Wealth Management—Removing The Taboo Behind Money

Hey, this is Mark Podolski, the land geek with your favorite niche real estate website, www.thelandgeek.com. and Scott Todd is out today, but that just means we get to go to our guests even quicker. So without further ado, our guest today is Cathy Longo. Now, if you don't know Kathy, she is a certified financial planner, a chartered advisor in philanthropy, which sounds really cool, like just a giver, a certified divorce financial analyst, which sounds even cooler because, let's face it, that's like a big part of the population. We don't even talk about that a lot. And what goes on with that. With over 25 years of wealth management experience, she is the founder and president of Flourish Wealth Management, an independent boutique wealth management firm in the Minneapolis area. Before launching Flourish in 2014, Kathy worked as a wealth manager, financial planner, and firm manager at companies of varying sizes in both Chicago and Minneapolis. Kathy Longo, how are you?

I'm great. Thanks for having me.

Well, I'm so glad that you could take time to talk to us about wealth management, because, you know, in our niche, we're always about building wealth, passive income, but there's always places where we want to sort of round out those edges, if you will. And so I think it's really important to kind of learn more about wealth management in these different areas and kind of, you know, go a little bit deeper into it. So let's just kind of rewind the tape. What got you involved in wealth management?

Well, I feel so fortunate. I basically stumbled across wealth management as a major, I say, kind of way back when. Back when I majored in wealth management at Purdue University, there were only about a dozen schools that had a major in financial planning. So I was an economics major. Stumbled across this class called personal finance and couldn't believe you could do this for a living. I love the idea of helping people with their money.

Wow. So, by the way, I don't know if you knew this, but I graduated from iu. I'm a Hoosier. So now. Now the podcast is really contentious.

Yes. Oh, no.

Oh, no. So what are some of the things that you see as problematic when you meet with a client?

Yeah, you know, so I. One of the big things that I see with clients is that people are not talking enough about money, so they really don't have a good connection to their own money story where their money's money can get caught up in emotions because money can be really emotional for people, and people have a hard time talking about money. So I think that that's that blockage that helps. It prevents them from moving forward with good financial decisions.

So just emotionally getting caught up with it. So we're going to look at, like, certain, you know, avatars of emotional blockages. Right. You might have, you know, the spender, the saver, and then along that spectrum, what do you have in between? Like, what do you see is most common that you see?

Yeah. So I think. And that's. I think of when you say the spender and the saver, and then you have them getting married to one another and what, what comes to be in that marriage? As, you know, we talked about divorce, or you did an intro that mentioned divorce. You know, it affects so many people. But money can be rooted in fear. You know, fear of not having enough, fear of making the wrong decisions. It can be issues of control, trying to use it to control one another. In a marriage, there's so many different. You know, it can be a sad, sad piece, too. Sometimes money comes to us via, like, an inheritance. We lose a parent, a divorce. We go through this transition event. So there's so many more emotions. And everyone has their own money story. You know, you think about how you grew up and what are some of those early money messages you learned from your parents and how your parents treated money. You take those into, you know, your own adulthood and your own relationships.

Right. Scott. Todd, you jumped on.

Hey, how's it going, man?

Hi, Scott.

How are you? Meet Kathy. We were just talking about one of your favorite subjects.

Oh, yeah.

Money.

Money. Money's good.

Yeah, money's good. So Kathy is in wealth management, Scott.

Okay.

And we might as well just pick on you.

Pick on me.

Yeah.

All right.

In your relationship. Because Kathy works a lot with couples, unfortunately, sometimes with divorce. Who's the spender and who's the saver?

Oh.

Well, I would say, sadly, that I'm the spender. And I would say that my wife is a saver. She does not want to really spend money. Like, I'm like, oh, we should do this, we should do that. So I think that I would fall into the spender category.

So, Kathy, how would you advise Scott and his wife to start a productive conversation about this so that they can build wealth, yet at the same time, Scott can take more flying lessons.

So does the different styles get in the way of how you approach money and setting financial goals for your relationship?

No, because I would say that. So it's not like. It's not like I'm. We save, right? So, like, we're on the same page as, like, we will save. We have a plan for that. I actually create the plan. So like I kind of manage the money. So I'm like, okay, here's what we're gonna do, here's how we're gonna plan, here's what we're gonna do. But then at the same time I filter in things that I want or that we want, things that you know, like, hey, we're going to go do this. And she's like, okay, we're going to go do that.

Yeah. And so I think that that's okay. The piece I love hearing is that you have a plan there. But I think with making sure. What I'll see with couples is that there can be a plan, but maybe one person really knows the plan and the other one's not as in tune to the day to day workings of the plan. So then they might not hold the other person accountable for maybe some of their spending decisions. So making sure that there's some ground rules around spending decisions, like okay, anything, is it 250, is it 500, whatever. It works in your relationship that you kind of get buy in from the other one. So there is still that accountability. But you said the number one thing which is saving and having a plan. So if you can make those goals happen, you're well on your way to a solid financial future.

Yeah. Kathy, you know what keeps coming up by the way? Infinite banking. I had a client send me a book about infinite banking and using life insurance as a vehicle to become like your own bank. Do you have any knowledge on this or thoughts about this?

Not enough to be an expert in that conversation. I tend to believe insurance as more of for a set period of need. I'm a bigger fan of term insurance. I don't subscribe to insurance as the greatest investment vehicle. I think there's other areas to look for investment. But insurance does play a role, especially why people are still building their assets or they need some immediate liquidity. That's what I think insurance has a better role for people.

Okay, great. Great. Scott, do you know anything about infinite banking?

You know, Mark, we've had a couple of guests on our podcast that have kind of like talked about how it's the greatest thing ever. And you know, I don't know, I'm just, I've done some research on it. I'm not that necessarily versed in it. I'm not an expert in it, but I tell you that it's not something that's ever really caught my attention. Like, you know, you got the, you Know, you're obviously buying life insurance policy. You're doing the cash withdrawal on it so that you can go do your investments, banking, you know, your own loans, whatever. But I don't know, I'm just not. To me, you're paying fees that I don't know that you necessarily want to like. I don't know. I think that you got to look at it for each person individually. For me, I'm not sure that the fees would kind of justify it.

Right, right. So, Kathy, what's some of the worst advice you see or hear given in your area of expertise?

Oh, gosh, there's so much, so much bad advice and there's so much secrecy because, you know, there's a lot of, like keeping up with the Joneses and assuming that, well, we be able to do this because, you know, our neighbors, you know, they're doing this. Why can't we do these big trips or buy these really big cars? So it's. I feel like people take advice with lack of information, so they're. They're basing their own financial decisions on what they're seeing, but not with a solid education or understanding of what their goals are. You know, So I think that that's a mistake. And I really do think as we kind of started our conversation, it's rooted in not having money conversations. You know, I think that people should be talking to their spouse, to their parents, understanding what their financial. Their parents financial picture is and how that might impact them to their kids, making sure that their kids are being prepared to deal with money. And even with our friends, you know, even conversations like this can start to encourage one another on what are you doing on your finances and, you know, come up some great ideas.

Yeah, yeah, absolutely. You know, I wanted to talk a little bit about divorce because if you ever are, if you're a fan of Shark Tank, you know, Kevin o' Leary wrote a book and one of his things was, you know, one of the biggest financial decisions you'll ever make in your life is marrying your spouse. Because if you go, if you don't get that right and you don't have this sort of, you know, alignment financially, you are at risk of losing 50% of your net worth. And it's something that I don't know about you. I think it's maybe a little bit of a taboo topic that a lot of people don't really discuss openly. So number one is what is a certified divorce financial analyst? And then number two is how does someone kind of help people through this messy part in their lives.

Yeah. So a certified divorce financial analyst is an individual who has education and training and past tests to be able to help people through the financial decisions through divorce. Because there's so much when you have, when you go through a divorce, you know, you obviously think of an attorney to help you along with those decisions. But attorneys might not have all of the financial expertise on all assets are treated differently. So whether it's a retirement account to understand what that tax effect is to whether it's real estate or land and understanding taxable accounts or Roth accounts, everything has a different tax impact. And spousal maintenance is treated differently. And so it's really being able to put all of the numbers together, look at proposed settlements, really be able to help them understand the financial decisions as they're going through the divorce so that they're not. Because again, speaking to emotions, I've seen people want to rush into that final decision because it's uncomfortable having to, you know, be in this contentious environment. You know, you're dealing with like issues with your children and how best to parent them and how to separate the finances. And it's just a really emotional time. So having a level headed financial person who knows all the ins and outs can be a great team player to have on that in that divorce process.

Wow, that's great. That's great. Scott, have you ever heard of anything like that? I've never even heard of anything like it.

No, I haven't heard of anything like that.

Yeah. So. Well, hopefully Scott and I won't need your services.

Yeah.

Hopefully I don't need it.

But it goes back to like, when you think about if we were having more conversations as we were getting married and thinking about that. Right. Partner and understanding each other's values and history with money, we could potentially either come up with systems or get some of these conversations to make sure it's not a deal breaker. Because money issues is one of the top reasons that people divorce. So we should be starting to talk about them. Maybe not on date number one, but, you know, somewhere in those early, earlier dates in terms of how we approach money.

All right, well, Scott and I have teenagers, so how would you advise our teenagers, they go into the dating world. What would be like the, you know, let's say it's date number four, date number five? What would be some. Some questions you'd want to ask to sort of probe to see do our values align?

Yeah, you know, you can talk about them. So these are kind of always some general questions, but, you know, how do your Parents treat money like, you know, do your parents talk about money? What kind of rules do your parents put around it? What expectations are, you know, depending if they're like, heading into college, what are your parents plans for college education and how did they approach it? How do your parents treat credit cards? You get a lot of, like, are your parents spenders or savers? You can start to have these conversations about, like, what's your experience? Everyone seems to have like an earliest money memory or their, you know, first experience earning money. Hey, tell me about your first time earning money. What's one of that earliest memory or what lessons did your mom or dad teach you? So there's lots of ways to approach it in like a fun way to learn about how they grew up with money and how they think about it right now. And then as you get a little bit older, you know, hey, what's your credit score? Let me reveal. Let's run our credit reports together and kind of see what's out there. Because I've had couples come up and run that and find some big surprises where they didn't realize the person they were with had run up, you know, $30,000 of debt, like credit card debt.

Wow, that's. These are really good questions. I'm going to save this.

Yeah, and student loans too. You know, you think about the challenges, kids coming out of college right now with a lot of debt that is going to impact them into relationship, being able to potentially buy a house together. You'd be able to even invest in the near term, as if they're having to focus so much on paying down that debt. So it's not to say that you rule out people with a lot of debt, but you need to go in with eyes wide open.

So, Mark, I have a question. Like, at your family, in your household, like, how freely to your children do you discuss, like, income, you know, like money coming in the door? Like, is that normal piece of your conversation or is that like a taboo subject with, with your family?

I don't really discuss it openly with the kids. You know, I, I do sort of, you know, because I'm a big reader. I give them books all the time that they, I don't think they ever open, but maybe they'll thumb through. I think they know, you know, just through osmosis, how I feel about money. You know, I'll always talk about, you know, saving, saving, you know, when it comes to college. Look, we've been saving since you were born, right? We have a 529 plan every single month. Mom And I automatically save, Right? But other than that, we don't talk a lot about income. And certainly, you know, my oldest works, and if he wants something, he's got it, he's got to buy it. For the most part. Yeah.

So, like, what I've started doing is because, like, before I did land full time, like, I didn't talk. Salary was off the table. Like, we didn't talk about it, but obviously the kids knew, oh, we're doing well, because, you know, we keep getting, you know, keep moving. Dad keeps getting promoted, no problem. But then what I started doing, really with. Really with my daughter, because I think she gets it. She has a job now. And so she. She knows, like, man, this is what I make an hour. So the mere fact that I, like, buy $100 pair of shoes, she's like, holy cow, that's 10 hours of my working, or whatever it works out to be, right? So now all of a sudden, she puts a value on. On things that are. That are being purchased. You know, like, she's. She's equated to how long she has to work. So now what I started doing, Mark, is I started taking, you know, like, a daily glimpse or, you know, like, for example, we went to a Tampa Bay Buccaneers football game a few weeks ago. And, you know, while we're sitting there, I, like, getting my phone, I scroll down and, like, the email reflects freshes. And I'm like, oh, look at this. I just made, like, twelve hundred dollars, you know, for twelve dollars just came in. She's like, stop it. You know, But I'm trying to show her, like, look, the money just doesn't show up, right? Like, you. You have to really command your soldiers. Your. The money that you save is your soldiers. And so the more soldiers or the more employees that you can put out there to work, and then you go deploy them to go bring you back more money. Like, that's the way I see money. And so I try to educate my children on the fact that, look, you got to work for money, right? Like, you gotta. In the beginning, you've got to build wealth, and no one's just gonna come and ring your doorbell and throw money at you. But the more assets that you can buy land for us that will bring more of these dollars back for you, it becomes a genius thing. So now all of a sudden, her. Her mindset shifted to say, wow, I'm keeping some money in savings, but how do I deploy that to go get a bigger yield on my money? So now we're having the conversation of yield and, you know, IRR and loans, you know, and all of these conversations that I never really figured, I never had with my parents. But now at 18, she's getting like, the benefit of that piece. And I gotta believe, you know, like, she's motor. She is excited now to start investing her money with the dedication that she's going to put these dollar bills to work and they're going to go work for her for the rest of her life. I think that's kind of a cool transformation.

That's really cool. Kathy, what are your thoughts on that?

I think that's awesome. I think you're normalizing the conversation. You're using everyday experiences and your experience being an investor to put that into just, that's part of life. So you're thinking about opportunities, of how to make your money work harder and you can use it even in spending choices because, you know, it's investing and how do you look at spending choices or whether it's okay, these are our goals for the year, what you're looking to achieve and, you know, do periodic updates, whether you're doing your tax return and talk about, like, what the tax return, you know, I have to give, like, the specifics of the numbers. But all of the stuff that we do that is related to finances, we can just normalize the conversation and say, oh, yeah, I just, you know, sent in money to my retirement plan or I was looking at the medical benefits, or we're changing this. This is how I think about creating an opportunity for her to ask questions, absorb that information.

Yeah, that's great. That's great. So, Kathy, what are some of your most gifted or recommended books when it comes to wealth management?

Yeah, so I love a whole bunch of them. One would be my own book that I just wrote, which is Flourish Financially. And that book is really written. It's not the nitty gritty of the money and how that all needs to play out, but it's thinking about your values, your history with money, all of the key transitions to plan for in life, whether it's retirement, career, death, divorce, and then getting ready for all those conversations with people. So I think that's a great overview that's missing where a lot of what I saw in more of the investing books are a little bit more focused on just the nitty gritty of the numbers and how those work. And for some people, that's not their first approachable book to understanding their own thoughts about money.

Yeah, no, absolutely, absolutely. So we're at that point now, Kathy, where we're going to ask you for your tip of the week. I think your mentorship has been great but now we're going to ask you for one more tip. A website, another book, something actionable for the art of passive income listeners to go improve their businesses, improve their lives. What have you got?

Yeah, so I'm going to send them to financial readiness test. It's an assessment that can be found on kathy longo.com k a t-h y l o n g o.com right when you open it you'll find it but it's just a nice overview that'll score where you're at in terms of your financial readiness versus that.

Nice, nice Scott. I mean you jumped on. Should I even ask you for a tip of the week?

Oh, I'm ready man. I'm excited about ready. This is one that, I mean I don't know that we've ever talked about it but man, I'm really been using this and I really like it. It's called privacy.com privacy.com. and what that is is basically, it's basically a website that you can go to, you link it to a bank account and you can literally go there and create credit card numbers on the fly that's linked back to your checking account. So basically what this does is let's just say that you know, you've signed up for a free trial somewhere and they want a credit card and you're like I don't want to forget about the free trial and canceling and all this other stuff. You go on there, you put a limit, you say like hey a dollar two. Well then you give them this credit card number and you can make it a single use or dedicated to a specific party. And then what happens is, you know, it's, it goes on there, it does the free trial but because it's a single use credit card, they can't charge you again. It's over, it's gone, it's gone. And you can try it out and not have to worry about about it. And if you want to continue using, great, you can put in a real credit card number or go back into privacy and create credit card that is dedicated to that specific person. So you know, with all these credit card hacks and everything like that, man, it's, you know, you don't have to worry about your data being exposed. If, if Amazon gets exposed, you just go kill the Amazon credit card or credit card that you're using through privacy. You nix it and it's really, really good for VA's too, you know, like, hey, you need a VA to go do something for you. No problem. Here, here's a credit card number. They use it one time, like the other day, I put a. I put a. My son wanted. My son wanted to order a pizza, and I didn't want to give my credit card number to him. And so I'm like, here, I got a credit card number for you. So I go there, I put a limit of $31 time, use credit card number. I text it to him, he goes, and he spends like $20 on a pizza. And it's done. The car, $20 and it's gone. Like, it didn't even go up to the $30. It's not like he had $30 to spend. He used it one time and whatever balance was left was there. So think about that in terms of, you know, giving something to your VA or something.

Wow, this is phenomenal.

And it's free. It's free.

Kathy, what do you think?

I think that's a great idea. And especially with cybersecurity and safety right now, that's an awesome way to go about dealing with your online identity credit card numbers.

Well, I wish I knew about this years ago. I've been a identity theft victim for years now. In fact, the guys, I keep getting things like the guys going to jail. Yeah. In Mojave county of all counties. That's funny.

That's funny.

So my tip of the week is learn more about becoming wealthy, getting your emotions in check about money. Go to flourishwealthmanagement.com learn more about Kathy and how she can help you. Flourishwealthmanagement.com I have a link to that as well. And you know, I do want to remind the listeners the only way, the only way we're at the quality of guests like a Cathy Longo from flourishwealthmanagement.com is if you do us three little favors. You got to subscribe, you got a rate, you got to review the podcast. Send us a screenshot of that review. To support thelangeek.com we're going to send you for free the $97 passive income launch kit course. So please do that. It really helps. Also, if you haven't checked out the book lately, Dirt Rich on Amazon is still available. Please leave a review. It always helps as well. Also, just while I'm plugging away, check out Scott Todd. Give him some love. Go to scott todd.netlandmoto.com and most importantly, if not automating your Craigslist and your Facebook postings posting Domination.com TheLandgeek Kathy Longo, are we good?

We're great. Thanks for having me.

Thanks so much for sharing. Scott Todd, Are we good?

Mark we're great.

All right. Well, I want to thank the listeners again, I would think Kathy Longo and let freedom ring. Thanks, everybody.