Scott Cannon
- Mar 12, 2021
- 6 min read

Caregiver Investing

Hello Everybody! I am so glad you are here with me today. I am the Proactive Caregiver and I specialize in educating others on how to be proactive by empowering YOU - the caregiver. If you cannot take care of yourself, then you cannot take care of your loved one.

Alright, ladies and gentlemen, we are about to get into yet another area that I think is forgotten in terms of self-care. Financial planning is a very important part of self-care because it helps to alleviate stress. If you are struggling to make the connection here then think about what you go through every payday. How quickly does your hard-earned paycheck disappear? How often do you use credit cards to make ends meet?

Having a flexible budget for the monthly expenses is important but so is preparing for the future. Getting married and having children alone changes what our younger selves planned. Those plans might change yet again when our parents, spouse, or even adult children turn to us for help. What I thought were the biggest expenses of my life in terms of wedding, college, or a home mortgage pale in comparison to the growing long-term care expenses.

This became the biggest blind spot for Mom who once was a diligent saver. As dementia began to take its toll on her physically it was also becoming a financial nightmare for our family. So while I speak with my next guest, Palbir Nijjar, think about your current budget. Do you have one? If so, how strong or flexible is it? Do you have anything allocated for emergencies or retirement? I know this might feel like the opposite mindset of positive thinking and manifesting abundance. Financial problems bring about corrosive stress. We have pulled in so many directions within this material world only to be blindsided when life happens in an unexpected way. It's not an 'if' and more so a 'when' the storm hits.

This is why I asked Palbir to come on with me today to help share with us just how important financial planning is for our unknown future. Palbir has a Master of Science in Financial Analysis and Investment Management. He is also a Chartered Financial Analyst (CFA) in the Pleasanton, California area. After nearly 20 years of investment experience, he launched his business, Smart Path Wealth Management. Palbir helps his clients get closer to what matters which is spending less time worrying about their finances and more time focusing on what is important - their family, friends, businesses, careers, and hobbies. His motto is "Plan better, invest better, and live better!"

Prior to launching Smart Path, he spent time working as a Financial Analyst for various technology companies in the Bay area. The tech industry is where he began to understand the unique needs of IT professionals and those who work for tech companies. During his time, he was able to contribute to The Motley Fool to showcase his passion for researching and analyzing great businesses. It's great to have a 401K but it's even better to have someone like Pal as an ethical advisor to broaden your options and learn how to weather those financial pitfalls and storms life will present.

When the decision was made to move Mom into our house and share living space between my house and my sisters it came at a time when I was not ready to be her full-time caregiver. I had no idea how long this arrangement would work for all of us but I did know there would come a time when we would reach our limitations. At first, I was honestly more concerned about how it would affect my marriage than her finances because I knew Mom had been a diligent saver. She taught me the value of money and especially to save for many rainy days.

As we boxed up her office room I came across several IRA statements which gave me some peace of mind at first. She did not have a life insurance policy, long-term care insurance policy, or a living will. I set the statements aside to review later and continued to box up the remainder of her home. A long life lived as a teacher and philanthropist were reduced to a couple of boxes and sentimental items with maybe a few valuables that could be liquidated if need be. A few months later my peace of mind later evaporated as I reviewed each IRA statement and began calling to verify my current status. I discovered one by one had been cashed out over the years that coincided with the wedding dates for me and my sisters along with other years our family experienced financial setbacks.

Knowing that Mom's care would only become more expensive as she progressed through the later stages of Dementia something had to be done. Unfortunately, valuable time had passed for creating significant savings for her long-term care. Liquidation of her assets became her plan B because she certainly had not won the lottery yet. She expected to die long before she needed long-term care and assumed the 3 of us would always be around to care for her. A dangerously flawed financial plan.

A small handful of companies that provide Long-term care policies have either gone under over the years and the rest cap their policies at $300K. It may sound like quite a bit of money but if you care for a loved one with dementia or have a special needs adult child that you may not outlive, then you can imagine the cost of care increasing with inflation. Long-term care policies are insurance applied to nursing homes or assisted living, adult day care, or in-home care. It covers chronic illness, disability, or injury.

Suze Orman, author, and financial advisor found out the hard way how many years of long-term care can cost through an experience with her mother. Suze's mother refused to sign for an LTC policy while she was still young which became costs of $20K/month for Suze in the last seven years of her mom's 97 years. Thankfully Suze was able to afford $2 million on her mother's care, but that is nowhere close to what the rest of us can afford. So when we struggle to be honest about our physical health and habits that could change, then in the least be honest about our financial health. Both will cost you more in the long run when left neglected.

LTC policies are one route to go and important to purchase earlier in life when you are still healthy. The smart saver will learn how to diversify their money to create more options later. This is why meeting with a Pal or someone in your area would be very beneficial to learn what your options are. Keep in mind on average, women need services longer than men at roughly 3.7 years and 2.2 years for men. Those figures are the average some live quite a bit longer. Bottom line we cannot depend on social services like Medicaid to meet all of our needs in retirement, especially when Dementia is causing more to retire sooner than they expected.

Want to reduce stress and improve your financial health? Then do the following below:

Check your credit report regularly - once a quarter or at least twice a year.
Avoid the use of credit cards like your life depends on it.
Develop Debt Repayment strategies for school loans and credit cards sooner to avoid high-interest expenses.
Be honest about your spending habits to find where you can cut the excess. Stop trying to impress or keep up with the Joneses.
Treat your savings account like debt or a bill you owe yourself!
Align your spending with your values
Even if you start small keep increasing savings every year. Inflation will not stop so neither should your savings.
Before you touch your savings for a non-emergency event think about how long it took you to save it.
Have a budget created to realistically plan and live better financially sound.
Track your finances monthly to make sure you are sticking to your budget.
Work on improving your health so you don't need the financial resources sooner than later in life.
Understand your family history as much as possible to know of potential medical (and financial) hazards.
Make your savings automatic to retirement accounts so you don't forget to set it aside or spend it instead.
Review your 401K performance at least twice a year. Contributions should increase with each raise you achieve.
If you do not have a 401K then consider traditional IRAs, Roth IRAs, and HAS Accounts as alternative self-funding options.
Talk to a Certified Financial Planner to help build a flexible financial plan sooner than later.