Keeping a woman on the side has become the norm for powerful men in China. A study published in January 2013 by the Crisis Management Center at Renmin University in Beijing showed that 95 percent of officials had illicit affairs, and 60 percent of them kept a mistress. But there is a distinction between girlfriends. There is “xiaosan,” meaning a “third party” and closer to what is traditionally considered a mistress; and there’s the “ernai,” meaning a second woman…
On a trip to Seoul a few years ago, I was amazed that the Hermès store was swamped with Chinese men aggressively buying up $12,000 handbags. A quick online search about this phenomenon led me to the explanation: The majority of Chinese top officials and businessmen had mistresses, and these mistresses expected compensation with high-status luxury items like Hermès bags. Buying them at Incheon airport on their layover back to China ensured that the items were duty-free and genuine (rather than ubiquitous knock-offs). Check out the wild out-performance of Hermès stock over the last 5 years, up 95% vs. the global markets which were down -8%.
The mistress culture is hardly specific to modern day China. It has been a significant part of society since before Biblical times. While childhood fairy tales would have you believe that marriage and romance are intertwined, the reality is that they are independent concepts that only sometimes overlap. The billions of people who still enter arranged marriages without romantic courtship offers evidence that marriage endures without romance. Conversely, the millions of enduring romantic relationships among gays and lesbians without access to civil marriage, until recently, offers further evidence that romance endures without marriage.
Marriage is NOT a requirement of enduring romantic love. Conversely, romantic love is NOT required for marriage.
Marriage is a civil contract between two people, laden with financial obligations to each other and to society. In the US, this includes paying for child care, providing for health care coverage, paying marriage tax penalties, paying each other’s debts, etc.
Romantic love (or “courtly love”) is the sexual attraction towards another person and the emotional bond that results. It is believed to have been popularized in Western culture in stories about medieval knights wooing women of nobility with elaborate rituals. (Even during medieval times, courtly love was far removed from the arranged marriages expected of nobility to establish succession.)
For less than the price of a tacky wedding dress, an experienced estate planning attorney can hammer out a will or trust, document property ownership interests, establish a health care proxy, appoint a durable power of attorney, and authorize a child or pet custody agreement.
WHEN MARRIAGE IS A GOLDMINE
Marriage is financially beneficial in the following circumstances:
- Avoiding federal estate tax on assets greater than $5.45M upon a [wealthy] spouse’s death.
- Avoiding state-specific estate tax upon a [wealthy] spouse’s death.
- Saving on health insurance premiums by piggybacking on a spouse’s employer-subsidized medical and dental insurance plans.
- As a lower earning spouse, you are entitled to one-third to two-thirds of marital assets upon divorce (stocks, bonds, real estate, business ownership).
- As a lower earning spouses, you are entitled to ongoing alimony and child support upon divorce.
WHEN MARRIAGE IS COSTLY
Marriage is financially disastrous in the following circumstances:
- When one spouse has substantial debt, the other spouse inherits the fallout from the debt.
- When both spouses work, they often pay a substantially higher percentage of income in taxes than singles (marriage tax penalty).
- Income taxes on Social Security benefits is higher compared to singles.
- Faster phase-out of deductions, exemptions, credits, and Roth IRA eligibility than if unmarried.
- Much lower subsidies for health insurance on the exchange than if unmarried.
- As a higher earning spouse, you part with one-third to two-thirds of marital assets upon divorce (stocks, bonds, real estate, business ownership).
- As a higher earning spouse, you are obligated to pay alimony and child support upon divorce.
If you have a good marriage, your financial obligations will be more like an expensive hedge fund that sounds impressive but actually lags the index while still charging 2% a year and 20% of gains. If your marriage gets rocky, your financial obligations will be more like investing in your nephew’s food truck, only to find out he quit to go backpacking across Europe, leaving you to sling kimchi tacos on the weekends to try to make up your losses.
FOCUS ON THE ROMANCE
So keep your sweetie happy, and focus on the romance. Gay, straight, bisexual, polyamorous, whatever…romantic love endures without marriage, and marriage does not guarantee that the romance endures. Therefore, I argue that romantic love and marriage should be considered separate entities, merged only with the blessing of a super tax-savvy CPA and not your nosy friends on Facebook or your nagging relatives asking you when you’ll finally get married.
American Kimchi 