Navigating Divorce and Financial Planning

Episode 22 & 23 with Michael Kothakota

Financial advisor and divorce planning specialist Michael Kothakota joins host Sonya Lutter and Wes Brown to offer invaluable insights into the intricate world of divorce planning and financial consulting.

Michael shares his career trajectory, from serving in the National Guard to establishing his own firm. He also provides practical advice and expert guidance on divorce processes and the emotional complexities of navigating divorce cases from a financial perspective. 

Tune in to hear Michael's research-based strategies that will give you a new perspective on relationships, money, and finding solutions.

• Transcript

  Wes Brown 1:40

  I have no, I have no concerns. Okay. Well, let's just let's start at the top. Tell us you know, okay, tell us about how you got to where you are. And full disclosure. You know, that's most people hit like the high points. And Sonya knows, I like to sort of go off script and go like, Okay, well, that sounded like it hurt. Can you tell us more about that. So we we make it back to some of your story for more details. But Mike

  Sonya Lutter 2:08

  loves when I asked those questions.

  Michael Kothakota 2:12

  That's where I look forward to most

  Sonya Lutter 2:16

  often Sutton,

  Michael Kothakota 2:18

  elephant, and castle.

  Sonya Lutter 2:21

  Elephant Castle. Look it up. It's in DC. Yeah,

  Michael Kothakota 2:26

  it's great place. It's a little Indian, English fusion? Well, maybe not fusion, but it's a good place to eat. It's pretty tasty. Stories. Yeah. So I guess my story, getting into financial services, it's really interesting. I, I originally thought I was gonna be a biochemist. And I took a bunch of those little batteries of tests that tell you what you want to do with your life. And like, the first eight were, like, medical related, so I didn't want to do anything in medicine. But number nine was financial planner. And so I thought I would investigate that. But then a few things happened in my life. I got, I got sent to Iraq, I deployed to Iraq with my National Guard unit. And so I spent four months in train up and then 15 months in country. And then when I came back, I decided to join Edward Jones. So I started my career at Edward Jones, and very quickly realized that probably wasn't the place I wanted to be permanently. So right at the three year mark, I left that happened to coincide with November 2008. So I started my RA firm, November 2008, and was thinking that there's nowhere to go but up from here. And then just slowly have built built my firm. From 2008 Till now, so I guess I've been a bit in 15 years owning my own firm, and then I guess three, so almost 19 years in the business. See before that, or during that time. Well, actually, so today's I guess I should go back to this probably a little bit more interesting to you since more relevant to what we're talking about. How long have you been in the business? Where have you been, like 20 years or so? So you were there?

  Wes Brown 4:35

  Well, my timing is I don't know if it's better or worse than yours. It was. It was December of 2007. So I

  Michael Kothakota 4:45

  mean, that might be worse, actually. Because you you like you're like hey, thanks.

  Wes Brown 4:51

  Yeah, yeah, I mean, I had to be worse. I need I knew no better. I mean, I just, you know, I mean, yeah, tell you that trades. Short story later. But yeah, so about I've been in it just about as long as you have. Okay,

  Michael Kothakota 5:05

  yeah. So So what happened is, essentially I just take whatever walked in the door, somebody needed help determining whether they should refinance a mortgage. You know, I would charge some fee for that I got, you know, I was there was a slow transition, transitioning my clients from Edward Jones, the people, most people who transition tell you the same story that some of the people that you are sure going to come with you don't. And then some of the people that you never thought would have come with you do. And my case was no different. But I also would take on anything related to anything finance related. And so I was approached by a woman who needed help with her divorce. And I thought, well, sure, I'll take that case, I'll take that on. And from that, I ended up, you know, building my practice working with people going through divorce, you know, before, after, or before, during and after. So in that process, I learned a lot about it. But that's essentially how I kind of built to where I am, I went back to school and got a master's in predictive analytics in 2013. And then went into the Kansas State Ph. D. program in 2016. graduated in 2019. A couple of years ago, I decided to apply for the head of research position at CFP Board. And I somehow got that that role and did that for about 15 months. And then now I'm back. I just I teach and, and then run my practice.

  Wes Brown 6:54

  Can I go back to a couple of points that I want to hear about? Okay. Absolutely. It's what I do. I'm

  Michael Kothakota 7:00

  sorry, it's your pockets.

  Wes Brown 7:04

  That's it. Sonya was waiting. She was just I could see you were just like, Okay, let's just get on with it.

  Sonya Lutter 7:10

  Yes, well, I'll break in because and then you guys can just have your own conversation. But you also share the similarity of the medical background. Not thinking you were going to go into something medical bio oriented. Wow. Yeah. And here you both are. That's interesting. That is interesting. Now, I can't wait to see what questions you're gonna ask because it is definitely not on script.

  Wes Brown 7:36

  Well, we can get back on script here quickly, but just a couple of like, a couple of like, details in there. So you were National Guard and you were deployed for how long?

  Michael Kothakota 7:50

  So overseas 15 months, but then you do? I think we did a five month train up. So basically, I mean, National Guard is, despite one weekend, a month and two weeks a year is really not ready to go. Right. And, and even my unit, which was mostly most of us were it was it was former 82nd airborne, folks. So even even we were like, we need some we're out of shape. We, you know, we needed some work. And given that the war dynamic had changed a little bit. We needed new training. And so we spent five months go into various training centers National Training Center in California, Fort Polk, Louisiana. We went down to Georgia for a couple of months Florida even that's where we did our, our urban training. And then back to Fort Bragg deployed. I was I was advanced party, so I left a little early. And then also, what they call call rear detachment. So actually ended up staying late. So usually the person who leaves early gets to go home on time, but I was not one of those people. So I went early and left late.

  Sonya Lutter 9:09

  I didn't know that you started a National Guard. I thought that you were straight into the army. And I see this is different. I

  Michael Kothakota 9:17

  was but but I did my deployment with the National Guard. So

  Sonya Lutter 9:22

  so the people that you served with, were also in the National Guard.

  Michael Kothakota 9:27

  Yes, when I deployed those were all National Guardsmen.

  Sonya Lutter 9:31

  Well, that's strange stories that you've told quite a bit differently. But then come back to that offline if you want. No,

  Michael Kothakota 9:38

  90% of them are from like, Fort Bragg 82nd. So 90% of the served in that unit. So it's the same sort of it's, it's, it's the same people it's just later, I was younger, so like some of the people I served with were 40 I was of course in my 20s Of course, I was in my 20s so

  Wes Brown 10:02

  that I might have missed the year. When was that?

  Michael Kothakota 10:06

  That was 2003. That was 2003. Yeah. 2003 to 2005. So I left in, let's say November 2003, and got back into February 2005.

  Wes Brown 10:19

  And it was after like, right on the heels of that, that you went to Ed Jones.

  Michael Kothakota 10:24

  Yeah. Okay. Yeah. I mean, there were a couple of things that happened that delayed me getting there. But that's, that's basically what happened.

  Wes Brown 10:33

  What I'm curious, what was it that compelled you to do that? Was it necessity you needed a job? But did you think that it would be? No. Did you have a sense of what it might be like? Well, I mean, I'm curious. No

  Michael Kothakota 10:48

  clue. Actually, I had done very little research into it. It seemed pretty cool. I did a good bit of day trading in college. And so I knew, well, I knew a very, I knew very little looking back, but at the time, I thought I knew a lot. And so I decided to, I thought, Oh, I'll be able to do this. I'm an investment expert. I'm a genius when it comes to this sort of stuff. So let me go ahead and become a financial planner. But I had actually had a really good job. I was in security management at a company called guards Mark security, they were eventually bought by Securitas, which is a big conglomerate much, much later than when I left but I was think I was the youngest manager there. I had when they offered me a promotion to go to. I mean, it doesn't sound like a promotion, but Kalamazoo, Michigan, it would have been taking over a large set of accounts. And I decided that no, I wanted to go this other route and do this financial advising thing

  Wes Brown 12:02

  was that like, like executive protection type of stuff.

  Michael Kothakota 12:06

  We did have executive protection. Folks, I was I didn't have anybody on any of my teams. Well, we would have we hired some executive protection. We had some of the folks from England, but the account I worked on was GlaxoSmithKline. And so we would when we did have some executives coming from the UK, we would we would hire a local executive protection for them. But mostly it was access control, making sure that, you know, people didn't come and destroy research samples, things like that. Interesting.

  Wes Brown 12:49

  And so So Ed Jones, like I'm just stuck on that. Um, yeah, I'm sorry. We can go past that. I'm just curious. I mean, it's like a hard right turn. So I'm just curious what the what was it? Now in hindsight, well, maybe. No, you didn't.

  Michael Kothakota 13:05

  I forget. I forget what the there was some kind of jobs board. I can't remember what it was called back in the day was a monster. And so I just looked for and you know, they of course had ads them and Ameriprise And so between, you know apply that Edward Jones and Ameriprise and Edward Jones seem to the single office seem to wit, you know resonated with me. So, yeah, like I I decided that that was going to be my, my approach. And then you know, not really, I mean, this is I don't want to say Edward Jones. It's a good firm, but that necessarily for me, it was it. You know, it's a little most people admit this still cultish. And that just wasn't, you know, where I wanted to be. And it was very, they sell independence, but it's not really independent. And my personality is more independent. That's

  Wes Brown 14:09

  okay. Yeah. Okay. Well, I appreciate you clarifying that. Just just just because I had a gap where those notes should have been, that's all. Well, they were all on the same page. Yeah. Yeah, absolutely. Sorry. I know, I took a little bit of a rabbit hole. But you know, I think I think here's the thing. So just to just sidebar here. So several years ago, 15 years ago, I remember my story's pretty circuitous as well. So you know, and would not have I mean, quite honestly, I would have argued with you if you told me when I was 18 that this is what I'd be doing. I'd like that there was over my dead body. I'd not there's no chance and I had a A guy I worked with about 15 years ago, and I remember him commenting about me being sort of the classic, you know, sort of product of a liberal arts background, you know, and just said, and and it's actually my conclusion that I think people who have a varied background, this is this is a little bit self serving, so you can understand you, you can see my bias here, but people,

  Michael Kothakota 15:31

  and yeah, 100% agree. Yeah, I

  Wes Brown 15:32

  think there's better financial planners, I think, particularly because once I understood what financial planning was, I used to sort of regret that it took me so long to get to where to like, find my place. And now I actually think it's probably one of my strengths. So that's why necessary, yeah.

  Michael Kothakota 15:49

  Have you read the book range by David Epstein? No. I pick that up. It'll make you feel a little bit better. So I'm, uh, I know, we're going off topic, but it sounds like that's what you guys do here. So when I was getting my master's I applied for the Tillman scholarship. I don't know if you remember Pat Tillman was the Arizona Cardinals guy who joined the Rangers. And then he was killed. He's actually killed in Afghanistan while I was deployed. So his wife put together this scholarship, they were sending her all this money, she put together the scholarship program. And so there were 60 scholarships a year. And I got happened to get one in 2013. And so they every year we get together, and they, they bring in as they've gotten more clout, they bring in these bigger names. And David, David Epstein became one year and he was promoting his book range, which was, and he was talking about this guy who was a long jumper or an a high jumper. So he became this champion high jumper, but he had only been like a, he had been a basketball player for so long. And turns out, he's like this great, you know, high jumper, and then it got him thinking. So he started investigating all these different things where if you, if you've done a bunch of different things that actually helps you with your thing, the thing you end up doing? So it's a it's a really good, good book.

  Wes Brown 17:16

  Yeah, I'll definitely pick that up.

  Michael Kothakota 17:18

  signees like don't don't take any of Mike's book ideas. No,

  Sonya Lutter 17:22

  you know, the Sapiens book. Mike's the guy. You're

  Wes Brown 17:26

  the guy. I've heard so much about this book. I'm not sure whether I'm supposed to read it or not yet, but I hear it's a it's a it's a good one.

  Michael Kothakota 17:34

  If you want to question everything you believe.

  Sonya Lutter 17:38

  Go for it. That's the book for you. Yeah.

  Wes Brown 17:42

  There we go. Well, so So you, like many advisors starting out? Took you know, just had to have a pulse that sounds like to get through the door. But you quickly found your niche. Which is, which is divorce planning? Can you I mean, candidly, pretty depressing topic. And, you know, I guess I don't know. Can you talk to us a little bit about what that's like and why you found I know, you had this woman who came through your door and was looking for help. It's it by the way. I have had clients who have gotten divorced and who have asked for help as well. And I have been shocked by the fact by how little financial planning is, is done by the attorneys who kind of occupy that space. Like it's really not part of their process by default. Maybe it is now with guys specializing, like, like you, but anyways. Yeah.

  Michael Kothakota 18:39

  Well, so I would challenge that it's a depressing topic. I mean, I think that, you know, relationships can sometimes run their course. Nobody, and they always actually, in fact, they always run their course, because that's just kind of the nature of the universe. But I think Sapiens right there. So, you know, so I think it can be depressing because of, of how we've built up this culture around marriage. And not that that's a bad thing, but it's just that, I think that if, you know, life just takes you in different directions and marriage is this kind of construct that we've placed around these romantic partnerships. And, you know, the, the divorce part of it is, is considered this, you know, terrible thing, but sometimes it it doesn't have to be and I think that you know, just because somebody gets divorced doesn't mean you know, and I think the stigma has kind of gone away like divorce person is not necessarily seen as damaged goods, but it used to be like that. I think my my interest in it was that it was to your point Wes is quite fascinating how little attorneys know about the financial part of it. And what is interesting is that they think that especially the less seasoned attorneys feel like they have to know stuff. So they'll pretend to know, things that they don't know. And so it's really challenging to just see that there's also some conflict between the law and what is financially best. And so, you know, the law in general is, you know, we've talked, you know, they talk about lawyers talking about how great our system is, it's this adversarial system, and you're always gonna have somebody advocating for you. And you fight it out. And then you know, the person with the best weapons, wins. But when you're talking about divorce, you're talking about families, you're talking about, you know, and so is, is that sort of dynamic appropriate for, for families. And I have my first case, this woman who walked in, went to trial. And if you're not familiar with divorce, most divorce cases do not go to trial. So you hear the horror stories of people being in litigation for years and years, that's not very common. And so it was extremely unlikely that my first case would have been going to trial. But I did go, I did go to trial. And this was an interesting couple, they, they had an interesting financial dynamic for 40 years, they, neither one of them worked. And the reason they didn't work is because the husband had inherited some properties in New York. And so they lived off the rental income from these properties. And in a, when you're getting divorced, if you have separate property, with which is in separate property is usually is can be inherited property is one of the ways that can be separate. You don't have to divide that. And so they had been living off of his separate property. And so what is what's a court to do? So you have to determine what the income is and and look at what's going on, they had a couple of they had some retirement accounts. But they spent it all. And in fact, her lawyers, in order to take her case to trial said, You're gonna have to sign over your IRA to me. And so she did, because she thought she, the first lawyer, she talked to told her that she was going to get a whole lot of money, that she was gonna get about $130,000 a year in income. Well, his properties didn't even generate that much income. And so, you know, this, there's, there's this lack of communication, lack of inventory. And so she just basically told this lawyer how much she thought he made. And he said, Well, I think you can get this motion without ever looking at it. And so there's this long they, between the two of them, they spent about $500,000, maybe a little bit less than that, and wiped out their retirements. So retirement accounts were gone. For him, it's not as big a deal for her it was, and he's gotta consider that they weren't working for 40 years. They've been paying into Social Security. They don't have they, they barely have enough credits to get anything, but they don't have a high 30. So their, their amount of Social Security is is minuscule. And so they're both you know, he's okay, cuz he's got these separate properties, but she's gonna need some sort of support. Well, how long is that support gonna last? But my, my whole point of that was I went through this process, and I realized, like, this is a, this is a backwards way of trying to dissolve a marriage. This is crazy. Like, why would you spend so much money doing these things for so little? And nobody is doing the math like so even if she got what she said she was going to what she thought she was gonna get. Is that worse what she spent? Right? It's in? In some cases, you might say, well, yes, but probably not. So I thought, I thought, Oh, I'm a genius. I've got a new way for people to get divorced. So I came up with this whole presentation. I found a group of lawyers, about 3040 miles away, and I went to give them this presentation. And then afterwards, this guy comes up to me, he says, Hey, that sounds like what we do in collaborative divorce. And I said, Oh, well, I guess, I guess I didn't think of this. So yeah, so that's, that's kind of the, the path into it. And then I did a bit of I've done both sides of dunk are all kinds of divorce, litigation, negotiated agreement, mediation, and collaborative divorce. Most of what I've done has been collaborative divorce.

  Sonya Lutter 24:49

  You also serve as an expert witness a fair bit. So can you tell us what that process is like and how did you make your way over into that?

  Michael Kothakota 25:00

  So most of the expert witness testimony I've done has been from divorce. But So generally when if you're working, if you're not in a in a collaborative case, typically neutral, which means I just worked for both people. In a non collaborative case, you're typically going to be hired by an attorney. That way anything, any work that you do is privileged. And sometimes that case goes to trial, and they need you to testify as an expert. So the process is generally you, you analyze the situation, and you write a report and make a recommendation. And so depending on the case, in most cases, you're going to trial for alimony purposes, it's, it's rare that it's for property division. It's, you know, I don't go you know, I'm not a, I'm not going to evaluate whether kids should be with one parent or the other. So I'm not going there to be an expert in that that case. But if we're trying to look at, you know, scenarios of of alimony, it's basically based on the need of the person who is seeking alimony and the ability to pay of the person who's going to be paying, and you want to make sure that those numbers are actually going to work. So that's generally what I would testify about. But a lot of times the property does get thrown into there. So if somebody is getting a large settlement, well, one of the things that you know, court would consider is, well, if you've got $5 million dollars, you can earn some amount of money off of that $5 million. And maybe you don't need them. And so a lot of times, I would get brought in, for those purposes, and I would provide an opinion about a specific rate of return that somebody could receive for the rest of their life. And you write a report, usually before the trial, you'll get the post by the opposing party. And then even those cases, most of the time will settle the day of the trial. So you'll see two attorneys like there, they get to the courtroom, and they're trying to iron it out before the trial even starts. And so most of those cases will not even end up going to trial. But then, if you do you get called to the stand, and usually you you kind of reference your report, make your recommendation, and then you get cross examined. Most attorneys tend to be pretty polite about it. But then a few of them can be pretty nasty.

  Sonya Lutter 27:34

  I've been watching suits. So I've got it from here. You got it.

  Michael Kothakota 27:40

  Oh, Harvey. Harvey in, in mic. Excellent.

  Wes Brown 27:45

  I'm, I'm just wondering why you'd volunteer to be in that setting at all, no offense to attorneys or you know, that the legal process, but it could just be my personality with regards to conflict, although I don't think I really avoid conflict. But I mean, that seems like it'd be super stressful.

  Michael Kothakota 28:03

  Yeah, it isn't, it can be incredibly stressful. I think if you're confident in your that you're right, which is which gets harder, the more you learn. It's harder to beat, you started to think, am I wrong? But I think then it's it's slightly less stressful. The the expert witness testimony should be fairly straightforward. You've got the facts on your side. The problem is, the way the legal system works is you can't have any uncertainty. And we're in a profession, that is just nothing but chaos. And so if you are if you if you go into trial, and you say this is the way it is, and there's no ambiguity, and there's no room for error, then you're lying. But if you tell the truth, well, then now they've got a hole they can poke in. So what you're saying is, it's possible that such and such could live off of, you know, $2 million less or such and such good, you know, only needs, you know, $700 So, that's the that to me, that's the stressful part is that if you So, before I started doing some of this expert witness testimony, the only profession that lawyers would hire our CPAs and I've never met a group of people more certain about everything. And they would get up on the stand and they will say this is the answer. Yeah. So and this that's not to throw shade at CPAs. But that's what they do. They say this is the answer. And then if they get cross examined, say, No, this is the answer. This is exactly how it is. And I've done business valuations and I've seen CPA business value valuation experts go in and say yeah, this is The value of the business and I'm like, I don't even know how you can possibly say that they never quit. Because nobody's made an offer for that business. You can provide a range that you think that this is what the business is, you know, worse, but you can't say for certain that this is the business value, and that's what they do. Because they don't want the opposing party to poke a hole in and, and no judge is gonna say, well, you're lying. And you're and honestly, they may not even be lying, they may think they think that that is actually correct. But I wouldn't be able to do that it would, it would literally be perjury, if I said that, because I know I was lying. Collaborative divorce, on the other hand is a lot different that lawyers are different, they tend to they tend to deal with the conflict in a way that is, that makes a little bit easier for me to do my job me just presenting facts. And and the other difference is you don't make any recommendations as a neutral. You just say this, if you want to do that. This is what it looks like, if you want to do this, this is what it looks like. And so it's really, it's really financial planning. Just in a different way.

  Sonya Lutter 31:16

  Curious, as you've spent all of this time at the end of relationships, if you have devised a set of list of like tips, or what people should do at the beginning of the relationship to maybe avoid those parts of the end of the relationship if that comes to be

  Michael Kothakota 31:33

  I think so. You guys talked a little bit about prenups on your podcast, I think it was the one with the with Scott tightwads and

  Sonya Lutter 31:48

  and I don't think I'm glad you worked out in there, because you were like our most avid listener. Looking for the role Mike's the one to overtake care, love it.

  Michael Kothakota 32:01

  So I think he said he didn't like them. I think the problem is not so much the the actual process that you go through when you're negotiating a prenup. But I think it's the name like it's, it's become synonymous with trying to screw over your spouse before you even get married sort of thing. And so when I talk to people about it, I typically say, you know, this is what what you want to put in place is a financial operating agreement for your marriage is kind of how I put it with contingencies and things that you think about when you get divorced, because when you get divorce lawyers are throwing all kinds of contingencies in there. You know, what if one person wants to stay at home? What if you have a child who needs more care? Perhaps you both want to work no matter what, but maybe you have a child who has special needs, and one parent is going to have to actually because it's it's so uncertain. And so how will you operate in these instances? And how will you, you know, how will someone be taken care of if the marriage fails? I think that putting those little those contingencies in place, which is very much a financial planning approach, that's what we do. Like we're, we're definitely looking to see talking about what ifs. So if you put those what ifs into place, I think gets most people comfortable, and then they get comfortable talking about it, and you can have the conversations about it. And we just don't do that. We don't do that as a society. I don't think any society does that. Even the, you know, the Catholic Church mandates you go through some kind of finance course. But that's pretty thin. So that's, I think that having that in place is is a good idea. And one of the other things, I think, is to recognize that whatever you think you do as an individual in the marriage, like if you think you do have you need to cut that, because you don't do you think you do 75% of it, you don't do 75%, you do, probably less than half. And I think it's really hard unless you're actually, you know, journaling and keeping track of all these things to know what the actual case is. But most people think that they do the most more in the marriage than the other person does. And if both people start to think that they're doing the less than the other person, I think both of them start to do a little bit more. So if you think you're doing less than half, well, then you're not really living up to your end of the bargain. So if you were a rational person who cares about the other person, you will seek to do more and if the other person is doing more, you know, I think that that's that's really helpful. So I always assume that I'm doing less than I think when he's always like, in my head, I think oh, yeah, I'm doing 50% When you say I forced myself to say I'm not

  Wes Brown 34:57

  like doing 50% What do you mean by that? Doing

  Michael Kothakota 35:01

  anything like it could be, you know, if you're the primary breadwinner, that doesn't mean you're doing 50% of the of the work in the marriage. Sure you could be, you could be earning all of the income, that doesn't mean you're doing 50% of the work in the marriage. If you are, if you're the, you know, if you're taking the kids to school half the time, that doesn't mean you're doing 50% of the work in the marriage, because it's, it's so multi dimensional. And so many of the things that, first of all, we value everybody values things differently. And I think you're gonna miss some of those components that you just either don't value or you don't think about. I think this is, you know, this is this is going to be a little gender bias. But I think that in general men tend to not think about that, and our society in general has been very much, especially in the US, it's the economic monetary benefit is valued more than the non economic, non monetary benefit. And I think that's, that's problematic for marriages. Because it seems to be that there's an asymmetry and workload, but in fact, it might be the other direction, if you're not paying attention.

  Sonya Lutter 36:18

  You guys just set me up for some good research stats here. You didn't even know you're gonna do it. I've always got something in my pocket that could come in handy. It's agenda oriented, of course, okay. It's ginger oranges. So I've done research on this. Not exactly what you're talking about, but looking at spouses perception of what they're doing in the marriage. And when women make more than husbands, so these are all heterosexual couples. So women make more, they're the breadwinner. They're actually doing more than their fair share of non paid work, like the childcare stuff, the cookies,

  Michael Kothakota 37:00

  when you say, etc. When you say they are doing that, their perception, that's what they're doing more. Yep,

  Sonya Lutter 37:06

  that's their perception. Okay. All right. Yep. And in both of these cases, as you can imagine, increases of money arguments. Increase. Yeah, yeah, I guess. So. what's your what's your argument to that? Like? What was the follow up question?

  Michael Kothakota 37:23

  Well, the follow up question to that is, well, if it's if it's perception again, I mean, I think they're probably more accurate, it would be interesting. I'd like to see a study where you you looked at people's perceptions, and then the variance between or the variance between their perception and what they actually did? I mean, that's pretty hard to do. But it would be I would be interested to see that I suspect that there's a higher variance with men in or larger variance than there are with than there is with women. But I don't know, I will say one of the things that's really interesting. So this is kind of this kind of goes a little bit back to divorce is that what you'll see is when it comes to splitting assets, and paying alimony, women who have to have the who have earned a greater share of income and generated the greater share of assets are much and this is anecdotal, because I didn't actually do a study on this, but they hate paying way more than men do. Men are like men, men in general, don't like it, but they just accept that that's part of life. Women don't understand why they would have to pay their former spouse, they don't understand why their retirement account has to be split. Even when you explain so I had a client one time. She said You mean she she had an affair? She said do you mean I have to Why do I have to give up half my retirement because I cheated on my spouse. And I said, you don't have to you don't have to give it up because of cheating them. You have to give it up because you married them. Like that's, that's the reason. Like it's not because you did anything like that's the it's not yours. It's that half is his. And so you'll see you do kind of see some interesting behavior when it's depending on gender. So I would think that it's probably likely that working women in heterosexual couples, for sure, probably do more of the marital work. I just, I would be interested to see what the variance is. But I do think that they probably think they do more than they actually just because that's just human nature. I mean, I think that's just the case. You

  Sonya Lutter 39:57

  might be right but I will need Some data to support that. But back to the question, okay, your example is fair. And like, let's put that aside. Let's just say that maybe he instigated the divorce and she makes more money. I do wonder if that reluctance to pay alimony is partially driven by some of those non financial features like, maybe she does perceive that she's doing more household work, and that she should have been somehow compensated for that in a different way. Maybe that's part of the reluctance for women paying alimony. I mean, biologically, this is not even the fault of men, biologically, women have more responsibilities for their own biological children when they are young. And it's like, it's nobody's fault. It's just the way life works.

  Michael Kothakota 40:49

  I mean, yes, I agree with that. In this particular case, they didn't have children. But I think that your point still stands. But I also would say, men will also think that there will, why do they have to give up all this income? You know, you made a choice to stay at home, you made a choice to do these things? They'll say that, even though what I always tell them is, no, you both made that choice? And they'll say, No, I never agreed to it. And I'm like, Well, you stayed married for five years after? Like you. You didn't say anything. So, you know, you didn't you could have gotten divorced at that moment. And then you wouldn't have had these issues. But you so you implicitly agreed, even though you're saying now that you didn't. But I do think that men think that that will they because again, they've they're valuing the economic labor, why did more? Because I So why do I have to share this with her and it was her choice, or she had an affair or whatever. So I think some of it is a lot of it boils down to perception. And I think we get very myopic in what our duties are, you know, when you're just taking care of yourself. It's easy, you know exactly what you need to do. Also, you can decide not to do it. But you can decide not to do certain things, you can decide not to go to the grocery store and just eat, you know, Snicker bars for dinner, you can, you can, you can not do the dishes for a few days. But it gets it's an it's not like when you have a partner that all of a sudden, the work is just twice as much. It's it's exponential, it may not be a huge exponent, but like, it's, it's very, it becomes very multi dimensional. Because everybody has their own values, everybody has their own approaches to doing things. And it's more, it's actually more work. So when people say like, I'd say marriages work, and so if you're not willing to put in extra work, not willing to take on that job, then they'll get married. Because it takes it actually takes a lot of work. And so I think people just think, well, you know, I, this is how I do things. And if I'm doing these things, and that's all the work that needs to be done. But that's not the case, you've got this other person you got to worry about. And then and then you have kids, and then it's just it becomes massive chaos, and then nobody can control it. And so the perception just keeps getting keeps getting blown out of proportion. And I hope that I'm making enough sense that you don't cut my interview. Because I do realize that it sounds very much like I'm all over the place here. But But I think that that is truly the truly the the thing is that it just becomes it's not that it's unmanageable, it requires conversation, it requires checking in, it requires making sure that the other person thinks that you're pulling your weight, and then being honest about that you're not or you are are you doing enough and asking if you're doing enough? Like do you feel like I'm like, There have been days where I've been like, I've been exhausted, you know, do you feel like I've asked my wife? Do you feel like I am? Do you feel like I'm doing enough? And it's very, very possible that I wasn't know the last time I asked that I was doing enough. So good for me, for

  Sonya Lutter 44:19

  the record, for the record. You know, I think that's one of the things that makes you really good in this particular areas because you are very rational and calm, which are both very necessary and highly reactive situations. But while you say you don't do financial therapy, or psychology or financial planning or touchy feely stuff, you really are so good at it naturally and you think about these questions and you think about the other person's perspective.

  Michael Kothakota 44:52

  Yeah, I won't say that. I don't think that I don't do those things. I think that I I think the challenge for me is, I find it difficult to, I feel like the numbers are easier. Because you can, you can place confidence intervals around everything, you know what you can quantify your error when you are doing first of all therapy is I don't practice therapy, just so everybody knows the non therapist, not licensed. But the but the components of it. And in using the psychology, I think it's very fuzzy. And so you don't know when you're doing it, right. You don't know when you're doing it wrong, and you don't know where your error is. I think that that is that's the challenge. It's, you don't feel I do not feel like I'm like I have a great deal of expertise senate is what I would say because of those things. And I don't know how other people feel about it. But that's how I feel.

  Wes Brown 46:03

  It, it's not surprised. I mean, it seems like you would have to have the the soft skills to navigate this space. But it also that that's on us getting it like it makes sense to me that you, you would do well in this if you had those skills. But I can also understand how you might arrive in this space too. Because the the incorrect correct me if I'm wrong, but all the stuff you just talked about is never factored into a it the outcome of a divorce, right? It's only ever measured in terms of finances. Right? So it's what one dimensional outcome, and there's no way to factor in all the things you just said. So what I what I heard you say were, you know, these are all ways to not get divorced. You know, thank you, you know, like, like, just assume that you could be doing more, or that you're not doing and you're not pulling your weight. So you should try to do more, if you can do more, just assume that you're less likely to get divorced. Like that makes sense to me. But if you end up there, there's, I mean, because there's so much there's so much of that that nonfinancial effort or work. There's just no way to unless you're tracking the hours of child care. But even then, like there's the subjective element of of like, how much you know, you taking care of a three year old could be harder for you than it is for me or for Sonya. So like, your perception of how hard you're working or what you're doing is going to be different. So like, to me, it's just like there's no way you can get there. So then the outcome is always a financial one. It's always a matter of numbers, right? Like, am I missing something there?

  Michael Kothakota 47:59

  No, you're not? I think there is. So there are some there are several different theories about alimony, some of it is what they would call. Well, there's retribution of alimony. But that has more to do with like punishing somebody and we don't really do that anymore. Actually, in North Carolina, they do that but most states do not most countries do not. But there's always the term retro abusive, retributive, what is that? What is? So if you have an affair, like we're going to South Carolina, and North Carolina, the law is if you are if you are a dependent spouse, and you have an affair, you are barred from alimony. So doesn't matter what your needs are doesn't matter. And so most states don't have up there are a couple of other states that that will bar a spouse who has an affair. And then on the other hand, if you are the payor spouse, the statute says You shall pay alimony. So, the and so that it could be $1. Right? Whatever it might be, but you shall pay alimony is is typically the language that's used. And so that would be retributive. There's also rehabilitative. So it's the idea is somebody gets alimony just long enough for them to get to a place where they can support themselves. But there is a school of thought that it's it's maintenance for it's it's sort of back wages for all the unpaid work that you did. So there's some theory on that, but most courts don't take that. Actually no courts actually have a statute where they take that into account. They do you'll see case cases where judges talk about it. I think the thing is, it's not it's you could quantify it. You could To quantify again, we're, you know, you wouldn't be able to do it precisely. But you could, you could have confidence intervals around to your point of how, you know, how much effort does it take to take care of a three year old, you could look at lost wages, from, you know, say you were somebody who stays at home, who was a teacher is going to have less lost wages than somebody who stayed at home who was an anesthesiologist. And so you can, you could you can quantify those things. But I think the problem is, the courts don't know how to interpret it. And lawyers don't know how to interpret it, they know how to argue it. So what you'll find is, rather than trying to, you know, come to some sort of agreement about that, they just say, well, that's speculative. So we're not even talking about and problem is everything is speculative. whether somebody's going to keep a job, where they're gonna live, it's all speculative. And so they they don't even they don't even notice that, that that what's the word? It's not a policy, but it's whatever the word is where you think one thing and it's, it's not actually true. So I think that's, that's part of it. They're just, there's just not a place to do that. And that's why I think some of this stuff is I actually want to go back to sanyes point about, you know, some of this, some of it could just be acknowledgement, right. It could be, you know, a lot of times people get into these divorces, especially to acrimonious divorces, and so they're fighting. So nobody's, you're not really trying to help your your soon to be ex spouse out because they're, they're coming at you. And sometimes, maybe, maybe the spousal support or some of these things are representative of some acknowledgement of what they've done. Because that's how they see it. Right. That's, that's, that's essentially how they see it, the courts see it a different way. And so lawyers will talk to their clients and say, Well, yeah, but that's not how a court would see it, here's what you here's the way you need to be thinking about it. And lawyers are very their lawyers talk about this thing called. And Wes, I'm sure you know, this isn't something that you do, because a good financial planner doesn't control their clients. But lawyers talk about client control. And it's not about control your client in the courtroom, it's about making sure that you make your client do what you think they're, they should be doing. Not convincing them, but but basically forcing them. So it's this concept of client control. Which is kind of just boggles my mind that anybody does that. But I think, you know, if, if we did come at it, so in collaborative, a lot of times, we'll talk about acknowledging what the other person has done, you know, appreciating you know what it is. And, and it's really interesting, if you, when you get to a point where people are actually doing that, you'll see some you'll see a spouse who stayed at home, acknowledge the work of the stress of going to high paying corporate job. And I have seen in almost every instance when that happens, the person who is supposed to be paying is like, I'll agree to whatever you want, I'll agree to pay what you want. And conversely, you'll see a lot of times, you know, I've never really appreciated what you've done for our family. And I just, I know that our marriage is over, but I just really want to acknowledge that, that that's occurred, and that you have really you've, you know, our children are wonderful, they're well adjusted. And I can't tell you how much I appreciate that. And then the person is like, Okay, I need some support for a little while, but I'm going to figure out how to make it work on my own. I don't want to, and it's and then once you once that happens, they're trying to help each other out. And when that occurs, that's when the magic happens. And that's when people can get the forest in these really powerful ways where they're, you know, they end up, you know, better off financially post divorce than they were when they were together. And so some of it is just acknowledging, you know, what the other person has done.

  Wes Brown 54:16

  How often do you see that?

  Michael Kothakota 54:19

  In Collaborative divorce, that happens quite often. It does depend on the attorneys attorneys have to be pretty experienced. People have to if I would say if people have sometimes in collaborative works, we have what we call coaches who are basically mental health, people who kind of help people get out of their own way. If you have that kind of structure in place, it happens more often. If it's just attorneys in a financial it happens less often. Some people there are going to be some people who are just you know, sometimes you get people who are extremely narcissistic. And it's just not going to happen. And I'm pretty sure a couple times we had some people high on the psychopathy scale. That's not good either. Oh, it's a challenge. So so. But I mean, I think in general, the people who are attracted to it, who are attracted to divorcing in that way, care about their spouse, and they want it to want it to go, Well, it's, they still have the conflict. And so you still need to, you still need to manage that. But if you can get to a place where they, they're actually trying to do something for the other person. It's kind of amazing. So I'd say most, most of the time 70% of the time that happens. When I first started, it was almost every case. And I'm not exactly sure why that is, I think it was just the fewer people did it. But now you've got more variation,

  Wes Brown 55:51

  I suppose. I want to pivot here in a second. But I do have a question. You know, I know that it's uncommon for financial planners to be involved, for an attorney necessarily to default to recommending for a client to get a financial planner. And I don't know that it would be many people's assumption that they need a financial planner going into a divorce proceeding or when you know, I think I think a lot of people assume you get an attorney, the attorney knows how to come up with a division of assets, and they're going to make sure it's fair, and I don't need to worry about it. And so how do people find you? I mean, I think, you know, I know somebody now, who is going through a difficult, really difficult situation, and they're sort of being pushed by their soon to be ex spouse to they're sort of being threatened, coerced, you know, I'm going to make you sell the house, to give me my half of the equity, if you don't agree to letting me have such and such, you know, that's in there, frankly. And in this actually, in this situation, it's, it's the, you would think that that that's in my mind, if I heard that I'd say oh, it's the man bullying is his wife, it's actually the opposite. She's the one saying, he wants to keep the house and he wants to help keep a stable environment for his daughters. But she's saying, Alright, fine, if you want to do that, and I won't make you sell the house to get my money out of it, then you need to agree to XYZ in really forcing him into a situation, and I have advised him, he's not a client of mine. But I've advised him to say, hey, you need you need to get somebody to help you through this. I'm gonna give him your number here after this. Because he's scared to death. He's scared to death. He doesn't, you know, he doesn't know what to do. He's worried we'll have money to pay the attorney, you know, all those sorts of things. And so it's a lot of reasons not to call a financial planner, as a lot, you know, and, anyways, but I, you know, again, we're all biased here at the table. And I think that would clearly be in the best interest. So, yeah, I

  Michael Kothakota 58:05

  think people find me through, I think it's just, you know, they, they can Google it. I don't, I used to have a CDFA. I dropped it many years ago. But mostly, it's just referral people will attorneys will refer to me, you build up enough of reputation, and then it just kind of happens. But I think one of the advantages of having a financial planner do it is we just know, the questions to ask, like the amount of times where I've seen you know, things like, you know, especially like with highly compensated employees who have, you know, really complex retirement, they don't even ask, they just assume it's a 401k. And we should just treat it like a 401k. Right. They don't ask whether it's fun and unfunded. They there's just all sorts of things that a financial planner is going to ask that that event that CPAs won't ask, like, they don't know these things, either. And so that it was absurd, you know, now 15 years ago, that they would just go to CPAs all the time. Because there's nobody who's going to look at it holistically. Look at the look at the, you know, people people say, Well, I'll keep the $400,000 house you take the $400,000 401 K not realizing that maybe that's not fair either. And so it's and lawyers will just let that happen. I've seen case I've seen judges order that and we look at judges as these people who are, you know, really hyper intelligent, if they're, they're intelligent, they just don't know a lot of things. So I think that it makes way more sense to go to to a financial planner, and I think that's why this is gonna look at it a little bit more detail. But

  Wes Brown 59:52

  attorneys don't do attorneys come to find you. Yeah, typically, do they, okay, okay. So Maybe that's

  Michael Kothakota 1:00:00

  yeah, so So the, I'd say the ones. So there was a generation that just doesn't there's a part, there's a generation that just doesn't. Younger attorneys these days seem to know what they don't know. And older ones who, you know, usually what they want is they want. So the older ones usually want somebody to tell their client, that they're being unrealistic. In almost every case, that's the, that's the reason they, they call me. But and then a lot of times, like testify, you know, as an expert for their case, or at least you guys familiar with like being conflicted out. So somebody will go read, like, if you're getting a divorce, you might go do a consult with all of the top attorneys in your area. And if you do that your spouse is conflicted from their conflict with from working with your spouse. And so that is a strategy a lot of people employ, it's the same sort of thing. Here, where if they, if they hire me, pay me some money, and then give me documents that I've reviewed. I can't be used by the other side. And so sometimes even that, sometimes people will just hire me for that. So I actually got to the point now, where I just say, it's $2,500, no matter what, like, just to if you if you want to have a contract with me, it's $2,500 Whether I do any worker up, because what would happen is people would get do that. They'd hire me, and then I'd get paid anything. And I'd be completely cut out for you did yeah. So oh, if that happens,

  Wes Brown 1:01:46

  you're back. We lost. We lost part of that. Oh,

  Sonya Lutter 1:01:49

  it might have worked on the recording. Yeah, but it's okay. It's okay. We have a really good producer, and he does a fantastic job splicing things together.

  Michael Kothakota 1:01:58

  Also, I've talked a lot may not be that important.

  Wes Brown 1:02:03

  No, no, this is.

  Sonya Lutter 1:02:05

  Yeah. Yeah. I mean, this is it has been all really fantastic. There are approximately 15. Other questions we were going to ask you, Mike. Sweet. So if we could run through those in rapid fire? No, I'm joking. We won't do.

  Wes Brown 1:02:20

  We do it? We you know my thing, you know.

  Sonya Lutter 1:02:24

  But one of my favorite questions to ask and we've talked a bit about this in a roundabout way, is what do you do to incorporate elements of authenticity into your daily life? Why are you laughing at me? I think it's a fantastic question. We're all about being authentic. And you've talked about it on the podcast, but tell me what you do daily.

  Michael Kothakota 1:02:48

  I know you have talked about on the podcast. I actually I when I listened to that episode, I was like, Oh, she totally ambushed Wes.

  Wes Brown 1:02:57

  Okay, fine. I was just he went, he went his

  Michael Kothakota 1:03:00

  explanation. You're like, just being honest. And everything I do. Like,

  Sonya Lutter 1:03:06

  Sonia. So now

  Michael Kothakota 1:03:08

  he's got to go back and be like, no, no. That's what I meant to.

  Wes Brown 1:03:12

  Thank you. Thank you. It's a hard

  Michael Kothakota 1:03:17

  it is it is a hard question. Yeah, I think. So in my everyday life, I think being. For me, I think just being honest with my emotions, and how I'm feeling and what I'm thinking, I tend to keep a lot of things in. And so you know, being able to share that with with people is is authentic, and it's historically been difficult for me. So I would say that is the most authentic. I can be.

  Wes Brown 1:03:57

  I think it's great answer the question.

  Sonya Lutter 1:04:02

  That's incorrect. Could you please try?

  Michael Kothakota 1:04:05

  It's not? I figured it might be incorrect. But yeah.

  Sonya Lutter 1:04:10

  Fantastic. Okay. So I'm almost scared to ask you about what book you're reading. You know, the questions come in, because you listen to the podcast all the time. So I'm scared about asking you because you are the type that would pick something really crazy to read. Just because you knew I would be asking you this question. Well,

  Michael Kothakota 1:04:30

  I did talk about range. There's there's a couple of books but I think I think Wes, you should for sure. Check that out.

  Sonya Lutter 1:04:40

  But not Sapiens or Yes, sapiens.

  Michael Kothakota 1:04:42

  He should. Everybody should read sapiens. It's a good boy.

  Wes Brown 1:04:47

  It rocks on. I mean, she she has been very disturbing. She hasn't really given me a clear this is why I'm not sure if I'm supposed to read it or not because she hasn't really given me a clear cut. Yeah,

  Michael Kothakota 1:05:00

  I think you should I think I think it's a it's a pretty good. Pretty good book. Yeah.

  Sonya Lutter 1:05:07

  So he's the one who told me to read it. So I think you should frame everything that you just

  Michael Kothakota 1:05:14

  that is true. Yeah. So there's. So I have I think about time a lot, how it moves, how we think about it, there's this book, it was actually written in 1956. It's called the direction of time. It's pretty. It's some of its technical, like physics technical, but some of it is pretty high level. There's like some philosophy in there talks about the guy's guy who wrote his name's Hans Reichenbach. He was a professor in at Berkeley. And then he actually died before the book was published, and his wife edited and published it. So that's, that's a book, if you're looking for something heavy, and you, you know, care about the perception of time, I figured, you know, because financial planning is very time sensitive, that it kind of makes sense. The other one is subtraction. Have you guys heard about this book? So the book is called subtraction. The guy who wrote it, he's an engineer, his name's lady clot, lady. clots are quotes or something like that. And it's about gains from subtraction. So it could be deleting things from your life. Maybe people who are, you know, not really adding value to your life. It could be deleting things from your diet, it could be deleting tasks, or work that you have doing, going. And so it's he's he's actually turned this into an area of study of his. He was he's a structural engineer or something like that. But it's a really fascinating book about and you read it, you're like, Yeah, that makes sense. I should start deleting things from my life. But I think that's a it's a really good book. I would, I would suggest picking it up. I haven't finished it. Actually. I think

  Wes Brown 1:07:20

  it started a while ago, I probably got about

  Michael Kothakota 1:07:23

  two or three chapters left.

  Sonya Lutter 1:07:26

  Wes is familiar with that process. Yeah, I'm doing

  Wes Brown 1:07:28

  that with about a dozen books currently. Yeah. But it sounds like a book I would like. And I think as long as it addresses starting with social media, that seems like the first thing. That's my Yeah, I mean, I would imagine that's got to be.

  Michael Kothakota 1:07:44

  It is it is in for sure. Like the, the it's it's, you know, improvement or gains by subtraction. And there's, you know, I can't imagine how many gains you get by cutting your social media content down.

  Sonya Lutter 1:08:00

  I'm also curious if this is why you stopped calling Mike. Subtraction. There's your answer right there. Write it down.

  Michael Kothakota 1:08:11

  Yeah, we know that's not true. That's not the case.

  Sonya Lutter 1:08:19

  Well, we for sure need to have you back on to go through the next 15 questions. Yeah, happy to completely unrelated to everything divorce.

  Wes Brown 1:08:32

  Yeah, cuz I understand you, we won't go there. But you get some insight on AI and all that kind of stuff as well. So yeah,

  Michael Kothakota 1:08:40

  I didn't. So you talked about doing a bunch of different things. There was there was a time there where I spent, I spent some time doing data science work. But I also did a good bit of work consulting on artificial intelligence for FinTech startups for a while. So. Yeah, there's a lot to talk about there. All right, as long as you're, in my opinion, differs a lot from other people. Thank you guys. This was fun. It was great meeting us.

  Wes Brown 1:09:07

  Yeah, you us. Well, this is this has been great.

  Michael Kothakota 1:09:11

  And I hope somebody will send me the recording where they make Sinese voice that share my voice.

  Sonya Lutter 1:09:21

  I started hearing my echo again, midway through I don't know what's going on. I'm sure it's a knee issue. So I will try to get that figured out. Also, my anxiety is rising because I've been texting was the last five minutes the kids are gonna come down any minute. Any minute. So, I mean, we made it look good. Oh, did you hear it? Did you read on cue. Perfect. Five more minutes.

  Wes Brown 1:09:52

  Well, Mike, thanks. Thanks, man. It's been awesome to have you on and in. There's obviously tons more to talk about. So I hope you'll agree to come back I'd be happy to think this was fun. Yeah. All right. Great. Well Hang tight for one second say

  Michael Kothakota 1:10:07

  I know two really cool podcasters

  Sonya Lutter 1:10:11

  were basically famous,

  Michael Kothakota 1:10:13

  right? I mean, if you can download your voice on iTunes