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
No Nonsense Landlord says
I had a uncle that use to tell me “My ex-wife made me a millionaire…, I used to have two million, now I only have one”.
Half of all marriages end in divorce, the other in death. Be thankful you are still alive.
Next time, find a woman you hate, and buy her a house. It will be easier and cheaper.
Bryan says
Thanks for stopping by and commenting!
Interesting statistic indeed: “Half of all marriages end in divorce, the other in death” In the end we are all dead and no one gets out alive. When you look at that way, I am thankful to be alive! 🙂
Fortunately I have found a wife that will be there to the end with me…. hopefully when I am 100 years old.
Take care,
Bryan
ARB says
Sorry to hear about all that. Sometimes you think you know someone that’s that close to you, but you don’t.
Frankly, I’m not a big proponent of the institution of marriage. That doesn’t mean I don’t believe in love or settling down or anything like that, but I think marriage is complete and utter BS. I’ll probably take some flak for that one too.
Not to attack married couples or anything (why the hell would I even do that?), but when you get right down to it, marriage (not love) is a legal contract. It’s a business deal. And nothing else. Two people can fall in love, live with each other, start a family together (if they can stand screaming midgets running around their house. I would not be one of those people), and grow old together without signing a binding contract stating so. I honestly don’t get why we have marriage in society.
Marriage just complicates it all, and by “complicates”, I mean “turns into a giant clusterf**k”. Because then you get a situation where one person just doesn’t want to be with the other anymore (which isn’t THAT crazy. Sometimes you just want something new in life after 20, 30, or more years) turns into a $1,000,000+ ordeal involving divorce lawyers and the US legal system. The hell? Just because one person doesn’t love the other person anymore?
Could you imagine having an annoying friend that you don’t want to hang out with anymore, and instead of just not calling this person, you had to hire a lawyer? Hey, I just defined marriage.
Love rocks. I know that to be the case because Disney movies say so (I also know that people throughout ancient history used to break out in modern day song and dance routines with wacky talking animals due to Disney movies). But marriage has little to do with love. It’s nothing but a binding contract that forces two people together. If two people REALLY love each other, they shouldn’t NEED a legal contract staying that they will stay together.
Love will become loveless. We can talk about our moral values until we’re blue in the face (working in some anti-gay message, naturally) and that will never change. Two people who were infatuated with each other when they were young and stupid and wearing the rose-tinted glasses will grow to tolerate each other at best and hate each other at worst. Perhaps they will find that they have less in common than they thought, perhaps they will find that they want something different out of life than their partner wants, perhaps they just find someone else that they have a stronger connection with. Oftentimes (say, 50%), one person will just decide that he/she doesn’t want to be with the other anymore. And, in my opinion, that’s okay. It sucks and is painful, but is also natural and perfectly okay.
But that shouldn’t cost $1,000,000 and a business.
And that’s why I say that while love rocks, marriage is bullshit.
Sincerely,
ARB–Angry Retail Banker
Bryan says
Thanks ARB for weighing in on the discussion. I know that you are frank and are not afraid to say what is on your mind! 🙂
A couple of your comments I agree with:
• When you get right down to it, marriage (not love) is a legal contract. It’s a business deal.
• …a situation where one person just doesn’t want to be with the other anymore turns into a $1,000,000+ ordeal involving divorce lawyers and the US legal system. Just because one person doesn’t love the other person anymore
• If two people REALLY love each other, they shouldn’t NEED a legal contract staying that they will stay together
• love rocks
Needless to say, the fact that I got married again 7 years ago tells the world I believe in marriage. Your points are valid and are a persuasive argument for not marrying. Here are some of my thoughts as to why living together might not work for those that wish to have a committed relationship:
– Unable to provide health benefits for your significant other due to policy requirements?
– In some states, after “X” years it would be considered common law marriage and a split might be treated similar to a divorce?
– Potential issues if the relationship has kids with custody and child support if there is a split?
It is a difficult decision to ponder for many when considering marriage. You don’t have any guarantees that your partner won’t change their mind later. What drove the desire to post this article was the seemingly lack of discussion about this topic in the PF blogging world. I might think twice about writing another article on divorce.
Take care ARB and thanks for the feedback!
ARB says
There’s no reason to avoid the topic if it’s an important one to you. But many people might not comment on it if it’s not an important topic to them. We personal finance bloggers rush to anything with the words “passive income” in it because it’s a topic that unites us and brings us all together. The topics of marriage and divorce don’t really unite bloggers in the personal finance sphere (because we’re personal finance bloggers), so that’s likely why it didn’t really get much comments. It’s not that it’s not important and likely not that it’s somehow taboo or something. But a person who is happily single may not comment (or even read the article) simply because he/she may not have anything to say on the subject. It doesn’t affect them. Makes me wonder how the hell I have enough of an opinion to go on a rant.
You can write an article about Halo 5 right now and I will give you an encyclopedia in the comments section because I am a Halo fanatic. But you likely won’t see anything from anyone else because Halo isn’t a topic that brings us all together, whereas personal finance/passive income is. If you put this article on a site about relationships, it would have likely gotten dozens of comments. But put your 7 part series about early retirement on that same site and you would have gotten crickets and tumbleweed. If it’s not a topic that doesn’t unify people, it simply won’t get comments. That’s just it. It wasn’t a bad topic or anything.
As for the whole marriage thing, I can see where having kids might complicate things. But then again, I don’t think it’s particularly simple during an actual marriage divorce either. I’m rusty on my divorce law (“rusty” meaning I’ve seen a couple episodes of Divorce Court back when I worked in a bank with a TV in the breakroom), but isn’t it mainly decided that unless the mother is completely unfit to care for a child, then the mother gets custody of the child? Or something like that? I can’t imagine it would be much different if there was no marriage.
Best to you and Dianne!
Sincerely,
ARB–Angry Retail Banker
Bryan says
Thanks ARB for sharing your insight on the divorce topic, highlighting why this topic is not getting much feedback. Your point about uniting our PF readers on passive income topics is spot on – in fact, our “Step 2 of 7” discussing that subject is one of our most visited articles! 🙂
I think we may wait some time before bringing this subject back up……
Take care!
Luke Fitzgerald @ FinanciallyFitz says
Great Post, Bryan! Also ironic because I will have a post tomorrow about divorce! 🙂
Thanks for sharing that journey. Im sorry you had to go through that but appreciate you passing down the lessons.
You’re right, this is a topic that is rarely mentioned. I think we would all be better suited if we gave it more attention. The advice you gave to your daughter is awesome!
Bryan says
Luke,
I look forward to your post tomorrow and you will get my input! 🙂
It actually helps writing about some of these experiences, even the unpleasant ones. It is so weird that it is not discussed more on websites like this one. I guess another subject you don’t see is planning for your death with funeral arrangements and other items. I bet Holly and Greg at Club Thrifty would have a few things to say about that! 🙂
Take care,
Bryan