Joint Investment Strategies: How to Talk to Your Partner About Investing

Daniel Penzing
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Establish Healthy Communication Around Money

Whether in romantic relationships, long-term friendships, or business partnerships, tackling the complex and challenging issues of money can be problematic. When couples break up, the financial aspects become even more complex. Unfortunately, there is no financial divorce because assets are fluid.

You may need to revisit the discussion of retirement planning and expected care costs with your significant other. You might also build up a policy regarding the sale of a vacation home or have a lengthy money talk. These are never fun but are important for long-term relationship happiness.

This conversation often reveals passions and needs in each person. This just might be the source of the fight.

Each year, people become more and more isolated. You can never have enough information on self-directed IRAs.

The two of you are now committed for life. Mutual funds are gaining rapid ground due to their competitive returns.

Create a list of all explicit items to share and those to share in an equal manner. This will help equalize income risk, and you will feel secure in your relationship.

Talk about things that may bug you. Discuss issues that aren’t just money-related, but how to uncover secrets and work through challenges.

Give a copy of the financial plan to your partner and allow him or her to read it. Write down some notes as to how much you should save for retirement.

Review Your Own Money First

We all have our own money, and we will have to decide what to do with it. Deciding whether to put money into a joint account is a serious matter that can affect both your finances and your relationship. Both you and your partner should be comfortable with what you are agreeing to, and must have enough money to afford to do it.

Get Clear on the Money Rules

Making a joint investment strategy needs to be a team effort. Before you move forward, you need to be clear on how you and your partner want to approach the investment decisions. Define what is the priority of the money.

Is it your retirement or buying the house of your dreams? Have an open discussion about your finances and agree on the rules for the joint account. Agree whether or not you will each contribute a specific amount to the account or if you will decide together how much will go into savings, investments, and expenses.

Set a Goal

Discuss your goals and decide where you want to be in 5 or 10 years. If you and your partner have different views about making a joint investment, it will not be easy to agree. Make sure you are both on the same page and commit to each other.

Think about What Might Go Wrong

Discuss how you will have a plan for emergencies and what you will do if something unexpected happens. Discuss a worst-case scenario, and how you will work together to overcome it.

Set Goals Together

Before you sit down to talk savings with your partner, do some planning on your own. Start by deciding what kind of life you envision for yourselves. Write down answers to questions like: What is your dream house? What kind of cars and vacations would you like? How much would you like to be making in 10 years?

Then, figure out where these things are likely to come from. Those ambitions you had when you were younger – just starting a career, for example – may require a lot less money than you imagined. Some of the stuff you may have gotten from your parents when you got married may still fit you now.

Looking at what you've got now can help you determine how much you need to achieve your goals.

But once you’ve figured out what you want, remember to set goals together. Not only does this create a win-win solution, but it can also make the dreams seem more attainable if you’re both working toward them.

Discuss the Investment Accounts You Have and Want

Even if you don’t want your spouse to have access to the details of how you manage your money, you should consider talking about the following things:

{1}. How you are coordinating between investment accounts and your retirement/emergency accounts.
{2}. How you are using the surplus cash that may be available to you.
{3}. What search strategies you are using to find investments.
{4}. Your asset allocation, and why you feel it is appropriate.

These are not the only topics you and your spouse need to be talking about. But they are important.

Review Your Contributions

Final Word