Last weekend, I walked my eldest daughter down the aisle, and then she was married in a lovely ceremony in Colorado. She was beautiful—as always—and the ceremony was perfect. Of course I found myself asking, where did all the years go?
I wish my daughter a lifetime of happiness!
Later, in a reflective mood, I thought back on my own history. My first marriage ended after 20 years. Today, I’d like to spend a bit of time talking about the financial impact of divorce on early retirement.
The recent FinCon conference was two weeks ago
I had some vague plans to attend the FinCon conference the week before my daughter’s wedding. My job recently got quite busy and so I decided to plan to attend FinCon next year.
The idea of divorce has been on my mind while reading my favorite blog sites and related comments. Many of the people in the FIRE (Financial Independence and Retiring Early) community do not mention divorce. Maybe this is because they are single or in the early years of marriage. On the other hand, perhaps it is because divorce is somehow taboo. Either way, this topic seems to be missing from the discussion.
I pictured a group of young 20- and 30-something bloggers sitting around a table at FinCon. The odds are that 80% of these bloggers are men; for our example, let us assume everyone is married. I would instruct every other person in the group to turn to his right and shake the hand of the person next to him. I would then ask each person to discuss with the person next to him the topic of divorce. Which one will be getting divorced? With a nearly 50% divorce rate, one of those two people shaking hands will no longer be married within a few short years. The divorce rate is staggering, and it concerns me that the FIRE and personal finance community do not seem to discuss this.
Some alarming statistics on divorce
We have heard for years that the divorce rates have hovered around 50%. A recent article here mentions that the likelihood of divorce depends on many factors—including the decade in which you married, your age, and the number of years married. Evidently, the numbers are beginning to look better for those married in the 2000s.
I was fascinated to learn this statistic: women initiate two-thirds of divorces. Back to our earlier example, if the person with whom you are shaking hands at the table is female and her marriage ends in divorce, there is a 66% chance that she will be the one who initiates the divorce.
The last consideration is that, according to a large body of research, many marriage failures are due to issues with money. Hey, at least this FIRE crowd is frugal minded, so that might help improve the likelihood of remaining married.
I was divorced after 20 years and 2 days of marriage
I have alluded in a few posts and comments that I am divorced from my first wife. We married in our mid-twenties and waited seven years before our first daughter was born. Our second daughter was born five years later.
We moved across the country on multiple occasions for my job. Once our first daughter was born, we stopped moving and settled in Colorado to be near family. We then started a rental property business together and bought another business that my first wife managed. We seemed to have everything going smoothly for us (financially), making excellent strides toward early retirement.
Nineteen years into the marriage, my wife handed me a “Dear John” letter. It explained that she no longer wanted to be married and would be happier as a single person. I had no idea this was coming and did not realize there were problems in our marriage. My wife did not want to talk about it. I attended counseling on my own to try to make sense of why the marriage failed and how to handle the loss. To this day, I still do not fully know why it ended.
My divorce was official 20 years and 2 days after we were married. Things did not appear promising for me.
The financial cost of divorce
This was quite a setback to me, emotionally and financially. I thought my life was over and ruined. Financially, I lost one-half of my net worth and one of the businesses the day the divorce was final.
Nowadays love is a matter of chance, matrimony a matter of money and divorce a matter of course –Helen Rowland
Child support was another issue. I love my daughters and understand why the child support was important. The challenge was the large amount that the court ruled based on its formula. I happened to be making the most money of my career at that time. No worries, I would be laid off about three years later! The child support did not change with my income. It was a tough couple of years trying to get a new financial foothold. I also bought a house in 2006 near the top of the California housing market. As I have mentioned before, I have made many missteps and mistakes in my journey.
The last financial challenge was that I lived over a thousand miles away from my daughters. The cost of all the visits and flights? About $50,000. The time together: priceless.
How many people could live comfortably on a million dollars in an index fund that is 75% stock and 25% bonds using the 4% rule, never touching the principal?
All tolled, the “Dear John” letter cost about a million dollars.
What is required to stay married?
While I didn’t see divorce coming, I survived. My kids survived, and are thriving. And I met my wonderful wife Dianne. This week we’ll celebrate our seventh anniversary!
I thought the divorce statistics would never apply to me. I was beyond heartbroken when they did. But I got up and got on with it. I also kept my belief in marriage. — Jennifer Garner
I am not a marriage expert. This was a growing experience for me that would be best for most people to avoid. However, here is some sage advice shared with my daughter last week and to our readers:
Respect each other. Pay attention to your spouse and try to understand his or her perspective. Most misunderstandings are due to problems with communication. I readily admit I am at fault 75% of the time.
Share some common goals and dreams. Dianne and I have this dream of retiring early, camping, traveling, building friendships, and volunteering. We each have independent goals, as well.
Commit to the long term. We are both in this for the long haul. I truly believe that with Dianne. When we have that perspective in mind, we will find a way to work out any problems.
Seek counseling if needed. We both would seek marriage counseling if we felt it was necessary. We are committed to a successful marriage, and will work through problems ourselves or with professional assistance.
Those who pray together stay together. I try not to bring religion or politics into our comments or articles. There is something special for those couples who pray together and are involved with their church.
The future of your marriage can be bright
I hope that this article did not come off as being too negative. The intent was to point out to those who are married that a successful marriage is a crucial element of personal finance and early retirement dreams. The book The Millionaire Next Door refers to a long and stable marriage as one of the key attributes of millionaires.
I wish everyone reading this a wonderful and successful marriage!
Have you gone through a divorce? If so, did it have a similar impact on your finances?
Photo Copyright : LIU MING