Property Investment
4 min read
Author: Louis Fraysse
Louis is a registered financial adviser with an MBA from Massey University.
Reviewed by: Lance Jensen
15 years’ experience in the industry. Active property investor with $6 million+ portfolio. Financial adviser at Opes Partners.
Going through a divorce will make your head spin.
You’re not just ending a relationship ... you’re closing the door on the life you had planned. It’s emotional, exhausting, and it can feel like your whole world is crumbling.
At the same time you’re going to have to make a lot of financial decisions. I see this all the time as a financial adviser.
You might go from two incomes to one; you might need to sell your family home and find somewhere else to live.
Or you might receive a lump-sum settlement. Then you’re left wondering: What do I do with it?
This article can’t tell you exactly what to do. After all, it depends on your situation. But I can give you the key questions to think through.
That way you can start rebuilding your financial life with confidence.
You don’t need all the answers right now, but start with these 2 questions:
If you’ve sold the family home, you’ll need a new place to live. That may seem obvious, but it’s one of the biggest – and most emotional – decisions you’ll face.
The upside? You may get money from the property settlement. That gives you choices, but also trade-offs:
Often there’s a trade-off between staying in the same suburb, the size of the house, and the mortgage you take on.
Some people choose to move out of their relatively expensive suburb so they can buy a home outright and avoid debt.
Others decide to stretch themselves to stay in-zone for their kids’ school, even if it means higher repayments.
Even if you’re the higher earner and can buy your ex out of the house, you’re probably taking on a lot of debt. That’s not an easy road either.
Your financial goals will often shift after you separate.
But you may still want to invest and grow your wealth. That’s because you’ll still want to retire (eventually) and you’ll now need to make it happen on your own.
Here are a few common options:
Each option has pros and cons and your new financial reality might change the math:
All of these will influence how – and if – you invest.
Mary got separated at 53. After selling the family home, she had around $1.2 million in hand.
Her eldest child was already at university, and her youngest had a year left at a local public high school. That school was in-zone, and Mary didn’t want to move out of zone.
She still wanted to be near her friends and in an area her child was familiar with.
The three options she considered were:
Each option had trade-offs. In the end, Mary chose to stay in her child’s school zone and bought a modest home.
She’s now working with her adviser on a long-term investment plan once her youngest finishes school.
It’s OK if you still don’t know what to do.
Let’s be honest: there are no good financial options post-divorce without some trade-offs.
And no-one really knows what to do straight away. But getting started – even just asking these questions – puts you on the path towards rebuilding.
It may also comfort you to know that if you’ve recently separated, financial advisers are trained to treat you as a vulnerable client.
That doesn’t mean you can’t make decisions. It means your adviser must take things slowly. They’ll be extra cautious because it’s an emotional time for you, so they need to give you the time and space to make the right decisions.
Louis is a registered financial adviser with an MBA from Massey University.
Louis is a registered financial adviser with an MBA from Massey University. He's also a property investor and a father. So he understand firsthand what it's like to balance family, investments, and long-term financial goals. Louis is based in Auckland.
This article is for your general information. It’s not financial advice. See here for details about our Financial Advice Provider Disclosure. So Opes isn’t telling you what to do with your own money.
We’ve made every effort to make sure the information is accurate. But we occasionally get the odd fact wrong. Make sure you do your own research or talk to a financial adviser before making any investment decisions.
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