Welcome to the premium edition of Graham’s newsletter! Graham’s newsletter is now reader-supported and this article is one of the many perks paid subscribers have access to.
Last week, I asked you to send in your questions about money and relationships – they could be about discussing your spouse’s spending habits, planning for a big life event, or even changing your priorities to save and enjoy your money better. We got some interesting questions this week:
How do I discuss my money and work effectively with my parents, and convince them about taking on more risk when I am younger?
As an entrepreneur, how can I navigate the income disparity between me and my girlfriend?
How can I manage my real estate to give my daughter a better future?
How do I manage multiple rental properties at once?
How do I switch my career into a finance/investing related field with zero prior experience?
And more! I really enjoyed giving my take on these topics, and I can see a lot of people getting value out of them because these are life circumstances many of us go through. I’m taking questions for the next issue of “Relationships and Money”. If you have a question to ask me, go ahead and drop it here:
Now on to the questions…
Disclaimer: This is not financial advice. This information is intended to supplement your knowledge in the field of investing and personal finance. Please do your own research carefully.
Talking to family
Sarah asks: I am wondering how to effectively have a conversation with my parents about money/work. I am a single 32-year-old woman and I value my parents’ wisdom while acknowledging we have different views on money… My parents will advise me on what they think I should be doing (they are usually not pushy). I have found that they don't accept my answer when I tell them what I want to do (regarding work). The question/situation will be brought up again and again until they get the answer they want. For example, my parents want me to have a "stable" 9-5 job with benefits but I would like to have multiple sources of income. If I go this route this will not be seen as stable, especially if at least one of those sources is a bit higher risk financially (like real estate). Any advice on handling this is appreciated. Thank you!
Graham: Hi Sarah, thanks for reaching out - I’m sure it’s a question most people have experienced. From your parent’s perspective, it sounds like they want to protect you from the risks that come with ‘striking it out on your own.’ Through being an entrepreneur, you’ll encounter many more hours – much more risk – a higher degree of uncertainty – and, no paid time off. Not to mention, so many entrepreneurs fail.
My take is that your parents just want you to have as little stress as possible, without taking into consideration that – in today’s age, even employment doesn’t guarantee stability (just look at what’s happening in the tech industry!)
Personally, I think it’s fine to be open with your parents and take the parts of their wisdom that work best with you – but, the final choice is yours. You may need to be firm, put your foot down, and explain how much you appreciate their help - but that it’s not what you entirely envision for yourself. It’s your life – and once your parents begin seeing the rewards of your work, my guess is that they’ll begin to support the new endeavors. Good luck!
Relationships
Bruno asks: Hi Graham, I'm a 28-year-old video production agency owner. I was living and working in LA, but have since moved out with my girlfriend to Oregon. Long story short, I make way less than my girlfriend. That doesn't bother me emotionally per se, but I do want to make sure I am holding my weight and not creating resentment. I make between 20k-30k a year. This is only my 2nd year in the business so I am happy with the progress. My girlfriend however makes $250k a year.
We have spoken a little bit about finances, her concern is that I will build resentment because I make less and she wants to explore and do things, like travel and attend concerts. But I have committed to helping my family at home by saving up and contributing to an account for them to buy a house. With both these expenses and now helping pay my girlfriend’s mortgage (she just bought this house before we met) and general shopping, I definitely will be tight on money. I don't see this as an issue, and I’m projected to make closer to $60k this year, if this momentum continues.
You taught me everything I know when it comes to financial education, and I contribute to a Roth IRA, and I’m building an account to buy Real Estate. She is doing that inadvertently through work, but she doesn't see it as a clear priority as I do. Luckily neither of us is in debt so there is no strain there. What do you think about the income disparity and how would you recommend navigating that in a way that neither of us builds resentment? I love her.
Graham: Hey Bruno, thanks for reaching out! This sentence stands out: “Her concern is that I will build resentment because I make less and she wants to explore and do things, like travel and attend concerts.” I think it’s worth having a deep conversation about what she expects you to partake in, and what you feel comfortable paying for.
It’s reasonable for her to want to spend the extra money on these experiences - BUT - it’s also unreasonable for you to live at her level if you feel like you’re digging into your savings to go along.
I think it’s time that you have a very serious discussion about finances and work out the logistics – what can you afford, what are your goals (long term), can she help you (financially) if she wants to go somewhere outside of your budget, is she okay scaling back and doing things that are affordable for you, etc. It’s important that both of your priorities align. I don’t think the issue is the potential for insecurity, but a mismatch of expectations between the lifestyle she wants - and what you’re able to partake in. Now is the time to talk about these and get on the same page! Hope this helps.
Sid asks: How to talk with your future partner if she is a big spender, and I am very frugal, and discuss more on the basis of building wealth now and enjoying later?
Maximillian, another reader of the newsletter, has a similar question.
Graham: Hey Sid! Do you both share the same long-term goals? Have you given thought to your own plan, what you want out of life, and how you plan to get there? Sounds like either a) the relationship might not be the right fit, financially, or b) you haven’t clearly explained your intentions for saving.
If you can break down WHY you’re saving, WHAT you’re saving for, and HOW this will bring a better life - long term, it’s worth having that discussion so she doesn’t think you’re being ‘frugal’ just for the sake of saving a little more money at the expense of fun experiences. If you can articulate what you’re saving FOR, it might help her get on the same page. But at the end of the day, you shouldn’t spend more than you’re comfortable - and, if that jeopardizes your long-term plan, could be worth it to rethink if this is the right fit for you.
Real Estate
Krista asks: I have a 19 yo daughter who is sacrificing by living at home and going to the local community college for her freshman and Sophomore year. She gets her general requirements out of the way and saves money. My husband and I have 19 apartments. One is a 4-plex that we are finishing up. It was a fire rebuild (a fire tore through our town and out of all the units we only lost the 4-plex. The insurance money has rebuilt it, I paid off the original loan with the proceeds from the insurance company and have done sweat labor along with my husband (who is a GC) on this rebuild.
My question is I am considering gifting this 4-plex to our daughter when she turns 25. It is worth a million dollars, so I will make a stipulation that she can't sell it. The rents will bring in close to $5k a month after expenses. What are your thoughts on doing this? I want her to not worry about money, and enjoy her life. I feel like this fire was a blessing and with the proceeds from the fire and our ability to rebuild it using mostly sweat equity, this might be the perfect tool to pass along to help her in her life. I originally purchased this property as land only in 1995 for $28k. Then we built a 4-plex on it. What are your thoughts?
Keep reading for answers to this and four more questions…