In this episode of Your Life Simplified, host Michael MacKelvie, senior wealth advisor, talks with Kurt Schindler, senior wealth advisor, about the benefits of working with an advisor to learn financial principles that can help you navigate your financial situation as it evolves. They discuss how proactive learning leads to more informed, confident decisions, and how, even though not everything can be predicted, a strong foundation in financial knowledge supports smarter, more adaptable planning.

Transcript

Michael MacKelvie: There are two types of planning knowledge sets: just-in-time versus just-in-case. How do they apply to your world, and how can you make sure that you are prepared? That’s what we’re here to talk about today. I am joined from Puerto Rico by CFP® Kurt Schindler, the Mariner office in Puerto Rico. How are we doing, Kurt?

Kurt Schindler: We are doing great today. It’s a pleasure to be here and talk about this. I don’t know where you’re located, but here it’s pretty nice and sunny, and I don’t want to rub that in too much.

Michael: No, it’s all good. Again, I’m Michael MacKelvie, CFP® with Mariner. I’m in the Seattle office, so pretty far apart. But glad we can make this connection. A little jealous as I look out the window and just see what it looks like today, but we’re going to work through that.

So there’s certainly different types of planning approaches that we see in this financial sphere, and I think one of the, I guess, premises that exists out there is just all education is good. What are your thoughts on that, though, just from an education standpoint? Before we get into the two different types of planning methods, what is this financial education, and what does it mean to you?

Kurt: In general, there are really no globally or universally accepted topics that should be in financial education because as we know as planners, there are a myriad of things that we need to address throughout our financial lives. So, how do you pick that first two, 10 topics that make those part of a curriculum, which is part of the issue in the financial education sphere of what to teach, how to teach it, how to measure the results in it. And I think we can all agree that having good financial information is certainly going to help with planning. But how do we define that good information, I think, is the most difficult. I think it depends on the life stage that the person is in. It depends on what is most urgent for them in terms financially that they’re going to pay attention to it for a long time.

Everyone, I think, needs a base of financial knowledge. And then to build on that, a certain financial concept — present value, future value, inflation, what is an interest rate, what is a growth rate. The things that we talk about every day and we know exactly what they mean, but even for a lot of clients and sometimes their children, they’re not too familiar with the terms when they’re asked to actually define them or describe them. Kind of puts them on the spot a little bit. But I think it’s really important that we as planners have this excellent level of communication that everyone in the conversation really understands what the terms mean in the context of what we’re going to be doing.

Michael: Yeah, and can you talk a little bit about these two different types of planning that you have kind of termed, or at least, you seem to use?

Kurt: Yeah, it’s not really my term. I pulled it from education where “just-in-time education” is, you’ll learn about something just before you’re going to do it. And “just-in-case education” is that baseline. And applying it to financial planning is, when do you plan for things? I mean, even the word “planning” says we’re going to do it ahead of time. We do that for goals, perhaps, but certain financial decisions we’re making, with a good base knowledge of information and understanding of my situation, I can make some just-in-time financial planning decisions which will end up being solid, but it really is in the context of the overall financial knowledge and how much I understand about my situation, so I can fully understand the consequences of the decision I make that I may have not given a lot of thought over time. I think we as planners come into doing that to help clients do it too. Before we make a decision, let’s recap what we talked about, what your goals were, what we’ve been doing over the past several months or years. This is the decision you want to make today because you need to act on it soon. Okay, we’re all on the same page. We’ll have that base knowledge. Okay, now let’s take a look at that decision.

Michael: Okay. So I guess, summarize, if you could, just-in-time planning.

Kurt: Yeah, just-in-time planning is, I’m going to make it just in time. It’s almost like — I want to call it point of sale, if you would. It’s at the moment. It could be I’m going to buy a car for my daughter, we’ve talked about it, but now, all of a sudden, it needs to be done. How do I take care of it now? Because literally there is no public transportation. If she doesn’t have a car, she can’t get to her job, now it’s an emergency. But you have to make that decision just in time so she can actually travel to her job. And just-in-case is, we already have this plan, we already know what the financing options are. We already have this modeled out in our cash flow, which we may have done that a couple of years [ago], now we need to refresh.

I look at the just-in-time as more of a refresher of the points that we had spoken about. And I liken it to education because what we had talked about with the client and planning, we’re talking about the modeling and the projections. We’re educating the clients, I believe, on what the longer-term perspective is, what we should be thinking about. Not every day, but get into motion, understand we have the base there, and then when these decisions come up, we’re ready to actually act on them. And it doesn’t create too much uncertainty for the client. It certainly will be stressful because it has to be done right away and just having a deadline, and we all know this, the deadline for taxes is coming up. The closer it gets, we get more stressful. So having that deadline does usually create some stress for clients in making a decision.

So, if we prepped right, we can just launch into it based on what we’ve already talked about. And I find that that usually calms the client down when they have to react to something. It also happens in life events where we lose a family member and we’ve already done the plan, but now we have to go back and review what we talked about, pull out the documents that we made sure were signed at the right time. But there’s decisions that still need to be made at that point. And I think going back to that just-in-case, the planning part, the longer-term planning provides the atmosphere in which the client can actually make the decision more comfortably and not feeling that we never talked about this, we don’t know we’re going to do. They do know. And in really stressful moments, like losing a loved one, sometimes you forget. I mean, just the shock of the loss. We kind of get off track, if you would.

Michael: Okay, so we have these two types of planning, sets of knowledge, let’s just say. Right? So, just-in-time and just-in-case. Just-in-time, as you mentioned, is these topic-specific events at the point of sale —  you mentioned the car, right? And would you say the just-in-case forms the backbone to that, as far as how you make those decisions in those moments?

Kurt: Yes, I would. The backbone of that is the preparation we’ve done, the knowledge we’ve gained in other areas, the other experiences we’ve had. That’s part of the education, if you would, in the financial planning process. Yes, it does form the background. And once again, if you’re in this stressful situation, we tend to kind of forget that we talked about this, we already went over it. And when you’re reminded of it, you go back in your notes, the clients calm down, and we can address the situation in a much more focused way. I guess that would be the best way to put it.

Michael: Okay. In a much more focused way. Okay. So how do you help people, I guess, then? Do you start with the just-in-case planning? Kind of walk us through, maybe, what some people should be thinking about in that realm.

Kurt: Yeah, when we talk about planning with the clients — I’ve been a financial planner now for, shouldn’t admit this, 38 years. So I really enjoy financial planning, talking folks through the process, where the end game is and how we’re going to get there. So, part of that process is the education process that we’re going to talk about things, give them knowledge that you’ll see how it’s relevant in the moment, but since they may not be applying it then or their focus is on something else, it stays there. And I know it’s in there, and then as we have those periodic meetings or bringing up these topics, again, we’re bringing up the concept, something like inflation that happens in Puerto Rico. The local market is a little more volatile than it is on the mainland in terms of gasoline prices, electricity, and whatnot. So as clients, we talk about the inflation aspect, that’s a base knowledge issue. And then when we talk about, when they’re looking to purchase a new automobile, what kind should it be? We go back to the base issue. Okay, listen, gas prices are kind of crazy. We really can’t control them. Maybe a hybrid option is a better choice at this point. And that’s where we bring together both the longer-term plan and the base knowledge to the decisions they’re going to make today. It also helps us stay away from the new sports car and other things like that that clients bring up.

Michael: Gotcha. Okay, so these concepts without — the just in case is these concepts without concrete, specific use cases, right? It’s more of just a broad-based knowledge. What would be some other examples of just-in-case planning conversations that maybe people should be having?

Kurt: Let’s look at investments, and we can talk about the volatility of the markets that’s been going on. And volatility is certainly not a new issue. So in the longer term, just-in-case conversations, we’re going to be talking about that and then what happens, how we react to that? What does it do to your monthly contributions to your 401(k) plan? How is the volatility good for you? And then the clients will listen and talk about it, it’ll make sense. But then when we’re in the volatile period, we can go back to that baseline and say, listen, we talked about this, now we’re seeing it in real time. What’s your difference — what’s your feeling on it? How does this impact you? How does it change your thought process? How does it make you want to perhaps modify what we’ve talked about long term? And that’s one of the issues that lately to me has been really helpful having had the conversation about volatility.

And I think there’s where the concrete issue is. We can talk about volatility and the client can say, “Yes, I can tolerate a 15% decline in my portfolio,” and it’s very easy to say now having lived through Black Monday in ’87, the 2007 debacle, Hurricane Maria in Puerto Rico, where things just went — When it actually happens, we really don’t know how we’re going to react to it. And that’s the just-in-time. Okay, it’s happening now, what do I do? And that’s where we pull back those concepts that seem so easy to talk about when it wasn’t really happening to, “This is what we talked about. Okay, go. Let’s go back and visit it.” I think that lately has been one of the bigger areas where I’ve been using that or having those conversations more frequently with clients.

Michael: Yeah,so maybe kind of priming ourselves for these moments when they do occur, because it’s not necessarily a question of if, but a question of when, such as the volatility piece. One of the pieces I always go over with clients, there’s a guide to the market slide that talks about volatility, and just the average intra-year volatility of roughly, I think, around 15% peak-to-trough intra-year declines on average. And so that kind of helps put it in perspective for people of when you see a 10% pullback, 15% pullback —“Oh, this is actually kind of normal.” And so there’s at least that backbone to where, when we have tariffs and other things that are maybe rocking the market, causing a pullback, “Hey, we’re level-setting looking back. Hey, this is something that we’ve talked about before.” We know these pullbacks are going to come. This is actually just around average, if not below average thus far as far as a typical pullback that we might see, right? And so there’s kind of that pendulum of moving from this just-in-case to this just-in-time that occurs. Now, do you view, I guess, the just-in-case conversations — I’d assume you’re still probably having those types of conversations with people.

Kurt: Yes.

Michael: And that’s kind of when they’re hitting you up about very specific use cases or instances. Can you talk about maybe some of those that don’t have to do with a car?

Kurt: Yeah, other instances are with children. Puerto Rico, in general, is a maternalistic society. So we want to keep our children, and we’ve talked about planning, for example — when I say “keep our children,” I mean keep them in the house and to continue to provide for them and help them out through life. And in the financial plan, you talk about there is this time when they will be leaving the house and they won’t be on your family payroll, if you would, you won’t have to cover their expenses. And now that your daughter has come up or your son has come up with this grand idea that they want to do a business, and they’re going to stay at home. How does that change what we talked about, what you decided what you wanted to do, and how do the emotions come into that that you really want to help out the child just because that’s what parents are supposed to do.

So it brings in those kinds of situations where there are changes to the financial plan not brought on by the individual and not brought on by the environment, but something very specific and family-related is where that comes in. And it’s really going back to the base. “We talked about this. What’s changed?” And it opens up a whole new conversation with a client — “Tell me a little more about what’s changed.” And in this kind of situation, the just-in-time is geared towards having the client explain to me what is different now in a way that they don’t feel that they’re being judged. Rather, they’re just explaining this to me that this is different this time. Then you talk about when else this might have happened in the past, and bring that out so they can see that, okay, this really doesn’t change my financial plan and no, I’m not going to financially support this business. We have to help our son obtain other resources to do this. So my financial plan for the family keeps on track. That has a lot to do with culture, and I find, having been down here for almost 35 years now, it’s been an interesting journey of learning that. It’s certainly not as prevalent on the mainland, at least where I grew up. So it’s not the same.

Michael: Yeah, I think that’s a good example. Anything else as far as these two pieces that you wanted to touch on?

Kurt: Yeah, I wanted to kind of touch on that what we do as financial planners has an education component, and each client is different. Some are just gung ho on investments, they really understand they’ve been doing it. So the education not going to be along those lines, but it’s really part, I believe of the financial planning process is to talk through different scenarios, give clients different options to think about, which is the just-in-case education, laying some new — I don’t want to say ground rules, but where we’re coming from in planning. Because down here, also getting into different types of investment vehicles, Puerto Rico has had an issue with the local municipal bonds, so investors are still scared about certain things that happened. So, bringing back to the baseline in typical market activities and whatnot, we get them back online. And then how does that change your decision going forward?

I think the education, whether we like it or not, we are teaching our clients how to progress toward their goals, how to reach their financial objectives, and that it truly works. You and I have been doing this a while. It works. We don’t do this overnight. And I think that’s also a new challenge in the markets that we have with crypto and other assets that just seem to shoot up. And now clients who never talked about that say, “Hey, how about this, can we use this in the portfolio?” And then we go back to the basics of investments and diversification and speculation and bring it back to that. And then it’s the just-in-time conversation about, well, maybe this now is a good alternative to add to the portfolio. There are new ways of investing in this, for example, that weren’t around five or 10 years ago. But they’re seeing it in the newspapers. They’re learning, just hearing the good parts, obviously, what gets published. So now, “I want to get on that bandwagon. How do I do it?” Go back to the baseline education. Well, don’t go with the crowd every time. We have to make sure it fits with what your objectives and goals are and how does it fit in.

Michael: Yeah. Well, that was super helpful. And yeah, I can see obviously setting that foundation and then there’s going to be these just-in-time moments that are going to occur, and you can always go back to that foundation. So, super helpful, and thanks again for joining us today, and if you’re listening to this on Apple, Spotify, YouTube, wherever you might be listening, make sure to subscribe to get more industry insights from industry professionals here at Mariner. Again, my name is Michael McKelvie, certified financial planner[SB1] ®. I was joined today by Kurt Schindler, certified financial planner®, Puerto Rico. You guys take care.

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