Money Habits | Megan Lathrop

 

Episode Transcript of: Money Habits | Megan Lathrop

Alan
Welcome back. We’re here today with Megan Lathrop. She’s a money coach, certified financial planner, and also an author. Megan, welcome in today’s show. Thank you. So thinking, give us some of your background. How did you get to where you are today?

Megan
Sure, yeah. Well, I’d say it really did start with the leap of faith. Right out of college, I started working at a major firm as a financial advisor. And I knew I mainly just wanted to help people with things with goal setting and giving them solutions without it being necessarily sales. So it turned out to be the financial world and financial services. So I’ve been in the financial industry since I graduated college.

Alan
And so if we go into the word money coach, I often don’t hear that in, in in the financial industry. So this is a unique position. Can you give me back? What What exactly does a money coach do?

Megan
Sure, yeah, well, one thing I found after maybe six or seven years of being a financial adviser is the most valuable thing I was offering my clients was more of the coaching aspect. And that’s really helping clients keep their perspective around the markets. So whether it’s helping them not operate out of fear, or greed, but you know, somewhere in between, or whether it’s helping them keep their, you know, other emotions out of the markets, that coaching relationship is what really served them. And what I felt I was much more gifted at than maybe the technical side of the money management. So there’s kind of an industry that’s formed, and I’ve bet gotten certified as a money coach, and it’s all about unpacking someone’s beliefs, patterns and emotions around money. And a lot of it comes from their childhood and how they were raised. So there’s a lot of just unconscious behaviors really involved.

Alan
You know, it must be a tough position, when you see the market falling 200 points. Yeah, people on the phone say no, calm down, right, everything’s gonna be you know, how do you maintain a cool in a volatile environment that we’ve been going through this last couple years? Yeah,

Megan
it’s tough. Well, for me, luckily, I have a belief, you know, in a higher power and a bigger picture. That kind of is where I try to help people recognize their security really can come from, but it’s, it’s tough, I’d say what’s happened in the last, even in the last decade, the different market cycles, has really brought people to a more creative, I’d even say spiritual part of their life, where they’re really putting money in its proper place in their life. So I believe it or not, I’ve actually been grateful for some of the changes that have happened because it’s helped us move away from so much about accumulation. And even you know, so many crimes and things that have happened, and people have really kind of reset their perspective on it. So it’s, it’s been tough, but I think it’s kind of exciting. What might come from this.

Alan
You know, I think that is so true. You look at the media today, you hear about the fiscal cliff, and are we you know, where are we going as a country? And if you if you believe the reports, there’s absolutely no foundation in in life, you know, because they’re telling you that everything’s gonna stop.

Megan
Right? Yeah. Well, the world was already supposed to end. Yeah.

Alan
Welcome to them. But, but as you walk through the process, and I think that having a foundation in life really is, is important. Absolutely. You know, I was, you know, thinking about this new year, a lot of people are putting goals and stuff in place. And what are the some of the things that you’d be walking your clients through this time?

Megan
Sure. Um, well, a lot of people have kind of what I’ve been calling like, post holiday blues and debt syndrome. You know, they’ve overspent during the holidays are they’ve spent outside of their means because of our culture of gift giving. So I actually just wrote an article for a magazine on how to get yourself kind of out of that debt and realigned for the new year, and maybe have some new spending habits and kind of a more intentional relationship with your finances.

Alan
So do you find your clients are typically older, younger? I mean, are you generation and focus into certain segments? Yeah,

Megan
I have a whole range. I mean, I have a heart for working with women in their 20s and 30s. Just because I really want to empower women and I’ve seen such value in people starting to invest young, you know, right out of college, it makes a huge difference in their financial life, just having that information early. But I’m also since I work here in Silicon Valley, I have a lot of clients that either have sold a business or inherited money at a later stage in their life. So I I enjoy really working with, you know, people into their 50s and 60s to that are kind of in that final stage before retirement.

Alan
When should a person come to money coach?

Megan
The earlier the better. I would really say I mean, after someone graduates College and is on their own with money and responsible for them, their selves and their bills. I think that’s a key time to kind of take a look at your habits around money and try to start forming some healthy ones that are going to serve you for the rest of your life.

Alan
Is it Are you able to help all people or is there certain person you’re able to help? more,

Megan
you know, I, I can help people that are open a lot more. One of the struggles I face as a coach is we we all focus so much on returns, you know and how much our portfolio is giving us in return. And that’s a huge part of what I do like to help people with but I consider it only half of kind of the whole picture. And the other half is kind of the soft side of their, you know, things I’ve mentioned their emotions and patterns and how they act around money. So if someone’s not too open to that it’s a little bit harder to really give them a holistic service. But I found I can I really enjoy having you know, a conversation with anyone who at least, you know, bring some more awareness or bring some, you know, insight.

Alan
Okay, I’m visiting today with Megan Lathrop. She’s a money coach, certified financial planner, and an author and Megan, I like to go more into more depth that we need to take a quick break. We’ll be right back after these messages.

Alan
Welcome back. I’m busy here today with Megan Lathrop. She’s a money coach, financial planner and a book author. Megan, before the break, we’re talking about your background and what a coach does. But can you differentiate for me? What is the difference between a money coach in a financial?

Megan
Yeah, sure. Well, financial planner focuses, what they do have in common, I guess, would be looking at someone’s big picture around money and their long term and short term goals and kind of really creating a game plan for someone and helping them identify their priorities. But where more of the money coaching relationship comes in, it’s kind of where psychology comes into the picture. And it’s about helping someone look at kind of where they came from around money. One thing maybe I’ll mention around the psychology is that most of our beliefs around money are shaped before we’re six years old, before we even really know what money is. So we kind of just inherit a lot of the ways our parents, for better or for worse, or whoever our primary caregivers were, how they engaged with money. So money coaching kind of brings in this whole other level of, are you frugal, are you generous? Are you disciplined? Are you you know, being timely with your bills, kind of all those types of lots of different traits like that, that really, I think, impact someone’s relationship to money, I think over the long run. You know, I think I mentioned earlier, if someone gets 8% 9%, or 10% of their returns from their portfolio, that’s one thing, but what’s really going to make a difference in their overall life, contentment, and satisfaction. And actually, what will determine if they fulfill their financial goals, comes down to the things that I believe I talked to people about in money coaching.

Alan
You know, it’s interesting, you talk about values when you’re a child, my, when I was younger, my parents got me a coin collection. And it’s a book full of pennies. So you got to get every single year. So I started to walk around to everybody I knew and said, Can you open your wallet and show me your coins? And my mom had to take them back? Say, Alan, you cannot ask people to open their wallets and take their money from them. I said, Okay, so I was taught at a young age the

Megan
right you will you’re very outgoing. It sounded like

Alan
let’s move back on on topic here that the future the financial industry. Boy, you know, we got all sorts of you listen to the paper, they massive debt, volatility and markets, you know, are we or are we not going to have social security? And so as you sit with your clients today, how do you advise them,

Megan
but one of the main things is about being proactive and intentional. So as you just kind of alluded to, we can’t really any longer, especially people of my generation, count on Social Security or even pensions, you know, we’re responsible for our financial lives, whether it’s investing in for our 401, K’s or other long term investments, it’s up to us. So I would say we kind of start there with how can I empower people around the relationship with money and a lot of it is education. One thing that is surprising is so many people that are very savvy in many parts of their lives, aren’t as maybe savvy or informed when it comes to really what they need to be doing for themselves financially to have the peace of mind they might want to have in their life,

Alan
you know, putting accountability into process is so important. Yeah. And, and I can see the value in having a money coach, right? Yes, accountability is a huge piece that you set goals for your clients to saying yeah, How much savings you want to put away and then come back and report.

Megan
Yeah, we have check ins, it’s usually once a month, I have different kinds of relationships I have with each client, but usually we check in at least once a month. And just as financial planning is a process, you know, money coaching is a process and kind of a relationship. Because you know, people have things come up all the time that change things, they begin a relationship or end a relationship or have a child or they’re ready to start saving for college goals. So there’s kind of constantly something to be engaging on and planning around and anticipating. So it’s a pretty ongoing relationship.

Alan
Do women invest differently than men?

Megan
I have found that they do. Yes. And hopefully it’s okay that I say that being that I am a woman, my experience has been that women contend to invest more emotionally than men. I think a strength men have in the markets is there some more of an objective approach. And some studies have just shown that women from being that psychologically, a lot of our security comes from things outside of us like finances, and how we feel if we feel comfortable financially, we can tend to make emotional decisions a lot more emotionally around money.

Alan
Megan, we need to take a quick break. We’ll be right back after these messages, I want to get a little bit more in the psychology how you deal with your clients. And maybe we can talk about the emotional versus objective side of testing. We’ll be right back after these messages.

Alan
Welcome back. We’re here today visiting with Megan Lathrop. She’s a Certified Financial Planner and money coach and author. Make it before the break. We got into the psychology of investing and I got I got a case study, I gotta run this by you. I’m a CPA, I don’t, I don’t do investment advice or this aspect. But from time to time, I’ll get people walking into my office. One day I had 102 year old mother and her daughter drove her up there at two years old. And they said we need to come do some estate planning. Mom was worth about $3 million, 2 million in cash. And then a million dollars in, you know, property, real estate and stuff like that. And so sitting him down, I said, well tell me what you want to talk about today and said, Well, we you know, we’re afraid about giving all this money to the government when mom passes. And so we’d like to do some planning in advance. And I said, Okay, do you want to do big gifts or small? Mom says let’s start small. So I said, Well, at that time, there was a $10,000 exclusion I said we can give to a daughter. And mom looks at me. She says, if I did that, what would I have to live on? Okay, psychologist, right. How would you deal with these people?

Megan
Yeah, well, Alan, that’s actually a really perfect example of how we all are we, we have these beliefs around our relationship to money from when we were younger. And it really doesn’t matter how much money we come into, or what the actual reality is of our finances, maybe what dollar amounts in our checking account. Though hard wiring in our brains is still whatever it was from when maybe that particular person had a lot more of a fear based relationship with money and experienced a lot of lack, and was afraid she wasn’t going to have enough. So that’s a perfect example of how that doesn’t change unless you make a really conscious effort to kind of become congruent really is probably the word with what’s your current day reality and how you respond to things. So that’s a perfect example of why it’s you can’t really go much further. I mean, I would be curious, you know, were you able to give them any advice? Or did it kind of stop there,

Alan
it stopped there, you know, there’s a reason why people accumulate and, you know, build their little empires, and we could because they’ve, they’ve adopted a certain methodology, right. And sometimes change doesn’t come easy. There was another guy that I met and it see the reality is, it’s sometime in life. People are gonna realize you don’t take it with you. Right. Okay. Now that guy back in the 40s. He invested in $10,000 investment in ups. Okay, and, you know, by the time that he was ready to pass that had gone to some $11 million. And he wrote specifically and as well he says, I never want anybody to ever sell ups. Well, the people came in that the errors and they said that it was an uncalled. this case, I said you’re going to be dead. Here. We think we’re going to do something else. And the ACA was emphatic. He says never sell, never sell. And yeah, the reality is he passed, the stock was sold. So yeah, I think having money coaches in place, grounds people to look guys, I see a lot of different perspectives in life. And let me share with you something. I mean, it’s invaluable what you do there, sir. Thank

Megan
you. Yeah,

Alan
I want to switch over the light. Let’s talk about magazine, you’re writing for magazine now?

Megan
Yeah, I’m contributing to a magazine called deliberate life. And it launches later this week. And it’s all about what we’ve really been talking about conscious choices and having a deliberate lifestyle. So a huge part of that is obviously our spending, you know, we spend money every single day, we invest in companies every day, if you’re invested. So how can we be deliberate about that and conscious about that?

Alan
Is there is there a difference between spending habits and people?

Megan
Yeah, well, there’s, there’s the basic thing of some, some people would say, you could be divided into spenders and savers. And from a psychology perspective, I mean, that’s where, you know, money therapy really comes into play, because in relationships, oftentimes, say in a marriage or even a family, to people don’t have the same relationship to money. So it can be it can get kind of testy sometimes, yeah, it can bring up a lot of conflict, or I like to think of you know, that as growth opportunities, and so I really view money as our opportunity for growth. And it’s really a tool to help us transform and become more of the person that we want to be and how we spend our money. And kind of if we look down at our checkbook is a real testament of where our values are.

Alan
So when when two people are coming together in a marriage, or a long term relationship, do you advise that one person have accountability for the other,

Megan
um, I? Well, it depends, some people have different degrees of boundaries, some people that I’ve coached come in, and they want to treat their money totally separately, and they find that works best for them and some merge, you know, fully, and maybe to the extent of maybe too much where there’s, it’s just fully merged. And there’s not a sense of empowerment for either person. So it’s really finding what works for each couple, and then helping them set that up. A great small little strategy of dump a lot of clients that has I’ve heard saved marriages is the man is maybe an entrepreneur and as a lot higher of a risk tolerance and is in, you know, starting different companies and things like that, just in some of the examples, this isn’t always the case, the woman is a little bit, we’d like a little bit more stability. So by us setting up for the relationship, a checking account that the woman has access to, that always has at least a particular balance, maybe it’s $3,000, or something that gives her the peace of mind that things are going to be okay. And she’s then able to support her partner kind of going off and doing more some more kind of aggressive, risk riskier moves with his career. So there’s little strategies like that, that are kind of that make all the difference so that the couple can be working together. And growing closer, rather than, you know, money is the number one cause for divorce, and ended relationships. So I just have a real heart for bringing in some of these strategies so that the people are truly partnering and working together and making each other’s life better because of the way they’re interacting around money with.

Alan
So when you’re chatting with with the individuals, do they come in as couples? Yeah, both. Oftentimes one

Megan
person comes in first, there’s usually one person in the couple who’s more interested in that. And then once we meet, they are they do decide to bring in their spouse or partner and we work together.

Alan
Yeah, you know, it’s interesting over the years in in our CPA practice, we see lots of different stories. But I certainly agree the number one cause for divorce today is money. You know, it’s how people handle this. Yeah. But I need to move quickly. You’re doing a book?

Megan
Yes, I am. I’m writing a book called The savvy gals guide to money. And all that matters. And it’s a book for probably its target on its audience will be women in their 20s and 30s. And that I’m passionate about women that are, you know, savvy, and have passions and have a career they, you know, are passionate about and want to make a difference in the world. And it’s basically a merging of technical financial advice, psychology and spirituality, and kind of how to engage with money bringing in kind of all those parts of yourself. It’s changed over the years, hasn’t it? It’s changed a lot. Absolutely. I think it’s kind of a cutting edge time right now, for women for investing. I mean, if we think even just 50 years ago, I mean, it wasn’t not everyone invested in the stock market. I mean, that was kind of more of an elite thing to do. And now you just start your first job and you sign up for your 401k into the stock market. So

Alan
is the stock market still good place to be? Yeah, um,

Megan
I believe in the future of the economy and the future. have us as a globe. But I think it’s definitely important to be taking it, you know, managing your risk and managing what your exposure is to and having things. You know if something is something you want to have for sure, in the next couple years, I wouldn’t say to put it in the stock market.

Alan
Megan, how does someone contact you for more information on many coaching and financial planning? Yeah,

Megan
well, my websites my name, Meganlathrop.com. And I have a Facebook page called live free. So it’s just facebook.com. Forward slash your money. Coach.

Alan
Megan, we appreciate you being on today’s show. Thank you. We’ll be right. We’ll be right back after these messages.

 

 

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This transcript was generated by software and may not accurately reflect exactly what was said.

Alan Olsen, is the Host of the American Dreams Show and the Managing Partner of GROCO.com.  GROCO is a premier family office and tax advisory firm located in the San Francisco Bay area serving clients all over the world.

 

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