← So Money with Farnoosh Torabi
So Money with Farnoosh Torabi
1851: Ask Farnoosh: Navigating Financial Dilemmas: From Divorce to Job Toxicity and Starting a Business
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Farnoosh Torabi
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Farnoosh Torabi
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You're listening to so Money with award winning money guru Farnoosh Torabi. Each day get a 30 minute dose of financial inspiration from the world's top business minds, authors, influencers and from Farnoosh yourself. Looking for ways to save on gas or double your double coupons. Sorry, you're in the wrong place. Seeking profound ways to live a richer, happier life. Welcome to SEW Money.
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Welcome to Sew Money everybody. I'm Farnoosh Tarabi, your host. This is our Friday Ask Farnoosh Sesh where I have gone through the DMs, the email, all of the places to get your money questions for the week. We've got a question about Farnoosh. Should I get a divorce? Will that Cost me more than I'm willing to risk. Question about starting an investment account for your child, whether or not to quit your job because the culture is toxic. All of that and more coming up in just a second. But first, let us talk about the week. Okay, I want to talk about something that I posted on Instagram earlier this week. A reel of one thing that I'm seeing on TikTok. I'm not on TikTok that much, but there's this trend. There are many problematic conversations about money happening in a lot of places, but especially on social media, especially TikTok. And one of the trends, one of the viral trends is women. And some of these are parodies. I know they're being funny, but women talking about being stay at home girlfriends, hashtag stay at homegirlfriend. And the glamour and the ease and the happiness, the joy that comes with having not a lot to do, sharing a bank account with your boyfriend and living in bliss. I have a couple opinions about that, and it's just startling. I couldn't believe this was happening. And again, I know there are some that are just doing it for the jokes, but there are some, I think, who are quite honestly true believers that their way of living is the promised land. And I just want to meet one of these women. I want to know what's behind this. Like, why does she think that she shouldn't work or that not working or that not having her own money is. Is better than leaning on a guy who's not even made a commitment to her? They don't share anything legally. Maybe he says we can share a bank account, but if that's his money, I don't know where. What the recourse is if they break up. There's no prenup. There's no marriage contract. And so these women are taking huge risks. And I was in DMS talking to some audience folks about, like, why do we think this is happening? What's going on? What's the psychology behind this? And I don't think it's psychology. I think it's cultural practice pressure. I think there are some people in this country that buy into this myth that it is unladylike to work and that having a. Being a quote unquote, trophy wife is something to aspire to, that traditional trophy wife of somebody who is beautiful and attractive but is really there to play a supporting role in the relationship, to support the man. And so she can't be working, because if she's working, then who's tending to the house? Who's making the mocha lattes, who's making the homemade cookies, who's writing him love letters during the day. It is a step study, let me tell you. And so share that on Instagram. And you guys, y' all seem to like it. A couple people were upset that I was taking these women down. Stop tearing these women down. And I'm like, look, they're putting themselves out there. What do they expect? And I will risk being seen as, quote, unquote, not nice if it means that I'm getting the message out there to most importantly, these very women who are making these videos that what they are doing is dangerous. My emotions may be heightened right now because I do really care. At the end of the day, there's no, like, soft way to put this. If you are dependent on somebody else for your financially livelihood as an adult, it's risky. So if you're willing to take the risk, that's fine. But I can't sit by and watch. I gotta say something. If you see something, say something. All right, let's go to the mailbag and check out our reviewer of the week. This person will get a free 15 minute money session with me on the phone this week. We're gonna say thank you to this Latina travels who left a review earlier this week saying, when I started hearing Farnouche's podc, a light bulb went on for me and it's been a wrap since. I admire Farnouche playing such a strong influence in the financial world for women of color. I love her podcast because it's educational and the guests are always so powerful. Keep it up, amiga. You got a huge fan here. Thank you so much. I would love to connect with you. Just get in touch. Email me Farnishitsomeoneypodcast.com you can DM me on Instagram. Look forward to hanging out. All right, let's go to our mailbag and I want to start with the question that's probably going to take the most time to answer. And that is our friend of the audience who's contemplating a divorce. She is anonymous. Here's her note. Hey, Farnooche, longtime listener here. I've been tuning in since the early days of your podcast. You're the reason why I started caring about personal finance. I'm in the midst of trying to make a decision that could have serious short and long term financial consequences. So I'd love to to get your thoughts. My husband and I are Both in our 30s, no kids, no debt, other than a couple thousand dollars left on a car loan. I'm a six figure earner while my husband left his six figure job earlier last year to take a break and figure out a career pivot. We own a $600,000 home that we bought in March 2020 and the house has since appreciated about $100,000. We both come from fairly humble beginnings, so being able to purchase this house as our first home means a lot to us. And living in a city where the housing market has stayed relatively warm even in this economy, this house is also a big wealth building opportunity for us. Unfortunately, my husband and I have been in a very rocky place in our marriage for over a year. We're trying to work things out and I still love him as a friend, but deep down my heart is saying this is not the right relationship for either of us and it would be best for us to get a divorce. However, my practical brain is pushing back against the idea of divorce for financial reasons. Not only can divorce be costly, but we'd both be giving up a major wealth building opportunity by having to sell the house as part of the divorce. I can't afford to buy him out and continuing to co own the house and renting it out is likely not an option. I'm wondering how much I should weigh the financial implications and opportunity cost in making a decision on whether or not to end the marriage. I know I can stand on my own financial footing. I so that's not a concern. I'm curious to know what your thoughts are. Thank you, Farnooche. All right, so my first thoughts on this is just firstly thank you for coming to me with this is a huge life decision and the fact that you wanted my thoughts and wanted me to weigh in, I don't take that lightly. So thank you so much for reaching out. And so what you presented here is a conundrum that is really rooted in your fear of something really important ending, which is less the marriage but more potentially this wealth building opportunity. It seems like you have your mind set already using your own words that you know, you see your husband as a friend and you don't really see a future together as a married couple. You've made up your mind on that. I could be wrong, but it seems like with that you've reconciled with that. The part that you're grappling with is the money part, particularly this wealth building opportunity part. If you come to me and you said, hey, I'm worried about the fact that I don't work or I don't make a lot of money, I don't have savings or I have a lot of credit card debt and now I want to get divorced. That could have some serious short and long term ramifications on my financial life if I were to get divorced really quickly and hastily. And so my advice for you in that scenario, in that financial scenario would be different than what you're presenting to me here, which is that you are financially stable, you make six figures, you don't have much debt. And what you're really just stuck on is that this home, which has appreciated $100,000, could appreciate more. So my question to you, my listener, is this. What are you more afraid of? Are you more afraid of being in a marriage that does not fulfill you, knowing that you could this time next year be in a happier place, in a happier relationship? Or are you more afraid of something that quite frankly hasn't even happened yet? It is just a story in your head that this house is going to continue to appreciate and build wealth. Homes, as we know, are a great store of value, but your home may not retain that added $100,000 in equity. I'm not being pessimistic. I'm just looking at the data and I'm looking at what forecasters are saying. So all this to say that you were kind of stuck between reality and your hopes. The reality is, my friend, that you don't want to be in this marriage because you're not in love with your husband anymore and you don't have kids, which helps because that makes for a less complicated separation. And then on the other side, you have this ambition, this hope that the house will become this wealth building tool. I'm not saying get the divorce, but I'm just saying be realistic about what you're actually going to win in a divorce right now, given everything you told me, given everything you know you're going to win your ability to reclaim your personal livelihood. You know, you could be in a healthier, happy relationship this time next year. Is that more real or less real than your home becoming this wealth building tool forever and ever? And by the way, and let's just play out that scenario, let's say you don't get divorced because you're really insistent upon keeping the house and getting richer. But all the while your marriage continues to fall apart and what does this house become now to you? Do you risk that this house becomes a source of resentment? A source of. It's like when couples stay together just for the kids, but they're miserable and then the kids don't feel great about that. The kids know my mother did this to us growing up. My mother's still married to my dad and she doesn't really listen to this podcast. I know this will never get back to her, but even if it did, I'm telling you the truth. Growing up, there were moments in our, in my parents marriage that they wanted to get divorced and they didn't. And they would make clear to us, to me, especially because I was the older child, that we're not getting a divorce because of your well being. And I was like, great, thank you. And I, at the time, I was like, yay, my parents aren't getting divorced. But as I got older, I started to really understand what it takes to be in a healthy relationship. I got really tired of their fighting. I thought to myself, I wish they would get divorced because now I feel like I'm the source of their misery. And frankly, they should move on. You should never feel stuck in a situation that makes you really unhappy because of maybe the prospect of something else happening that could be great. But what's more important to you? What are you more afraid of? The thing that you're more afraid of is where the answer lies. If you're more afraid of being in a relationship that keeps you unhappy, that keeps you stuck, knowing that the longer you're in this relationship, the longer it means you're not going to be in a better relationship, are you more afraid of that? Or that maybe your house is going to grow more in value? Listen, if you get a divorce now, you still walk away with an extra 50k. If you split it down the middle, that's not nothing. So again, I know this is like a very nuanced, complex problem. And my answer is not meant to give you the shortcut answer or even the answer, but it is just meant to give you some things to think about. And it's being, I'm being very honest. This is how I would have, I would approach this. I'll give you one other example of a couple that did stay together because of the house. This was back in the recession when you couldn't sell a house. Their home had depreciated massively and they wanted to get a divorce. They had kids too. Things were really complicated. So they didn't get divorced right away because it meant a lot of loss beyond just the loss of the marriage. It meant financial loss. It meant breaking up the family in a very difficult economy where their jobs were uncertain. And so the house was what kept them together. They lived in separate quarters in the house so that they could still at least be separated and maybe pursue their own personal lives while they were working their way towards a divorce. But they for them, the decision was we're going to get divorced, but not right now because the house is underwater, one of us just lost our jobs, we have small kids and you add it up and it's okay, let's make a plan. Let's take some time. It's not to mean that we are not going to move on with our personal lives and have a divorce eventually, but we need to create an interim plan. Everyone's life's different. And again, my friend, thank you so much for emailing me. If you have more questions, if you want to talk more about this follow up, I'm happy to be here for you. Right now my family and I are in full on vacation planning mode for later this summer. And the hardest part? It's not finding a place, it's narrowing down where we want to go. Do we head out east of the Hamptons? Go north to Cape Cod? Stick closer to home with one of New Jersey's beach towns? There are so many great options on Airbnb, it's actually kind of overwhelming, but in a good way. What's also struck me is how thoughtful so many of these listings are. What? Welcoming, well organized, full of personal touches that make a space feel like a home. But behind every great stay is a host or a co host making it all happen. Not every property owner has the time or bandwidth to handle bookings, guest questions, and everything else. That's why Airbnb's co host network is such a great resource. A co host can help manage the day to day, from messaging guests to restocking supplies to making sure the home is guest ready all season long. If you've been thinking about hosting but don't want to go it alone, I now's a great time to team up. Visit Airbnb.com host to learn how a co host can help you earn extra income without taking over your life. Introducing the new Dell AI PC powered by the Intel Core Ultra processor, it's not just an AI computer, it's a computer built for AI. That means it's built to help do your busy work for you so you can fast forward through editing images, designing presentations, generating code, debugging code, running lots of apps without lag, creating live translations and captions, summarizing meeting notes, extending battery life, enhancing security, finding that battle you were looking for, managing your schedule, meeting your deadlines, responding to Jim's long emails, leaving all the time in the world for more you time and for the things you actually want to do. No offense, Jim. Get A new Dell AI PC starting at 699.99@dell.com AI PC how those ahead? Stay ahead. Hey, so money friends, I know many of you are thinking about starting your own business or you're already in the trenches making smart, strategic money moves. If that's you, I want to personally recommend a podcast that can seriously help you get to that next level. This is Small Business. What I love about this new season is how real it gets about something we talk about a lot here. Risk. Every episode shares honest stories from founders who faced tough financial decisions, taken bold but calculated risks, and made it through the highs and lows of building a business. Host Andrea Marquez breaks it all down in a way that's actionable and relatable. You'll hear exactly how these entrepreneurs tackled things like funding, pricing, and knowing when it's worth betting on yourself. If you're looking for real, practical insights that can help you move forward with clarity and confidence, this podcast is it. Follow and listen to this Is Small Business now on Apple Podcasts, Spotify, or wherever you get your podcasts. Don't wait to start making smarter money moves. Today.
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Narrator
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Farnoosh Torabi
All right, our next question is from Laura on Instagram, who wants to know whether she should quit her job because, frankly, it's getting to be toxic. She says the company culture at my employer is slowly becoming more and more toxic. At what point do I know that enough is enough and I should leave? I'm confident I could find another job making similar money, if not more. But is the grass always greener? So I asked her on Instagram. I followed up. I said, can you be a little bit more specific, like what's actually happening in your situation? And she said that there are constant power struggles with rewards to the big egos. I've kept my head down, but I feel now I'm being personally bullied. I've reported a specific incident to hr, but I haven't received much support. My direct managers have been supportive, but I feel like nothing is being done to address the root issues. Yeah, this just sound like a rooted issue where there is a reason these bullies feel comfortable doing what they want to do, acting how they want to act, without consequence. There is a cultural problem going on and companies compete on culture for good reason, because there is a lot of toxicity in the corporate landscape. And knowing this, there are companies that pride themselves on having a very different kind of culture. And I do think that some companies are better to work for that reason. But you want to also be realistic. You don't want to just jump ship because of one bad incident or like you're getting a bad sense of things. If this is a job that's paying you a good salary with benefits, it's got good flexibility. You like your direct manager. There are some pros. And so you want to weigh the pros against the cons. If this persists and HR doesn't reconcile, doesn't rectify the situation. If you get. If you continue to be bullied, if you continue to be passed over for opportunities and promotions over politics, then yeah, I think that this is not a sustainable situation, especially if your goal is to rise up through the ranks and to get further along in your career and grow. So my answer to you, Laura, is this doesn't sound like you're a forever company. I would start to look around. There's never any harm in looking around, passing around your resume, putting feelers out there. In the meantime, maybe the situation improves at your job, maybe it doesn't. But it never hurts to compare and see what else is out there. I don't think it's a grass is always greener scenario. I do think there are some companies that are truly better at everything and truly better, especially at the culture piece. Good luck, my friend. All right, we have a question from Carrie, who has twins, Kevin and Emma, who are freshmen at Penn State. My alma mater, and their intended majors are finance, which is also what I studied. Incredible. Okay, so she says. I've shared your media platforms with them both. We are all in awe of you. This is so sweet. As an alumni, any guidance you could share to help them gain an edge would be most helpful. All right. I had a great time at Penn State, let me tell you. And I was a finance major. Would I do anything differently? Probably not. I had a really incredible four years at Penn State. I studied abroad. I worked at the daily paper. Not on the news side, funny enough, but on the sales side. Selling ads, creating ads, selling them. That was a huge leg up. Let me tell you pretty sure it landed me a number of internships because it was real life experience. Our college paper was not just this, like, basement enterprise. This was a paper that went out. I think we had something like 30,000 copies a day. Daily paper. It was the largest college daily paper, I think, at the time. So to work for that organization, that's not too shabby. So our sales team brought in a lot of revenue. I was part of the sales team, helped I developed a lot of skills outside of the classroom in that experience. And if your freshman kids are interested in that, I think back then they were. There's a training program. You apply. There's a training program. And I was there for four years. It was an incredible experience. I'm actually having lunch with two women that I met at the Collegian all those years ago next week. So it builds incredible lasting friendships as well. So that's one thing. Studying abroad, a hundred percent. If you can do it, if you want to do it, I more than encourage it. The opportunity to be living in a country with no responsibilities except to go to class and then you're there to travel, why not? And then Penn State actually has a number of programs where you're essentially just paying Penn State tuition and then sending your kids abroad. There are other private programs you can enroll in, and those credits will transfer over back to Penn State. But there are Penn State programs that run abroad that would just require you to then secure your airfare and they'll arrange housing and all of that. I did that. It was incredible. I spent five months in Paris. There's even some business fraternities and sororities. I would look into community service. The State College area has a lot going on. So that's one of the benefits to going to Penn State, is that you have this ginormous university with all of its resources, but it's also within this really wonderful community with so much richness and so much culture. So tapping into that is another way to get global experience, world experience outside of the classroom. Definitely spend a lot of time outside of the classroom. Classroom time is required, and you should go to class, but don't limit yourself to that. And if you want to start a club at Penn State that you don't see listed, the school, at least when I went, was very receptive to taking your pitches and then giving you money to go do the thing. So if they want to be entrepreneurial in that way, also something that they can explore. Amazing. I'm so excited for them. Okay. Chelsea wants to know Farnoosh I'm choosing a platform to invest for myself and our kids. Is there a platform or broker that you recomm? Okay, so you know, we've talked a lot about Robo Advisors on the podcast and these are tech driven investment platforms that come from all over. You can get one through Charles Schwab and Merrill and Goldman Sachs. You can also get one through some of the newer, more modern players in the space like Ellevest and Wealthfront. I like all of them. You know what I would say to you is as you are looking to find a home for your investments, is first think about what you need, what you like. A lot of these investment platforms, it's their interfaces are different, the UX is different. They all have their own avatar in mind as they're building out these platforms. And so whatever one speaks to you the most, I would explore. I would also look at their fees. They tend to be very competitive and similar as a result. So 0.3%, 0.25% to 0.3% of your assets under management is typical. And a lot of them usually have access to the same kinds of investments. So index funds, ETFs, all that stuff. So that is how you can go about looking for an investment platform. Again, you, you're the priority here. A lot of them will also have custodial savings accounts, which is where you would be investing for your children. They can't invest on their own yet, so you have to invest in on their behalf. And you usually do this through a tradition, through an instrument known as a custodial investment account, where you're investing on their behalf and then they take over the reins once they turn. I believe it's 16, maybe it's 18 in other states, but start with you. And then if you find a place you like, look and see if they have these custodial accounts where you can then invest for your kids. All right, next question. And this will be our last Farnoosh. My husband and I listen to you every week. Wow. A couple. I like it. We love your fresh take on investing and money management and listening to all of your guests. I have a quick question. When you formed your company, did you start with an llc? We are curious how you started out. We love traveling. We would love to start a travel website down the road, but we want to avoid rookie mistakes. Thanks a million. We love you, Jen. I love you, Jen. Thank you so much for this question. All right, so I started my company after I got laid off in 2009. It's the kick in the pants that I needed to just do the thing. And the first thing I did was talk to my accountant. I said I want to incorporate. I want to start a financial education company, a production company, even company that produces content around personal finance. And so that's books and speaking and brand partnerships and workshops, et cetera. Wasn't even thinking about a podcast back then, but he said to me, okay. And he was not just any old accountant, he was an attorney and was well versed in business law. And so his recommendation to me at the time was to incorporate as an S Corp, not an llc, but an S corp. They're different. And which one you choose, it really just comes down to sometimes your preference and the type of business that you have. The one that's the best for you really comes down to how many owners have a stake in your business? Are all of your business partners US Citizens? Does a partnership or corporation have a stake in your business? And how would a self employment tax affect your net profit? I can't obviously answer these questions for you. So important to sit down with a specialized tax expert who knows business law. Tax law. A CPA would be able to help you, but preferably a CPA who works with business owners. And then additionally once you get that set up and you get your tax ID number, you can establish business checking accounts and business credit card accounts which I do recommend to separate from your personal and then other things like bookkeeping. QuickBooks I use because it's simple and I do have a bookkeeper and I have an experienced CPA who does my taxes and also now my personal taxes with my husband. And that's it. Then you're off to the races. Good luck to the both of you. I'm excited for your venture. Let me know how it goes if you have questions as you're building the business and how I can support you. All right, thanks everybody. Thanks for tuning in and I hope your weekend is so money. This episode is brought to you by Progressive Insurance. Do you ever think about switching insurance companies to see if you could save some cash? Progressive makes it easy to see if you could save when you bundle your home and auto policies. Try it@progressive.com Progressive Casualty Insurance Company and affiliates. Potential savings will vary. Not available in all states.
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Narrator
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