In a past article, entitled What If I Fail with My First Real Estate Investing Deal, I explored some of the social implications of real estate investing, and how our struggles, which are bound to happen, can impact our relationships.
Based on this article, perhaps your next article could be titled, “How to marry the right person.” The follow up could be, “What to do since you haven’t married the right person.”
Have a good day!
Now, I’ve known Dan and his family for a while. He was the first student in CFFU, four years and hundreds of students back. And before then, his children were students of Patrisha’s at the music school. Because I know his family well, I can tell you that Dan’s comment proves that all jokes are 90% truth and only 10% funny…:)
Risk Tolerance and Investing
Dan’s wife benefits from two distinctions. For one thing, she is a fabulous mom to their two children, and runs a tight household. Dan, who knows what the hell is good for him, and who would be totally lost if it weren’t for his wife, absolutely tends to take his cues from her. And I don’t mean this in a bad way – I am the same way, because like Dan, I also know what the hell is good for me!
The problem, if you can call it that, is that unlike my wife, Dan’s wife is the most conservative, risk-averse, investing-wise unimaginative and borderline closed-minded person you will ever meet. She doesn’t know, and she doesn’t want to know, and I don’t see that changing any time soon…or ever. This attitude has done well enough for her, as far as she is concerned, and there just isn’t any motivation for her to change her views…
What About Passive Cash Flow
So – the large reason they are doing well financially, which is the reason Dan’s wife is not interested in considering real estate investing, is because Dan has done well in his medical practice. He started at the bottom, worked his way up into partner, and as far as I know has bought out either some or all of the rest of the partners in the office.
Dan has done well, but Dan is not entirely happy!
Time and Taxes with Real Estate Investing
The thing is, whenever we talk Dan complains about two things. First, he works a lot, and when I say a lot, I mean too much kind of a lot. And secondly, Dan pays taxes, and when I say he pays taxes, I mean too much kind of pays taxes…get my drift?!
Both make Dan very unhappy, and he has isolated rentals as the one strategy that can help him with both of his problems. Real estate can create passive income, which over time will allow Dan to work less. And, real estate can lower his effective tax rate, which would mean that he doesn’t have to earn as much in order to be left with the same spendable income. Dan wants these two thing to happen desperately. Why – because he is tired…
Indeed, Dan is not a young guy any more. He works as hard now as he ever did, and the prospect of continuing in this mode is not merely unappealing to Dan, but bothers him a lot. He, at the end of the day, doesn’t think it’s safe to have all of the money coming into the family as a function of him being able to punch the clock (have you heard this before?)
Do You Need the Support of Your Spouse for Real Estate Investing?
I don’t know the definitive answer to this question, guys. What I can speak to definitively is what I know from personal experience, and what I’ve personally seen.
First of all, my wife, Patrisha, is a big part of my business, and a big partner in strategy. We have different strengths, and this fill different roles, but both are needed in order for the business to run smoothly and to grow.
This is also the case with so many of my friends who succeed in the real estate world. Whether it’s Brandon Turner, whose wife is very much a partner in crime, or Serge Shukhat and Brian Burke, whose wives were right there beside them taking the punches and keeping things going.
I don’t think that any of our spouses are currently involved to the extent they once were, but I do know that to this day no significant decision is made without consultation with our spouses.
So, from where I stand, the answer is yes – you have to have your spouse’s support. This sport is just too hard to come home at the end of a terrible day just to hear…I told you so…
I am sure there are people out there who become successful in real estate investing in spite of not having the support of their spouse, and manage to keep their relationship healthy through all that. I am sure they are out there – I just don’t personally know any 🙁
What Are Dan’s Options?
Guys – Dan’s thinking is right on, isn’t it? Wanting to create some passive income is a reasonable thing. Realizing that as he is getting older, it gets more difficult to spend ours in the practice is certainly nothing new, and is a very real concern. Wanting to create revenue streams that are not tied to his practice is also a good idea, as I discussed in this article. Needing real estate as a tool to help with taxes is certainly the right idea.
But, his wife has no interest, and she is not exactly wrong in her reasoning either. So – what are Dan’s options?
I mean this as a question. I want to start a conversation here, guys. I don’t know what to tell my friend Dan, aside for what I outlined in this article – to come clean with his wife about the real reasons for wanting to invest in real estate. I feel him, as they say, but aside for driving home the point that he is tired and they need to lay the groundwork for some sort of change to take some weight off of him in the long run, I don’t know what to tell him.
Please help! Does anyone have better perspective on this? I am sure Dan is not the only one with this dilemma…
Leave a comment…let’s talk.