Post # 1
I’m not sure how to support my love – G – through this. His brother manages his investments and took G at his word when he said he was fine with high volatility/high risk in the stock market. Because of some very aggressive and complicated investments that his brother made on his behalf, G admitted to me that he’s lost $20,000, about a third of his savings, in the past month or so. For context, he makes a very good income ($175K+ a year), but is thinking about a career shift later this year that would reduce his salary substantially for the next year or two, so he doesn’t have a whole lot of time to rebuild his savings.
I feel like I’m writing to Suze Ormand, but I just am not sure how to make sense of this. I have my own savings, so it’s not a matter of survival for us, but I’m just kind of shaking my head about how this happened. He’s a really smart man, and his brother is too, but I think this might be a case of men being overly confident and bravado about risk. I know a lot of people have lost money in this economy, but when I hear that number all I can think is, “that’s an entire wedding!!!”. Any advice about how to carry on?
Post # 3
That’s the stock market for ya! I mean, it happens. :/ Sucks, though.
Post # 4
I’m so sorry! That has to be really hard for him, especially considering the future career shift. I don’t have any real advice, I’ve never been in that kind of situation (I control most of the finances) but I am sorry that you both have to go through that.
Post # 5
Have you two met with a financial planner? I think that’s an important part of planning a life with someone, making sure you’re on the same page with money. As Laylabelle pointed out, never invest anything in the stock market that you can’t afford to loose. Do you have other savings? It stinks, but it can be a good learning experience, both for how you manage your money, and whether you two are on the same page. Good luck!
Post # 6
Alot, alot of people have lost a TON of money in the stock market. Especially recently. However, with him losing that much, I really think he needs to hold off on the career change til he can recoup his loses. It kinda stinks to have to do that, but that’s life and the price you pay for playing with high risk stocks. My dad is a wealth manager and while the gains can be great, the losses can be devastating. Just got to pick up the pieces and move on.
Post # 7
The hard part is trying to skirt the fine line between my being upset about it — because hey, it’s his money right now, I think he’s plenty upset on his own — but also letting his know that this freaks me out. I keep telling him to stick everything into CD’s like I do, and we joke about how I’m totally opposite in terms of being conservative with my money. But hmm, you’re right that this might be a little red light about potential issues in the future.
@KMSull, that’s great advice, thank you.
Post # 8
That sounds like a tough situation to be in. I know it can be frustrating to watch someone make poor decisions with their money when perhaps you saw clearly from the beginning that it was a bad idea.
However, I think you should try to put this in perspective. He still has $40k in savings (right?) and still has a job that pays $175k per year. If he was thinking about switching jobs and did not feel comfortable with how much he had saved, he’s in a lucky position that he has a good-paying job–one can hope that he should be able to stock some more away.
And he should be learning a very good lesson here, right? I mean, who doesn’t know that “high risk” investments present a very high risk of losing some value? However, how many of us can really say that we truly appreciate how risky it is? Moving forward, I am sure he’ll think of this experience when he (or his brother) starts talking about volatile investments.
So, maybe you can just help him see the good that has come from this and how lucky he is. I think, as far as life’s lessons go, this one doesn’t seem too bad. At least he’s not $20k in debt with a job that pays a fraction of his, you know?
Post # 9
I think it can also be a plus not a minus that you have such different investment philosophies. This way your investments will be the safe backup while his investments will have the potential to provide a lot of wealth. I’m also curious, before he lost this sum recently how much did his brother make for him?
In the long run $20,000 is not that much and it’s better that it happened now so he can adjust his strategy than later and with more money.
It sounds like the two of you are in a great financial position and will do just fine. It’s only money. 🙂
Post # 10
Since there’s nothing you can do about those $20,000 now, I would channel your frustrations/energies into making financial plans for your future. Talk with your fiance about what level of financial risk you are willing to take in your stock portfolios. Also, you said your fiance’s brother “took him at his word” about how much risk he was willing to take. Maybe he was willing to take that much risk, but it’s you who do not feel comfortable with it? Or did he overestimate how much risk he could actually handle? Money is one of the top issues couples fight about. It may be his money now, but soon it will be both your money and it’s important you agree on how to handle things. Maybe there can be a compromise where some money is put into secure things and some into high-risk areas?
Nevertheless, the future is where you must put your attention. 20k lost stinks, but it’s not like his entire savings is wiped out. 40k is still a substantial amount of money. And even if everything were gone, you would still find a way through. Good luck!
Post # 11
“Loss” when talking about investments can mean a lot of things. It’s not like going gambling and literally dropping $20k. Are these long-term investments or something short-term that he got out of after losing that much so quickly? I recommend talking to a financial planner if you have combined assets.
If it makes you feel better, everyone has money issues. I take serious issue with the fact that my fiance has debt and does not save well at all.
Post # 12
I think that’s sort of crazy that he lost a third of his money in a month. We lost about a third of our investments but that was back during the big dip in the market and it’s slowly going up. I don’t think that he should be investing with his brother, money matters really shouldn’t be mixed with family I think.
If you two aren’t sure what type of investments you should have, you should talk to a financial planner and determine your real risk tolerance. My husband and I are very risk tolerant because we are young and we don’t really care if the market is volatile now because we don’t need a lot of the money we have in the stock market for a while. But not everyone is like that. And honestly, if you need the money within 10 years, it shouldn’t be in the stock market.
EDIT: I also think that you two shouldn’t invest in anything that is complicated and that you don’t understand. There are so many good investments out there that are easy to understand and you shouldn’t be putting your money in things that are too complicated!
Post # 13
@fanatic888 and @chelseamorning, our assets are totally seperate so it’s not a matter of any personal loss for me. I guess I do see this kind of playing with the stock market as gambling (this was on short-term options that expired, resulting in a total loss), and I am a little ticked at both G and his brother for being overly cavalier. He was making money at one point, but from his initial investment to now he’s down the $20k.
Glad to see at least that everyone doesn’t think this is the end of the world, I’m very protective of my money and I can see now that I’m becoming more protective of his.
Post # 14
20k is really not that much for someone making $175k a year. You have to ride the waves of the stock market. Was 60k the amount he had invested, or his savings? I’m guessing if he makes that much money he has more than 60k in assets. You should probably lay out your finances together and make a plan so you know what’s going on with the money.
Post # 15
Stocks are meant to be long-term investments- not a savings account. He needs to diversify his funds in bonds, CD’s, stocks, etc. If he is changing jobs, he needs his savings to be liquid, not tied up in investments. Also, never, EVER give all your money to one house, advisor, planner, spread it out!
I agree with sitting down with a planner- someone neutral- and find out what kind of risk you want to take with future nest eggs.
*Sigh, I’m getting off my soapbox. I just worry because I work for a financial firm and people don’t even know the name of their brokers.
Post # 16
Yowch. If I were in your shoes I’d be a upset, too. I think the other bees who suggested meeting with a financial planner are on target, particularly if you’re on the road to marriage or intend to combine assets. FI and I don’t make nearly the amoutn fo money you mention and he’s very responsible, but it was still really difficult for me to feel secure once someone else was involved in investment decisions.