• Briefly Noted
  • Three Investment Management Tips for Couples

    One spouse is responsible for making the investment decisions in the majority (56%) of households surveyed by investment firm UBS. Men are the primary decision-maker in approximately 40% of households, while women are the primary decision-maker in approximately 16% of households.

    Though it’s common to have one person make the investment decisions in a household, survey respondents tasked with the responsibility didn’t express much satisfaction with the role. Notably, the less-engaged spouse isn’t satisfied with the division of labor either. Women in married couples were the least confident about their financial situation in retirement. Women were also the most likely to report disagreements about how much money to spend in retirement (30%).

    Given these findings, UBS offered three options for potentially improving outcomes and satisfaction.

    Plan together and then assign responsibility for execution. UBS suggests couples create an initial financial plan together and then divide the responsibilities for executing and monitoring the plan. The firm believes that both spouses will become more engaged and satisfied if this approach is followed.

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    Discussion

    Sheila Beall from NY posted over 2 years ago:

    I don't understand the difference between wealth allocation and asset allocation.


    Ron from WA posted over 2 years ago:

    Asset allocation refers to division of a portfolio among various asset classes, such as stocks, bonds, real estate, cash, etc., in order to achieve a desired balance of risk vs. return. It may be helpful to think of it as a strategy, or means to an end.

    Wealth allocation refers to the intended purpose of assets. The focus is on desired uses, such as retirement living expenses, travel, charitable giving or legacy inheritance, etc., and timing of those uses. It may be helpful to think of it as a lifetime budget plan, or bundle of goals.

    The suggestion in the article is that it's important for couples (or anyone, for that matter) to consider and agree on the goals first, because those goals will affect asset allocation choices (among other investment management parameters) in the present.


    Barney from WA posted over 2 years ago:

    I totally agree with involving both husband and wife in the asset allocation decisions. To achieve these goals, I would prefer to start with a budget. My wife does not like to budget because she feels I am blaming her for our overspending. How can I involve her to help with budgeting?


    Wayne from WI posted over 2 years ago:

    It is not uncommon for couples to have difficulty with creating or keeping a budget. That is sometimes because one or both do not understand the right way to create or maintain a budget. If one spouse creates a budget and then demands that the other comply, the budget is destined either to fail or to create additional friction. To get started right, I strongly suggest taking Dave Ramsey's Financial Peace University class. These are often held in various parts of the country and are hosted by trained facilitators. You can find FPU on the internet.


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