My husband is good at his job, a hard-worker, and a reasonably smart guy, but I swear sometimes he can really be a stubborn idiot.
A few years ago he earned a big payout in company stock after a company he’d work for a long time went public. I told him he should diversify. Instead, he waited. It went down a bunch and he kept waiting for it to go up. Finally a year later it got up again to a point that he felt comfortable selling most of it and diversifying into a wider range of stocks. Better, right?
Well… around this time he agreed to work with a financial advisor who deals exclusively in stocks, who gets to keep a per centage of whatever my husband makes. I told him that’s fine but that he shouldn’t have all his money in stocks, and he shouldn’t take all-around financial life advice from a guy who only makes money from the money my husband invests in stocks. I also told him we’d build a lot more wealth over the long term if he worked toward buying a house in the next couple of years. Did he listen to me? Nope.
I asked him about it again last week, since I’d seen the stock market slide in response to current U.S. administration actions. He said that his “financial advisor” (the one who, once again, only makes money from trading stocks) told him that he should keep all his money in the stock market, especially since it was diversified among different stocks, and that he should only take significant funds out 12-18 months before he thought he was going to make a major purchase.
Queue the current stock market plunge, and me feeling kind of miffed.
*First* of all, the husband already should have known that a major purchase could be less than a year away, because I’ve been bringing up the topic of finally buying a house frequently over the past year. *Secondly* I’m annoyed he’s listening to this random guy telling him that he should keep all his money (except about 3 months worth of living expenses) in the stock market. *Who* does that?? I don’t think that’s a normal/commonsense way to manage money – am I wrong?
Now that the stock market has gone down so much, he acknowledges I was right the last few times we had this conversation – but I wish it didn’t always have to take something like that. I’m now in the right to feel annoyed by this, right?
Comments
I keep most of my savings in the stock market. Admittedly, I don’t have a big expenditure coming up, just retirement.
My son is starting college next year. But if I have to, we can tighten our belts and pay with our salaries.
I think you are not correct here.
Letting someone else gamble with your money is wild. Very basic personal finance advice is to never use a financial advisor who takes a cut of your money. I would be more than annoyed if I were you.
Are you buying a home this year or next? The general financial advice is to keep money needed for large purchases in the next 3 years out of the stock market because the market is volatile in the short term. So yes, you’re right to be annoyed that he kept it in the market when you guys are looking to buy a home this year.
If the house purchase is 5 years out, you guys should be fine.
Keeping most of your money in stocks isn’t inherently unreasonable … but if you’re married you should be figuring out your finances together and you should both agree on how/if your money is invested and if you’re using any sort of advisor/manager. Especially if you’re planning to buy a home together. Him blowing you off over many years about the plan for the finances is definitely annoying (at minimum)!
I think it would be wiser to save for a down payment separately from your stock investments.