The Inevitable Full Stop

It's coming. No one knows when.

Jan 07, 2023

It was a rough month. I had fallen short of my monthly targets and my line manager was hounding me to push for more business, to do more meetings, and to somehow pull a magic trick from thin air.

That’s when the phone rang, and I was surprised to see the name of this former colleague of mine from my days at Standard Chartered Bank in Mumbai. I had last met him five years back and hence the surprise. After exchanging pleasantries, he asked me a question that I vividly remember: “Do you know anyone who would be keen to join the Wealth Management Unit of one of the biggest French Banks?”

The only answer I could think of was, “ME!!!”

That random call happened in 2008 and led to two super productive and profitable years with that institution. This stint also gave me a lot of time to explore business opportunities which I eventually pursued full-time from Jan 2011. Thinking about my days in 2009-2010 brings back a lot of cherished memories and I will always remain grateful to him for making that call to me.

I share about him because he passed away recently, leaving behind his wife and his child. He had a fatal bike accident while riding and did not recover from the ensuing concussion.

This whole episode took me through a mental rabbit hole of sorts.

What’s the point of all pursuit if it’s gonna come to a grinding halt inevitably? Why plan for the long term, when a curveball could derail all our plans in the short term? Why stress about the future, when the present is fraught with uncertainty and risk that stays invisible to our vision?

And that’s when I started thinking about the perks of having one’s life in order, just in case a curveball is heading our way.

Come clean about Money #

Irrespective of where you are financially, it could immensely help to disclose all your cards to your dependents. If they had a misconception about your financial stability, they would know that things ain't as glossy as they seem. If they never knew how much you have accumulated, then they might just develop a sense of stewardship towards this pool of capital built with painstaking effort over many years.
Either way, they would feel like partners in the future that you are building for all those who matter to you.
I shared my entire net worth - stocks, bonds, deposits, cash, properties, and mortgage - with my wife and explained to her where it can all be accessed in case of any adversity. It isn’t an easy conversation, but it’s a conversation one needs to have, especially with someone very close to you.
Just in case you have doubts about the longevity of your relationship with your current partner, then take your time to share everything. Alternatively, you can talk to an attorney or someone else in the family or your inner circle who could assist in the liquidation and distribution of the capital when the time comes.
But do know, that time is running out. You don’t want to wait until the last minute. I have seen enough families struggling to get their hands on the assets left by their deceased family members and let me tell you that it’s a frustrating process to go through for everyone involved. Just the regular visits to the court are enough to drain all the energy of the beneficiary. They don’t deserve this and hence the need to plan it in advance.
Thanks for reading Psychology of Investing! Subscribe for free to receive new posts and support my work.

Photo by Tingey Injury Law Firm on Unsplash

Insure yourself #

Insure yourself with a cover that is at least 10X - 20X your annual income. Getting an idea of an adequate cover would require the assistance of a professional financial planner. Having good financial advice pays huge dividends, while you are alive, and even after you have been rested. So don’t hesitate to look around for recommendations from your family and friends. I am sure you will find a gem of an advisor who genuinely cares. They are a rare breed, but they are out there.
Leaving your family abruptly might be the most painful mental jolt that your family could experience. But if they have to go through financial setbacks because you did not plan your life well, then the experience of pain only doubles. Add the anxiety of making ends meet on a daily basis only because you took things for granted. They definitely don’t deserve that either.
Getting this step right becomes even more important if you have not accumulated enough assets yet. You might be in the start-up phase of your career, or you may be hustling hard to get to the top of your profession, or you may have lost everything in one bad financial decision - either way, it becomes crucial to have a life cover in case the gods decided to have your company way before your goals were accomplished.
The best part is that term plans do not cost much. I can insure myself with a life cover of USD 1 million with a premium payment of USD 200/- month. I am 42 years old and this cover seems adequate enough for my family. But you may be younger and may choose USD 100,000 cover, which would cost less than USD 10/- per month. That’s just 2 cups of coffee at Starbucks !!! Term Plans are the most affordable way to secure your family and should be seriously looked at.

“In case you can’t be there to catch them, make sure you leave a safety net.” - Anonymous

Distribution of your Assets #

Make sure every single deposit, investment, security, and property of yours has a nominee/beneficiary assigned to it. The last thing you want is to see your family members fight over assets left in limbo. This sight will not be a good one, even if you had a balcony seat up in the clouds.
I know your family is great together and love each other unconditionally. But circumstances change, people change, and mindsets change. Why would you want to rely on the illusion that things will remain the same? Many a time, it doesn’t !! What remains the same is your beneficiary/nominee set in a legal document and that would get executed by your bank/lawyer when the need arises.
Alternatively, you could set up a will that clearly specifies how the assets will be distributed amongst the family members. Most of our clients in the Middle East have opted for this route and have registered their wills with the courts. This creates peace of mind for the asset owner today and gives clarity about the process that will take place eventually.

Photo by Obi - @pixel7propix on Unsplash

Get rid of the Fat #

Pay off personal debt/credit card/loans unless you are using them for tax benefits or accumulating loyalty points. You could also accelerate debt repayments to shorten the time required to reach a debt-free phase. Having zero personal debt is a powerful setup to aim for - it gives you a lot of freedom in your choices, and leaves no liability upon your family to deal with once you are rested.

And if you do have personal debts, it becomes even more important to insure yourself for an amount in excess of this liability. This would ensure that your family is left with adequate funds, after payment of the liability. This needs good financial planning, which again requires you to put an effort to seek a professional’s help.
Keep your lifestyle simple by saving more than spending. Every corporation has umpteen Marketing & Sales professionals on their payroll, whose sole objective is to part you from your money. They would create emotional sales pitches, induce artificial scarcity of their goods & services, try to dump leftover goods with 50% or discounts, and then there is Black Friday, White Monday, or Flourescent Thursday. So watch out :)
Stay away from anything complex or complicated. If you have to buy some digital assets, lock them up in a physical wallet, whose password needs to be secured in your bank vault, and where liquidity is another round trip through a cumbersome process - please stay away. There are many simpler ways to grow your capital, especially today when interest rates are pretty attractive globally. I just got 7% on my deposit with HDFC Bank and that’s good enough for now.

Embrace difficult conversations #

For those with kids, custody of your children also needs to be thought through in case of an eventuality when both parents are deceased. It’s very uncomfortable to think about this scenario and it sounds morbid. But you would thank yourself for having a structure in place, in case of this possibility plays out. Even if the odds are really low, they are still there. It’s not 0% and hence needs your attention, especially when children’s upbringing has so much to do with their learning and development before they become independent.
There are many relationships with unresolved issues, unfulfilled expectations, and unkept promises. These weigh you down mentally while you are alive, and could become even a bigger burden once you are gone. Ideally, you would like to leave your dependents in an environment wherein people would be more than happy to assist and sincerely care. This desired outcome would require you to invest in relationships today, show up today, make a difference to people around you today, and live an exemplary life.

I will let Seneca summarise this piece :

Let us prepare our minds as if we'd come to the very end of life. Let us postpone nothing. Let us balance life's books each day... The one who puts the finishing touches on their life each day is never short of time.

Drops of Wisdom

Discussion about this post