Scams and Fears: How to Navigate Senior Finances | Pivot

1. KSKara Swisher0:00

   This question comes via email, I'll read it. "Hi Kara and Scott, big fan of the podcast and would love your insights on a financial challenge with a parent. How do you approach financial planning with a parent who is increasingly keen on betting against the US economy influenced by questionable sources and conspiracy theories, basically anything but mainstream media? My mom is particularly bullish on gold, convinced that the US dollar is on the verge of collapse. I strive to listen and offer data-driven advice, but I'm concerned if I challenge her beliefs too directly, if I push her further to those ideas. How can I communicate that the US economy isn't on the brink of implosion without alienating her? Thank you, Nikki from Texas." Oh man, Scott. (dramatic music) Oh, I don't know, get control of her stuff, I guess, Nikki. Uh, Scott, you answer this one.

2. SGScott Galloway0:41

   (laughs) Never committed?

3. KSKara Swisher0:42

   Never committed, like, uh...

4. SGScott Galloway0:43

   Um, no, I-

5. KSKara Swisher0:43

   My mom spends way too much money, but it's her money. I don't really care what she does with her money.

6. SGScott Galloway0:47

   I think you gotta reframe the argument, and that is rather arguing against her for an asset class, 'cause quite frankly, she might be right and you might be wrong. Each of you has a 50/50 likelihood that gold is a good or a bad investment or the US economy is gonna go up or down from here. It's the wrong argument. The argument is the following. It's, "Mom, we have some money, you have some money. Nobody knows. The brightest people in the world don't know."

7. KSKara Swisher1:08

   Yeah.

8. SGScott Galloway1:08

   "What they do know is that we shouldn't put too many of our eggs in one basket. Mom, if you feel you have insight here or you get some reward from picking this stuff, then okay, we're gonna take 10, maybe 15% of your assets and you're gonna buy gold. But we're gonna put the rest in diversified index funds, 'cause here's the thing, Mom. You don't have the time to make it back, and it doesn't matter how smart you are. Warren Buffet lost 50, 60% of his net worth during the great financial recession. You can be a genius, the market will always trump individual behavior. So if you wanna have some fun, you're really into gold, fine, but the majority of your assets, because we love you and we wanna make sure that you are always economically fine and that you don't have the emotional stress or financial stress at this age, we're putting the rest in diversified index funds. Can we agree on this, Mom? You wanna put some money in gold, fine, but the majority of it needs to be in diversified low-cost index funds." Don't argue over asset classes. She knows no less or more than you. What you know is that she needs to be diversified and ensure she doesn't have the stress or financial stress at this point in her life.

9. KSKara Swisher2:17

   Listen, Nikki. I would do the opposite.

10. SGScott Galloway2:20

    (laughs)

11. KSKara Swisher2:20

    I would, um, I would make a fake gold bar and hand it to her and try to get control of her finances.

12. SGScott Galloway2:26

    That's, that's called parental abuse. (laughs)

13. KSKara Swisher2:28

    That's correct, because, uh, you're protecting her. Uh, I think, uh, uh, is, is she old? I don't know. If she's not old, uh, I don't know. I'm always like with my mom and her money. Um, you know, if it's your money, spend it down to zero, and then you'll be at our behest at some point. But I don't, I think you can't protect people from the things they wanna do. What you can protect them from is schemes and things like that. That's something that's important. Don't let her buy Trump gold coins or, or sneaker, gold sneakers or whatever, if she happens to like gold. Um, be careful of scams and get, keep her out of those. Let her buy a gold, whatever, gold future or whatever.

14. SGScott Galloway3:03

    Individual assets, Kara, are a scam.

15. KSKara Swisher3:05

    Yeah. Yeah. Uh, well yes.

16. SGScott Galloway3:06

    Individual assets at that age are a scam.

17. KSKara Swisher3:08

    Yeah, I agree, but I'm just saying, just buy a little bit of a gold... What is it? Gold future? What do you buy? What... You don't actually buy gold, right?

18. SGScott Galloway3:14

    Gold future. Give her some Krugerrands. Old people like Krugerrands.

19. KSKara Swisher3:16

    Yeah, Krugerrands.

20. SGScott Galloway3:16

    Not an engager. Just give her some-

21. KSKara Swisher3:17

    Put them in your, put them in your, um, put them in a safe so people don't come and steal them from her as she gets older.

22. SGScott Galloway3:22

    Have her, have her stay at, at Trump Plaza and there's gonna be gold everywhere.

23. KSKara Swisher3:25

    Gold everywhere. I don't know. I, it's very difficult. Uh, my policy with my mom is just she wants to spend her money, let her do whatever she wants to do as long as she isn't fooled by something.

24. SGScott Galloway3:34

    What does Lucky spend her money on other than Pucci dresses?

25. KSKara Swisher3:36

    Oh my God.

26. SGScott Galloway3:36

    She looks fabulous. Which-

27. KSKara Swisher3:37

    She does look good. Um...

28. SGScott Galloway3:38

    Which does she spend her money on?

29. KSKara Swisher3:39

    Oh, uh, silly things. Buy stuff for like the children, my kids-

30. SGScott Galloway3:44

    That's fine.

Episode duration: 5:36