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June 18, 2011 3:16 am

How to ringfence a casino marriage

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The casino bank is a gang of wide boys and mad scientists making huge bets in an attempt to make money

“Have you considered a complete split? Separation?”

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    “No. That would be going too far. But Bob is just behaving intolerably. I just need more stability. He’s been taking advice from some special commission.”

    “Well – have you considered ringfencing? That nice boy George Osborne says it’s a good idea.”

    “How does it work?”

    “Well, let’s imagine that your marriage is like a large bank.”

    “It’s not that bad.”

    “I hear you. But just imagine. Banks have two sides to them. There’s the ‘utility’ and the ‘casino’. The ‘utility’ is all the banking stuff that’s actually useful, like being somewhere safe to store your money and taking the money you deposit and lending it out for mortgages or small business loans. And making sure your pay cheque actually arrives in your account.”

    “And Bob’s pay cheque.”

    “Yes. And the ATMs and debit cards. The kind of stuff that if it all went away, civilisation would collapse into some sort of zombie apocalypse. This is all utility banking.”

    “Right.”

    “And then the casino bank is a gang of wide boys and mad scientists making huge bets with each other in an attempt to make money. The losses at the casino can cause trouble in the utility. Which is why you need ringfencing.”

    “So how should I ringfence my relationship with Bob?”

    “The first thing to do is to ensure there’s no possibility of cross-contamination from any risky activities he’s been undertaking.”

    “Don’t be disgusting! Bob would never ... would he?”

    “They all said Bernie Madoff was a pillar of the community, didn’t they?”

    “God, you’re right. Shall we get another bottle?”

    ”Excellent idea. But let’s focus, my love. So you could start by erecting a Chinese wall in the bedroom.”

    “I could. It wouldn’t make much difference, he hardly comes near me. Except occasionally after he has been on a bender.”

    “But that’s why you need the protection. You don’t have much to do with each other, except the shared name and the shared accommodation and it’s those occasional attempts to grab your assets that do the damage.”

    “OK. You’ve convinced me. Chinese walls it is. But what about the finances? Bob can make a lot of money in a good month but then sometimes he’ll blow it on the horses. At least he says it’s the horses. And then he’s dipping into the joint account to tide him over and the next thing I know we can’t make the mortgage payments.”

    “That is another thing – you could always deleverage. Stop taking so many holidays, pay off some of the mortgage. Maybe even sell the house and move somewhere smaller.”

    “No way. The house is undervalued. We’re holding it to maturity.”

    “Suit yourself. But you need to ringfence the household account. This is the money you need to meet your regular obligations. Think about the school fees, the car, the one-on-one Pilates sessions. You have to protect your core activities.”

    “And I don’t think Daddy will be willing to give us a capital injection next time.”

    “You’re lucky he did the first time around.”

    “You’re right. You’re right. God, I need a drink. And I’m still worried.”

    “About what?”

    “Well – is it really possible to do this ringfencing? Bob’s name is still on the house and the car. He can run up debts using our joint assets. I suppose we could put them in my name only. But even then, he might find a way around it. And I don’t think I could afford this without Bob’s salary.

    “And he’s so smart! He advises me on my pension and my investments. I need Bob’s advice there but what if he uses them to take the same old risks? And if I take them over, who’s to say I’ll be any better?”

    “I see what you mean. But you need to try. You need some self-respect, darling. You can make your own way in the world. You can’t be the dowdy, boring old thing who just hangs around with Bob.

    “You’ve got to be your own woman, make your own money, be respected for what you do. You can be a part of this relationship with Bob and still be proud of yourself.”

    “Are you sure?”

    “Yes! No. I mean, maybe. It’s going to be difficult. Maybe you should go for the divorce after all.”

    tim@timharford.com

    Tim Harford’s new book is ‘Adapt: Why Success Always Starts With Failure’

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