Money on the Mind: Prepping for Retirement Without Losing Your Mind

0:04Felix Salmon: Hello and welcome to what the hell is this Anna?

0:10Anna Sale: We're chatting again about money, slate money, DSM, death, sex and money mashup.

0:17Felix Salmon: We are. This is this is the greatest crossover event of the century. This is where Slate Money, where we nerd out about finance and money stuff, crosses over and which is hosted by me, Felix Salmon of Bloomberg, crosses over and incorporates the best podcast in the entire Slate universe, which is Anna Sales' Death, Sex and Money. Anna, you are the heart, if I am the brain. I am. I'm not much of a brain, but you definitely have brain and heart. And we are here to talk a little bit about the emotional side of money, which I feel is something that people don't talk enough about.

0:56Anna Sale: Here's how I think of it. If you've ever pulled up a retirement calculator and tried to figure out if you're on track, we're going to talk about all the things that come up in your body. The numbers you talked about when you put in those numbers.

1:11Felix Salmon: Exactly. So I know this is great. And I and if everyone who's watching this on the YouTube, which is the perfect place to watch this, the other person here is genuinely for realsy, no joke, my financial advisor, Adriana. Welcome. Introduce yourself.

1:29Adrianna Adams: Hi, Felix and Anna. Thank you so much for having me. I'm really excited to chat today. As you introduced, I'm Adriana Adams. I am the head of financial planning at Domain Money, but I'm also a certified financial planner, which is really just a fancy way of saying I help people deal with their money every day.

1:47Felix Salmon: So, okay. So you help people deal with their money, and this is the thing that I have realized. I first realized this about 10 years or so ago, when I was talking to someone who was working for one of the big Swiss bank, private banks. And they were talking about the people who do, you know, they look after the money of very, very rich families.

2:11Anna Sale: People who bank with private banks.

2:12Felix Salmon: People who bank with private banks. Exactly. And they were saying that when they were recruiting people into this job of being a private banker in Switzerland, the place that they recruited was not business schools it wasn't you know mba programs or cfa programs or anything like that it wasn't even it was um the hospitality industry they would find people who are really good in like the first class lounge first class section of airplanes or like high-end restaurants or something like that because really this is all about just making people feel comfortable making people feel good rather than, as you say, Anna, making people feel terrified to even think about it.

3:01Felix Salmon: And Adriana, as someone who deals with normal people rather than multi-billionaires, I want to ask you, to what extent is your job really just holding people's hands and saying, it's okay to talk about money. It does not need to be terrifying. I'm not here to scold you. I am not here to tell you that you're spending too much and you're not saving enough. and just trying to make people, put them in the psychological space of even just being able to think about this.

3:31Adrianna Adams: That's funny you say that because I actually thought you were going to say, Felix, that they went to somebody in psychology to hire at Swiss Bank. Now, I did not see your answer coming, but I would say, to me, personal finance is probably 80 % personal and 20 % finance. So I would say the vast majority of my time and of a CFP's time is really talking about a client's values and their goals and who they are rather than the actual number crunching in the math side of it. It's immensely tilted towards psychology and personality.

4:09Felix Salmon: And is that something that one gets trained to do or do you just need to kind of work it out?

4:15Adrianna Adams: I actually wish I would have gotten a second degree in psychology or something because I do feel like you have to just naturally be good at it or get some sort of training. It is one of the things that I learned very early on in getting real world experience in the industry was how other people interacted with their clients and figuring out how to do that in my own way because they don't teach you in finance school.

4:40Felix Salmon: And presumably in this, you know, I mean, all of our meetings have been over Zoom. Presumably this is not, you can't learn the old fashioned way, which is by sitting next to someone and overhearing what they're saying.

4:51Adrianna Adams: Exactly. It's actually more difficult online. You make a really great point. You have to be even more articulate and pay even more attention to the very small cues, especially when you're dealing with partners or couples, because you can't pick up as much as you can in person. necessarily on the little things going on or some of the body language, depending on the frame of the video. So you do have to pay very close attention to really pick up on some of those small things, especially online.

5:23Anna Sale: Felix, can I ask you what you noticed about Adriana working together, like how she approaches this work? You talk about money in your professional life. You are a business journalist, and I feel like it's quite a compliment that you get to talk to Felix

5:37Adrianna Adams: about his personal money and i i want to know what he likes about you but but this is exactly it right

5:43Felix Salmon: so one one of my um toxic traits is that i was like i know about money i write about money for a living like no one needs to tell me this shit and so it took me and i certainly don't need to pay someone, you know, 1 % of my assets every year to tell me stuff I already know about the importance of diversification. And so I never really thought that this was for me until I realized that for all that I was completely confident in my own abilities, My wife was not quite as confident in my own abilities. And she would always be a little bit nervous about money things. And I was like, well, that's...

6:35Felix Salmon: And also, I would be nervous about money things because it's deeply psychological. And just because you have a certain amount of money doesn't mean the nervousness goes away. and and i realized that like hearing from someone who could speak a little bit more with a little bit more like emotional nows than i have rather than just saying ah number seems fine don't worry about it um it which turns out not to be very reassuring um would would would be incredibly valuable. And then not to plug Adriana's company too much, but they have this amazing system where you just pay them like a fixed dollar amount rather than the 1 % thing.

7:23Felix Salmon: And so at that point, it just became a no brainer.

7:25Anna Sale: Uh-huh. I see. You didn't feel like she was coming. You felt like it was a good deal and it was something that you were willing to invest in.

7:32Felix Salmon: And it turns out that for all that it was really good for Michelle, my wife, it was equally good for me that there was that all of the sort of psychological hang-ups i had about money it turns out that you know well adriana as a professional psychologist is is very good on that no i mean i'm i'm joking but i'm also serious that i do think in many situations um the stuff that people spend thousands and thousands of dollars and hours going over with their therapist and struggling with can and could be dealt with much more easily and much more quickly and much more cheaply just by sitting down with someone like Adriana for a session or two.

8:18Anna Sale: What do you mean by that? Like, what have you found, Adriana? Like, Adriana, what do you find that people can perseverate over that you can kind of cut through?

8:26Adrianna Adams: That's a really good question. I think the biggest thing for me is being able to something that you touched on, Felix, is being able to listen to two people and understand what both of them are trying to accomplish. And then how do I speak both of their languages to get them both on the same page and buy into the action item that is going to help them both achieve the goals that they want? Because when you're talking to two different people, they think about things differently. They could be saying the same thing just in a different way, but they don't realize it. And that's something that I think you were saying, Felix, is really understanding how can I speak your language and the finance language, but also just speak layman's terms and talk to Michelle and bring you guys to the same page and make it easier to really agree and make a decision in the end of the day.

9:17Adrianna Adams: That's, I think, what I love about my job the most is helping people gain the confidence to make financial decisions. I'm not making the decision for them. I'm educating them and showing them the pros and cons and some of the options and certainly telling them which one I think is the best fit for them. But in the end of the day, it's your decision what to do with your money. And I want to make sure that you're completely confident with that decision.

9:42Felix Salmon: So there is a wonderful privileged world of middle class podcasters where when we think about personal finance and financial advice and all of this kind of thing, the first number that jumps into our head, the first word that comes into our head is like retirement, 401k. it's like this idea that the main thing that we should be sort of focusing our planning around is however many years it is in the future and are we going to have the requisite standard of living when we're no longer earning money and this is of course obviously a great source of stress um people keep on you know people have this very annoying habit of like in calling up their 401k accounts and seeing how much money is in there and like deciding that if it's, you know, it should probably be higher or if it's gone down, that's bad.

10:41Felix Salmon: And if it's gone up, that's good, this kind of thing. And so I have two related questions for you, Adriana. The first one is like, do people massively over-index on retirement when, or do a certain type of people massively over-index on retirement when they start thinking about personal finance and their own money? And relatedly, is that a function of the financial services industry more broadly realizing that the way that it can sell products to individuals is by focusing on retirement?

11:13Adrianna Adams: There are broadly, I think, two types of things that people focus on primarily. Either people are too focused on living their life today and not enough about retirement, or the opposite, and they're not living their life enough today and they're focusing too much on the retirement piece. So those are the two things that I see, I feel like, which is interesting. And actually, usually if I'm meeting with spouses as well, one of them is doing one and the other is doing the other, which can be a good balance actually. Yeah. But I do think that there's a lot of things targeted towards retirement because if you get somebody thinking about that, it definitely pulls on those emotional strings, right?

11:56Adrianna Adams: Because then all of a sudden, you either have seen someone in your family go through a really great retirement experience or financial experience, or you've seen somebody go through a really tough experience and having to retire too early and not having enough, or you've seen both, right? But usually you're kind of emotionally tied to one of those experiences and that's what you think about. So I do think there's a tendency to lean into that and talk about retirement to get people interested in certain products or financial instruments. But I do think it's worthwhile being one of the most talked about things.

12:34Adrianna Adams: I'm a huge fan of making sure that your bookend goals are met first. Felix, maybe you remember this from one of our first chats. What's a bookend goal? What's a bookend goal? Yes. What are the bookend goals? It is short-term liquidity and your long-term financial security. So I do really want to help everybody live their very best life today. But you can't live your best life today if you don't have the financial security and peace of mind of knowing you have enough cash on hand in case anything comes up and that you are actively saving enough or already have enough saved towards retirement. If you know that you already are saving what you need to, or that you have enough already saved, then suddenly the burden of making financial decisions today of where you spend your money and how much you spend going out to eat or on vacation, it suddenly doesn't matter anymore because you know that your other goals are already being met.

13:27Adrianna Adams: So I do think there's a lot of value in everyone focusing on retirement. To circle back to your first question, Felix.

13:34Felix Salmon: So that is, you have all manner of whiz-bang softwares and lines on charts and whatnot where you're like, you know. Yeah, you're looking good. Oh, no, I think you should be putting more in this kind of stuff.

13:49Anna Sale: I feel like I've had really wonderful life-changing conversations with financial planners where I have felt seen. Wait, you have? I have.

13:59Felix Salmon: Wait, wait. Tell us more about that. When, where, how?

14:04Anna Sale: Well, here's what I'm going to say. Like where I feel seen. I feel their curiosity about how things are going at work. I hear like I like the way they talk to my husband. I like the way they talk about how we make financial choices together and how we they equip us with a new shared vocabulary. I feel it's it's fun to feel someone paying very close attention to you and your values. invariably by the last 15 minutes of the call, we are hearing about it would also be better if you were saving more for retirement. And we are retirement savers. So I have a little bit of a kind of like conspiracy theory that like, you know, there's you mentioned there that there have been people you have helped, Adriana, who you say like you have the building blocks in place where you're going to have a comfortable retirement.

14:51Anna Sale: I don't really believe that.

14:56Adrianna Adams: well okay i need to hit on something that what you were saying that triggered it is and i don't know how the financial planners that you've met with were compensated or what their incentives were but in my position i have absolutely no financial incentive to tell you to do anything with your money my compensation does not change no matter which decision you make because you're

15:17Anna Sale: paid like hourly you're paid for a session as opposed to getting a piece so it's it's not quite

15:22Adrianna Adams: Just like a shrink, really. It is similar.

15:28Felix Salmon: Adriana's hour has 30 minutes.

15:33Adrianna Adams: The tiers are essentially based on what you need help with, not how much money you have. So yes, that's the core of it, right? So what do you need help with and where are you at? And then there's a fair price to pay for the professional guidance you're looking for help with. I need to just go completely sideways for one second here.

15:52Felix Salmon: Here are the tears, which is like T-I-E-R-S. But how often, how often, Adriana, do you get the other kind of tears?

16:02Adrianna Adams: Often, often. I would say, you know, a couple of times a year, which in my experience is often because I try to avoid getting the tears too much because sometimes you're like, I'm not doing a good job if I get the tears. But other times, if you get the tears, actually, you are doing a really good job digging in. We've had a great food. Yes.

16:20Anna Sale: Yes. Yeah, exactly.

16:22Adrianna Adams: I always tell clients like this is there's no judgment here. Like I'm here to do and talk about whatever you need to talk about. If you need to cry about an experience you've had or because you're feeling overwhelmed and anxious, like, let's do it. I usually will be crying with you because I can't handle seeing other people cry. So if you start crying with me, just know that I will be crying with you.

16:41Anna Sale: But you were going to tell us about people who have actually gotten their act together for retirement. And are these people who just have wealth and they were going to be fine in retirement no matter how they plan?

16:52Felix Salmon: It really helps if you have$15 million in the bank, then at that point, boom.

16:59Adrianna Adams: After you receive your trust fund money, you're in really good shape. So no longer need worry. No, I'm totally kidding. They're honestly not. They're usually people that have just been conscious about their finances and have made smart decisions. It's that simple. If you are spending less than you've made, that is a really great place to start if you are actively saving. But it's about figuring out what you want to achieve. I mentioned this earlier. If you know what you want, it's very easy to make the right decisions. But if you don't have a long-term plan, you don't know what decisions you should or shouldn't be making.

17:37Adrianna Adams: So if you put it down on paper, I want to be financially independent by 50, then you have something to work towards. I would compare it to maybe something that's a little bit easier to digest for other people is if I want to be my own boss or the CEO of my own company 10 years from now, you could map out what you should be doing every single year to get there and you could probably make it happen, right? So the people who are usually fine are the ones who have thought about it in some capacity. And I always say, though, if you never have before, the best day to plant a tree was 20 years ago. The next best day is today.

18:14Adrianna Adams: So if you're listening to this and you're thinking, oh, well, I haven't planned, like it's all out the window because I didn't look into the future yet. Absolutely not. Like today's the best day to get that plan in place and figure out what you should be doing.

18:25Felix Salmon: obviously we can joke about trust firms but the the intuition is that the more money you make the more financially secure you are i mean that is that broadly true no

18:42Adrianna Adams: i would say i have worked with clients who make a lot of money that you would think you would be extremely financial secure. But if your lifestyle creeps up with your income creeping up, you feel the same insecurity that somebody making 120th of what you make. If your spend to income ratio is the same, then you're going to have the same insecurities. Just because you make more money does not mean that you'll be more secure if you don't know how to do the right things with it.

19:15Felix Salmon: So that's, I mean, that's kind of reassuring for most of us, right? Like it's like you don't actually it's not like i think most people think that if they earn 50 more than they're earning right now then all of their money worries go away and then they get upset that they haven't received the big raise and they're never going to make that much money and therefore they won't be able to be financially secure but like the the message is even if you do wind up making a lot more money that in and of itself does not solve the problems you still have to do this thing that you're going to have to do anyway.

19:51Adrianna Adams: Right. More money, more problems, right? Who said that? I don't remember. You know.

19:57Felix Salmon: It's not easy looking after three different houses, Adriana. No, it's not.

20:02Anna Sale: Here's another question I have that I feel like where my emotions really come into play. I am somebody who really likes instructions and doing homework. And I feel like there's an illusion with retirement planning that you can put some numbers into a formula. Maybe it's not an illusion. And you can kind of guess where you're going to end up. And then they'll remind me, Anna, just so you know, this is all, you know, there is risk. We can't guarantee returns. You're going to have to face your fear of uncertainty. And I have a hard time with that because I want to feel like I can, if I do the things that you tell me to do, this is what's going to be the outcome.

20:45Adrianna Adams: I have a question for you.

20:46Anna Sale: Yes.

20:47Adrianna Adams: So once you figure out the number you need to save, do you know what you're supposed to do with it though? Or like what account? Like you said, you like homework, right? So like, do you have a very prescriptive list of like, okay, this goes here this month I'm doing this or what, what type of accounts you're using? Kind of. I'm one of those people who has like

21:05Anna Sale: a set of things that are set it and forget it. Like things that are pulled out of my My direct deposit from work. My husband works for a university. So for now, he's got a public pension waiting for us. God willing.

21:21Adrianna Adams: One of the few.

21:22Anna Sale: The university doesn't close before he turns 65. But then I do have a lot of where I get caught is stuff like, oh, well, even if I have stuff in index funds, what if there's an AI crash coming? And should I be doing something to manage this in this moment? Because everybody's telling me there's uncertainty in the market right now and blah, blah, blah, blah, blah, blah. So this question of like what I can set and forget and just follow the path and what I need to be actively managing because I'm a vigilant person.

21:53Adrianna Adams: Got it. Is there one answer to that? Yeah.

21:57Felix Salmon: No, I mean, there is. I mean, if you ask me, I would say that there definitely is an answer to that, right? which is actively manage as little as possible. And really, the optimal frequency with which you check in on your investments is like once every other year. Adriana will say like once a year. Really? I'm saying once every two years, yeah.

22:23Anna Sale: Like you really do that, Felix?

22:25Felix Salmon: Yeah.

22:26Anna Sale: Once a year or once every two years?

22:28Felix Salmon: It's like the less often you do it, the better.

22:33Adrianna Adams: The happier you're doing.

22:34Felix Salmon: And there are the SSRN papers. There are like empirical papers showing this.

22:38Adrianna Adams: I agree. I love those stats. I couldn't agree more. I do usually say once a year because, but that's more so for like planning opportunities. That's why I say that because the tax code changes every year, right? Or not every year, but there's going to be little things that change that we want to stay on top of. But as far as like checking your 401k account, once a year at most, because you will not, I mean, at least what is, I wish I had the stat on hand, but like, let's say approximately nine times out of 10, if you only check it once a year, you're going to see green, right? Like, whereas if you check it every other month, you're going to see some red.

23:18Adrianna Adams: And all of a sudden you have way more anxiety that you just would not have had if you just didn't look at it.

23:25Anna Sale: You're telling us to trust the process.

23:27Felix Salmon: If I can just like do my little rant about financial services companies as well, like they, their UX is all about maximizing agita and stress, right? So that if you open up, if you have savings in a brokerage account, and you open up the brokerage account, the first number you see, the biggest number you see, is how much it did today. Today, like versus yesterday, as though anyone cares about what happens over a one day time horizon when they're investing for 30 years. It's completely insane. And of course, you know, markets are basically a random walk. So that means there's a 50 % chance you're going to see a negative number the minute you open up that screen.

24:09Felix Salmon: It is so stupid.

24:10Anna Sale: I couldn't agree more. And what do they get out of making us agitated?

24:16Felix Salmon: They think that you're going to buy their expensive services of like holding your hand.

24:21Anna Sale: Okay. Well, my main takeaway is I'm deleting the app from my phone.

24:24Felix Salmon: Delete the app. Do it.

24:26Anna Sale: I love it.

24:27Felix Salmon: I love that. Do it. But yeah, delete the app. You will be happier. You won't need to pay your therapist nearly as much. And you will save money just by deleting the app. So that is the takeaway from this episode of sleep, death, sex, and money. Yes, delete the app. Delete the app. Delete your Twitter. That will help. delete your 401k out that will help even more and yeah Adriana thanks so much for coming on it's been so great having you here thanks for having me

25:02Anna Sale: this was awesome thank you Felix

25:04Felix Salmon: and thanks to Shana Roth and the whole Slate crew for putting this show together