How to have that frank and thoughtful conversation…

Dr. Paul’s Lessons Learned

Whenever my parents had a medical question they called my sister.  I was always a child in their eyes and like all good sons and daughters, I was destined to spend most of my life trying to gain their respect.  It was 1995 and I was on my way to Maryland to help Dad organize his finances into Quicken (reference).  I had purchased a laptop with the hopes of easing him out of the middle ages. 

At face value nothing had changed.  When Dad opened the door he saw the same clumsy, independent little boy who had left 16 years earlier.  Five years of undergraduate education, 4 years of medical school, 4 years of residency and 2 years of fellowship–all culminating in a faculty position at the largest and one of the most prestigious pediatric hospitals in the world–proved nothing; I was still his little boy…

It is almost impossible to get parents to share their finances with their children.  I think the most likely reason for this is because we are always children in their eyes.  How can we be trusted with their financial future?  In many cases, unfortunately, children can’t be trusted.  One mistake, even if made with good intentions, can mean financial ruin and at their age that means the nursing home or even worse – isolation, hunger, and death.

Ultimately it’s up to the parents.  They must first be willing to accept the help, and second be trusting of the person who’s offering it.   Like anything else in business, it’s all in the presentation. You may, like me, look back on the experience as a fond memory.

Now I have no doubt that he was proud of all of my accomplishments, but like any father he had his own ideas about what I should be when I grew up.  In high school he had tried to set my sights on engineering.  After it was clear that I was destined to at least attempt a career in medicine, Dad began to suggest that I focus my efforts on surgery.  After all, surgery was well respected by virtually everyone on the planet (except of course by those in other medical subspecialties), and respect was important to my Dad.  Surgery also paid well.  And on a scale of 1 to 10, with 1 being girly and 10 being manly, surgery was a ten. That also mattered to Dad. 

After several hours spent catching up, Dad and I sat down and began to input decades of transactions into Quicken.  Two days later, fifty years of investing had been organized into one simple easy-to-access spreadsheet.  His response lacked luster at best.  Perhaps he feared technology.  I wasn’t concerned because I had saved the best for last.  We then put all of his stocks into a watch list and connected the computer to the Internet.  It was nothing short of a miracle.  Within minutes, Dad was looking over an up-to-the-minute snapshot of his entire stock portfolio including their daily gains, losses, and sum totals.  He would never have to transcribe a radio or television broadcast stock market report again.  I looked for a reaction.  He was unfazed. 

While I was a little disappointed, I had entered into this venture with very low expectations.  After all, what we had accomplished was no small fete.  I was now a little more familiar with Dad’s finances and he was a little more trusting of my curiosity.  As I watched him slowly make his way up from the table, I signed on to AOL and suggested that he create a screen name using my AOL account.  I explained that email was a “free” alternative to the telephone.  Now that grabbed his attention.  Within minutes he watched as Tami and I began emailing one another free of charge. 

Dad looked at me with amazement.  “How did you do that?” he asked.  I explained in laymen’s terms (my terms) the process of emailing.  He then looked at me, smiled, and said, “I realize that I don’t tell you this enough, but your mother and I are very proud of you.”  Before there was even time for this historic moment to enter my consciousness, I was shocked back into reality.  I watched Dad, using the skills that I had just taught him, write his first email.  “Dear Tami.  Your mother burned herself with a pot of boiling water last week and it doesn’t look like it’s healing very well.  When can you come by to look at it?”   I didn’t even know that Mom had a burn. 

Every day it was the job of whoever’s hands were free to transcribe select stocks from the daily Dow Jones Report on NPR.  While we bitched and moaned about whose responsibility it was, Tami and I actually coveted the role and took great pride in the accuracy with which we transcribed the often difficult to hear report.  Dad first became vested in the Dow Jones in 1948 after being left a small amount of money with the passing of Mom’s parents.  My Dad quickly became addicted to watching his portfolio grow.  He was a wise old-fashioned investor who was in it for the long haul.  He was also very secretive about his holdings, a trait that was characteristic of my parents generation.  Dad did have the wherewithal to hire an attorney and designate Tami as both his medical and durable power of attorney.  But it wasn’t until the winter of 1995 that I realized how much of a nest egg he had accumulated. 

Open up communication and find a non-confrontational way to discuss finances.  This is easier said than done, but being open and honest up front  (this is repetitive) is the best way to start.  Share reading materials on financial planning.  Offer to bring them up to date on technology. 

Provide them with options, not with demands.  Jointly meet with their financial counselor.  In the average household children inevitably gain control of their parent’s financial interests, either through dementia or death.  By discussing it early on, you are giving them the opportunity to help control how the money will be spent should one or both of them become incapacitated.

I was never really interested in the stock market, but I also realized that whatever portfolio Dad had built, that nest egg would someday be mine to manage.  I had been using Quicken for three years to do my own finances, and thought that it would be a great opportunity for me to become involved in Dad’s finances while offering him a quick and easy way to organize his portfolio.   Every day, just after the market closed, he would listen closely as his stocks were reported, etching the numbers into his version of an Excel spreadsheet.  This version was first created in the 50’s by him, using a number 2 pencil, a ruler and a legal pad.  Now there were dozens of legal pads, with each one containing a detailed chronology of his investments, most of which were born out of the original 5 stocks he had purchased in 1948.  Well, it was 1995 and about time for his son to make his life easier.  It was time for my father to jump on the technology train with me as the conductor. 


If you are not financially savvy, don’t fake it; access available resources.  Either educate yourself or employ a certified financial planner to help you and your parents forge a plan.  It is money well spent and you gain the trust as a caregiver.


I was lucky; Dad didn’t fight the opportunity.  He gathered all of his checkbooks, notebooks, and legal pads and strewed them across the table.  It was truly a sight to behold.  As we slowly made our way through each checking, savings, and investment account, I became more and more amazed at the fortune that he had amassed with the ultimate goal of protecting him and his wife from destitution.  This was the beginning of several important milestones that Dad and I would share.  For the first time in his life, he trusted me with his finances.  He would broaden that trust even further after his move to Houston, like it or not. 

It is almost impossible to get parents to share their finances with their children.  I think the most likely reason for this is because we are always children in their eyes.  How can we be trusted with their financial future?  In many cases, unfortunately, children can’t be trusted.  One mistake, even if made with good intentions, can mean financial ruin and at their age that means the nursing home or even worse – isolation, hunger, and death.

Start with the basics.  Everyone, especially the elderly, should legally select an individual to represent their interest when it comes to their finances (durable power of attorney) and health (medical power of attorney).  This is often difficult to discuss openly because when there are two or more siblings, one may be better suited for this role than the other.  Perhaps the best representative is another family member or friend. 

Regardless, it must be someone whom the elderly person trusts.  In most states these documents are very powerful and allow the designee complete control over the respective interests of the incapacitated individual.

When my father moved to Houston in January of 2000, I was forced to take charge of his finances.  Luckily for me, I had already met his Maryland stockbroker and was semi-familiar with his assets.  Dad was in Houston for a little over a month before he was able to take part in financial decisions.   Though Tami was his designated power of attorney in Maryland, that would not help him in Texas. 

Therefore, the first goal was to complete the paperwork required to allow me to control his finances if needed.  This would take some time because Dad would have to sign away that control, and for all intents and purposes, he was still recuperating from the mental hit that landed him in my house in the first place.  We were lucky in that I had a great job with a good salary that could carry us all for several months. 

Dad’s faculties had improved by early March, making it possible for us to meet with a local attorney referred to me by a trusted friend.  The meeting began with the lawyers and their witnesses, all in agreement that Mom and Dad were of sound mind.  Once that was documented, the attorneys then explained the seriousness of the decision that they were about to make.  After both voiced their understanding, they signed the documents giving me control over their lives should either of them become incapacitated.  It was surprisingly easy and honestly, that alone should scare everyone. 

There is an immediate assumption that the children have an honorable interest in their parents’ well-being.  Again, that is not always the case; but unfortunately, the elderly have little choice.   If they don’t make the decision early, under their time-table, it will be made for them and often by a court-appointed attorney who is in the market for a new pool.

Our next step was to find a local stockbroker who would represent my Dad’s interest.  Dad had grown comfortable with and trusting of JT, his longtime stock broker in Maryland.  After several months of working directly with JT I began to understand why Dad liked him. 

He was older, patient, knowledgeable, experienced, offered direction without assuming control, and more importantly, he seemed to respect Dad.  It was clear that he wasn’t in it for the money; in fact, he rarely made any commission from Dad’s account because Dad rarely bought or sold anything in his portfolio. 

He conducted business the way they used to, in the olden days.  I respected that.  However, it had grown difficult for both of us to manage Dad’s account over such a long distance.  We both agreed that it would probably be best if we transferred his account to a local Houston branch of the same brokerage firm.  Unfortunately, all brokers were not cut from the same cloth.

Unless you are a certified financial or investment analyst with a proven “successful” track record for the elderly, don’t become your parent’s financial planner.  That role carries too much responsibility and risk. 

Search for an analyst that’s been at the same respectable firm for years; the older the better.  Investing for the elderly should be focused on consistent income from low-risk, safe and secure investments. 

Find the firm that will allow your parents the option to pay the analyst based on commission for transactions, rather than on a percentage of the holdings.  My father rarely bought or sold anything and therefore the “commission on transactions” method of payment made more financial sense for him. 

If your parents will allow it, get to know their investment broker.  Schedule frequent meetings and ask a lot of questions.  Make it obvious that while you are there as a support for your parents, you are also there to oversee performance.

This post really wasn’t written for the wealthy client.  Of course anyone is welcome to read it, but honestly, the wealthy clients are usually well represented by knowledgeable legal and investment advisees.  In addition, most of their heirs know exactly where they stand when it comes to inheritance and control over their parents’ fortune. 

It’s a little different for us commoners.  While transferring Dad’s account from Maryland to Houston, we made an appointment with a broker at the Houston branch of Dad’s brokerage firm.  Apparently, when someone with less than a certain amount of money enters a large investment firm for advice from a broker, there is often a “call list” and it is customary for each broker to “do their time” on that call list responding to inquiries. 

Unfortunately for us, it was TF’s day to take on new accounts.  He was a large man who on the surface seemed nice and knowledgeable.  After sizing up Dad’s portfolio he was confident that he could increase Dad’s income considerably by getting rid of some of Dad’s “old timer” dividend-oriented stocks while reinvesting in the technology sector.  He was down to earth, had a strong Texas accent, and seemed to say all of the right things. 

Like a sixteen-year-old wooed by the words of a seasoned car salesman, I succumbed to the words of a “talkative young whippersnapper”  (Dad’s words) who had convinced me that he was going to teach Dad and me a thing or two about the 21st century investor.  We were in his office for less than an hour, but that hour resulted in a  $100,000 lesson in the wisdom of Dad’s generation. 

In my defense, the timing of our reinvestment strategy couldn’t have been worse.  We entered the technology market just prior to the crash of the dot.com companies.  Bottom line, I had gained a lot more respect for Dad’s insight into long-term investing and a whole lot less respect for the wisdom of the day trader.  The lesson wasn’t over though.  We had sold a lot of what T.J referred to as Dad’s “dogs” so that we could purchase some real high-tech winners (i.e. Enron).  The sale of those dogs would soon translate into (capital gains?) at tax time.  Most of Dad’s stocks were either purchased in the ‘40s and ‘50s or had originated from stocks that were purchased in the ‘40s and ‘50s through acquisitions, break-ups, or stock splits.  (Capital gains?) were near 100%.  Luckily for us we had a lot of losses to counter-balance all of those gains.  (That was sarcasm.) 

Minimize expenses to the bare necessities.  Making the bathtub more accessible doesn’t necessarily mean that you have to modify the entire bathroom to meet the ADA standards for the disabled.  For the same amount of money you could provide your parents with a sitter who could help them with all of their daily activities.

As I prepared for my first tax time with Dad, I again gained a lot of appreciation for the patience and hard work that it took for Dad’s portfolio to grow.  As I sifted through all of those record books, ledgers, and tablets, I saw a man with his sights set on one prize – preparing for the future. 

Dad wasn’t looking for cruises or trips to the Riviera, he was securing a nest egg that would bear interest capable of maintaining his and Mom’s modest lifestyle while the capital remained accessible for an uncertain future. That future included the end-of-life years that are all too often filled with health crisis after health crisis, disability, inflation and a life with little to no support from the government. 

If Dad was going to survive those years, he would have to plan for them.  I can remember back to countless conversations that Tami and I would have with my parents trying to convince them both to spend some of their “fortune” on luxuries.  After all, we didn’t need it and they would have benefited so much more by those creature comforts like big screen TVs, luxury cars, and trips to Europe. 

Dad never really argued, he just kept plugging along, perhaps all too cognizant of the fact that one day all of his planning would “unfortunately” pay off.  As I wrote those weekly checks for Mom’s 24-hour care, quarterly taxes and work compensation insurance on 4 full-time caregivers, as well as Mom’s daily expenses and healthcare bills, I thank my lucky stars that Dad forged his own path and ignored his children’s advice.

Help your parents navigate through the financial clutter.  Provide them with options, not demands.

Dad was the consummate businessman, always organized and attentive to the details.  As he aged, his inherent need to be organized continued, but his ability to attend to the details diminished.  This was coupled with an almost exponential increase in the details of his day-to-day life.  Those details included voting ballots for the board of directors (BOD) for huge companies of which Dad owned a few shares.  I referred to this “stuff” as financial clutter. 

When Dad was younger he would enjoy reading over the prospectus and making an educated decision as to who should be on the BOD of AT&T.  But as he aged, he became almost paralyzed by the clutter.  Our dining room table became a gauge of this behavior.  What was once a symbol of comfort and calm became the centerpiece of chaos. 

Every bill, stock prospectus, and insurance policy for the past 5 years was given a designated space on the table top.  In Dad’s mind it was organized and important–but as each pile grew, Dad’s memory took on one more unnecessary factoid to remember.  Each pile represented something on his ToDo list, a list that he could never quite get his hands around. 

We tried to help him separate the necessary from the unnecessary but to no avail.  Dad eventually designated the dining room table as a “no fly zone” for everyone except him.  It was the spring of 2000 before our dining room table saw the light of day.  Mom and Dad were with Tami while I began the year-long project of cleaning out the house.  All of the clutter on that table was inconsequential.  I know that because I’m the one who spent hours going through it with a fine tooth comb.  Just in case, though, I boxed it up and stored it in my sister’s basement.  Like father, like son.

It happens to almost all of us.  We start off life with no worries, but by the age of 30 we have a job, a mortgage, a family, bills, debt, assets to manage, etc.  As we get older, the juggling doesn’t get better, it gets worse.  There are more demands on our time and more expectations of our memory.  For example, random access memory (or RAM) is the most common type of memory found in computers.  RAM is utilized anytime a computer program is activated.  When multiple programs are in use, more RAM is required.  When the need for more memory exceeds the amount available, you simply buy more RAM. 

When the responsibilities of everyday life become increasingly complex for the elderly, they can’t buy more memory.  That’s where the caregiver comes in; they become their parent’s RAM.  I can’t even imagine what it must have been like for my parents to manage their financial responsibilities, even on their most astute days.  Looking back over the years, I see now that there were a lot of things that I could have done differently.  Preserving Dad’s memory would have been on the top of that list.  While I was unable to provide him with more memory, it was within my power to minimize the number of programs that were consuming his RAM. 

I could have arranged to have my parent’s bills, bank statements, and/or stock prospectuses forwarded to me each month.  Even more basic than that, I could have made more frequent visits to Maryland, perhaps on a quarterly basis to help him sort through the clutter (financial and otherwise).  Ultimately it’s up to the parents.  They must first be willing to accept the help, and second be trusting of the person who’s offering it.   Like anything else in business, it’s all in the presentation.

In summary, communicate with your parents early about their finances.  You could begin the discussion by sharing reading material on financial strategies for the elderly.  Offer to help them sort through their bills each week.  Join them in meetings with a financial planner.  You could even take it to the next level. 

There are several online academic institutions that now offer certificates in life planning for the elderly.  This training will better prepare caregivers for making wise and informed financial decisions for the elderly.  Whichever approach you chose, don’t expect miracles.  If your father is like mine, it won’t happen overnight.


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