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- [00:00]
A
Hey so Money listeners, it's Farnooch. Do you want to make more money? Of course you do. Whether it's in your job or your business. I'm going to be teaching all my best practices Tuesday, October 28th for a 90 minute live workshop where I'll teach how to negotiate better and earn more. Real scripts, insider strategies and my proven step by step process. If you can't make it live, no problem. Everyone who registers gets the recording. Go to somoneyworkshop.com to save your spot. The that's somoneyworkshop.com today's episode of so Money is sponsored by Domain Money. To learn more, visit domainmoney.com somoney so Money Episode 1897 Simple Year End Money Moves with Big payoffs. You're listening to so Money with award winning money guru Farnoosh Torabi. Each day get a 30 minute dose of financial inspiration from the world's top business minds, authors, influencers and from Farnoosh yourself. Looking for ways to save on gas or double your double coupons. Sorry, you're in the wrong place. Seeking profound ways to live a richer, happier life. Welcome to Sew Money.
- [01:11]
B
Every situation is different. There's no one size fits all. A cookie cutter plan doesn't work in my opinion. So what I like to do personally and with clients through coaching is list out everything that we want to accomplish and let's put put a timeline or a deadline on each thing and then let's reorder it based on how we want to tackle it. So for things like IRA contributions and things like that, you actually have until April when you file your taxes to meet those deadlines. So there are some things that have flexibility that don't have to be done by year end, but you don't know what you don't know.
- [01:49]
A
Welcome to Sew Money everybody. I'm Farnoosh Tarabi. Well, as the year winds down, many of us are asking, what should I take care of financially before December 31st? What can wait until the new year? And how can I build a spending plan that actually reflects the life I want to live? We're going to explore all of this, including how to think about emergency funds, the current economic cycle, and how that might affect our plans, as well as the myths around working with a financial planner. To help answer these questions, I've got a great guest, Adriana Adams, CFP and head of financial planning at Domain Money, which is a modern financial planning platform on a mission to make expert guidance guidance more accessible, personalized and transparent. Adriana has worked everywhere from Wall street to startups and now leads a team helping clients align their money with their goals and their values. And before we get going, just want to say, I am not a client of Domain Money. I am paid by the firm to promote its services, which means I have a financial incentive to say positive things. This should not be taken as investment advice and results for clients may differ. Here's Adriana Adams. Adriana Adams, welcome to SO Money. It's great to have you. We have a lot to discuss. The economy, the markets, how to manage your money before the end of the year and then some. Welcome.
- [03:16]
B
Thank you so much for having me. Farnoosh I'm so excited to chat all things finance today.
- [03:21]
A
Yes, let's talk about the remaining months of 2025, the fall and heading into the winter. For me, I love this time of year because it's like everybody wants to do all their financial to dos in January. So imagine getting ahead of that. That noise that we always have in the beginning of the year that overwhelm. It's kind of like waking up really early in the morning for anyone else is awake and suddenly you've gotten so much done. So for you as you work with clients and even in your own financial life, what are some of the loose ends that you recommend we tie up now versus waiting until January to do it? Financial loose ends.
- [04:00]
B
There are so many things that we can be proactive about that we can get ahead of for next year. The first thing I would say is we need to focus on what the deadlines are that are December 31st. So there are some tax planning deadlines, things like tax loss harvesting or making Roth IRA, traditional IRA, 401k contributions, those types of things. But actually one that doesn't have a hard deadline that I personally put a hard deadline on is managing your cash flow. It is such a great feeling going into January with your spending plan already set for the year, rather than being midway through January and realizing that you've already lost 15 days and the whole year is thrown out the window.
- [04:42]
A
So when you say spending plan, walk us through that a little bit. Do you recommend cutting the leaky spends first the subscriptions? What is the assessment?
- [04:53]
B
Where I start with clients is understanding their values and the life that they want to live before we even look at the numbers. Because I want to know truly what they're thinking forward looking without them having regret from maybe where they spent money or any type of insight. So I start with figuring out the life that they're trying to live and Then I start with the deep dive of historically, where has your money gone? And does this align with what we talked about and what your values are moving forward? And if not, then let's get it realigned. So unlike some traditional kind of budgeting bootcamps, if you will, it's not always about spending less on coffee or avocado toast or things like that. It's more about, what life do you want to live, and then how much money do we have to work with and how can we fit it all together?
- [05:42]
A
Let's be really specific. If somebody is looking at 20, 26 and they're like, this is the year that I want to become a homeowner, or, this is the year that I'm going to start my business, do you think that these bigger goals should anchor the spending plan? In some ways I do.
- [06:01]
B
So I love starting with the overall financial goals. So what do you want to achieve in life? Think about it from, like, a career perspective, right? If you know that you want to be the CEO of a company or the vice president of sales or your own boss, and you think that vision might be 10 years away, the easiest way to get there, in my opinion, is to say, what do I need to do year by year to get there? And so financial planning to me and cash flow is very similar. If you want to start a business or buy a home, let's first put a timeline on that. If it's 12 months from now or if it's six months from now, then let's break it down into monthly goals or habits so that we're on track for that. Does that make sense?
- [06:42]
A
It does. I'm conscious of the listener who might be listening to us and being like, I got a lot to do before the end of the year, and good news, you have many months. But is there some stuff that can be put off till 2026 and it's okay?
- [06:59]
B
Yeah, absolutely. And you hit on a good point, actually, because every situation is different. There's no one size fits all. A cookie cutter plan doesn't work, in my opinion. So what I like to do personally and with clients through coaching, is list out everything that we want to accomplish, and let's put a timeline or a deadline on each thing, and then let's reorder it based on how we want to tackle it. So for things like IRA contributions and things like that, you actually have until April when you file your taxes, to meet those deadlines. So there are some things that have flexibility that don't have to be done by year end, but you don't know what you don't know. So first let's figure out what all the goals are and what we want to do, and then let's prioritize from there.
- [07:47]
A
Interest rates are maybe coming down more between now and next year. At the same time, there's so much that we don't know. We don't know where the job market's headed. We don't know if this rate cut is going to help us have a soft landing. So we're telling people to plan for 2026. But are there some macroeconomic facts that we should take into consideration just so that we're more realistic?
- [08:13]
B
Absolutely. What I think is most important when we talk about having concerns over where the economy or the job market is, is it's actually not macro. It's very personal. It's what is your emergency fund doing today? Do you have a fully funded emergency fund? Do you understand what your emergency fund should be? One of the questions I always ask people is, what would your life look like if you lost your income or your job tomorrow? Do you want to have a big enough emergency fund that you can still go out to eat or get your coffee, or are you planning to strip back to the bare bones until you restart? What is your personality and how is that going to go? And then let's figure out how much of an emergency fund you need. And once you're confident that you have your emergency fund funded, some of this noise and what's going on economically becomes a little bit less scary.
- [09:02]
A
What do you recommend? I know it's individual and depending on if you want to get that restaurant in every week or several restaurants, it's going to look different. Three months versus six months versus maybe even a year's worth of cushion. What do you typically recommend to clients?
- [09:19]
B
I start with a little bit of a default, depending on the client's situation. For example, if you are a sole income household, we're going to baseline at 6 months single income. We want to make sure you have at least six months because that can be a little bit riskier. You're only relying on one source of income. Or if you're a business owner, six to 12 months maybe. Because not only do you only have one source of income, but you're also primarily responsible for it. You don't have a company who's writing your paycheck, so that might be an opportunity to keep a little bit more cash on hand. But then on the flip side, if I have a dual income household where there's Two earners who are earning a similar amount of income, that's where we may default more to the three month timeline because you really. Three months would actually last you six months. If one of you lost your job, you would still have the other income. So it definitely is different for everybody. But those are some rules of thumbs and benchmarks where we start when we're having that conversation.
- [10:15]
A
You've been a financial planner through many cycles. How would you describe the current cycle that we're in? Just curious, are you and your clients having more conversations right now about recession proofing their finances?
- [10:28]
B
Absolutely. So I have been through many cycles and what I will say is it always seems the scariest when we don't know what's gonna happen. So that uncertainty is what's really scary. So not knowing if we may go into a recession, our rate's gonna change again. That's where a lot of this anxiety comes from. And I think what the shift I've seen this go around, I would say is a lot of people are looking for other ways to make income. So they're very well aware of what the job market might look like and they're finding other ways. Maybe they're doing some consulting or starting a side hustle on the side. And from what I've seen, that is becoming much more popular. So I'm really intrigued by that trend and it's a really interesting one to help people plan around because there's a lot more planning opportunities if you've got that different income coming in.
- [11:18]
A
I like to hear that the side hustle has endured all these. I've been talking about side hustles since I feel like the last recession, the Great Recession. And although we're not advocates of hustle culture, hey, an extra revenue stream or two, if it's something that you enjoy doing and it's making you have more security, it's meaningful money. Like, I have no problems with that.
- [11:43]
B
Exactly, exactly.
- [11:45]
A
So we want to pivot now and talk a little bit about your industry financial planning. The biggest questions that I receive from my audience is does it make sense to work with a financial planner? Am I ready? What will it cost? So we have an expert here with us. We want to talk about this especially because the industry over the last few years, we're seeing changes in terms of the relationship between client and and financial planner. I think it's expanding. But I want to hear from you what you're seeing in terms of the evolution of this relationship between a CFP and client.
- [12:22]
B
Absolutely. So a little bit of background on myself too. I grew up at Morgan Stanley, so to speak, a very traditional firm. And at Domain Money, what we're doing is a little bit different. We're not just managing portfolios. We're helping people make real life decisions and helping them do that confidently. We're democratizing financial planning. So you asked a question earlier too, on, you know, when is it right to work with a planner? What does that look like? If you have financial decisions to make that are gonna impact your life and you want a partner to help you on that journey or give you confidence, then talk to a certified financial planner. It can't hurt to open the conversation and see if they can help you. That's my opinion at least.
- [13:05]
A
And even right now, with things being so uncertain, planners are not just the experts that are going to help us find meaning in the numbers, but also to find meaning in our financial goals and in our our life goals, which then goes back to how we're financial planning. Talk about a typical day in your life as a planner and what kinds of conversations you're having with clients, especially right now.
- [13:30]
B
So much of our job is psychology rather than actual number crunching. So I always say I wish I would have gotten a minor or even a major in psychology back when I was in school because it would have been so helpful. However, real world experience of working with clients and talking through these conversations is invaluable as well. So the kinds of questions that people are coming to us with now are more about what should we be doing today, given the economy? So like you were asking earlier about like where things are at, when things are going well, people are generally a little bit more focused on long term, am I on track for that long term goal? What are we doing for the year? So right now I would say people are very focused on what can they do today, what can they do next week, and making sure that they're set up for short term success and long term success. I would say a lot of questions do come around, budgeting and cash flow too. Our demographic that we primarily work with at Domain are having kids, buying a house, maybe changing careers. And so there's a lot of psychological questions or psychology that goes into that of having the CFP get to the root of what you're trying to do and then we can figure all these other things out. Right? So a lot of it is more deep value finding. What are your goals, what are we trying to do here and why do we want to make decisions or changes today? And that can really help us determine what numbers and data to look at.
- [14:58]
A
Yeah. The why is so important. Right. Because sometimes we follow the herd. We're like, everyone in my age group is doing these things. So therefore, this is what financial adulting looks like. And are you so brave as to say to someone, maybe this isn't right for you? Like, I think maybe you're doing this because it was culturally expected of you, or everyone at work's doing this, so you need to do this.
- [15:26]
B
Absolutely. We have a ton of those conversations because everybody is programmed to try and keep up with the Joneses. Right. And so being an unbiased third party, I can really take a step back and say, based on what you're telling me, it sounds like you actually are more interested in doing X, Y or Z instead of the norm. And I'll give you an example. Even I was working with a client recently, and she is. Has been stellar with her finances and is on track for very early retirement. She lives a very modest life. She was like, everybody is maxing out their 401ks and contributing to their 401ks. And I know there's tax benefits, but I just. I don't know if I should be doing that or not because of my timeline. And it turned out she, based on her tax allocation, we actually didn't want to max out her 401k. We didn't want to leave any money on the table. So we made sure she at least contributed to get her employer match. But from there, her saving strategy looks very different than a lot of her friends.
- [16:27]
A
Yeah. What is your financial philosophy when you're working with clients? Like, what is the framework that you're bringing to them? Because I assume that depending on who you work with, and this is part of finding the right fit when you're working with a planner, is you want to work with somebody who you feel like you can get behind their thinking and their model. How would you characterize it, your relationship to money and how you try to coach your clients?
- [16:53]
B
I love that question. Our philosophy, if you will, is helping clients live the life that they want to live. So we come in with absolutely no judgment on what they're trying to achieve, where they've been previously and where they want to go. And that's really important to me because I do feel like there are a lot of people with very strong opinions about how things should be done or certain things that are a must do or a must have in your financial plan. And we really take all of that out of it. At Domain, there is no cookie cutter. There's not one single thing that I can think of that is the same in every single plan or even in half of the plans that we write and the advice we provide. The other thing that I'll mention too, that I think really differentiates our philosophy and how we work is we break things down into step by step instructions. So you actually have an interactive action item list in your dashboard of things to do. And it not only does it make it easier to actually do all of the things, but it also comes with some gratification of checking the box off. Right. And making sure that you understand what you're doing and why. So I think those are really important and a part of our core philosophy.
- [18:08]
A
Yeah, the visual reinforcement is I can definitely say I need that and I benefit from that. Or what do you think are some of the myths or misperceptions that people have about financial planners? Adriana We've all heard that people assume that financial planners are too expensive, that I'm not ready because I don't have a particular size of my net worth. We've heard it all. But what do you want to dispel?
- [18:33]
B
The two most common things that I want to dispel are that financial planning is only for the wealthy and that financial planning is only related to your investments. At Domain, one of the other unique things about how we do financial planning is it's flat fee financial planning compared to asset under management, which I think you've dug into a little bit before too. And we can talk about it also more. But I'm sure your listeners are somewhat up to speed on what the asset under management model is. But at Domain, our fee structure is based on the topics you want covered and how complex your financial situation is, which is really unique. So it you're not going to pay more just because you have more money. And I think that's really important because historically it was the opposite. If you had more money, you were paying the advisor more money to manage your money. And so I think that's really important. But just to circle back to your original question, you don't need to be wealthy to work with a financial planner.
- [19:29]
A
What are the life stages that your clients are typically coming to you at that would trigger a need to work with a professional, whether it's a life stage or it's a next step that they're looking to achieve. They've inherited money. I'm sure there's a long list, but what are the top reasons?
- [19:49]
B
The top reasons that people come to Domain to work with a certified financial planner is to well, there's a couple of triggers. I guess I would say the top reason is because they are looking for help making a decision. So some of those triggers or the decisions are how much house they can afford or how much to put down on a house. Another really popular one I see all the time is, can I afford to have children? Or said another way, how does having kids affect my overall financial plan and my retirement track record and all of those things? So I would say those kind of next steps of life are two of the most common. And then one other one I'll throw in here, because this one's kind of timely with rates, too, is people who bought a home five years ago when rates were 2 1/2 percent, and they're coming to try and understand they've outgrown the house, maybe, or they need to move for work. They're trying to understand, do they hang on to that house, do they sell it, do they rent it? And so that's also one of the most common niche parts I would say, that we see these days just because of where we are at in that cycle.
- [20:53]
A
That's interesting. I want to talk a little bit about the question regarding can I afford to be a parent? Can I afford to have children? A lot of that is financial reasoning, but a lot of that is also so emotional. How do you balance that answer and what are the financials that you look at to be able to be realistic about this goal?
- [21:16]
B
It's a very emotional conversation. What we're going to do is look at what does your financial picture look like if you don't have kids and you stay on kind of the track record you're on today? And what does your financial life and your balance sheet and your net worth potentially look like if you have two kids over the next five years? And what does that retirement timeline maybe look like? And then we compare and contrast the two, and that can usually give people the confidence to say, oh, it's only a couple of years, like having children. And the joy that's going to bring me is well worth what this situation playing out might be. But then I have other clients who are like, by all means, I want to retire at 50 and I'll do whatever I can to get there. And they may see those numbers and say, if I have to work till 65, then it's not in the cards for me. And that's okay too, right? There's no right answer. But my favorite thing to do is to look at option A and option B. And usually you can understand really quickly which decision you want to make when you see those numbers.
- [22:11]
A
Yeah, I find too that too often couples or individuals who want to become parents, caregivers, they look at the calculation as just, this is the cost of having kids. And it's going to add to whatever I'm spending today versus the reality which is that your life is going to shift, your priorities are going to change. And I'm not saying it's going to be less or more expensive, but it's just that you have to start from the bottom again and work your way up and then using this goal of becoming a parent, a family as an anchor to everything else. Because if your lifestyle right now is a lifestyle of a singleton or a child free couple, you're spending in areas that just will not be possible when you become a family, at least in the beginning because you're so busy raising children. And of course though there's the add ons of childcare potentially, but maybe you don't do that. So I think one of the silver linings to all of this when it comes to affording parenthood is that you do have options. It's not super rigid. And I think that sometimes just opening up people's minds and eyes and ears to those alternatives is, is how they.
- [23:25]
B
See through it, is how they get through it 100%. And I think that's also one of the big benefits of working with a financial professional is we've seen a variety of situations and how this can play out. And we can help you talk through the pros and cons or the alternatives and then also take it a step further and help you map out what those look like. But it's really hard if you don't know what the options are. So I would encourage people to talk to their friends, talk to their family, talk to their advisor, talk to their therapist and talk through some of these situations so that you can really start to figure out what it might look like for you. Because it's so different for everybody.
- [24:02]
A
There's a concern out there that planners might push products or investments for commission. How common is that? And what should consumers ask to avoid potential conflicts of interest or even finding things in their portfolio that they are not approving of or learning more and more about how the laws are expanding around private equity showing up in your 401k and crypto showing up in your 401k? And I just wonder what are your thoughts on that? And how can consumers protect themselves?
- [24:34]
B
The number one question to ask is are you a fiduciary? So by virtue of being a certified financial planner and all of our advisors at Domain Money are certified financial planners, we are all fiduciaries. And fiduciary is really just a fancy legal way of saying we have to act in our client's best interest. And the difference is if you're not a fiduciary, you typically follow the suitability standard. So let's say there's three investment options or three strategies that are suitable for you. Furnished, right? Like they might fit in, they could help you achieve your goal. If I am not a fiduciary, I can push any one of those three. And unfortunately, a lot of times people will push the one that brings them back the most money, right? The most commission for them because they have a conflict of interest. But as a fiduciary, we have to recommend the one that is best for you, not just one of the three that could maybe work. And so I do believe that fees and commissions in that respect can be a major red flag. I'm a huge fan of flat fee transparency and fees and all of that good stuff. But to just double click on your original question, you need to know if the people you are working with are a fiduciary and just ask.
- [25:54]
A
That's how you get to the transparency. Hopefully they're upfront about it. And there's a, there's signage and there's. They're not hiding that. I'm sure that's something they would want to be forthright about. Gosh, it makes me wonder why there's anyone in this industry who's not working on the best interest of their clients and why somebody would want to work with them. I don't get that. But that's another show for somebody who is right, for someone who is maybe starting out, they don't have a ton invested, their finances are not quote unquote complex yet. Maybe they're just a singleton, but they want to get on the right track and they're interested in working with a financial planner. What does that relationship look like versus later on in their life when they do have more going on?
- [26:39]
B
That's such a great question. And you know what? The way I want to answer it is actually how we do it at Domain, because I think we do it in the very best way. And to our point earlier, there's so many different ways, there's different types of advisors that do different things. So let me speak in particular to how we would help someone in that situation at Domain. The very first thing we're going to do in any good certified financial planner should do is get to know you personally first. Let's hear about your goals and what you want to accomplish and let's make sure we're crystal clear on the value that we can provide and how we're going to go about this. And then at Domain we onboard you to our platform and have you upload documents and then it's hands off for you. So we get to work digging into all of the data and all of the numbers and putting together a cohesive plan for you in a simplified format. And then we'll get back together to walk you through in a very educational way the pros and cons of different strategies to consider maybe some areas of opportunities. Where can we help you maximize your portfolio? And also not only what are you currently on track for, but what do you need to do to get on track for those goals you told me about in the first session when we were getting to know each other because sometimes and usually there's a misalignment there and we call that our plan delivery meeting and usually it's a nine, at least a 90 minute session cause we've got a lot to go through from there. We're your partner through it all. You have coaching sessions to use throughout the year. We usually are very prescriptive with what you should use those coaching sessions for cuz people will be like I don't know what I should use that for. So maybe it's doing a backdoor Roth IRA when the time comes or tax loss harvesting in November or liquidating funds from the 529 to pay a tuition bill. Something is like as simple as that. We're here to help you and hold your hand through it all. And from honestly though, the how we work with more complex clients is very similar. We take the same approach, right? We're just going to dig into the details. No matter how simple or complex you are, we are going to get so detailed on your finances and make sure that you've got all your bases covered.
- [28:40]
A
Yeah, fantastic. I want to learn more about Domain Money. And with so many entry points out there for working with a financial planner, so many resources, what was the the white space in the market really that Domain saw or what was the need that they were trying to fill? In other words, what wasn't working in the financial planning world that domain saw an opportunity to show up and provide and fulfill.
- [29:06]
B
This is such a good question. It started as filling a space where people didn't have access to financial planning. And this goes back to My career at Morgan Stanley, I had so many peers or family members or friends who were looking for help and I would help them pro bono right on the side because I wanted to make sure that they were educated and knew what to do, but they weren't qualified to work with an advisor at Morgan Stanley. Like we were not allowed to onboard somebody at a certain asset under management threshold. We wouldn't get paid on it. And it wasn't, it didn't fit the platform. It really started as filling that gap of people who didn't have a place to turn to. However, it's so cool to me because it's evolved into we have clients with a negative net worth. We have clients with more than $20 million in net worth. And it's truly turned into a space of helping people who want detailed financial planning help to make life decisions. So it's no longer just about portfolio management and what am I on track for retirement. It's truly about being a partner with somebody and helping them make everyday decisions.
- [30:12]
A
Negative net worth, how does that work? What is, what are those conversations and where is that person's money coming from to pay you? I don't. Maybe we need to clarify.
- [30:22]
B
That's a great question. That's a great question. Yes, they're earning.
- [30:25]
A
A lot of times they're earning money, but maybe they're in debt from law school or something.
- [30:28]
B
Yeah, exactly. You hit the nail on the head. So a lot of times it is from school debt. Occasionally we will have clients who maybe just got themselves and this might not be a negative net worth, but maybe have some credit card debt, but they have assets on their balance sheet and they don't know how to weigh the pros and cons of what to use to dig themselves out of a hole. But in general, the clients who are good with a negative net worth are in some sort of school debt, which is very common these days. Right. It's so expensive to go to school, especially if you're going for a master's degree, a law degree, a doctorate. It really adds up.
- [31:03]
A
Yeah, I want to send more people to Domain Money, so we're going to put that link up right now. Domainmoney.com somoney make sure you use that link so they know that you heard about Domain on Sew Money. Adrienne Adams, thank you so much for joining us during what is a really critical time of year. And your advice was just so important, easy to digest and hopeful. I'm hopeful, which is not easy these days. It's. I really appreciate you of course.
- [31:34]
B
Thank you so much for having me, Farnoosh. It was great to be here.
- [31:40]
A
Thanks so much to Adriana Adams for joining us. If you'd like to learn more about Domain Money, check out domainmoney.com slowmoney that's domain. Com. So Money, I'll see you back here on Wednesday. And I hope your day is so money.