Need some advise

perpetual_Bull

I'm in the process of ending my forteen year marriage. It's all over except for the settlement. The only luck i had during all this was most of the money was mine before our marriage. Life some times just doesn't work out the way we want

I have two options:

1> Draw the money from my brokerage account ( i would have to sell down several mutual funds )

2> get a home equity loan ( My home is currently paid for free and clear )

I really need some advise from fellow investors because i can't make my mind up. Many people have advised that i take the money from the house and avoid touching my investments. I'm stuck in the middle because i'd hate to make payments on top of child support for children that i have 50% of the time. Also, i'd hate to pull the money from investments that could compound & appreciate over time

Mark

I'm truly sorry. In similar circumstances nearly 30 years ago I was inclined to settle out with money I had (even though I desperately could've used it) rather than with money I hoped to repay. I guess we're all different so you're going to get that many different responses. Me, I just abhor debt for the most part, even good debt. Best of luck.

bee

Hey PBull,

Sorry things didn't work out. I initially missed the point about the kids which is probably the most important piece...emotionally and financially.

Take the time to explore your options. Good luck.

MaxBialystock

Reply to @bee (and perpetualBull): "You didn't mention kids..." But he did. He'll have the kids 50% of the time, with the double whammy of child support.

It is indeed a dilemma. You face a retched choice. Nothing to do but bite the bullet. If you take a home equity loan, the payments would be fixed. You might decide to let your funds grow and compound, and in theory end up ahead of the game, in the end---barely. I went through divorce, too. Stinks.

tgeno

Divorce sucks. I got one last year and took the settlement money that she was entitled to under Florida law (a low 6 figure amount) out of investments. However, in exchange I insisted that she agree to no alimony and waive any interest in the house (which was in my name) and any interest in my pensions or social security. We didn't have kids. For what it's worth, my advice would be to weigh the interest rate on a home equity loan against what you conservatively think you can realize from your investments. My gut tells me that the interest on the home equity loan will probably exceed your conservative projection of annual rate of return on your investments. Personally, I would prefer not to be making loan payments on top of child support. Also, the loan payments and child support are certain, and the future return on your investments is not certain.

Investor

One other option is to sell the home and pay her off with that and buy a smaller one for yourself at lower fixed 30 year interest rates available right now.

Alternatively, you can move to a apartment (rent) for a while.

perpetual_Bull

My heartfelt thanks to all of you...


Because the major money was mine before marriage ( this includes most the money that purchased our home ) I got off rather easy. Under my States laws she was only able to get at half the income from my taxable investments during our marriage. However, this did not take place because once i proved the money was seperate property - she needed to hire accountants to figure her share - she backed away. With this settlement she signs the grant deed on the property and all rights to future money. I believe the whole settlement equals 1/3 of the current house value. Yes... I had myself a really high priced attorney. I got what i paid for at 250.00 an hour.

The settlement goes something like this:

Half my 401K
Half her school loans
Pay off her car in full
two years of living expense in cash
And child support ( state law ) for children that live with me equal time

It still equals tons of money..but it could have been much worse. My ten thousand dollar attorney bill saved me another hundred grand or so. The child support issue really bugs me because i buy my children every thing already. This money will only support my ex's habits, not the kids. With child support ordered it really leaves no wiggle room ( loss of job, etc ) Before the divorce (children under my direct care ) I could tighten things up if times called for it.

MaxBialystock

Yes, there is no justice. Ex-wife and I agreed to be flexible before the documents were signed and everything was finalized. Our line of work would have made it unreasonable for me to insist she stay local, particularly in light of her flexibility pledge. Afterwards, there was zero flexibility. The two of them lived on the Left Coast, and if I wanted to ever see him, it was at great expense, all on my own. At the same time, I was obligated to pay child support EVERY month. It was a very long 17 years. Watch yourself.

Mona

Reply to @perpetual_Bull:

I had myself a really high priced attorney. I got what i paid for at 250.00 an hour.

I gather you do not live in Boston, New York, Philadelphia, Chicago, LA, or some other metropolitan areas. That $250 per hour would easily have been $450.