Advice please

[Smo]

Hi everyone,

I would really appreciate some advice, I just had a long conversation with my partner about his career. Long story short we are both lawyers and are both doing OK. But he hates his job, he doesn''t mind the work but the culture of where he works and his boss (who is the CEO) are pretty bad. I think he could put up with the culture but it is his boss that is really upsetting him. I don''t want to say too much but from what he has told me, his boss in an a**hole and not a leader.

My partner has basically decided he has had enough and he wants to start his own business. He has always been a risk taker and in the past it had paid off for him. I am a lot more conservative and I know I tend to look at the risks rather than the positives. Basically, if he does this, our income will decrease by more than half and our lifestyle will change. Of course if he is successful it will benefit us both but if he isn''t, well it will be tough.

The other issue is that we recently sold our apartment and the sale resulted in a profit for us. We had been talking about buying 2 or 3 investment properties, renting them out and waiting for them to increase in value plus we would benefit from the tax deductions. I would rather buy a nice place for ourselves but acknowledge that his plan, whilst meaning that we live in our current apartment (which I don''t like) for the next 5 years or so, would be far more financially beneficial than just buying a nice new home.

In speaking to him about starting his own business, I said that I guess we would have to put the investment property plan on hold for the time being. Given our income will decrease by more than half I didn''t see how we could have 2-3 mortgages. He disagrees, he thinks that the apartments will pay for themselves (it is likely they will but for strata, council, water rates etc and of course any unforseen issues).

I guess I would just like to hear from other people who have been in situations where their significant other has quit their job and started their own business and how this has worked out. Do you think I am being overly cautious? I don''t know, I think I just needed to vent! I just want him to be happy and he is so unhappy in his current job. Sorry this was such an epic!

 

[AdiS]

Date: 10/16/2009 5:56:37 AM
Author:Smo

Hi everyone,

I would really appreciate some advice, I just had a long conversation with my partner about his career. Long story short we are both lawyers and are both doing OK. But he hates his job, he doesn''t mind the work but the culture of where he works and his boss (who is the CEO) are pretty bad. I think he could put up with the culture but it is his boss that is really upsetting him. I don''t want to say too much but from what he has told me, his boss in an a**hole and not a leader.

My partner has basically decided he has had enough and he wants to start his own business. He has always been a risk taker and in the past it had paid off for him. I am a lot more conservative and I know I tend to look at the risks rather than the positives. Basically, if he does this, our income will decrease by more than half and our lifestyle will change. Of course if he is successful it will benefit us both but if he isn''t, well it will be tough.

The other issue is that we recently sold our apartment and the sale resulted in a profit for us. We had been talking about buying 2 or 3 investment properties, renting them out and waiting for them to increase in value plus we would benefit from the tax deductions. I would rather buy a nice place for ourselves but acknowledge that his plan, whilst meaning that we live in our current apartment (which I don''t like) for the next 5 years or so, would be far more financially beneficial than just buying a nice new home.

In speaking to him about starting his own business, I said that I guess we would have to put the investment property plan on hold for the time being. Given our income will decrease by more than half I didn''t see how we could have 2-3 mortgages. He disagrees, he thinks that the apartments will pay for themselves (it is likely they will but for strata, council, water rates etc and of course any unforseen issues).

I guess I would just like to hear from other people who have been in situations where their significant other has quit their job and started their own business and how this has worked out. Do you think I am being overly cautious? I don''t know, I think I just needed to vent! I just want him to be happy and he is so unhappy in his current job. Sorry this was such an epic!

Well, this answers your question, I think. Starting your own business is always risky, but even if it does mess up your plans a little bit, him being happy should come first. I am going through some hard times with my own job at the moment and I mentioned that maybe I''ll start looking for another one soon. DH was absolutely supportive, even though me quitting would seriously affect our finances and we just bought a new home. Your partner needs to know you''re there for him right now too.

 

[NewEnglandLady]

If it were me, I'd tell my hubby that I supported him 100%, but not to make any big financial decisions until our lives were a little more settled. I know he's the risk taker, but I think it puts you both in some danger if you take out multiple mortgages. He doesn't know if the apartments will pay for themsleves and he doesn't know if his business will succeed. Hopefully they would, but in this case I'd prefer to take it one step at a time and see where it leads.

Last year my husband was miserable with his career and decided to take a break, go back to grad school and figure it out. He's always made more money than I do, but I supported him 100% and we put all large purchases on hold until our future was more settled.

 

[lucyandroger]

I have to disagree that his happiness should come first if it means it is to the detriment of Smo's own happiness. They are in a partnership so they should make this decision together. There may be plenty of other possibilites that involve him leaving his current job without throwing all of their other plans as a couple out the window.

Smo, can you and your partner talk to a financial advisor. Before you guys do anything, you need to be comfortable with the plan as well and coming up with a financial plan and being sure you can afford to take the risks he's planning will help you. This may be an awesome opportunity for the both of you but if your relationship doesn't survive that long, then what good is it anyway.

Not to scare you but I'll share this personal story. My mom is currently a judge but when she first graduated from law school she worked for a firm. I was around ten years old when she started working there and I remember how miserable she was. She HATED it. So she decided she wanted to hang a shingle. This involved losing her income and putting out a lot of money into start-up costs. My dad was not okay with the idea from the beginning. He didn't think they could afford it and the whole thing made him uncomfortable. So it switched, my mom was happy and my dad was miserable. They didn't communicate well, there were money issues (as there usually are when starting a business), and it seeped into the rest of their interactions. They ended up splitting up.

The point of that was just to say that if you don't iron things out first, things can go bad. Both sides need to feel comfortable and be on the same page otherwise resentment can enter the picture pretty easily.

ETA - You should check to see if you could even get those mortgages without his income on the application. It's tough to get a mortgage now and banks don't want to take risks. Even if you plan to rent them out, the banks want to see that if you're left without a renter for a while, that you can make the payments.

 

[Diva0413]

That''s definitely a tough situation to be in. I agree with lucyandroger about going to see a financial planner. That way everything is put on the table and you both can comfortably take the next step. I hope things work out for you.

 

[kama_s]

Lucyandroger makes a great point. I would have to agree with her, speak to a financial advisor. Personally, I would be okay with either him starting his own business OR doing the rental real estate, but definitely not BOTH. I would be more inclined with helping him start his own business, to be frank, because if he''s miserable you''re not going to be any happier, kwim?

 

[dragonfly411]

Smo - Here''s what I think. I think perhaps you should both compromise. I think it''s fair for him to be able to try to start his own business, and perhaps you could invest PART of the profit in that, and part in a property? Would it work? I do understand you are more conservative about taking risks, and I completely understand, but it sounds like your guy has a great head on his shoulders, and would probably do well as an entrepreneur vs. working for someone who is making him miserable. The other thought is for him to look at other firms, but I rather like the idea of him setting out on his own. It might take a bit of time to build up yes, but...

Another thought is to get the investment properties, get them rented out, and use the profit from them being rented to work towards him building his own business.

 

[AdiS]

Date: 10/16/2009 9:33:53 AM
Author: lucyandroger

I have to disagree that his happiness should come first if it means it is to the detriment of Smo''s own happiness. They are in a partnership so they should make this decision together. There may be plenty of other possibilites that involve him leaving his current job without throwing all of their other plans as a couple out the window.

The way I understand it, it is to the detriment of their investment plans, not her happiness. To me it''s not the same. I could be wrong of course.

 

[tlh]

Date: 10/16/2009 9:33:53 AM
Author: lucyandroger
ETA - You should check to see if you could even get those mortgages without his income on the application. It''s tough to get a mortgage now and banks don''t want to take risks. Even if you plan to rent them out, the banks want to see that if you''re left without a renter for a while, that you can make the payments.

This is a very good point.

 

[lucyandroger]

Date: 10/16/2009 10:59:53 AM
Author: AdiS

Date: 10/16/2009 9:33:53 AM
Author: lucyandroger

I have to disagree that his happiness should come first if it means it is to the detriment of Smo's own happiness. They are in a partnership so they should make this decision together. There may be plenty of other possibilites that involve him leaving his current job without throwing all of their other plans as a couple out the window.

The way I understand it, it is to the detriment of their investment plans, not her happiness. To me it's not the same. I could be wrong of course.

I see what you're saying and I agree that would be different. However, I read a lot of anxiousness about their financial security if they went through with these plans and that can really eat at a person. Plus, it can be extremely stressful to be the sole breadwinner while your partner starts a business. You have to be totally on board for that to work.

I'm also not sure it makes much sense to make what you see as poor financial decisions just for your partner's happiness, without discussing other options that may make you more comfortable and get him out of a bad situation.

 

[kenny]

Unless there is some unusual financial hardship, you are both lawyers you could easily live on one salary.

I''d tell him to go for it.

 

[jewelerman]

I would take time and think logically about the next move and take emotion out of it.Its unfortunate that he hates his boss,but many people do and it should make him very happy that he is employed and has so many options in this ecomomy.As everyone has said...do your homework and prepare.Everything right now is a huge risk.Buying property is always a good idea,buy finding renters is questionable right now as is leaving a paying job for an uncertain future(ive been at a job i dislike for a year because it helps with incoming bills).What happens if you loose your job or you are unable to work?Are you planning on drastic changes in your lifestyle so you can save money as a safty net?I wouldnt make any big changes unless you have a fairly sustantial nest egg to draw from in an emergency.Make a very detailed plan and stick to it,it will make him happy to know that this job isnt forever and that will make it more bearable!Never do anything last minute out of emotion!Its time to clean house and plan,plan ,plan!GOOD LUCK!

 

[MichelleCarmen]

Is there enough demand for rentals in the area you live in? A friend of mine has a rental, but there isn''t enough demand in the city she lives in and so it''s sitting empty and she''s stuck with two mortgages.
Is there enough demand for the type of business your partner plans to invest time/money in?

Like Kenny said, you are both lawyers and should be able to live on one salary (if you cut back).

Reducing living expenses isn''t as hard as it seems, nor as painful. It becomes a habit after a short time to ask yourself twice before buying something you want, however do not need. Once your Partner''s business takes off, you''ll find that a) you can again enjoy aspects of your lifestyle you had to sacrifice, and b) you will end up saving up money because you''ve trained yourself to live on a smaller budget.

Before my husband changed professions we DID make major life changes. We sold our high mortgage home, moved to a place that is LESS than what we can afford to pay (if we wanted), and have changed how we spend our money - less eating out, INCREASING our cable package and reducing movies out - which has saved money in the long-run, and me spending less on clothes - I don''t have bi-weekly spending sprees anymore. . .but still DO buy stuff.

Best of luck.

 

[TooPatient]

Either the real estate OR the business.

At least to begin with.

I won''t go into detail, but one of the clients here has rental properties. Have always done well. Now there are so many vacancies out there that finding renters (commercial buildings & appartments/houses) has gotten more difficult.

He and his wife own several properties in different locations (appartments, commercial buildings, and homes) and have more vacancies & have to charge lower rent than they had been getting.
Things are hard for them now. They have had to take out $10,000 at a time from their personal account to pay the mortgages & utilities for these properties.

You have to be able to pay the mortgage & other bills for any properties you have even if you don''t have renters. (as an idea of what you should plan for, the couple in the situation I mentioned has been dealing with this for 6 months now)


I''m not saying it is a bad idea. It is just something you both need to be aware of and able to afford if a situation like this comes up.



His business and the real estate are both very big decisions that could have good or bad consequences for both of you long term. You BOTH need to be comfortable with whatever decision you make. Where I work, I have seen many people with their own businesses or with rental properties struggling recently. I''ve also seen others who are doing quite well.

 

[Haven]

Date: 10/16/2009 11:55:17 AM
Author: jewelerman
I would take time and think logically about the next move and take emotion out of it.Its unfortunate that he hates his boss,but many people do and it should make him very happy that he is employed and has so many options in this ecomomy.As everyone has said...do your homework and prepare.Everything right now is a huge risk.Buying property is always a good idea,buy finding renters is questionable right now as is leaving a paying job for an uncertain future(ive been at a job i dislike for a year because it helps with incoming bills).What happens if you loose your job or you are unable to work?Are you planning on drastic changes in your lifestyle so you can save money as a safty net?I wouldnt make any big changes unless you have a fairly sustantial nest egg to draw from in an emergency.Make a very detailed plan and stick to it,it will make him happy to know that this job isnt forever and that will make it more bearable!Never do anything last minute out of emotion!Its time to clean house and plan,plan ,plan!GOOD LUCK!

This is very good advice.

I can share my experience from the other side of the issue. I resigned from my teaching position in July because I was very unhappy there and my work circumstances were such that I could no longer ethically teach in that environment. My husband was the one who suggested that I resign, and he supported my decision to do so 100%. However, we make a point to live our lives in a way that affords us the freedom to leave a position that is too stressful. As the one who resigned, my husband''s support was wonderful and I can''t imagine not having it.

Here''s the thing, though: your situation sounds very different, you have some plans on the horizon that have not yet been realized, and your partner''s decision to leave his job will potentially change those plans. He is not just talking about leaving a job, he''s talking about leaving a job and changing your financial future as a couple. I don''t think I would have felt comfortable leaving my job in July if it would have potentially put a wrench in the plans we had made as a couple. It''s definitely worth doing some serious talking to each other, and to a financial expert.

Good luck.

 

[AdiS]

Date: 10/16/2009 11:18:54 AM
Author: lucyandroger

Date: 10/16/2009 10:59:53 AM
Author: AdiS

Date: 10/16/2009 9:33:53 AM
Author: lucyandroger

I have to disagree that his happiness should come first if it means it is to the detriment of Smo''s own happiness. They are in a partnership so they should make this decision together. There may be plenty of other possibilites that involve him leaving his current job without throwing all of their other plans as a couple out the window.

The way I understand it, it is to the detriment of their investment plans, not her happiness. To me it''s not the same. I could be wrong of course.

I see what you''re saying and I agree that would be different. However, I read a lot of anxiousness about their financial security if they went through with these plans and that can really eat at a person. Plus, it can be extremely stressful to be the sole breadwinner while your partner starts a business. You have to be totally on board for that to work.

I''m also not sure it makes much sense to make what you see as poor financial decisions just for your partner''s happiness, without discussing other options that may make you more comfortable and get him out of a bad situation.

Well, that''s normal. Like you said, being the sole breadwinner in the family is tough, no doubt about it. I guess it all comes down to this: would it be worth it? I guess it really depends on the specific person and couple.

I bet DH didn''t feel like screaming "Hurrah!!!" when I told him I was considering resigning my job. I''m sure his first thought must have been "Now?!? When we just bought our first home together and it requires so much work and money?" All he said was "We''ll manage. If you want to do it, I''m with you." Some would say it would be irresponsible and irrational of me to quit right now. I haven''t decided yet but I''m just content to know that whatever my decision is, hubby will be there for me.

 

[lucyandroger]

Date: 10/16/2009 2:18:49 PM
Author: AdiS

Date: 10/16/2009 11:18:54 AM
Author: lucyandroger

Date: 10/16/2009 10:59:53 AM
Author: AdiS

Date: 10/16/2009 9:33:53 AM
Author: lucyandroger

I have to disagree that his happiness should come first if it means it is to the detriment of Smo''s own happiness. They are in a partnership so they should make this decision together. There may be plenty of other possibilites that involve him leaving his current job without throwing all of their other plans as a couple out the window.

The way I understand it, it is to the detriment of their investment plans, not her happiness. To me it''s not the same. I could be wrong of course.

I see what you''re saying and I agree that would be different. However, I read a lot of anxiousness about their financial security if they went through with these plans and that can really eat at a person. Plus, it can be extremely stressful to be the sole breadwinner while your partner starts a business. You have to be totally on board for that to work.

I''m also not sure it makes much sense to make what you see as poor financial decisions just for your partner''s happiness, without discussing other options that may make you more comfortable and get him out of a bad situation.

Well, that''s normal. Like you said, being the sole breadwinner in the family is tough, no doubt about it. I guess it all comes down to this: would it be worth it? I guess it really depends on the specific person and couple.

I bet DH didn''t feel like screaming ''Hurrah!!!'' when I told him I was considering resigning my job. I''m sure his first thought must have been ''Now?!? When we just bought our first home together and it requires so much work and money?'' All he said was ''We''ll manage. If you want to do it, I''m with you.'' Some would say it would be irresponsible and irrational of me to quit right now. I haven''t decided yet but I''m just content to know that whatever my decision is, hubby will be there for me.

I totally agree! I was just saying that I don''t think she should make major financial decisions (investing in multiple properties, starting a business) based just on his happiness. She has to think of her own well-being both financially and emotionally as well. If they''re able to come up with a plan that they''re both comfortable with, then that''s great!

 

[Smo]

Thanks guys! As per usual some great advice!

Thank you everyone who responded. I was feeling a bit down last night and worried I had been too negative about him quitting his job. I don''t even think it is the idea of him quitting his job that has me worried more the fact that he wants to do both, new business and 2 - 3 investment properties.

Perhaps it would be helpful if I gave a big more background. We live in Australia and whilst the economy hasn''t been great it is a lot better than it is in the rest of the world. He also works in employment law which is a relatively booming area at the moment (owing to the economy and also a recent change in the federal government and as a result a huge change to the employment law system). His business would be basically him doing his current job but by himself. We can survive on my salary but obviously we will need to cut back.

I think seeing a financial advisor is a great idea, we have seen one in the past but we weren''t pleased with him and didn''t think he gave good advice but hopefully we can find someone who can give us good advice before we take this plunge. We need to see someone anyway on the various tax implications of running a business. We will do our homework.

Regarding the properties, I think I could get the mortgages with just my salary. Also, we have already done the research on the properties and factored in the various costs. I already have great insurance that would cover us if I could no longer work etc but maybe I would need to look at getting insurance for if I lost my job. The Sydney rental market at the moment is very strong, landlords are really doing well at the moment and have been for some years. Interest rates are low and if we locked in the loan I would be comfortable that the repayments would be covered by the rent and one of the properties we had considered making an offer would mean that we would actually be making a tiny amount of money on it.

So I guess what I am saying is that I can see his point that we could afford to buy the properties but my point is that we are already taking a risk by him leaving his job, I don''t see why we should add the additional risk of buying the investment properties at the same time. Why not wait six months from when he starts the business (which will probably be March next year) and then look at buying the properties? I think this is reasonable and more than fair?