Planning for The Unexpected: A Conversation with Dale "Opie" Skjerseth and Cyrus Bamji


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Money and Retirement in the New Normal


Jean Chatzky Interviews: Dale “Opie” Skjerseth and Cyrus Bamji

Jean Chatzky, educational fellow with the Alliance and founder/CEO of HerMoney, recently spoke with Dale “Opie” Skjerseth, the Production Manager for the Rolling Stones, and Cyrus Bamji, Head of Communications for the Alliance for Lifetime Income, about the importance of financial analysis, how to save for retirement and how to navigate the current state of the economy. This interview originally aired live on Facebook and has been edited for length.

Scroll down to read a transcript of the edited conversation.

In this conversation, you’ll learn:

  • The value of creating a retirement income plan and planning for the unexpected at the start of your career
  • How to talk with friends and family about the importance of preparing for your financial future
  • What important characteristics to look for in a financial professional

Watch the whole video on the Alliance for Lifetime Income’s Facebook page.

Conversation

Jean Chatzky:
Hey, everybody. I’m Jean Chatzky. I’m very glad to have all of you with me today for what looks to be a really fun conversation. My guests are Dale “Opie” Skjerseth who is the head of production for the Rolling Stones, along with Cyrus Bamji, who is head of communications for the Alliance for Lifetime Income. If you’re wondering why we are having a conversation with the head of production for the Rolling Stones, we’re here to talk about how unpredictable life has been over the past few months and how somebody in a career that can be so unpredictable has dealt with his finances and mentored a lot of young people through the challenges of being a gig worker.

Opie published an op-ed recently, in the St. Louis Post-Dispatch, all about his finances.

He wrote, “I am a planner by profession. I’ve been on the road since 1979 with some of the world’s biggest bands, including The Stones since 1994 because of my ability to anticipate the un-anticipated and be prepared for potential risks. It’s also why I’m financially secure now and in the future despite the lost paychecks resulting from the postponement of this year’s ‘No Filter’ Tour and the stock market’s current volatility, all because of the coronavirus pandemic.”

Talk about the un-anticipated. I just think that is such an incredible way to bring financial planning to life and make it relevant. Opie, can you start by telling us a little bit about you and about your career in music?

Dale “Opie” Skjerseth:
When I started in 1979, my father said, looking at what we do, “No one’s going to be there for you. No one’s going to support you. You need to take the time to start investing into the future. You need to start looking at what your retirement is.” With that advice as I started with my career, I started planning. I got an IRA right away, but just like my career, it just became planning and planning and planning. So I’ve continued to plan further into my future for where I’m going to be and what I want to do in my career. I started in 1979 as nothing. I was a backline guy, worked my way up, made my way through the channels, moved to LA, and then got my break as a production manager in 1988.

Thirty-plus years of being a production manager is really planning for the unexpected constantly. Those words my father taught me resonated, and it just became planning, planning, planning with my job and for my future. As I matured with more income, and had more of a foundation to build, I bought things like annuities and other items that would make my portfolio strong. As I continued to plan, I continued to teach by my team, my colleagues, my friends, and my family to help them prepare for the future because you never know what’s going to happen in your story.

Jean Chatzky:
That’s really true, and I want to dig into that. I want to dig into it tactically, but Cyrus, you have been working with the Alliance now for several years. Before that, you spent time at AARP as I did. What are you hearing from people in terms of how much they are surprised by what’s going on in this current environment? How are people handling the unexpected?

Cyrus Bamji:
At the Alliance, we do a lot of research and we research consumers who are either approaching retirement or retired, so that’s one caveat in terms of what I’m going to say. What we’re finding now is: (A) the world was shocked. This was unexpected, and no one anticipated it. For folks that are looking at retirement either this year or who are thinking of retirement in the near future, we think that this is a retirement reset moment. That’s what the research is showing.

Folks that were invested in the market, who were humming along in terms of what they were thinking about money in retirement, are all of a sudden, thanks to this pandemic, scared for their retirement savings.

When we began our COVID-19 tracking surveys, health care and one’s own health was number one on people’s minds. However, around May, that changed dramatically in the research. Our respondents’ number one concern became their money and their investments in the market for their retirement. That was a huge change. Bottom line, people who are thinking about retirement, especially retirees and people who are close to retirement, want to move towards investments that are less risky and will help to protect their retirement.

Jean Chatzky:
Opie, how has COVID-19 affected the music business specifically? I know you were out on tour when all of this hit. How did this impact you?

Dale “Opie” Skjerseth:
It all started with everybody hearing things as we were heading out to Mexico. I was working with Guns N’ Roses at the time. We did the show, and all the countries we were about to enter lockdown. So, we came home immediately. It just was a domino effect to the industry as shows continued to get cancelled.

Back to preparing, we are always prepared to shut down in our industry. You never know what will happen in our industry. For example, last year when Mick Jagger had his heart situation, we all went home, not knowing when we’re going to get paid again. When a tour goes home, you don’t know if you’re going to get work again. I always tell my team that you need to prepare for at least a six month to a year shutdown. That’s the natural effect in our industry, because touring has become seasonal now and you never know if you’re going to get work again.

Jean Chatzky:
Six months to a year is a large window, but six months is the same advice that I give to everyone. We all need to be prepared for emergencies, but yet, when I look at the research, what I see is person after person who has not done that, who finds it very difficult to actually save money, to actually make a plan. How do you walk people through the steps of planning, and how did you do it yourself?

Dale “Opie” Skjerseth:
The first thing I tell people is to write down what they spend every day for a month and then look it over. Then, continue to do it for at least one year. I push writing it down because I always feel if it flows from your brain out your hand onto a piece of paper, then you can really see what goes on. Then, you can evaluate what you need.

I wrote down even small things like a pack of gum, and I’ve taught this to my nieces, nephews and godchildren. As they matured, the funniest thing is they all come back and say, “Dating is my most expensive thing.” I said, “Well, you have the choice,” but the ones that have done this practice have become successful even as young men and women. Beyond this, I tell people to also look at their monthly bills because you never know what might pop on there. The other day, on my phone bill, it came up that there were 20 extra dollars being charged to my bill. So, I called them. Of course, you get passed around to 25 different people, but I kept on. I finally got it off the extra charge removed. At the end of each year, I take and reevaluate my spending. I go through my sheet and start cleaning it up. Then, also at that time, I tell people to look into their investments. If they don’t have a financial professional, I urge them to get one and look at all the little things you need to do. Maybe it’s time to move something to a better investment.

In addition, if you’re not happy with the financial professional you have now, look into someone that understands you. That’s key for a financial professional. I always point that out to people. If you walk into a financial professional’s office and you sit there and you come out knowing half of what he or she said, it’s okay. If you come out of there knowing nothing, find somebody else because your financial professional needs to listen to you, and you need to listen to them.

Jean Chatzky:
I think you’re getting at some really important concepts here that factor into both the planning process and dealing with an unexpected time like this. Let’s break it down and go step by step for people.

The first concept that you mentioned was getting really honest with your spending. I mean, you described going line by line by line and not just to the dollar but to the dime. Cyrus, why is this so important? Why do you think so few people actually do it?

Cyrus Bamji:
Because they think it’s going to be hard. People, in general, don’t like to look at numbers. They know they’re getting a set paycheck every month. Hopefully, they’re managing it as best as they can, putting some away for savings, putting some away for retirement, but in general, most folks don’t. We at the Alliance have been educating folks on three things and no question about it, it applies to today.

One is that you have to save for retirement. No question about it, right? Number two, you have to grow your money, and so because of that, you need to invest it in the markets in whatever way, shape or form. Find a financial professional who you can afford and who will meet your needs to grow your money. Then, the last thing, which is what the Alliance is really focused on, is you have to make your money last. People often forget that retirement can last 20, 30, 40 years or more. Many people these days that live to 100, especially women who tend to live longer than men.

On your retirement day – whether that be at age 65, 67, et cetera – you come to the realization that, “Uh-oh, I’ve got 30, 40 more years to go?” That’s almost your entire working career. That realization is kind of the wakeup call that we see and people are saying, “We got to figure out what our expenses are going to be in retirement. It’s no longer about growing my money. It’s about making sure I have enough money every month to make it last with those basics and those essential that I’ve got to cover and pay for.”

Jean Chatzky:
That is called a life reset, right?

That’s basically what people go through when they figure out how to make money last through unexpected times like this but also for as long as they live.

Opie, how did you find a financial professional that you felt like you could trust? How did you come to a mind meld with that person? I think it’s a question that I get asked all the time, and I agree with you that you need to find somebody who is the right fit for you.

Dale “Opie” Skjerseth:
I’ve dealt with a few. Seven actually, but I moved on from them as I grew. The lady I work with now is fantastic. She listens to me, she knows what I’m looking for, and she knows when to bring things to me. We really gel.

Here’s what happened. I lost somebody, and with it, a lot went down in my financial world where I actually had to take over and learn not to do that. You should always use a financial professional. So, I found my current financial professional Lisa. She listened to me, and then she evaluated if she wanted to work with me, knowing what I wanted. She doesn’t want to deal with someone that wants to play hard ball. She’s a long-termer.

We gel because we have a good conversation. We’ve talked over the pandemic. I never call her. When there’s a market fluctuation, when we had a big hit here, I didn’t even call her. I’m not worried. She knows how I want to feel, and knows that I’m not aggressive anymore. Right before this all went down, she came to me and said, “I know you got money in the bank, but you should at least put something in a bond, an 18-month thing. You need to let this ride.” So, that part was good. She sees what I want, and you want to make sure somebody sees you also as a human being, not as a bank account.

Jean Chatzky:
You put finger on a couple of important things there. She listens to you and that’s important. When I am helping people choose a financial professional, I always suggest that they pay attention in that first conversation and recognize who’s doing the listening and who’s doing the talking because a financial professional needs to understand you. They need to understand your goals in order to figure out if you can be helped by them. The other thing that I heard you say was that she really understands how much risk you want to take. Especially now, people are nervous, and we need an financial professional who’s going to help us take the appropriate amount of risk, not getting too conservative but also understand what we’re comfortable with and what will allow us to create a future that still allows us to sleep at night.

Cyrus, I’m sure that is part of what’s driving the research that is showing that people are more willing to look at adding an annuity to the mix because they’re less comfortable with the ongoing volatility than they used to be.

Cyrus Bamji:
There’s no question about that. There has been a flight towards annuities recently, and it seems to happen usually when the markets are volatile like they are now. People start thinking about risk and the fact that their investments have gone down. There are a lot of millionaires out there who also are risk averse during these times and then start thinking about the fact that this market volatility could happen 10 years from now again or two, three times during my retirement. Because of that, I want to protect myself during that time.

A good financial professional is going to help you figure out for your retirement how to spend your money. That’s probably the most important thing because money’s not coming in from work or other sources, so whatever nest egg you’ve built up over there, you need to figure out how to spend it. There are two categories that people need to be looking at: what their needs are going to be on a monthly basis, their must-have money as we like to call it, and then the money that they want. The investments you make in the marketplace, whether they’re growing or they’re declining at any given time, is not as important as what money you can count on in retirement every month.

When you’re working, you could count on a certain paycheck. You’d be able to cover your bills with it. In retirement, you don’t have that paycheck, so you’ve got to figure out what your expenses are, and calculate what you are spending money on. Figure out what essential expenses you have, like your mortgage or rent, your utilities, your groceries, and other basics, and then figure out what kind of protected income source you’re going to have to cover that.

Social Security is obviously one, once you start drawing on that. If you have a pension, that’s a guaranteed income, and then the third is annuities. The people that are the most confident about their retirement and frankly not touching their investments in the market are the ones that have annuities in there because that annuity keeps coming to you. That monthly income keeps coming to you during that whole period of time.

Jean Chatzky:
Someone listening says, “The periodic review of all spending needs to be part of our DNA in order to identify which are must to have or nice to have.” I think that is so true. Someone else wrote that she called her credit card companies and she got her interest rates lower, and that’s how we do it. We stay on top of these things, and we’re vigilant about saying, “Hey, I know that there’s a better deal out there. I want a piece of that better deal.” You cannot give up on that.

Last week we had a very interesting conversation with David Blanchett from Morningstar. One of the things that he said, that I haven’t stopped thinking about, is the fact that they see people in retirement who actually have enough money but don’t feel like they can spend their money because the money’s not coming in as a paycheck. The money is in principal. I know from watching my own mom who is in retirement, she doesn’t like to spend her principal. She is really proud of the fact that her financial professional has helped her keep her principal where it was 20 years ago today and that she’s been living very comfortably on that money.

Cyrus Bamji:
She’s probably worried about running out of money. At the end of the day, as that nest egg starts to shrink, every month or year you get a report hopefully that shows you how much you drew down. When that nest egg starts going down slowly but surely each year, that’s the reaction. Our research shows that the people’s concern is about that. If they had a source of income that is guaranteed and that’s coming in, they wouldn’t have that kind of worry.

Jean Chatzky:
I don’t want to get into the weeds here, Cyrus, but a listener is asking why I’m not asking you about the cost of an annuity. I don’t want to get into a very product centric conversation here, but there are people who worry that annuities are going to be too expensive. I want to say before you answer this question is that prices are all over the map. It’s really, really important if you are starting to look at converting some of your retirement savings into a form of lifetime income, into a paycheck, that you do your research, and you really compare fees. You want to understand what you’re shopping for because there are wide discrepancies. Cyrus, do you want to weigh in on this?

Cyrus Bamji:
I would echo that. You have to talk to a financial professional because annuities can be complex in terms of the choices available. Have your financial professional look at fees, costs, and the benefits.

Jean Chatzky:
Opie, as you’ve evaluated how to put your financial life together, what did you buy? What pieces make up your puzzle?

Dale “Opie” Skjerseth:
Well, I have three annuities, but they came with time. I have bonds. I even have savings bonds from 30 years ago.

Jean Chatzky:
You really did it yourself, my friend.

Dale “Opie” Skjerseth:
I have cash. I have mutual funds. I have a wide selection. I have a couple of insurance policies, which were my biggest, most expensive ones. Once I figured out annuities and how they worked well, I’ve built them as my cornerstones. I put everything else in the middle, and whatever happens, it rides. Those, I have not lost principal on them. I have not lost a lot of money during this time. I mean, anything I’ve lost was also money made, and it’s riding. I don’t plan to pull them. I run for the long term in that sense, so I know where my financial foundation is. With the rest, I rolled the dice, because why not?

Jean Chatzky:
It sounds like you also have some stocks and mutual funds that will provide you with potential growth. So, it’s a matter of putting together a portfolio where you have different pieces.

I know that you are the guy in your family and on the crew when you’re traveling with the Rolling Stones or with Guns N’ Roses that takes aside the younger crew members and talks to them about money. People don’t like to talk about money, right? So, how do you start these conversations? How do you get people to talk to you about their money?

Dale “Opie” Skjerseth:
I don’t pressure them. I can guilt them into it, because I see what they spend their money on because we’re living together. On tour, you see what everybody does. You see where they spend their money. So, I talk to them, and I say, “Hey, have you thought about investing in something? Have you thought about investing in your future? Have you saved for the six months?” That’s number one when we all get out there. Have you saved for the six months? Do you know about spending? What are you doing with your credit cards? I even convinced a lot of them to use their credit card’s point systems to hook to Amazon so that you can use money for your points.

I just try to teach as much to them as they want to listen to. Some will take it and run with it. I have guys and gals that are doing fantastic. They call me and say, “Hey, I want to thank you. We paid our house off when you told us to. You’ve taken us out of debt like you asked us to,” and now they’re rolling. I had a guy called me the other day because he’s going to buy a house. I said, “Are you ready to sit home for 12 months?” He said, “Yep. I can do it. I have enough money in the bank. I can buy a house and have enough to pay my monthly mortgage and live with it. I figured it all out like you showed me.”

My godchildren save dollar bills, and they’re only 13. I showed them how to put money in a jar, and at the end of the year, I split it with them, and I save too in a jar, and they love it. This is a very important time to teach your kids the value of money.

Jean Chatzky:
Absolutely. I can’t let you leave without asking you if you ever got any financial advice from the Rolling Stones.

Dale “Opie” Skjerseth:
My financial advice from them is what they do too in that they’ve invested well into themselves and to their career. That’s how I’ve looked at it. I’ve invested my time into my career. I know that they’re all very wise businessmen and they have invested into their careers. As you can see, when they release something new, and they know how to play – 58 going on 60 years of touring.

Jean Chatzky:
That’s a pretty good track record.

Dale “Opie” Skjerseth:
All my acts are older acts, and they’re still working-class people. They’ve never taken themselves out of that. Yes, they have more money. Yes, millionaires in this time, but millionaires make big bets too on the market, and they take bigger hits.

We all can take this time to do a little bit of a reset and look into what we need to do for the future because when this ends, we don’t want to forget it because it can happen again.

And retirement will happen. So, we all want to take our future in our hands.

Jean Chatzky:
I think that is a perfect way to wrap things up. Cyrus, Opie, thank you so much. If you all are looking for more information, please go to ProtectedIncome.org.

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