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How Marriage Can Complicate Your Investment Decisions
Sometimes the easiest decisions to make, are the ones you make alone. You might have a feel of where I’m going with this.
Yes, it is about marriage and the investment decisions that have to go through a “higher order” in order to go ahead.
I can sound a little tasteless to even say this. But it is a somewhat embarrassing fact. Having a spouse can hinder your property investment decisions. So much that it can sometimes be enough to put you on depression pills just to seek some mental relief.
Did you ever try to buy a car and you wanted a silver one, while your spouse insisted that a black car looked better? Yup. You know what I’m talking about.
How about the dinner table which you like the round one while your wife prefers the rectangle design?
These are small negligible choices to make. But it is this underlying relationship dynamic that can cause chaos when it comes to financial decisions.
Buying property can turn out the same way. Your husband or wife may have a set ideas of what they are looking for in property, be it residential or commercial, apartment or landed house. Some spouses tend to be stubborn and even though they realize they are incorrect, they refuse to admit it.
This is how beautiful relationships are.
Factors way beyond the realms of what is at hand can greatly affect how receptive one is to an investment. Sure, social factors are at play. But it is the relationship dynamics that take things up a couple of notches.
There are times when your spouse is being influenced by the family or friends. Sometimes, even by people 6 degrees down their social circle they have never met. Perhaps you do not even know this occurring and you think the ideas are theirs alone.
Co-workers can also greatly influence a spouse who feels the need to keep up or have a certain appearance, even as it relates to a house. The magic is even more ming-boggling when these co-workers do not have the same experience as what you are experiencing. Situations and circumstances differ greatly. Yet, third party advice are taken as seriously as a major press release.
The financial end of it can also affect your investment decisions.
You need to take into consideration how much money your spouse brings to the table. Often times, there is one party making most of the money while the other party makes a more intangible (yet valuable) contribution to the marriage.
So even if you are the one who controls the dough, it does not imply that you are the one making the final decision. It might appear that you are, but don’t kid yourself.
You know what I’m talking about.
There is also the question of credit history. You may have an outstanding credit history that bankers will drool over, while your spouse has been negligent in making timely repayments on the credit card bills. This immediately puts a dent on any credit facilities and loans you need to apply for.
In some cases, spouses were not aware of their partner’s bad debt, that occurred prior to the marriage. It sometimes comes out during the acquisition of property. And because you have sworn to stand by your partner through the good and bad times, surely you cannot give him or her a good dressing down just because of this.
Depending on where you live, your spouse’s financial issues could have a major impact on you. In North American, the laws from province to province and state to state.
For instance, if your investment falls under community property laws…properties that you and your spouse bought after marriage are considered jointly owned. So should your spouse have a prior debt that is being collected upon after your marriage, the creditor has the right to come after the property.
This means that even though you had nothing to do with the debt, you can now lose your property.
Other areas have what is called a common property rule. This means that the creditor can only ask for a percentage of the property owned jointly. In most cases, they are looking at 50% of the property value. In all likelihood, the investment property would have to be sold by you and your spouse, in order to honor the debt.
Even if you work towards finding a method to honour the debt without selling, you might not get the chance. The creditor could go to a judge and ask them to look at shared assets.
This means property, vehicles and bank accounts. The judge may make the decision that your property has to be sold in order to pay out the debt quickly.
Looking at the many investment decision making complications that couples have that nobody talks about, you should really think it through on how to go about making any real estate investments.
First and foremost, be open and talk about what role each party should take up. And very importantly, remember that you are making a financial decision. So any aspects of social pressure should go out the window.
If you have to sell a house because you cash buffer has run out, do it. Don’t be petrified into making a tough decision just because you are thinking about how your friends will troll you at the back of your head.
There is also no place for your ego to gain an upper hand.
Yes, you might think that this is a great opportunity to get one over your wife just because she made you buy that black sedan over the silver one. But that is not being pragmatic with your investing activities. If something makes common sense, you should not be willingly oblivious to it just because you have a score to settle.
Finally, make sure you are in line with the future plans you have for the family. The last thing you want is to make a decision now which will cause others to suffer in the future. And if you are honest with yourself, a happy harmonious family is worth much more than any successful investments you will make.