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Insights

Levin: Long-term care, climate change and your finances

There would seem to be nothing in common between long-term care and climate change. But there is. Insurance companies cannot properly price it. This is evident to anyone who has seen their long-term care insurance or homeowner’s insurance costs continue to increase. If insurance companies are stumped, how do we plan for ourselves? Let’s take each issue separately.

Rather than go into the types of long-term care policies, let’s simply think about whether you need the insurance. I am generally ambivalent about the coverage because it is unclear whether it provides any real financial advantages. Here are some reasons it may make sense to own it.

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Levin: You can plan for tomorrow and still enjoy life today

Why do people spend money they don’t have, burst through their budgets, and end up pinky-swearing that they will never spend money like that again — until they do it again the next time?

In the book, “Atomic Habits,” James Clear wrote, “The costs of your good habits are in the present. The costs of your bad habits are in the future.”

Think about that. Buying something that you don’t really need at the expense of saving for something that you do means that you are paying a future price to satisfy today’s want.

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Levin: Why you need to ask questions of your financial adviser

A new client recently was asking many questions in a meeting, ending with one about whether there are ways to see their account directly from the brokerage firm in addition to the portal that we provide. He said, “As a lawyer, I like to double check everything.” And he ended by saying, “I trust you enough to ask this of you.” This got me thinking about gifts that occur in a reciprocal planning relationship.

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Levin: Finding a middle way with money pays big dividends

The fog had come in over the harbor as the fireworks were set off. The sound was loud, but the colors were muted until the fireworks fell below the cloud covering and briefly sparkled.

We had not been to a fireworks display like this and before the fog became too thick to see much of anything, this faint display was transfixing. While this fireworks show did not create the rush of ones in the past, it stayed with me longer.

Let me make a case for the muted, or as I prefer to think about it, the middle way. Our attention is drawn to the extremes, but why? 

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Levin: Build on areas of agreement to resolve money dispute with partner

I have learned a lot in over 35 years of doing this. And I am still learning. But I can give you something I have learned which constitutes the greatest financial advice you will ever receive as it relates to dealing with money with your partner. No matter what needless package arrives, what cockamamie get-rich-quick scheme is suggested, or what conversation you are about to have for the umpteenth time, if you want to stay in relationship with your partner then never roll your eyes.

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Levin: Coming to terms with our weird relationship with money

We spend a lot of time talking with our clients about how to not spoil their children and why their children have a weird relationship with money. Here’s why: because they do. And you do. And I do. And so does everyone.

The people who don’t think that they have a weird money relationship are similar to the people who say out loud, “I don’t talk to myself.”

Let’s not get defensive, let’s make our own weirdness less impactful to those around us.

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Levin: Financial planning jargon could be costing you money

Financial planning has a lot of confusing jargon. Here is a short course on what some of these things really mean.
Financial planners get paid in three ways: commissions, fees and commissions and fees. Period. Fee-only planners charge retainers, hourly rates or a calculation based on a percentage of net worth or assets that they manage. While some firms use the term fee-based, there is no such thing. These firms collect fees and commissions.

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Levin: Getting financial planning right means being open to adjustments

I was recently in a meeting going over a relatively big project and the presenter said, “We have to get this right.” I felt myself tense immediately. If we didn’t get it right, that means we got it wrong. And what would the consequences be for getting it wrong?
As the meeting went on, the conversation become more focused on the problems, not the opportunity. The stakes were elevated to a place where a decision was going to be unlikely.
Think about all the decisions that you have made in your life and how few of them you really had to get right. That’s because almost nothing is binary. There is a continuum of “rights” and most of the time we can’t know where we landed until after the fact.

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Levin: When talking money, try these five steps to get to the real issue

When the Mueller report came out, to no one’s surprise, many Democrats and many Republicans came away with starkly differing takes. No amount of chatter will likely weaken those positions. The problem is that the issue is not the issue. The issue being discussed is what Mueller did or did not uncover, but that is not always the issue. The underlying issue may be how people feel about the president, it may be people’s feelings about how the president is being treated, heck, it may even be why you lost your job.

When it comes to our financial lives, the issue is rarely the issue. Let’s think about this.

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Levin: Getting comfortable with your buying decisions

Most people don’t want to be told what to do with their money. It’s
their money and they can do whatever they want with it. Well, almost.
You may be able to buy a black-market Oscar, but you can’t buy an Oscar victory. So while it’s your money and you can do what you want with it, not everything is for sale.
Things we may not think of as being for sale are regularly sold. Minnesotans are terrible at zipper merging because they feel like they may be budging in line, but most don’t think twice about paying for the right as a sole driver in the car-pool lane to pass everyone.

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