What about your partner?

It’s a question I’ve been asking myself a lot for quite a while. Being a single guy turning 22 in a couple of months and having family members constantly asking me ‘Don’t you have a girlfriend yet?’, one can start asking the questions of life.

During a FIRE-meetup last year I already talked about the topic of (frugal) girls with financialfreedomsloth. Some weeks ago, I stumbled upon a forum with discussions about marriage and financial arrangements. Long story short: often men got bashed for their financial ‘behaviour’ in marriage by women and very few people had any financial knowledge or knew how money works.

Some subjects that repeatedly saw the light:

  • Every euro/dollar you make in marriage, should be on a mutual bank account. No matter how much your partner makes. In case of divorce, you split 50/50.
  • Everything you have before marriage, becomes property of both partners in marriage (for instance a house).
  • An argument for the 2nd bullet was the following: if they divorce, one partner would have nothing (although the owner had to pay all the bills for the house and the not-owner could save up??).
  • From a different view, if one partner is ‘rich’ and the other ‘poor’, then how does the ‘rich’ one know for sure money is not the reason for a marriage?

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I can keep on going, but these were the main thoughts.

I think it’s easier to come to an arrangement if you found out about FIRE together. Both partners know the value of money and investments so there’s no leak in one’s hand.
But, still, there is always the possibility things go wrong. Did you take any measures as a couple or as an individual in case you break up? Any marriage clausules?

Very often my young age is an advantage, but not in this domain. Rowing against the flow of luxurious parties and money-flush events, I make offers in a financial way. Let me illustrate this: a lot of my friends go out to eat in restaurants a couple of times a week. I love doing this too, but not 3 times a week. First of all, it is expensive (ranging from €10 – €30 each time) and secondly, it would become too mainstream so it would bring less joy when I actually do go. This implies a small part of social isolation, but luckily enough I make this up in other domains. ‘Normal’ students don’t go out to eat 3x a week either…

My hobbies are either free or cheap. I don’t have expensive horses to take care for or like to get €80 haircuts + €60 manicures. Everyone chooses his own lifestyle of course…

On the other hand, I like owning things. I really really do. I simply love it. It aren’t really materialistic things like brand watches or design furniture, but stocks. I adore the idea of being owner of a business. Knowing more than 2 million people get out of their beds everyday to work for my cause makes me feel like a king. At this very moment I’m looking at a box of Nesquik and realizing I own shares of the company (Nestlé). It’s an awesome feeling. Knowing that you contributed in a financial way by buying stocks and knowing that you will (hopefully) be rewarded with value creation in the long run. Enjoying a drink in a bar and seeing someone having a Stella Artois, makes me smile. “Yeah bro, that’s “my” company providing the beer!”

If I would tell this to most of my friends, they wouldn’t understand shit. That’s ok. It just turns out that my passion for stocks is a profitable one.

Now, this turns into a small problem… To buy stocks, you need money. It’s pretty hard to manage a portfolio with a partner who you have to explain everything and convince. It’s either my way or no way. I’m only this stubborn concerning stocks and portfolio management. Don’t worry, I do know how to compromise in other subjects. (Tip: glasses of wine can help)

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Now the biggest issue: buying a house with your partner. To buy a house, you need tons of money (especially in Belgium, expensive as fuck). This would imply selling stocks because I won’t buy much with €800 cash (additional possibility is the €22k piggy bank). It’s impossible to estimate the net worth of a future partner, but I guess I’m a bit unique in my investing habit and net worth age-wise. I’m a bit afraid any partner would like to use all available money to buy a house. This would mean an unequal share in the invested capital in a house. Having a job in which percentages of divorce are pretty high, I don’t want to take any risks.

For this reason, I need some opinions. I never told any girlfriend any exact numbers, but I did say I invested in stocks. Would you rather not even do this? I was thinking about not even telling anything at all and just count the cash + piggy bank as available capital. It feels a bit like lying. Unfortunately, it would also be awkward after a couple of years announcing you can FIRE. “Hey honey, I’ve got enough dividends to live off. Enjoy work today!”

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Another point why I don’t want to converse my stocks into cash for a house: low mortgage intrest rates. At current rates of +- 2%, I do make a hell of a lot more even with very safe high risk/reward options (5-6%). Opportunity cost > mortgage cost –> maximize mortgage to maximize gains. Good luck explaining this.

Anyways, so far my questions/doubts/views on the matter.

What about you and do you have any financial arrangements?

 

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Dividend + Net Worth Update

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Let’s have a look at what the beginning of 2017 brought me in dividends.

January:

– National Grid: €36.48
– Solvay: €66.53
– Wal-Mart: $11.30
– Altria Group: $5.45
– Walt Disney: $6.50

February:

– Verizon Communications: $13.74

This adds up to a total of €137.90 (used conversion rate: 1,06 USD = 1 Euro) for January & February.
It’s not bad, although February was a pretty poor month dividend-wise. January exceeded the €100-mark by a distance, which is nice to see.

Small bonus: the government paid me an extra €112 above my normal wage for a 2-week manoeuvres abroad, to cover the small expenses. I barely had any, so just nod and smile. Of course this will integrally go towards the portfolio.

I regret not buying more Altria Group & Disney when I took positions. Both positions are rather small compared to the other stocks in my portfolio, yet I have high expectations of them for the future.

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Now, let’s take a look at the net worth.

  • Stocks & Investment Cash: €89,000
  • Bonds: €8,200
  • Pension funds (stocks+bonds): €4,700
  • Mortgage Insurance: €3,000
  • Cash savings @ bank : €800
  • Piggy bank (cash from parents untill I turn 24): €22,000

–> Total net worth: €127,700

Excluding the piggy bank (which is not available yet, but on my name), my net worth stands at €105,700. This means I’m well on my way to reach my 2017 goal of amassing €125,000.

The last months have been very profitable on the stock market, which boosted the portfolio value.

Note: I didn’t add the value of my car, laptop, phone or any other valuable liabilities. It doesn’t seem interesting to me, because they are not assets. Honestly I don’t give a damn if someone would pay €6,000 or €8,000 for my car, as I’m not selling it.

I expect March to be a very profitable month, as I have been waiting for a payrise and retributions on the difference (even maybe a small promotion bonus, not sure about that one). I will probably pay my August holiday with the retributions, this way the investment ratio stays about the same.

How is your net worth evolving?

Consumer Staples Love

Although I try to diversify my portfolio in different sectors, consumer staples have my preference by a distance. This for a couple of reasons;

They are more easy to understand and to forecast in my opinion. In general, earnings are pretty stable and tend to go up over time. The sustainability of the business is more easy to predict. I guess those are a couple of the reasons why consumer staples companies tend to trade at higher valuations than other stocks.

They give me peace at mind. Knowing every day millions or even billions of people are using “my” products keeps worries at bay. It makes me sleep like a baby at night. Every time I see people smoking Marlboro, spraying Axe, eating Ben & Jerry’s or drinking Budweiser, I smile a little. Good or bad times, consumer products will be in demand.

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Maybe one of the reasons I like them is because of my own cost-cutting mindset. I don’t spend much (or even any) money on stuff I don’t need. First of all because it’s always in my way, second because I simply can’t cut costs on hygiene, food or drinks. If your paycheck would decrease 10% tomorrow, would you stop drinking Coke or stop showering? I hope not.

Last week I was checking out General Mills’ website. They have been paying a dividend for 117 consecutive years. This is simply lit. I can’t imagine much companies in other sectors being able to show a comparable dividend track record. What’s not to love about this? Your grandgrandchildren will be grateful for this.

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