How Can Couples with Different Investing Goals Meet in The Middle?
By Brian Famigletti, Managing Director & Head of Marketing
Identifying Your Goals
Investing can be complicated enough for an individual. Add in the complexity of two people with differing needs, wants, and goals, and investing as a couple can be difficult indeed. But it’s far from impossible.
The first step to creating an investment plan as a couple is to identify each person’s goals. A portfolio to pass onto future generations? A high retirement income? A beach house to retire to? Whatever your goals are, they should be clearly communicated to your partner — along with the reasoning behind them. It is difficult for couples to create an effective financial plan without knowing what you are planning for and why.
Once you know the “what” and “why” it’s time to determine the “when.” Identify a timeline for each goal and consider what you want your future to look like in 5 years, 10 years, and so on. These aren’t just important questions for you to think through. It’s crucial to know your partner’s answers as well – and for them to know yours – so you can choose a plan that works for both of you.
Having The Conversation
Even with all the necessary information, that choice isn’t always easy. This is why the next step is to have an open and honest conversation. Not everything will be agreed upon, and disagreements may not be immediately resolved. The opportunity for shared financial success is available only when both parties are open to listening and compromise.
Typically, most couples ultimately want the same thing: financial security for themselves and their children, if they have any. The challenge usually lies in varying opinions on the best way to achieve those goals. It is also imperative to understand what each person’s definition of “success” is when it comes to investing.
In this step, it may be helpful to utilize a financial advisor, either during the initial conversation or further down the line, to provide insight, expertise, and an unbiased third-party perspective.
Finding Common Ground
Once this groundwork is laid, you can begin the process of identifying what you have in common and where the discrepancies lie. The topics to consider here include each other’s lifestyle preferences, risk tolerance, and favored assets.
You may find that you have different investment goals driven by the same underlying motivation. For example, one partner may have the goal of leaving a stock portfolio untouched in retirement to pass it down through generations, while the other aims to have a certain amount of funds in Uniform Transfers to Minors Act (UTMA) accounts for each child. Both goals are driven by the desire to provide for your children. Although the paths are different, they are on common ground.
On the other hand, there may be instances where your goals do not align at all. This is where compromise comes in — and compromise often comes down to priorities. For example, if you have a casual interest in cryptocurrency, while your risk-averse partner heavily favors safer investments, it’s probably not worth pushing to invest any joint savings in digital assets. Finding compromise when it comes to your partner’s high priority goals will likely encourage them to do the same for yours.
At the same time, if your resources allow for it, you can always fund multiple goals simultaneously — i.e. budgeting funds for both equities and a UTMA account or setting aside a portion of your personal discretionary spend to invest in crypto. This can be a happy medium for the relationship and provides diversification to boot. But of course, it can be easy to stretch your assets too thin which is why it’s important to ensure the highest priority investment vehicles are fully funded first.
If a couple can identify their respective goals, recognize their common ground, and remain open to conversation and compromise, financial security and success is well within reach.
Sources:
https://thehgroup.com/investing-as-a-couple-getting-to-yes
https://blog.reination.com/keys-to-smart-investing-when-your-spouse-has-different-goals
https://wellergroupllc.com/investment-planning/managing-finances-as-a-couple
