Convincing my spouse that REI is a potentially good idea

Wilson Adams · 2016-05-24T15:58:16-07:00

My wife and I are very calculated people. Our families always encouraged us to save the way they were taught (savings, 401k/pension, IRA). Looking ahead, I can see that we are both going to need some alternate forms income in order to successfully pay back our student loans, achieve financial freedom and live the lifestyle we want to live. We don't want to be billionaires one day, but we also cannot fathom living the way we do now. I've been looking towards investment avenues to circumvent this problem long term, which is how I eventually came across BP and REI in general. I'm hoping that one day I can strategically make my cash flow in such a way that student loans and job security are no longer a source of stress. The problem I have is that any variation of the word 'invest' makes my wife think that a coin flip will lose us our entire life savings. No matter how I try to approach it with her, it ends up getting pushed to the side because the idea of 'playing with our money like that' stresses her out. I'm sure some of you have a similar situation. Anyone have any advice on how to make 'investing' seem less intimidating up front to their spouses?

Selina Rifkin

Trumbull, CT · Member since 2015 · 15 posts · 6 votes

10y

My husband was VERY freaked out about the idea, and he has been an electrician for 25 years, and we've re-done our whole house. What help turn him around was that I really listened to his concerns and fears and tried to find answers for him. I created time tables and alternative plans in case he dug in his heels and made sure he always knew he was my partner and could say no at any time. I learned how to assess properties and read as much as I could on how to be a good landlord. I also set up a side room and did Air BnB to earn some extra money.

Knowledge both reduces stress, and can give you ideas on how to do this in a way that works for you as a team.

Good luck!

2 Reply

Thomas S.

Member since 2016 · 13k+ posts · 12k+ votes

10y

It took me years to convince my wife to risk it all.

First you must educate yourself fully to the point that you can talk the numbers off the top of your head. Talking about it will slowly ware off on her. The vast majority of investors start out with only the vaguest idea of how it actually works. Dreams and starry eyes.

You will find many even on this forum that still lack the discipline and knowledge to operate a business.

Also although many are comfortable in the belief that real estate investing is low risk bankruptcies occur every day from bad choices or bad luck. One professional tenant can wipe out a novice investor.

Your wife is right to be concerned. Starting a business can cost you everything.

To be successful your wife must embrace the challenge and become enthusiastic about the prospect of being in business regardless of the risk. If she does not get to that point you are wasting your time and need to forget it all together or move forward without her.

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Sanzhar Zikirov

Investor · Bishkek, Bishkek · Member since 2015 · 3 posts · 1 vote

10y

hi! Generally speaking, women are more on safe side, compared to men who are more risk takers. I explained my wife, that we need to purchase a property (we already have our own SFH) and guarantee the future for our kids. Before kids grow up, the property should make some money necessary for kids' education. I hear my wife's positive comments like 'now both of our kids are safe, they dont have to worry about the housing in the future', and she she's so happy about it, and I have motivation to work further in REI. Now she fully supports me in this venture.

Hope your family will be good support for you!

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David Moore

Investor · Crystal, MN · Member since 2013 · 486 posts · 277 votes

10y

@Wilson Adams

Interesting reading all the posts on this thread. I haven't seen many comments about time. Real Estate investing is interesting, because there are a lot of stories associated...stories of success and failure. A number of investors lost $$ in the 2008 downturn...some of the podcasts bring this to light. Building a real estate investment business takes time. It also takes capital. Yes, there are ways to market and acquire properties with no and low cash, but most of the established world we know buys houses with loans, whether through FHA or commercial loans at porfolio lenders. Those lending institutions want you to have income, savings, and a cash down payment.

One poster suggested starting small. That is a good idea. A house hack is incredibly smart for a first investment. In your post, you did not detail plans for family going forward. But with a house hack, you can leverage your income, your wife's income, and acquire up to a 4 unit building, FHA loan. Using the 4 plex example, you live in one unit, rent out the rest. Or a duplex, which are much more common.

With house hacking, and all investing, it is a simple math problem. Take the anticipated rental income, subtract all expenses, and what is left over is yours to keep. House hacking can get you rent free living, with your tenant paying off all the bills. Does that sound appealing? Start simple and small, is my advice, but do this as a team. You can lead...be the idea person...but I advise you trust her point of view as well.

I spoke 4 months ago with a 22 year old now former tenant who was bright, had big student loans, and a solid job about house hacking. She is now closing on June 10th on a home purchase. She was turned town by a first lender, but pressed on. It can be done, and her renters will cover all her housing expenses, assuming she follows through with this. Many ways to play this.

1 Reply

Jazz Inman

Vancouver, British Columbia · Member since 2016 · 9 posts · 1 vote

10y

In that case, I would suggest you wait for some time. Do not rush into things.

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Wilson Adams

OP

Nashville, TN · Member since 2016 · 21 posts · 3 votes

10y

Our REI strategy is still something we are working on. With the way things are now for us financially and time wise with work and school, we won't be acting on anything for a year at the very least.

I'm taking this time now to figure out what the best niches and strategies are to put us where we want to be eventually. Convincing her of this avenue is merely the first of many steps.

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Chinmay J.

Investor · Northern, VA · Member since 2016 · 1k+ posts · 904 votes

10y

I always get a chuckle when people say, "How can I convince my wife/husband.." I don't know how I or we, can convince your wife. If you were able to convince her to marry you, I am sure you can convince her that real estate investments can pay off very well. On top of of that if you say you guys are "calculated" people ( I think the word you probably want to use is numbers person), there is plenty of evidence out there in plain sight to convince yourself.

In this day and age, no one can convince others.. other than themselves that is....

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David Sisson

Architect · Providence, RI · Member since 2016 · 257 posts · 195 votes

10y

Didn't have time to read everyones replies. However, my wife is also very conservative towards investing. If I even mention "I'm going to put some money in an IRA", she gets nervous. In addition, my wife is not a numbers person, so I can't really convince her with numbers, it'd make her even more nervous.

Two things help.

1) Yes, run the numbers and run them again, until you are absolutely satisfied that the investment is safe. You should do this regardless.

2) Talk to her about the good feeling of being financially independent, and discuss it as a business, rather than an investment. My wife responds well to discussing what we want out of life (great education for our daughter is currently the important one) and me showing her that I have a way to get there. I focus on the result ($xx of cash flow each month equals great education for our daughter equals we need 10 units, etc). I don't focus on the deep numbers of these things, just the results.

Don't lay logic on your wife, it's deadly boring and if she's nervous about investment, then work instead on the results and feelings. Show her that you'll contain the risk and not put all the eggs in one basket. Again, make sure you can convince yourself with the numbers, have multiple exit strategies and show a great upside in all the strategies, then work on showing her how her life will be better and she will feel better. Then do a small one, and get her feedback through the process.

If there is no way, then you need to look at different investments. Honestly, you should be comparing the performance of RE vs other investments anyway.

My first RE investment paid off our student loans. It was a flip that took way longer than expected, but was a great learning experience. I'd probably still be paying the loans if I hadn't done it.

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Wilson Adams

OP

Nashville, TN · Member since 2016 · 21 posts · 3 votes

10y

@David Sisson She's less of a numbers person than me, but still very competent with understanding math. That's less of the problem. Right now its more that we don't have the resources (time and money) to do it quite yet, and thinking about it is a constant source of stress.

I'm glad you mentioned your student loans. We both have them, mine being significantly larger than hers. We want to have a family one day, be financially independent, help fund our future children's college (if they choose to go), and retire without the financial worries that we already have. I am just not sure there is a way for us to make all of this happen relying solely on our salaries.

And on a side note, it's nice to see a fellow Rhode Islander on here.

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Bob E.

Queen Creek, AZ · Member since 2014 · 2k+ posts · 1k+ votes

10y

You could start with a small performing note.

As far as being conservative remember: "Risk is the likelihood of not achieving your goals".

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Convincing my spouse that REI is a potentially good idea

Convincing my spouse that REI is a potentially good idea

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