Investing for Couples: Four Strategies for Aligning Your Goals
We are often asked by aspiring investors, "how do I convince my spouse to invest in real estate?" or "can you convince my spouse to invest in real estate?"
We're not in the business of convincing spouses. Although, it sounds like there's a market for it! In all seriousness, getting your spouse to see the merits of real estate investing might be a tough job. But if you do it right, you might be able to get on the same page. We've put together four strategies you can use to talk to your spouse about real estate investing.
- Convincing your spouse to join you on a real estate journey is all about supplying them with the proper education. The first thing you should do is take a look at your current investments, and have a discussion about the realities of the stock market. We know that market crashes are inevitable and cyclical. These investments are not as safe as your spouse might think. Many of us have been taught that the stock market is THE way to invest, but it’s just not true. That’s not to say the stock market is necessarily bad, but perhaps it should be used as just one investing tool, instead of your entire arsenal.
- You should also talk with your spouse about the fees you are paying inside of your investment accounts. Most of these stock market-based accounts are riddled with high fees, as your account is charged on the basis of the transactions that occur inside of your mutual funds. One simple way to track these fees is to use a website like FeeX. All you have to do is sign into your investment accounts, and it will tell you what kinds of fees you’re paying, and how high they rank. Once your spouse sees the concrete numbers, he or she might be more likely to discuss alternative investing options.
- Address their concerns about appreciation. One of the first things hesitant people ask about real estate investing is, “what if the property value dips?” Real estate is no longer an appreciation game; that ended back in 2008 when the housing market crashed. In buy and hold investing, it’s all about cash flow. It shouldn’t matter if your property value drops, because you’ll be consistently bringing in rental income. Plus, you won’t be looking to sell this property, so the value is not of great significance.
- Show them the deals! Come to this conversation equipped with specific examples of investments, and how they can perform for your family. Once your spouse is able to compare the ROI on real estate versus a traditional investment, the wheels will start to turn. That being said, don’t overwhelm your spouse with an excess of information. Speak in simple terms of total cost, cash flow, and ROI.
Remember to take the right approach. Finances are a sensitive topic, even within a marriage or partnership. Try to be kind, and understanding of your spouse's concerns. While we can't convince your spouse for you, you can also try to approach of directing him or her to our podcast for additional information!