Author Topic: Husband who won't invest  (Read 3632 times)

Hula Hoop

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Husband who won't invest
« on: April 02, 2018, 02:37:45 AM »
I'm sure that this has come up before but I'm having problems searching for it.  Anyway, my husband is very frugal - we're very similar and there is no friction about spending.  I'm the breadwinner but my husband runs a small business where he makes a very modest living.  I've always invested my money mostly in Vanguard back in the US and this has stood me in good stead.  We own an apartment with a mortgage but the mortgage interest is incredibly low (1.75%) so no plans to pay off the mortgage anytime soon.

Unfortunately, my father in law passed away almost two years ago.  Husband has finally received a small inheritance which he has just sitting in a bank account.  I'm trying to get him to invest in something similar to Vanguard here in Europe but he just fundamentally doesn't believe in it.  We've had this discussion a thousand times and it just goes round in circles. He's a pessimist and thinks he will lose everything in a crash.  There is absolutely no use talking to him about this. This might be a cultural difference as I've noticed that in Italian culture people only ever seem to invest in "bricks" ie in real estate and they distrust the stock market.  So now I'm trying to persuade him to do just that - get a small mortgage (if this is even possible) and buy a tiny apartment near where we live to use as an AirBNB or just rent out.  He seems more receptive to this idea.  In fact, he seems receptive to any kind of investment option that isn't stocks and bonds.  He even brought up my wealthy cousin who invests in art.  But this really scares me as he knows absolutely nothing about art.

So my question is - anyone else have a spouse like this?  Someone who is frugal and totally on board with living simply and saving a lot -but who disagrees about investing and just can't be persuaded?  How have you resolved this?  And any advice on not letting my husband's inheritance money just fritter away in a bank account?

Hirondelle

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Re: Husband who won't invest
« Reply #1 on: April 02, 2018, 02:54:46 AM »
I think @Imma has similar issues with her SO if I remember correctly! Though I think they've just kept finances seperate and save/invest their money in their own way.

MrThatsDifferent

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Re: Husband who won't invest
« Reply #2 on: April 02, 2018, 03:44:45 AM »
Dealing with the same issues. No real advice except, let him do his thing. You do your thing. At least the investment property would bring in money. Accept people for who they are and look after yourself first and foremost.

Linda_Norway

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Re: Husband who won't invest
« Reply #3 on: April 02, 2018, 10:23:25 AM »
Leg your husband invest in a rental if he is more comfortable with it. It is his inheretance and he need to be comfortable with the investment.

Hula Hoop

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Re: Husband who won't invest
« Reply #4 on: April 02, 2018, 10:37:50 AM »
Leg your husband invest in a rental if he is more comfortable with it. It is his inheretance and he need to be comfortable with the investment.

Even for the rental, I have to do a lot of persuading.  What he really wants to do is let the money sit in a bank account earning no interest for years.  Obviously, I know it's his money to do whatever he likes with but this drives me nuts. 

Gilly

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Re: Husband who won't invest
« Reply #5 on: April 02, 2018, 10:55:27 AM »
So, this isn't an optimal solution, but you could pay off your mortgage. You state you do not want to, but when the other option is having that money gain 0% in value, paying the mortgage of would gain you something.

simonsez

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Re: Husband who won't invest
« Reply #6 on: April 02, 2018, 11:04:45 AM »
What he really wants to do is let the money sit in a bank account earning no interest for years.  Obviously, I know it's his money to do whatever he likes with but this drives me nuts.
Does he know how inflation works?  Can you convince him to at least invest in gov bonds or some vehicle that is low risk that would keep pace with inflation?

MrThatsDifferent

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Re: Husband who won't invest
« Reply #7 on: April 02, 2018, 11:09:09 AM »
Leg your husband invest in a rental if he is more comfortable with it. It is his inheretance and he need to be comfortable with the investment.

Even for the rental, I have to do a lot of persuading.  What he really wants to do is let the money sit in a bank account earning no interest for years.  Obviously, I know it's his money to do whatever he likes with but this drives me nuts.

Again I say, let him. Something to think about. You might need cash for a time before you can access or you want to access your investment accounts. His bank money could be the cash you both access until you’re ready to draw down. That way your invested and retirement money keeps growing. Use his money first and your money after.

pachnik

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Re: Husband who won't invest
« Reply #8 on: April 02, 2018, 11:16:28 AM »
My situation is similar to OP.  Most of my money is invested in index funds/bond funds with a balanced asset allocation. 

My husband, so far, is keeping his money in a cash account.  He's considering how to invest it but I am not sure he ever actually will.   The most I would do is suggest GICs for him. 

But, TBH, I am grateful that he is saving at all.  That wasn't the case before. 

blinx7

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Re: Husband who won't invest
« Reply #9 on: April 02, 2018, 11:25:32 AM »

I also think it is fine to use the money to pay off the mortgage.

While his fear of the stock market is probably part cultural and part just not understanding how it works, he has stated he is concerned about risk and preservation of capital.  Those are legitimate concerns shared by a lot of people.  He may also have a psychological attachment to this money as it is inheritance money, and a feeling he should be more careful in how he uses it. 

He may be more comfortable in investing in the future if you have no mortgage. 

In terms of getting him comfortable with investing, instead of going around and around have you considered asking if he would read a book about financial planning strategies (e.g., something like the bogleheads book)  -- on his own time and without you hovering over? 

Hula Hoop

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Re: Husband who won't invest
« Reply #10 on: April 02, 2018, 11:44:46 AM »
blinx - I have to look around and see if I can find a good investment book in Italian.  I'm also going to have ask his accountant if she can recommend government bonds or other low risk investments here in Italy.  i really have no idea what is out there.

phred

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Re: Husband who won't invest
« Reply #11 on: April 02, 2018, 12:17:06 PM »
Italian bonds and low-risk don't seem to go together.  Isn't Italy one of the counties in financial trouble -- along with Greece, Spain, Portugal...?  A very quick Google showed bank interest as higher than bond interest; maybe Hubby is a genius.

Anyway, I would try to get some grocery ads (Xeroxes) from 5 yrs, 10 yrs, 15 yrs, 20 yrs ago.  Compare prices and how they've risen.  This would be a good intro to talking about inflation.

Investing in real estate is investing, and would allow him to sleep at night.  Having a rental apartment is what saved Fernando Aguirre when Argentina's economy collapsed.  The paper assets became basically worthless.  Surviving the Economic Collapse by Fernando Aguirre

An entertaining personal finance book for beginners may be The Barefoot Investor by Scott Pape.  The author is Australian, so his examples are Australian, but the message is universal.

If I read the chart correctly, Vanguard's year to date yield on its S&P 500 index is -0.79.  Yes, it may improve, but we may be in a sideways market instead of a bull -- which means that after a lot of up & down volatility our money remains where it started.

Your husband may not have the sophisticated investing vocabulary you have,  but his solid grasp of peasant economics may be ne plus ultra.  Try and understand why he's coming from where he's coming from.  Sometimes the past is prologue

PoutineLover

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Re: Husband who won't invest
« Reply #12 on: April 02, 2018, 12:28:18 PM »
I don't think you can or should convince someone to invest if they are uncomfortable with the idea. I'd recommend either a high yield savings account (which would probably only be 2%max) or something like a GIC (guaranteed investment certificate) which gives you a set percent when you put your money in for a set period of time. It's not high, but you can't lose. My mother is the same way, very risk averse and even though she knows about inflation, she can't stomach the ups and downs of stock markets. If you're going to do real extraterrestrial estate (lol autocorrect), definitely do a lot of research because it's easy to lose money there as well.
« Last Edit: April 02, 2018, 09:07:11 PM by PoutineLover »

Hula Hoop

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Re: Husband who won't invest
« Reply #13 on: April 02, 2018, 01:12:36 PM »
Thanks for the suggestions.  Yes, husband thoroughly understands inflation - that is not the issue.  I'll look into a high yield savings account - he might be ok with that.  There is an Italian finance message board - kind of like this one but not mustachian that might be interesting reading for him so I'll direct him there.

the_fixer

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Re: Husband who won't invest
« Reply #14 on: April 02, 2018, 02:12:56 PM »
How about paying off the mortgage then taking the amount you were paying per month on the mortgage and investing that money.

Husband gets to be happy that the money went towards the mortgage and you get to slowly invest going forward.

Not optimal but might help with the underlying issues.

I have a similar situation with my wife where her mother left her a small amount of money and she does not want to lose the money she wants to do something special with it someday. As of right now it sits in a savings account but she is looking to put it into a CD or something. Sometimes you just have to realize there are underlying issue that you can not overcome and find something that works and makes the person comfortable.

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frugaliknowit

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Re: Husband who won't invest
« Reply #15 on: April 02, 2018, 02:13:17 PM »
I would try to get him to pay down the mortgage.

Once that's paid off, then your increased availibility of investment funds can go into stock index funds.

Imma

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Re: Husband who won't invest
« Reply #16 on: April 03, 2018, 07:11:48 AM »
I think @Imma has similar issues with her SO if I remember correctly! Though I think they've just kept finances seperate and save/invest their money in their own way.

This is mostly true, except that my s/o doesn't have an inheritance sitting in a bank account. He has an emergency fund and is investing in his own business for now. He likes to see my investments grow, so think he might be more open to investing in a few years.

If I remember correctly, Hula Hoop is in Italy, and I can absolutely imagine why Italians aren't trusting the stock market / 'paper' economy as much as Americans are. Italy was hit very hard by the 2008 crisis and went through decades of unrest in recent history. Even though art is obviously a bad investment from a mathematical point of view, at least it's tangible / real. So if he's receptive to everything but stocks and bonds, he probably prefers real money or real things.

If it's a 'relatively' small amount of money (less than €50k or something) I think I'd just accept that he'd rather keep it in a savings account. You could shop around to find the account with the highest interest %, possibly in another EU country - although I think interest rates in Italy are already fairly high compared to other EU countries. Under the European deposit insurance scheme the first €100.000 deposited with every bank is insured, so make sure you don't deposit more than €100k per bank.

If we're talking a larger amount, I think real estate investing isn't a bad idea at all, especially if you focus on tourists (if you are in an attractive location). Tourism is a pretty big important part of the Italian economy. You say he's a small business owner, is there any way he can use that money to grow his business?

Laserjet3051

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Re: Husband who won't invest
« Reply #17 on: April 03, 2018, 09:48:32 AM »
My wife will absolutely not invest; she is spooked by stocks and bonds, neither of which she understands and is not willing to receive any education/training/info from me to that end. We are cracking 50 years old and this has been a lifelong trend, no way to persuade her. My only option is to accept what I cannot change and continue being frugal, saving and investing what I can.

Trying to educate the kids on investing/saving has been much more of a productive effort for me and hopefully will pay spades in returns.

obstinate

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Re: Husband who won't invest
« Reply #18 on: April 03, 2018, 01:12:14 PM »
My logic has always been, in most scenarios where the stock market goes down and stays down, I have bigger things to worry about than whether or not my investment account is doing well. I am not sure this will be compelling to your husband, but it's all I've got.

Hula Hoop

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Re: Husband who won't invest
« Reply #19 on: April 03, 2018, 01:35:42 PM »
My wife will absolutely not invest; she is spooked by stocks and bonds, neither of which she understands and is not willing to receive any education/training/info from me to that end. We are cracking 50 years old and this has been a lifelong trend, no way to persuade her. My only option is to accept what I cannot change and continue being frugal, saving and investing what I can.

Trying to educate the kids on investing/saving has been much more of a productive effort for me and hopefully will pay spades in returns.

This is exactly like my husband.  He's also over 50 and not going to change. 

Imma - good points.   I will look around for the best interest rate.  We live in a pretty touristy place in Italy so a tourist apartment would probably work well.  Anyway, it's his money so he has to make the decision. 

Misstachian

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Re: Husband who won't invest
« Reply #20 on: April 03, 2018, 08:00:52 PM »
My husband also fears the stock market, but money in a bank account burns holes in his pockets. He feels like money that isn't being spent is essentially wasted. So we gave him more bills to pay! He gets to see money being used the way he feels it should, i.e. spent on goods & services, and I get to use more of "my" portion on saving and investing.

It's all ours so the distinction is a little silly but it works to keep both of our lizard brains happy.

tralfamadorian

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Re: Husband who won't invest
« Reply #21 on: April 04, 2018, 11:28:39 AM »
If the numbers work, real estate is a wonderful investment. If he's open to exploring that as opposed to index investing, then I think it's a good compromise.

Linda_Norway

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Re: Husband who won't invest
« Reply #22 on: April 16, 2018, 01:57:44 AM »
There are banks that offer higher interest on a savings account of you put the money fixed for a number of years. Or only one retrieval per year. There you can often get a whole % higher than normal high interest. See of you can use that.

MrMoneySaver

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Re: Husband who won't invest
« Reply #23 on: April 16, 2018, 09:08:17 AM »
Remember that if you do convince him to invest in stocks, real estate, etc., and then if (when) there's a crash, it's your fault.

PizzaSteve

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Re: Husband who won't invest
« Reply #24 on: April 16, 2018, 09:34:36 AM »
Good advise so far. Maybe consider his assets part of the total portfolio and take more risk with your part, like 100% equities, and be happy?

Hula Hoop

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Re: Husband who won't invest
« Reply #25 on: April 16, 2018, 11:45:48 AM »
Good advise so far. Maybe consider his assets part of the total portfolio and take more risk with your part, like 100% equities, and be happy?

That's a good idea.  I'll also try to convince him to put the money into an account with better interest as Linda suggested.

Epor

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Re: Husband who won't invest
« Reply #26 on: April 16, 2018, 11:58:33 AM »
Remember that if you do convince him to invest in stocks, real estate, etc., and then if (when) there's a crash, it's your fault.

This ++. It can breed resentment. Do not "convince" him of anything. You can give facts and tell him what you are doing etc, but the decision needs to be his.

PS: Shout-out to Italy! I lived in Italy for almost 10 yrs and miss it tremendously.

Hula Hoop

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Re: Husband who won't invest
« Reply #27 on: April 16, 2018, 03:22:39 PM »
Remember that if you do convince him to invest in stocks, real estate, etc., and then if (when) there's a crash, it's your fault.

This ++. It can breed resentment. Do not "convince" him of anything. You can give facts and tell him what you are doing etc, but the decision needs to be his.

PS: Shout-out to Italy! I lived in Italy for almost 10 yrs and miss it tremendously.

Yes, that is very true.  I'm going to shut up about the money apart from finding a bank account with a decent term deposit interest rate.  I'll let him mull it over in his own time.

Ciao from Italy to epor.

abpa

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Re: Husband who won't invest
« Reply #28 on: April 20, 2018, 04:23:53 PM »
My Eastern European husband won't do stocks either.  I think he gets it from his dad.  Every time the currency would change in Slovakia (Czechoslovakia at the time), he'd drive to Poland and buy construction supplies or sewing machines as a hedge.  We've come up with a situation that works for us.  I do VTSAX, 403b and an IRA, He does cash, extra mortgage payments and saving for the down payment on a rental.  It actually balances out well for us.

daverobev

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Re: Husband who won't invest
« Reply #29 on: April 20, 2018, 06:00:34 PM »
I would frame it as buying a business. If they won't do indexing, take them round your city and look at all the shops - and say, does this business make money? Would you like to own (part of) that business?

Can you see that owning (parts of) several businesses is less risky than owning just one?

Then go and find a dozen, say, really good blue chip companies that - yes, will have down times - but won't die (certainly not all of them).

Like... Coca Cola. Or some consumer staples company. Sell him on *owning the business* not participating in stock market madness.

Does he drive? Does he like cars? Would he like to own some of VW, say?

Imma

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Re: Husband who won't invest
« Reply #30 on: April 21, 2018, 01:08:55 AM »
That sounds very much like how my parents explained stocks to me as a kid, Daverobev! They invested our birthday money and they would let us help pick stocks of companies we liked, so I remember we had Coca Cola and McDonalds and the company my mother worked for. They actually weren't succesful so this was also an unintended lesson that stockpicking and buying and selling all the time is a bad strategy.

ChpBstrd

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Re: Husband who won't invest
« Reply #31 on: April 21, 2018, 01:05:00 PM »
My brother works at a bank. He asked me to guess the average amount of time their customers spend invested in 6 month CDs. I guessed 6 months, because why would anyone invest in such a low-yielding product for longer than the exact amount of time until a specific, planned purchase. Correct answer: NINE FUCKING YEARS. Do you know what the stock market did in nine years? These investors "lost" 100% by playing it too safe.

At this level, we're talking about a sickness, not a lack of education.

Perhaps you could offer to borrow his money for what the bank pays in interest. Then invest it in REITs, preferred stock, and a few bonds. Set aside half in case he does a "margin call" on you and you'll still come out ahead.