SPEAKER_00: 0:10

Hello and welcome back to that Home Loan Hub. I'm rejoined by Elizabeth from Know Your Worth because you're worth it. This episode is not sponsored by any providers, and this is not financial advice, but um would like to share something really cool with you guys. Hello, Elizabeth. Hello. What are we talking about today?

SPEAKER_01: 0:32

I thought I would talk about a kind of case study. It's kind of a merging of multiple things. But I have been, I don't know, fortunate in that they've come to me, but it's unfortunate in the sense that I have had a few really young widows who have come to me because they've received life insurance from their husbands. So when I'm saying young, they're not 50 yet, these women. They're they're very still like in their prime. And husbands have very tragically passed away, but left significant life insurance. And these women also were not the ones managing the money. Um, so they've come to me because they want to know what they should be doing for their future, how they should be managing things right now. They a lot of times just feel very anxious having large lump sums in their bank account. They're like, just do something with it quick. And they also want to like honor the person that they've lost and how they use the money. And we see that a lot with inheritances. People, even though a dollar is a dollar is a dollar, we treat it differently depending where it came from. This will be a psychology thing and what we have. And so if you received it as a result of losing someone you loved, you feel this sense of like responsibility about how you use it. So they're obviously really interesting cases because you feel quite a lot of responsibility, like even more so than the normal amount of responsibility and what you recommend to these people. So I've had them come and we want to balance how much do you pay on the mortgage, how much do you need to supplement you right now because you've gone from a two-income household to a one-income household and your bills have not dropped by half. And then how do we protect your future? Because again, you were expecting to have two of you earning two Kiwi Savers, all of that. Now it's just you, because let's not assume they're gonna repartner because that's not you know something they want to think about. So, how do we make sure there's enough for the future?

SPEAKER_00: 2:35

So I'm like, I've I can I can say so many things, but I'm trying to like keep your story going. Because for me, when you were talking about a dollar is a dollar, you know, like first thing that sprang to my mind was that's why people lose a lot of money that they win through lotto.

SPEAKER_01: 2:52

Yeah, because they don't value it the same, right?

SPEAKER_00: 2:54

They don't value it because it came easy. Yeah, but on the flip side of it, if people got the money because of life insurance, that's the last thing they've got to hold on to from their loved one. That's like the last connection. Yeah, exactly. If you think about it, you know, and that's why for them, they want to make sure that thing lasts them at least their lifetime or gets passed on to their children.

SPEAKER_01: 3:16

Yeah, absolutely. So that's the thing they want to do right by their kids in the instances where there have been kids, they often want it to be kind of used in in alignment with the person's values. Like, I was about to say values, yeah. What would they have done with this money? And then, but also am I being sensible? Because obviously, you'll know as financial advisors, we have additional responsibilities for any vulnerable clients.

SPEAKER_00: 3:42

Yeah.

SPEAKER_01: 3:42

And so for me, this is a really unique kind of category of vulnerable clients where we need to be making sure that we're not letting them make any rash decisions.

SPEAKER_00: 3:52

Yeah. Because again, I was just about to say, especially if the men were the ones making all the financial decisions for the family. And and she was just happy, you know, cruising along, maybe earning money, but not really worrying too much about where things are going. Because she knew that he had it, he he knew what he was doing, and you know, she would trust him. But at least in this case, what I can say is the happy story that they had life insurance.

SPEAKER_01: 4:19

Yeah. So both of the women that I've helped in the last couple of years, fortunately, their partners were actually quite savvy. So they had good life insurance, they had been building up Kiwi Savers, they had been doing all the right things so that when something happened, their partners were looked after. Yeah. So, yeah, one of the kind of strategies that I've taken with these women is let's model out what does your kind of like expenses and everything look like, and what is retirement gonna look like because that's still maybe 20 years away almost for some of these women, but they might now not be able to work full-time because of the kids or have a lesser earning capacity. So then splitting the money into something that is very accessible, hopefully still better than a bank account, like a higher interest option, but that they can draw on to supplement themselves, particularly in the first year or two after losing someone where they probably are gonna outsource some stuff, they're gonna go easy on themselves, they need time off work, they might want to be seeing a counselor, all of those things where like their lifestyle is gonna be quite different to their norm. So let's give them some money that's accessible, but hopefully, like we've talked about in previous episodes, not eroding. It's just like keeping it safe. And then some that is for the next maybe five years in maybe more of a balanced fund. So that how much do they need in there that they can again supplement? I know for one of the women, they had been meant to take this big overseas family trip. And she still wanted to be able to do that with her kids because that was important, and that was again like a way they could honor their dad. And so being like, well, that's gonna happen. So we're gonna allocate that some money is gonna come out of that fund for that.

SPEAKER_00: 6:14

Yeah.

SPEAKER_01: 6:15

And then something that is higher growth, higher returns for their future, and try to see how much we can put into that category because we know that we need to really future-proof them. Because now that they are on their own, obviously there is also more risks of if anything happens to them and impacts their earning capacity. We want a really good safety net. But having that balanced portion really gives them a sense of security that it's not you haven't put it all on red. It's not all really high growth, particularly if they're new to investing, it can feel uncomfortable. But having that kind of three-pronged attack is a good way to be like, we can maintain your lifestyle, we can still grow your money for the future, and we can protect the capital so that you know you're kind of being prudent. Um, and then other factors can come in, like, do you want to invest it in an ethical fund because that's important to you or was important to your partner, or yeah, do you want to earmark some of it for activities that were going to be family activities and you still want to do that?

SPEAKER_00: 7:23

I loved it. And for those that have missed an episode that we've done on ethical investment, please go back a few episodes ago. Elizabeth and I covered in quite some detail. Yeah. But for me, what really stands out is that the support this women are getting, you know, from someone like you in that horrible time of their lives, right? I mean, earlier this year I saw a widow and it was a tragic accident, and her husband passed away and they had four kids, and she just sat there and she was like, I had, you know, like if nobody could envision that happening. Yeah. And they were about to move to Australia, you know, and they were about to start a new life, and they were winding down all the businesses and stuff like that. And unfortunately, he didn't, his insurance lapsed, and and he didn't realize so there was, you know, a bit of a battle uphill to try to get his insurance payout. And uh, and she was on the other side of that spectrum of going, what am I gonna do now with my life, you know, and how am I gonna go through this? But what I'm noticing is that usually female clients would want to see a female advisor for that support, for that care. And and I'm not saying that, you know, we're limiting men not to come and see us. And again, I did have some men that have been widowed, and and to be honest, again, they usually feel comfortable coming to a female advisor than the block because with us they can cry and there's no judgment.

SPEAKER_01: 8:49

I think it's it's a nurturing kind of environment potentially, and just a more compassionate approach, perhaps. I I think you're right, and I think what I've noticed with these women is the importance of the wraparound financial advice that either they or their partner had prior to something happening. So I've had one where the life insurance was jointly owned, which is fantastic, because then she got that separate from the will and probate, which is good because they hadn't actually updated their wills and she was only entitled to a very small portion of his estate because the wills were from like when they first started dating. So there was that importance of the insurance is being set up correctly, the legal stuff being up to date, and then after the fact that investment and planning advice.

SPEAKER_00: 9:43

Yeah, so it's really makes a big difference. Yeah, so it's a really good reminder, right, to have those things updated and reviewed frequently in your living days, yes, in your living years, instead of you know coming to a reality check of when something tragic happens. But um, but how good that this women had options of what to do with that money and how to set themselves up and their children for the future.

SPEAKER_01: 10:09

Yeah, absolutely. And I think we're really lucky in the range of investment options that are out there as well, that there is an option for like every different part of what you need. So that's something I find really beneficial, is that for people who do need money on call that is still going to be better than p having it in the bank, there's an option for that. If you need something that's really aggressive, there's an option for that. If you need these middle grounds, we've got things that can work. And so I think that makes a difference as well by not being tied to, say, like just one provider. Because you can make a package and a plan that suits the person.

SPEAKER_00: 10:46

Yeah.

SPEAKER_01: 10:46

And then that stays dynamic as well. Like you're gonna look after them for a long time and adjust the plan as you need.

SPEAKER_00: 10:52

Yeah. No, I love it. I love it. Thank you so much for this case study. I think it just hits home.

SPEAKER_01: 10:57

I know. I mean, I I realize it's slightly confronting um talking about when you've lost someone, but I also think it's much better if you have some idea of it when everything is good and you're happily going through life rather than be blindsided.

SPEAKER_00: 11:14

Yeah, exactly. And I think you're right, like making sure that people don't do those rushed decisions when when something tragic just happens, because when something happens to us, our functioning brain actually goes in the fog mode because you go into this completely different brain function and you can't think straight. And you make decisions, then a year later you look back at it and you go, Why did I do that? Because you weren't thinking properly, because you were in that adrenaline rush and you know, flight or yeah, that fight or flight kind of state of being. Yeah, exactly, exactly. So our job as advisors is to recognize that vulnerability and lead people through this journey. Yeah, hold their hand, and and I I often remind my clients to breathe. Sometimes that just helps too. Sometimes I need that just in my normal life. So just breathe. Awesome, Elizabeth. Thank you so, so much. I would I hope you're gonna come back with case study for fun performances as well. That would be really cool to compare that. And uh, for those that uh want to hear more from us, give us the topics, reach out, let us know what you wanna hear, and we'll deliver. Yeah, I could talk about investment for days, so I just need like narrowing down. I can tell. You and I. Awesome.

SPEAKER_01: 12:34

Thank you so, so much, and have a lovely day. Bye.