It can be difficult for couples to maintain an atmosphere of trust and open communication about investing. Many husbands and wives simply do not discuss their investments. I am constantly amazed by the number of people I meet who approach investing with the idea that there is no point in talking with the other person because their spouses wouldn't understand the proposals, or are not interested in financial matters, or would automatically nix any investment opportunity.
Usually, though not always, men are the ones with this attitude. If you think I am making this up, I wish you could stand at the podium with me during some of my speaking engagements. If the audience is strictly male, generalizations such as those I've just made elicit guilty laughter, knowing looks, and nods of understanding. But if the audience includes women, the men sit rigidly in their chairs, wearing poker faces and even getting defensive. Men know how they think; they just don't want to admit it in front of their wives.
Although I didn't acknowledge it at the time, the way I handled our finances during the early years of our marriage generated major problems in my relationship with my wife. Simply put, Judy didn't trust me. She had no idea what I did with our money or what my actions might mean for our future.
While the children were at home, Judy was focused on raising our children. At first, the money or what I did with it didn't matter; Judy was just glad that I put food on the table. But when I started an accounting firm in Indiana, things began to change. As she tells it, the steady stream of papers I asked her to cosign for the business began to make her uncomfortable. She didn't understand exactly what she was signing, and I never took the time to explain things.
All Judy knew was what she saw: We were making payments on the two new cars I had purchased, we still had my college loans to pay off, and we took on a significant amount of debt when I started the business. From a financial standpoint, Judy was scared – but what was even worse was her fear that if she questioned any of my decisions, I might leave her. Remember, neither of us knew the Lord then. The way Judy saw it, I loved the business more than I loved her.
Even after we became Christians, I failed to bring Judy into the financial loop. In 1977, I sold my Indiana accounting firm so we could go into full-time ministry. At the end of the year, I realized I had an unexpected tax problem: the proceeds from the business sale had boosted my income, and I hadn't planned for the tax consequences this increase would create. On the advice of a Christian financial planner, I invested in some apartment buildings and a gold mine – two of the myriad tax shelters that everyone seemed to be jumping into at the time.
When I mentioned the investments to Judy, she instantly spotted a problem. Designed to shelter income and provide tax-reduction benefits, the apartments and the gold mine had no real economic promise. As investments, the chances that either asset would grow in value or generate income were slim. To Judy (and eventually to the bulk of the financial community), investments like these didn't make much sense. Even so, she did nothing to try to change my mind. "I was past the point where I wanted to protest – much less fight – about money," she says.
I knew, of course, that investing in the apartments and the gold mine carried a measure of risk; every investment is "risky," to some degree. But in my mind, the risk was secondary to our perceived need for a tax shelter. Heedless of Judy's perspective or the risk the investments carried, I rationalized my decision. (As things turned out, we did not lose any money, and we did reap some tax benefits. But, as Judy predicted, the investments themselves turned out to be economically worthless.)
Any investment can be rationalized – especially if you are a man. Men seem uniquely capable of attaching a "no risk" or "low risk" label to any financial move they want to make. Not long ago, I met with a couple who had a large amount of money to invest. They wanted to know where they could get a 30 to 50 percent return, saying they had heard of something called a market neutral investment.
Never having heard that term before, I was intrigued. "What is a market neutral investment?" I finally asked.
"One where there is no risk," the fellow answered – with a completely straight face. "If the market drops, market neutral investments are not affected."
I wanted to laugh, but I looked at his wife. She was as concerned as any investor I have ever seen. From what I could tell, her husband was the financial "expert" of the family, but he had missed a truth that she intuitively understood: There is no such thing as a "risk-free" investment.