Exit Strategies

The following is a guest post from The Strump. 

How many times in your life have you jumped into something without thinking, then tried getting out but it wasn't so easy? Getting into anything is pretty simple because it's so fresh and new at the start - like an investment or a relationship – but sooner or later the lustre wears off and you know you it’s time to move on.

Take a bad investment – you plop down your money on the latest stock or mutual fund and you're eager to watch it grow … but then it fizzles. What do you do? Keep your money invested and hope it goes up or cut your losses and invest in something newer and better?

What about a bad relationship? You've spent years living together building assets but then turn over one day and realize you're not living with the same person. It's funny how love can quickly turn into hate. Nothing is worse than a scorned lover who feels entitled to half of everything. What if there is a financial imbalance where one makes significantly more and the other stayed at home? That is a recipe for disaster, if you ask me.

Here are some examples of exit strategies:

• Relationships
– get a pre-nuptial agreement or cohabitation agreement. When the love is gone, you're money won't be because you've protected yourself at the outset and everyone knows what they're entitled to. A friend of a friend of mine didn't have a co-habitation agreement and ended up losing half his pension. Ouch!

• Investments – before you buy, you should of course, do your homework. But when you're ready to sell, do you know what you're investing in yet or are you simply panicking at some tidbit of news you read on some financial blog? Have another investment in mind before you sell or you'll just end up making the same mistake again.

• Work – with all the layoffs floating around these days, it's clear that the day of staying with a company for life are over. Always network when you don't need a job and keep your eyes open … and don't forget to keep your skills up to date. These will come in handy if you get that pink slip.

• Life
- for the ultimate exit strategy, get your estate in order and make sure you have the following – will, life insurance, etc.

Using a personal example, I had a job once and thought it was going well in the first three months, until I was summoned into my manager's office and promptly dismissed. Given that it was my probationary period, I didn't get any benefits or severance. I also had not kept up with my networking and didn't have any new opportunities readily available. That was a huge lesson learned. (I should have had an emergency fund, too!)

All good things come to an end. When I look around and think that life is going my way, I usually know there's some nasty surprise around the corner.

Having an exit strategy can ease the pain of these unexpected or rather inevitable events.

Comments

[Benjamin Bryan]

What's the point of marriage with an exit strategy? If you have to get a pre-nuptial agreement perhaps ask if you should even get married. Obviously you don't intend on being committed to each other for life. Love doesn't turn into hate. A willing love (agape) is tested and grows even when you don't feel like loving (phileo) each other emotionally.

[Tom Feyl]

Jesus himself said that marriage is permanent except for infidelity. In light of this, I don't see any Biblical place for contemplation of divorce. That excludes prenuptial agreements. I also don't see any Biblical support for cohabitation, since it's almost accompanied by fornication, which is condemned in Hebrews 13:4.

[Julie]

Wow. I could see a pre-nup if one fiance had a large inhertance or other money out there given by family just for him or her, but if both partners are starting out with not much money and hoping to build a life together (emphasize together!) then what's the point of a pre-nup.

"Nothing is worse than a scorned lover who feels entitled to half of everything." Half of everything, for richer and poorer...that's called marriage.

"What if there is a financial imbalance where one makes significantly more and the other stayed at home?" Is this guest author implying that the spouse who stayed home to raise their children is not contributing to the family finances or maintenance of the household? Is this not usually a decision made by both spouses? If I were married to a man like this, I'd get a contract with some financial assurances built into it before I gave up my career to raise his children, only to find myself penniless after keeping his home fires burning.

I'm lucky enough that my husband earns enough, and that I wanted to stay home with the kids. My husband appreciates not only that I put my career on hold to spend these precious years with our chidren, but that our house would be in chaos, and both our nerves would be shot without me running all the errands, cleaning, etc. while he's away at work. Marriage is a partnership!

[Rajeev Singh]

I do agree that one must have exit startegies ready for all jis major facets of his life. Most imporatantly one must ahve an exit startegy for his investments. We all know when to invest but seldom do we have an idea of when to exit. Also the idea of having an emergency fund is an excellent one.