How Do You Handle Transitions?

One of my favorite aspects of growing up in Asheville was that we experienced four distinct seasons.  When I grew up and lived in other parts of the country, I appreciated this distinction, and now understand that it matches my curiosity and excitement about what may happen next as change unfolds. My basic personality type seeks out change, and I look forward to the seasonal transitions as nature showcases something new in each one. As we enter the fall season, many of us become aware of the shifting feeling of a transition.  It can show up as an uncertain rumbling of anxiety, or as excitement as the crisp fresh air replaces the summer heat.  How do you handle transitions, whether it is the change of seasons, a new job or home, or a major life transition from a divorce or loss of a loved one?  Our core personality may influence how we approach these chapters, and influence our coping ability.

There are two types of change: external (marriage/divorce, having children, moving, changing jobs) and internal (how attitudes toward change are shaped).

Change theorists surmise there are three stages of change (source):

Stage 1: grieving whatever you are letting go of

Stage 2: period of doubt and uncertainty, where most of the action is internal, i.e. how you’re processing the change

Stage 3: light at the end of the tunnel, where plans begin to take shape and action is ready to be enacted. This is the period where hope for a better outcome begins to take hold

Finding coping mechanisms helps with navigating transition, especially the big ones. (source)

  • Expect a certain amount of anxiety or depression. Even positive changes often mean the loss of something in our lives, i.e. changing jobs means saying goodbye to coworkers we’ve come to think of as friends, buying a house or moving to another state could mean leaving behind a beloved home full of memories, or saying goodbye to friends.
  • Realize this is a new chapter. While acknowledging the losses is healthy, avoid living in the past, and this can be accomplished by thinking of the new thing as a fresh start.
  • Think positively about the transition bringing opportunity. The expression, “When one door closes, another opens,” may be clichéd, but it can also be true. Perhaps a career transition forced by a layoff can become an opportunity to learn a new skill to take your expertise in another, more exciting direction.
  • Avoid stagnation. The longer you take to get started on your new journey, the more chance there is to become inured in routine that feels comfortable but may not be very fulfilling
  • Have a support system. Going through change alone is daunting to say the least, but relying on friends, family, or counselors/coaches can help you maintain your momentum and move forward.
  • Make sure your expectations and timeframes are realistic. There will be difficulties associated with the changes, but taking them one at a time helps keep them from being overwhelming. Biting off more than you can chew is a quick path to giving up. However, by taking the change in manageable chunks helps you not only navigate the transition, but when you look back, you can see how far you’ve come. If you’re visual, make a list and mark how long the tasks take to do, and by the time you’re near completion, you can see how far you’ve come. For example, someone wanting to change careers may need a degree to enter the desired new field. That’s a big obstacle, but going about it one class at a time, they can manage it in smaller doses and before long, degree in hand, they can begin their chosen path and be proud of progress made.

At Earth Equity Advisors, we have noticed that our biggest competition is often not another financial firm, but inertia.

Some people explore responsible investing, yet feel overwhelmed with the thought of moving accounts and establishing a relationship with a new financial advisor.  They may even cringe with they open their statement and see that some long-held investments do not match their values, yet making a change feels like it will take more energy than they can muster up.

At a recent conference, the keynote speaker referenced a psychologist’s statement that as consumers, our first decision to buy a product or service is from the right side of the brain—how it feels to us, rather than all the analytics of price, value, product quality, etc. that come from the left side of the brain.  When it feels right to you, making changes and navigating the transition can feel empowering and positive.

Here’s to embracing change as we enter fall, and cheering nature as the leaves change color—they make transition look easy

So You’ve (Unexpectedly) Inherited Some Money…What Next?

It can feel like a rollercoaster when you unexpectedly receive news of an inheritance. It could be completely out of the blue, or it could include a larger or smaller sum than you thought might be available. Here are five steps to navigate your new financial situation, and how to best handle it when others may be involved.

Step 1: Acknowledge that there are emotions attached to this money.

Many inheritors skip this first step. You could be be feeling excitement, sadness, anger, jubilance, or anxiety. No matter what you are feeling–and how often it changes over the coming weeks and months–it is important to appreciate that these feelings are natural and appropriate.

Step 2: Appreciate that nothing needs to happen fast.

Resist the urge or impulse to make a big purchase or change your lifestyle until you have thought through all the implications of each choice. Also, resist the pressure when others ask you to loan or give them money. By approaching this as a process and consider all options before using any of the money, you will be happier when confirming a loan or gift will be an appropriate use of funds down the road.

I recommend at least a three-month timeline for this process to consider ideas. This time period allows you to balance your emotions about honoring the person who provided the inheritance, and letting go of the past so you can plan for your future.

Step 3: Set up a strategy for reviewing options with a group of trusted advisors.

Ideally, these will be people without an agenda for the money.

Spend a little time dreaming about saying YES to YOU! How do you want to use the money for short-term and long-term outcomes?

For some people, the dream could be starting a business, paying off a loan that causes you anxiety, taking a big trip, buying a house or making charitable donations—all of these are noble thoughts and deserve full exploration of the pros and cons.

Get input from this group (colleagues, friends, family, advisors) to help you articulate these dreams and how they connect to who you are and your future. This group can also be your accountability checkpoint when you have an impulse to spend the money. Sometimes a counselor or coach is helpful to process these ideas and the associated emotions. Ultimately, you can come up with a plan with categories for the money , for example:

  • 5-10% for a splurge (BIG YES TO YOU!)
  • 50% investing for the future (you and your family legacy)
  • 40-45% for your dreams that you have created and discussed with your advisors (starting a business/gifts/loan payoffs/charities etc)

Along the way, stay curious about the process and your reactions.

Step 4: Recognize that this is a great opportunity to take a look at your inherited beliefs about money.

Decide if what worked (or didn’t work) in the past is really a match for the person you are today.

“Our past is a story existing only in our minds. Look, analyze, understand, and forgive. Then, as quickly as possible, chuck it.”—–Marianne Williamson

I recommend reading The Emotion Behind Money, Building Wealth from the Inside Out by Julie Murphy Casserly, CFP. This book can be helpful as you navigate these financial choices.

Step 5: If you choose to invest some of the money, look at it through fresh eyes.

Was it invested using a 1980s model with companies that do not behave in ways that match your values? If it was inherited from an elderly relative, perhaps it was invested in a risk averse manner that matched them.

However, you are younger and more interested in building a solid nest egg for the future, and you may be willing to take more risk to hopefully generate higher returns. If you resonate with the triple bottom line philosophy, specifically seek out companies that fulfill these characteristics (they make a profit and make a difference in the world). This investment strategy leaves a legacy for future generations that clearly states what you believe in and value.

Rejoice that you have been given this opportunity to responsibly navigate this inheritance.

Have questions about an inheritance or need a consultation for your investment strategy? Contact us.

When a Trust or Inheritance Comes Your Way…

By Peter Krull

We have had several clients over the past few years who have inherited investments or trusts from parents, grandparents, etc. While this event is typically a bittersweet occurrence, there is often a second level we have to address.

Many of the younger clients inheriting the wealth do not have the same values as their parents or grandparents. And so when they receive inherited assets they often find investments that are not aligned with their values, including fossil-fuel companies, defense contractors and big pharmaceuticals.

What we hear from many new clients is that the financial advisor who had been managing the account previously was not interested in transitioning the account to one with responsible investments. Occasionally this is a difficult situation to resolve – many times the advisor has been a family friend for many years. Sometimes, simple inertia takes over and the account stays where it is for years.

But eventually folks find their way to us. What we do is empower clients to be changemakers and invest with their values. We work with clients to identify those investments that do not represent their interests and use a tax-managed approach to divest and reinvest in more appropriate opportunities.

The truth is that you do not have to settle for investments that keep you up at night. You can change and you can make a difference. Better yet, you can do so and still have competitive returns. All you have to do is ask.

Peter Krull is President & Founder of Krull & Company, a leading socially and environmentally responsible investment management firm based in Asheville, NC.