- By Elizabeth Yoder
- Posted September 2, 2021
Financial Planners Can Apply Lessons From Pig Farming
I was pursuing my Summer 2021 issue of The Livestock Conservancy News when I read a wonderful article by agricultural educator, Rhyne Cureton.
In the article, he describes the old tradition of raising pigs for stable household income, ensuring a farm's unstable cash flows and potential for crop failure.
He then describes his experience of being startled at first by the way some farmers were not feeding their pigs a balanced diet. He started in on lecturing them and later was told off because he was asking the farmers to feed the animals more than they were able to eat themselves.
As a financial planner, I was struck by both the elements of ensuring a stable income with diversification, as well as keeping the comprehensive plan in mind. As advisors, it is our job to make recommendations based on what we see is lacking in a plan. We see both opportunities and dangerous blind spots. We spot holes that we encourage to be filled through either a more diversified stream of income or tools like disability insurance. However, we also have to take into consideration what taking those recommendations would actually mean to the client and their family.
For example, we meet with families who have been told by other advisors or agents (or by the wise all-knowing guru, Google) that Long Term Care Insurance protects them from spending their money down in the event of a long-term care need. This protects their ability to have good quality care when nursing or memory care is needed. It also protects their interest to leave money to their children or other inheritors that they’d like to support when they are gone.
All of this is true, in some situations. When we ask our clients what their experience with long term care has been with their families, the answers will be varied. Hereditary factors can sway our decision to move forward with insurance, but not always.
The real concern is can they afford it? Like the pig farmers in Ryne Cureton’s article, we have to look at the real impact of keeping the insurance active and paid alongside their goals to have money for their own retirement and to support the loved ones who will remain once they are gone.
We might notice that the need for long term care may be a real and true risk for the family and that a long-term care stay would leave the family few options for care and for leaving money to heirs. If paying premiums for coverage will exhaust their retirement savings as well, for the potential to have better care options, the goals of the client must be discussed to see what they are willing to do. Paying premiums would limit their life experience NOW. We have encouraged people to just live their lives, not being limited by the burden of annual premiums that would eat away at their life experience and long term retirement plans. The potential to need long term care still exists, but if it is not needed, the client will have lived their life, and potentially had money to share with the next generation.
The article referenced in the Livestock Conservancy News was entitled, “Don’t Forget the Farmer When Farming.” Don’t forget your client’s lives when giving them advice.