How I manage Money in Relationships & Marriage. (as a millionaire)

okay welcome back now one of the most common questions i get asked as a ex google x facebook tech lead and multi-millionaire by the way i also interned at microsoft and what else um did i mention i'm a millionaire i i did okay just checking so one of the most common questions i get asked is how do you manage money in a relationship for example does each person get an allowance every month how do you budget do you split your income from your paychecks or do you just mix it all together and so as somebody who has gone through this whole financial cycle from marriage through divorce i wanted to share some of my key learnings on how to successfully or unsuccessfully manage money in a relationship should be an interesting useful episode let's get into it quick pause this video is sponsored by techlee.ting.com a smarter more modern cell phone servers that will help you cut your phone bill in half see how much you can save at tecly.ting.com and get 25 just for trying them out link in the description below okay so in my relationship i was the higher earner when i married my ex-wife i already had a few million dollars in the bank and she didn't have that many funds of her own so what i did is i would put 100 000 into her bank account just for daily spending money you know just for day-to-day use and also this amount would act as a starter for her to learn to manage larger sums of money maybe get familiar with investing and my general plan was to add to this as her confidence with money grew and who knows if her returns on investment were good maybe she could even manage 100 of the funds such that i could free up my time to focus on employment or active businesses however with the whole divorce obviously this whole idea never quite panned out but actually something entirely different occurred so what happened well she kind of grew tired and bored of investing actually she lost interest in it and was afraid to spend the money as well like she would just leave it there and try not to touch it and still get me to pay for everything as if it was her own money and that was a really weird thing to me because i always considered money to be shared between both of us yeah she can hold some i can hold some but what we're really trying to do is generate return on it we're like the custodians of wealth and even though she's holding some it doesn't necessarily mean it's entirely hers to spend however she wants we still generally should consult with each other on any large expenses but in any case i remember towards the end of our marriage while my ex-wife and i were still trying to work things out one condition for her was that i had to wire her like 500 000 of cash and i'd always be wondering what are you going to do with that cash exactly right and now in retrospect i can see that there's only one thing you can do with that large sum of money and is to buy an apartment a house just for yourself without my permission that's the only possible reason somebody would want that much money which is weird because even i never treated the money that i held in my bank account as truly my own like i would never spend more than 100 or so before consulting or checking in with my ex-wife i remember i had to get her permission to get playstation 4 pro i mean yeah sure i could have just gone and bought it but i fundamentally believe that two people in a relationship should be on the same financial journey and be working towards the same financial goals and so here's the difference i think that my ex-wife viewed the money in her bank account as truly her own which she could spend however she wanted whereas i viewed none of the money as my own i kind of saw myself as more of a money manager an investment person who would just invest the funds try to get a return on it but yeah i would spend none of it unless i got explicit permission from my ex-wife on any large major purchases and the fact is if you're going to take shared funds and go spend it however you want like splurge on a brand new porsche card the other person would just view you as being financially irresponsible a financial threat and liability and it would make good sense for them to just leave the relationship in order to protect their own financial futures now the other reason this whole concept doesn't quite work is that my ex-wife would try not to spend any of the hundred thousand dollars in her bank account like she would try to actually be cheap thinking that was her own money when you know there's many more funds available between the two of us to support both of our lifestyles and so that's when i realized we may be on two different financial paths altogether because while i was working towards financial independence where i could live indefinitely off of the interest drawing down say two percent of my investments per year this concept is not even possible for my ex-wife at just 100 000 of savings at that range you'd be more interested in either saving that money or maybe reinvesting in yourself or going towards more speculative bets and so quite frankly my original plan to share half of my wealth or more with my partner and by the way this is personal property separate from community property in the marriage completely collapsed due to number one a technicality where the other person didn't seem confident in managing larger sums of money and number two this individualistic mindset of viewing the money in your own bank account as your own rather than seeing yourself as a custodian of the wealth more like a money manager like a treasurer now here's an interesting concept let's pretend you're married and you have a wife and her mother has cancer and it's going to cost 500 000 for treatment and nobody else can pay this except you obviously you're not that close with the wife's mother but this mother is very important to the wife so how is your wife going to unlock these funds for herself well she could get the divorce once she gets a divorce she'll get half of the funds maybe she'll get five hundred thousand dollars there if there's a million dollars split between both of you and then she'll have access to those funds to help her own mother and spend it however she wants however if you wanted to keep this marriage intact while also not becoming bitter or resent for yourself for having spent five hundred thousand dollars on the complete stranger or feeling that you need to be compensated somehow now then ideally i think you would share the same values as your partner you would align on that and you yourself would develop a good relationship with this person such that when this person becomes sick you're willing to spend money on that or at the minimum you want to see this smile on your partner's face and you're willing to spend for that now as far as smaller purchase go i really wouldn't sweat the small stuff you know for me i just put 100 000 in my ex-wife's bank account and told her to spend that however she wants on daily stuff and i didn't want to be bothered to check on every little purchase the fact is going out to eat at the restaurant for lunch or getting a starbucks cafe latte isn't going to bankrupt you but what i would look at is lifestyle choices so if your partner needs to buy a louis vuitton bag every two weeks just to feel good about themselves or they need to chase social status and keep up with the joneses whereas hey maybe for yourself you don't care about any of that you're trying to get towards financial independence then you would be on two totally different financial paths and you would eventually collide and so i remember in the past i thought about budgets and allowances a lot and now i see what you really need is trust because for myself i don't need a budget or allowance rather i employ these in order to control spending on other people that i don't trust whereas for myself i know that i'm financially responsible so trust is better than any budget because number one you don't have to waste your time approving or disapproving every little expense and you could also even give them a million dollars as an allowance and know that they would spend it well maybe they would invest it now i know there's also an arrangement where some couples just have their own individual money they share nothing and everything is just split they split the paychecks but my issue with this is that this seems more competitive in nature and people inevitably will end up competing for time like maybe they have a child and if one parent has to waste their time reading books to this child while the other parent is out there hustling on only fans or whatever then they would demand to be compensated for having wasted their time doing this and who knows this type of relationship may become very rivalistic and you end up with two people competing to see who can make the most money because they're each trying to keep up with each other and nobody has time to actually sit down and relax or take care of the child and while this type of relationship may work if you're doing it let me know in the comments below i'd love to hear about that it seems to me that inevitably one spouse will finally win and out earn the other spouse at which point the richer spouse may want to upgrade their lifestyle move into a nicer apartment leaving the poorer spouse in the dust unable to catch up and having to rely on perhaps the generosity of the higher earning spells the situation then it reduces into having to actually work as a team rather than as competitors not to mention in certain states community property states like california where i live it's best to hold your assets and community property because there are certain tax benefits like a cost basis step up on death of one of the spouses that can help you avoid capital gains taxes on stocks or real estate and so to truly be able to get the most out of the relationship you want it to be a tax optimal relationship of course you need financial trust as the basis for that now one thing sometimes i think about is how you don't necessarily need to be rich yourself you just need some rich friends for example some of my rich friends like warren buffett bill gates or elon musk you know they take care of me they have more than enough wealth for themselves they're surrounded by opportunities which they may share with you and they throw some of the best parties like last week i think i was on this birthday dinner cruise with elon musk or maybe that was a dream but there was a steak all-you-can-eat crab sushi and i even submitted my resume while i was there and so what i'm trying to say is that you know spouses at some point used to be the best of friends and friends take care of each other so why do you need to develop an antagonistic competitive behavior with one another if you just treat each other well and then in that situation they learn to take care of each other and this analogy really applies to the example we talked about the mother-in-law as well if you were to actually work put in the time to develop the relationships align on the values discuss those through and utilize your skills of influence persuasion and kindness rather than say trying to grab as much money as you can to try to buy your way through to whatever you want i think that you would have more than enough funds and either way you're probably going to need the skill one way or another in order to get permission and unlock more funds from your partner to deploy them to whatever cause that you think is going to be worthwhile now you know what else you can do to save money is to visit techlee.ting.com a smarter more modern cell phone service that will help you cut your phone bill in half if you're locked into some contract plan like a 18-year family plan contract a cell phone contract plan that is then team mobile is one step towards freedom because there are no contracts see i used to be overpaying for myself on contract plan 60 bucks a month 80 bucks a month for a lot of services that i didn't even use voice messages texting you know i just use email data plans most of the time and so with team mobile they've actually released brand new plans to help you save even more money get talk and text for just 10 bucks a month data plan starting at 15 bucks a month or unlimited plans starting at just 45 bucks a month try comparing that with your cell phone service so show them some love and if you go to techlet.ting.com you will get a free 25 dollars just for trying them out there will be a link in the description below and so if we take a step back and look at the considerations around money management in a relationship it all revolves around this basic concept of trust like if you take a look at my parents they both began very poor my mother was a farmer and they worked their way up they saw how each other was making money they saw how each other spent money and as they gained more and more wealth their trust in each other solidified over the years because trust is earned it is not just given out freely and so if i were you that's one thing i would look at your parents study them learn from them you know maybe go live with them for a few years maybe a decade or two and i know you don't necessarily want to live with your parents but then again we don't all want to brush our teeth either but when you push yourself out of your comfort zone and do something challenging that's when you are learning and growing the most personally so that's it for me hope you enjoyed the video let me know though in the comments below what are some of your best tips on managing money in a relationship and also check out this video here on how to protect money in a relationship i think you'll find it to be also insightful or interesting at the least and i'll see you in the next one thanks bye

Channel: TechLead

Views: 323,690

Keywords: personal finance, how to manage your money, how to manage money, how to budget, marriage and money, money in marriage, financial freedom, how to manage finances in marriage, dave ramsey, ted talks, how to manage money in marriage, relationship advice, money management, investing, investing for beginners, how to invest, how to invest in stocks, stock market investing, stock market investing for beginners, stock options, how to be a millionaire, credit score, credit card

Id: CJkozcLsurA

Length: 11min 49sec (709 seconds)

Published: Thu Mar 18 2021