Greetings from Mr. Moneyaire! After much cajoling from Mrs. Moneyaire and some inspiration from her Accidental Landlord post, I’ve finally come up with a topic worth posting on this blog.
Anyone who has been in a relationship for any length of time will understand what it’s like to navigate between two competing objectives. This might be as simple as trying to figure out what to eat for dinner—should we eat in, or eat from a restaurant? Should we travel for an upcoming vacation or stay home? Should we purchase that new fancy car that Mr. Moneyaire wants, or do the responsible thing and buy below our budget? These are negotiations that happen every day in all relationships.
I don’t have any magic formula for making this work. There’s no one-size-fits-all solution that will make decision-making easy or painless when it comes to contentious life decisions. And every relationship will have its own dynamic—you may have developed a great way of deciding on dinner with your significant other, but you can’t ever seem to agree on an investment strategy.
That being said, there are a few tips I can offer that have worked well for the Moneyaires. Mrs. Moneyaire has already touched on a few of these:
- Develop a framework for purchases (useful, beautiful, and memorable)
- Talk through goals and expectations
- Create an investment strategy and stick with it
What I wanted to address is: what if one of you is action-oriented, and one of you is more hesitant before taking action? In our house, that manifests as Mr. Moneyaire (yours truly) being known as “Mr. No.” I’m an expert at shooting down ideas from Mrs. Moneyaire, much to her chagrin.
There are always a million reasons and ways to say no. Here are just a few of them:
- We don’t have time to deal with it
- We don’t have money to deal with it
- I’m not interested in doing the work
- I don’t think it’s a good investment
- It doesn’t align with our future plans
- ….you get the idea.
What can turn a no to yes? In practical, Moneyaire terms, why agree to a new investment idea if you’re not fully convinced of its merits?
I’ll use the practical example of buying a new investment property to illustrate how this has worked for the Moneyaires. I’m generally opposed, at first, to buying a new property. Any new condo we buy comes with a significant time, money and mental investment. To proceed, I need to fully understand the value. We’ve bought several at this point, so here’s how we navigated through “No.”
- Do the Math. Investment properties have a limited set of variables to consider. There’s the purchase price, ownership costs (taxes, mortgage, maintenance), and potential income. The Moneyaires developed a fairly simple investment property calculator that takes all of these variables into account and gives us a single number. That profit or loss number, on a monthly basis, goes a long way toward turning my “no” to a “yes.” If we’re going to spend $20,000 on a down payment but will get a profit of $300+ month with minimal effort, then Mr. Moneyaire is more than happy to ponder next steps. If we’re putting that much money into a property and only pocketing $100/month, is it really worth our time? Not convinced!
- Weigh the Time Commitment. A primary consideration in most big decisions is “How much time is this going to take?” A condominium that requires significant upgrades will also require significant time to upgrade. That means nights and weekends doing more work, on top of working full time. Is it worth it? Time with Baby Moneyaire and Mrs. Moneyaire is always top priority, so the profit needs to supersede the commitment. Mr. Moneyaire is very focused on the “passive” element in “passive income” and I approach all decisions in that way. I would argue that its less “laziness” on my part, and more just a recognition that our time is limited. Similar to how we buy material goods, I want my time to be invested in things that are at least two out of the three benchmarks—meaningful, beautiful and useful.
- Have a Plan. Mr. Moneyaire manages projects for a living, so top on my list of priorities are the W questions. Answer these questions and suddenly an easy “no” becomes a (sometimes begrudging) “yes”:
- What work is required?
- When will it be done?
- Who is doing it?
- Why are we doing it?
- Where are we going to have to travel to work on this project?
- Understand the Market. Mrs. Moneyaire knows local real estate pricing trends better than some real estate agents. So, I trust her instincts when it comes to whether a property is fairly priced or will get sufficient rental income. Still, there are some ground rules that can’t be broken if Mr. Moneyaire is going to move from “no” to “yes”:
- Don’t buy based on emotion
- Don’t buy just because we haven’t bought a new property in a while
- Don’t buy just because we have the money to do so
- Don’t buy at the top of the market
- Don’t buy a property that requires more work than we can handle
- Don’t buy in an area we wouldn’t live in ourselves
The key, I think, to the success the Moneyaires have had is a bit of natural tension between moving too fast or too aggressively (Mrs. Moneyaire) and moving too slow (Mr. Moneyaire). We check each other’s worst instincts. We pressure-test ideas in a way that produces a better outcome. And, most importantly, we try (as much as possible!) to respect the role we each play. Sometimes “no” is the right call; but sometimes navigating through “no” and getting to “yes” produces the even better result.