours to live and the comment is notice what feelings arise as you confront your very real mortality. Ask yourself what dreams will be left unfulfilled? What do you wish you had finished and what do you wish you had done? So now it's more of the focus on what would I have done differently now knowing I have one day. It's the focus on the regret. Again, just looking through that lens of okay, what would I have prioritized now?
Benjamin Haas 17:34
Yeah, and some people are really quite good in the whole YOLO. You only live once, no regrets. But then there's a whole other segment of society that I am in that will always look back, try to maximize. Oh, I could have done this. I should have done that. Yeah, so it's a completely different way to come at, you know, the same idea here. If you would regret not having done it, then what is stopping you from prioritizing that now?
Adam Werner 18:04
I'll throw out one last, maybe one last client scenario, came to us with the goal to retire early being 50-55, or maybe not 50 but 55. Wanting to retire early, that dictated different things in the financial plan and then experienced some loss of a very close friend in their life at a young age. Then there was a family member that just had debilitating health issues and very quickly pivoted to I'm young, we don't know how much time we have, I want to be able to spend it with those that I care about because tomorrow is not guaranteed. And even just again, having that kind of as the focal point or the guiding light, it ultimately just leads to that prioritization, figuring out if this is what I want to do now, which for him it was I want to cabin by the lake I want peace and quiet. There's a common theme here I think with a lot of these people, not wanting to be in the hustle and bustle of society. How do we make that work? Because you said it earlier it's not our role to say no, you shouldn't do that. It's, if this is what you want to do. Fantastic. Let's just make sure that everything else kind of lines up to allow that to happen or at the very least, let's explore the tradeoffs if there are any. Knowing that there's consequences to all of our decisions good and bad, and at least feel good with the tradeoff or the sacrifices that you may have to make if this is where you place the priority.
Benjamin Haas 19:36
Yeah, because buying a second property is going to be a really bad idea for a lot of people. But when it truly does align to what you're looking to do, then again, we can be financial planners here. We can have that conversation on should I liquidate assets? Am I taking out a loan? How am I going to pay for this? By the way, am I going to have to work a couple extra years now? We go through those dominoes. That is a part of the job that we need to do but another great example, all the way to the clients that we've talked about this in other podcasts that maybe decide to retire a little bit early to get out of that hustle and bustle, out of the stress. It's just all of this helps us articulate the tradeoffs and maybe that's the key word, if we can understand whether you're coming at it from all the money, not enough time or the world of regret. How can we efficiently put these pieces of the puzzle together to give you the context for that? And then move variables as we need so that you're comfortable going, yes, this does matter. I'm willing to sacrifice this over here or adjust this over there because it's clear that this is what matters most.
Adam Werner 20:43
Yeah. So, what started out as a really fun podcast, talking about winning the lottery, you know, quickly leads to crap, I have one day left to live. What didn't I do that I wanted to do? But ultimately, the point is, it's a very natural and actually a powerful thought exercise to go through. If I win the lottery, what would that allow me to do to really figure out what matters to you in life? Where do you want to place that priority, that focus, and then if you have somebody in your life, a financial advisor or financial planners like us, let's figure out how to align your wealth, align your money, just to get you to that point. Allow you to do the things that actually matter to you because that's ultimately where that fulfillment and contentment in life should come from.
Benjamin Haas 21:33
Perfect. I love that as a summary and like you said, the 10’s of people listening, go through it. If it's your thing, have a beer or a glass of wine on a Friday night and make it happen and then share with us what you learned.
Adam Werner 21:53
Yeah, we'd love that.
Benjamin Haas 22:04
Hey everyone, Adam and I really appreciate you tuning in. Please note that the opinions we voiced in the show are for general information only and are not intended to provide specific recommendations for any individual. To determine which strategies or investments may be most appropriate for you, consult with your attorney, your accountant and financial advisor or tax advisor prior to making any decisions or investing. Thanks for listening! Investment Advice offered through Great Valley Advisor Group, a Registered Investment Advisor. Great Valley Advisor Group and Haas Financial Group are separate entities.
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