The Invisible Workload For Women – Episode 181

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[00:01] Welcome to the Prosperity Podcast, fresh alternative personal finance talk for independent thinkers who prosper outside of Wall Street. Here’s your host, bestselling author, Kim D.H. Butler, and No BS Money Guy, Todd Strobel. Hey everybody, welcome back to the Prosperity Podcast. This is No BS Money Guy, Todd Strobel, and we have the president of Partners for Prosperity and our co-host, Kim Butler, with us today. And we’re going to be talking about the invisible workload for women. Now, Kim is always kind of reluctant to separate genders when we have financial conversations, but I think if we look at what is happening in our society today, women are entering the workload that are still the primary nurturers, and in most cases, they also have to

[00:59] face the potential responsibility of caring for a parent. So I mean, it’s just getting stretched thinner and thinner, and although I do not disagree with the opportunities, I think it means that we need to have maybe a different attitude towards preparation than what the previous generation did. So welcome, Kim, how are you? Very fine, thank you. Obviously, I am a woman, and so why am I resistant to be talking about, quote, investments are different for women or we should do things differently for women? And the reason that I’m resistant to that is I disagree. I don’t think that women, per se, are any different. And that runs full circle when we swing around and start to talk about the life insurance arena, and here we’re talking about the death benefit part of the life

[01:55] insurance arena, and so many times when a family starts buying life insurance, the woman may be a stay at home mom and or they may be in a job that pays less than the male worker of that household. Those are just statistics, you know, factual statistics that there’s really no argument can be made about them, whether we like it or not. So, OK, fine. So what does that parlay into when we’re talking about the life insurance death benefit and this concept called a human life value? Well, human life value is a measurable item, although it’s loosely measured. It’s kind of a rule of thumb. That’s typically 15 to 20, sometimes even up to 30 times your income. Well, what if you’re a stay at home spouse?

[02:49] And in this case, truly, it could be male or female. It doesn’t matter. A stay at home spouse can often get about half of the death benefit that the working spouse can. So let’s say spouse A, I won’t even identify whether it’s male or female, earns a hundred thousand, then they could easily get a million five up to even three million dollars of death benefit coverage. And then the stay at home spouse for that family, spouse B, let’s call it, could get about half of that number. OK, well, what happens, as Todd is stating, when we take into consideration the fact that the woman is potentially a caregiver for a lot longer than just her children’s lifetimes, because she may end up just because of a whole variety of reasons, societal work related things.

[03:43] She may end up not only caring for her own parents, but potentially caring for her husband’s parents as well. Now, Todd, am I remembering correctly that you had a statistic about some caregiving things or something? Not sure I’ve got them for this particular one, but continue. Well, you made a comment early on around the importance of the female’s role playing as a caregiver. And it’s interesting to note, too, that when we take a look at this life insurance issue, so you’re talking about a typical family, you know, maybe the woman is 30 and we’re getting some life insurance on her. Well, what about her mother and potentially her father having life insurance on them, the older generation in this case,

[04:38] in order to reimburse that the second family for the caregiving that goes on. This is a very natural extension of using life insurance to replace things. That’s what insurance does. It replaces things. And that’s why the human life value designation and information is so important because the other school of thought talks about doing a needs analysis for life insurance, like, well, would you want to pay off your mortgage and educate your kids and let’s throw an interest rate in here and a tax rate and investment rate and assume a whole bunch of information and come up with this number that you supposedly need. That’s not what insurance does. Insurance replaces value. So if you have, for example, a 70 year old mom or grandma,

[05:31] in this case, I guess, would be an easier way to describe it. And there’s potential in her future for her 30 year old daughter to be giving care. How cool it would be to have life insurance death benefit. Again, this is where we’re focusing on the death benefit, not the cash value. Life insurance death benefit on that 70 year old woman so that when she does pass away at 90 or 117 or, you know, whatever the age is that she chooses to go, that there is an amount of money to go back to the next generation for the care that was given. And whether it was a woman or a man giving the care is largely irrelevant. But our goal here today is to just make us all wake up to the longer term and very valuable role that often does fall to women

[06:29] that is the caregiving for not only her children, but potentially her parents, maybe even her grandparents, possibly also her husband’s parents and even potentially grandparents. And how valuable that is and how it can be paid for literally with death benefits on those older generations. In fact, it wouldn’t be abnormal at all to have, say, a 30 or 40 year old woman purchase the life insurance on her parents. So this would be where the let’s just use a 40 year old with, say, a 70 year old grandma. The 40 year old owns, pays for and is the beneficiary of life insurance on the 70 year old who is the insured. Now, we’ve talked on this podcast a lot about that exact opposite situation, but this time we’re having the middle aged crowd own

[07:32] and be the beneficiary of and pay for life insurance. And here we’re strictly focused on death benefit. So whereas in the past we might do pay to petition writers and really try to beef up the cash. In this case, we might do more term insurance writers and very lean. You still want to use whole life because you absolutely positively want that death benefit to pay, but you’re going to have a very lean policy where it’s a higher higher death benefit and lower cash value focus rather than the other way around. I did find our statistics, by the way, but I’m just kind of thinking in my mind when that first started happening. I mean, early in my career, I did not see cases where children bought insurance policies on parents.

[08:20] But I think it’s very normal today because a lot of times the children are the ones who are paying for part of the expense for their long term care. And it does allow to be them to be reimbursed. Absolutely. Todd Langford tells a story at truth training that has always really kind of hit me hard from an emotional standpoint about an attorney that was in his 40s and talking with Todd Langford about educating his own daughters. And Todd helped him understand using the education calculator on the truth concept software, how amazingly expensive putting somebody through school is. And not only do you have all the actual hard dollar costs, but you have what’s known as opportunity costs on that college education.

[09:14] So just a real quick description of that. If you spend 100 grand putting a kid through school, not only have you lost 100 grand, you’ve lost that hundred thousand dollars plus its investment return for the rest of your life. And this attorney, who had been kind of hard nosed throughout the whole discussion, actually teared up because it finally dawned on him what his parents had gone through. And so here’s the story facts. His parents had a attorney as a child. That was the one that was in the conversation. Another child that was an attorney. A third child that was a physician, a practicing physician, and a fourth child who had two PhDs. And so the man in the meeting, the 40 some year old, finally realized how much all that education had cost his parents.

[10:13] And so it’s just an interesting additional concept or fact in light of the discussion that we’re having here about insurance really being a replacement environment. So, of course, in this case, this man’s family had already passed on, but he certainly could have had some dollars that could have benefited them and they could have had some dollars that could have benefited him as it related to this. But education is definitely a cost that can be replaced with the death benefit. And, of course, care is a cost that can be replaced. And there’s just so much additional freedom that a family has when there’s death benefit, when the presence of the death benefit is there and can be used for dollars to do different things with.

[11:08] Super. Well, let’s have some fun with these numbers. By the way, I found these. These are in the May 2017 edition of Money magazine. So, first of all, if we compare the hours that a man works to an hour that a woman works in a paid work environment. I’m assuming that includes self-employed. Any ideas, men versus women? I’m going to guess 50 for the man and 30 for the woman. You’re close, but not on the man. Thirty six point seven five for the women and forty three point nineteen for the men. Interesting. And how close that is to almost being together. How about household activities? And these are things like buying cereal to toilet paper. OK, I’m going to guess this is hours per week. Let’s say two for the man and 10 for the woman.

[12:07] Wow. How about 13 for the woman and nine for the man? Interesting. All right. All right. How about and now this is all in to income families, by the way. It’s would not. So, I mean, they’re. Kind of skewing the numbers a little bit and that they’re not talking about stay at home people. How about hours dedicated to child care? OK. Gosh, that one’s tougher. These are working people. So I’m going to go 10 each. Now, you know, it’s higher for the woman. I’m going to go 10 for the man and 12 for the woman. Well, you’re almost got it. It’s nine point four five for the woman and six point two three for the man. Interesting. How about purchasing of goods and services? Five for the woman and two for the man.

[13:02] Wow. You nailed the man. But the woman is three point five. OK. Anyway, I don’t know that this is relevant, but they’re kind of fun things to play with. But I think that maybe this would be a good time to mention the book that you have on life insurance, because it might be able to just open people’s minds a little bit to the other. Well, I shouldn’t say the other uses of life insurance, the primary use of life insurance, but the other options of paying for it. So while I talk about the book, will you do us a favor if the article didn’t do it already? Will you add up, I’m curious, the total of all the man’s numbers and the total of all the woman’s numbers? I got him. Awesome. So this book that Todd’s referring to is called Busting the Life Insurance Lies.

[13:52] Now, if you want our quick primer, you should go to live your life insurance. But if you want the full meal deal, Busting the Life Insurance Lies is a really fun story about a family at Thanksgiving where the three generations. So you’ve got grandparents, parents and adult children are discussing life insurance and how much and what type and who should get it and et cetera, et cetera, et cetera. And throughout that entire weekend, we follow a fun storyline. And at the same time, we bust about 37, I think, some lies about life insurance that are common out in the marketplace. So grab the book on Amazon. It’s called Busting the Life Insurance Lies. And it’s by Kim Butler and Jack Burns. And we had a great writer team help us with James Ransom and his crew.

[14:48] And I really think you’ll have fun with it. In the very back of the book, there is an entire presentation that Todd Langford did on the internal rate of return on cash value of life insurance, because that’s a tough concept for people to get their arms around. So if nothing else, you’d find the book valuable just for that back section where the internal rate of return is called. So, Todd, I’m curious, what is the total? And give us the source again. This is May of 2017, Money magazine. And we’re talking about adding up the paid work household activities, child care, purchasing of goods and services. And we talked about the individual ones. But how do they add up for the woman and for the male?

[15:34] And what would your guess be? So I’m thinking 75 hours a week for the woman and 55 for the man. How about 62.8 for the woman and 58.4 for the man? Wow, that surprises me that it’s that low in total. But that really isn’t the point. The point here is that actually, I think there’s two points. One, there are definitely a lot of other jobs that women do. You know, I say jobs, just things to run a house. And, you know, it cracks me up when you hear this woman interviewing, like she wants to come back into the workforce or whatever. And the guy does often tend to be a guy interviewing her. And he says, you know, what have you been doing? It’s like running the house for the last five years or whatever.

[16:31] And he might kind of sneer about like, well, what does that mean? And the woman just rattles off this long list of taxi driving and doctoring and appointment setting and da da da da da da. And of course, you know, we all know that women that do that can absolutely hold their own in many, many positions because of the high organizational skill and attention to detail and follow through and follow up and et cetera that is necessary. But the other thing that’s interesting to me is that really doesn’t strike me as very many hours. And so it makes me want to ask our listeners, like, what do you do with your free time? And we know that that can be a really big impact on you as a human being, you as a parent, you as a good partner in the marriage, et cetera, et cetera.

[17:23] And so I’ll just be curious if we get some fun answers to what do you do with your free time? If it’s truly only 60 some hours that and I’m sure for entrepreneurs, it’s way higher than that. But if it’s true, time is all spent on an app. On an app. Did you say N is a Nancy AP? No app like on everybody. Everybody’s on the phones and the tablets and everything else. Yes, yes, yes. So one should ask, what are you doing with that? And I just think that’s a fun question for us to think about. Super. Well, I hope you guys had as much fun making or listening to this as we had making it. And tell us our title again, because I like that. It’s called The Invisible Workload for Women. There you go. Thank you much.

[18:10] Super. Take care, everybody. Thank you for listening to the Prosperity podcast. To take control of your money and have it work for you, visit us at partnersforprosperity.com. If you liked this episode, make sure you subscribe and leave a review.