Top Investing Mistake #8: Not Getting Buy-In from Important People
Whenever we start a new project or course of action, it is important that the people who are closest to us understand and accept what we are doing. In fact, it’s best if they are so enthusiastic that they actually help us make the project succeed. This is true for many aspects of life, and it is especially true for investing.
The #1 reason that couples fight and get divorced is because they have major disagreements about money. And, if one spouse buys into an investment and the other spouse feels that it is too risky (which is usually the case), then the whole family is going to have serious problems. If the investment does not work out and the family loses money, the situation could become worse still.
How do we solve this major potential problem, before it occurs?
The best way to handle this problem is to make sure that all the people involved have accepted the risk, and understand what the worst case scenario is. If the husband wants to buy stock in a particular company, then everyone has to understand that if the company fails, their investment will be lost completely.
In addition, spouses are not the only ones who need to buy in. Children are often adversely affected by the financial decisions of the parents, and are the last to find out. Besides the financial risks, there are increased commitments on the parent’s time. For example, suppose the parents decide to buy a rental property. It may be a good investment, but will require time, work, and energy on the part of the parents, especially if it is their first time purchasing property.
One way to handle this particular situation is to sell the kids of the idea of owning property. More income means more toys. (How could a kid argue with that?) Instead of isolating the children as unimportant bystanders, what if they could be recruited to help? Any high school student is educated enough to manage the accounting. How hard is it to use Excel or Quickbooks?
Once all the people who will be affected by the investment have bought in, then whatever happens will strengthen the relationships of the people involved. Credit for making profits can be shared, and celebrated appropriately. Problems can be solved as a team, and the creativity of multiple members makes finding great solutions easy.
It’s great to get rich through investing. And, it’s important to use the whole process to improve the relationships that matter most to us. By getting everyone’s buy-in at the beginning, we can set ourselves up to succeed through the investing process.
Related posts:
- Top Investing Mistake #3: Listening to People who are Totally Unqualified
- Top Investing Mistake #2: Failure to Launch
- Top Investing Mistake #10: Not Finding Your Groove
- Open Source Investing: What Can We Learn from Other People?
- Top Investing Mistake #9: Not Doing More of What is Working
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is one of my favorite financial books of all time. It's an allegory about a guy who has a terrible job, and how he overcomes challenges to achieve his dreams.
