Rising Above the Money Fog with Mikelann Valterra (ep. 77)

All right, so welcome to the new retirement podcast. Today, we're happy to have Michael Ann Valterra, an author, speaker, and master money coach who has dedicated over two decades to helping people around the world rise above the money fog, transform their relationship with money, and design their ideal life. Michael Ann's work is grounded in financial psychology, and she has been a thought leader in developing powerful, practical ways to reduce money anxiety. Join us as we delve into the concept of money fog, its impact on financial decision making and how to navigate through it to reach your financial goals. So with that, Michael Ann, welcome to our show. It's great to have you join us.

Hello. And I'm happy to be here. Hello from Seattle.

Yeah, it's great to see you. My oldest is living in Seattle right now, so he went up there to start a business, and I'm learning all about it. I think he loves it in the summer. It's definitely a little bit darker than California.

Yeah. We were. Six months of gorgeous beauty and six months of overcast, and there you have it.

Right? And I think you're. You're. You have longer days during the long season and then, like, longer nights.

It's true. I mean, I love, love, love Seattle, but I get it in the winter. It's just the overcast days are, you know. Yeah. Endless.

Yeah. Well, I grew up in Rochester, New York, so, you know, I appreciate the west coast, no matter where. Where I'm at, up or down.

Well, you're in such. You. You are in such a beautiful area. You're in one of my most favorite areas of the whole country, the Bay Area in the north. It's just gorgeous.

Thanks. Yeah, no, I definitely grateful to live here and appreciate it. All right, so, Michael Ann, you know, I would love to kind of get your backstory and just have you spend a few minutes kind of sharing with our audience, you know, your journey to becoming a coach and building a practice.

Yeah. Who the heck am I? Yeah, that's a great question. Right. So I guess I'd start with you. I mean, you know, this money coaches, financial coaches. 25 years ago, which is when I started my coaching practice, we didn't exist. You know, I spent years explaining to people what I did because no one had ever heard of what's a money coach? And even now, I get that question still, you know, a fair amount. So used to be that people could see a credit counselor with debt issues, they'd see a financial planner with investment issues, something, you know, something that you know a lot about. And. And neither of Those fields was well equipped to deal with the emotional side of money. And the truth is people do need to build net worth and investments and a lot of people are struggling with debt. It's like everything. So money coaching arose, you know, from this, this place of, you could say financial literacy, but, you know, really teaching people how to manage their cash flow and really look at it. And so, you know, my, my undergrad was economics. I, I just loved, you know, looking at and thinking about money. But get this, Steve. When I went to grad school, my master's is in psychology, you know, and so I finished grad school and, you know, here I am at this bright, shiny, you know, master's in, in psychology, transpersonal psychology. Let's even get like crazier. And I was still fascinated with money. I debated becoming a financial planner, but I also debated becoming a psychotherapist. You know, I was so like, talk about two fields that, oh my gosh, there's so much energy between them. They often feel it at opposite ends of the spectrum. Particularly 25 years ago. Right. So I, long story short, I met a money coach by the name of Karen McCall, one of the pioneers of financial coaching in the United States. And she was looking at the psychology of money deprivation issues around money people's true needs and wants and why they spend differently than what they say they value. I mean, really good stuff that no one else was talking about. And I said, Ms. McCall, I want to do what you do. Can you train me to be a quote unquote, money coach? And I was the very first person she trained. And so that was 25 years ago.

How many coaches do you think existed when you first got started?

I don't want that.

Five versus versus now? Yeah.

Oh, you know, that's a good question. Part of it is because, you know, as you know, the coaching industry isn't really regulated. It's all over the place. It's like the wild west in coaching. And so the term coach is sort of an ubiquitous term. There's a lot of different types of coaches. Money coaching is only now sort of gaining in popularity, if you will. So it's definitely increased by at least 100 fold, for sure. It, it literally was invisible. It just, it didn't exist 25 years ago. It really didn't.

Got it. I mean, how did you meet Karen?

So I, I, you know, like I said, I got this, this interesting master's in transpersonal psychology and I was fascinated, still with money. So I went to work at a think tank in your neck of the woods called the Institute of Noetic Sciences in Sausalito. Sausalito, basically in the Bay area of California. And we started studying, you know, it's a think tank. What do you do, you think? And so they were looking at alternative forms of thinking about money. I met Lynn Twist, who went on to write a very famous book called the Soul of Money. Bernard Lyotar was a very famous international economist. We were looking at alternative currencies, I mean, just, you know, really fascinating things that this think tank around money. And again, 25 years ago, so everyone thought everything was kind of weird. And we had a conference to look at alternative thinking around money. And we invited this woman, I'd never heard of her, I didn't know anything about the field, named Karen McCall to talk to us about financial psychology and needs and wants and deprivation issues around money. And so, you know, she just was a speaker and I was working at the think tank. And it was one of those lightning moments in life, you know, because I was just so fresh out of grad school and I didn't really know yet what I wanted to do. But what I realized very quickly was the only way to be a coach, a money coach, was to be self employed. No one was going to hire me because the field just did not exist.

It's interesting. I mean, now it's becoming, I think, more accepted. But I agree it's still kind of the wild west out there. Even financial advice, right? Lots of people can call themselves a financial advisor. You can be a CFP and a fiduciary, or you can be kind of a salesperson with a suitability requirement. So it's interesting that it's out there, but I think it's good. I'm glad that there's more people approaching helping people with money, with, with different perspectives. Now the flip side is folks need to know who to trust and, you know, we should, we should dive into that. Like, how do you find, you know, a reputable coach? Like, how do you know?

I agree. Well, you know, it's part of the reason why many years later I decided to become an afc, which is an accredited financial counselor. But I didn't even have that option when I started coaching because there was. The designations just seriously did not. They just didn't exist, you know, so, you know. And will the finance industry continue to become regulated and. Yeah, I believe so, you know, I absolutely believe so. I usually recommend that people work with someone who's a cfp, certified financial planner, if they're looking at retirement planning. But There's. There's a lot of really good people out there that absolutely can help you get a handle, you know, around your money. And that's why people are often confused about where to go.

Yep, 100%. So. Okay, cool. So you get. You kind of, like, find this industry before it really exists, and you've had your career in it, and then you've kind of written this book about money fog. Can we dive into what that is and how that manifests itself in the work that you do with your clients?

Yeah. Thank you. So the. The book was published recently. It's called Rise above the Money Fog. The Key to Confidence, Clarity, and Control over your. And you know what, what it looks at is this concept of money fog. And it's what I see as a financial coach that a lot of people, and I know I'm speaking to the choir here, but they don't know, for example, how much they spend. They don't know how much they need to earn. Right. So what money fog is. Is a little bit more interesting than what I just said. It's the feelings of stress and anxiety that come about from being vague about your money. So I would say. And actually, you'll find this interesting fog. F O G stands for something, because every good acronym's got it. You know, Got to have that in your book, Right? So it stands for when you are in fear around your money or when you feel overwhelmed over your personal finances or when you feel guilty around your spending. Those are signposts that you may be in a money fog. And so, like, just a couple of good questions, you know, for your. For your listeners, if they're kind of going through and trying to diagnose, do they think they're in a money fog? If you don't know where you spend your money, absolutely. That is a signpost of being in a money fog. Likewise, if you don't know what you need to earn to live the life you want, that is a sign of being in a money fog. But. But I would also say, you know, if you do feel fear and anxiety over your personal finances, that's a sign of being in a money fog. If you don't have a good system for tracking where you spend your money, that's a sign of being in a money fog. The number one thing I hear, Steve, when people call me is it's about control. People say, I don't feel in control of my money. I don't feel in control of my finances. And that's usually because they're in a money Fog. Right. And the last one I threw in may sound a little bit odd, but it's actually my favorite. It's do feel like money is a sacred tool to help you live your best life. And, you know, some people hear that and they go, well, that's kind of weird. Like, sacred tool to live your best life, you know, But. But it is a tool to live your best life. And if you're in. In a fog, it's like driving in a car in a fog. You usually. People don't realize how deep the fog is when they're in it. They just drive very slowly to avoid hitting something.

That's interesting. I like that acronym. And of the three, so fear, the sense of overwhelm and guilt in your practice, is there an order of prevalence that you run into these things? Is like, fear number one or is overwhelmed number one or guilt?

Yeah, that is a really interesting question. I see fear more than anything because I work with a lot of people between 40 and 70. Right. And there's a lot of fear in. One of the big fears is fear I'm not going to have enough. So there absolutely are fears about retirement, but I'd say the fear is broader than that. There's a lot, because I have people that say, listen, I have a financial planner. They tell me I'm fine, and. And then they pause and they go, and I don't feel fine. Like, I don't know, can I go to Hawaii? You know? And that goes into the guilt around the spending. That goes into. I'm overwhelmed. Like, it's really interesting because even when people get a handle supposedly on retirement, they still don't feel like they're in control of their current spending. They have. There's this general message they get that says, you know, 30 years from now, you should be okay if everything goes according to plan, so don't worry about it. And they're like, oh, my gosh. And there's a lot of fear that comes up that says, well, what if, what if, what if, what if, what if I want to remodel the house, I want to buy a car, I want to go to Hawaii. So it, you know, there's. There's so many smaller spending decisions that are not necessarily related to the retirement conversation, and yet everything's related.

Yeah. And so it's interesting that people will have a financial planner that is telling them that they're fine, and then they still find their way to you and they say, am I really fine? Or like, how else can I think about this?

Yeah, isn't that interesting. And you know, and I mean, I've had it happen for years and years and years. But I think it's because, you know, a lot of planners are very focused on the big picture and they're focused on retirement. I mean, let's just say the obvious, you know, and so they're looking at your investments, but they're not looking at your annual or monthly budget. Right. And sometimes they will say they are and they'll look a little bit at, you know, they'll say, well, let's look at cash flow. But really when you work with a money coach, the centerpiece of our work is really engaging in a spending plan process where you're literally feeling in control of money and learning how to plan your spending month to month, year over year. And so as an example, you know, I had a client recently say, okay, I'm working with my financial planner. He says I'm fine once I retire, but I'm afraid I don't have the skill set that once I retire I can't spend more than X. I don't, I don't know how to do that. I've never really thought about it. I mean, I always pay the credit cards off. I think everything's okay, but, but once I retire, I actually have to like manage my money and my cash flow week in and week out. I am freaked out by that. Right? How do I do that? Because I don't want to feel like suddenly I can't do what I want to do.

Do you see people constructing retirement paychecks? This is what some of our users do with their, they can be planning enthusiasts. Like they've, I think for many folks, you know, where they go through this, you know, you're accumulating wealth. It's simple but not easy. And most people are unsuccessful. But you know, like, hey, for a lot of our users, they're 401k millionaires. You know, they've been like working, saving, steadily investing in low fee index funds, building wealth. And then yeah, they get to this phase of, okay, well now I might need to live for 20 or 30 years easily, right? And I have to manage this money myself. And that's a scary proposition. I want to be tax efficient. I don't want to blow myself up. And you know, our users are actually doing like a lot of them manage this themselves, but most people, it can get, you know, you can quickly get over your head. You know, do you see folks saying, okay, I want to buy bond ladders or I want to annuitize you know, I want to get an annuity or things like that to kind of provide some guaranteed income to.

Well, I think that that's, that's the line between financial coaches and financial planners, right? Because I'm not going to give investment advice now. I do a lot of financial literacy and I help people, you know, look at net worth and track net worth and, you know, all that good stuff. But that's, in my opinion, a specialist function to go to a planner and look at those questions just like you're going to go to your accountant, just like you're going to go to your mortgage broker. Whereas the analogy I would use is many coaches are like family doct. We are sitting in the center of a lot of specialists, right? And when you work with a money coach, you're working, you're looking at a lot of subjects around money. You're learning how to manage your cash flow month in and month out. You're learning how to work with an annual income and spending plan. But you're also doing things like looking at your story around money and looking at why and how you spend. Because again, you know better than anyone, money is so emotional and people hit the D accumulation, accumulation phase, they freak out. That's a clinical sum up, right? But you know, they've, they've spent their whole life accumulating and then now that we're at this precipice, they're like, oh my gosh, I have more money than I will ever have in my whole life and I'm going to spend it down, you know, and it just, it brings up a lot of old stories, a lot of old fears. And, and the other thing that I hear a lot is people will say, listen, if I screw up and make a bad money decision and overspend, I can handle it during my working years, I can catch up, I can work extra, I can save more. But I'm afraid of making a mistake once I retire, once I'm in my deaccumulation work optional years because I'm used to having this paycheck income as fuel into the system, right? And once I'm not adding all this fuel of this money, it's like money starts to feel like it's more precious and people want to become more and more thoughtful about how they use it and all the old gremlins come up.

Yep. Yeah. It's so interesting how, I mean, when we're, when we're young, we're kind of like, oh, get a job. And like the future seems far away, right? And like who cares? And I have friends that have drained their 401ks because they were like in their 30s. They're like, Ah, who cares? You know, I need this, I want to start a company or something. I'm gonna, I'll rebuild it later. They don't realize the effect of compounding, you know. So I want to, I want to share one story that just for our listeners where to kind of frame up how it almost doesn't matter how much money you have. So I, I have a friend and this is going to sound ridiculous, but they have accumulated $10 million of investable assets, right? They have a lot of money and the husband's like, we're fine. You know, I mean they, they live nicely, right? But they're not, not necessarily extravagant and they're both very well educated people, right? They both have MBAs and they've been highly paid. That's why they, they didn't know this wasn't a windfall. They made this money through a series of wins and you know, they're calling their 50s, but his spouse is like, who's actually contributed, making most of the money, is worried about this and cannot let go of it. She's very concerned that as they kind of downshift and they're both working a bit less, they're still working and making money, but less money. Then will they have enough and having that sense of safety. It's just that it brought it home to me that that is way more money than 99.9% of the world's ever going to have and touch. And they're not irrational people. They can just throw in the bank and be spending half a million here and they probably don't spend that much money. But it shows you that the emotional side of this thing, even for very well educated, very wealthy people is front and center.

It's huge, you know, and it goes to money personalities and childhood upbringings around money. It also goes to different brain chemistries. I mean, all of that comes into why we do and feel the, you know, the way that we do around, around money. And you know, it's interesting in particular with couples. And you've probably heard this about half of all long term relationships or you know, partnered relationships are made up of opposite styles around money. I mean, the classic simple example is the spender marries the saver, right? And you know, in, in a lot of these relationships and now you're not describing this as their dynamic, but I'll just bring it up because it's so common. It doesn't have Anything to do with money. When couples initially get together, it is a natural attraction pattern. People that are very, they call themselves savers or the super savers out there, right, Are very motivated by security. Whereas people that are more spenders, actually, it's about freedom. I want to do what I want to do when I want to do it, right? It's, it's, it's about what is the point of life. The point of life is to enjoy life. And so, you know, these, these people come together. It has nothing to do with money. You could say, oh my gosh, she seems so secure and her head is on so straight and she knows where she's going. And he's so vivacious. I've never had so much fun at the drop of a hat. I've never picked up scalped basketball tickets the night of, you know, whatever. Just awesome fun. It's a juicy, beautiful chemical connection. Opposites attract, right? And then they get married and the fun ensues because, you know, the different money personality styles around this, it. When money comes into play, that's a different dynamic, right? Because bottom line is the more a person who spent the spender, you know, the more who's freedom oriented, the more they spend, the more their spouse saves. As a reaction, the more that person saves, the more the spender's like, you can't tell me what to do with my money. Oh my God, you're so frugal. You have miser. You can kind of hear the words, right? So they spend to prove that, hey, it's enjoying life. And so they end up doing what's called polarizing. And so there's just, there's so many dynamics with, with, with couples. And ultimately they're all dealing with and reacting in many very, very often to how they were raised around money.

Right? Yeah, I definitely want to dive into that, but I think that's right, like the, you know, if, when you, when you ask people, how do you want to. You want to understand yourself better. Look at your parents, right? Understand your family dynamic, how you're raised.

I think that's when you hear that.

But yeah, for money, for your emotional outlook on life and all that stuff. I would. This, this whole idea of the relationship dynamic is really interesting because I think, you know, mostly we think about our own situation especially probably more and more, I bet more couples, they are partners, they come together and they keep their money a little bit separate or, you know, they don't necessarily commingle things as much and they have more control. So like when you work with couples or individuals, like how do you measure success? Like what's a good outcome? Like what, how do you see their, assess their progress?

Half of it's going to sound very practical and half of it's going to sound very, very emotional. So part of it is people come into financial coaching, generally speaking, pretty stressed. There's a lot of stress and there's a lot of anxiety around money. And so part of it is you're measuring our stress and anxiety levels going down and you could use a good old ten point sc, right? You know, give me the number when you start versus you know, where are you over time? But you know, anxiety is, is, is big. And women suffer from financial anxiety more so than men do. And that's kind of well, well documented and there's a lot, there's a lot behind that. But you know, as you know, men suffer greatly from financial stress and anxiety as well. So it's, it's out there. The, the practical stuff that you're measuring tends to be around debt reduction and sa. Right. And financial coaches work with a lot of different types of savings. You know, for example, a piece that's often missed in a lot of financial planning is saving for smaller expenses that are non monthly that are going to happen this year. Right. Like where's the cash fund for travel? Yeah, exactly. Property taxes is a perfect example. Right. You know, so because people feel like, oh my gosh, everything's going fine and then bam, fill in the blank, something happens and that's not really handled at the level of a retirement plan. It's like everything's fine. And then why do I have three grand on my credit card debt from the trip to Hawaii. Right. So you know, when these expenses happen, generally speaking, you know, a lot of professionals, they will either put the extra expense on the credit card and then feel bad that they're dragging debt around, right. Or they will suck the money out of an account that it wasn't intended for. And maybe it is an investment account. Right. So those are on the one hand easy things to measure, but, but it's a big deal, you know, because, so there's so much, we'll use the heavy word shame. You know, people come in with a lot of what they feel like is almost financial secrecy. People only knew that I'm carrying credit card debt, right. If people only knew that my net worth is this. And everyone probably thinks it's that. If people only knew that I threw that trip to Hawaii on the credit card, they probably thought I had all this cash laying around. So it's, there's so much that. And you know, as adults, we tend to think that everyone else has it figured out. So it depends on what, what the goals are when people come into coaching, because it's, it's generally half around the emotional side. They, people are just tired of not feeling good around their finances. And then the other half is, yeah, I want to build savings and I want to, I want to reduce debt. And then, you know, there, there's, there's a long list of other goals from college to retirement.

Yeah, I would love to get your insight into the, you know, how men and women show up differently in terms of what they're worried about and maybe what they're good at. I mean, I'll, I'll say this on our side, our user base bias is male biases married. I think we see more men engaging in planning, at least so far. We're intentionally trying to pivot towards get more women on the platform. But I'm curious what you see across the genders, like how they're thinking and what they're good at and what they're, you know, what they're worried about.

Well, so that's a really, really good question, Steve. So money fog affects men and women equally. And women are no more likely to be an overspender than, than a man is. It may look different. You know, male overspenders are very into toys and gadgets, you know, as an example. Right. But it's, you know, women's spending may look different and, and male savers and female savers, again, it may, it may look different, but there's, there's just as many. But women do carry more anxiety around money, more stress. And, and the more anxiety and stress you're under, the more that blocks vision, the more that blocks our ability to plan. And that, that's true. Regards what, what the, what the subject is, you know, but we're talking about, about money. And you know, the other thing is they, they did this study so many years ago in, in divorce. But I think this makes a good point that the differences between men and women is the, the focus is different both in time and also in what you're focused on. So in divorce, men are focused on themselves in the future, worried about their future retirement, which is, this is totally makes sense. Right. And women are focused on their children in the present. And so there's a different time focus and there's, there's a different person focus. And that's why a lot of the conversations around post divorce are just a mess and, you know, it's all important, present and future and children and ourselves. Women need to be more focused on themselves in the future. Men need to be more focused on the present, on their kids. I mean, that's all fair, right? And this goes deep into, you know, brain wiring and history and culture and like, oh my gosh, this is a huge kettle of fish. And, you know, I think that the, the other piece that we haven't touched on is men are still out earning women. And there's, there's also different career trajectory between men and women. And so that has a huge impact on net worth. And so, you know, part of women's stress is they have half the assets that men do. And I'm, I'm not exaggerating. Half, half single women have half the assets that single men do. Right. And so that's, by the way, I.

Have to imagine that is changing rapidly just because in college now, I mean, this one part, one demographic, sorry to cut you off, like it's 60, 65% female. You know, so women are grad, are entering and graduating college at a much higher rate. They're entering the workforce at a much higher rate.

This is what's interesting, Steve. It is, but not as much as you think, because what we know is. So my first book was written on women and earning issues. This is why, this is something that I know like more about than I probably even want to know. Right. So the income disparity has reached almost par for young women entering the workforce. Young women and young men. Right. 22, you're totally right. Not the issue. The issue is go out 10 years, go out to when women are between 30 and 40. That's the problem. They're, they're still off ramping at very, very high levels that a lot of women are leaving the workforce to care for children at much greater rates than men are. And by and large, it's still more women than men. And this goes a, into even bigger discussion than we can have because, you know, part of it is US Corporations are still not really great at supporting both parents around, you know, work life balance and child care. And, you know, we're. The issue you're bringing up. Women in the United States are very much lagging behind our European counterparts. And this goes to the kind of the working environment in the United States. So I wish it was changing more than people think it is. And it's because people don't think it's an issue anymore because young women coming out of college are coming out at much greater rates. Right. Now than young men. You're absolutely right. We've all seen the stats, right? But they're still off ramping more than men are. And so is it changing? Absolutely. It's just not changing as much or as fast as we wish.

Yeah, well, I know, I mean, we see this in the data, right, that women, if they, you know, have children, right, There's a penalty, right, for Social Security and saving money. Right. They're not aggregating wealth during that time frame and they lose all the future compounding and everything else. So.

Well, and actually you just brought up something really interesting that this is such a, interesting topic. You know, I work with a lot of people in midlife and women are powerhouses in midlife. Right. The women's career trajectory starts later than men's, but goes, goes just as high and just as long. Right. So, you know, women in their 40s and 50s are starting businesses and are just kicking butt and doing amazing things. But the problem is the word that you brought up, they're losing out on the compound interest because they're starting all their investing in their 40s and 50s. And so that, that piece. Yeah. And you know, I always say, yes, you can catch up because I think that the thing that I get frustrated is when I read all the financial planning articles online, it's a lot of fear mongering, a lot of, well, you're kind of screwed if you didn't start investing when you're 25. And when people are stressed and in fear around money, they make no decision, they take no action. And so it's not fear based conversations around money. People think they're trying to browbeat people into taking action, but the research shows it doesn't work.

Work. Yeah. So interesting. It's like I'm a big proponent, if you listen to our podcast of like just teaching personal finance in high school and we'll give another shout out to next generation personal finance. I'm gonna have Tim Ranzetta, who's the founder, come on the podcast soon. They're educating, they're teaching teachers of how to do this and, and they're pushing legislation to get it to be mandated in different states. And it's starting to be mandated, which is good. But yeah, getting that lesson and starting to save and invest. It's both, you gotta, you gotta save and you have to invest and. Yeah, and keep at it. I think another big thing just between women and men and that I've heard is like men, you know, tend to have a larger appetite for risk. I think they're less rational, but they will, you know, they'll take risk and they can blow themselves up, but they can also like. Oh wait, we had one of our guests on. He, he yolo'd, you know, he put all his money into Apple after he got laid off and basically 10x his money and became financially dependent in 10 years, you know, and I mean he basically. Great, fantastic outcome for him individually. A super high risk move. Right.

But you know, men enjoy gamifying money in a way that women don't. You know, and you were, you were talking about the differences between the genders around money. There's nothing wrong with gamifying money. In fact, if you know that that is part of your motivation and that's something that you enjoy. Absolutely gamified. And a lot of the platforms are built on gamification. Right. And, and that appeals to men more than women. It just, it just does. You know, whereas women are looking at what can I do with the money? What, you know, what's the. I mean, there's a lot of different things and, and you know, I'm obviously saying this in a fairly simple way, but you get the point.

Yeah, no, it's great. Why? We're gonna have to spend some more time later talking about the whole gender thing. I know.

Yeah, we could, we could go for hours on the gender thing.

It's.

It's in. Boy, does it get controversial fast. So I appreciate you even bringing up the, the sacred cow. Right.

No, it's great. I mean, it's like, I feel like we need to have totally. I mean, it's, you know, Elvest is doing some interesting stuff, right. With like, like totally female focused investing and coaching and support.

It's awesome. I love it.

I love it. No, it's really good. But yeah, you, you could see why I know that, you know, gender specific schooling, especially for women, makes a massive difference. Right. If you go to a women's only school, your outcomes are way higher. Right. So.

Yeah, yeah. And yet the subject is always controversial. Right. You know, so, yeah, it's, it's. But you know, I guess the last thing I would say on that subject, just because we can't ignore it, is all of this wouldn't be a problem if the divorce rate wasn't so high. You know, if couples got married and stayed married, the fact that one person made more or had a different investing style or whatever, you know, things would be not that big of a deal. The reality is it's 50%. You know, half of people divorce and it has a Massive impact on your net worth. And there we have it. That's where this stuff really starts rearing its head.

Yeah, 100%. And like, that's another big trend is gray divorce. Right. We've covered that. Where people are living longer, you know, they're married for quite a long time, have kids and then, and I, you know, so smell life. Like they become empty nesters and then people are looking at each other like, hey, is this really that great? Do I still want to be married here? And then, you know.

Well, you know, I think I'm, I think I'm that because, you know, I was married for many years. My, my son's 24 and I just got married, a second marriage, as you can imagine, two months ago. Right. And, and I'm in my, I'm in my mid-50s. So here we are. You know, I mean, I'd like to think I am not the full gray hair, but you know, it's. Technically, it's exactly what you're saying, you know, second marriage in the second half of life.

Yep. Yeah, well, we're living longer lives and so it's, I think it's changing the dynamic as, as people, it changes people's perspective if they, you know, we're, we're kind of inventing new phases of life. Right. So, you know, we have, you know, you're kind of born, you have adolescence, and now we have this like, there was like adult early adulthood. Now there's this like, I don't know what they're calling it, but there's this phase of life where you're like 20 to like 28. That's like a new thing where maybe you're hanging out at home or you're way more likely to be at home and you know, kind of getting launched versus, I think in our Gen X or like in our generation was like, hey, graduate college, get a job. And you're, you're on, you're making money.

It's the adulting phase of the 20s.

Exactly. So, and then on the flip side, you know, you know, you're, you're, you, you know, you're six years old or in your mid-50s and you're like, well, I'm thinking about retiring. Or then maybe it, I think that's something people should be aware of is that very often people plan to work till their early 60s or mid-60s, and then they actually get, get involuntarily retired in their late 50s.

It's so true. I know everyone has heard. Well, maybe they haven't heard, but you Know, the longer you wait to take Social Security, the more money it pays. But again, we know most people end up taking it earlier than they originally thought they would for, you know, for all those reasons.

Yep. Well, and then you're kind of staring at if you're healthy and Albert wants to be healthy, like, oh, well, maybe I'll live to 85 or 90. And then healthcare is getting. There's all kinds of amazing things happening. Right. I mean, now we have. We have, you know, fat loss in a. In a shot. Soon it's gonna be in a pill. I was just reading this morning, Larry, that they're like, there's medicine, there's pills now that you can take. It will get. You mimic exercise.

Yeah. Yeah. It's. It's crazy. The wonderful stuff that's out there. I just. I love it. I love it. And it means that we want to feel good about money for a long, long, long time. And part of that's the skill set around money. Part of it is the mindset around money. And you got to combine both skill set and mindset.

Yeah. So would love to get some of your insights. You know, you deal a lot with people going through transitions. Right. And, you know, maybe some of the big challenges and things people run into and kind of how you kind of frame up, you know, helping people or what that process looks like as they go through career changes, divorce, what, you know, empty nesting, that kind of stuff.

Right. So, you know, one of the things that I talk about is I call them the three key questions. I kind of thread it throughout the money fog book. And we always want to be able to answer the question, what can I afford? How much is enough? And what would be possible? And I'll dive into those because it's related to what you just asked. You know, over time, we get used to going, yeah, I kind of know what I can afford. I'm living my life fine. And, yeah, you know, I. I know how much is enough, and my paycheck seems to match. It's fine. You know, and I. I know what would be possible. I want to do. I want to go back to grad school someday. That'd be cool. But then transition hits, and. And the big transitions are the ones you mentioned. You know, going through divorce is a huge transition. Retiring is a transition. Sometimes they're voluntary, sometimes they're not. Empty nesting, huge transition. Right. And so what. What I find it's a common time that people come when they're in transition because suddenly they can no longer answer those three questions. The Transition is like, oh, my gosh, I don't know anymore what I can afford. On the other side of divorce, everything's changed, right? I no longer know how much is enough. I have no idea what I need to make. Am I making enough? I don't know. And what would be possible? Which is the most exciting question of all in money? We lose sight of what's possible when we go through a transition because the money fog descends. And, you know, when. When you're in a fog, you know, it's like I mentioned earlier, it is like driving a car in a fog. And, you know, you know, so I used to live in the Bay Area. I went to grad school down there. And. And so for all your listeners that have ever flown in or out of San Francisco Airport, sfo, how many times have you been delayed for fog? Just raise your hand, listeners. It's like all of us. And so, you know, SFO is down in. In an area called Daly City. In that area. I've never seen fog that dense when I live down there where there was like, there's a stoplight in front of a stoplight to tell you a stoplight's coming because you're driving in, like, pea soup, right? And I feel like that's what the money fog is like. When you're in a fog that thick and you don't know which end is up and how much you need and where your money's going. And am I okay? You don't have vision, right? Your. Your vision is very dim. You're taking every ounce of energy to keep your money car on the road. You're driving slow, and you can see three feet in front of you, and it's stressful. And when you drive out of the fog, you suddenly go, oh, my God. I. I think I knew I was in a fog. I had no idea it was that thick.

So what are some of. I mean, I totally hear you. I. And I agree. Like, this anxiety and concern is real. And then people get in a scarcity mindset. But, like, what are your clients doing to emerge from that? Like, what changes in their life so that they feel that. So I totally get it. Like, you've got. If you've got a good job and good income and you're securing your job, that's like, gives you visibility or. One thing, we see a lot of users that if they have pensions, they love pensions because it's like, they really understand when the pension kicks in. And Social Security, like, oh, yeah. Like, in my family, there's a guy's teacher, he's like, yeah, I'm gonna end up with 90, $100,000 a year of income. You know, he, which is plenty. Or maybe a little bit more, but like lifetime income, he doesn't think about it. And it rises with inflation.

Like, there's our financial planning. It's all handled. I know I have enough. Yeah.

Yep. How does that. So how do people that don't have that situation get that sense of control?

Yeah. So, you know, a big thing in coaching is really teaching people how to manage and plan their cash flow. And, and by that I mean I'll, I'm going to use the dreaded word. Okay, Ready, listeners, starts with a B. It's called budget. Right. Everybody hates that word. And, and I, I even hate that word, Steve. I hate the word budget because it sounds like diet. That's why so many people don't want to do it. What, what I would advocate is we use the word spending plan. And, and teaching people how to plan where they want their money to go is life changing. People suddenly feel in control of their money. And when people come into coaching, we literally start at the month level. Let's, you know, you could call it a forecasting plan, you can call it a cash flow plan. You can use all sorts of fancy words. Right. But, but imagine planning where you want your money to go in April and looking at how to match up with the cash flow. It is this, like you feel in control in a way that you never, never have. I've literally had people in tears when we finish their first cash flow plan because they've never seen money so clearly before. Right. And all of that sits within an annual spending plan. So that's, that's a huge piece for people. The other thing I would throw in, Steve, is that one of the, you know, in terms of, like, quick tips for listeners that will help them rise out of the money fog. What, what I find is that a lot of people have, have too many accounts. And I mean, they have too many credit card accounts, too many checking accounts, too many saving accounts. I'm not talking about investment accounts. It's another subject. Right. But, but people have so darn many accounts. Sometimes it's left over from relationships or, you know, it's so easy to open an account. Nowadays, people get caught up in what I call bucketing. So they think, oh, this credit card for trips, this credit card for emergencies, this credit card for eating out, you know, and it kind of works until it doesn't. And then people are transferring money all over the Place. The other problem is it's a lot of energy to look at your money. That many places you, you lose the big picture. Right. And so one of the big recommendations I give people is we prune accounts. We need one primary checking account. You know, we need one or two primary credit cards that the fewer accounts, Steve, is actually correlated to higher net worth. And it's correlated to people feeling less stressed and more peaceful around their money. Now you can have a really high credit score and have 50 credit cards. You can. If you really want to spend that much time and energy managing that many accounts, go for it. Right. But generally speaking, for people that have that many. No, that's a silly number. Right. But for people that have a lot of credit cards and checking accounts and savings accounts, it's correlated to stress and anxiety and people lose the big picture of their money. So that's a, that's a great go to is like, that's a starting place. Starting place is simplifying your account structure.

That makes sense. Yeah, simplification. Some people get into automation, you know, they'll, they'll try to like, you know, hey, my paycheck goes here. It automatically splits here. This da da, da, you know, bills are auto paid. They, you know, but they have a way of wrapping it all back. And I know that one budgeting tool I've heard people love is like, you know, you need a budget. I had the, you know, I had the founder on and you know, it's more of like a methodology for like building a budget. But I, it does require, I think, a great deal of like enthusiasm.

But people say, well, and I, I, that's a fabulous program. You know, I mean the tool that I recommend is called Money Grit, which is a spending plan program also. And it's not that dissimilar difference is YNAB is very month focused. There's no annual plan in it because it's a different type of methodology. Right. And so it works really, really well for some people and for some personalities it's got a rabid user base. I mean, and you know, Jesse's brilliant and you know, amazing and just a lovely, lovely man. So, you know, you've got to find the right, the right tool for different personalities because it doesn't matter how good the tool is if you don't use it and it doesn't work for what you personally need.

Yeah. 100. Well, I think this idea of visibility is really important too. It's like, that's something that we'd like to realize more and more Our users are forecasting, but it's that sense of, you know, I'm good, you know, I have some level of visibility into, in a worst case scenario, I think that lets people take a breath if they can get there, right. Like I've got like having an emergency plan, right. I have six months or a year or I have access to credit that can like, like a home equity line that lets me do that. So I understand the big levers I have and, and I don't have to freak out. So unfortunately, half this country is like paycheck to paycheck, even high, high earners. All right, well, look, sorry, I know we've been cranking for a while here. I want to ask you kind of one more big question and then we can kind of move to wrap up or you and I can answer anything too, if you have any questions. But like one thing we touched on was like, of money personality types. And I would love your take on what those are and how the, how those things come to life for people.

Yeah, that's one of my favorite subjects. I mean, part of it is what motivates people. Like I said, the two most common are we're motivated by security or we're motivated by freedom. How I would name them is people that are motivated by freedom. I call them the liberty personality type. Right. The point of money is enjoy life. People that are motivated by security, I call them the safe harbor type. And you know, the point of money is be safe. But there's, there's also two other types I would put out there. There's people that, their personality type, I would call them mission driven and people that are the aid workers. And so mission driven personality types. The, the point of money is move your vision forth in the world. Whether you're CEO or Mother Teresa. The point of money is bring forth what you, what your vision is. Right? It's not money, it's what you can do with it. So that's the mission driven personality type. And that last one I mentioned, the aid worker, that personality type is fundamentally motivated by love. What is the point of money? Help the world. Whether it's my family, whether it's philanthropic giving, you know, so, so, but underneath these four types, you can, you know, I said it right. It's like we have these motivations and we're all a combination of all four. No one is a hundred percent, you know, any of them, but we tend to be weighted in one of them. And so, you know, like the, the aid worker types, those are our teachers and our counselors. I mean they tend to be drawn to helping work versus you know, the, you know, the mission driven type. So, so the first two definitely are the most common people really get like I'm a Liberty type. It's all about what I can do with my money and enjoy my life versus the safe harbor. I want to make sure no matter what I am okay. It is the safe harbor types that are most drawn to you and your software. Right. And yeah, and, and, and it's like it's such, it's such a beautiful tool. I've used it, I love it. I just think it's just beyond, beyond completely fabulous, you know. And, and it's because it gives people this sense of, of safety. I know I'm okay now and I can run some scenarios and I know that me and my family are going to be okay and safe 20 or 30 years from now.

How do you. Well, I'm curious for yourself. I mean I would score you one way but I'm curious how you self assess on this.

Yeah, it's. It's an interesting question. I mean I'm. I. People tend to. This goes to the midlife thing we were talking about earlier. People tend to balance out and shift in the middle of their life. So I used to be more safe harbor. I'm now tilt a little bit more towards Liberty. Right. So that's a real common shift for people in midlife. Depends on what you know, what they were. And I tend to be very mission driven.

You know, it's like driven. You're out here educating people. Yeah, right.

You know, I mean you don't write a book without having that, that it's a, it's a power part of a personality. You know, you need a lot of that to like bring forth your mission in the world. Otherwise you just don't have the power of the energy to do it.

It. Are there. Do you have a test on your website so people can self assess?

I've got different blog posts that hit at the high level but you know full on many personality typing that's, that's. It goes beyond what people would do in a thing. I mean I do it obviously with my clients, but there's certainly some high level blog posts I've got that absolutely get into this particularly the first two. Right. The first two around Liberty versus Safe harbor which is that you know, kind of freedom versus security and that's very helpful for people. People.

How do you think the population divides itself broadly? Are most people in like Liberty and Safe harbor or is it like 25, 25, 25, whatever.

It's. Yeah, that. That is a really interesting question. I. I believe it's. It really is. 25, 25, 20, 25. But the thing is, is that most people don't talk about types three or four. Most people, you know, if you think about what's out there in terms of the financial psychology world, financial psychology is still a very young field, and people still talk about, about are you a spender or are you a saver? Like, it's binary. You're either you know, the freedom or security driven. And, you know, actually you can be power driven, which would be either Mother Teresa or the CEO. Right. The point of many is vision and mission, you know, or, I mean, how many people are driven by money as love? It's all about spending money, you know, on their families. Right. So it really is all for. And, and, you know, we have all four. You wouldn't, wouldn't. You would be very out of balance around money if you were 100% one of those types. It would cause issues for sure.

I mean, given the level of anxiety around money, I've got to believe that a lot of people have a decent amount of like, kind of that wanting to be safe.

Absolutely, yeah. 100%. I agree. That's. That's human. Right? I mean, money is connected to core survival issues. This goes all the way back to childhood and our childhood, many stories, very young children know that money is connected to this thing called food and bills and important things that mom and dad do. So you're. You're totally right, 100%.

Okay. Well, Michael, and this is awesome. Anything else you want to touch on before I wrap up for our audience that you think they should be aware of or, you know, we'll. We'll obviously link to your site, your site, Seattle Money Coach and your books and stuff like that in the show notes.

But yeah, no, I mean, we hit so much. You know, I work with people all over the United States, and my message to people is we're all on a journey and you're okay where you are. I want people to come out of fear around money. If everyone told their money story, it would be like the most wonderful, entertaining movie you ever saw. I mean, it's normal to have twists and turns and ups and downs around our money story in our life, but we feel so bad about it because we don't share it. Right. We all have an amazing story, and you are where you are in your journey. And the question is, where do you want to go? What are the Tools and the resources to get you to. To a happier place. You can feel better about money. That's. That's the big message.

Yeah. That's great. Actually, I have one more question for you, which is, given you've. You've been doing this for 25 years, you've seen. I mean, how many people have you helped?

Oh, my God, I don't know. Hundred, hundreds and hundreds and hundreds. Right. Hundreds and hundreds and hundreds. Yeah.

And. And you probably helped them for a long period of time. So how are outcomes outcomes? Because I think a lot of people are worried, like, I'm gonna end up in the poor house. But I. I'm curious, like, is the reality that most people end up fine?

Yeah. I mean, what. What I say is, you know, I haven't lost one yet. Right. I mean, that assumes that people stay in and engaged. Are there people. Can you help everyone? No, of course not. That would be silly. You know, some people come into coaching and go, oh, wait, I don't actually want to do any work. I just wanted to talk about it a little bit, you know, so, no, you. You can't help everyone. I would not want to put that out there. Um, but I have seen amazing things when people. I mean, that's the whole point of the book, right? When people rise out of the money fog, everything becomes possible. And part of it is tapping into their vision, you know, learning again, skill set and mindset and. And we need both. And when people get both, there really isn't anything that they can't do. They're afraid to look at the future. But anything's possible. Once you get clear, once your vision clears, things come up that you hadn't even considered. And I think that that's the exciting thing in coaching. I don't always know how things are going to work out. And as people get clearer and clearer, things arise that help solve just about everything you could. Could possibly imagine. Right. And it's. It's amazing. But. But answers do not appear as answers when you are in a cloud, right. When you become very clear and different answers and opportunities arise before you. You see them for what they are is potentially really helpful. So you will grab hold of resources that may have been there all along. But when you're in a money fog, you just don't see them.

Yeah, yeah, it's super powerful. I. For us, you know, we're very focused around helping people get to this place of financial competence through literacy. Right? So. So understanding your situation, what's possible, like, where you are today, what's possible in your future, what are the big levers for you? And then helping them, and this is where coaches and advisors come in, but helping them actually affect those changes in their lives and stick with it. So that, and the big point is, like, if you get to a place of financial confidence, like you're saying, then you can, like, look around. You're not in the scarcity mindset. Like, I'm gonna run out of money tomorrow, but, like, what am I doing here? What am I gonna do with my time, which is really my scarcest resource, and how do I step forward boldly to kind of do what I want to do next? So. Okay, cool. Well, this was great. So, Michael Ann, thank you very much for coming on the podcast. This is great.

I love being here. Yeah. I love your podcast and I'm sure all of your listeners just absolutely adore you. It's such wonderful stuff that you're talking about and you're talking about stuff that needs to be talked about more. So thank you. You.

Thanks. Well, I think they, they, they adore the guests. You know, the guests are the, are the real value out here. But I know, I appreciate your time and, and your insights into psychology and kind of framing the issues and I think the kind of this emotional side of it, like, so important. Like, we spend so much time thinking about the math, but like understanding and I think the perspective on kind of men versus women, the dynamic and relationships, these are all things that like, like, are new to me. So it's fascinating. I think people really like this podcast. All right, well, anyway, with that, so Michael L, thank you for coming. We will point to your site, Seattle Money Coach and books and so forth. And for anyone listening, if you leave a review for us, we appreciate all feedback is welcome. And checking out our site at newretirement.com and Michael N's site at Seattle Money Coach. We appreciate that. So thank you and we'll talk to you week next, next time.