Well that took a long time, but it was worth it

As many folks know, you tend to marry/get involved with people who are your opposite (outgoing folks with reclusive folks, spenders with savers, etc.) That is how it was with Mrs. 39 Months and I. I tended to “pay myself first” and then spend the remainder, up to the point where the checking account was close to zeroing out. Mrs. 39 Months was a saver from the word go – and I mean “saver”.

For our entire relationship, she has dumped any extra money she had (leftover at end of year, gifts of money, bonuses etc.) into a savings account. Period. When her company had a 401K, she pretty much put it in guaranteed income (savings, CDs & bonds). Ouch!

While I redlined it, I made sure my 401K had a large amount of stocks, especially when I was younger. When we finally had enough surplus cash to invest in an IRA on the side (and a Roth IRA shortly afterward) it ended up being my money which got put into it. Thus I could control the investments, and it was 70% -80% stocks.

Eventually her savings account has reached six-figures. All earning 0.25% in a basic savings account. Needless to say, this has caused a minor amount of stress/strain in our relationship. No matter what I said or how I reasoned, she wouldn’t budge.

Well, I finally got a small victory this week. I got her to take $10,000 and invest in two $5,000 CDs (a 2 year and a 4 year) offered by her local bank. The plan is to create a 5-year “ladder” of CDs earning more than a regular savings account. These are both earning around 2.5%, which is 5X higher than her regular savings account. We will see if this convinces her to try a little more with her savings. At least I can say that we have a healthy emergency fund, right?

I hope you are all moving forward towards your FI goals as well!

Mr. 39 Months

3 thoughts on “Well that took a long time, but it was worth it”

  1. Wow, congrats on the victory! There is something to be said for having liquid cash available, but if you have no plans to use it short term (such as for real estate which is what my wife and I have always done), it is kind of a shame to be earning practically nothing in a savings account. Hopefully she is happy with the CD’s and goes more in that direction.

    In the last couple of years, in an effort to diversify our investments, we’ve started loaning money to a real estate developer we’ve grown to trust. It is done as a first position note, so that the loan is secured by property in case there is a problem. More risky than CD’s, but more upside, and not nearly as risky as buying real estate directly.

    1. Yep, I’m hoping when she sees more money we can get more of this done.

      The real estate one is interesting, but I know she won’t go for that. For me, I’ve actually been interested in fixing/flipping for decades but haven’t had the time/resources to do it. Now it seems like the market is oversaturated with flippers, so I’ll have to wait for a market correction and then do it (unless I can find a sweet deal)

  2. re: 2 x CDs at 2.5% sounds Pyrrhic victory. You can get a savings account at many on-line banks paying over 2%.

    Personally, I wouldn’t have a married a person that kept that much in a savings account. It was probably earning well under 0.25% over the previous few years. It’s not so much that the savings account would have bothered me but the resistance to logic. You can easily increase her yield by nearly 10X by switching to one of many on-line savings accounts. There is no trade-off and a 10X increase as opposed to the CD ladder which greatly reduces liquidity for a minuscule premium over on-line savings accounts.

    Throughout my life, I have consciously dissociated myself with people who eschew logic (especially when it is in their best interest). Typically that behavior is a symptom of deep-seated emotional issues. Often it is a lack of trust in general or specifically with the person presenting the unassailable logic. Either way, I have better things to do with my life than deal with dysfunctional psyches.

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