The Riskiest Investment: AND most of us will do it...

The Riskiest Investment: AND most of us will do it...

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If I told you about an investment you could opt into which could result in you potentially losing 50% of EVERYTHING you had, would you do it? I’ve already done it and I can tell you that it is the one investment I pay the most attention to.

I’m talking about getting married.

All investments need monitoring, I will not get complacent with this one I can tell you!

As with any investment it really pays to do your homework and I did my research prior to this one. I did quite a few years of research actually before settling on the right fit for my investment portfolio. And all that homework sure has paid off as we have just clocked up 15 years of happy marriage. My Mum did warn me that he was indeed a risk because “he was far too nice” but I brushed those concerns aside and I’m so glad I did.

In my peer group I am still reluctantly (I am one of the rare people who don’t like going to weddings) attending the occasional wedding. But by and large our friends relationships seem to be going in the opposite direction of marital bliss at the moment and I find myself watching from the sidelines. Both de facto and marriage relationships end for a variety of reasons and I fully support the decisions they are all making to be leaving their spouses. It is one of the hardest life events to go through and they have my full support. It is certainly not an easy thing to do.

But in most situations leaving means halving not only your union but pretty much every piece of relationship property that you have accumulated over your time together, for better or worse.

I once heard a guy on a radio interview refer to his current marriage as his “GST marriage”. He was on his third one.

When he got divorced for the first time he split everything 50:50.

When he got divorced for the second time he split that 50 into 25:25.

Now on his third marriage if it all goes belly up he is down to 12.5:12.5 (which at the time was the Goods and Services Tax amount).

Cripes, how do you recover from that?

You don’t even have to go through the ordeal of an over priced and stressful wedding to commit yourself to this risky investment either. Just three years of living together will do it. They say give dodgy financial schemes a wide berth, well maybe marriage is one of them? If you separate after three years and then get divorced then it is time to split your relationship property (things that have financial value and debts) in half.

Heck, why be so concerned about which stocks to pick? You probably have more chance of losing half of your net worth just by saying “I DO”.

What on earth can you and I do to avert this financial disaster? There is no point saying “create the perfect marriage” because is there even such a thing (although I’m feeling a little smug right now. Cripes, I hope pride does not come before a fall)? And who wouldn’t want to share their life with someone else.  Perhaps all of the wonderful years are worth the potential heartache if it comes to an end?

So my answer is to accumulate as much wealth as you possibly can while you are at your happiest in your marriage... so that if your relationship does go belly up then at least you both (and any dependents) have enough to survive on. Don’t save for your retirement (well, actually you should do that too), instead save for your get out of jail/marriage fund. Do the leg work early on and build up the coffers as much as you possibly can. If you break up you are both going to get more or less half anyway. You might as well get half of a decent sum right?

My calculations would say that your relationship needs to save enough to buy two houses outright. Then, if you part you can both buy a house and hopefully have enough left over for the next marriage. You could also take the time to have a conversation along these lines:

“It’s not that I don’t love you Honey, I just don’t want to get financially decimated twice thanks very much”.

“Oh, and here, sign this legally binding pre-nup in front of a lawyer while we are on the subject…”

And everyone, just take a moment to be thankful you are not Angelina Jolie and Brad Pitt right now!

This blog is brief today, hopefully unlike my marriage! I’m just off to tell my husband I love him…

Happy Saving!

Ruth

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