Advice for long-lived lesbians: “Plan. PLAN!”
In part three of our interview Luna Jaffe talks about how gay men are better than lesbians at managing – and liking – money.
Here, she talks about how we can catch up.
What’s your best advice for long-lived lesbians who want to manage money well for the rest of our lives?
Plan. Plan! I know, that sounds obvious, but the biggest thing happens when people actually look at their numbers. By that I mean that they’re getting a realistic picture of how long the money they have could last given certain parameters, which is a huge factor in people learning and understanding how to behave.
So, planning means you have to get data. To plan well you have to get really good information, really good data. What I do in financial planning is work with assumptions, so we run scenarios which are only as good as the assumptions I make. So for example, if I assume you’re only going to live until 80, then I could be giving you some serious headaches at 81 if you’re out of money. If I assume you’re going to get 10 or 12 percent return on your money and you only get 5, I’ve created a problem.
Right now, Long-lived lesbians are getting to the age where we’re starting to inherit money. I’ve had clients who’ve been living close to poverty level, but then they’ll come in and say things like, ‘I never even knew my uncle had any money but I just inherited fifty thousand, or a hundred thousand, or two hundred thousand dollars.’ The thing is, they don’t know what they don’t know about that money. The first response is a knee-jerk response that comes from the emotion of it. They might feel that they don’t deserve the money, or they might say things like, ‘I never liked that uncle.’ Therefore they want to just spend the money frivolously.
For people who are new to having money, it can be uncomfortable. The internal feeling is that it sets them apart from other people, or I have something other people don’t have, or I don’t know how to invest it, so why bother, or I’ll go buy property, even though I don’t know how to buy property or if that property is a good investment.
I tell them to slow the hell down, and talk to people, multiple people, who have no vested interest in their choice. Yes, talk to your partner and your family members but don’t rely on them as much as you rely on professionals who can give you a variety of different thoughts. Then go home and see what it feels like. Play out all the different scenarios – write it down, talk to people — of what you could do with that money.