(Closed) He lost $20,000

posted 12 years ago in Money
Post # 32
Member
1141 posts
Bumble bee

this isn’t really advice, but they say women are too conservative w/ their investments…but then women also make more on their investments in the long run, so maybe you 2 can find a risk level you are more comfortable with….I tihnk it’s OK to have some higher risk in a diverse portfolio WHILE YOU ARE YOUNG but then slowly chill out…*hugs

Post # 33
Member
8943 posts
Buzzing Beekeeper
  • Wedding: June 2009

@RB: I knew you weren’t directing it at me!  But 30% is a lot for a month (especially since most investments aren’t doing that horribly right now).

Post # 34
Member
5280 posts
Bee Keeper
  • Wedding: November 2010

I think money is very relative as well.. if he makes 175,000 per year losing 20 is like loosing 1000 or 1500 it sucks but it’s not that huge of a dent.  The stock market is volatile right now and will probably shoot up in the next few months or few years.  I think perhaps he should focus on building his savings up, he should sock away about 6 months of living expenses away and after that then he can relax. and invest. but i think you’v ebeen given brilliant info already so i don’t have anything to really add.

Post # 35
Member
4835 posts
Honey bee
  • Wedding: April 2013

Keep in mind that investments and savings are not the same thing.  If he had $60k invested in the stock market in an aggressive portfolio I’ll assume he knew what he was doing and he’d allocated that money as a long term investment. (that generally means 10 year minimum, in terms of the stock market often much much longer).

That’s what happens with long term investments.  Sometimes they gain a lot of money and sometimes they lose a lot.  You just have to stay invested and ride out the bumps (which includes not counting your chickens if you make a big gain and you don’t intent to convert to cash).  

He needs to stick to his game plan.  If he truly has a high risk tolerance and is properly allocated this sucks but it’s not a catastrophe.  If not (for example, if he’d planned to withdraw that money 2 years from now to buy a house), then he should look at re-evaluating his financial strategy.

And one could say that spending $20K on a wedding that’s over in one day is quite similar to losing it on the stock market in a couple of months….(I said could, not should :D)

Post # 36
Member
2220 posts
Buzzing bee
  • Wedding: January 2012

Losing 20K is losing close to 2 1/2 months pay. Average income earners would have a heck of a time recouping that loss.

Post # 37
Member
2385 posts
Buzzing bee
  • Wedding: March 2010 - Calamigos Ranch

GAH… in one month?! If his broker wasn’t his brother, I’d sue him!

Post # 38
Member
8943 posts
Buzzing Beekeeper
  • Wedding: June 2009

And plus the OP did say it was his savings, which I’m assuming means he doesn’t have cash savings other than this $60k.

Post # 39
Member
4835 posts
Honey bee
  • Wedding: April 2013

Yeah, read the updates – OUCH on the short sell.  

Definetly work on communicating about investment strategies.  Sounds like a balance between the two of your approaches would actually be a great mix…but it’d be better to do it without giving you an ulcer!

 

Post # 40
Member
1015 posts
Bumble bee
  • Wedding: June 2010

Um, this is going to be an unpopular opinion so I apologize if I offend anyone,

$20K is a heck of a lot of money if your Fiance makes $175K.  Most people making $175K are paid  in significant bonuses.  If this is his base salary, it is a little different, but if he is getting a significant portion in bonuses, this is taxes as gaming winnings at almost 50%… which would make that $175K around $87K, which is a huge difference.  Even if his base is $175K, he will stil be in a very steep tax bracket.  If he lives in California for example, deduct another 10% on top of that for state taxes.

Long story short, $20K is most likely close to 25% of his take home pay for the year ever if he is maxing out his 401K ($16.5K pre-tax dollars).  It still won’t drop him down a tax bracket. 

If my Fiance lost close to 25% of his annual take home pay due to poor investments even if he “trusted” whoever, I would be pissed.  Same thing goes for me, if I lost that kind of money on high risk investments, he would be pissed. 

In general, you shouldn’t be putting a significant portion of your investment money in high risk investments… thats just asking to be cleaned out.  Especially in this economy, which is in so much flux.  If his investment porfolio is $300K or so in total and he lost $20K, then I wouldn’t be so upset, but if this was most if not all of his money invested, I would be seriously concerned about his ability to invest wisely for our future.

 

Post # 41
Member
2220 posts
Buzzing bee
  • Wedding: January 2012

@Mrs. Louboutin: I share your sentiments EXACTLY… I commented above, so your opinion isn’t that unpopular! To say its “not that big a deal” is so untrue!

Post # 43
Member
2316 posts
Buzzing bee
  • Wedding: August 2010

… okay, I’ve been thinking about this since I last wrote. Could he potentially try to live at what he would make at the job he really wants to do that makes less money? That way he could both recoup his losses and see what it would be like to live at a pay cut like that? Might be an interesting experiment to try! If my dad, who make more money than anyone should, taught me one thing and one thing only (they’ve taught me alot of things, but this is the one thing they would have wanted me to learn if nothing else) is to live below my means. That means never carrying a credit card balance, and having your car payment and mortagage payment as your only debts (other than student debts). It’s safe, and no, it’s not really the “high life” (my parents are the only ones in their group of friends who haven’t moved in 20 years) but it’s safe, and secure.

Post # 44
Member
2220 posts
Buzzing bee
  • Wedding: January 2012

@Cinnamon Roll: My comment was directed more to the other posters who were like “Oh 20k is nothing when you make that much…” Um, yes it is! I know you get how big a deal it is or else you wouldn’t have titled the thread “He lost $20,000”

I’m totally happy that the two of you discussed his finances in depth & that you’re feeling better about the situation. Money management & financial issues can be a major stress in a relationship! I’m so happy you have an open dialogue regarding finances 🙂

Post # 45
Member
8943 posts
Buzzing Beekeeper
  • Wedding: June 2009

I’m glad you two talked!  When you get married, you two should both be completely involved and aware of all the investments that you are in and understand what is going on.  It is both of your money after all!

Post # 46
Member
1148 posts
Bumble bee
  • Wedding: June 2009

It’s good that you are realizing the loss rather than dismissing it.

The best advice is some I’ve already seen here–move forward, there’s nothing you can do about the lost money now.  But make sure that you and your fiance (and his brother?) are on the same page about your investing goals, especially when you are married.  Whether than means taking a longer term approach to investing, doing so more conservatively, etc.

The topic ‘He lost $20,000’ is closed to new replies.

Find Amazing Vendors