Rob and Sarah’s differences on investment opportunities had become painfully obvious several years ago. Rob encountered Sam, an old friend, who wanted to get Rob involved in a “deal of a lifetime.” Sam said that if Rob invested $20,000, he could double it in two years.
Rob decided to make the investment. That night he tried to get Sarah on board and shared all the numbers with her. But Sarah wasn’t convinced. She asked Rob all kinds of questions about the investment, some of which he couldn’t answer.
Despite Sarah’s skepticism, Rob moved ahead with the investment. But it didn’t turn out as projected. Rob and Sarah were fortunate to get back half of their investment, but that one investment decision put a lot of stress on their marriage.
Making financial decisions
So how should husbands make investment decisions? After talking it through with our wives and obtaining their input, we weigh the risk. Then we decide for or against. How should we weigh the risk? We consider two types of risk: financial and marital.
Rob knew Sarah was uncomfortable using savings set aside for education and a newer car to make a risky investment. The financial risk Rob faced was the same anyone faces with such a high-projected return: He stood a good chance of losing the money because risk and reward go together regarding investments.
First, if Rob and Sarah had the money to lose, they could probably have withstood the financial risk. However, they did not have the extra money. Rob was investing their auto and education funds.
Second, Rob had not factored in the other major factor — marital risk. Marital risk is typically much greater than financial risk. It’s one thing to lose the money; it’s quite another to live in harmony with your wife after telling her you lost the money that was earmarked for a new family car and the kids’ education.
Weighing the emotional risks
Rob and Sarah soon realized they had some relational baggage from that bad investment decision. Rob had to work longer hours to recoup the loss, and the family had to wait an extra couple of years for the new car. The result was additional stress on their marriage.
If Rob had been wiser, he would have discerned that Sarah would rather have a bird in her hand (the $20,000) than have two birds (the potential $40,000) in the bush. Rob could then have concluded that the investment at their current savings level was not worth the marital risk.
In any investment there is always trade-off and risk. The question is whether the risk is worth the reward. Too often we ask about risk strictly from a financial sense and forget that the greatest risk could be to our marriage relationship. To paraphrase Scripture, what does it profit a man if he amasses a lot of investments but loses his marriage and children? Investments should be evaluated from a financial standpoint as well as a “marriage harmony” standpoint.
Establishing some guidelines
My wife, Julie, and I feel the simple policy of not committing to an investment without talking it over keeps us from responding to the lure of the moment and potentially making a decision we would later regret. I’ve also found that if I can and will answer her question, “Can we afford to lose this money?” I will have a lot more freedom in making the decision. If the answer is yes, her worries are reduced and her comfort level increased.
Once the decision is made, both husband and wife must resist the urge to say, “I told you so” no matter how the investment turns out. The husband will be tempted to do this if he doesn’t make the investment and it turns out to be a real winner. The wife will be tempted to utter this comment if he makes the investment and it goes badly. Remember, we’re after harmony and communication. Investments are only a tool. They shouldn’t become a source of arguing or tearing each other down.
This article was adapted from 8 Important Money Decisions for Every Couple by Russ Crosson.