Maslow’s Hierarchy of Needs

Our 2 Cents – Episode #113

Maslow’s Hierarchy of Needs

Happy Sunday! We’re back with a new Our 2 Cents podcast episode. As mentioned last week, we’re diving into the world of Maslow’s Hierarchy of Needs and discussing how we feel it relates to money and finances. Then, we’re giving a quick update on the future of tax filing and rounding out the show with some listener questions.

1. Maslow’s Hierarchy of Needs:
   • We’re dissecting Maslow’s Hierarchy of needs and sharing how it applies to your every day life.
   • What does it have to do with your money?
   • What are the financial parallels with the pyramid tiers and how do your finances impact you in each level?
2. “Tax Filing Should Be Simple”:
   • The Inflation Reduction Act included $15 million for the Treasury Department to study the development of a free federal tax-filing system.
   • What could this mean for the future of tax preparation and filing in our country?
3. Listener Questions:
   • “I’m almost 60 years old and I don’t have any money yet in Roth IRAs. Should I start converting some IRA money to Roth over the next few years?” – John
   • “I’ll be inheriting about $250,000 after we settle my mother’s estate in the next few months. I could use this money for a lot of different things like paying off debt or saving it for my own retirement. But part of me feels uncomfortable using my mom’s life savings to clean up my mess. Do you have any suggestions for how to navigate this?” – Don

Tune in now to join us for this discussion!

Request Your Free Consultation Today
847.499.3330

Podcast Transcript

Announcer: You’re listening to Our 2 Cents, with a team from SGL Financial, building wealth for life. Steve Lewit is the president of SGL Financial and Gabriel Lewit is the CEO. They’re here to discuss all the latest in financial news, trends, strategies, and more.

Gabriel Lewit: Good morning, everybody. Gabriel and Steven and producer, Katelyn, not on the microphone, of course, because she refuses to wear her headphones and join us. But she did do a great countdown this morning, as well as listen to Steve and I wax philosophical here about one of the topics we’re going to talk to you about on our show here today, which was Maslow’s hierarchy of needs. So we’re going to jump into that in a minute. But before I do, because we did talk about that last time and we said we were going to expand upon it. Folks, did you know that Steve led me astray this week?

Steve Lewit: No, no, I didn’t really lead you astray.

Gabriel Lewit: You know what he did? So there was a mysterious plate of cookies.

Steve Lewit: Delicious looking cookies

Gabriel Lewit: In the kitchen. And normally someone brings in cookies.

Steve Lewit: Chocolate chip cookies with big chocolate chips in them.

Gabriel Lewit: Normally someone brings in cookies and sends out a quick note or puts a note next to them, so people know who to thank. And in this case, they didn’t look like cookies I’ve seen before, because I’m a cookie connoisseur, of course.

Steve Lewit: They were alien cookies.

Gabriel Lewit: And I went around like, “Hey, do you know who brought this in?” I said to Katie, she’s like, “No.” I went to Rob, he’s like, “No,” I went to Cody, he said, “No.” I went to everybody. I even went to Steve and nobody knew.

Steve Lewit: No, I didn’t.

Gabriel Lewit: And I’m really like, “Well, who brought in this plate of mystery cookies?” And then finally Steve looked at me and he is like, “All right, I brought them.” And I was spending 30 minutes walking around the like, “Well-“

Steve Lewit: You were obsessed. You were obsessed with knowing.

Gabriel Lewit: It was a mystery that needed to be solved.

Steve Lewit: You wouldn’t eat the cookies until you knew who brought them. And then when you found out I brought them, you won’t eat them anyway.

Gabriel Lewit: So, Steve looked at me as like, “Well, I was scared that nobody was going to like them because I made them with almond flour.”

Steve Lewit: Yeah man, healthy cookies, folks. Almond … Go ahead, go ahead.

Gabriel Lewit: And this is the mystery that was finally solved

Steve Lewit: Folks, I made delicious almond flour, chocolate chip cookies. It’s healthy, it doesn’t have wheat in it. It’s made with refined stuff, I mean not refined, natural stuff. And they are they’re okay, they’re not great. I know what to do there.

Gabriel Lewit: You heard it from him.

Steve Lewit: I know what to do the next time. So the next batch-

Gabriel Lewit: Yeah, use flour, regular. There’s these crazy things out there called recipes that when you follow them, they create these magically good tasting cookies.

Steve Lewit: So, I am searching in Maslow’s hierarchy of needs.

Gabriel Lewit: All right, back to the show, back to the show. We’ve got a good show-

Steve Lewit: For self-actualization.

Gabriel Lewit: They don’t know what that means yet.

Steve Lewit: Which is my desire to become the most that I can be.

Gabriel Lewit: Okay, we’ll explain that in about 10 seconds here. So we got a good show lined up for you today. Couple of fun topics, a couple financial questions from listeners. So, we’ve got a few things here to dig on into. So, speaking of that, 10 seconds later, Maslow’s hierarchy of needs. So, we did talk about this last time and it’s a very intriguing concept and it’s been used in a variety of different fields. So first, it was done of course, by a fellow named Maslow who created it. And we’re going to talk about what it is and then how to apply it to your life in a variety of different ways. So dad, do you want to explain just high level, what is Maslow’s hierarchy of needs?

Steve Lewit: Well, Maslow said, “Look, there are levels of needs, like a house, you have foundation levels all the way up to the roof.” So on the bottom, if you think of it as a triangle-

Gabriel Lewit: And to expand upon that, you can’t build the upper levels of your house without the lower levels in place.

Steve Lewit: Well actually, you can build the upper levels except it gets as you … you know those games where, as you get higher, it gets more dangerous.

Gabriel Lewit: So, if you have no floor, you can build your roof?

Steve Lewit: Well, but you’re saying we have no floor. People have floors. They’re just not very good ones, so you can have like a roof.

Gabriel Lewit: I see what you’re saying. I’ll accept that.

Steve Lewit: Because we’re building stuff all the time, but if you build it on a rocky or a soft foundation, you could build it, but it’s going to collapse, or it won’t work well. So Maslow said, “Look, first of all, you have physiological needs. You need air, water, food, clothing, just to stay alive.”

Gabriel Lewit: And you were going to describe this as a triangle shape.

Steve Lewit: Yeah, so I was going to do that.

Gabriel Lewit: Sorry. I distracted you.

Steve Lewit: No, I love being distracted.

Gabriel Lewit: I was going to say something, and I forgot.

Steve Lewit: So, on the bottom of the triangle, the biggest thing is the physiological needs. You cannot do anything if you don’t have your physiological needs.

Gabriel Lewit: Can you explain what those are?

Steve Lewit: Yeah. That’s food, clothing, shelter, sleep, air, water, food, things that keep you alive. So, if you don’t have those, basically you’re dead. You have nothing else on top of that.

Gabriel Lewit: Well, and more important, if you don’t have that, you can’t even worry or think about anything else beyond that, because you need those so badly to survive.

Steve Lewit: Exactly. So, folks in violent countries or in starving countries, they spend their time just where do I get my next meal?

Gabriel Lewit: Do you know what’s funny? Not that.

Steve Lewit: No.

Gabriel Lewit: Worrying about where to get the next meal, but I watch a show called Naked and Afraid. And I often think of this Maslow’s hierarchy of need because the only thing that they are focused on the show is how do I get water, shelter and food?

Steve Lewit: Absolutely.

Gabriel Lewit: And they cannot think or do anything else beyond that because that’s … Number one, without those they’re doomed, they can’t sit and make weave baskets and chat about the world philosophy or the stars. They’re so focused on food, water, air. Well, they get the air, but shelter.

Steve Lewit: Full time job. So, now once you have that in place at any level, once you’re not full time hunting and killing, then you can go to safety, which is your personal security, employment. Sorry, I missed my microphone, resources that you need to do things, your health, owning things. And that creates safety around you.

Gabriel Lewit: So, that’s your second level, is safety needs, safety.

Steve Lewit: Okay, I can eat, and I can sleep and I’m okay but now I want to feel safe.

Gabriel Lewit: So, you build your shelter. If you’re in Naked and Afraid, you build your shelter, you found your source of water. You’ve got a reliable source of food, maybe fish or something. Now you’ve graduated up to safety needs. So, you’re going to build some … maybe a little small fence around your shelter to keep out the animals

Steve Lewit: And you’re going to start saving, maybe you save some meat over there.

Gabriel Lewit: Salt it, cure it.

Steve Lewit: Or you build a tool chest with your rocks and your arrows made of twigs. I should go on this show.

Gabriel Lewit: Oh God, that would be hilarious.

Steve Lewit: That would be hilarious. Then once you have your physiological needs and your safety needs, the next level on the triangle is, well, now I can have friends and be intimate with people and that’s called love and belonging. So, I have a sense of connection. I can relax into the more refined things in life.

Gabriel Lewit: Hard to relax and go on dates and hang out with friends when you’re worried about your safety and your food and shelter.

Steve Lewit: Yeah, if you’re dating and you want to invite your woman back to your shelter and you don’t have one, you see, that’s very, very difficult.

Gabriel Lewit: That’s not good.

Steve Lewit: Now why I thought of that, I don’t know.

Gabriel Lewit: I don’t know either.

Steve Lewit: But that does happen.

Gabriel Lewit: So, that’s the third layer.

Steve Lewit: In the real world.

Gabriel Lewit: Love, friendships and belonging.

Steve Lewit: Now I’ve got love and friendship. And then we go to this more refined level, which is esteem, self-esteem, status, recognition in the world, strength, power, freedom, respect, all those things that make us feel good and that we have meaningfulness in life for ourselves and other people.

Gabriel Lewit: And then-

Steve Lewit: Can I go to the next?

Gabriel Lewit: You can, the next and last, the peak of the pyramid.

Steve Lewit: On the top, although most people don’t understand this the way I think it should be understood, but that’s my opinion, is self-actualization. And the way Maslow defines self-actualization, it’s the desire to become the best that I can be. In other words, you and I are perfectionists, which is impossible to actualize that because nothing is perfect, but that would be self-actualization, making myself the best that I could be.

Gabriel Lewit: So, there is five layers here. They all build upon one, another similar to the layers of your house. And what Maslow said is you need to have the lower layers progressively to be able to get to the higher layers. So, just to reiterate that a second time, without safety and air, food, water, you’re going to have a tough time self-actualizing and just perfecting your hobbies or views on life, or your ideals, or whatever it is that makes you the best that you can be because you’re too focused on those lower levels. You have to be focused on those.

Steve Lewit: But unlike a house, where the foundation is the same dimensions of the house, what Maslow was saying here is that food, clothing, and shelter, because it’s the bottom of the triangle, is the most important thing. If you don’t have that physiological, then everything suffers from that and then it goes up the level. So, the most sensitive part here is self-actualization, this is what we want in life. We want to get the best of us out of life. And as you go down or up the triangle, each one counts more and more important. So, I can’t self-actualize if I’m not eating properly or sleeping properly, that foundation is the most important.

Gabriel Lewit: Yes. So, what does this have to do with your money? You might be wondering that question and why are we talking about it on our financial show? Well, there are a lot of financial parallels to this. And if you were to ask me if I was building this pyramid, Maslow’s pyramid with a little bit of financial spice shaken on top, I would also say in addition to your safety needs of personal security, resources, other things that you need to feel secure, you also need financial security. And so, the challenge is, is without financial security, which is one of the lower levels of the pyramid. It’s hard to feel good with love and belonging, with esteem, and with the self-actualization layers. It’s very difficult to start to focus on those things when you’re worried about your money, because money is a form of security and it also is an enabler. We talk about it being the fuel for your journey. So in many ways, that’s a big part of why, what we do is not just about your money, it’s about improving the overall quality of your life, because it’s going to enable you to have the security you need to focus on these higher level life achievements, per Maslow.

Steve Lewit: In other words, it takes care of the physiological need of food, clothing, and shelter. Well, food and clothing, yeah, shelter is on it. Food, clothing, and shelter, because if you don’t have money, you can’t pay for that. So as you said, it’s an enabler for finances to work similar to the hierarchy of Maslow’s needs, but it fulfills each layer of the … it affects every part of the Maslow’s-

Gabriel Lewit: It does.

Steve Lewit: … part of Maslow’s triangle.

Gabriel Lewit: So, that’s how important money and finance is in today’s world. And it’s just interesting when you think about it from that perspective, and maybe our conversation on this topic here today gave you a slight new outlook on things and the importance that getting financial security is. And it also would explain why if your money is in the stock market and the market’s down 20% this year, and you’re feeling stressed, or worried, or frustrated, or like you can’t do things, that’s the impact that a lack of financial security is having on you. And it makes sense, because it’s such a vital component of what you need to feel good about your life.

Steve Lewit: Yeah. It’s the second layer from the bottom, so it’s very important. So if you’re worried about the money in the stock market, basically you don’t feel safe. The future is like, “Wow, what’s going to happen to me?” So, that feeling of not being safe affects your love and ability to love, it affects your self-esteem and it affects your ability to self-actualize yourself.

Gabriel Lewit: Yeah. And just like someone on Naked and Afraid or an old school, tribal man or somebody, if resources are scarce, what do you typically do when resources are scarce? You use less of them. You hoard more of them. You save it for the rainy day that you hope will last you through. You start to restrict yourself.

Steve Lewit: And you fight for them. So, there’s also that fight that you have to have, where do I get them from, will somebody steal them from me?

Gabriel Lewit: Well, yeah. And that’s more of a stress and anxiety, but where I was headed with that is that’s what people do when they feel like they’re losing money in the market. They restrict themselves, they spend less, they defer more because they don’t know how long this winter will last, or how long their resources will last. And that can again have some big impacts on you in the prime retirement years, when the goal is to really enjoy yourself. So hopefully, these examples make sense and if you’re interested in this concept, we got to move on to a new segment here, but go online, go to Google, type in Maslow’s hierarchy of needs, click images, you’ll see a lot of different examples of it. And you can read about it if it’s something that’s interesting to you and then really pay attention to how your money is impacting your life. If you find that it’s a negative impact, give us a call because that’s part of what we’re here to do, is make sure that your money is a positive influence and a positive impact on your life, not something that’s a detractor.

Steve Lewit: Before we move on. Gabriel, I have a question for you.

Gabriel Lewit: Yes?

Steve Lewit: Now we see these triangles all the time. None of them have on the bottom rung what I think should be on the bottom rung. What do you think should be the basis of your hierarchy of financial needs? What is on the bottom?

Gabriel Lewit: Well, I think what you’re referencing is there are some people that take this concept and try to create a full financial version. I actually don’t like those versions at all. I like to just apply the concept of money and finance to Maslow’s original hierarchy of needs, just the way we talked about it here, how it impacts it. Some people try to convert the concept and say on the bottom level you’ve got cash flow needs and then you’ve got taxes. Yeah, you got all those things. But at the core, keeping things really simple, your money impacts your security and it impacts your feeling of safety and it impacts your feeling of wellbeing. It impacts all the tiers that we’ve talked about there. It’s really that important.

Steve Lewit: Folks, I’m going to recommend Gabriel go into politics.

Gabriel Lewit: Why is that?

Steve Lewit: Because I asked the question, and did you hear how he skirted around that question with a non-answer? It was a good answer and it was fun to listen to, but he still didn’t answer my question. So, I don’t know if I should ask you again or I’m going to get another political answer.

Gabriel Lewit: I would not go into politics, I don’t think.

Steve Lewit: Yeah, it’s a terrible thing.

Gabriel Lewit: That doesn’t sound like a lot of fun.

Steve Lewit: No, it’s not.

Gabriel Lewit: All right. Well, moving on to our next topic in time.

Steve Lewit: I’m not going to get an answer.

Gabriel Lewit: I don’t think you are, yeah. So, we’ve got a few other things to chat about with you here. Quick update a story in the news that you may or may not have heard about, just interesting tidbit for you. Did you know … Oh, by the way, folks, if you have questions on any of that, call us, (847) 499-3330, or go to sglfinancial.com and you can click get started or contact us. Or you can email info@sglfinancial.com and we’d love to hear from you.

Gabriel Lewit: So, tidbit of the day, and we’ll talk a little bit about this and then we’ll do some listener questions. Did you know that the US is moving one step closer to letting Americans file their taxes online for free directly to the IRS, which would cut out private companies like TurboTax, H&R Block, and a lot of other time and energy that goes into filing your taxes.

Steve Lewit: I didn’t know that. Where did you get that from?

Gabriel Lewit: Well, I shall tell you.

Steve Lewit: Tell me please.

Gabriel Lewit: So, inside the Inflation Reduction Act, which I think most people we are familiar with, we talked about a little bit, there’s lots of things that was buried in all these bills, a lot of smaller pieces. So one of those smaller pieces was there was 15 million set aside for the treasury department to study a free federal tax filing website.

Steve Lewit: Wow. Wow, wow.

Gabriel Lewit: And then just this past Thursday, Treasury Secretary Janet Yellen was discussing this and expressing support for simplifying the process. And here’s her quote, which you might be interested in. She said, “Tax filing should be simple. I recently came across a statistic, it takes an average American 13 hours to file a tax return.”

Steve Lewit: No, no.

Gabriel Lewit: She said during a visit to an IRS facility in Maryland.

Steve Lewit: Wow.

Gabriel Lewit: Compare that with Sweden where some taxpayers can file simply by replying to a text message. We can and must do better. This is words according to Janet Yellen.

Steve Lewit: Weil, I actually agree with her, I think it is … Well, a whole tax code. You know how big you ever see a tax code book?

Gabriel Lewit: It’s large.

Steve Lewit: It’s like seven inches thick. They’re 633 different pages in a tax code book. So, it is a bit complex. We have a very complicated system, but the idea of simplifying it, I’m all in on that. How that’ll fly with the private business market. It’s like, “Oh, you’re going to put me out of business. Thank you very much.”

Gabriel Lewit: Well, so look, obviously my hunch would be that a lot of people would enjoy this if they have simple taxes, right?

Steve Lewit: Sure.

Gabriel Lewit: Imagine that you just get a text message that says, “Hey, would you like to submit your taxes?” And you just say, “Sure. Okay, here, cool.” “Here’s your refund.” That would be pretty nice. Now certainly, more complex cases where you’ve got businesses, rental properties, real estate transactions, all those things would still require-

Steve Lewit: Definitely.

Gabriel Lewit: … I imagine taxpayers-

Steve Lewit: Definitely.

Gabriel Lewit: … Sorry, tax preparers. But it would certainly be cool for a lot of our clients are on social security, get a couple IRA distributions and RMD and that’s about it, right?

Steve Lewit: Yeah, they file an easy tax return.

Gabriel Lewit: Yeah, easy tax return. That would be pretty cool.

Steve Lewit: I think I like it.

Gabriel Lewit: Yeah, so that was the concept there and just something for you to keep on your radar if you see or hear anything about it. I think it sounds like a neat idea. Certainly we do tax preparation too, it would actually impact us as well. But like I said, I think it would be really, really helpful and simple for people.

Steve Lewit: And of course, the IRS will help you find all the loopholes.

Gabriel Lewit: Yes.

Steve Lewit: So, you pay less.

Gabriel Lewit: Well, yeah. Then you get into the whole, “Well, can we even trust them and what are they going to miss?” So, there is obviously a trust factor there who knows how they would work all those kinks out. Maybe you probably still need a lot of preparers just to do reviews of the automated ones. Who knows? But just thought that was an interesting tidbit that I hadn’t heard about yet.

Steve Lewit: Good find.

Gabriel Lewit: Okay. So with that in mind, we’ve had a couple listener questions trickle on through over the last couple of shows. So, we thought we would cover those here today. Funny enough, we’ve got an email message here from a John and a Don, I like that.

Steve Lewit: I do too.

Gabriel Lewit: Just coincidentally, they rhyme, and I was reading Dr. Seuss last night with my daughter. And so, I’m in a rhyming mode.

Steve Lewit: Now you can read John and Don.

Gabriel Lewit: John and Don went to the pond.

Steve Lewit: Uh-oh, here we go.

Gabriel Lewit: I don’t know. I’m not going to keep rhyming for you.

Steve Lewit: Please.

Gabriel Lewit: Okay. John says, or asked in his email, he said, “I’m almost 60 and I don’t have any money yet in Roth IRAs. Should I start converting some over the next few years?”

Steve Lewit: Yeah. Yeah, john. Yeah, everybody. Why is this even a question?

Gabriel Lewit: It comes up a lot.

Steve Lewit: I had potential clients in yesterday and they’re in their 70s and they say, “Well, why should we … It’s not going to benefit us the Roth conversion. My CPA said I’m wasting my time and you talk about it all the time.” I said, “Yeah, I do. First of all, you might live another 25 years.” Taxes are going to probably go up. I’m an economist and I look at the national debt and look at the interests on the national debt and interest rates are going up. It can’t cut spending anymore, so we’re left and taxes are going to go up. So, that’s number one, you have to pull money at them.

Steve Lewit: And number two, if you convert it to a Roth, then your kids get it at the peak of their earning years. And if it’s not a Roth, they’re going to pay through the nose on this. So, taxes go up and then your kids pay through the nose, so why wouldn’t you convert it to a Roth? I don’t understand why that’s … John, I’m not picking on you, but I don’t understand why that’s even a question.

Gabriel Lewit: Well, I think you and I have talked a little bit about it before, but I can’t remember exactly when or if we talked about this specific point. So, I think it comes down to people incorrectly think that when they look at their traditional IRA or 401(k) balance, that they have more money than they would have if they did a Roth conversion. So, you look at your statement and you see a million dollars, let’s say, and let’s say you’re thinking, “I want to convert some of that or all of that to a Roth IRA. Well, if I do that, I’m going to have $700,000. Or if I convert 100,000 of that, I’m going to have only 80,000 left of that 100. I’d rather have the $100,000 and have more money.” I really do think that’s what people are thinking is I’ll have more money because I’ll have a hundred instead of 80.

Steve Lewit: It’s the world doing an illusion on your head. So, you have a million dollars in the IRA and it looks great. And you say, “Hey, I’m a millionaire,” except you’re not because-

Gabriel Lewit: You have a partner.

Steve Lewit: You have a partner there that’s going to take 200 or 300,000 from you sooner or later. So you don’t have a million.

Gabriel Lewit: Guarantee, they’re not going to get rid of … There’s no way to get the money, you or your kids out of the IRA without paying taxes.

Steve Lewit: Yeah, your partner’s not going to say, “I really love you. Why don’t you keep the money?” Not this partner. So, it’s like a head trip you look at, it feels good. And you say, “Well, why should I convert?” I’m only like you said, “I’m only going to have 800,000 in there.” Well, that’s all you got right now. Now, the other part of that Gabriel, is people think that by paying that 200,000 in taxes today, I’m going to lose all the benefit of compounding growth on that money over the next 20 years.

Gabriel Lewit: Right Because I think people believe that if they get compounded interest in growth on their million dollars, that will equate to more interest in dollars, than it would on 800,000.

Steve Lewit: And that sounds right, except it’s wrong because if taxes remain the same, let’s say taxes are 20% and you pay the 20% today and just grow the 800,000, or you grow the million and pay the 20% in 20 years, you’re in exactly the same place.

Gabriel Lewit: Yeah, it’s a mind trick.

Steve Lewit: It’s a mind trick, right. So, it’s all how people perceive this.

Gabriel Lewit: But if you pay 20% today and then the Roth grows, versus if you wait in the IRA and then you pay 25% or 30%-

Steve Lewit: In the future.

Gabriel Lewit: … it is actually worse.

Steve Lewit: Oh, it’s a lot worse.

Gabriel Lewit: Even though you’ve been earning more interest in dollars on the money over the time and looking at a bigger balance.

Steve Lewit: The only way you lose on a Roth conversion is if you don’t do it right, you don’t watch your IRMA costs, or pushing you into brackets and if the taxes go down in the future. And I would say the probability of taxes going down in the future are slim to none.

Gabriel Lewit: Yeah. So, it’s really interesting, John. I think if any of those reasons are why you’re thinking you shouldn’t, let us know. If it’s a different reason, let us know and we can of course, guide you through that a little bit closer. But those are some of the things we hear a lot is, “Hey, don’t I have more money if I don’t convert?” And the truth is in most cases, it’s the opposite. So, something to think through, as you’re thinking through whether or not to do a Roth conversion. And speaking of that, that’s a great question around this time of year, John, because it’s quickly approaching what we call Roth conversion season, October, November, December, are our prime Roth conversion time. So, if you’re a client out there listening to this, we’re going to be sending out a letter soon. If you’re potential client out there thinking about working with us and are interested in Roth conversions, this is a great time to start walking through that.

Steve Lewit: Well, it’s actually more than that, Gabriel. It’s not only Roth conversions, all kinds of tax planning for our … October, November, December is a huge tax planning period for us because it sets up the next year, how you handle your RMDs.

Gabriel Lewit: Yeah. We were thinking about calling it RCC, or RRCCs, or something like that. RMDs, Roth conversions and charitable, right? Charitable planning. So, tax planning’s year round, but those are the three core components of the fall quarter when it comes to tax planning. Yes, sir.

Steve Lewit: Yes, sir.

Gabriel Lewit: All right. Thanks John. Now, Don. I just wanted to put those together. I just love the fact that they rhymed. Okay, Don says, “Gabe, Steve I’m inheriting about 250 approximately after we settle my mom’s estate in the next few months, I could use this money for a lot of different things, like paying off debt. Maybe save it for my own retirement, but I feel uncomfortable using mom’s money to pay off my debts and clean up my mess,” in your words, Don. Any suggestions on how I can navigate this?

Steve Lewit: I’m being very mean this morning.

Gabriel Lewit: Well, be nice, man.

Steve Lewit: Yeah. Don, listen, how do I say this?

Gabriel Lewit: Say it, nice. Whatever you’re going to say, make me worried.

Steve Lewit: It’s like you got mom … What do you have? There’s a tape in your head that says that you’re doing something wrong by using mom’s money to take care of yourself, yet she left you that money because I’m assuming she’s a loving mother. She wants you to take care of yourself. Now, she may not agree that you’re using her money to pay off a debt, but you know what the real world is about, is taking care of yourself. And if that’s the best use for your money, I suggest you ignore that little tape playing in your head saying, “Well, maybe this is the wrong way to use the money,” and make sure in your own decision making, that this is the right way to use it, which is really the question to me.

Gabriel Lewit: Yeah, in our business, being financial advisors, there’s a lot of psychological elements to financial decisions. This is one that pops up from time to time, about how should I spend mom or dad’s money that I’ve inherited? And obviously, there’s different viewpoints on it. Some people say, “Oh, I’ll spend it however I want to.” Others are like, “I should do something that mom or dad would’ve approved of with their money.” So, depends on the angle you’re going through. But I think paying off your debts would generally be something that is smart. You’re not taking the money and blowing it away on the casino.

Steve Lewit: Casino, right, exactly.

Gabriel Lewit: It’s a smart move, right?

Steve Lewit: Yeah, it’s great.

Gabriel Lewit: It’s a good thought.

Steve Lewit: It’s a great thought.

Gabriel Lewit: Or saving it towards your retirement is a smart move. Those are smart, mature financial decisions.

Steve Lewit: And it’s hard. This is where we come in, Gabriel, because I think this is what we do, is because we have no emotional connection to money. So, we can look at someone like Don and say, “Hey, wait a minute. That’s a great move,” because we’re not emotionally connected. I have clients that own … I have a client that owns hundreds of thousands of dollars in AT&T, that they inherited. Now, AT&T is just … it’s just a horrible investment, but they won’t sell it because they inherited it. And it’s like, “Oh, I can’t sell that. That’s my parents’.” Well, why not? So, that emotional connection prevents from making … It’s a feel-good thing, which is a bad business decision.

Gabriel Lewit: Yeah. I’ve got a client, same, inherited a huge amount of IBM stock and won’t touch it and wants to leave it to her kids. So, here you’ve got money sitting in IBM stock, literally just passing over an entire generation. What if the grandkids and say, “Well, I can’t sell this. This is grandpa and mom’s stock.” Someone’s got to spend it at some point, or make sure that it doesn’t have all those restrictions around it, to put it to some beneficial use, or something.

Steve Lewit: Or it turns into Sears.

Gabriel Lewit: Yeah. Well, now we’re just talking concentration risk of individual stocks, little different topic. So Don, hopefully that helps a little, I know we can’t make that decision for you, but I think you’re on the right track thinking about paying down debts and secure retirement.

Steve Lewit: But Don, if you want to talk more about it because it’s hard to get through those emotions, Gabriel emotions are really strong, especially when you inherit money from parents and you want to remember them. You want to feel good about them. You want to feel good about yourself and you think you’re doing the right thing by not selling it because it’s mom and dads’. I understand that. But as a business decision, need some thought in there.

Gabriel Lewit: Yeah. Yep, yep. All right, my friends, hopefully you had a nice time joining us here today. We had a great time sharing our thoughts here with you. Thanks for tuning in to Our 2 cents. So again, if you’ve got questions on anything, give us a call (847) 499-3330, or send us an email info@sglfinancial.com.

Steve Lewit: You know what I think, Gabriel?

Gabriel Lewit: I do not know what you think.

Steve Lewit: I think you and I; this was a great session, I think we had today. You and I should go celebrate by having coffee and cookies together.

Gabriel Lewit: Did you bring in non-almond flour cookies? Well, thanks again, folks. Hopefully you have a wonderful week. If we can help you in any way, give us a holler and we will see you on the next show.

Steve Lewit: Stay well, everybody.

Announcer: Thanks for listening to our 2 cents with Steve and Gabriel Lewit. For any questions about your finances, give SGL a call at (847) 499-3330. Or visit us on the web at sglfinancial.com and be sure to subscribe, to join us on next week’s episode.

Prerecorded Voice: Investment advisory services are offered through SGL Financial LLC, and SEC registered investment advisor. Insurance and other financial products are offered separately through individually licensed and appointed agents.