It is no secret that the emotional reality of divorce is painful.
It also has a huge impact on couples regarding the money involved, due to its complex redistribution of assets, obligations, and long-term economic implications.Â
Kevin O’Leary, an investor who appears on ABC’s “Shark Tank,” offers some blunt words on divorce, plainly stating exactly what he thinks about it from a financial viewpoint.
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Divorce often requires the division of property acquired during the marriage, including homes, vehicles, retirement accounts, and investments.
Determining equitable distribution can be complicated by varying state laws and the couple’s financial circumstances.
In addition to asset division, ongoing financial responsibilities such as alimony and child support may be mandated. These can significantly impact one or both parties’ budgets, particularly if income disparity exists.Â
Related: Dave Ramsey has blunt words for Americans buying a car
There are big legal fees, mediation costs, and additional expenses related to establishing separate households that strain resources.Â
Both parties involved may face reduced living standards post-divorce, as the cost of maintaining two separate households tends to exceed that of a shared one.
Divorce can also negatively affect long-term financial planning. Retirement savings may be split, for example, and future contributions could be diminished. Investment strategies may need reconfiguration, and insurance policies often require revision.Â
Tax consequences also frequently arise, as filing status changes and some deductions may no longer be available.
In cases involving children, education and health care costs must be considered, often requiring ongoing coordination between both parties.
O’Leary explains his take on divorce that many people may not want to hear.
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Kevin O’Leary says getting a divorce is ‘stupid’
In a post on Instagram, O’Leary spells out in no uncertain terms how he feels about the decision to get a divorce.
“Think of the geometric loss of wealth every time you get divorced,” O’Leary said. “You pay the woman that you divorced, or man, and you pay the government a third — often through capital gains liquidation — because you can’t separate all the assets without liquidating them sometimes.”
“So you’ve got government sitting there, you’ve got the other spouse sitting there,” he continued.
“This is the stupidest thing you could ever do.”
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O’Leary describes his view on the background involved in many divorce cases.
“You’ve spent your whole life to actually create this nest egg,” O’Leary explained. “It could be, you know, you’re 45, or whatever. You’ve got a comfortable life and all of a sudden you don’t like your wife or husband.”
“Think about that for a while,” he said. “Because you are going to wipe out up to two-thirds of your wealth.”
Related: Shark Tank’s Kevin O’Leary warns Americans on 401(k)s
Kevin O’Leary explains a reality of divorce some may not want to hear
O’Leary emphasizes his blunt opinion on one aspect about the decision to get a divorce that many people would seemingly not wish to confront.
“You better really like somebody else a lot,” he said. “And frankly, sometimes it’s not the other person you’re divorcing. It’s you. You’re the problem.”
“If you’re getting married for the third time, you’re a guy or a woman, it’s not them. It’s you,” O’Leary continued. “There’s something wrong with you. And you should probably not get into another economic union.”
O’Leary further explains his perception that ending a marriage can be one of the most financially damaging experiences in a person’s life.Â
When you marry, you’re forming a joint economic venture — every dollar, asset, and liability is shared, he says. That partnership carries high stakes, so selecting a compatible financial partner is vital.Â
O’Leary advises couples to discuss money habits early, align their long-term financial aspirations, and build safeguards to maintain stability.Â
A well-matched union isn’t just about love; it’s also a strategic alliance, he explains. Without shared financial values, the costs of separation can be devastating.
O’Leary suggest that people consider not just the emotional side of commitment, but also the financial blueprint they are crafting together.Â
If you are the type of person that repeatedly faces divorce, he has a frank word of advice.
“You should probably just date till you drop dead, because it’s stupid,” he said.
Related: Tony Robbins sends strong message to Americans on 401(k)s, IRAs
Great Job Jeffrey Quiggle & the Team @ TheStreet Source link for sharing this story.
