What is La Vida Loca?

John, one thing I’ve noticed over the years when reading through clients’ financial plans is that we have an expense titled La Vida Loca. Can you tell me a little bit more about what that is and why you’ve developed it over the past 25 years?

So, it comes from the old Ricky Martin song, La Vida Loca, and it’s something that I put in my clients’ plans for a host of reasons.

The first and foremost reason probably is if I’m uncertain that I have an accurate depiction yet from the client as far as what their expenses really are. Think of it as a placeholder or maybe a buffer or a little bit of padding that I’m just adding to their plan to stress test it.

And also, where it can be used is to encourage my clients to get out there during their go-go years and enjoy their wealth. A lot of our clients have accumulated their wealth through frugality. Not being cheap, but being frugal, right? There’s a difference. And I admire that and I think that’s great. But oftentimes my role is to push my clients out the door and say, go have some fun now. You’re not going to run out of money.

And so, to kind of prove my point, I’ll oftentimes put two or three or four or several thousand dollars a month sometimes of La Vida Loca, right? To create that scenario where they’ve got peace of mind and they know that we’ve over accounted for what their lifestyle needs are. And so, I’ll use it when my gut feeling is that my clients are going to expand their, their spending in retirement as well, meaning they’re already thinking that. And so that’s how I’ll kind of just throw it in there as a placeholder.

The two things that I always think about that you taught me when I was first in the firm was one, we’re here to give you permission to spend, and two, we’re here to be here so that you know no matter what happens, there’s a plan.

Absolutely. Exactly.