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How to Find Advice Worth Taking · After the Rush Podcast

0:03
SPEAKER_00: My friend is standing on a stepladder with a paint roll in her hand,
0:07
SPEAKER_00: cutting in around a window frame in a house she does not live in.
0:12
SPEAKER_00: She designed this house,
0:13
SPEAKER_00: she built it,
0:15
SPEAKER_00: she lived in it for years,
0:17
SPEAKER_00: alone and then not alone,
0:19
SPEAKER_00: through the part of her life where she was proving something to herself
0:23
SPEAKER_00: and proving it well.
0:25
SPEAKER_00: The room she's painting right now, she chose the window placement in that room.
0:31
SPEAKER_00: She knows why the light falls the way it does at four in the afternoon
0:36
SPEAKER_00: because she made it fall that way.
0:38
SPEAKER_00: She has not slept in this house in six years.
0:42
SPEAKER_00: When she married, they decided to live in his home.
0:45
SPEAKER_00: It suited the life they were building.
0:48
SPEAKER_00: Her house sits an hour up the road and rather than sell it,
0:52
SPEAKER_00: she found a long-term renter and kept it.
0:55
SPEAKER_00: Six years of that.
0:57
SPEAKER_00: Six years of a water heater going out on a Wednesday,
1:01
SPEAKER_00: of a text message about a garbage disposal,
1:04
SPEAKER_00: of driving an hour each way to meet a plumber,
1:08
SPEAKER_00: six years of,
1:10
SPEAKER_00: it is what it is,
1:12
SPEAKER_00: which is a sentence people say when they have decided not to look
1:16
SPEAKER_00: at something directly.
1:18
SPEAKER_00: The renter moved out last month,
1:20
SPEAKER_00: so she's back at the house with a roller and a gallon of eggshell,
1:24
SPEAKER_00: doing the whole thing all over again.
1:27
SPEAKER_00: And while she paints, she is chewing.
1:31
SPEAKER_00: Long-term renter again?
1:33
SPEAKER_00: Or list it as a short-term rental and see if the income is actually better?
1:39
SPEAKER_00: Or maybe sell it, take the money, put it on the market, and never drive that hour again?
1:47
SPEAKER_00: She has said all three out loud to me, more than once, in the same conversation.
1:54
SPEAKER_00: This is After the Rush.
1:56
SPEAKER_00: I'm Katherine McDowell, and this episode is about how to find advice worth taking.
2:01
[music]
2:12
SPEAKER_00: The decision laid out.
2:14
SPEAKER_00: Let me put her three options on the table the way she has them.
2:19
SPEAKER_00: The first is another long-term tenant.
2:23
SPEAKER_00: She knows this one.
2:25
SPEAKER_00: It is predictable money and unpredictable labor.
2:29
SPEAKER_00: It does not really make a profit so much as it holds a position.
2:33
SPEAKER_00: When she runs the numbers, she runs them the way most people do.
2:38
SPEAKER_00: Rent coming in, mortgage, taxes, insurance going out, and whatever is left is called income.
2:47
SPEAKER_00: The calculation leaves out the $400 in repairs in March,
2:53
SPEAKER_00: The two months of vacancy,
2:55
SPEAKER_00: the gas and the tolls on the Saturdays,
2:57
SPEAKER_00: and the fact that she is currently painting the house for free.
3:02
SPEAKER_00: The second is short-term rental, or Airbnb.
3:06
SPEAKER_00: Higher nightly rate, which is the number everybody quotes.
3:11
SPEAKER_00: And then a very different business underneath it.
3:15
SPEAKER_00: Cleaning turnover,
3:16
SPEAKER_00: guest messages at 10 at night,
3:19
SPEAKER_00: furnishing the place,
3:21
SPEAKER_00: local permit rules that change, platform fees, and seasonality she cannot control.
3:27
SPEAKER_00: An hour away, she would need a local manager.
3:31
SPEAKER_00: A local manager takes a real percentage.
3:34
SPEAKER_00: Higher gross, thinner net, more hands in it.
3:40
SPEAKER_00: And then the third is to sell it.
3:44
SPEAKER_00: Take the equity, put it somewhere that does not require a stepladder.
3:49
SPEAKER_00: There are taxes to look at here that most people do not know about
3:54
SPEAKER_00: until it's too late to plan for them.
3:57
SPEAKER_00: Because she has lived in the house as her primary residence,
4:01
SPEAKER_00: but she has not lived there in six years,
4:03
SPEAKER_00: and the rules about that have a clock on them.
4:08
SPEAKER_00: Those are the three.
4:09
SPEAKER_00: She can describe all of them accurately.
4:12
SPEAKER_00: She's not confused about the facts.
4:15
SPEAKER_00: So why has she been turning it over for six weeks?
4:21
SPEAKER_00: I think this is what she's actually asking for.
4:25
SPEAKER_00: Because she's not asking a financial question.
4:28
SPEAKER_00: She is asking whether she's allowed to be tired.
4:32
SPEAKER_00: I have watched this pattern in different settings for 30 years,
4:36
SPEAKER_00: in nonprofits and in clinics and around my own kitchen table.
4:40
SPEAKER_00: When someone keeps re-asking a question they already have the information to answer,
4:46
SPEAKER_00: the question is not the question.
4:48
SPEAKER_00: Something underneath it has not been said out loud yet.
4:53
SPEAKER_00: Usually because saying it feels like a betrayal of some earlier version of themselves.
5:01
SPEAKER_00: She built that house.
5:03
SPEAKER_00: Selling it feels like selling the proof.
5:07
SPEAKER_00: So the decision keeps getting handed to a spreadsheet because
5:11
SPEAKER_00: the spreadsheet cannot make her feel disloyal.
5:14
SPEAKER_00: If the numbers say sell, then it was not her choice.
5:18
SPEAKER_00: It was math.
5:21
SPEAKER_00: I understand the impulse.
5:23
SPEAKER_00: I do.
5:24
SPEAKER_00: But it does not work.
5:26
SPEAKER_00: And here's how you can tell it is not working.
5:30
SPEAKER_00: She has been chewing on this question for six weeks and she has not run the numbers once.
5:36
SPEAKER_00: There is a version of asking for advice that is really asking for permission.
5:43
SPEAKER_00: It sounds identical from the outside.
5:46
SPEAKER_00: Both of them come out of your mouth as a question.
5:50
SPEAKER_00: The difference is that when you get advice you did not want, you go find another person to ask.
5:58
SPEAKER_00: And when you get permission, you stop asking.
6:02
SPEAKER_00: I am not against wanting permission.
6:04
SPEAKER_00: Most of us need it more than we admit,
6:06
SPEAKER_00: especially in this chapter, especially about the money we earned.
6:11
SPEAKER_00: But you cannot get financial advice and emotional permission from the same person in
6:16
SPEAKER_00: the same conversation.
6:18
SPEAKER_00: And expecting to is how people end up taking terrible advice from someone who was kind to them.
6:25
[music]
6:34
SPEAKER_00: I went looking for a quote for this episode, something to hang the thought on.
6:39
SPEAKER_00: I typed something like,
6:40
SPEAKER_00: wisdom about seeking advice, into a search bar, expecting to find one good line.
6:47
SPEAKER_00: I was not prepared for the volume.
6:50
SPEAKER_00: Proverbs 12, 15.
6:53
SPEAKER_00: The way of a fool is right in his own eyes, but a wise man listens to advice.
7:00
SPEAKER_00: Proverbs 11.14 Where there is no guidance,
7:05
SPEAKER_00: a person falls, but in an abundance of counselors there is safety.
7:12
SPEAKER_00: Proverbs 15.22 Plans fail for lack of counsel, but many advisors, they succeed.
7:23
SPEAKER_00: Proverbs 19.20 Listen to advice and accept instruction, that you may gain wisdom in the future.
7:33
SPEAKER_00: Proverbs 20.18 Plans are established by counsel.
7:39
SPEAKER_00: There are more.
7:40
SPEAKER_00: That is just a sample.
7:43
SPEAKER_00: Whatever you believe about the source, notice the editorial decision.
7:49
SPEAKER_00: A text that had a limited amount of room,
7:52
SPEAKER_00: that had to fight for every line, spent that much of it on one idea?
7:59
SPEAKER_00: You do not repeat yourself five times about something people are already good at.
8:04
SPEAKER_00: You repeat yourself about the thing people keep getting wrong.
8:09
SPEAKER_00: And notice the word that keeps showing up, abundance, many advisors, not an advisor.
8:18
SPEAKER_00: The instruction is not just to ask.
8:21
SPEAKER_00: It is to ask more than one,
8:24
SPEAKER_00: which is a much harder discipline,
8:26
SPEAKER_00: because the second opinion is the one that might disagree with
8:29
SPEAKER_00: the answer you already liked.
8:34
SPEAKER_00: So who do you rely on?
8:37
SPEAKER_00: Most people answer that question by proximity.
8:40
SPEAKER_00: They ask whoever is standing there.
8:43
SPEAKER_00: A sister, a co-worker, the guy at the church who once mentioned he owned rental property.
8:49
SPEAKER_00: It's not stupid.
8:50
SPEAKER_00: It is fast and free and the person cares about you.
8:54
SPEAKER_00: It is also how my friend ended up asking me.
8:58
SPEAKER_00: And I am the wrong person, which I told her.
9:03
SPEAKER_00: Here's the filter I actually use.
9:05
SPEAKER_00: And it is one question at the center of it.
9:10
SPEAKER_00: Is this person living in a way I would want to live in a specific area that I'm asking about?
9:19
SPEAKER_00: Not generally, specifically.
9:23
SPEAKER_00: I have friends I would trust with my life who would not ask about money.
9:29
SPEAKER_00: I know people whose finances are immaculate whose marriages I would not want.
9:35
SPEAKER_00: The filter is narrow on purpose.
9:39
SPEAKER_00: I am not asking for parenting advice from someone who has never been
9:44
SPEAKER_00: for three nights straight with a sick child.
9:48
SPEAKER_00: Not because they're unintelligent,
9:50
SPEAKER_00: but because they have never had to make a decision at four in the morning
9:54
SPEAKER_00: on no sleep.
9:56
SPEAKER_00: And that is the condition under which most parenting decisions actually get made.
10:01
SPEAKER_00: I'm not asking which college courses to take from someone who has not sat in
10:06
SPEAKER_00: a college classroom.
10:09
SPEAKER_00: I am never, under any circumstances, asking my broke uncle about money.
10:17
SPEAKER_00: Everyone has one.
10:18
SPEAKER_00: Mine gives excellent advice at length, unprompted.
10:23
SPEAKER_00: The second question is quieter, and it matters just as much.
10:28
SPEAKER_00: What does this person get if I take their advice?
10:32
SPEAKER_00: A real estate agent will tell her to sell.
10:36
SPEAKER_00: A property manager will tell her to keep renting.
10:40
SPEAKER_00: Neither one of them is lying to her.
10:42
SPEAKER_00: They are both telling her the truth as it looks from where they are standing.
10:46
SPEAKER_00: And where they are standing happens to be where their income comes from.
10:51
SPEAKER_00: That does not disqualify them.
10:54
SPEAKER_00: It means you wait their answers.
10:58
SPEAKER_00: The third question.
11:00
SPEAKER_00: Has this person been wrong in a way they will tell me about?
11:06
SPEAKER_00: Anyone who has managed money or property for 20 years has a story about
11:11
SPEAKER_00: the year it all went bad.
11:14
SPEAKER_00: If they cannot produce that story,
11:16
SPEAKER_00: either they have not done it long enough or they are managing my impression of them.
11:22
SPEAKER_00: And I do not want either of these people advising me on something that matters.
11:26
[music]
11:32
SPEAKER_00: So what I told her and what it costs.
11:36
SPEAKER_00: I told her not to ask me.
11:38
SPEAKER_00: I have opinions.
11:40
SPEAKER_00: I have lots of opinions, and I've shared some of those.
11:44
SPEAKER_00: I have run budgets,
11:45
SPEAKER_00: written grants,
11:47
SPEAKER_00: and brought over a million dollars and sat with women who had no credit history
11:51
SPEAKER_00: and helped them build one.
11:54
SPEAKER_00: None of that qualifies me to tell a friend what to do with the single largest asset she owns.
12:00
SPEAKER_00: In a tax situation I do not know,
12:03
SPEAKER_00: at a stage of life where the mistake is expensive,
12:08
SPEAKER_00: and the clock on fixing a mistake is short.
12:13
SPEAKER_00: What I told her was pay someone, which is the part where people flinch.
12:19
SPEAKER_00: So let me deal with it directly.
12:22
SPEAKER_00: She does not need a financial advisor in a way that phrase is usually meant.
12:28
SPEAKER_00: She's not looking for someone to manage her portfolio for a percentage every year forever.
12:34
SPEAKER_00: She has one decision.
12:36
SPEAKER_00: It has three options.
12:38
SPEAKER_00: And she needs a few hours from an expert's attention on it.
12:44
SPEAKER_00: That is a real service and it has an aim.
12:47
SPEAKER_00: You are looking for a fee-only fiduciary who will work on an hourly or project basis.
12:56
SPEAKER_00: Two words in that sentence are doing all the work.
13:00
SPEAKER_00: Fiduciary means they are legally required to act in your interest,
13:06
SPEAKER_00: not merely to recommend something suitable.
13:09
SPEAKER_00: As for it in writing,
13:12
SPEAKER_00: the phrasing I use is direct,
13:14
SPEAKER_00: Will you act as a fiduciary in all of our dealings,
13:19
SPEAKER_00: and will you put that in writing?
13:21
SPEAKER_00: A yes takes two seconds.
13:23
SPEAKER_00: Anything that takes longer than two seconds, you've got an answer.
13:29
SPEAKER_00: Fee only means the only money they make is the money you pay them.
13:34
SPEAKER_00: No commissions,
13:36
SPEAKER_00: no product they get paid more for steering you toward,
13:40
SPEAKER_00: Fee-based is a different phrase that sounds nearly identical,
13:44
SPEAKER_00: and it's not the same thing.
13:47
SPEAKER_00: And similarly, of the two words, is not an accident.
13:55
SPEAKER_00: Where to look?
13:56
SPEAKER_00: The National Association of Personal Financial Advisors is fee-only by requirement
14:05
SPEAKER_00: of membership.
14:06
SPEAKER_00: The Garrett Planning Network,
14:09
SPEAKER_00: is built specifically around hourly work, which is exactly her situation.
14:16
SPEAKER_00: The CFP board runs letsmakeaplan.org.
14:21
SPEAKER_00: Before hiring anyone, look them up on the SEC's advisor search or the FINRA's broker check.
14:33
SPEAKER_00: Both are free.
14:35
SPEAKER_00: Both take about four minutes.
14:38
SPEAKER_00: What it costs.
14:40
SPEAKER_00: Hourly work generally runs in the range of $250 to $400 an hour.
14:47
SPEAKER_00: A single defined project like this one,
14:50
SPEAKER_00: where someone reviews her actual numbers and the tax consequences of each option
14:56
SPEAKER_00: and gives her a written recommendation,
14:59
SPEAKER_00: tends to land somewhere between $1,000 and $3,000,
15:04
SPEAKER_00: depending on the complexity and where you live.
15:08
SPEAKER_00: The ongoing percentage model,
15:11
SPEAKER_00: usually around 1% of assets per year,
15:14
SPEAKER_00: is a different product for a different need and she does not need it.
15:19
SPEAKER_00: That number is going to sound like a lot right up until you compare it to the cost
15:24
SPEAKER_00: of being wrong about a house.
15:27
SPEAKER_00: Six weeks of her turning this over has already cost more in attention than
15:32
SPEAKER_00: the meeting would cost in dollars.
15:36
SPEAKER_00: And she should ask more than one.
15:39
SPEAKER_00: Abundance of counselors.
15:42
SPEAKER_00: Two consultations is not indecision.
15:45
SPEAKER_00: It is diligence.
15:48
SPEAKER_00: She should also bring the tax question specifically because a CPA and
15:53
SPEAKER_00: a planner see different parts of this.
15:56
SPEAKER_00: And the primary residence exclusion has a look back window that is doing something
16:03
SPEAKER_00: to her whether she looks at it or not.
16:08
SPEAKER_00: There is one thing the planner cannot do for her,
16:12
SPEAKER_00: and she needs to do it first, before the meeting, on paper, by herself.
16:19
SPEAKER_00: Nobody can price the memory.
16:21
SPEAKER_00: An advisor can tell her the net return under each option.
16:27
SPEAKER_00: They can model the tax hit.
16:30
SPEAKER_00: They can tell her what her labor is worth if she is charged for it,
16:34
SPEAKER_00: which is a number she has never once calculated in six years.
16:40
SPEAKER_00: What they cannot tell her is what it is worth to own the house she built.
16:46
SPEAKER_00: That is not a soft question.
16:48
SPEAKER_00: It's a real line item and it has a real number.
16:52
SPEAKER_00: And she is the only person who can write it.
16:55
SPEAKER_00: If she cannot say what it is worth,
16:58
SPEAKER_00: the spreadsheet will assign it as a value of zero by default.
17:03
SPEAKER_00: Because that is what spreadsheets do with things that have no number in the box.
17:09
SPEAKER_00: I suspect she already knows the answer.
17:13
SPEAKER_00: I suspect it is the reason she has been asking three people the same question
17:17
SPEAKER_00: for six weeks and going home unsatisfied.
17:22
SPEAKER_00: She wants someone else to say it so she doesn't have to.
17:27
SPEAKER_00: Nobody is going to.
17:30
SPEAKER_00: Get the numbers from someone qualified to give them and get permission from yourself.
17:36
[music]
17:42
SPEAKER_00: I am not a licensed financial planner and nothing here is financial advice.
17:46
SPEAKER_00: What I offer is the perspective of someone who has lived the financial conversation
17:51
SPEAKER_00: at every level and who understands that money is never only about money.
17:58
SPEAKER_00: That's the episode.
17:59
SPEAKER_00: If it landed,
18:00
SPEAKER_00: the kindest thing you can do is to send it to one person who has been asking you
18:06
SPEAKER_00: for advice you are not qualified to give.
18:08
SPEAKER_00: You know who.
18:10
SPEAKER_00: After the Rush lives on Substack,
18:13
SPEAKER_00: where you can subscribe and read the essay that runs alongside this one.
18:18
SPEAKER_00: If you want the workbook and other things I have built for this chapter,
18:22
SPEAKER_00: they are at aftertherush.store.
18:26
SPEAKER_00: Come in through any door.
18:27
SPEAKER_00: They all lead to the same room.
18:30
SPEAKER_00: I'm Catherine McDowell.
18:31
SPEAKER_00: I'll see you next time.
18:32
[music]