How to Invest as a Couple

One of the most important decisions that has to be made following marriage is how to invest the collective assets of the couple.  The decision has different solutions, usually pending the financial status of each spouse, and the stability of the relationship.  Before considering how to approach a collective investment, it is wise to seek the aid of a professional like a Certified Financial Planner in Philadelphia, a wealth management firm in New Jersey, or a financial advisor wherever you live.

It’s one of the most important questions a couple will face in their relationship but it so rarely gets asked until a relationship is well underway – should we pool or separate our money for investment?

The answer is as unique as the both of you. But there are some critical facts and some questions to consider as you develop a financial strategy for a lifetime.

Pooling can be a great idea after a marriage because the both of you are legally bound together, so why not bind your finances for potential maximum return? Many financial experts believe it’s a good idea for the simplest of reasons: The bigger the pile of money you two can gather, the greater the potential for financial gain with the right advice.

But there’s more to it than simply combining your assets. Pooling your investment dollars should produce not only shared decision-making, but shared awareness of everything going on with your finances for a lifetime. It’s the kind of cooperation that will not only benefit you all the years of your marriage, but also provide a surviving spouse the knowledge to function if the other dies suddenly or is incapacitated.

It’s a move that woman need to consider in particular – it’s to their advantage to maximize the total investment pie because chances are they will be the lower-earning spouse, as they may go years without income if they stay home to raise children. And if the marriage breaks up – as roughly 40 percent of them do these days – she’ll need extensive assets to prepare for a retirement that will be statistically longer than her husband’s.

But how about a couple that wants to plan separately? The first question is: Why? There may be compelling reasons – for instance, one spouse has assets he or she wishes to protect from another spouse engaged in a high-risk business proposition. Others may have significant inherited family assets that need to be protected for heirs from potential loss in a divorce. And of course, this is the least attractive reason, but it happens: One spouse doesn’t simply trust the other.

These questions and more are a good reason for a couple planning to marry to sit down with a trained financial expert like a Certified Financial Planner™ professional to go over their respective and combined goals for home ownership, retirement, kids’ college savings and various other lifestyle goals. A visit to tax and relevant legal professionals makes sense before the wedding as well.

Using this advice as well as trying to find a financial advisor will allow for the decision on how to collectively invest have a professional opinion.  By doing this, the decision will also be made easier and potentially permanently advised by a professional, making it beneficial for the couple in the long term.

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Posted by Jay McGrath | Leave a comment