Convincing spouse to sell losing investment

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
hcj
Posts: 261
Joined: Wed Mar 26, 2014 2:21 pm

Re: Convincing spouse to sell losing investment

Post by hcj » Tue Sep 06, 2016 3:53 pm

mouses wrote: We have no idea why the spouse is not working. Perhaps the spouse is doing child care and also additionally damaging his or her ability to earn money in the future. In which case the OP's earnings really are joint.

No one said there was an agreement that the initial property each had before the marriage became joint. If there were, the spouse would have retitled the account in both their names.
Agree with this. Another possible scenario: spouse and OP are both from Europe, and made a joint decision for OP to pursue career in the US -- knowing spouse would not have the right to work here. In which case, spouse has given up some financial security and independence because they made a joint decision to invest in OP's career, to both their benefits (assuming they stay married).

I think it would be more fair to think of it like this: if OP received a sizeable inheritance, does he or she expect to call that joint? I don't know, maybe most people here think yes. (At the same time, I think BH gives out a lot of advice when people are thinking of leaving things to their children, to put it in trusts so that it remains separate property and harder for spouse/ex-spouse to get to.)

User avatar
celia
Posts: 8354
Joined: Sun Mar 09, 2008 6:32 am
Location: SoCal

Re: Convincing spouse (Cultural Considerations)

Post by celia » Tue Sep 06, 2016 4:02 pm

123 wrote:A similar post from the OP about the same time last year indicated that they were both around 40 years of age. I haven't come across any reference to how long they have been married or if either was married previously. The spouse has a European background and the investments in question are inherited European holdings.

There may be some cultural issues including honoring and respecting ancestors that are deeply held and which are not going to succumb to what we consider "reasoning". Depending on how long the marriage has lasted the spouse may want to hold onto her money, maybe it's all she has if she's not working here.
123, Thank you for pointing this out. Your post made me think about the European couple who is living in the US but had unresolved US tax issues. That earlier post is here:
viewtopic.php?f=1&t=174552&p=2636605&hi ... e#p2636605

This is the same family. The wife is from Spain and the inheritance happened in Europe (possibly Spain). Until one year ago, his wife didn't even know what she had inherited, but received a yearly statement of some kind showing what taxes were paid in Europe. OP is temporarily working in the US and a recent thread asked how he would be able to go from Vanguard-US to Vanguard-Europe as they plan to go back in a few years. We have no idea if the wife gave up a job to come to the US for her husband's career. It appears she has been accomodating to his wishes, other than the inheritance.

OP, without mentioning this to us, we are trying to apply US Inheritance and Tax law to your situation which may not be applicable to your wife. I think Spanish?? law would overrule anything we say. I don't even know if we have any participants who can address the cultural, legal, or inheritance factors for your home country. We are addressing the situation as if you were US citizens living in the US. Please don't try to push our cultural and legal factors on your wife as they may be irrelevant to your situation.
A dollar in Roth is worth more than a dollar in a taxable account. A dollar in taxable is worth more than a dollar in a tax-deferred account.

User avatar
randomizer
Posts: 1510
Joined: Sun Jul 06, 2014 3:46 pm

Re: Convincing spouse (Cultural Considerations)

Post by randomizer » Tue Sep 06, 2016 9:25 pm

celia wrote:OP, without mentioning this to us, we are trying to apply US Inheritance and Tax law to your situation which may not be applicable to your wife. I think Spanish?? law would overrule anything we say. I don't even know if we have any participants who can address the cultural, legal, or inheritance factors for your home country. We are addressing the situation as if you were US citizens living in the US. Please don't try to push our cultural and legal factors on your wife as they may be irrelevant to your situation.
Sorry for the confusion. The discussion has gotten quite out of hand from the original scope that I intended for it. I wasn't looking for tax or legal advice (and if I had been, I would have tried to provide context relevant to that question); rather, I was specifically wanting to explore the question of what kinds of arguments people might suggest to persuade somebody that their actions are being dominated by loss aversion, and I tried to provide enough context for the question to make sense without dumping a huge amount of extraneous detail in the question, but it appears that something about the way I phrased it or responded to the initial request for more info has opened up a can of worms.

The conversation veered off in all manner of directions, with some posters immediately diagnosing the ill health of our marriage, others rapidly picking sides for or against imagined or real positions that each of us might (or actually might not) hold, and so on. It's pretty clear to me that this kind of thing is a very delicate subject because it has touched off so much divergent input. I think it's been very useful, if nothing else because it highlights the importance of treading carefully. I also think a lot of insightful commentary has been made about the emotional connection people can have to their investments, and particularly to those associated with an inheritance. I also think there's been some off-point stuff, but that's ok too.
87.5:12.5, EM tilt — HODL the course!

User avatar
randomizer
Posts: 1510
Joined: Sun Jul 06, 2014 3:46 pm

Re: Convincing spouse to sell losing investment

Post by randomizer » Fri Jan 20, 2017 3:31 am

Status update: fourth months pass without us discussing the subject, stock goes down a bit, stock goes up a bit, stock goes down a bit again, house purchase imminent within the coming months and the stock is still concentrated in this one company, so we decide to talk about it again. Spouse has decided to sell "when stock hits $X" (a value it previously had). Is aware on some intellectual level that that may never happen, but evidently believes on some emotional level that it must happen at some point. I have no influence here, so I will just wait, cross my fingers and hope the stock doesn't go boom. In the end, it is an ever-dwindling % of our total net worth, so I am going to try and not lose too much sleep over it.
87.5:12.5, EM tilt — HODL the course!

Rodc
Posts: 13601
Joined: Tue Jun 26, 2007 9:46 am

Re: Convincing spouse to sell losing investment

Post by Rodc » Fri Jan 20, 2017 6:23 am

TOJ wrote:
nisiprius wrote:Proceed with great caution. Your marriage is at risk. People argue more, and more bitterly, about money than about anything else, and everything described makes it sound as if this is a time of financial stress for the both of you.

This all falls in the category of "easy to say and hard to do," but if you think about it I think you'll agree that in theory it's what you should be doing.

First, be glad that even though the amount in question is large and important, it's not essential to your joint financial future. It's only in books that couples say "I wouldn't mind losing everything and starting from zero as long as I was still with you," but losing 39% isn't losing everything. A 39% loss is perfectly survivable financially, the important thing is to survive it emotionally and maritally.

Second, you say your spouse "intellectually" accepts what you've said. If you are sure that your spouse understands your point of view, that's a significant achievement. Don't make "convincing" the goal. If you want an achievable goal, see if your spouse is willing to try to state your point of view in words that you agree are an accurate description of your point of view, and you be prepared to do the same. I would also, just in talking, use phrases like "sell some of it."

Then try your best to let it go at that. The reality of the situation is that you don't really quite accept the boundaries of property ownership here, but try to back off and respect ownership rights. Let it go. Hope for the best. Try not to look at a brokerage statements that don't have your name on it. Tell yourself the money is lost and let go of it.
Spouse A trades his time for money every day. Spouse A is in charge of earning the money to pay the bills and save for the future. So, if spouse B gets a windfall, spouse A has to watch it go out the window because spouse B is stubborn? Spouse A could retire 5 years earlier with such a windfall invested correctly. Spouse A has likely contributed to the marriage many multiples of spouse B's inheritance over the years. The inheritance should be treated as if spouse A got a 6-figure cash bonus from his/her work.
+1

There is what is legal and there is what makes sense and sometimes they are not the same thing. Either you are joint partners in life or you aren't.

OP is in a tough spot - this is not a trivial issue and they are not on the same page. OP cannot control their spouse. They can only control themselves. So they need to decide how important this is to them, they have to consider potential actions and potential benefits and potential risks, and the various likelihood. Sounds like spouse is not willing to share what they are thinking which makes this really hard. Maybe that is the place to start: OP stop talking, start with an open mind and see if you can get your spouse to open up about what they are thinking.

Whoops missed second page: OP best of luck
We live a world with knowledge of the future markets has less than one significant figure. And people will still and always demand answers to three significant digits.

stevekozak2
Posts: 40
Joined: Sun Dec 25, 2016 12:38 pm

Re: Convincing spouse to sell losing investment

Post by stevekozak2 » Fri Jan 20, 2017 7:53 am

It is my opinion, that more than financial diversity, you need marriage counseling. I am seeing some pretty strong undertones that you and your spouse are not a cohesive unit.

Frisco Kid
Posts: 365
Joined: Sun Nov 16, 2014 6:18 pm
Location: San Francisco Peninsula

Re: Convincing spouse to sell losing investment

Post by Frisco Kid » Fri Jan 20, 2017 8:11 am

Is it possible another factor here is that the OP's spouse is not working and therefore not contributing financially? OP mentions going forward what % of their joint finances will be contributed by him/her. On topic I agree with other posters saying let it go to keep peace.

User avatar
plannerman
Posts: 675
Joined: Wed Feb 21, 2007 10:42 pm
Location: NC Mountains

Re: Convincing spouse to sell losing investment

Post by plannerman » Fri Jan 20, 2017 9:16 am

I have been through this, and what worked for me was to encourage the reluctant party to initially sell just a very small percentage of the position. Once the ice was broken it became easier and easier for them to part with the asset. Think baby steps.

plannerman

User avatar
randomizer
Posts: 1510
Joined: Sun Jul 06, 2014 3:46 pm

Re: Convincing spouse to sell losing investment

Post by randomizer » Fri Feb 24, 2017 8:17 pm

Final status update: we're now buying the house and the losing investment has been sold. If it wasn't for the fact that the purchase is literally on top of us now, I am pretty sure we'd still have the stock.
87.5:12.5, EM tilt — HODL the course!

Post Reply