Monday, January 30, 2017

CEO of Everything

Becoming suddenly single through divorce or the death of a spouse can be extremely difficult. Gail Vaz-Oxlade and Victoria Ryce teamed up to write the book CEO of Everything to “offer sensible advice and emotional support so you don’t have to figure out every twist, turn, and bump in the road on your own.” Vax-Oxlade’s experience with divorce and Ryce’s widowhood give them lots of personal experience to draw from.

The authors show keen insight into human nature in several ways. One example concerns the fact that in many ways we are the sum of our habits. “You can stop flossing your teeth for a while, but three weeks is a new pattern setting up to take hold; you need to end it before it becomes entrenched. Ditto eating too much or too little, isolating yourself, or drinking yourself to sleep at night.”

This book deals mostly with non-financial matters in the difficult road from couple-hood to living on your own. However, I’ll discuss primarily the financial parts of the book here. But don’t let this bias give you the wrong impression. The authors deal thoroughly with all aspects of divorce and widowhood.

There is no shortage of Vaz-Oxlade’s usual very direct style. “People who consider not having a will as some kind of reverse talisman that will protect them from dying are dopes.”

In the case of divorce, joint debt can create future problems. “If you’re on the hook for your mate’s debt ... it’s time to get your name off the documentation. Cancel joint credit cards to prevent large purchases by your spouse.”

One piece of advice I don’t understand, perhaps because I’ve never had overdraft protection is “Don’t confuse the kind of overdraft protection you ‘buy’ for which you sign an agreement, with what some banks call ‘bounce protection’ or ‘courtesy overdraft protection,’ which they offer to save you from the hassle of a returned cheque. The latter can be very expensive.” I didn’t know there were fundamentally different types of overdraft protection. What I take from this is that people should understand the terms of their overdraft protection.

“Nearly two-thirds of support orders in Canada are in arrears.” This is such a high percentage that something must be very wrong. It can’t be that almost everyone is a deadbeat.

Most people are ill-equipped to handle lump sum payments such as life insurance payouts. “It’s easy to think a lump sum of money will last forever, but if you spend $40,000 of your stash a year, $200,000 will last only five years.”

When it comes to investing, people usually ask “‘But where do I start?’ Start with indexed investing. Go online to an unbiased source and familiarize yourself with the investing world.” I’d say that if you can get started with index investing, you’d do well to stay with it indefinitely.

I’ve never seen advice to work with multiple advisors before. “If you work with a couple of people you will, in effect, diversify your advisory base and have a built-in check and balance for any advice you receive.” Advisors won’t like this much because they want to control all your assets, but maybe this is reasonable advice for someone with enough assets that an advisor would be willing to take on half.

The authors capture my feeling about keeping too much stuff. “There are things I want to be able to see that are special ... I don’t want then hidden by a bunch of crap.” Keeping thing I don’t need or want just makes it harder to find the things I do need and want.

“People seem to be under the impression that owning your home outright means you’ve got shelter costs on lockdown. I like to point out that I live in a paid-for home, and the carrying costs on my house—property taxes, insurance, maintenance, and utilities—ran to just under $1,400 a month.” Good point. Another cost to add when comparing to renting is the opportunity cost on the house equity. I use 4% as an expected excess real return of stocks vs. real estate. Others with more fixed income and whose investing approach is more expensive might do better assuming 1% or 2%. Another thing to consider is that it’s possible to be much better diversified in stocks than in owning your home.

“If you don’t plan for home maintenance, then everything that must be fixed becomes an emergency.” It’s easy to forget about expensive repairs when you don’t need any for a few months, but they are inevitable.

I’m fortunate that I have no first-hand experience with divorce or the death of a spouse. So, this limits my ability to judge the value of this book. But, like Vaz-Oxlade’s previous books, she shows that she genuinely wants to help her readers rather than just sell books. The same appears to be true of the other co-author, Ryce. I think I would get a copy of this book for someone close to me in need.


  1. When it comes to support orders, from what I've seen there are times when there is something very wrong.

    First we're well past the times when you can safely assume that every divorce leaves one person as a helpless and incapable victim. I don't think it's uncommon for both people to be fully capable of supporting themselves.

    Second, support payments are applied according to a strict but generic rule that makes it almost impossible to account for the unique details of anyone's situation or sometimes basic facts of reality.

    The result in some cases can be similar to communism - the person who contributes the least gets the most reward. I've heard of people doing all kinds of strange things as a result like taking a job and asking for a lower salary (and that's on the more reasonable end).

    I don't know what the overall stats are but it doesn't seem like the current practice has caught up to the modern world. A lot of people may be better off financially by avoiding a legal divorce.

    Or, since you can't always predict a bad relationship in advance, they may be more reluctant to commit to anything in the first place. The cost of getting it wrong can be far greater than anything else in life including purchasing a house or making large investment mistakes.

    1. @Richard: It sounds like you know a lot more about this area than I do. I've had a few friends describe details of payment amounts they are required to make and they didn't seem reasonable to me.