How do I get my GF interested in preparing for her long term financial future?

[Chuckanut]

Remind her that as she ages she will have less time and need more money to get the same financial results.

Also, remind her that as you both age the demographics mean there will be more single women than men, and there will be a large supply of rich widows. :-)

[haha]

Quote:

Originally Posted by Chuckanut Also, remind her that as you both age the demographics mean there will be more single women than men, and there will be a large supply of rich widows. :-)

I'm sure Mulligan would not do anything that likely to land him on his ear.

Women understand most everything, but one thing they are born understanding is romantic realities, and you can take that one to the bank.

Anyway, she is younger, she would never face this. And she likely is good looking. What that business about differential mortality means is if you are seeking an average looking 80 year woman, your competition may be modest. Otherwise, better do a good job on the boyfriend front or you can be replaced, by eager and sometimes younger rivals.

Now, my last comment on Muilligan's situation. Be very careful- you said she is new to serious saving, but she is doing it very well. Let her cruise a few years, or as long as she wants to. There is no guarantee at all that hoarding cash is not the absolute best strategy now. But there is a guarantee that if you persuade her to take a reluctant ride on Mr. Market, and he throws her off, she may become discouraged and run back to cash once and for all. And this is unlikely to do much for your stock with her, either.

Ha

[Koolau]

I like the Roth idea the best, so far. Show here how she can legally avoid taxation on earnings and she may see the light. The possibility to take the money back out (minus earnings, of course) makes a Roth very similar to any other "emergency fund" which she seems to want to have. I'm guessing that her recent lay-off experience is the reason she has become a good saver. Help her to see that she can still do that with very little risk to her emergency fund. A relatively low risk fund (perhaps short term bonds or even pssst. Wellesly) could get her hooked on investing.

Good luck!

[Onward]

Quote:

Originally Posted by Mulligan How do I get her to transition from "hoarding cash", to some modest if not even low risk investing. Any advise on how to get her to take an interest in this?

It sounds to me like she doesn't understand inflation or (possibly) the power of compound interest. A couple of tutorials may be in order.

[Mulligan]

Alright, I was able to complete the conversation today. Thanks with all the assistance especially in the psychological area!!!! If I had went with my typical get to the point of "hey we need to get you thinking about your financial future" , it would have went bad. It still got shaky at times, but pulled through well. I started discussing my new financial goals, and then slowly switched to hers ( which wasn't much there) which got her a bit suspicious. She was really impressed with the financial calculators. I showed her 10k money in the savings account would go all the way up to $10,200 in twenty years if she kept it in her current 0.05% account. I showed the I Bond rate of 4.6% and in 20 years at that rate (which may not continue but that is beside the point ) her money would grow to 25,000. That example definitely caught her eye on making her money work for her. I know this isn't a true financial plan, but it's a starting point she agreed to which is getting her on the road.
1) She is going to buy 5k of I Bonds this week and then transfer them into a TD account
2) She will the purchase $400 a month in I Bonds for a year starting in January. This gives her 2 months to build back her savings to her comfort level, and gets her in the habit of monthly "investing".
3) Opening up a checking account that pays 3% for her savings money, she can jump through the hoops as she does her finances all online anyway so that is no big deal
4) In 2 months she is eligible for company 401k and the 3% match. She is willing to start out with 6%. Dont know the investing options yet, but will start out conservative so she doesn't get discouraged with immediate losses.

I was able to sell her on I Bonds on the safety and current yield, with ability to withdraw in a year if necessary. She understands the importance of taking the company match and the tax savings benefits from investing.
This modest start still allows her more than 300 of free cash that she can still drop into her 3% checking account. I will try to keep my mouth shut for a year and let this play out until she gets a little success and comfort with it. I am very proud of her!
Still, I can't quite understand all the pitfalls and land mines one has to avoid in talking about money especially with the fairer sex! The message sent is not always the message received. She is very independent and self reliant especially financially. My sincere advise with all the subtle speak still got received as I was doing this to avoid her being a financial burden on me which was not the case. Maybe in a year we can discuss Roths, short selling, and hedge funds

[haha]

Quote:

Originally Posted by Mulligan It still got shaky at times, but pulled through well.

Good going Mulligan! This sounds very positive.

Quote:

Still, I can't quite understand all the pitfalls and land mines one has to avoid in talking about money especially with the fairer sex! The message sent is not always the message received. She is very independent and self reliant especially financially. My sincere advise with all the subtle speak still got received as I was doing this to avoid her being a financial burden on me which was not the case.

Don't you feel that we men are just as resistant to "being helped" as women are? Many a woman has treid to help a man detour from his self dstructive path, only to be rejected and abused for her efforts. Usually there are reasons why we do what we do, for good or ill. I had a woman friend maybe 10 tens ago who inherited a nice hunk of change, enough for most of us to retire quite safely. She had not worked during the 13 years between her marriage and divorce, and she wan't planning to start if it could be avoided. Partly because I liked her, and partly because I didn't want to be close by if/when everything fell apart, I tried to give her a little background standard stuff about conservative investing and most importantly about health insurance. She more or less told me to mind my own business. I was never sure whether she suspected I wanted her dough, or if it was just her overall bad judgment and stubborness. She was best in class on both these traits.

Anyway I got out of Dodge, but we stayed in touch. She is now, at age 57, completely broke and working at some sort of telephone service business. Her only hope of retiring and staying in her lower middle class house is for her ex to retire, and apply for SS. Half of his would still perhaps not keep her above water. And I really don't think even this would work. People do stupid things all the time. For me it is sometimes a struggle to avoid my own favorite class of stupid decisions.

Ha

[Mulligan]

Quote:

Originally Posted by haha Good going Mulligan! This sounds very positive. Don't you feel that we men are just as resistant to "being helped" as women are? Many a woman has treid to help a man detour from his self dstructive path, only to be rejected and abused for her efforts. Usually there are reasons why we do what we do, for good or ill. I had a woman friend maybe 10 tens ago who inherited a nice hunk of change, enough for most of us to retire quite safely. She had not worked during the 13 years between her marriage and divorce, and she wan't planning to start if it could be avoided. Partly because I liked her, and partly because I didn't want to be close by if/when everything fell apart, I tried to give her a little background standard stuff about conservative investing and most importantly about health insurance. She more or less told me to mind my own business. I was never sure whether she suspected I wanted her dough, or if it was just her overall bad judgment and stubborness. She was best in class on both these traits. Anyway I got out of Dodge, but we stayed in touch. She is now, at age 57, completely broke and working at some sort of telephone service business. Her only hope of retiring and staying in her lower middle class house is for her ex to retire, and apply for SS. Half of his would still perhaps not keep her above water. And I really don't think even this would work. People do stupid things all the time. For me it is sometimes a struggle to avoid my own favorite class of stupid decisions. Ha

Ha, I find it interesting how people react differently to the same thing. Talking this morning she added a little follow up ( I did not initiate ) to our conversation. She stated to the effect that finally I'm making a little extra money and don't have to worry about bills, I now have to worry about money for retirement she called it a double edge sword! I told her it shouldn't be a worry, but a joy to have surplus money and embrace the challenge of making your money work for you and get satisfaction of watching it grow. Hopefully she will buy into that line of thinking. One comment she made last night I thought was interesting that almost derailed our conversation was " why do you talk and worry about money? Nobody I know worries about it, or talks about it? " I'm sure she is right because none of her friends have any money or are eyeballs in debt. Of course, I bit my tongue and did not say that last comment out loud, thankfully.

[haha]

Quote:

Originally Posted by Mulligan One comment she made last night I thought was interesting that almost derailed our conversation was " why do you talk and worry about money? Nobody I know worries about it, or talks about it? " I'm sure she is right because none of her friends have any money or are eyeballs in debt. Of course, I bit my tongue and did not say that last comment out loud, thankfully.

Mulligan, this is like a trip down memory lane for me. This same woman I referenced above used to cast my horoscope to prove that I was money obsessed and I needed to move into more spiritual interests for my own good.

Your thing with GF seems to be going well, but just be sure you are upwind if/when something blows. Trying to change people can be hazardous. Lots of single, pleasant school teachers around, with their long term money issues pretty well covered.

I have found it best to be as money obsessed as I please, but keep it to myself. To some (many) women, it is OK for Donald Trump or Warren Buffett to pay close attention to money, but for average guys like us it is a character flaw.

Sometimes they feel differently if they feel that they have a royalty interest in our wells. But I believe in cash basis accounting; no accruals please.

Ha

[travelover]

Quote:

Originally Posted by Mulligan ......... One comment she made last night I thought was interesting that almost derailed our conversation was " why do you talk and worry about money? Nobody I know worries about it, or talks about it? " ..........

All I can say is, don't mix your finances with hers in a legal sense.

[Mulligan]

Quote:

Originally Posted by travelover All I can say is, don't mix your finances with hers in a legal sense.

She has become a really good saver since her new job, almost 25% of her take home. But your statement is a very telling one for me. At my age if I ever got married to her or anyone, I don't know if direct mingling of finances would work. I've been on my own the last 15 years and I have answered to no one with all my decisions good and bad. Habits become ingrained. I think at this moment in time, living with someone would be the best longterm scenario. I would have no problem providing the shelter and paying the monthly normal bills if she was at a financial disadvantage, but clothes, personal expenses, and mad money I would rather not have to fight over with a shared checkbook. Too old to fight about money, and too set in my ways to not care.

HA said - I have found it best to be as money obsessed as I please, but keep it to myself. To some (many) women, it is OK for Donald Trump or Warren Buffett to pay close attention to money, but for average guys like us it is a character flaw.

Another "instant classic" statement from Ha! Your second sentence I love, the first one I need to remember to do.

[carnivalday]

Being a single gal, I have had to learn about finances and saving for retirement on my own. I started investing in dividend paying stocks, and really got excited when those first dividends started coming in. Once I saw them I wanted more, and invested more, and got more dividends! Now Im rabid about saving every bit of money I can and putting it into one of my dividend stocks or funds. Maybe if gf would do this and see how her money can make her money, it might turn into a fun thing for her. Fun is a good thing.

[GregLee]

Quote:

Originally Posted by Mulligan ... and get satisfaction of watching it grow.

Or not watching it.. My wife has always been almost totally uninterested in our investments.. Back the 70s, we started an IRA for her with a growth mutual fund with $6000.. We didn't add any money after that, and seldom looked at a statement from the mutual fund.. But even without watching, her IRA has done just fine -- $200k now.. Your GF can just send in some money and forget about it.

[Mulligan]

Quote:

Originally Posted by GregLee Or not watching it.. My wife has always been almost totally uninterested in our investments.. Back the 70s, we started an IRA for her with a growth mutual fund with $6000.. We didn't add any money after that, and seldom looked at a statement from the mutual fund.. But even without watching, her IRA has done just fine -- $200k now.. Your GF can just send in some money and forget about it.

I'm hoping that will happen she is going to start at 6% into 401 plus match. Hopefully in year she will see the benefits and put it up to 10% as by then I think her cash cushion will be high enough she can't justify hoarding anymore and start investing more.
You reminded me of something that made me chuckle. 20 years ago, when I was married, I put two thousand in an Exxon IRA in my wife's name. She chastised me for wasting the money on it ( boy, she loved to spend!). When we were getting divorced five years later, I told her to make sure she got her addressed changed on the IRA so she could get her statements. She said do I get to keep it? I told her it's in her name and hers. She was stunned it had grew to 6k in that amount of time. She wasn't making fun of that purchase then!

[BellBarbara]

If you want to manage her money, MARRY HER. I think it's crazy for you to push her to financial instruments she is not comfortable with. What happens if she loses money, are you going to replace the money?

I can't believe I am the only one to comment on this.

[Mulligan]

Quote:

Originally Posted by BellBarbara If you want to manage her money, MARRY HER. I think it's crazy for you to push her to financial instruments she is not comfortable with. What happens if she loses money, are you going to replace the money? I can't believe I am the only one to comment on this.

She isn't uncomfortable with the financial instruments, it's getting over just putting all the money in a 0.05 % savings account. Moving all her current money sans the emergency cushion, to I Bonds, and 3% interest checking account in another bank involves no risk. She has a 401 from another company, but its been a year since she has had the opportunity to do it. She has moved up into a higher tax bracket that really makes it more beneficial to invest in a 401k. It's just getting her exposed to these options and understanding them is the issue. Btw, I certainly didn't mean to suggest she is needing a man to marry her. She probably is more independent than I am.

[BellBarbara]

My point went over your head! I am not saying she needs a man to marry her, I am saying you are not married to her, thus not responsible for her, and should not push her to do things she is not comfortable with. I think this is a big mistake.

It's like you can't help yourself from trying to manage her money. And yes, she is uncomfortable, or she would do it on her own.

Have you asked her if she would rather you drop it? Or if she wants your advice?

[travelover]

Quote:

Originally Posted by BellBarbara My point went over your head! I am not saying she needs a man to marry her, I am saying you are not married to her, thus not responsible for her, and should not push her to do things she is not comfortable with. I think this is a big mistake............

I suspect that Mulligan plans to be with this woman long term, if not marry her. If she plans poorly, it hurts them both. I sympathize with his plight.

[Mulligan]

Quote:

Originally Posted by BellBarbara My point went over your head! I am not saying she needs a man to marry her, I am saying you are not married to her, thus not responsible for her, and should not push her to do things she is not comfortable with. I think this is a big mistake. It's like you can't help yourself from trying to manage her money. And yes, she is uncomfortable, or she would do it on her own. Have you asked her if she would rather you drop it? Or if she wants your advice?

No she appreciates it, it's just making sure it is presented the right way. Her uncomfortableness with it is not because she doesn't want do it, it's because she has no knowledge of it at all. She had never heard about I Bonds, did not know about the local bank paying 3%, and did not even know she moved up into a higher tax bracket and it's implications concerning tax deferred investing. In fact she called me today to let me know she got her TD account card and is eagerly waiting to deposit 5k into it to draw some interest from the money, that wasn't generating her anything. She is very intelligent, but has never been exposed to this and had no initial interest in it. Once I provide info and options to her and she agrees with whatever options she likes, she is setting it up and doing it on her own. Knowledge is power, but the delicate dissemination of it is the key.

[ESRwannabe]

You might want to start off just getting her to max the 401k and Roth. She could put the money in a money market fund. Maybe she would be willing to put the money into a high quality bond fund. I wouldn't try too hard to convince her to invest in stocks. It sounds like that would be too much of a change right now.

[haha]

Quote:

Originally Posted by BellBarbara If you want to manage her money, MARRY HER. I think it's crazy for you to push her to financial instruments she is not comfortable with. What happens if she loses money, are you going to replace the money?

I was thinking about your rather strong comment, not with respect to Mulligan but more about this general situation of relkationships between unmarried but long term partners. I don't think that relationships are so cut and dried that a couple should either get married or stay out of one another's extra-bed lives. Many of us are single, but consider that we are in long term relationships, or at least in relationships that we want to be long term. If someone can respectfully share knowledge with his/her partner, isn't that better than just going on down the road? Compatible partners are not so common that we can afford to be extremely choosey about everything. If you love someone, and given your belief system feel that your partner's approach to some area of life is far from effective, shouldn't you speak up?

I feel that partners routinely attempt to influence one another on many fronts, and without doing that and submitting to that, unless we are very lucky we are likely to spend most of our time alone.

I know that I would strongly prefer my partner to give me direction in some area that she seemed to know more than I, than for her to just disappear from my life in fear and frustration. These things can always be discussed.

Ha