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Personal Finance: Know Your Money, Trust Your Plan, Live Your LifeWhy Personal Finance Matters
In this episode, I sit down with Michelle R. Martin, founder, CEO, and principal wealth advisor of Riverstone Private Wealth Advisors in Rhinebeck, New York, to talk about one of the most important—and sometimes most intimidating—parts of life: personal finance.
Michelle has spent decades advising clients through retirement, inherited wealth, tax planning, estate planning, divorce, the loss of a spouse, and the sale of businesses. But what makes her story especially powerful is where she began.
At 19 years old, Michelle was a single mother, living in a converted garage apartment, waiting tables, struggling with bills, and eventually relying on welfare, food stamps, and WIC to get through an incredibly difficult period.
That experience became the foundation for the work she does today.
From Financial Struggle to Financial Knowledge
Michelle described keeping every bill pinned to a corkboard and manually tracking every payment as she tried to find a way forward.
Despite working long hours while pregnant, the numbers simply were not adding up.
Eventually, her stepmother stepped in, moved her across the country, gave her a place to land, and most importantly, taught her how to think differently about money.
That lesson became one of the major themes of our conversation:
Financial knowledge is power.
Michelle went back to school, completed her degree, entered the financial services industry, and made a commitment to pay that gift forward.
Today, the daughter she was so frightened about bringing into the world at 19 now works alongside her in her firm.
That is an extraordinary full-circle story.
What Is a Fiduciary?
One of the areas I wanted Michelle to explain was the term fiduciary, because many people hear the words "financial advisor" without realizing that not every advisor operates under the same standard.
A fiduciary is legally required to put the client's interests ahead of their own.
If two financial options are available and one pays the advisor more money but is worse for the client, a fiduciary is obligated to recommend the option that is best for the client.
Michelle contrasted this with a lower standard sometimes described as suitability, where a recommendation may only need to be considered suitable or appropriate rather than necessarily the best available option.
Her advice is to ask any financial professional you are considering working with three direct questions:
Are you a fiduciary?
Are you a fiduciary all the time?
Are you willing to put that in writing?
Those are important questions because we should understand the obligations of the person we are trusting with our financial future.
Your Financial Life Is More Than Investments
Another major point Michelle made is that good financial planning should be holistic.
She compared our finances to a house with many rooms.
One room may contain investments.
Another may contain tax planning.
Another contains insurance.
Another contains estate planning.
All of those areas need to work together.
If your advisor only talks about investments, an important question to ask is:
What are we doing besides investments?
Michelle used another analogy I really liked. Investing without a broader plan is like driving down the highway at 80 miles an hour with the windows down, music playing, and plenty of gas—but you have no idea where you are going or which exit you should take.
You may be moving quickly, but movement alone does not mean progress.
Building Financial Habits in Your 30s
I asked Michelle what someone around age 30 should be thinking about financially.
Her first recommendation is to build an emergency fund containing approximately three to six months of expenses.
Importantly, that means expenses—not three to six months of salary.
She also recommends creating structure around how money moves through your accounts.
One idea she shared is to have income deposited into a savings account and then transfer only what is needed for bills into a checking account. From there, automate as many regular payments as possible.
You can also create a separate amount specifically for discretionary spending such as dining out, shopping, or entertainment.
The idea is simple:
Control your money so that your money does not control you.
Don't Leave Free Money Behind
For people who have employer-sponsored retirement plans, Michelle strongly recommends contributing at least enough to receive the full employer match.
If your employer matches three percent, for example, contributing at least three percent allows you to receive that additional money.
Her message was clear: don't leave free money on the table.
She also recommends thinking about term life insurance while you are younger, particularly if you have a spouse, children, a mortgage, or others who rely on your income.
And when it comes to investing, Michelle cautioned against constantly chasing the next hot stock.
Someone consistently investing a meaningful percentage into a diversified index fund may ultimately be in a much stronger position than someone investing a much smaller amount while trying to find the stock of the year.
Consistency matters.
Why Time Is So Powerful When Investing
Generally speaking, younger people can tolerate more fluctuation in their investments because they have a longer time horizon.
Markets rise and fall.
If you are 30 years old, you potentially have decades to move through those cycles.
As you approach retirement, the picture begins to change because you may soon depend on those investments to provide income.
That does not mean everyone should follow exactly the same investment strategy. It does mean that your age, goals, timeline, and personal circumstances should all be part of the plan.
What Changes Around Age 50?
Michelle describes 50 as an important window of opportunity for retirement planning.
Someone who hopes to retire at 60 or 65 may still have 10 to 15 years to identify weaknesses in the plan and make meaningful adjustments.
This is the time to run the numbers.
How much will you need?
What have you accumulated?
Where are the gaps?
What can you do now to close them?
She also recommends taking advantage of catch-up retirement contributions where applicable and taking a wider look at your entire financial picture.
That includes old retirement accounts, your spouse's accounts, home equity, life insurance, long-term care considerations, and any other significant assets or obligations.
At this stage, the goal is not simply saving more money. It is understanding how all of the pieces fit together.
Talk About Money With Your Spouse
One of the most important parts of our conversation was Michelle's recommendation that couples stay informed about their finances together.
In many households, one person naturally becomes the primary bill payer or handles most of the financial organization.
That is fine.
The problem comes when the other spouse knows virtually nothing.
Michelle shared a very personal story about her mother and stepfather. Her stepfather handled all of the household finances. When he died suddenly from a massive heart attack, her mother had no idea how to pay the bills, where important information was located, or even how to access some accounts.
She had to figure all of this out while grieving.
No one should be placed in that position if it can be prevented.
Both partners should know where important financial information is kept, what bills exist, who to contact, and how to access what they would need in an emergency.
Some couples may even find value in having a monthly financial meeting where they review their goals and progress together.
Making Financial Decisions During Major Life Transitions
Retirement, divorce, the death of a spouse, and the sale of a business are all examples of major financial transitions.
These moments can compress years' worth of financial decisions into a relatively short period of time.
The challenge is that some of the biggest financial decisions of our lives arrive at exactly the moment when our judgment may be under the greatest emotional pressure.
Grief can make us freeze.
Fear can make us panic.
Anger during a divorce can cause people to fight for assets they may not realistically be able to afford.
Michelle's advice during a major transition is powerful:
Slow the decisions down.
For approximately the first six months, avoid making irreversible decisions unless a genuine deadline requires action.
If you suddenly receive significant money through the sale of a house or business, retirement, or another major event, put it somewhere safe and give yourself time to think.
You do not always have to decide immediately.
As Michelle put it, protect the person first and the portfolio second.
Money Is Emotional
We often pretend that money is purely mathematical.
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