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Key points
- Financial security can ease anxieties about the future.
- Managing financial risk is part of good decision making.
- The vast wealth some people dream of is a diminishing return.
- You want to be on the same page with your partner about investments.
Maeve was in her 50s, but she fidgeted like a grade-schooler. Finally, she handed me an overdraft notice from a bank. “It’s not my fault,” she said, “but I can’t do anything about it.” The account was in her name and her husband’s and, according to Maeve, he was spending them into the poorhouse. “I can barely talk about this,” she confessed, “but I need to make him stop.”
Maeve was upset because her husband was putting their financial future at risk. Instead of saving for retirement, he was drawing down their resources.
Maeve’s husband—the man she thought could ruin them—was in fact a distinguished professor of applied physics, an expert on heat exchange who had made a fortune consulting with power generation equipment manufacturers. But now, at age 56 and at the top of his career, he planned to leave his academic post and start his own company. He told Maeve that in ten years they’d be ten times better off than were now . . . they’d just have to spend a lot of money first.
Maeve’s husband, Phil, didn’t want investors. His plan was to self-finance the basic research. Eventually, he assumed he’d sell the company for hundreds of millions. Was he crazy? That depends. He had an idea for a new type of battery that would power electric vehicles. If current models could go maybe 200 miles without a recharge, his battery could go 1,000 miles.
But Maeve thought they could lose every penny. She worried that her husband would recklessly, obsessively, egotistically put everything they had in jeopardy. “At our age,” she said, “we shouldn’t put ourselves at risk.” She wanted my advice on how to talk with Phil about acting more prudently. The problem was that Phil had always managed their money; he had made them rich (relative to most academics); and he regarded their money as an extension of everything he had accomplished.
Yet as we age, our finances can become a concern. The last thing we want is to worry about where the money will come from. If we’ve saved, we worry less. Phil appeared to be playing the tape backwards, so that just when he ought to be taking less risk, he was risking everything.
Maeve knew that when happily married couples fight, it’s frequently over money. In fact, they had had heated discussions in the past over Phil’s taste for gizmos. But this was something new. He had never seemed reckless. He never withdrew money from his university retirement account; their checking account was never mistakenly overdrawn. So, Maeve believed that Phil was taking steps that would have been unthinkable a few years earlier.
Maeve had tried to talk with Phil about his strategy, but, instead of keeping the conversation on a financial level—how much he should spend, where the money should come from—Phil made it all about him. Maeve did a sort of imitation of Phil: “He said ‘you’re not qualified to question my scientific judgment, and this is about science. The money will take care of itself.’” She considers his remarks defensive, a sort of smoke-screen to exclude her from further discussion about his plans. She thinks he doesn’t want anyone to curb his commitment to the (possible) breakthrough of a lifetime.
So, what started for Maeve as the sort of conversation that any wife might have with her husband had turned into a battle about his identity and ambitions. “How can I ask him to be prudent without saying that he’s not a great scientist?” she asked. I really didn’t know. Each saw the issue in such different terms. For Maeve, it was about money and their life together; for Phil, it was all about him.
Sometimes, a person who has always made us happy—and whom we assume will continue doing so—suddenly becomes a source of consternation. It’s like they don’t even hear us. As we age, we assume that we know such people, so it’s shocking when they act out of character or, rather, the character we assume that we know. This was Maeve’s situation. When exacerbated by her fears about money, it became unsettling.
So, as we spoke, I suggested that Maeve remind Phil that she had always supported his work and was his greatest admirer. Thus, she wasn’t questioning his scientific judgment but only how he proposed to allocate their resources over the coming years. Her queries (not demands!) were about their shared lives, which she had every right to discuss. In this regard, while she hoped he’d pursue a dream that could change whole industries, she wished he would do so with her and the family in mind.
In other words, I suggested that she acknowledge in principle what mattered most to him—the science, the astounding breakthrough—while reminding him that, in practical terms, more people were involved than just himself. He shouldn’t take risks that could drastically affect her and, down the road, their grown children. He should think about himself as a scientist in context with who he was as a person.
In effect, I suggested that Maeve breach the either/or dilemma (money vs. science) that Phil had created by demonstrating her support for his initiative and even for putting money into it. She just wanted him to reflect on how that money would be invested.
Getting further into the weeds, we discussed how to tell Phil that if he took early retirement, they could live on the payouts from his account, along with dividends from his other investments. She could also offer to work for the new firm, even if only to order supplies. The point, of course, was that she was willing to forego luxuries and even to work (which she hadn’t done since the children were born); in return, he should take her interests into account. They could share the undertaking.
Finally, and perhaps most important, I suggested that Maeve remind Phil that while investors would naturally want a share of any profits, they would also provide an element of security. They’d provide time. Phil could be meticulous. He wouldn’t have to rush to file patents for a technology that was still only a concept. In other words, he’d be free to do the science. He could still invest some money and maybe even retain a majority interest, but he would at least mitigate the risk.
At least things might start moving towards the center.
