Advise Needed: What to do when your partner looses the Sleep at Night Factor

[always_learning]

My wife has lost the Sleep at Night Factor.

We own 2 IP's and we are building/developing 2 more now. The development project is moving forward (albeit a little late) and a reasonable profit margin is still there.

My wife is a wonderful person but she is worried, she now wants to sell everything NOW so we can "relax".

She has read Rich Dad, she understand my purpose and why I wish to continue to invest, she also has seen the increase in values of the existing IP's, but that doesnt matter if we have any debt however managable ( <50% LVA). Investments have all been organized by me etc. she has gone along with it but not with her full blessing, I wont say I twisted her arm, but I will say I pulled her along a little otherwise we would have never have purchased any IP's (but we would have a nice bank account, but nothing compared to the equity we now have).

Any advise from those with anxious partners?

 

[bbg2003]

This is a normal part of the life of an investor. I'd suggest this (with your partner of course):

1. Review what you are doing.
2. Review why you arew doing it.
3. Review your budgets, allowing for extra expenses.

If you come up with the same results that made you start, why stop now?

If you come up with different results (ie from higher interest rates), how much worse are they? And are they still acceptable? What can you do to improve the situation?

Given your LVR it seems unlikly you'd get in financial trouble.
Remember: He who nothing does nothing achieves, and nothing learns as well.

best wishes
bbg2003

 

[Puppeteer]

I don't have an anxious partner, but why don't you ask her for her opinions for investing.

Discuss what her investment goals would be, and what her investment strategies are.

If she has none, then suggest that you continue down this path as a team while she does some research, and works out what investments she likes, and then discuss it again in the future.

Ask her what her specific concerns are, and then put some time into explaining your views on those concerns.

It sounds as if the project is a good one, and that communication is the key. Listen to her, and work through the decisions as a team.

 

[BUNDY]

Perhaps you could include her a little more. for example, sit down with her and show her the ins and outs of everything. Walk her through the finances and show her the bottom line. It's quite easy to say, we've just made $400k in 12 months - that would have taken us another 4 years of work to achieve that.

After this, then ask her what her concerns are. Maybe sit down together and formulate a plan so you both have direction and goals. That way you can see on paper what you want to achieve and mark it off as a milestone once you achieve it.

All people are different and cope with things differently. Perhaps she isn't upset with investing, more that she feels trapped into a situation, job etc due to the large mortgages and repayments?

My partner usually flips out about once every 6months and wants to sell everything. I usually listen to everything, then say, well if you want to sell then we will (meaning it) - money isn't everything - but it helps!!

Let them know that they are more important than money/ investing. The next day or so, everything is fine and we are back on track - investing again.

let us know how you get on.

Cheers
BUNDY

 

[Kenkoh2000]

Originally posted by always_learning
My wife has lost the Sleep at Night Factor.

We own 2 IP's and we are building/developing 2 more now. The development project is moving forward (albeit a little late) and a reasonable profit margin is still there.

My wife is a wonderful person but she is worried, she now wants to sell everything NOW so we can "relax".

She has read Rich Dad, she understand my purpose and why I wish to continue to invest, she also has seen the increase in values of the existing IP's, but that doesnt matter if we have any debt however managable ( <50% LVA). Investments have all been organized by me etc. she has gone along with it but not with her full blessing, I wont say I twisted her arm, but I will say I pulled her along a little otherwise we would have never have purchased any IP's (but we would have a nice bank account, but nothing compared to the equity we now have).

Any advise from those with anxious partners?

**********************************************
Dear Always_Learning,

I guess if I am in your shoes, I will sit down to discuss things with my own wife, as to the causes/sources of her fears and anxieties. Perhaps, she has a lower threshold for risk-taking and you are exceeding her limit for her to feel comfortable in life. Perhaps, she doesn't really understand the investing rules and rules of the game for property investment, such as your investments/stakes getting bigger, her faith is being shaken or that simply that she has never play such a big stake in her own life as yet.

2. Perhaps you need to explain to her the various safety measures which you have incorporated in protecting your own investments through your own investing strategies or that she needs to be educated on the difference between good debt, bad debt and neutral debt and that most rich people grows richer because of inbcreasing levels of good debt accumulation.

3. 2 cents worth of suggestions.

4. Thanks

Regards,
Kenneth KOH

 

[Macca]

hi AL,

well someone has to say it..............how about some sleeping pills and a few drinkies...........

Ok ..........got that out of my system.

I can relate to this situation, my wife is also far more cautious than I am in investing. The problem is, that I can do all the numbers in my head while I am looking at the place, my wife needs to see them all written down.

So for peace in the household I write them all down for her (from out of my head hehe) but then she is happy.

Have you tried setting out in writing your investment journey over the past 2-3 years?

eg 3years ago we owned this and owed that much, our assets were this much etc etc, then list your situation 2 years ago, then 1 year ago then your projection of the next year.

By putting it down on paper she can see before her eyes what you have achieved and where you are going and what you hope to achieve in the future.

This can PROVE what you have gained by investing rather than just sticking it in the bank so they can lend it to an investor

All truly wealthy people invest their money, they keep the petty cash in a bank account sure, but they are far more likely to own shares in the bank than to have big money on deposit.

It would be good if she can explain to you what she would rather invest in, just putting cash in a bank account is NOT investing, it is far too pasive IMHO.

 

[Rolf Latham]

Hi AL

Risks that are obvious to some are not obvious to others.

While I can understand what Mrs AL is feeling, I think its also worthwhile for her to be made aware of that a modicum of managed risk means that you both dont have to work until you are 70 +.

Ta

rolf

 

[geoffw]

For me, MrsW was happy to go along with me, while really not understanding what I was trying to do. I was the one who had attended the courses, so she left it to me, no matter how uncomfortable she was with the idea.

Then she played a game of Cashflow (with Nivia aka "The Wife") as well as others.

She got out of the ratrace first, so took the worksheets home to study.

On the last property we bought (about 16 months ago) the only question was- "Is it cashflow positive?". It was, so she approved.

The Cashflow game has enabled her to understand the ideals- even if the pathways may be slightly different from out situation right now.

 

[Mikhaila]

It is indeed a normal investor’s lifecycle. The desire to sell everything NOW is usually a subsequent reaction to some other event(s) however. Me and my partner almost periodically have this impulse and it is just a matter of working out what was a root cause. I am an IT contractor and a single bread earner in the family now, so I had several impulses lately after the client I contracted for went into voluntary administration and they owned me almost 15K (fortunately it was all recovered). My partner had the sell NOW impulse after being stressed handling two little kids and her study. There are even much smaller things in life which can cause this impulse(e.g media report). It is of cause very individual and varies greatly from one family/person to another. I have a friend who started to loose sleep because he has investment loans of about 450K. I had a chat with him and probably cured his insomnia after telling him that we owe almost 1M to the bank.

AL, we usually go through mental exercise of selling everything and deciding what we are going to do with the money, who will handle the sale, what will happen after will offload everything/part of investments. This exercise usually helps to get to the real reason why the SELL NOW impulse is in place. Once the reason identified it is usually much easier to deal with this reason rather than selling anything. Again, this is just us you/your wife may be very different…

M.

 

[np2003]

If you can manage to serivce the loans, why sell now? Do you want to buy more IPs or buy a Merc?

If you can't service the loans, better sell now. This month's property guide book is DOUBLE the size of last month. Lots of sellers soon. Some houses have been listed for months with no sale. Good luck!

 

[Aceyducey]

Originally posted by always_learning
Any advise from those with anxious partners?

I don't have an anxious partner, but have spoken to many people who do.

Generally the issue is education & experience.

The partners haven't been educated as investors & see investing as 'risky' rather than rewarding.

They don't have much experience investing - and your experience doesn't count as it's not THEIR personal experience.

The best 'cure' is twofold, but requires one vital decision on their part, the willingness to learn!

If they are not willing or open-minded about investing, the best approach is simply to put them in relaxed social situations where investors are talking about investing & give them the room (ie: stay out of hearing distance) to raise their concerns with other people - NOT YOU OR IDENTIFIED FRIENDS OF YOURS!

Once they are willing to learn more, firstly provide some avenues for education and LET THEM pick which avenues interest THEM.

They may not learn in the same way you do, so if you like books, giving them books only will not necessarily help them (and thus you).....provide them info about some events they could chooseto attend, people they could call, books they could read & provide them with an opportunity to play Cashflow (it does help many people think differently).


Secondly, involve them in the research of different investments. When they are conducting the research they will learn for themselves what are and aren't good investments and why...you may even find that they are better at locating good investments than you are

At the end of this process they may still not agree with your investment approach - but will at least understand your thinking & be able to argue you out of poor investments more effectively

Best case they may become your active partner in investing - crucial in my view for a strong long-term relationship.

Cheers,

Aceyducey

 

[MJK]

My experience is that the other half likes to see some cash in the bank. Its short term thinking against long term thinking.

Set up a ten percent account for savings for personal or family use only eg a holiday etc... That way she can get excited about the rising savings while you concentrate on the long term stuff.

You cant go for broke eating peanut butter sandwiches pulling your partner along by the ankle. If shes not into it you have to make sure your investing is not affecting your cash flow too much.

Positive or nuetral investments will suit her better.

MJK

 

[mitch]

Gday AL ,

When my wife and l were looking for ip3 it became a bit too much for her (what with 3 kids and running the house , not to mention me ) and so we agreed that l would do the ip thing and she would have nothing to do with it.

This has worked very well for us as its alot easier for one to decide on the week to month mangement of our 3 renters than both.

l do the lot and usually fill her in on the details as things happen,ie new pm , and keep her abreast of our financial position every few to six months.

This might not work for everyone but since the change in june 02 its been smooth sailing for us both ,in this matter at least

Regards Mitch

 

[geoffw]

Originally posted by always_learning
We own 2 IP's and we are building/developing 2 more now. The development project is moving forward (albeit a little late) and a reasonable profit margin is still there.

IP can be a very slow game.

From the pictures you posted not too long ago, it looked as if was not too many months until it all finished- but that won't help in the short term.

I don't know whether there may be cultural issues- do I remember that your wife is Japanese?

MrsW is Mexican- she was brought up with a strong culture of bricks and mortar, but without debt. (she leived for some years in a two room house, with a number of siblings, until her parents could afford to add a room at a time). She sort of played along with me- but a game of Cashflow 101 (which she won) was instrumental in helping her to understand what I have been trying to do.

The unexpected growth we have seen recently has been a big bonus. But the idea of little deals building into bigger deals, until you get out of the ratrace was very important.

If had not been for that game, I would not have had anything near the support I now have.

Now she wants to follow her dream of a business- a dream which I am personally sceptical of after having seen some bad failures. I think it's time for me to help her with her dream though- and it's a chance for me to learn. Some of the successes of where I've been so far will help her with that.

It's going to ne an interesting exploration,

 

[Kristine..]

Re: Re: Advise Needed: What to do when your partner looses the Sleep at Night Factor

Originally posted by geoffw
Now she wants to follow her dream of a business. I think it's time for me to help her with her dream though- and it's a chance for me to learn. Some of the successes of where I've been so far will help her with that.

Geoff

You've hit the nail on the head.

When one spouse thinks it's all going the way of the other - and that can be going to the footy, working all hours, buying investments, whatever - it's hard for the other to remain enthusiastic.

Negotiating, selling, call it what you will. We all have to see a benefit before we buy the idea.

'Retirement' may be too far away, or too negative a goal to be interesting. Who cares about sipping lattes by the seaside when you're old and grey, when the children need shoes now and it's a while since you went out for dinner.

Anxiety can develop for all sorts of unspoken reasons, not least of which can be fear of being greedy, of overstepping the mark, of exposing the family to social risk because of the increase in wealth.

Always, you have taken the quantum leap from just buying a house here or there to actually developing the properties from scratch. That is what 'other people' do, and perhaps is more than what your wife bargained for.

She may even be embarassed by your success. She may not think it 'fun' at all.

My husband is English. While his parents and most of the relatives have always owned their own home, no-one owns more than one. Only one relative has ever run a business, and he didn't start that until after he retired!

Mike is gradually becoming used to the idea, and for the latest acquisition just signed on the dotted line. He realises that we now have enough (how many is enough) to harvest a few to pay out the ones we want to keep - in retirement!

Yes, we could have more disposable income, but how much coffee can one person drink? Over the years I have reassured, cajoled, defied, and just gone and done it, anyway.

And sometimes, the reluctant spouse wouldn't have objections if they weren't told about every single detail and have to look at plans, contracts and loan documents all about the house.

My suggestion is:

Pay off the family home as soon as you can and try and avoid the temptation to mortgage it again. With one property secured, the potential loss of the investment properties is of lesser importance.

and then perhaps she will sleep well at night again.

cheers

Kristine

 

[Tibor]

Hi AL,

As you know I had my bad times with declining IT work and eventually I've decided to leave the industry and start-up a new business venture, which is already going.

During the past 1.5 years I have heard in every week (sometimes it took 2 weeks) to sell everything and at least save our home!!!

I sat down and calculated how much we would be paying in early termination fees, loan closing cost, solicitors fees, ATO cap gain, RE agent fees, etc, etc and came up that we would be the biggest idiots to sell.

To me it made sense, not to her, especially when I mentioned that I want to refinance and BUY A BUSINESS! This was almost the end of the world (as we know it). When slowly, slowly I managed to start to get the message across about the total lack of ANY job security, our current financial situation (as a casual labourer you earn just a bit less than a well paid IT contractor), total lack of control over our life and the need that we have to take ANY opportuntiy to make a quid, as well as the huge cap gains on the properties we bought, she started to come along.

Still doubtful, frightened, but at least start to see that a different option might just be available. I also pointed out that the expect cap gain for the next 12 months will way exceed what we are 'slaving in' as GROSS (not net) wages, might also helped.

Obviously, risk profiles with as as well as with you and Mrs AL are different, which makes life a bit more difficult. Not sure whether Steve's cashbond could give her a piece of mind. My better half felt much more secure after talking to Steve (thanks Steve!), and in spite of the fact that we did not proceed with the Cash Bond option (not because we do not believe in it, but CRA and related financing issues) she started to accept a different risk reality from hers.

Obviously now I will have to produce the goods, so her newly gained and very fragile 'safety' will increase.

This is what has worked for me, after several hours of conversation / disagreement / argument, etc.

I hope Mrs AL can also be convinced as this might be your family's best opportunity to gain eventual financial freedom. Once the asset is sold it does not produce passive income, hence you (and your family) will have to rely even more on your / Mrs AL's job and be further away from what you'd like to achieve.

Obviously, individual circumstances are different, I just tried to share mine whith the hope that will help yours.

Cheers,


Tibor

 

[Robyne]

My husband wants to sell one or both IPs often. Maybe these are flashes of insight and he is right! Both properties are negatively geared and our lifestyle would be much easier if we didn't have the requirement to pay large sums of money at regular intervals.

Anyway I usually manage to convince him that we are doing the right thing to hang in there.

I am with Kristine re paying of the mortgage on the PPOR. With your house secure, risk tollerence for everything else can go up.

Robyne

 

[Kristine..]

Actually, Robyne

About a year after we bought the Bank Mike was very unhappy and desperate to sell.

The commercial loan was for 15 years and repaying the capital over that period of time was a heavy burden.

I was our tenant for the first two years and the rent was a big drain on the cash flow but we were making up the difference on the loan with after tax money and it took all we had.

So, we decided to sell.

Nearly $3,000 in advertising and six weeks of disruption but no inspections later, and the auction came and went without a bid.

The agent who I had thought so highly of sold me a pup.

During the first two years the rateable value decreased.

Doom and Gloom.

The first tenant after I closed the business and rented the building went into liquidation.

The second tenant has enjoyed no rent increases for four years.

But recent sales in the area indicate that the property has now made up for lost time. It was revalued October 2002 at near-as-damn-it twice what we paid for it in 1997.

When the valuation came back, all of a sudden the 'why' we were doing this became clear. Mike felt a lot happier, he was relieved that finally our sacrifice in paying the loan was not money wasted.

Robyne, investing is a long term project. When we are paying in each month, it is tiring to be budgeting all the time.

But the rewards are wonderful when they come. It's just a matter of 'hanging in there' for the first few years, and anything we can do to reassure the more hesitant spouse will be effort well placed.

Any good project should have a risk management plan. Investing is a good project.

Regards

Kristine

 

[Rolf Latham]

Hi Kristine

Thats one hell of a good post. Outlines the following ideas which I have read somewhere


1. Dont get off the horse before the race is finished
2. Manage risk, have a plan in place, tenancy risk, rate risk, value risk etc
3. Borrow the max as soon as you can for when you truly need it few will lend.

Ta

rolf

 

[whitt]

The last Ip we bought I mentioned to wife:

-No money down
-Positive cashflow $80 PW after expenses
-Increased equity in 10 years time we can use.

And the $80 PW we could use for anything eg... a new lounge suite on HP.

Summary . Another Ip. possibly a new lounge suite all with none of own money.