Investing as a Couple: Getting to Yes
In a perfect world, both halves of a couple share the same investment goals and agree on the best way to try to reach them. It doesn’t always work that way; disagreements about money are often a source of friction between couples. How can you bridge that gap?
Define your goals. Making good investments decisions is difficult if you don’t know what you’re investing for. Make sure you’re on the same page- or at least reading from the same book- when it comes to financial goal-setting. In some cases you may have the same goals, but put a different priority on each one or have two different time frames for a specific goal. Coming to a general agreement on what your priorities are and roughly when you hope to achieve each one can greatly simplify the process.
Make sure the game plan is clear. Making sure both spouses know how and why their money is invested in a certain way can help minimize marital blowback if investment choices don’t work out as anticipated. Making sure that both partners understand from the beginning why an investment was chosen, as well as its risks and potential rewards, may help moderate the impulse to say, “I told you so” later.
It takes two. If only one person makes all the decisions- even if that person is the more experienced investor- what if something were to happen to that individual? The other spouse might have to make decisions at a very vulnerable time. If you’re the less experienced investor, take the responsibility for making sure you have at least a basic understanding of how your resources are invested.
If you’re the more conservative investor…If you’re unfamiliar with a specific investment, research it. Though past performance is no guarantee of future returns, understanding how an investment typically has behaved in the past or how it compares to other investments could give you a better perspective. Consider whether there are investments that are less aggressive than what your spouse is proposing but that still push you out of your comfort zone.
If you’re the more aggressive investor…Listen respectfully to your spouse’s concerns. If you don’t have the patience to educate your spouse, a third party might be better at explaining your point of view. Concealing the potential pitfalls of an investment about which you’re enthusiastic could make future joint decisions more difficult. Remember that you can gradually make changes in your portfolio.
What if you still can’t agree? Consider investing a certain percentage of your combined resources aggressively, an equal percentage conservatively, and a third percentage in a middle-ground choice. Or use separate asset allocations to balance competing interests. Finally, a neutral third party with some expertise and a dispassionate view of the situation may be able to help you work through differences.
-S. Joey Elmore, Vision Financial Group
4505 Pine Tree Circle, Birmingham, AL 35243
Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2016. Investment Advisory Services offered through Investment Advisors, a division of ProEquities, Inc., a Registered Investment Advisor. Securities offered through ProEquities, Inc., a registered broker-dealer and member of FINRA & SIPC. Vision Financial Group, Inc. is independent of ProEquities, Inc.