Adventures with lyrical - buying a business
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Do you both work? If so, keep a joint account for bills, the kids, etc, and keep separate accounts for personal stuff. It might suck she spends so much money on food when you don"t, but if she"s making her own money, then it"s kinda hard to tell her what to do with it.Tarrant said:
On the other hand, if you are the sole bread winner, then you really need to set the ground rules. He(she) who makes the money, makes the rules.
I think this is an important point. First, you need money to create wealth, and the only way you are going to get, at least early in your life, is to save it.Cad said:
I don"t know how old you are Cad, but I do find it interesting that Lyrical and I are roughly the same age, have the same philosophies when it comes to money, and have followed similar paths to success. It seems like you have some of the same beliefs.
Most people make more money, end up spending more money. Bigger house, bigger cars, etc. Like Lyrical and yourself, I stayed small and paid off debt. I paid off my student loans before I hit 30, even though a lot of people will tell you to keep your student loans and pay the minimum, since the interest rate on it is good, I just wanted to shed all my debt. The first car I ever owned was a "present" upon graduating from high school, which was a used Honda Civic. I drove that same car for the next 10 years, it ended up with over 200,000 miles. I bought my second car when I was almost 30, and I still have that car today, 13 years and 150,000 miles later. I do have another car now for my wife, and I also bought a fancy car for myself a few years ago.......so that"s 4 cars in the last 25 years, and 2 of those were in the past 5 years.
I also rented a condo through my 20s, saved up, and after paying off the loans, saved more and used that to start my first business. I didn"t start making good money until I was 35. That was the first year I ever made more than $100,000, and it seemed like a king"s ransom to me at that time. I"m sure many of you can hit that mark before age 35, which would put you in a better position than myself, assuming you stay debt free.
I"ve never read the Millionaire Next Door, so I don"t know how "frugal" he was or recommends, but I definitely lived frugally during my 20s. I guess the message I would give is that given all the examples posted before mine as well as my own, the path to wealth is paved by saving early in life, paying down your debt, and then investing for your future. The key is to start early in life with good spending/saving habits, because if you wait too long, you will make it extremely difficult to accumulate any wealth, and you could end up living paycheck to paycheck just like most people.
Surely you can respect someone would rather live in poverty for 50 years than drive a civic for 25.
Big Phoenix
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Shonuff
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Damn forum ate my huge ass response. Stuff like the above post is why you discuss this when dating and also watch to see how they spend money. We talked about saving/investing, she agreed she wanted to do it, and then we got married and I started getting her overdue credit cards. She came from a poor family, I knew that going in, but was surprised that her parents didn"t teach her to pay her cc bills when you have the money. She"d rather have gone out to dinner than to pay her monthly minimum and keep her credit clear. I looked up her cc score, and it was 538, she couldn"t have financed a cup of coffee.Tarrant said:
I"ll be honest, until I got her to see things my way, I was an absolute spending nazi, and it was implicit that if she didn"t do as told, we"d be done. I gave her a verbal lashing that you wouldn"t believe if she even bought a 50 cent soda out of the machine while at work.
I was an absolute prick about spending, and I didn"t care if she pushed back, I pushed back harder. I knew a co-worker who was 60 years old, that said he was going to have to live in a trailer park at mandatory retirement at 65, because he lets his wife blow all of his cash. And he was making just under six figures, which is alot in the midwest. I was determined not to be that guy.
I ask her if the early days were worth it. It took like 1.5 years to get rid of her bad habits. When she lived with her family, they had holes in the floor, there were six people living in like 1k sq ft, there wasn"t enough to eat, and bill collectors called all the time. Now she drives a Mercedes, we live in one of the most prestigious neighborhoods in the area, and our bedroom is larger than the house she grew up in. She says it was all worth it.
Simply put, the ends justifies the means. Part of being the man of the house and being the leader is about steering the ship where it needs to go and not caring if anyone"s feelings are hurt.
Cad
scientia potentia est
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I was much less of a nazi than you guys about spending but I probably made a lot more early in life. My wife is also a professional so we have a double income. Aside from our house (purchased this year, with lol free 3% money) we live like we earn 60-70k a year but make many times that together. So our investments pile up. I"m hoping to be able to retire at ~45-50 with 10 million in investments. I"m 35.Izuldan said:
Shonuff
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Pretty much the less money you make, the more militant you have to be. I started out making $10 an hour like everyone else, although I still was able to invest 5% of my income back then. Now I don"t have to be militant at all, since my income has probably gone up ten times since I got out of college.Cad said:
No, my goal is to BE the one that saves money for both of us. In the end, you have to play to your strengths. A buddy of mine I talked with, when I first started seeing that I would soon share finances with my girl, said he has separate checking accounts and her money is hers, his is his. He saves and invests, she doesn"t. The way people fight over money I just don"t want to be that way and he said he didn"t either.Tarrant said:
If you can get your wife to save then great! My girl earns her money and she has a right to do with it what she wants, whether I agree or not. I"d prefer she saved more and over time the more I learn about saving and investing... hopefully I can help instill that in her also. I won"t fight about money with her though, just not worth it considering how many relationships tank because of that.
I do support us. I pay my half, maybe more if you start considering groceries and dinners out where she says she"s short on money and I just end up paying anyway. So long as I can still save I"ll try the baby steps over time approach with her saving money also.
Shonuff
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And if I was paying all that crap plus saving for retirement, thats when I"d pull her aside, have a family meeting, and tell her I want her to be more a partner, and that she needs to show me something and start participating. I"ve done it in the past, so what if she gets butthurt.Cathan said:
My wife views the bank account as a contest to see how quickly she can get it to zero every week. She used to be a lot better about money but now that she is making a decent amount she wants to spend. I think part of it is a keeping up with the Jones" type thing, since most of our friends also make good money and spend like they do.
Couple things I did that helped the situation. First is I laid out a budget with her to show exactly where our money was going. In that budget each week ~$200 in cash was pulled out. That was gas/grocery/fun money. She could basically spend it any way she wanted but had to make sure she had enough left over to buy groceries and put gas in her car. A couple of weeks she insisted on going out to eat several times and ran out of money to buy groceries. Now we didn"t starve but we had to make due with what was in our cupboards and she didn"t like that one bit.
Next thing is the classic "pay yourself first" strategy. I made sure that money for savings and investments were automatically pulled out of our account each payday so she never even sees the money in the account.
Couple things I did that helped the situation. First is I laid out a budget with her to show exactly where our money was going. In that budget each week ~$200 in cash was pulled out. That was gas/grocery/fun money. She could basically spend it any way she wanted but had to make sure she had enough left over to buy groceries and put gas in her car. A couple of weeks she insisted on going out to eat several times and ran out of money to buy groceries. Now we didn"t starve but we had to make due with what was in our cupboards and she didn"t like that one bit.
Next thing is the classic "pay yourself first" strategy. I made sure that money for savings and investments were automatically pulled out of our account each payday so she never even sees the money in the account.
Cad
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This won"t work by the way, unless you force fiscal discipline she won"t have it, and if you do force it, she"ll probably resent you. If wealth is something you aspire to, you better make it all yourself (counting on her to waste a portion) or find another woman.Cathan said:
I think this might be pretty culturally dependent. My current stepdad who initially was married to a Japanese woman in Japan brought up how it"s a cultural expectation that the man makes the money and the (stay at home) woman sets the budget. I have no first hand experience though.Izuldan said:
What you said makes sense to my Western ass though.
OneofOne
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Can"t agree with that quote from Izuldan, nor Lyrical"s "man of the house" comment. When I was considering my (future) wife as my lifelong mate, one of the important qualities to consider for me was her financial sense. Which frankly she has more of than I do, her growing up dirt poor. I would never think of telling my wife what she could or could not do. She"d laugh at me if I tried - and I wouldn"t have it any other way. I want an equal, and that"s what I have. But because we hashed all this out BEFORE we got married, I never have to worry about her going and blowing money on stupid shit, and visa versa. We have a plan and are both sticking to it.
I wish I had some sage advice about what to do now, after the fact, but I don"t. I can only say that this is something that should be strongly considered before you marry someone, because as you are finding out now, it"s a very big and very important issue.
While I"m sure it works for some people, the idea of having separate bank accounts simply boggles my mind. Maybe it"s because my parents operated in the same way my wife and I do, so this is something that just seems normal to me.
I wish I had some sage advice about what to do now, after the fact, but I don"t. I can only say that this is something that should be strongly considered before you marry someone, because as you are finding out now, it"s a very big and very important issue.
While I"m sure it works for some people, the idea of having separate bank accounts simply boggles my mind. Maybe it"s because my parents operated in the same way my wife and I do, so this is something that just seems normal to me.
The first thing I thought about that was beneficial about separate banking accounts is security...
I can look at my statement and within 2 minutes I can determine if there are any suspicious charges. If I combined with my fiance I don"t know her spending habits and I couldn"t tell if there was a fraudulent charge. Same goes for her.
I keep track of my account, she keeps track of hers.
I 100% agree with you on the whole equal thing in having a partner. I don"t get over on my girl and she doesn"t get over on me. We work together and that"s the way I want it. I dated girls that did whatever I wanted and it was fucking boring. I felt like they were lesser than me and I hated that they needed me because they were lesser. They didn"t work or couldn"t hold steady jobs, weren"t as good at talking things out as my fiance now is and a whole host of similar issues.
I can look at my statement and within 2 minutes I can determine if there are any suspicious charges. If I combined with my fiance I don"t know her spending habits and I couldn"t tell if there was a fraudulent charge. Same goes for her.
I keep track of my account, she keeps track of hers.
I 100% agree with you on the whole equal thing in having a partner. I don"t get over on my girl and she doesn"t get over on me. We work together and that"s the way I want it. I dated girls that did whatever I wanted and it was fucking boring. I felt like they were lesser than me and I hated that they needed me because they were lesser. They didn"t work or couldn"t hold steady jobs, weren"t as good at talking things out as my fiance now is and a whole host of similar issues.
Shonuff
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How is everyone equal when one person is paying all of the bills and paying for the retirement and the other person is spending money on every frivolous thing in sight? I"d be to the point of divorce if I was the only one contributing to the house.OneofOne said:
This stuff should be hashed out before you get married, but these guys are already married and having issues. One thing I"ve learned is that you can"t change people fundamentally, even if you want, and you have to go for shock value to make any movement at all.
What advice do you give people that are already married and experiencing conflict over financial issues? I tried talking to her about the importance of being financially secure bla bla bla, but her financial bad habits were ingrained. I had to do alot of yelling and screaming in the early days, now I don"t have to at all.
If that works for you I think that"s great. Obviously the ideal situation is to have a spouse that shares the same philosophy regarding money as yourself.OneofOne said:
I was mainly responding to Tarrant"s situation where you and your significant other don"t share the same philosophy. In that case, it"s important to maintain some financial control over your money otherwise you will have a difficult time accumulating wealth to retire on. The last thing you want is to be still working at 65 and resenting the fact you could have retired earlier if it wasn"t for your wife" frivolous spending....I"m thinking that could cause some serious marital discord - better to nip it in the bud.
Outside of that, I still think it"s important to have separate accounts. I understand you didn"t grow up with that, and you feel you and your spouse should share everything, but for myself, I think it"s always important to maintain a sense of self, even in marriage. Part of that is having your own money. It"s nothing sneaky- communication and honesty are key. You discuss with your partner how much you and your family needs to live on and invest, you put that into a joint account, and you also discuss how much you both want to keep for yourselves, not only to make purchases for yourself but also so you can buy gifts for your family without them having to know how much things cost. Plus, both of you can spend personal money without having to always get the consent of the other, so it helps maintain some of your independence.
OneofOne
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A complete non-issue. My wife reviews our account transactions on a weekly basis. Since neither of us is spend-happy, it"s actually quite easy to make sense of. Occasionally she"ll ask "hey did you spend x at y?" "Yep that was me" Poof - that easy.Cathan said:
Glad to see we are on the same page regarding this. I wouldn"t respect as much someone who I considered a lesser partner, and I want a partner I respect 100% - and I have that. Don"t settle for less.
Re Lyrical
It seems obvious that we have a fundamental difference in philosophy regarding money in marriage, if not marriage itself. But more, I wonder if you even really read my post? Especially when I read the first thing you have to say.
I broke this question up because it was unfair of you to ask it in the way you did. They aren"t equal in the situation you describe, and never should have gotten married in the first place (unless you are willing to accept that). But... that was kinda my point.Lyrical said:
More generally though... How is your spouse not your equal? What if they get laid off, what if one is a homemaker? Are you less equal then? I simply can"t accept that that is ever true. I would never marry (or stay with) someone who I considered a lesser partner. Was your wife the superior partner while she put you through school? If she was making more money than you (were you even working?) then how could you tell her what to do with the money she was earning if you didn"t think you were equal? Unless... I think this is where your "man of the house" philosophy comes in, and it"s just something we"ll never agree on. My penis does not make me the "boss".
I said I had no advice in my previous post. But that was just me trying to be nice. If you talk to your spouse and can"t reach an accommodation you both agree on regarding your finances, then it"s time to call it quits. Of course I think this is something that should be discussed BEFORE marriage, but, here we are.
Financially speaking, I assume? Again, what about homemakers and laid off spouses? Perhaps instead you meant to say "you"re either in it together or you"re not" in which case I concur. Contribution takes more than one form.
I agree 100% that you can"t change someone, and thinking you can is setting yourself up for disappointment. So do you think your wife"s spending and/or saving habits are truly changed, or that she"s simply trying to please you? Or have you "converted" her by showing her what is possible?
I was trying to stay away from the D-word but, divorce.
I"ve typed up like 5 different responses to this but I keep deleting them. I don"t want to be a snarky bastard. Just another instance where our philosophical difference in what marriage is appears.
I agree 100%. But I think you can reach that "goal" through several different avenues, as long as you find what works for you. For us, it"s our "us" time. Money is just such a non-issue, likely because it"s one of the few things we agree 100% with each other on.Izuldan said:
I will concede the gift issue however /chuckle. Either getting cash from the machine/store or once having my sister order something for me, there can be an extra step involved.
Another topic from: The Millionaire Next Door I have a question about to those that are already financially independent here...
What did you do for your kids" education? Did you send them to expensive private schools or to public school? The book praises education but it also said most of the rich people send their kids to public schools.
Personally, I went to public school and I wish to god I"d had the advantage of going to a private school where the classes are smaller and I could learn at my own pace in an environment more conducive to learning, and that was back in NC...
Here in New Orleans private schools are where kids with money go to school and public schools are mostly for the poor kids. Catholic private schools are a big portion of the high schools here and my fiance plans to send her daughter to a coed private school that"s about $9000/year. I"m all for it even if it does mean a big drain on our funds. In another city where public schools were good I could possibly argue for sending her to public schools but here in New Orleans? Fuck that...
So what did the rest of you do for educating your kids?
What did you do for your kids" education? Did you send them to expensive private schools or to public school? The book praises education but it also said most of the rich people send their kids to public schools.
Personally, I went to public school and I wish to god I"d had the advantage of going to a private school where the classes are smaller and I could learn at my own pace in an environment more conducive to learning, and that was back in NC...
Here in New Orleans private schools are where kids with money go to school and public schools are mostly for the poor kids. Catholic private schools are a big portion of the high schools here and my fiance plans to send her daughter to a coed private school that"s about $9000/year. I"m all for it even if it does mean a big drain on our funds. In another city where public schools were good I could possibly argue for sending her to public schools but here in New Orleans? Fuck that...
So what did the rest of you do for educating your kids?
Shonuff
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OneOfOne, I"ve already said it, Ive asked her about it, but now that she"s gone from the poor house to a 5k sq ft house in one of the best subs in the area, and has money, she says it was worth it. That"s just what it took, alot of financial discipline on both sides, and she knew it and agreed to it while we were dating. I had to be pretty militant on my salary, she agreed to it before hand, and she knew she needed tough medicine. And every time she visits her family (who by the way lost their house in foreclosure and now live in live a 500 sq ft rental in the most dangerous part of town), its in her face that she lives differently, and that it took discipline to get here. She"s happy, and she says it all the time. Literally, they were on forced diets growing up, and never knew when the bank was going to come and take their cars or home.
I stand by what I said before, both spouses should try to contribute equally to the well-being of the household. Things come up like being unemployed, and thats understandable, but when you work and blow all of your paycheck every week while the other spouse is covering the bills and paying for retirement, that"s not right in my book. I"m thinking that I was a junior exec by the time I was 30ish in the Fortune 10 company I worked for. I didn"t expect my wife cover half the bills, because 80% of the hh income was made by me. But I did expect her to contribute some, and keep her credit cards current and her other debts she had. Eventually, I paid off all of her debts, but we always worked together. She always contributed some towards it.
When you marry someone whose been poor their whole lives, you can put a goal in front of them that they want, but if they have no one around them thats done it, it can be pretty tough.
I stand by what I said before, both spouses should try to contribute equally to the well-being of the household. Things come up like being unemployed, and thats understandable, but when you work and blow all of your paycheck every week while the other spouse is covering the bills and paying for retirement, that"s not right in my book. I"m thinking that I was a junior exec by the time I was 30ish in the Fortune 10 company I worked for. I didn"t expect my wife cover half the bills, because 80% of the hh income was made by me. But I did expect her to contribute some, and keep her credit cards current and her other debts she had. Eventually, I paid off all of her debts, but we always worked together. She always contributed some towards it.
When you marry someone whose been poor their whole lives, you can put a goal in front of them that they want, but if they have no one around them thats done it, it can be pretty tough.