Your partner could be the best source of ideas. And could also balance you out! Find out more by trying to involve each other through joint investment decisions
As always, we at Pair Shaped are always looking at everything we do with a “relationship” lens – and if there’s a way we can improve something, we will.
We wanted to tackle an idea that we think is often viewed as a individual task – and that’s investing, and what to do with your hard earned money.
To us, when you really look at it, investing speaks to your core, and who you are as a person – because it really takes into account your beliefs and the way you view the world.
And this is why investing can actually be an amazing activity for you and your partner to start getting involved in – because you can learn a lot about each other.
As long as you do it the right way – set some grounding principles, keep dialogue open, and get to the same page on risk/reward, though not necessarily agree -you can spend time debating and having positive, constructive conversations about what to invest in.
Simplifying it greatly for an example, if one partner really likes real estate, and another partner likes technology, there can be a lot of discussions you can have around why, and around how you should allocate your resources. Maybe you decide to explore technology as your “risky” assets, or maybe you both agree that technology investments today are the way forward.
And if you disagree – you can find common ground. If tech is too risky for one partner, perhaps the allocation amount or the type of instrument can be tailored to meet both partners’ needs. For example, in this example, why not invest in a tech ETF – that will give you broader exposure, but perhaps not so much absolute amount risk?
Investing together means sharing your world views together – it means having an enriching conversation – even if you don’t end up putting down a cent
We spend most of our daily lives working and acting professionally with others – why don’t we do so with our partners?
Yes, our loved ones are there to be silly with, and fun with, and human with – but they can also be there as a solid intellectual guide as well.
By establishing a home “investment committee”, you and your partner can meet periodically to discuss potential ideas of where to put your money.
The truth is, while we may share a lot, and often, with our partner, we may have forgotten to share with them one of the most important parts of what makes us so interesting – and that is linked to our beliefs, our views, and how the world works. Our fears, or desires, and our vision for the world all comes together in the idea of investing. There is so much to discuss and share – we think everyone should start now!
Avoid some pitfalls – set some ground rules
Because there’s money involved, things can get tricky. It should be a safe and fun exercise, not something at risk. So we suggest the following as a basis before you start this journey.
- Talk. Talk often, about what, when how. Discuss your goals first – is it security? Is it paying off debt? Is it that you’ve got a little extra cash, and you want to play with it?
- Agree on the risk / reward. You must both be comfortable with the amount put in, and the amount you’re willing to lose. Remember, investing, when done properly, can be a great way to supplement your income, but it is never guaranteed.
- Never make an investment that one partner strongly disagrees with. Allow each other to disagree.
- Agree that a decision made is a decision made. Agree now that retrospective “I told you so”s are not allowed. As long as you have both agreed on a decision, you both get to enjoy the outcome of your decision.
- Establish a routine. Once you’re agreed on getting started, set a reminder in your joint calendar (a topic for another post! how we get organised as a couple) as periodically as you’d like. We recommend once a month to start, but this can become more frequent (or less) depending on your schedules and interest.
Some topics to help get you started
Here are some thoughts that will help get your conversation going:
- macro events
- Is the world heading for a global recession? Are we heading for a country recession?
- How does unemployment look at the moment? How will it look in 6 to 12 months?
- How are the markets doing? Which markets do you look at – the Dow, the Nasdaq for tech, the FTSE (UK), the AIM (UK smaller cap), the DAX (Germany)?
- What about physical commodities? Gold, silver, aluminium, bio, food staples, gas, and so on? What do you think about their value?
- Same for real estate… is the state of the economy going to impact real estate?
- What’s going on in the world that might shake things up? The impact of Covid-19? The long term impact of Covid-19? Is it an election year?
- What will everything look like next year?
- What are people buying now?
- What’s the hottest craze now? Will it last? Will things like meat substitutes be a long lasting investment?
- What hasn’t corrected yet?
- Learning more about the risks and rewards of picking a stock, bonds, ETFs, funds, and all the other kinds of vanilla trading products
- What about newer instruments like digital currency?
It can be amazing what doors the above topics can open between you and your partner. You may learn something completely new about their opinions on the world. Even if not, the simple act of deciding together to put a nest egg away on a selected investment of your joint choice is a powerful thing. At the end of the day, it is one of the most co-operative things a couple can do.
What you choose to invest in – what’s safe, what’s risky, what’s long term, what’s not – at the end of the day, beyond all the research reports and googling you can do, comes down to what you believe in. Hopefully we can get people to start thinking about investing as a joint activity – as something that can bring couples closer by being more co-operative, active, and invested – in each other!