What Is Liquidity?
What is liquidity? When a holding is liquid, it simply means you can sell it anytime the market in which it trades is open for business.
Money plays a role in so many of the decisions we make, yet it remains one of the last true taboos in American life. Despite its importance, 62% of people say they do not talk about money at all. Not with family, not with friends and in nearly half of cases, not even with their spouse or partner. In fact, most Americans feel more comfortable discussing politics, religion or even the details of their love lives than their bank accounts.
The reluctance here is understandable. Money is tied to identity and emotion, including feelings of self-worth, fear of judgment, embarrassment or shame around things like spending, saving and debt. As uncomfortable as these feelings may be, avoiding these conversations carries a real cost. Silence can create stress, undermine financial security and strain relationships across generations.
These conversations are especially important to have with family. Understanding each other’s expectations, responsibilities and values leads to smarter planning and strengthens families along the way. Talking about money, even imperfectly, is one of the most powerful steps families can take toward long-term financial well-being.
For parents with adult children, looping them into your financial plan helps give them the information and tools they may need to help you one day or ensure your estate plan and legacy wishes are fulfilled. Consider discussing:
Your Financial Plan: Share how you expect to spend your retirement and what lifestyle adjustments you expect to make. For instance, do you plan to downsize or relocate? Are you planning to spend more time with the grandkids? Take the time to understand if your plans align with your children’s so there are no misunderstandings.
Your Estate Plan: Let children know what you intend to leave behind, whether it is financial assets, property or personal valuables. Surprises can lead to conflict, while clarity early on can help prevent it. There are no hard and fast rules about what you need to share. If you are uncomfortable with specific dollar amounts, for instance, you could use percentages or rough ballparks.
Your Goals and Values: Wealth planning is not just about assets. It is also largely about purpose. Explain what is important to you and what you hope to accomplish with your wealth. For instance, are you hoping to help fund your grandchildren’s education? Are there philanthropic causes you value? Helping your children understand the “why” behind financial decisions can make it more likely your legacy is carried out.
For children of aging parents, approaching financial topics can feel daunting. It might feel like prying, or maybe money is a topic you have never broached with them before. But doing so now is far easier than navigating decisions in a crisis. Honest conversations about future plans and resources can prevent stressful last-minute decisions later. Consider discussing:
Long-Term Care Plans: Do your parents have long-term care insurance or funds set aside for potential future health care needs? Have they thought about where they want to live as they age?
Key Decision-Making Roles: Understanding responsibilities in advance can eliminate confusion when timing matters most. Find out who holds powers of attorney and will oversee medical or financial decisions if parents are unable to.
Financial Safety and Organization: Ask how parents have organized important documents and where they are kept. Who needs to know passwords to important accounts and where are they stored? Is there an estate planning attorney who has copies of documents such as wills and trusts?
While knowing what to talk about is important, having this discussion is another matter. They can be uncomfortable, to say the least, and they are often downright emotional. A structured, thoughtful approach helps. Consider the following:
Choose the Right Setting: Avoid holidays and major family events. These are often already stressful times when emotions may be running high. Instead, schedule a dedicated time that allows for calm, uninterrupted conversation. Let participants know the topic in advance so they can come prepared with questions and concerns.
Set an Agenda: Be clear about the purpose of the conversation. Are you educating loved ones about your financial situation? Discussing an estate plan? Addressing specific concerns like debt or spending? Putting the agenda in writing can help keep the discussion focused.
Acknowledge Emotions: Money is deeply emotional, and strong feelings are a normal part of the conversation. Acknowledging that reality upfront can help defuse tension. Aim to create an environment where everyone feels heard and respected, by asking open-ended questions, encouraging family members to share their perspectives and resisting the impulse to blame or shame.
Turn Conversation into Action: By the end of the discussion, make sure everyone understands their role. Sometimes the goal of a meeting is simply transparency, and no follow-up is required. In other cases, families may need to outline next steps or ask for help.
Conversations about money within families can be complex, emotional and consequential. As your financial advisor, we can help clarify complex issues and outline planning strategies for you and your family to consider. We can also help facilitate family meetings, serving as a resource to guide conversations and answer questions as they come up. If you are ready to talk to your family about money, reach out. We are here to support you every step of the way.
This post was written and first distributed by The Writing Company.
DISCLAIMERS
This material is intended for general public use. By providing this material, we are not undertaking to provide investment advice for any specific individual or situation, or to otherwise act in a fiduciary capacity. Please contact one of our financial professionals for guidance and information specific to your individual situation. This is not an offer to buy or sell a security.
Shore Point Advisors is an investment adviser located in Brielle, New Jersey. Shore Point Advisors is registered with the Securities and Exchange Commission (SEC). Registration of an investment adviser does not imply any specific level of skill or training and does not constitute an endorsement of the firm by the Commission. Shore Point Advisors only transacts business in states in which it is properly registered or is excluded or exempted from registration. Insurance products and services are offered through JCL Financial, LLC (“JCL”). Shore Point Advisors and JCL are affiliated entities.
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