Why Tough Love Is Important When It Comes To Your Finances

Tough love is necessary for achieving financial freedom!Years ago, I once knew someone who was unhappy with her husband. Let's call her Nancy. To fill her void, Nancy went on dates with various men while her husband stayed late at work. At the cafeteria one day, Nancy mentioned she was falling in love with one of her men named Jack. Jack was handsome, single, charming, and financially well off. Something about him made her heart sing.

What first turned out to be casual coffee once a month evolved into dates twice a week. On Tuesday, they'd meet up after work for drinks and dinner for a couple hours. On Thursday, they'd go to spin class together, followed by a meal and sometimes a movie, and then some extracurricular activities back at his place. She wouldn't get home until 1am every Friday morning to her husband's dismay.

As an acquaintance, it was clear to me her path was only going to lead to trouble. But who was I to give her tough love about what she should and shouldn't do outside of her marriage? I wasn't her brother, father or boss. I kind of gave her a generic, “you should do what makes you happy” when she asked for my advice. I didn't want to tell her to leave her husband because I was too afraid of what would happen if she did. What if I gave her advice that made the situation worse?

I found out months later that the husband followed her one Thursday evening. He confronted them screaming before they could go into Jack's apartment. He then pulled out a wrench, pointed it at Jack, gave one last yell and smacked him in the temple with one violent swing. The husband then dragged his wife back to his car by her hair and began berating her for being unfaithful.

They tried to work out their differences, but they finally filed for divorce a year later largely because Nancy was four months pregnant with Jack's child! It's hard to hide a growing bump after the first trimester. Nancy's husband told all her friends, family members and colleagues what she had done. He even shamed her online. And even Jack, Nancy's lover, disappeared during Nancy's third trimester like a coward. Nancy was devastated.

When I visited Nancy and her baby one afternoon to see how they were doing, she told me, “Why didn't you set me straight at the time?! I needed to hear some tough love!” She then began to sob. A blanket of guilt smothered over me.

Tough Love With Personal Finance

Tough love is important for your finances
Those who are disengaged don't care

With over eight billion people in the world, chances are high we'll all find someone to spend our lonely time with. There's someone for everyone if you're not too picky. With trillions of dollars in the world, perhaps many of us believe we'll all be financially independent even if we don't get our financial act together.

Unfortunately, money doesn't naturally flow to those who need it most in a capitalistic society. Money flows to those who do the most to get it. If we choose to live in America, or any capitalistic country, then we must accept that those who are luckier, smarter and harder working will tend to attract more money than the rest. And once you have money, it's much easier to create multi-generational wealth, which will really piss off those with no head start.

Luckily, the internet serves as the great equalizer for anybody who has enough motivation to start their own site, take advantage of technology, and leverage an unlimited demand curve. And lucky for those who don't have the motivation, there are sites like mine you can read for free to gain some perspective.

The reason why I'm very frank with many of my articles is because there is NO REWIND BUTTON. Building wealth for financial freedom is about exercising good financial behavior over a long enough period of time. I could coddle you into thinking everything will be alright if you buy that luxury car and save just 10% of your income every paycheck, but I would be lying. Showing kindness is ineffective if I'm not going to pay off all your debt, provide you a better job and give you some money. I'm sorry, but my resources are limited.

Don't wake up one day as a 65 year old with an “oh shit” moment. Time goes by way too fast. And if you do wake up old and financially destitute, know that it was probably because nobody around you gave a damn to help set you straight.

The power of saving early + compound returns
You want to be the blue line because someone told you the power of saving often and early. Source: JPM

You might think I sometimes lack compassion on Financial Samurai, but it is precisely because I care, which is why so many of my articles are raw and unbuttered. I also selfishly care because I have no desire to relive another financial crisis!

By providing a framework on whether to pay down debt or invest, you should be able to make better financial decisions.

By giving you some guidance on various asset allocations by age for your portfolio, you'll decrease your risk of blowing up in a downturn.

By providing net worth targets to shoot for by work experience, hopefully you'll get motivated to save and earn more if you are behind.

I'm not a journalist who will write a 5,000 word article saying the middle class is in trouble while offering zero solutions to get out of trouble. Our personal finances are just too important not to find solutions. This is Financial Samurai!

Nobody Will Save You But You

“Do not handicap your children by making their lives easy,” Robert A. Heilein.

Look back at every single mistake you've ever made. Throw in all your regrets as well. Do you wish someone told you the hard truth, even though it may have hurt your feelings? Or do you wish nobody said a thing about the realities of your choices? With every single mistake I've made, I wish someone would have showed me all the downside risk.

I WISH someone slapped me silly in high school about the repercussions of taking a prank too far senior year. But I was too crafty. It would have saved me a lot of stress during college, wondering whether I'd ever get a job.

I WISH someone had educated me more about past real estate down cycles and how it can devastate a person's finances if they have too much debt. I might have saved hundreds of thousands of dollars and avoided feeling tremendous amounts of regret and stupidity years later for buying a vacation property.

I WISH someone would have told me more aggressively to stop day trading my portfolio while at work. It was allowed, but it negatively affected my work performance, raised red flags to senior managers and ultimately wasted my time because I couldn't make money for a sustainable amount of time. I'm sure my pay and promotion were adversely affected because I lost the support of one MD who had to review all employee trading.

And now I WISH someone could give me guidance on all the things I'm doing wrong online. I'm sure I'm missing a lot of obvious opportunities. Everybody has their own issues to deal with, so I understand. I've just got to figure things out for myself.

If someone is giving you tough love, LISTEN. They've probably already been through what you are going through. Thank them for taking time to give you valuable advice. It's much easier to say nothing because giving tough love hurts! But tough love is still love. It's the people who no longer care about you who don't bother saying anything.

Related: How To Get Everybody Else To Pay For Your Financial Mistakes But Yourself

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Planning for retirement when paying for private grade school
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50 thoughts on “Why Tough Love Is Important When It Comes To Your Finances”

  1. To succeed in your career, you find a mentor – someone who is ahead of you in years, experience, and position who can guide you along the way to avoid the common mistakes.

    So few people get professional financial advisors, but it makes me wonder why people don’t find financial mentors to help them avoid the obvious mistakes.

  2. Anonymousinbk

    I’m chinese american, born and raised in nyc. I lived at home during college and law school.
    I definitely do think culture plays a large role in my mindset.
    Let me ask this of all who want their kids out at 18 – are you fine with your kids seeing you once a year or moving out of state the first chance they get? Not that they don’t love you, but that’s the cost of business when it comes to tough love.

    1. Thanks for sharing. Not sure if it’s tough love, or a mutual desire to leave the house and be independent sooner.

      Adult children who live at home for all of college and then all of graduate school are a minority in the states. What did your friends do? Did you not have the same desire to “Cheng Jia Li Ye”?

    2. “Let me ask this of all who want their kids out at 18 – are you fine with your kids seeing you once a year or moving out of state the first chance they get? Not that they don’t love you, but that’s the cost of business when it comes to tough love.”

      As a parent you make the best choices you know how. And a lot of it is based on experience.

      I paid for college myself. It’s truly one of the things I’m most proud of. My parents also gave me the ‘you can’t stay here rent free unless you’re going to college and getting good grades’ speech’.

      There were no issues. I have a great relationship with them.

      It’s not tough love in my opinion. It’s called being a parent. And, as such, your job is to prepare your kids – as best you know how – to survive and ultimately thrive as adults financially, socially and spiritually.

  3. Anonymousinbk

    I have mixed feelings. I agree that throwing them to the wolves at an early age will help them develop character and independence. I just have reservations with the idea that an 18 yr old is an adult. College kids are still kids!

    I think what I would do is allow them to live at home during college and give them a 2 year grace period to get their feet under them. If they choose to go to grad school that’s fine. If they use that time to save a little money to make some moves that’s fine too. I think that is a balance between coddling and “tough love.” Thoughts?

  4. I’m curious what you think you’re doing wrong with this blog. It seems to be very successful. Are you losing readers? Is the comment about “a lack of compassion” still bothering you? Are you concerned that you aren’t growing?

    If you are concerned about growth, it’s possible that you have simply reached a market limit.

    If you are concerned about the readers saying you lack compassion, I’ll admit that I have felt that way myself after reading a few of your posts. However, I don’t think you are a bad person, I just think you give too much credit to the “pulling yourself up by your bootstraps mentality.” I agree that hard work can get you ahead, but I think luck is a major factor in success as well. I was pretty happy to see you call out “luck” in this post.

    You may find this article interesting.


    Keep up the good work. Although I don’t always agree with your point of view, I think you are a great writer.

    1. I’m always looking to challenge myself and get better. The sky is the limit for online growth. I think having an attitude of always trying to get better makes people better, don’t you think?

      The only thing we can control is our work ethic. And I totally agree with you that most of any success I have is luck.

      How about you? What is your story? Why did you change your handle but keep your email the same?


  5. @Anonymousinbk – What do you propose? Let them live in your house till they’re 30? What do you think that teaches them? After they graduate high school they are adults.

    1. I would likely take my Grandfather’s stance. You can stay so long as you are on a planned educational plan. (not taking 9 years to complete undergrad). You can stay otherwise as long as we have a planned way with a timeline for you to leave. Say you have 6 weeks between school and the start of your job and you are looking for and saving for an appropriate apartment.

  6. Anonymousinbk

    Any thoughts on what “tough love” means for child rearing? I don’t have children now but it scares the living hell out of me that I will raise entitled lazy millenials. Kicking them out at 18 seems extreme…

  7. I don’t like tough love. Nobody likes to hear criticism.
    You need tough love when you’re young so you learn how to turn it into something positive. That’s why I’m teaching my 5 years old that life is not fair…
    But, yeah, tough love is no fun.

  8. My issue is not that I can’t take criticism – it’s more that I struggle to decide whose advice to listen to.

    I have had a lot of idiots offer me dumb advice that I ignore.
    If someone I admire who clearly has more life/work experience than me gives me tough love, I listen to, and internalize, their advice.

    What is the best way to determine whose advice is worth consideration?

  9. Midwestern Landlord

    Mistakes are a part of life. The key is learning from them. Find a person that has never made a mistake and then you find a person who has never done anything.

    While bad decisions, mistakes, etc. can be devastating at the time, in the long run they can have great value. They can change one’s course for the better. Good things moving forward can come out of prior mistakes.

  10. “People who ask for advice already know what they are going to do; they are really just asking for permission.” – John Wooden

    FS, have you ever received ‘tough love’ advice that you took, on anything? Me neither. You friend ‘Nancy’ and her response to you “why didn’t you set me straight?” shows that she hasn’t learned anything, and is still failing to take accountability.

    Here’s some ‘tough love’ on your relationship with ‘Nancy’: if she is an ‘acquaintance’, yet she is confiding her marital troubles, multiple affairs, and sex life to you, and you are visiting her and her woods colt baby years later, and she is sobbing in front of you, you are in the ‘danger zone’ and need to cut off this relationship. This woman is drama walking, you are a married man, and nothing good can come from a visit with ‘Nancy’. If you are uncomfortable having your wife present when you visit, that should tell you all you need to know. Good luck!:-)

    1. Yes. A 10th grader told me in 8th grade on the bus ride to school in Kuala Lumpur, Malaysia, “You’re an idiot. Enjoy the 8th grade because grades don’t carry over or accumulate until the start of the 9th grade.”

      I did more research, and that mean I would get a clean slate in 9th grade to try hard, do well, stop messing around, so I could give myself a chance to go to college and have a better life.

  11. I wish I had more people around me that knows about Finances in order for me to even hear tough love. Teaching myself everything and according to your chart, I’m uber late.

  12. First off, I believe in tough love when it comes to finances, because life’s not a video game; there’s no do-over.

    Second, your acquaintance and her personal situation is a terrible comparison to financial illiteracy, bro.

    It sounds like she was an entitled emotional abuser (infidelity qualifies as abuse, at least according to the majority of respected psychologists), and her ex-husband sounds like an a-hole physical abuser.

    ““Why didn’t you set me straight at the time?! I needed to hear some tough love!” She then began to sob. A blanket of guilt smothered over me.”

    You didn’t owe her “tough love” or any advice whatsoever; what you probably should have done was told her that you’re not an ear to cry on when it comes to her violating wedding vows, and dropped her as a friend (there’s some tough love for you :-). It’s not your job to teach any other adult the basics of remedial integrity; the fact that she f-d up her life by having an affair and executing a bunch of abominable life choices is 100% on HER (we don’t live in feudal ancient Japan, she could have divorced her husband honorably), and nothing her blameshifting can do will change that (just as her ex’s terrible physical violence is 100% on him).

    When it comes to infidelity’s resultant emotional abuse and physical abuse, the Western world has spoken quite clearly, and both are largely considered inexcusable behaviors; they don’t require tough love, they require social shaming and legal ramifications. Financial illiteracy is totally different; it requires tough love because it’s complex, affects everyone for a lifetime as you pointed out so well, and it’s not even taught in schools for the most part (and when it is, it’s often funded by the same factions that most benefit from keeping people at least somewhat financially illiterate).

  13. Curtis Alexander

    Tough love is especially missing with parents nowadays.

    We all want our kids to have it better than we did growing up. But, looking back, I realized I really didn’t want for anything as a kid. At least not the things that were important. And the things I didn’t have made me work just that much harder.

    There’s a reason mother birds push the babies out of the nest.

  14. For the latter part of your post, you REALLY tell anyone anything though? People need to fail and make mistakes. It’s what forces them to finally do the right things if they’re capable.

    In the case of your friend, I think “do what makes you happy” is perfect advice. I think that implied to leave her husband since she was unhappy with him.

    Tough love boils down to not being an enabler – not actually telling people what they want to hear, forcing them to make changes theirselves.

  15. Rather soon I learned to live below my means. What would have been good is to have the lessons on what investing could mean. For years, saving was the thing I knew. This is good. Investing it myself would have been better.
    I discovered it now, and plan to shave of 15 years of my working life!

    Reading the comment above from AJ:
    The plan with our kids is to give them a lot of love, and also tough love. Learn that there are boundaries, that they need to solve problems themselves, that hard work pays, that you need to enjoy life and that there will be happy times and working times.

  16. I can definitely relate to this post. I have not received tough love but I have given it to other people. Many (all) did not listen.

    When I was a teenage 33 years ago, I told my aunt to not be a crutch to my cousin but she continued to give money thru the years. My cousin is a couple of years younger than I. My aunt equate money with love. She gave him 80K for down payment for a house, 10K twice for two cars, 5K each year for college tuition for my cousin’s child, money to travel overseas to visit my cousin’s in-laws,etc. I always told my cousin to save money especially for college tuition but my cousin and spouse spent money on new clothes, electronic and gadgets. They each got layoff recently and are struggling but at least their child graduated.

    I recently saw my aunt and she complaint about my cousin now age 50. I told her that she will get no sympathy from me since I told her 33 years ago that her child will be dependent on her forever. The worst thing is that my cousin does not even love my aunt and does not even appreciate the money! My aunt said to me how can I not help my child? I have no reply.

    I have another aunt that has the same problem. My aunt gave an 800K house to her child. This child (now age over 40) expects my aunt to baby sit for her at times and would yell at my aunt when she does not get her way. I told my aunt to stop helping her and my aunt said it is too late now to stop helping her.

    These parent don’t understand that they are raising a weaker child that will not be able to survive without them. We do not have children so maybe that is why I don’t have a bleeding heart.

    6 years ago, I told my co-workers to not make major purchases like a house or a car because of future layoffs. A close friend showed me how to generate tax free passive income. I tried to share and I told many but no one listened to me. Some mocked me and did not understand why I wanted to be FI.

    In the last 4 years over 500 people were eliminated and layoffs are still continuing due to outsourcing. Many that did not listen to me got layoff and are in panic mode. Some are now following my investment plan to generate tax free passive income. They now say that they should have listened to me 6 years ago. I responded that it is never too late to help yourself. I currently help 5 ex co-workers and I don’t charge any money since I enjoy helping them. For 3 of my co-workers that were eliminated, I gave them each a financial plan to be FI.

    I do try to learn from people’s successes and I try to avoid their failures. My parents had their own business and they purchased rental propeties. They worked hard 10-12 hours a day 7 days a week and they had a lot of financial stress. Since I am not an entrepreneur and I can’t deal with tenants, I did it differently. I worked for a company that has a pension. My external investments provide tax free passive income that covers over 100% of our expenses and we became FI two years ago.

      1. Ken,

        I buy a lot of individual municiple bonds which is Federal and State tax free in the US. Our state is financially stable so I don’t have to worry. I brought a lot of 5% bonds when I started 6 years ago and last year brought more at 4% close to PAR. If you live in state tax free like Florida then you can buy bonds from other states and it will be state tax free too. That is one reason I would love to move and to retire in Florida one day.


        1. Ah, gotcha. Florida is great for retirees: warm weather and no state income tax. I grew up in south Florida, went to school in Tallahassee, and then I got the hell out.

  17. The MAD Consultant

    I’ve found tough love to be the best medicine for a few reasons. One you live with no regrets since you spoke your mind they way you felt was necessary. Two is that most rational people eventually come around to their senses. Even if at first they are a little perturbed by what you had to say. Nice article

  18. FinanceObsessed

    Great article Sam. I have a different perspective on tough love however. I don’t mind someone telling me that what I’m doing is wrong or that I’m being stupid with my money or that I should work more as long as they have solid and valid reasons. What matters is HOW they convey that information. I believe you should have told Nancy what you thought about the situation (not what Nancy should do) then Nancy should have thought through the analysis herself. I don’t think telling someone the portfolio they have is too leveraged is tough love, just a neutral thing. It’s up to the receiver of the message to decide on the validity of the sender’s claims. What do you think?

  19. Believe Fire

    It’s difficult for me to give tough love to friends or family about money. I think in most cases they are unlikely to be appreciative, and it may end up being detrimental to the relationship.

    Sam, do you have any advice for providing tough love to someone close to you?

  20. About all those: >>I WISH someone would have …

    The truth is, someone did, or many people did, or we told ourselves… BUT WE DIDNT LISTEN.

    1. Nobody listens. Plus, much advice is bad. Hence, my belief in fate. Do all you want but what you do is fated. All the decisions you made were based on who you are back around kindergarten. So that tough love is a little late. Someone needed to drill it into us when we were five. Now that we’re adults it’s too late.

      But only for most of us. There’s those few who can change the stars.

      Btw, this poll is laughably biased in the question slanting. Like voting for president in Russia.

  21. airportsyndrome

    Good article. Thank you, sir. I chose Other. Tough love but be able to relate and share mistakes. I have haters in my family for giving my son tough love. He is 18, and I am booting him out next month. I opened him a Vanguard IRA as a gift and explained to him the power of compounding.

  22. I wish my parents were responsible with money and taught me how to be financially responsible before going to college.

    I wish my grandfather were alive for longer so I wouldn’t have been able to ignore his financial prodding up till age 5 that I completely forgot.

    I wish my 8 years younger brother would listed to me so that he wouldn’t make the same mistakes I have.

    And finally, I wish I had bought as much property as possible a few years ago before RE doubled in Denver. Instead we have no property and are still renting. And our rent went up 15% last month after negotiating down from a 20% increase. Landlord knew we weren’t going to move, and they called our bluff.

    I’m sure there’s a lot that I’m leaving out.

  23. There is always tough love type advice coming from someone. The question is, do you listen to it? Some people can take criticism, process it, and assess their best option. Others feel their way is always the best way, and need to make their own mistakes first.

  24. I’m going to abstain from the voting process, simply because I need to process this a bit more.

    In many ways, I have received my fair share of tough love over the years. Some of it developed determination, perseverance, and strength of character, while other instances of tough love left me feeling defeated.

    Philosophically, tough love is a great way to help a person if you are willing to walk alongside the person and provide support throughout their change. If you are going to tell it like it is and then abandon the person, you would be further ahead to just keep quiet and let the person learn by trial.

    Sam, just curious – how did life turn out for Nancy? Are you two still close?

  25. Aliyyah @RichAndHappyBlog

    I am a pretty self-sufficient person. I have had very few things handed to me. I have worked hard for what I have and will continue to do so to reach financial independence. I think some of us learn that tough love is good by default.

  26. Jack Catchem

    Great article, Sam. In my line of work I normally end up dealing with the end results of the “laissez faire” and “disengaged” parent/friend/spouse. They turn to me and say “tell them to do as I say or you will arrest them.” I’m often forced to reply that 1) it’s not a crime to ruin your life and 2) there’s no ten minute speech I can give to fix months or years of silly decisions.

    As you say, this is capitalism. There’s no one to save you but you, and there are few bold enough to criticize because they care. Thanks for caring!

  27. The Green Swan

    We all need that tough love or people to truly drive in the importance of compounding investments. I’m lucky to have experienced that growing up and plan to pass along to my son so he can avoid “I WISH…” as much as possible.

    Your honest posts are very enjoyable, keep them coming!

  28. I picked other because I think it varies based on how you know the person and what your relationship is with them.

  29. Unfortunately, you can’t make people listen to tough love.

    One way to convey urgency toward change – is to tell them about a few mistakes you wish you had never made in life. I’ve seen that work.

    The truth is though, we are rewarded for bad choices initially. Its that initial high that pushes us over into habitual behavior, then into a lifetime of financial problems.

  30. Distilled Dollar

    Easily my favorite article from you yet!

    Tough love is the reason my student loan debt has been a massive advantage — being in debt propelled me to finding out about personal finance early in life. Had I graduated debt free, I would easily have been swooped up in the standard lifestyle with no real urge to learn about personal finance, let alone start the process of building wealth.

    Personal Finance naturally involves difficult topics. I would say the hardest part is admitting to yourself where you stand. Everything else afterwards might be difficult, but with time it can be figured out (such as finding more ways to save, how to invest, good vs bad debt, etc.)

  31. Tough love is really hard for me to hear, because I tend to be so overly self-critical that odds are I’ve already told myself a hundred times that I need to stop doing x or y. But I know I need to hear it, and I appreciate it when someone has the guts to be able to deliver it to me straight.

    Thanks for being our source of tough love, Sam!

  32. Financial Slacker

    When I look back, I had plenty of people giving me advice. Some of it even tough love.

    But honestly, I was mostly too stubborn to listen to that advice. I didn’t know everything, but I assumed I knew enough. And I certainly didn’t need a couple of old folks (who were my age now) telling me what to do.

    Even if you had given your friend Nancy the tough love speech, would she have listened? Sometimes I think we need to live through those mistakes and come out smarter and stronger as a result.

    So how do you get someone to listen to your tough love?

    1. Great post and I totally appreciate your comment about the NO REWIND BUTTON! So true…

      “With every single mistake I’ve made, I wish someone would have showed me all the downside risk.” I agree with you here too – especially the major financial mistakes. I earned a doctorate a few years ago that focused on decision analysis and as I move into early retirement, I hope to grow a small “decision coaching” business to help people use a better process as they learn to make really important life (especially financial) decisions.

    2. I agree here “Slacker” – when I was given advice about relationships, I was totally stubborn and didn’t listen. I would really have liked to have had more sound advice about some financial issues though. I don’t even want to think about what my Vanguard account would look like now if my money had not been invested with a big insurance company’s mutual funds for over 20 years…

  33. “WISH someone would have told me more aggressively to stop day trading my portfolio while at work.”

    Guilty – though that was more of a WISH I had taken the advice from books I read.

    I have thought a lot about what I do with advice lately, I think half the time I want to prove that my way will work too and pull a few pointers out, 40% of the time I take it and 10% of the time I ignore it and have WTF was I thinking moments awhile later.

    Keep telling us how it is! That is why I come back regularly!

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