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Slip into something more comfortable and delve into personal finance with Josh Sheluk and Colin White, experienced portfolio managers at Verecan Capital Management. Each episode demystifies complex financial topics, stripping them to their bare essentials. From investment strategies and financial planning to economic headlines and philanthropic giving, delivered with a blend of insight, transparency, and a touch of humour. Perfect for anyone looking to understand and navigate their financial future with confidence. Subscribe now to stay informed, empowered, and entertained.
Verecan Capital Management Inc. is registered as a Portfolio Manager in all provinces in Canada except Manitoba.
Welcome to Barenaked Money, the podcast where we strip down the complex world of finance to its bare essentials With your hosts, Josh Schallick and Colin White, portfolio managers with VariCam Capital Management Inc.
Colin White:Hello, and welcome to Bare Naked Money. Here today, we will be talking about talking about money in a continued series. Today, we have myself, Matt Kempton, and, of course, your familiar and esteemed host, Colin White. Colin, welcome.
Matt Kempton:Thanks, Matt. It's exciting. It's even more exciting to talk what I believe our topic today is gonna be talking about talking to your spouse about money. Now just for the record, and I should you know, full disclosure, I've been married for 32 years, So I've been talking to one spouse for 32 years about money. And believe me, that is as instructive as talking with a few hundred clients and their spouses about money.
Matt Kempton:This will be a fun conversation.
Colin White:It will be. And, well, I have been married a shorter period, a little more than 2 years. But I first before starting this off because I've done a fair I've done a bit of research into this episode. At first, I'd like to thank myself. Michelle, I'd like to thank you, that we we fight about things, but money isn't, our most common site.
Colin White:And that puts us in, in a different group than it seems most are in. So I'm, I'm thankful we don't have the same fights it seems many are.
Matt Kempton:Wow. That is like the biggest public suck up that I've seen in a long time. No.
Colin White:She doesn't listen to this thing. What?
Matt Kempton:Oh, okay. Alright. Fair enough. And somebody's probably going to send her a link to this though. No, but you're you're right.
Matt Kempton:And it's just funny. You've done the, the, the, the looking at the studies, but I can tell you from experience, money is one of the biggest stressors in a relationship. And it's it's one that, you know, people have very different, takes on money. They have come from different backgrounds. There's a different reality.
Matt Kempton:And then their financial situation changes over time. And as you grow together as a couple, your financial situation always also changes as a couple. And so you need to be constantly acquiring new skills and new abilities to make decisions. That's not always easy. Not everybody's on the even if you start on the same page, you may not be on the same page all the way through.
Colin White:And so just in my experience, we've gone through a couple recent sort of of the bigger events. Wedding being a big one. We just had well, our little guy is a a year and a half old now. So having a baby comes with a lot of expenses and a lot of just new decisions to make, many of them money related. So you find yourself in uncharted territories in a lot of ways, but and and even in the money discussion ways.
Matt Kempton:Well, yeah. Because when you get married and you don't have a child, then you have a certain, you know, feeling about money and how how it's important. You have a child. Alright. That's gonna shake everything up.
Matt Kempton:You know? Are you what are you what are your joint priorities with regards to how you're gonna raise a child? And there's a monetary consequence to that. And so each each major event in your life, it causes a different set of money issues. And whether it's short term versus long term or, you know, wanting to you know, the level of support you wanna be putting aside for the next generation, how important that is, you know, the life experiences you wanna give, you know, you feel you need to give for want to give your family.
Matt Kempton:All these things change over time. So it's it's it has to be an active conversation and, you know, you need some guardrails, I would suggest, to to try to keep it on the road but it because it can very easily turn into a conflict because it's often not even a money conversation. It's like, don't you love our child? It's like, yes. I don't think that sending them to private school is a requirement.
Matt Kempton:Well, that means you don't love our child. Like, well, no. It doesn't mean that. It's just a different opinion on the sensibility that has a fairly significant monetary impact to it. So it's you know, the the lines blur, which is what makes this really, really difficult.
Colin White:Very true. And and I'd like to come back to those guardrails. I think we should spend some time on that. But but first, I just wanna give give some stats here, and I think we've all heard that money is the one of the leading causes of of divorce. And just some further stats, and here's some numbers from, some Fidelity.
Colin White:In fact, a couples and money study. And what they found in that is that 1 in 5 couples identified money as their greatest relationship challenge, and nearly 1 in 4 individuals said they were often frustrated by their partners' money hadn't, but let it go for the sake of keeping the peace. Mhmm. And these these were couples who were over the age of 25, married, or in long term relationships. So these are these are serious relationships, that the survey came out of.
Colin White:And then according to a February 2024 survey from, Red Financial, 56% of couples say spending, saving, and investment philosophies say they're spending, saving, and investment philosophies aren't compatible with their partners. That complete the trouble, of course, and of the respondents who merged their bank accounts with their partner, almost half, 48%, said they uncovered financial mismanagement, bad credit scores, or unknown or concerning purchases. Well, those those numbers line up with what you've seen?
Matt Kempton:Well, but it it but they're all suspect, to be honest. Right? Because, you know, there's a materiality aspect of things. Right? So, there's the the big issues.
Matt Kempton:Like, what what are your priorities, Short term versus long term. Owning a home versus not owning a home. Educating kids versus not educating. There's big picture items. And if you align or can find a way to find a common ground on those big issues, blowing up the boat over the fact that your partner stops at Tim Hortons every morning to get a coffee and that's a complete waste of money, Even though that's not affecting any of your long term financial or short term financial goals, you really got to question yourself because there's some people that that's just offensive to.
Matt Kempton:You shouldn't be buying a Starbucks every day. Only stupid people do that. Why are you stupid? And, you know, to the extent that it impacts larger goals, okay, maybe it's got some some heft to it. But if, you know, you're accomplishing your retirement goals and you're living in the house you wanna live in and you're living the life you wanna live, then, you know, that's where, you know, the challenge is to maybe let that go.
Matt Kempton:You know, the expression I always use in life in general is, is this the hill you wanna die on? Like, is this worth blowing up the whole thing? And because oftentimes in relationships, it can get, you know, a little bit petty from time to time, a little bit tit for tat. And when you are so completely enmeshed with another human being and they do something that just annoys you, it's difficult to let that water roll off your back for sure. So, you know, when I'm talking guardrails, and, again, we we've had this conversation in other contexts about talking about money.
Matt Kempton:Having a moderator in the room, you know, having a professional who can guide the conversation a little bit can be helpful because, you know, I feel the adviser's role is to, you know, build the common ground. And, you know, okay. So here are the long term goals everybody's trying to accomplish. Here's the way to accomplish them. If you could get that part relatively lined up, then the little shit.
Matt Kempton:You know, my wife likes to shop at Costco. I think that's dumb. There's only 2 of us. But, you know, it it's not gonna derail any other plans that we have. So it's just one of those things that, it's kinda dumb, but alright.
Matt Kempton:Fair enough. We're we're spending money at Costco. So it's just put putting it in context. Like, the the how much does it really matter? Because if you if you try to fight about everything, that that will make your relationship very, very toxic.
Colin White:Well, absolutely. I will agree with your wife on the Costco front. So I am the more, cautious around money of our couple though. We are similar, but I would be more on that end. But Costco is what gets me.
Colin White:Costco is the greatest store in the world. And I just find myself creeping down different aisles and the character, just grows and grows and grows because it's, well, they set it up that way. But Costco is my is my weakness.
Matt Kempton:Mhmm. Well, again, we used to go again to not to make this a Costco podcast, but we had 2 young kids at home and we had a house and we're maintaining a property. Yeah. You know what? The quantities of of stuff and the quality of stuff you could pick up at Costco made a ton of sense.
Matt Kempton:2 people living in an apartment. Like, really? Like, how much stuff can how much toilet paper can we store? You know, I don't need £5 of chicken spice. You know, the the little shaker does just fine by me.
Matt Kempton:So but, again, that's but the the the point and to circle back to the podcast is because this is what happens. Even even with us, even with you and I just talking about relationships, we've money trailed off. See how easy that is to do? So, you know, when talking to your spouse with money, you know, the first thing, hugely important. Ignoring it's not gonna fix it.
Matt Kempton:Ignoring it's just gonna make it's gonna just build and build and build and be a problem down the road. Yeah. So but try to talk about the big issues, like short term versus long term. That's the kind of stuff that you wanna kind of find a common ground that everybody can live with. Because if, you know, one partner is saying, I wanna retire at 52.
Matt Kempton:The other one is saying, I'm gonna work into my sixties. That that's a disconnect. You gotta sit down and talk about that. Like, that that that's a lifestyle difference that you guys are gonna have to to try to work out in one way or another. That's not that's not something you wanna let, you know, the the one supposed to get to 52 and said, that's it.
Matt Kempton:I'm retiring. I know that's supposed to go no. You're not. Like, you you don't wanna get to that moment. You don't you don't wanna get to that moment without having talked about it it because you are going to have some very, very real stress in in in a stressful time because, again, the the the fracture has already happened.
Matt Kempton:Talking about it for a few years leading up to it, maybe 1 or the other can make their peace with, you know, some kind of a compromise. Not talking about it is not the strategy. And if the talking about it leads to a huge issue, well, it's better to have it earlier than later. It could get deal with it in whatever way you have to deal with it.
Colin White:Well, good point. And and much of it kind of ties itself into to financial planning and understanding the goals. Would that just place where you talk about goals? You each lay out your goals. Maybe one is very interested in traveling.
Colin White:Hopefully, both of you are. Trips can come with different different levels of lavishness or it can be very simple. And so just because you're both interested in traveling, doesn't mean that it immediately aligns you on on the money side of it, but at least we're at least you're talking about it. What, you know, a system, I think, having, you know, especially earlier days, a system around things might be helpful. Once having once starting these conversations, you both decided we'd like to save money.
Colin White:We know what for these future goals. Well, let's put some systems in place. If we're immediately saving our monies to our RRSP, monies to our tax free savings account, Here's the leftover pool. Well, if it gets spent at Tim Hortons, if it gets spent at Costco, that's okay because we've already put things towards these bigger goals that we've talked about. And there's a little bit of wiggle room in here for inefficiencies.
Matt Kempton:Well, no. And it's important that, you know, for a human being to function as, like, you know, here's x amount of money. Just go do whatever you want with it so that if you really need to stop at Tim Hortons because that's gonna make you feel good at a moment in time and stuff, you you've got the capacity to do that. I will challenge you that a financial plan per se is not the answer. Like, a financial plan as in projecting your financial future is not where the issue lies because life doesn't go in a straight line.
Matt Kempton:And the first time that you run into a bump where an inheritance gets received or there's the, you know, some kind of major financial bump where we surprisingly need to spend $15,000 on a roof. You know, when those things happen, it's more about the principles of how you deal with money. It's more about being able to talk about money because a projection is not gonna happen. Like, whatever you sit down and project in your financial plan, that's absolutely not the future. But the the part of a financial plan that is absolutely worth its weight in gold is talking about goals and how you talk about money because developing a language around talking about money and realizing where the commonalities are and how you set goals and understanding where your partner's head is allows you to have the words to have a conversation about the inevitable things that happen.
Matt Kempton:Like I said, all of a sudden, it becomes very important that, you know, you that you need a lot of money to support your child because they're gonna go away to school. Then you guys both agree this is a big deal. We were planning on it, but this is where we've ended up. So, no, it's not gonna be 4 or $5,000 a year. It's gonna be $25,000 a year.
Matt Kempton:Okay? How do we handle that? So having the ability to talk about money, having shared your principles with your partner and understand where the the the compromises need to be made, That's the skill set that you wanna develop. Yeah. Unfortunately, I think too many people, you know, when you say financial plan is they can make a projection and then one partner uses that to beat the other one over the head.
Matt Kempton:That wasn't in our plan, and it's like, that's not healthy, you know, then and it's also not real. It it it just isn't. There's too many uncertainties in life.
Colin White:Yep. No. Good point. So these conversations and this getting on the same page needs to happen, but how how soon is too soon? When when do you start finding out if there's this alignment?
Colin White:In this conversation, I started actually having an idea. Maybe the best first date you should have is at Costco. You're gonna find so much more out about that person if you do that than if you go to a coffee shop, if you go anywhere else, you'll be at Costco.
Matt Kempton:Now we're giving dating advice. Wow. You're so outside our lane.
Colin White:Well, it's money related, though. You learn you learn about that person in ways that you might not otherwise. So but when when is too early to start those conversations? I met. I I feel this should happen before a marriage.
Colin White:These are important ways to know if you're compatible.
Matt Kempton:Yeah. Listen. And I I I got married relatively early in life and, no, I didn't you know, have all the conversations that maybe should have been had in the depth that they should have been had for sure. But for me, when you get to the point of cohabitating, whether that's a marriage or not, you're gonna start living with somebody. Don't walk down that road without starting to have conversations.
Matt Kempton:You know? And because if you're not if you're completely financially incompatible, dude, they just don't. Like, you know, if if you guys can't have a good, honest, thorough conversation about money and priorities in a very honest, open, and transparent way, you're setting yourself up for a world of hurt. Right? Now there's people that, you know, oh, they're so wonderful and that, you know, if you're gonna make your decisions emotionally, then you're gonna pay the price for that.
Matt Kempton:But, you know, also, you don't wanna be on the 2nd day. Alright. So listen. I brought my checking statement with me. Can I see your checking statement?
Matt Kempton:Let's go through how we spend money. Like, you know, that's probably not the romance most people are looking for. So
Colin White:I mean, to me, that sounds quite romantic. What's your credit score?
Matt Kempton:Oh, man. You you CFAs continue to just amuse me.
Colin White:But to your point on the I mean, I mean, again, according to this red financial survey, 56% of couples say they are essentially not financially compatible. So
Matt Kempton:Well, again, and and I but I challenge that because, I've been talking with clients like, you know, my partner, you know, stops at Tim Hortons every morning. It's like, well, yes, but you're on path to retire at age 55 like you both want. You take a big vacation every year. Your house is paid for, and you get 2 paid for vehicles in the driveway. That's not a problem.
Matt Kempton:That that's not a financial problem. That's a behavior problem, and that can be just as offensive. Right? So when you ask a partner about their partner's money habits, they are going to make a judgment call that may or may not be fiscally material. Right?
Matt Kempton:They because the lines get blurred and they and they absolutely get blurred all the time. As I deal with those conversations where clients perfectly financially stable, but one client doesn't like how the other client is dealing with money in their child. One client doesn't like how the other client's dealing with, you know, Costco or they buy a new truck every 5 years, and that's unnecessary. Nobody needs a new truck every 5 years. Right?
Matt Kempton:So they so in a survey like that, I guarantee the answers to it. Oh, yeah. No. We buy new vehicles. There's no way we should buy new vehicles even if they're completely financially stable.
Matt Kempton:You know? So to me, again, that's not a financial conflict. That's a behavioral conflict that happens to have a dollar figure attached to it.
Colin White:Well, I think I'd push on you a little bit on this one.
Matt Kempton:Who? Who? Who? Who? Who?
Matt Kempton:Well, just brave and look. You look good and brave and stupid all at the same time.
Colin White:Well, just to to take the recognition that we work at a wealth management firm, and the clients we speak with, I don't have qualified to work at a wealth management firm. And so there are there is a segment of the population we'd be having these conversations with more often in a segment we just frankly aren't as often because they aren't sitting in our offices.
Matt Kempton:I will cede the high ground to you on that one. That is a valid point.
Colin White:Oh, no. So, yes, sir.
Matt Kempton:But Say, look, look, look, it happened. So, no, absolutely true. But money is a funny thing. Like, if there's a certain threshold of money that they they talk about that up until a certain point, all you're worried about is money. Like, if you, you know, don't have enough money to feed yourself, you don't have enough money for for shelter.
Matt Kempton:If you're in survival mode, that's all that matters to you. It it's it's 105% of what you care about. Maybe at a certain threshold where your basic needs are looked after, and then it becomes, know, you begin to care about other things. Prior you could set priorities. You can have goals, all that kind of stuff.
Matt Kempton:So, again, it really depends on where you are on the socioeconomic scale as well. But, again, to back to the topic of our podcast, no matter where you are talking about the money and having a money language and if you have a money conversation, even if you know that you're on completely different pages because some people look at it and said, well, we can't talk about money because I can't get them to stop going to Tim Hortons. Well, you you can't no. You you you didn't talk you you maybe can't get them to stop that behavior, but it doesn't invalidate every conversation about money. You need to be able to talk about it.
Matt Kempton:It is important. And if you don't, it will just cause a problem. It's gonna grow and grow in one day. It's gonna be a a an instrumental.
Colin White:I agree with you on that. And so actually, so maybe that segues us interestingly into, into this piece. So I I read an article online, and this is coming from a financial therapist, which, did you know that was a job?
Matt Kempton:I I the first time I've heard that, I've been referred to that.
Colin White:I was gonna say I thought that was us. That's fine.
Matt Kempton:Well, it depends on the day and depends on the conversation, but yes, I've been called that.
Colin White:So she has a few sort of approaches to to these, to to having the conversation with your spouse. Just maybe some some guidelines to put in place. And so one of them is just to first to set regular times to discuss finance. The next to consider putting aside the word money. So I don't know if you sub another word in or if you just don't say that word.
Colin White:My
Matt Kempton:Like, like bagel, like do we have a church? I don't understand weird to say this.
Colin White:That would fix everything. Finally, and I I think this is quite important. Focus on the future, not the past. You know, we can only look forward here. And, you know, it becomes just a war of, well, you bought that double double 3 years ago, when I asked you not to, you know, and you're not gonna make any progress here.
Matt Kempton:So, I mean That that's just relationship advice. Like, if, you know, if you're gonna be in a long term relationship, then you're gonna carry forward something forever. Eventually, there's gonna be so much weight in what you're carrying forward. It's just gonna weigh everything down. So being forward looking is helpful.
Matt Kempton:I I I guess I don't like the way the first this was was raised there. You know, set aside time to talk about money. I don't think this needs to be a weekly thing or a daily thing or even a monthly thing. You know, I think that having a conversation about money and establishing a sandbox that everybody can play in and then stop talking about it is is the best way to handle it. So, again, for clients who we sit down and have a conversation with maybe every 6 months or once a year.
Matt Kempton:Okay. That's the meeting. Let's sit down and let's let's put it all on the table. Let's make some decisions. And those kind of decisions can be the way short term versus long term.
Matt Kempton:So our monthly savings program is this. You know, we we're gonna try to reduce our debt over this period of time. We're gonna blah blah blah, and we're gonna save, you know, 10% or 15% of our the money coming to our account we're gonna put into savings. Alright? Everybody agree?
Matt Kempton:Great. Don't talk about it again. Just go live it. And, you know, 6 months later, a year later, sit down and say, okay, are we happy with that balance? Are we saving at the right level?
Matt Kempton:You know? Are we making the right progress to all our goals? And then put it all on the table, have a big conversation about it, then make the decision, and then stop talking about it. Because if every morning you get up, it's another conversation about putting money into the ETFSA, you know, then that's not good. That's that's toxic, you know, because again, there's no no new information available every day.
Matt Kempton:There's no new information available every week necessarily. So having a conversation and setting okay. So, you know, $500 goes into your individual checking account. You can do whatever you want with that. And, you know, $200 is gonna go to the TFSA.
Matt Kempton:$20 is gonna go to the RESP. Then we're gonna set aside money there at the end of the you know, do that. And then forget about it for a while. Just go do it. Live within it.
Matt Kempton:And if when you sit down after 6 months and say that's not working, I want to make some changes. Okay. Let's put everything on the table and and have a conversation rather than a pitched battle that's being fought every day where you're trying to make progress towards getting what you want, whether it's a new truck or a vacation or more money on your allowance or whatever it is.
Colin White:Yeah. You know, a daily calendar event where we see when, like, you spent this last week and I spent this, so that means I get to spend this much more. That's not going to it's not gonna get you where you're trying to go.
Matt Kempton:That was it. No. It may get you exactly where you're trying to go, but it's not a happy place. In fact, the people around you will not be happy there. Right.
Matt Kempton:The one person who's keeping score like that is gonna be very happy we're keeping score like that, but that is a toxic way to deal with your finances. Good point. You took a trip, therefore, I get to spend money. Okay. That's the other thing I hate doing.
Matt Kempton:People use, you know, get into the whole justification, like, I deserve this. I retired for this. They did this. Therefore, I did this. No matter what words you put around it, math is gonna math.
Matt Kempton:You know? So if money leaves the account, that money left the account. That doesn't mean there's more money there in the account to spend. You know? You spend money and use that as justification for spending more money.
Matt Kempton:Math's gonna math. You know? There's there's going to be a mathematical consequence to that. And that's and that and that's where the the the birds come home to roost because math is gonna math. And, you know, no matter what justification you put forward, if the sum total of everything you're doing is unsustainable, it's gonna show up.
Matt Kempton:It doesn't matter how good your reason was. Right? And and it's funny because people will come in and try to almost get my approval. Like, you know, well, I did this, this, and this. Great.
Matt Kempton:Is that okay? I don't know. Is that you you tell me, is that okay? You know, you're not gonna be able to take that vacation anymore, but, you know, okay, you've made that choice. Right?
Matt Kempton:Oh, no. I wanna take the vacation. But where's the money? Well, you said it was okay. No.
Matt Kempton:I didn't say it was okay. Again, there's a financial consequence to everything. You can make whatever decision you want, but there's gonna be a consequence. And as we've already discovered in this conversation, it quickly morphs from, you don't love the kid. Well, yes.
Matt Kempton:I love my kid. It's like, well, that's not a money conversation. And you're talking about how much money to put away towards your education. That's a money conversation. You know, to have that devolve into why don't you love our kid?
Matt Kempton:That's why it's complicated. That that that's where the the the streams get crossed, and that's where people's feelings get hurt and expectations and all the rest of it.
Colin White:Now so to these other points, so what about having a conversation about bagels?
Matt Kempton:See, then this is the problem. I I'm not that person. I don't exist in that space. So, you know, not saying the word money sounds all colors are stupid to me, but I'm not gonna say that that's not gonna work for some people. For some people, that's going to lift the emotional weight of the conversation.
Matt Kempton:I've reached a point in my life where I recognize what doesn't make any sense to me can still make sense to others. So if you're, you know, the the triggering effect of the word money because, you know, you're supposed to scream the word at you enough that you have a negative emotional response to it every time you hear the word post traumatic stress, to call it a bagel and make everybody giggle for a second and put them in a better frame of mind to have a conversation. You know what? Fair enough. You're you're writing your own movie.
Matt Kempton:If that works for you, fantastic. I'm not gonna hold that out and say, like, this this is how you have to do it. I I just I'm not that person.
Colin White:And then to the last point, I mean, that we've already touched on it, focus on the future, not the past.
Matt Kempton:Yes. Do that. Well, that that's a healthy philosophy for anybody on anything really. Right? So, you know, I don't think that's specific to money.
Colin White:All historians might disagree.
Matt Kempton:Well, for me, it's, you know, what's next? I mean, all all we can do as humans, like, we're moving forward. You can't go back in time. You know? So no matter where you are, it's, you know, let's focus on what's next.
Matt Kempton:Worrying about anything has never made has never made any difference in the entire history of humanity. You know, carrying things from your past with you doesn't help. You should learn from the past. Take the lesson, but don't relive the moment. Like, don't be tortured by the moment.
Matt Kempton:Just what's next? What are you what are you gonna do about it? Well, this, this, and this happened. It's terrible. That wasn't the question.
Matt Kempton:What are you gonna do? And that's something that, again, for all the all my years in coaching. Like, so I and you deal with and I I love sports as a metaphor for life because it very much is. You know, you've had a negative outcome. You know, the the ref is bad.
Matt Kempton:You had a bad game or whatever. You're all pissed off and you're pissed off your teammates. You pissed off the referee and you're pissed off at your parents. And and my question to the to the athlete at that moment is like, what are you gonna do with that? I'm not gonna address like, we're not gonna get into any of that, but what are you gonna do?
Matt Kempton:That's all that counts. What are you gonna do next? Well, okay. So then now we take that energy and put it into the next thing rather put that energy into complaining about something and carrying something forward. So but then that absolutely applies to me.
Matt Kempton:You know, what are you gonna do next? Like, I should've, I couldn't, if I would've had a $1,000,000 if I've done this. Like, what are you gonna do right now?
Colin White:I almost pulled the trigger on the video, and I just didn't. And then
Matt Kempton:here here we go. The homo. I don't know.
Colin White:So we spend most of the time here talking, I think most people budgeting as it comes to money issues within a couple. But what about, what about the differences when it comes to investing and maybe in risk tolerances within the household when they can differ? Because I've seen this of one with a much more tolerance for growth, for risk, and then, and maybe the other more safety, more, you know, preserving that capital. How do you handle how do you manage those conversations and think about investing for the household when when they both have a different sort of, comfort with risk within investments?
Matt Kempton:Well, one of the roles of of a professional advisor is to give enough oxygen for everybody to speak, you know, which I'm very, very big on. I need both members of the household there, and they're both gonna participate. And that goes against how some houses are organized. Some houses, there's one supposed to the other that looks after these things. No.
Matt Kempton:You don't. Shut up. And to the man who thinks that they're looking after you is like, shut up. You're gonna die first. You know, statistically, your wife is gonna be my client longer than you, so shut up.
Matt Kempton:She needs to be here. But it's it's giving that oxygen, and that's a moderated thing. Let everybody in the room speak because off I often find, if not always find, they're not as far apart as they think. You know, they they don't understand what the word risk is. You know?
Matt Kempton:And, honestly, risk is a very nebulous word. Right? Some people think that, you know, the stock market is risky. Well, it's volatile. Yes.
Matt Kempton:It moves up and down, but many people equate the risk of going to 0. So as I explained to people, you're investing in the stock market and you are afraid of losing all your money. In order for you to lose all your money, every company you know has got to go into business on the same day, and if that happens, we probably have more trouble than the fact you've lost your RRSP money. So I was like, oh, I can't lose all my money? Well, no.
Matt Kempton:You don't have to put yourself in a position where you can lose all your money. Like, you know, you can put yourself in a position where it can be volatile and move up and down, but you know? So having a good thorough conversation about what everybody means about risk. Because oftentimes, when you get into a couple that's fighting over money, it just becomes a a 30 times a view. It's like, we need to take more risk.
Matt Kempton:I hate risk, but we need to take more risk in order to retire, but I hate risk. And it just talking points back and forth. Like, it's never it's like, well, what do you mean by risk? Like that. They never get there.
Matt Kempton:It's like, well, you know, I I don't wanna risk losing all our money. Oh, okay. That's a valid fear. Everybody should have that fear. You know?
Matt Kempton:And that's not what's necessarily being proposed. Right? So, again, having a moderated conversation where you get away from, oh, they don't take enough risk or he takes too much risk. They've already made their judgments. They they've retreated to their mountaintops, and they're just gonna throw stones back and forth to turn that into, well, what do you mean by that?
Matt Kempton:Drive a conversation. Have a moderated conversation where everybody gets to talk. The vast majority of the time, I've been able to feel that I have found a good middle ground for them that satisfies everybody because again, there's this misconception that, you know, again, I gotta swing for the fences, I gotta be in the next hot thing, and I gotta be that, And I need to take that level of risk in order to be financially successful because that's what Warren Buffett did or whatever. And that's not always the truth. That's not always accurate.
Matt Kempton:So having a nice moderated conversation where everybody gets to describe what they're talking about with risk, and then your portfolio can be different things. You can have, I suppose, you know, say, okay. What if we took x percentage, invested it this way? And we took x percentage and invested it this way. And then as a professional, you do the math to say, this will still accomplish your goals.
Matt Kempton:The expected rate of return of investing this way is still likely to get you where you wanna be. And, also, as a professional, you sit back and say, well, if you do this, you're gonna have to change your goals. You're not gonna be able to retire at that age. You should expect to work longer or what whatever the impact is because it's it's all about, you know, is what I'm doing now effective? And then, you know, okay.
Matt Kempton:Is it or is it likely to lead to success, or is it likely to lead to failure? You know? And and these things are not normally black and white. It's all probability. But that's why it's a complicated conversation that couples honestly are not really well equipped to have.
Colin White:No. That that's one that we especially find ourselves in the middle of, and and a financial plan can be helpful in just, maybe finding that middle ground around. What what does it mean? Like you said, what does it mean to take risk? And if these are the things that are most important to you, and those are long term considerations, well, here's the long term asset allocation or risk, maybe overall level that that should be able to get you there.
Colin White:It'll fluctuate. Things will fluctuate in the meantime, but we're not looking at a scenario where we're going 0. And so and if if that's what you were worried about, well, that's not really what we're talking about here today. It's just, looking at statements month to month, then the balance will change.
Matt Kempton:Well, I'm up at night.
Colin White:Are you up at night? Because
Matt Kempton:Well, this is the other thing. Like, you know, you you can do it exactly the right thing, but somebody comes into the office. I haven't slept in 3 days. Oh my god. We have to change something.
Matt Kempton:Like, obviously, this isn't working. Like, all the rational conversation in the world, it isn't doesn't matter. I mean, I can remember back in 2008. I had a client who whose mother passed away in Florida, so she was down in in Florida in a retirement community, and she was kind of dealing with their mother's affairs. And this is 2,008.
Matt Kempton:So she was at the epicenter of, you know, streets and streets of empty houses and bankruptcies everywhere, and everything was a complete mess. And everybody around her was absolutely up to their neck and and her mother just passed, and she was emotionally very, you know, very rot. And, you know, in 2008, when the market was doing what it was doing, the advice we gave was just, you know, if your goals are still long term, let's just ride this up. It'd be fine. And she called me, and she was in such a state.
Matt Kempton:I was like, okay. We'll sell everything. Like, emotionally, there's just no way she was going to I wasn't gonna be able to build a bridge to get her anywhere comfortable because of the environment in in that particular situation. So that can trump rational thought. You try to insert rational thought there to show it was in the conversation, but it's gonna get overwhelmed by the actual facts of what's going on for that person at that time.
Matt Kempton:So that's one of those judgment calls. That's that's that is absolutely one of the the things when it comes to talking about money, whether it's your spouse or or your parents.
Colin White:Are there any areas you think we we've missed here when when speaking with your spouse, keys to success, in a long term marriage. And this is one of the areas you've you've obviously had to find some positive ways to work together on. Any advice to people out there?
Matt Kempton:Yeah. It's just talking about money is tough. Yep. But do it anyway. Like, this this is not that the cost of avoiding this dramatically outweighs the the the temporary comfort you're gonna have by not talking about it.
Matt Kempton:And, you know, develop a bagel language if you need to. You know, find a trusted adviser that you can sit down in front of once a year or once every 6 months or whatever frequency and just put everything on the table again and rebalance everything. You know, but don't turn it into a daily conversation. You you brought up something earlier about budgeting. And there's different kinds of budgeting.
Matt Kempton:Different people have different proclivities towards budgeting. And budgeting itself can be wrought because then you are accounting every expense, you know, how much money you did spend at Starbucks or how much money you did spend on groceries or eating out or whatever. But some people can make that work in certain couple situations, and there needs to be and you brought this up really. There needs to be slack in the system. Don't plan everything down to the nickel.
Matt Kempton:Like, there has to be slack. Nobody life doesn't go in a straight line. The planet doesn't travel in a straight line. You know? So leave slack in the system.
Matt Kempton:Let people be people because there's gonna be a day that your brain just desperately needs to have something. And if there's slack in the system that's going to allow it to happen and not derail something that's more important, let it happen. Like, don't don't look for financial perfection, and don't have don't look for 1 person to live up 100% to somebody else's financial sensibilities. That's an expectation that's that's too high.
Colin White:That's true. And so to our engineering friends, I I hope you put that last point in. It's it's quite important.
Matt Kempton:It's it's the whole ballgame. You know, again, it's just the hill you wanna die on. I do have clients with spreadsheets, and they laugh at themselves, most of them. And they understand the limitation of a spreadsheet, but it's also a compulsion. They need to do a spreadsheet.
Matt Kempton:Okay. Let's let but let's try to do it in such a way that you don't set the world on fire because nobody else is gonna give a shit about your spreadsheet. You know that. Right? But some people, that's how they feel in control.
Matt Kempton:So it's not worth it not talking about money. You should talk about money. You should do it with a moderator in the room and whoever that moderator is, financial adviser should be well suited to that. And, you know, recognize that if you think you are at an intractable point that there's no way forward, there very well could be. But, you know, sit down in front of somebody, have a conversation, see if they can find a middle ground, and maybe relieve all the all the tension and stress you're feeling.
Colin White:Yeah. And I guess as a closing thought, do you think people are going to start going on first dates at Costco?
Matt Kempton:Well, you're such an influential, you're an influencer. So I think that there's a very good chance that over the next, you know, 5 to 7 days, that that'll become a trend and then fade out right away. All right.
Colin White:Well, Costco share some sales about 1st week of, of this trend continuing on. And actually, maybe one final thought. It's interesting. Money is such an that's such an important item in in in marriages, and it's, you know, such a cause of divorce. But do you think anyone do you ever hear of someone breaking up or ending a relationship and money is the reason why?
Colin White:Or is it money becomes it's a big frustration, which then leads to this, which then leads to that. And then that's the reason why. Do you ever this just struck me that I don't think I've ever heard anyone ever say that. We broke up because of money.
Matt Kempton:Oh, I absolutely have, but money is the manifestation of something else. Mm-mm. You know? It it more goes like, you know, we broke up because of money because I found out that they had a credit card they didn't tell me about, and they put a mortgage on the house they didn't tell me about. So it was the deceit.
Matt Kempton:So the deceit, the trust, and the alignment of what's important. You know? I've got no skill whatsoever in the giving marital advice, but you have to be aligned on a moral level. Like, you have to share, have a have a shared belief in what's right and what's wrong at at at some level, and sometimes that gets manifested in money. It could be somebody, you know, is, they they they gamble or they so they're they're adventure seeking or or or whatever, or they, you know, they're they're constantly trying to spend money to make themselves feel better or, you know, whatever.
Matt Kempton:There's there's some kind of disconnect. Now you could argue is that that disconnect that caused the marriage to break up, it was manifested in money. It had a money effect. So was it money that caused the breakup, or was it the fact that they just weren't compatible on on a moral level?
Colin White:Yeah. That's, anyway, that it's it's deep. It's interesting
Matt Kempton:to that, aren't they?
Colin White:I think that's beyond our expertise.
Matt Kempton:Oh, I I I think I I preface my whole comment with that. Yes. It's beyond my expertise. I I'm sitting at the edge of the abyss staring and going, I think this is what I see. No.
Matt Kempton:No. It's it's a complicated conversation. It can be an achy conversation, but it's a crucial conversation. If you're not having it, it's you're not having it at your own peril. Alright.
Matt Kempton:So thanks for leading our conversation and coming up with these ideas. You know, if the viewers give us enough positive feedback on Matt's performance, we'll let him keep doing this. So I'll make sure that the Matt fan club is heard from. And if you like what you're hearing, pass it on to your friends. Hit follow.
Matt Kempton:And we're always open to suggestions for future future content. So reach out to us and let us know if you'd like to hear a particular topic dissect it. So thanks, Matt.
Colin White:Thank you, Colin.
Matt Kempton:If you're breaking a sweat trying to figure out what your financial advisor is talking about, you're not getting the service you need. You probably hate trying to get an answer from them, but you also think moving your accounts will be a headache. And it might be. But working with Dontrocktheboatwealthplanning.comor.ru isn't exactly stress free, is it? Call us.
Matt Kempton:We will demystify the world for you.
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