Is this normal ? Financial - H behaviour

[flabj]

H is being gifted some money by family and has decided to open up a company with family to invest the money in certain things. I don't want to be too specific.

I'm not part of that company etc and was fine with this.

I've recently found out that a huge proportion of his salary will now also flow into the company in order to be able to keep making investments with said company.

Am I overreacting to think this is a bit off ?

I didn't mind the gifts / inheritance, but surely the salary is a stretch too far and should be our money ?

I also work etc but just worried about this and being kind of frozen out.

Or is this just normal and absolutely fine ?

Thanks for advice.

@mrsdineen2 I don't think he's being fucked over at all. That's not what I'm worried about at all.

How do you normally run finances?

Is this money that he has left over after paying his portion of the bills and outgoings?

So is he expecting you both to live off your salary?
Will be still be putting an equal amount in the family pot?

No. He'll still pay his stuff and I'll still pay mine.

This is just his savings money I guess, it will go into that company.

Sorry for the cross post, your update changes things. If his parents gifted him the starting money, and he's using that to create the company, and gifting them back part ownership of that company, then the could very well be fair. He's not just giving a random person something for nothing.

The devil is in the detail though. Whether or not it's actually fair will depend on the exact numbers.

If it first gift was very small, his salary investment is big and he does more of the work, it's not fair to give them an equal share of profits.

If the amount he's going to invest from salary is a good bit less than their gift, and they'll be working as hard as he is for the company, then it's fair.

Like I said, your update complicated things, and there's no black and white answer, but I hope my comment gives you some perspective and helps you to judge the situation.

Does this impact on the amount he is able to use to pay towards the household expenses and joint savings?
He can't reasonably expect to use his salary just for himself while you keep your household afloat and pay for all everyday living expenses.

The parents aren't in the company for profit from it in any way.

Thanks for your perspective.

It definitely will impact ' joint savings '. We've never had joint savings though.

Although I've been saying we should do that for years.

He has savings and I have savings, separately.

Now the amount he would be saving, is going into this company, which I'm not part of.

In that case it just becomes of question of whether or not it's a sensible business decision full stop. In which case he needs to fully justify and explain how you as family are going to see a return from his investment.

I think you should talk to a solicitor OP.

@mrsdineen2 we will as a family benefit from
100 percent what comes from that company.

It's just that in the event he leaves me or dies, his parents will be first in line.

Initially I was going to say you’re right, but actually from your updates I can’t see any issue with this. Your current set up financially is such that you each pay a % of the bills and the rest of the money is “your” individual money, that means whatever each of you want to do with that money is up to you, he could save his bit, he could spend it on takeaways, he could invest it in this way, that is “his” money to do whatever he likes with. So on that basis, he’s not doing anything wrong.

In my marriage this would be different because we have joint finances, so all money is “our” money. Meaning that if my husband wanted to do this then it would be a discussion first & a decision to make together because we do see it all as “our” money. You mention this being “your/our” money but actually the set up you current have financially is such that you and your husband don’t actually have any shared money, you just share your joint bills and whatever is left is individually yours, and in that situation he can do whatever he wants with his bit just as you can.

That's a legal issue tbh, well over my head. Regarding profit, I don't doubt benefit from he profit, but just make sure your DH can prove, as much as anyone reasonably can, that the business will make a profit.

I did say this to H. I got so angry when I realised but I just don't know if I'm being unreasonable.

Just to clarify, I am not concerned at all that this is a good business venture or he's being taken advantage of or anything like that.

My issue is that he doesn't own the company by himself and that essentially he's taking money that would be ours jointly, into the company - where it will no longer be ours jointly.

If he dies or leaves me or whatever, I will be entitled to his share / half his share in the case of a divorce - and his parents would get most of it.

When actually, I make sacrifices to enable him to earn that money and my money goes only on our family. You could argue that our family does benefit from the company money too. So I just don't know if I'm being unreasonable.

But I would be more comfortable if he invested more than half his salary in a company he owned by himself/ or with me.

I said I'll get some advice on it and he got really mad.

I know that maybe I'm being unreasonable. Which is why I wanted to get some advice on this.

He’s reducing income tax, by the looks of it. Reinvested money is a business expense. If the company is profitable and has potential for growth, then reinvestment can make sense. I expect he has taken financial advice already.

You have separate finances, so what he’s investing isn’t coming from the marital pot. It appears that he’s kept the inheritance strictly as a non matrimonial asset.

I don’t know anything about the financial side really but surely the solution is just to make sure that in the event of his death his shares go to you? I can’t see it being an issue otherwise as the profits would go to you as a family and it’s not impacting your day to day living. He should have discussed it with you but it doesn’t sound an unreasonable proposition from what you’ve laid out.

Indeed, I agree with keeping the inheritance separate but kind of draw the line at the salary.

Do you think I'm being unreasonable ?

We can't you also be a partner?

You don't all have to hold shares equally.

I don’t think you are over reacting.

Rule #1 of investing: only invest what you could afford to lose.

That surely doesn’t include your salary income.

No, but I don’t think he is either. You’re not on the same page financially, but that doesn’t mean that one of you is right and the other wrong..

I would get clarity, personally. I would recommend sitting down and talking out with him AND a financial advisor. There’s scope for compromise.

I'm not concerned whether this is a good investment. It's a good investment.

I'm just concerned that it's like he's moving his money in a way so I can't benefit from it, if we split or if he passed away.

So this is his own money to do with as he wishes? It doesn’t impact joint money?

@InterIgnis thank you.

Yes I think just having it explained might help.

I don't want to come across grabby either but at the end of the day, he can make all these investments because I'm taking care of things at home, whilst also working full time and I very often spend all my money on looking after the family.

I make huge sacrifices as well and I always see the money I enable him to save ( by paying for a lot of stuff myself, even though I make less ) as a joint thing.

My savings are his and his savings should also be mine.

I would be concerned about unilateral decisions about family finances

It sounds like it isn't going to negativity impact your day to day life which is reassuring but would it impact longer term investments such as replacing cars if the kitchen?

You say it's a good investment but is that just based on the spin you get from your partner and his family? What is the competition like, a good idea is less of a good idea if there are a 100 other people setting up businesses with that good idea and there is only space for 20 such companies.

Where would partner draw the line? How did you find out about him investing his salary into the business? Was it after the fact? If the business needed more cash would he initiate further payments without discussion or put your home up for capital which would start to put your day to day life in difficulty

I wouldn't say there are glaring red flags here but there are definitely a few amber ones that need a bit more digging and more discussions about