The Biggest Marriage and Money Mistakes to Avoid

Mindy:
Welcome to the Greater Pockets Cash podcast the place I interview Rachel Richards about divorce, splitting vital belongings with out the good thing about a prenup and what occurs afterwards.

Rachel:
However right here is the place I made errors. Once more, every occasion will get to maintain their very own premarital belongings, so any financial savings I had earlier than the wedding, I get to maintain. Any retirement accounts, quantities that I had earlier than the wedding I get to maintain, however the development in these retirement accounts in the course of the marriage, that’s a marital asset. So to begin with, mistake primary is that, and I can’t even imagine I’m like saying this out loud as a result of now it appears so apparent, I mixed our accounts previous to marriage.

Mindy:
Hey, hiya, hiya. My identify is Mindy Jensen and I’m internet hosting the present solo in the present day. I’m right here to make monetary independence much less scary, much less only for anyone else, to introduce you to each cash story as a result of I actually imagine monetary freedom is attainable for everybody, irrespective of when or the place you’re beginning. Whether or not you need to retire early and journey the world, go on to make massive time investments in belongings like actual property or begin your personal enterprise, I’ll enable you attain your monetary targets and get cash out of the way in which, so you may launch your self in direction of your desires.
In the present day, I’m speaking with Rachel Richards. Chances are you’ll know her from Greater Pocket’s Cash Episode 317 and from her books, Passive Revenue, Aggressive Retirement and Cash Honey. Earlier than we usher in Rachel, let’s take a fast break.
And we’re again. Previously, we’ve talked to Rachel about her cash story, however in the present day, we’re going to go slightly bit extra private. Actually, we’re getting actually private with Rachel in the present day. We’re speaking about divorce and the most important monetary classes she realized whereas going by one just lately. Rachel, welcome to the Greater Pockets Cash podcast.

Rachel:
Thanks, Mindy. I’m excited and nervous to be right here in the present day.

Mindy:
Nicely, I don’t actually chunk, so we’re going to simply have a dialog as a result of sadly, you aren’t alone on this journey. And I feel that there’s lots of people on the market who might really feel that, “Oh, I’ll simply keep as a result of I don’t know what to do,” or “Love conquers all. I’ll simply give it one other go.” And as you simply stated, love doesn’t at all times conquer all and typically the divorce is the only option for all concerned, so let’s speak about what occurred.
You and your ex had been collectively for what, seven years and also you talked about him in your BP podcast, you constructed your rental empire collectively. Why did you break up?

Rachel:
Sure, so this wasn’t sudden or sudden. I feel the easiest way I can clarify it’s that we needed various things out of life and it didn’t begin that means. After we first met, I had this very sturdy imaginative and prescient of constructing an actual property portfolio and changing into financially unbiased and quitting our jobs and touring the world. And my ex appeared to love that. He jumped on board. And we began out as a crew working in direction of that and I talked lots about that on my BiggerPockets actual property episode.
However in some unspecified time in the future I feel he realized that that’s not what he needed. I feel he needed to pursue his profession, which is ok. I do want he had figured that out sooner, however that’s not what occurred, so he type of stepped again. And I used to be doing most of it by myself. I used to be managing the leases. I used to be planning for our future. I used to be dealing with our funds and taxes and investments. I used to be constructing these passive revenue streams and this turned exhausting for me. And I felt that he was indignant with me that I needed to proceed to drive ahead and that I had these targets. And there are various different massive vital the explanation why we didn’t work out. There have been household points, there have been issues we tried to work by in remedy, however for me, I actually assume that the misaligned imaginative and prescient is what it boils right down to.

Mindy:
Being on the identical web page may be actually, actually useful. And whenever you’re not on the identical web page, that doesn’t essentially imply that both of you is incorrect. You’re simply completely different. And there’s lots of people who aren’t going to be on the identical web page as you, however it looks like when certainly one of you desires to journey the world and certainly one of you undoubtedly doesn’t need to journey the world, these are big variations.
It’s not like certainly one of you desires to journey the world on a regular basis and certainly one of you solely desires to journey 10 months out of the 12 months. These are extra appropriate targets or extra doable, extra, what’s the phrase, compromisable, however completely sure and completely no are going to be tough to compromise on. Certainly one of you goes to have to surrender what you needed and that’s laborious. How outdated are you now?

Rachel:
I simply turned 30 this 12 months.

Mindy:
Okay. That’s a very long time to compromise and quit all the pieces you need and be primarily sad for the remainder of your life as a result of another person’s imaginative and prescient modified so dramatically.

Rachel:
Yeah, I feel that’s true and I actually beat myself up for a very long time pondering you’re married and also you’re speculated to determine it out. That’s what married {couples} do. You’re simply speculated to discover a means. And I saved pondering, I simply have to attempt more durable. And I did for an extended, very long time, however the factor is there’s just a few issues that may’t be overcome. When two people need two various things out of life, that’s not one thing that may essentially be mounted. And it took me a very long time to just accept that truth and to appreciate that there was another choice and that possibility was getting a divorce.

Mindy:
I do know that the divorce didn’t go the way in which that you simply needed it to go. What does actually? Who comes from their divorce that’s like, “Sure, I obtained all the pieces I needed.” That by no means actually occurs. However are you able to shed some mild on what you didn’t assume went your means?

Rachel:
For positive. God, I’m going to get emotional already.

Mindy:
That is an emotional matter. I’m sorry. This isn’t like, “Yay.”

Rachel:
Yeah.

Mindy:
This isn’t a cheerful, enjoyable matter. And that’s okay, as a result of typically you must talk about not completely happy, enjoyable issues.

Rachel:
I hoped for an amicable divorce, for positive and my divorce felt the furthest from amicable that I might think about. And that’s as a result of harm folks need to harm folks. And I felt we had these massive looming issues that had been current for years, not simply the issues I touched on, however much more than that. And issues actually escalated the final six months of our marriage. Throughout that point in direction of the top, I really feel like we each tousled massive time. We each unintentionally harm one another in some ways and I come clean with my half in that. However I feel the distinction is that regardless of something he had carried out as much as that time that harm me, I simply needed out of the wedding. Whereas he checked out my actions and from the second I requested for the divorce, it simply appeared to me like he needed to maintain inflicting ache or get again at me or blame me or one thing.
My good friend’s dad instructed me, and one thing I laughed about virtually the entire time is I used to be 29, 30 at the moment and I used to be like, I can relate to my good friend’s dad and mom greater than my associates now as a result of my good friend’s dad and mom have been divorced. And I’m like, I’m so younger, so I’m speaking to my good friend’s dad and mom. However my good friend’s dad instructed me, folks will at all times say you don’t know somebody till you marry them. However that’s not true. You don’t know somebody till you divorce them. And I’ve discovered that that could be very sadly correct.
So, I’ve needed to discover loads of empathy. I’m not bitter, I’m not resentful, I’m not indignant, or if I do have moments of anger, it’s often because I’m harm nonetheless. However I’ve needed to discover empathy that that was his coping mechanism. It was simpler to harm me and blame me than to just accept that we weren’t proper for one another or to just accept that perhaps it wasn’t anybody’s fault or that we by no means ought to have gotten married as a result of that could be a laborious tablet to swallow.

Mindy:
With the good thing about hindsight, do you see clues that perhaps it wasn’t going to work out now that you would be able to look backwards?

Rachel:
Sure. I’ve been in remedy since February, months earlier than I even requested for the divorce. And I struggled a lot as a result of I believed, “Nicely, how might I’ve seen this coming?” And he or she instructed me, I wager for those who assume actually laborious, there have been indicators that had been there very early on, that one thing was incorrect, that he would ended up treating you this fashion. And I did. As soon as I actually began pondering again about it, there have been clues early on that I neglected and that I ignored.
And so, one factor I’ve been engaged on now with my therapist is, “Hey, right here’s acknowledge these crimson flags early on in different relationships,” or if I do resolve to begin relationship once more or get into one other relationship. We’ve been engaged on that and that’s one thing that’s essential for me now as a result of that was a giant mistake that I made.

Mindy:
What’s one thing that you could possibly have carried out otherwise or what’s one thing that somebody who’s listening to this present now can do to audit their very own relationship to actually guarantee that they need to be within the relationship that they’re in?

Rachel:
I learn this quote or one thing on Instagram and I do know it’s such as you don’t take recommendation from quotes on Instagram and TikTok movies, however a few of these issues are actually useful, okay? What it was it stated the primary crimson flag that comes up or the primary problematic habits that comes up in a relationship would be the cause you find yourself breaking apart later. And I feel that’s a really highly effective assertion. It’s not at all times true, however I feel it’s one thing price contemplating. Should you get into an argument or no matter, no matter it’s, the very first thing that comes up in your new relationship, the recommendation I might give to you and that my therapist has given to me is to pause, okay? Don’t simply resolve the issue and transfer on, however pause and actually perceive, “Why did that make me uncomfortable? Has that habits been adequately addressed? Is it a brief resolution?”
After which take note of whether or not that habits comes again up. As a result of both that’s one thing that your accomplice has addressed and that’s it, or if it comes up once more, it’s now a sample. And one thing my therapist instructed me is that if it’s a sample, it is going to hold persevering with. It’s both been resolved as soon as and for all or it’s a sample and it’ll hold persevering with. And at that time you must ask your self, “Do you settle for this sample? Are you able to settle for that and cope with it?” Or the one different choice is to interrupt it off and transfer on along with your life.

Mindy:
That’s laborious to do. I’m going to let you recognize proper now that that’s extremely laborious to do, particularly when, “It’s only one factor.” It’s “Oh, it solely occurred as soon as,” or “It solely occurred twice.” It’s really easy to miss it, particularly whenever you’re within the love bubble and all the pieces else is ok or there’s a pair different issues, however “He’s principally nice,” or “She’s principally nice.” I need to make this clear. This isn’t a man-bashing episode. It is a you had been in a relationship with a person, so it’s popping out as that is what his drawback was, however this isn’t a “I disagree with all males. I hate all males” episode. That is undoubtedly one thing to consider.
Should you’re listening to this episode and also you’re enthusiastic about your personal relationship and pondering, “Ooh, I’m feeling seen,” you need to discover that slightly bit extra. And I’m not saying that you have to break up. I’m saying you have to discover your relationship. Relationships may be healed. They are often repaired typically, however typically they’ll’t and that’s the place we’re at now. And I’m sorry that that occurred.

Rachel:
Thanks. And sure, I agree. That is simply relationship recommendation. It’s not about hating males. I like males and I feel there are good males on the market. The sample factor may be so laborious as a result of I discussed there have been household points and the primary time this subject occurred was proper after we obtained engaged and we went by remedy to resolve that subject. And I used to be like, “Nice, that’s been resolved.” After which the following time this subject got here up in a giant means was years later, so I didn’t acknowledge it was a sample at the moment. I recognized it as a brand new subject.
And so when my therapist helped me acknowledge that it was a sample and he or she instructed me, “Listed here are your solely two choices,” I used to be like, “That’s it or is there not one other? The place’s the third possibility? As a result of these choices suck, girl.” However yeah, you actually should pause. Don’t overlook issues. Don’t rush previous issues. Pause and really feel and perceive whether or not one thing is an actual drawback or not.

Mindy:
Nicely, let’s speak about actual property. You’re recognized to your actual property and also you had at one level 38 doorways. How was your actual property impacted by the divorce?

Rachel:
Nice query. In our divorce, we really solely began with 5 models that we needed to divide and that’s as a result of we bought most of our models final 12 months in 2021, and that was not divorce-related. I’ve defined why we did that on my Instagram, so anybody can go there. However we began with 5 models this 12 months. We had two single household homes in Kentucky, a duplex in Kentucky, after which a giant single household boarding home in Denver, in order that’s what we had.
Now, there have been three ways in which my actual property was impacted by the divorce. Primary, we had been each below a court docket injunction to do many issues. To not spend greater than we might usually spend. We additionally can’t transfer, switch, promote, make investments any of our belongings or cash, so for seven months throughout my divorce… sure. For seven months, I used to be not legally allowed to put money into rental properties or syndications.

Mindy:
However that’s one thing you’d usually do.

Rachel:
I do know. However the entire level is we are able to’t be making strikes on our belongings that’s going to affect how we break up our belongings, so I can’t tie up our funds and do one thing with out his being on board. Which was so annoying as a result of I’m this massive actual property investor and coach and I’ve applications after which I’m educating folks and within the meantime, I can’t even do it myself, so it was effective. It was simply extra of a nuisance.
After which quantity two, we had a tenant transfer out in April and one other one later in the summertime and each of those had been our single household leases. My ex refused to comply with put new tenants in these properties. He compelled us to maintain them vacant for months and we misplaced hundreds and hundreds of {dollars} this 12 months in our actual property portfolio due to that. After which quantity three, we ended up deciding to promote within the mediation. And on the finish of the divorce, right here’s the way it all performed out. We ended up deciding to promote the 2 single household homes that had been vacant. I saved the duplex in Kentucky and he saved the only household home in Denver.

Mindy:
After which whenever you bought the 2 single households, did you simply break up these evenly?

Rachel:
Yeah, and that’s nonetheless occurring. And so, I went from 38 doorways to 2 in a span of a 12 months. I’ve joked about it with my associates as a result of as you recognize I gave that speech at BiggerPockets Convention scale from zero to 38 doorways in below three years. And so as soon as this all performed out and I spotted how the belongings had been going to be divided, I texted my good friend group and I used to be like, “The best way to downsize from 38 doorways to 2 in a single 12 months, break up. Observe me for extra actual property investing recommendation.” Probably not. I imply, we bought most of them, however I do really feel slightly self-conscious as a result of I simply hope that my followers and college students don’t assume it takes away from my credibility. I imply, I don’t assume it does.
I nonetheless have achieved what I’ve achieved. I nonetheless have the information and experience and sources and community. And I do need to construct my portfolio again up slightly bit extra subsequent 12 months, to not show something, however as a result of I like actual property and the monetary advantages and I need to have extra properties. However some folks will have a look at my trajectory and assume, “Who’re you to show these things whenever you now solely personal a duplex?” However that’s okay, they’re not my folks, so I feel I simply mentally have to let that go.

Mindy:
That’s a extremely good level. They aren’t your folks. If they’ll have a look at your “present portfolio” and see that you simply solely have two doorways and subsequently, don’t know what you’re speaking about, they’re not going to hearken to you anyway, so that they’re going to search for causes to not hearken to you. There are many folks on the market who will see that you simply did at one level have 38 doorways. That’s loads of doorways.

Rachel:
Yeah, and I like all of the syndications now, in any case. I’m in 9 syndications. I’m going to maintain investing in syndications. I might do what different folks do and say, “Oh, I personal 1,065 doorways as a result of I’m in 9 syndications.” I assume I might try this, but-

Mindy:
You can try this. I feel that’s disingenuous to say that. I feel that-

Rachel:
I agree and that’s why I don’t. That’s so deceptive.

Mindy:
I feel that saying, “I’m a part of 9 syndications” is way extra trustworthy with the precise counting. We’ve had a dialog about that anyway. What about what you are promoting? You had Cash Honey Rachel is… I imply I don’t have a look at Cash Honey Rachel and assume, “Oh, that’s Rachel and her husband.” I feel that’s Rachel solely, so was that impacted by the divorce?

Rachel:
My enterprise was undoubtedly impacted in a number of methods. It was impacted when it comes to revenue. I’m down about 60% in revenue 12 months over 12 months and this was one of the traumatic components of my divorce. It was June once I obtained an electronic mail from my legal professional and he notified me that my ex needed to have my enterprise valued. Now, there have been solely a few moments in my divorce that I simply felt just like the world was going to finish. I felt the world was collapsing round me and that was certainly one of them. I imply, I almost simply screamed. I simply felt this complete time I simply needed to do what was truthful and cheap.
My ex-husband was making a big wage, over 200 grand at the moment in cybersecurity. He had full well being advantages, 401K, inventory choices, all these items, in order that was his factor. This was my enterprise, so I figured, “Let’s break up the leases, let’s break up all of our investments in cash 50/50, and that’s that.” When he selected to return after my enterprise, I used to be shocked. He didn’t have something to do with it. He didn’t make any monetary contribution and I made positive of that. I made positive to not ever be financially depending on him once I give up my job in 2019.
I had already changed my very own revenue from our leases, from my half of the rental revenue and from my e book royalties, so I used to be not depending on his wage at any level and he made no mental contribution to my enterprise in any respect. However that’s what he did and he might legally. He determined to get a enterprise valuation.

Mindy:
You stated legally. That seems like we’re about to speak a couple of prenup or lack thereof.

Rachel:
Sure. And earlier than we get into that, I need to simply say slightly bit extra about what the enterprise valuation means and the way that impacts the divorce.

Mindy:
Yeah, yeah. Let’s speak about that.

Rachel:
Okay, so when we’ve to divide our belongings, simply so everyone seems to be conscious of what that actually means. If anybody is listening and also you personal a enterprise, whether or not it’s a rental property enterprise, a facet hustle, you’re an writer, any sort of enterprise, when we’ve to divide our belongings, we’ve to agree on a price for all the pieces. Except one thing belonged to us previous to marriage, making it a premarital asset, then all the pieces else will get break up 50/50. Solely the premarital belongings are protected.
Him placing a price on my enterprise meant it will get break up 50/50. It meant one other line merchandise on my facet of the steadiness sheet, which meant I must purchase him out of it at 50% and so, he would get to offset it with extra. He would get to perhaps stroll away with one other rental property due to that or one other syndication or far more money, in order that’s the way it works. I used to be so scared about my enterprise valuation. I lived in concern for months and months what it will come again as.
Let me simply say this yet one more time. Legally, my ex was entitled to 50% of my enterprise as a result of we had been married, interval. There may be nothing I might do about it. And I keep in mind telling a few of my shut associates about this and I keep in mind telling you about this, Mindy, at one level, and also you had been so indignant for me and also you had been like, “How is that attainable? Can’t one thing be carried out?” And I used to be like, “No, nothing may be carried out.” That’s once I stated the one factor that might have been carried out is that if I had a prenup and in order that’s the place we are able to speak about prenups.

Mindy:
Earlier than we speak concerning the prenup, let’s speak concerning the enterprise valuation. Now, this seems like a authorized course of or there’s a proper process for getting this carried out. You give your financials and what you are promoting data to a 3rd occasion they usually’ve evaluated. You may’t simply say, “Hey, it’s price a greenback.”

Rachel:
Proper. Yeah. We needed to rent a joint professional, anyone that we each agreed on and that is usually a CPA. Anyone that has carried out enterprise valuations earlier than, so that’s who we employed to do it. It was a really irritating and lengthy and tedious and costly course of that price us someplace between $5000 and $10,000. And sure, it was costly. And I’m clearly hoping that the enterprise valuations going to be low as a result of once more, I’m going to have to purchase him out at 50%.
I obtained the valuation again on October seventh, 10 days earlier than our mediation and the valuation was really decrease than I believed it will be. It was so low that I cried completely happy tears. And I keep in mind pondering, I’ve cried daily for six months and I’m really crying completely happy tears proper now. And I feel I used to be crying and laughing like a loopy particular person as a result of it was simply so ridiculous and absurd that we’d spent all this cash on this enterprise valuation, for what. It simply felt so pointless.

Mindy:
With the enterprise valuation, that’s an official factor, so when it is available in low, clearly, you’re completely happy. Can he protest it or is that simply, “Oh, I assume it’s price a greenback now?”

Rachel:
He might. He might protest it. He might have had a person professional. His personal professional CPA have a rebuttal report, however we didn’t have sufficient time to do this earlier than the mediation. And I might have carried out the identical factor. I really did have a rebuttal professional employed that he didn’t know. However I had somebody ready and employed and able to take that report and simply rip it to shreds in case it got here in actually excessive, so I used to be ready to have anyone are available and say, “Really, no. It’s price means decrease.” However I didn’t want that particular person to do this.

Mindy:
Was it at all times a given that you’d be capable of retain possession of this enterprise?

Rachel:
Just about. Sure, as a result of there’s actually no world by which a decide would have checked out all the pieces I had contributed and brought my enterprise away from me. It was fairly clear lower that I used to be going to be the proprietor of the enterprise. It’s simply that I had to purchase out my ex-husband. Does that make sense?

Mindy:
Yeah, no, that is sensible. I simply need to guarantee that it was by no means on the desk that he might proceed that will help you run it by not doing something in any respect and proceed to get 50%. He didn’t have the choice to say, “No, I don’t need you to purchase me out. I need to proceed to be 50% proprietor.”

Rachel:
No, no, that may not have occurred in my case. It might occur in a husband and spouse or husband and husband or spouse and spouse case the place they each did contribute to the enterprise, when it comes to mental contribution or monetary contribution. However as a result of that wasn’t the case for us, I used to be the rightful proprietor. I simply had to purchase him out of it.

Mindy:
He obtained 50% of what you are promoting. Was all the pieces break up 50/50?

Rachel:
Solely marital belongings are break up 50/50. And once more, marital belongings are something which can be acquired throughout or gifted to the wedding. Something that both of us had earlier than the wedding that we introduced into the wedding that was protected. However right here is the place I made errors. I made loads of errors and we’re going to speak about many of those errors. Once more, every occasion will get to maintain their very own premarital belongings, so any financial savings I had earlier than the wedding, I get to maintain. Any retirement accounts, quantities that I had earlier than the wedding, I get to maintain. However the development in these retirement accounts in the course of the marriage, that’s a marital asset.
Initially, mistake primary is that, and I can’t even imagine I’m saying this out loud as a result of now it appears so apparent. I mixed our accounts previous to marriage and I really feel so silly ever doing that as a result of I didn’t perceive the repercussions on the time of doing that. And I didn’t have any doubt in my thoughts at the moment that we weren’t going to work out, as a result of who has a doubt of their thoughts whenever you marry anyone that you simply’re going to be the 50%? However so, that’s what I did. I added him to my accounts previous to marriage.
And since I did that, all of my banks and accounts had been now not separate premarital belongings as a result of he was now a joint account proprietor on them. So, I took away my very own premarital belongings. And it wasn’t a lot, it wasn’t a lot. Thank goodness for that. However nonetheless, I took away my very own premarital belongings. After which he didn’t add me to his one funding account, so he had his protected premarital funding account. However I took that away for myself, in order that’s terrible. That’s mistake primary.
One other mistake is that this, as a result of we had been a crew and I noticed us as a crew, whenever you’re married, that’s the wholesome mindset to have. There’s nothing incorrect with that, however what I did is that I didn’t assume it mattered whose retirement accounts we contributed to. I figured it’s all going to finish up on the similar pot on the finish of the day. We’re all going to withdraw from it. It doesn’t matter whose, so why did it matter. And once more, I can’t imagine how naive I used to be. And this was each earlier than and in the course of the marriage, for years, we had been maxing out his retirement accounts, his HSA accounts, and never mine.
And that’s one thing I did. It’s not like he was doing that or controlling that. That’s one thing I did. And now, his retirements had been already slightly bit bigger than mine after we met due to our age hole, however not considerably. However on the time of our divorce, he walked away with 250 grand in tax benefit retirement accounts and I had solely $53,000 in mine. So, that was an infinite disparity and drawback that I did, that I created that mistake.

Mindy:
And that was as a result of they had been his accounts previous to marriage?

Rachel:
It’s as a result of I used to be contributing all of our mixed funds and ensuring we had been maxing out his retirement accounts and his HSA accounts for many of the years we had been married, as an alternative of mine. So, his accounts grew a lot greater than mine did.
And now, in our divorce I might have stated, “Nicely, the retirement must be divided up evenly.” I might have stated that, however as an alternative I selected to that I needed to stroll away with the syndications as an alternative of retirement belongings, so that’s the means it was negotiated. However once more, I might have began issues out and if I had simply had a unique outlook and been extra good from the start, I might have had a far more even retirement scenario proper now. Does that make sense?

Mindy:
Mm-hmm.

Rachel:
I don’t know if I’m explaining that effectively. Okay, so then one other mistake, and this one is just not as massive of a deal, however it’s simply one thing you don’t take into consideration. So, one other mistake, mistake quantity three is that certainly one of my ex’s premarital belongings was his truck. And after we obtained married, and this was a pleasant Dodge Ram, like a $50,000 automotive. After we obtained married, I didn’t assume to place the title into each of our names. It was at all times in his identify. However I bought my automotive two years in the past and we turned a one-car family, in order that truck was each of ours that we shared.
And after we first separated and he moved out, he took the truck and he left me stranded in Denver. And so, I had no automotive and no means to get round and there was nothing I might do as a result of the title was in his identify. Once more, simply you must take into consideration these items. It’s a must to shield your self. That’s among the errors with the way in which the marital belongings had been break up and the way in which that issues performed out.

Mindy:
Wow. Yeah. That’s not one thing that you’d take into consideration as a result of it’s a truck, what do you concentrate on?

Rachel:
Yeah.

Mindy:
You don’t give it some thought till it’s too late.

Rachel:
Precisely.

Mindy:
If all the pieces had been saved separate, even in the course of the marriage, would your whole cash and earnings have been protected?

Rachel:
No, undoubtedly not. And I’m glad you requested as a result of that’s not the way it works. Something earned in the course of the marriage is a marital asset. It doesn’t matter if it’s put right into a separate account or not. And that’s really a reasonably large misunderstanding for most individuals. Once more, the cash you earn throughout your marriage is just not protected simply because it’s put right into a separate account. When you get married legally, something earned from that time ahead is a marital asset, irrespective of which account it will get put into. The one factor that may shield you is a prenup.

Mindy:
Which I’m assuming you didn’t have?

Rachel:
No. My greatest remorse.

Mindy:
I don’t have one both.

Rachel:
Nicely, I feel you’re doing effectively. And I’ve seen you and Carl and also you each are simply the loveliest couple.

Mindy:
I used to be so offended when he introduced up the subject. I used to be like, “Should you convey this up once more, we’re not getting married.” And since I believed that it was a plan for a divorce and it wasn’t till Episode 301 of this podcast the place we interviewed Erin Thomas that my ideas on prenups modified. It’s such an amazing episode. If you’re enthusiastic about getting married, for those who’re listening to this and enthusiastic about getting married, hearken to that episode. It isn’t a plan for divorce. It’s a plan for a way your marriage goes to work. And he offers some actually nice ideas. He’s obtained a e book popping out about all of these ideas, however he’s not on this present in the present day. I simply need to make certain all people listens to that episode.
What was your stance on prenups earlier than you bought married?

Rachel:
Nicely, clearly, I didn’t assume it was mandatory.

Mindy:
Who wants one? We’re in love.

Rachel:
We’re in love. We’re going to be those that work out. We’re particular. And at the moment we had been engaged, neither of us had substantial belongings and our web price was not considerably completely different. So I actually, I didn’t assume it mattered. I didn’t assume it was related. I did give it some thought. I simply didn’t assume it was related. However to begin with, that was simply the case after we obtained engaged.
By the point we obtained married, we had invested in leases collectively. Our wealth had considerably modified and I didn’t ever rethink the prenup scenario, in order that’s on me, that’s my dangerous. We had mixed our accounts, so I don’t know why it didn’t cross my thoughts once more to rethink a prenup at that time.
Secondly, that is actually the extra vital factor, you don’t know what companies you’re going to begin, what e book you’re going to jot down. And besides I had already written my first e book by then, however once more, it didn’t cross my thoughts. You don’t know for those who’re going to begin an actual property empire throughout your marriage and that’s what a prenup can shield. If I had a prenup that stated any books I write or any enterprise I begin associated to that’s mine and mine alone, we might not have been on this mess. And there may be actually a lot ache and stress and nervousness that we might have averted had we had a prenup. And that’s the greatest mistake, absolutely the greatest mistake I made. And now I firmly imagine that everybody ought to have one.

Mindy:
Why do you say that everybody ought to have a prenup?

Rachel:
As a result of we’ve to have a look at this unemotionally for a second. Pure logic and arithmetic right here, okay? Which I do know isn’t good. However 50% of marriages finish. And I’m not saying that from a bitter perspective, I’m saying that as a result of these are the statistics, so let’s simply be lifelike. And I by no means thought I might be in that fifty%. None of us do, by no means in one million years, however that is purely threat administration, okay? Consider it as threat administration. Your odds are 50%.
So, for instance, Mindy, you’ve automotive insurance coverage, proper? Okay. It’s not since you assume you’re going to trigger an accident or that you simply’re going to do one thing dumb. You’re not going to drink and drive or textual content and drive, that may be silly. It’s to handle the danger of different folks. It’s as a result of it’s good to guard your self simply in case one thing dangerous occurs to you that you would be able to’t management.
You wouldn’t enter right into a enterprise partnership with no authorized contract outlining what occurs if issues go dangerous. You wouldn’t enter into an actual property deal with no authorized settlement in place with an exit plan. And now, you’re telling me you’re going to signal a lifelong dedication with out an exit technique if issues go south, which 50% of the time it is going to. So, why are we defending ourselves legally and financially in each circumstance in life apart from marriage? We can’t management different folks.
Consider the issues which can be outdoors of our management in a wedding, and I’m not saying any of this is applicable to my scenario, however listed below are some examples. Somebody turns into emotionally or bodily abusive. Somebody turns into an alcoholic or drug addict. Somebody cheats. Somebody realizes they’ve a unique sexual orientation. Somebody desires one thing else out of life. Folks change. You may’t management it. After which what are you speculated to do?
You may keep the identical particular person and uphold your vows until the day you die, however you must handle the danger that somebody might change in your marriage and that’s outdoors your management. And yet one more factor I’ve to say on this as a result of I do know I’m very enthusiastic about this. Right here’s the factor. You have already got a prenup. It’s the one which the state offers. You have already got a authorized settlement. It’s the one which the state offers you. And I wager it’s not very favorable. I wager it’s not what you’d need, so if you wish to shield your self, you higher write up the pre prenup that you really want and that you simply comply with or else, you’re topic to the federal government’s needs and whims.
And take it from me, It’s significantly better to return to a loving settlement now than it’s to combat over funds when there are two indignant and harm folks. It’s one thing you do out of affection for the particular person you’re marrying since you are good sufficient to acknowledge that there’s a stage of threat. And so, that’s all.

Mindy:
That may be a nice quote.

Rachel:
Thanks.

Mindy:
It’s significantly better to do it whenever you’re all nonetheless associates.

Rachel:
I feel I’ll get off my soapbox now, however sure.

Mindy:
No, no, no. You’re right here to share your experiences. This was a extremely crappy factor that you simply went by and you’re right here in the present day to share with everybody who’s listening who is likely to be enthusiastic about it or in a relationship the place they’re beginning to query what’s occurring or just simply inquisitive about what occurs in a relationship when it ends. You’re right here to share your story so folks can be taught from you and I admire that.

Rachel:
Thanks.

Mindy:
Now, let’s get into some nitty gritty. How a lot did this divorce price you?

Rachel:
I simply appeared on the whole the opposite day, however the factor is expenses are nonetheless coming by. I simply obtained one other $1,800 invoice, however the different day, yesterday, my estimate that I got here up with was $49,800 and that was totally on attorneys. Mine to this point has been $17,000. I imagine my ex’s had been costlier. There are issues that we needed to pay for value determinations, enterprise valuations and once more, there’s nonetheless prices coming in. It’s been a month, however we’re nonetheless paying for issues. However sure, $49,800.

Mindy:
That’s loads of {dollars}.

Rachel:
Nicely, I really feel that we might have simply mediated as an alternative of hiring attorneys and we might have achieved the identical final result and that’s what I hoped for at first. And we might have saved some huge cash. We most likely might have saved 35 to 40K, and I do assume that’s one other mistake. It’s not my mistake. I feel that’s my ex’s mistake, however that’s an possibility. You may mediate with out having to rent attorneys in any respect.

Mindy:
The attorneys are those that win in a contested divorce. Okay, let’s recap. What do you assume your greatest errors had been?

Rachel:
Nicely, I undoubtedly simply tousled general. And from a monetary perspective, I failed to guard myself. I didn’t advocate for myself, and it’s laborious to say that with my background. It’s simply laborious to confess that. I’ve a level in finance. I’m a former monetary advisor. I’m a bestselling writer. I educate folks advocate for his or her self. And if somebody as good and competent as I’m screwed up this badly, what does that imply for everybody else? It scares me to consider. And that’s why I’m on right here sharing this.
The one silver lining they obtained me by was understanding perhaps there’s a cause for my struggling. Perhaps my errors will assist another person keep away from this ache sometime. Perhaps I’ve this voice and platform for this causes, however nobody ever has to endure in a relationship or marriage or divorce after which really feel helpless the way in which I did financially and legally. So, please, hearken to my errors and be taught from them.
Certainly one of my errors combining accounts earlier than marriage. One other one, contributing to his retirement accounts and HSAs and neglecting my very own. One other one is just not placing belongings, titles into each of our names like his truck. After which the most important mistake is just not getting a prenup, which might have protected my books and my enterprise.

Mindy:
Okay. I’m going to cease you proper there and say that no one is ideal and also you’re not allowed to beat your self up as a result of that is my podcast and I don’t let you try this, so cease.

Rachel:
Thanks.

Mindy:
I might additionally say, “Hey, I don’t know what you’re doing incorrect. All the pieces I do is ideal. Have you ever seen my funds?” And all people, who has seen my funds is laughing hysterically as a result of I mess it up on a regular basis. I feel it makes it actually human. I feel it makes you actually human. And that anyone who’s in the same place, who isn’t a finance professional, who is meant to know all the pieces, and by the way in which you may’t know all the pieces, will hearken to this story and say, “Hey, perhaps I’m not such a large number up as a result of Rachel is meant to know all the pieces and he or she made errors, too.” So,, perhaps I ought to cease beating myself up for these similar errors that I made or for related errors.”
I imply, how many individuals have a prenup? I might like to know what share of my listeners have a prenup. I feel it will be very low. I feel that lots of people are like us. I’m not going to get a prenup. I’ve nothing to save lots of. I’m not going to get a prenup, that’s only a recipe for divorce or that’s simply planning for divorce and we’re going to remain collectively ceaselessly, so there’s no cause for me to get a prenup. And I feel that you simply’re not even near alone on this state of affairs. I might be very shocked if 10% of my listeners had prenups. I feel that they’re not that widespread, even on this explicit state of affairs.

Rachel:
They’re widespread I wager amongst divorcees.

Mindy:
You realize what? I feel they’re. I completely assume they’re. However I feel that-

Rachel:
My enterprise coach, I used to be speaking to him earlier this 12 months and I used to be like, “Yeah, I’m by no means getting married once more,” throughout certainly one of my moments. And he was like, “Oh, you’ll get married once more, simply with a prenup subsequent time.” And he’s proper.

Mindy:
Okay, so on that very same vein of not beating your self up, what did you do proper?

Rachel:
I did loads of issues proper. I used to be within the know relating to all of our funds. I used to be the one which saved observe of our accounts, our logins, our balances. I saved observe of all of our month-to-month bills and people had been in my possession, in order that was actually nice for me. We had separate and never joint bank cards, which I believed was useful to simply have my very own private bank card that he didn’t have entry to.
I selected an amazing legal professional. I selected anyone logical who was not making an attempt to select fights to select fights or spend pointless cash. He did an amazing job advocating for me. One factor I’m pleased with myself for doing is mediating and coming to an settlement at mediation, regardless that I felt it was far, removed from truthful. I felt I walked away with far lower than what I ought to have. And I used to be indignant about that at the beginning. However the different possibility, if we didn’t comply with one thing in mediation, that meant we needed to go to court docket and go to primarily a trial, which might have been subsequent 12 months, that may have been 2023 and it will’ve been months and months. Extra delays, extra prices.
I might have continued to lack management over my funds, my actual property, my companies. And now, I’m capable of transfer on lots sooner and I’m ready to make more cash. And so, giving that up was the most effective monetary choice that I made. And I didn’t see it at the moment, however I see it now as a result of I’m making extra now. I’m investing in actual property. I’m residing my life the way in which I need to reside it. Coming to an settlement in mediation, regardless that I felt it was completely unfair, I’m glad I did that.

Mindy:
Yeah, that… let’s see. Let me collect my ideas for a second as a result of that’s fairly profound to appreciate. I imply, this was simply finalized. To comprehend so quickly afterwards that sure, I might have gone to court docket, I might have doubtlessly gotten more cash out of it, however then it will’ve price me extra time, extra psychological anguish, extra all the pieces on this extended, for what? How rather more would you’ve actually gotten? Lots of of hundreds of {dollars} extra? You need to win. I’m not going to let him win. I’m going to win. I’m going to go there and I’m going to actually stick it to him.
And that, the maturity to simply settle for the mediation that’s given to you, “You realize what? I’m simply going to do it and be carried out, as a result of then I can transfer on with my life.” That’s so profound and good and I don’t know that I might have been that profound or good, so that you’re higher than me.

Rachel:
My dad helped me lots and he was simply making an attempt to construct me up going into mediation and he simply saved saying, “You’ve already gained. He can take all the pieces and also you’ve already gained.” And the factor I’m pleased with reminding myself of is that that was true. He might have taken our total marital property, however what he might by no means take away is my means to construct all of it again. He can’t take away my information, my drive, my ardour. None of that he can take away. He can’t contact me. He might have taken away much more, however on the finish of the day, I nonetheless win. I can construct all of it again and that may by no means be taken from me.

Mindy:
Precisely. Now, you had been speaking and also you stated you had separate bank cards. Was {that a} acutely aware alternative?

Rachel:
Probably not. I don’t assume it was unconscious or acutely aware. It was simply one thing we had at all times carried out. We had joint bank cards for the enterprise. I assume, I don’t know if it was even within the LLC identify or each of our names, however we each had separate bank cards, however it was all paid out of our joint accounts. And we might see one another or at the least I had entry to his as a result of I managed the entire logins and the entire funds. However I don’t assume he ever might actually see mine or cared to. I might have given him my logins if he had needed them. However sure, we did have separate bank cards.

Mindy:
Emotionally, what was this course of like?

Rachel:
There may be undoubtedly no exaggerating that this was the darkest 12 months of my life. And I do acknowledge that. To say that’s privilege as a result of folks have gone by lots worse and I’m fortunate that I hadn’t gone by something worse. I’ve handled despair earlier than, however that is despair, nervousness, and grief, all on the similar time. And people listening which have misplaced somebody or been by divorce will know you’re additionally grieving since you don’t simply lose the particular person you’re keen on, you lose the whole life you thought you’d have. And it’s not only a regular breakup.
I misplaced my future , the entire life that I envisioned and I misplaced my roommate, my greatest good friend, my journey accomplice. And the worst freaking half is that I misplaced my canine. I haven’t seen an image or video of my canine Chloe in seven months and I nonetheless cry about her to at the present time, so it’s a large quantity of loss and coping that’s really unimaginable. After which including to that’s the absolute horror of somebody you’re keen on turning in opposition to you and hurting you, coming after you, making an attempt to inflict ache month after month. And I nonetheless can’t reconcile that.
The truth that I really feel like I don’t know the particular person I married and what he was able to. It was simply surprising and bewildering and I’ve by no means felt so helpless in my life. After which maintaining it collectively and making an attempt to run my public going through enterprise as a result of I’ve lots of of hundreds of followers. I gave that BiggerPocket speech on October 4th, that was lower than two months in the past in San Diego and it’s certainly one of my proudest issues I’ve carried out. I had a lot enjoyable. I used to be surrounded by associates. It was clear to me that I made a big effect that day and it was such a cheerful week throughout such a darkish time in my life. And what folks would by no means know is that two days later I got here again dwelling and I keep in mind crying in my mattress, on and off for 11 hours straight. And I cried a lot that my left eye gained’t shut as a result of I used to be so depressed. That was the toughest month, however I survived.
And as you recognize, my divorce was finalized about 5 weeks in the past on October twenty first. And that has been an enormous aid, an enormous weight lifted off my shoulders. I’m nonetheless not emotionally okay as you may see. There’s loads of therapeutic to do. I’m working with my therapist nonetheless. And even supposing I can proceed to realize lots and hit massive milestones in my enterprise, I’m nonetheless struggling. And that’s okay. I don’t count on to really feel higher in a single day. No achievement goes to elevate the crushing weight of despair or elevate the loneliness that I nonetheless really feel each evening, however I do know that I shall be okay. And that’s sufficient for me proper now.

Mindy:
You may be okay. You’ll thrive, and you’ll come out on the opposite facet even higher than earlier than.

Rachel:
Thanks.

Mindy:
However getting by it sucks.

Rachel:
It sucks.

Mindy:
And it’s the slog that you must do. Nicely, come again to Longmont. My ladies would like to be taught extra about monetary independence from you as a result of they don’t hearken to me in any respect. Significantly, if you wish to really feel higher about your self, hearken to my ladies speak about how superb you’re.

Rachel:
You’re so candy. I like your ladies.

Mindy:
Take them. However critically, you’re doing loads of good. You’re educating folks change their monetary lives. You’re exhibiting folks that you would be able to be an actual property investor. You may change your monetary future. You’re not caught in no matter circumstances you’re in proper now. You may change the long run. You may change your funds. All you must do is hearken to Rachel.

Rachel:
Thanks.

Mindy:
Okay, Rachel, you’re implausible. I like you. I’m so completely happy that you simply got here on this present in the present day. Nicely, I can’t actually say that. I’m so completely happy that you simply shared this with me. It’s not a enjoyable matter, however it’s a subject that we have to speak about. And we haven’t coated this on this present earlier than. There are people who find themselves in a relationship questioning what they need to do. And I like that you simply tried to repair it. I like that you simply went to remedy and did what you could possibly do to attempt to make it work. And it turned obvious that it wasn’t going to work. So, “Okay, then we have to separate, we have to break up.” And that is what occurs whenever you break up and it’s not at all times fairly.
If you’re enthusiastic about getting married, hearken to Episode 301 and speak to your accomplice a couple of prenup. It isn’t a plan for a divorce. It’s a plan for a way you’re going to deal with your funds. And it’s additionally a solution to shield each of you need to the wedding not work out, ought to anyone change, ought to one thing occur. And like Rachel stated, 50% of marriages finish in divorce. You want a plan to guard your self.
Nicely, I feel that could be a good place to finish this episode. Rachel, thanks a lot to your time in the present day.

Rachel:
Thanks.

Mindy:
Rachel, the place can folks discover you? She is Rachel Richards and you could find her at-

Rachel:
Okay, so my Instagram is Cash Honey, Rachel. And each of my books, Passive Revenue, Aggressive Retirement and Cash Honey, are on paper e book, audio and E-book on Amazon. After which lastly, we didn’t speak about passive revenue in any respect, however that’s what I’m recognized for, so if anybody want to obtain my Passive Revenue Starter equipment totally free, I’ll give that totally free in the present day. You may go to moneyhoneyrachel.com/passiveincome to obtain that.

Mindy:
Thanks. Listeners, for those who want some passive revenue, Rachel is the queen. All proper, now, that wraps up this episode of the BiggerPockets Cash podcast. She is Rachel Richards. I’m Mindy Jensen, saying we obtained to shake, rattlesnake.