Min’s note: Given my professional discipline of risk management and diversification, I continue to find the quest for a life-long marriage an insurmountable order, and neither do I have any first-hand experience. My comments below were based on the collective wisdom of Team Totum.
Learn how happy couples can grow an investment future together while also protecting themselves.
Insert chirping-bird and flute sounds here: Valentine’s Day is upon us, a time when the chocolates fly, the mushy poems lie, and investors in love decide how much they’ll buy. From each other, that is.
As a force of irrational exuberance even former Fed Chairman Alan Greenspan cannot explain, love is indeed too often blind when it comes time to unite portfolios and pool finances. Think of it like an investor who pours money into a pet stock without taking time to check the numbers. And here’s one statistic that cannot be ignored when it comes to couples and their money: Half of marriages still end in divorce.
Tricks of taking love to the bank. If you and your honey start by keeping separate bank accounts, be careful. “It seemingly encourages the attitude that my money is mine and mine alone,” says Min Zhang, CEO of Totum Wealth in Los Angeles. “However, if one has automated payments and credit cards, it can be difficult to reorganize this, not to mention ordering new checks.” A good mutual target, Zhang suggests, is to start a new joint account that allows for spending transparency and a gentle path to financial union while preserving some autonomy.