Investing as a Couple

Investing For Two: How Real Couples Save

From buying a home to saving cash, investment opportunities are bound to happen during your relationship. LearnVest shares stories of couples with different investment approaches and what you should do if these examples come up in your life.

Here's one love-related question you might not have pondered: Are you on the same page about your … portfolios?

After all, once you hitch your life to someone else's, you're working toward joint financial goals and building the life you want to live together, whether you want to buy property, save for retirement, have a little bundle of joy … or all three.

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And each of you may come into the relationship with different values, approaches and risk tolerances. So figuring out how to make investing work for you both can be complicated.

Below, three couples explain how they've made their respective investment styles fit their lives. Then, Katie Brewer, a CFP® with LearnVest Planning Services, shares how couples in similar situations can help set themselves up for success.

The Super-Savers
Brandon Sutherland*, 32, a software developer, and his wife, Jill, 32, an optometrist, live in Newbury, VT.

Brandon Says: Jill and I pay a mortgage on our house, have about 18 years' worth of essential expenses saved, no consumer debt and retirement accounts. Although Jill has about $30,000 of student loan debt.

We keep most of our money separate, which has worked for us for over ten years. We provide an equal amount to our joint expenses, but everything left over remains with the person who earned it.

As far as investing for retirement, I max out all tax-advantaged accounts available to me: a Supplemental Retirement Account, an HSA and a 403(b) with an employer match, then invest everything that's left over, after expenses, into a taxable account at Vanguard.

Aside from that, I primarily invest in low-cost index funds. My portfolio is roughly 75% U.S. stocks, 10% international stocks, 10% REITs and 5% Cash. Jill has a 401(k) invested entirely in a singular low-cost John Hancock S&P 500 index fund.

I'm saving aggressively (over 70% of my income) to build up enough money so that I don't have to work a normal job again if I don't want to—I even blog about my quest for financial independence at madfientist.com.

Based on a conservative estimate of our projected future expenses after I stop working, I'm aiming to secure 300 months' (25 years') worth of savings. All told, we currently spend about $2,200 per month. I follow the 4% rule, and based on my current expenses, as long as I have over $300,000, I'll feel comfortable covering my half of essential expenses for the rest of my life. I have side income from my work as a software developer (I've designed a few apps) that should be able to cover discretionary costs.

Jill is saving to be able to work less (6 to 9 months per year), but wants to continue working for the foreseeable future. She plans on working as a "locum" optometrist (an optometrist who travels around filling in at practices) and will be able to set her own schedule.

After a bad experience with a financial adviser in my twenties, I now handle all my investing myself. I tend to take a hands-off approach to managing my portfolio and invest primarily in passive index funds. As I'm mostly in equities and more focused on the tax part of things, I don't rebalance every year.

I do plan on getting into bonds in the future and will look into rebalancing annually at that point. I focus on the things that are within my control (e.g., taxes, fees, etc.) and try to add as much to my balances as possible. I also plan on doing a Roth IRA conversion ladder during early retirement so I can get that money if I need to.

We'll be selling our house (and most of our belongings) in Vermont this year and heading to Florida, where we plan on establishing residency because there's no state income tax. We'll then head to Scotland, where we plan on renting a furnished place from a family member in Glasgow to make our expenses more predictable while having the flexibility to move quickly and spend long periods of time abroad.

I've gotten quite good at using miles, points, credit cards, elite status and loyalty programs when traveling over the last five years, so we already have close to one million miles/points. Once we're settled in Glasgow, we plan on using miles to travel to Southeast Asia. We'll take our time getting there, with stopovers to explore Tel Aviv, Amman, Abu Dhabi, Muscat, Doha, Kathmandu, Hong Kong and Bangkok. Travel hacking has allowed us to travel the world cheaply and comfortably in the past, and we plan to continue to do this in our future travels.

The CFP® Says: "If you're in a position where you want to save up enough to work less (or not at all), the more familiar you are with your budget and fixed expenses, the more accurately you'll be able to predict whether it's achievable to stop working a normal job. For couples who keep their money separate, I applaud finding a method that works for you, but I would encourage you to sync on your long-term goals, like retirement, to make sure you are both on track and no one gets left behind."

*Name has been changed.

The Job Transitioners
Vincci Wong, 33, who works in education, and her husband, Sammy, also 33, an auto mechanic, live in Atlanta.

Vincci Says: I owned a townhouse before my husband, Sammy, and I married in 2011, but neither of us were investing. We decided to purchase a larger second house to live in and use the townhouse as a rental property. After looking at how much we needed to maintain the current home yearly, we decided we should push to increase our savings and investments.

We have no credit card debt and an emergency fund that could last us three to four months.

I worked for an insurance company for five years and took advantage of the 401(k) plan. I left my job a few weeks ago to return to the education field (I used to teach college level ESL) and am now looking at director/managing positions in tutoring centers. While I think I'll be happier in education, I'm anticipating a pay cut and have had to take out money from my personal savings to ease the transition. While I'm not saving or investing now, I plan on starting back up again once I secure a new job.

My husband started investing in stocks (mainly for retirement) when I got my 401(k) in 2009. I'd personally like to invest more in the stock market, but Sammy, while a great saver, is more timid. He is, however, looking to start a 401(k) or IRA soon. We both want to build our savings by investing more in the future and hope to have a comfortable lifestyle.

We have financial conversations all the time to see how we're doing and what else we can do. It's difficult to know what to invest in since we don't have a financial background or a financial adviser (although we've thought about getting an adviser in the future).

I'm also considering purchasing a tutoring franchise in the next five years. I've been offered some jobs and a franchise opportunity and am trying to make a decision now. While we have an investor and the franchise fees and start-up costs are small compared to other franchises, I do have lots of sleepless nights over starting my own business or taking over an existing one. Sammy and I have discussed this endlessly—weighing all options and looking at our five- and ten-year plans for our future.

The CFP® Says: "When making a major career decision—like whether to buy into a franchise or to take a director position—make sure to weigh both the up-front cost (would you need to significantly deplete your savings?) and the effect it will have on cash flow. Re-evaluate your budget with the expected income from either pursuit to see if you would need to make significant adjustments to your spending. After crunching the numbers, can you manage that change? If there's a way to keep a steady paycheck while working on an entrepreneurial project like building a franchise, you may be able to have the best of both worlds."

The Business Owners
John Philip Schmoll Jr., 39, and his wife, Nicole Mari, 36, own a marketing and advertising business in Omaha.

John Says: After I finished college, I started investing in a 403(b) (with an employer match) in my first major job at a nonprofit. Working in the financial services industry and getting my MBA in finance inspired me to get more involved in investing. I was excited to put the strategies I learned into practice with our personal finances.

My wife, Nicole, has always taken a general interest in investing. She started with a pension plan and then a 401(k) at her first job out of college. When she left her salaried position to run our business, she opened a brokerage IRA and moved over her 401(k). We rolled it into a rollover IRA and invested it largely in index funds and a few dividend-paying stocks.

Beyond my debt repayment (I had between $10,000 and $15,000 in credit card debt and $20,000 in student loan debt), Nicole and I had never really discussed finances until our first premarital counseling session in early 2001. Thankfully, we were on the same page when it came to budgeting, saving, investing, spending and paying off debt.

Today, we own our home and no longer have any credit card debt. We have various IRAs (Roths, rollovers and SEPs) and an emergency fund that has four months of general expenses and seven months of mortgage payments built up in it. We're working toward having six months of general expenses covered and 12 months of mortgage payments.

All of our investing is through our various retirement accounts (the large majority is either in index funds or dividend-paying stocks that I selected individually). A very small part of our portfolio is dedicated to investing in growth-focused individual stocks. We rebalance annually, and invest with the long-term in mind. Nicole and I are comfortable with risk because we know that it can lead to larger potential returns in the long haul.

Because of my comfort level, we don't work with a professional and I manage the investing for our family. I keep Nicole informed of everything we're invested in, but I handle it on a day-to-day basis.

We'd like to save for retirement by maxing out our Roths and SEPs every year and more seriously saving for our three children's college educations (but not at the expense of our retirement fund). We hope to own property at some point, but just don't have time to manage it along with our business right now.

Owning our own business allows us to contribute more to our SEPs. It can be challenging not to just sit on cash, deciding instead to take a risk and put it into the market. And as we have a fluctuating income, the temptation is always there to keep the money more liquid in case we need it in a down month.

We haven't always been self-employed and now that we are, living on a strict budget has become even more critical. There's no one to sock away money from our paychecks for us. We fight against complacency and fear, but remain committed to investing so that we can grow sufficient retirement accounts.

The CFP® Says: "As a business owner, it's critical to keep on top of your budget, as well as proactively save for retirement and taxes. It is wise to continue to keep building emergency savings, although I would recommend building it out to nine months of net income when both partners have variable incomes. Business owners especially may want to consider working with a fee-only CFP® to make sure they take advantage of all their deductions and stay on track for the future."

LearnVest Planning Services is a registered investment adviser and subsidiary of LearnVest, Inc. that provides financial plans for its clients. Information shown is for illustrative purposes only and is not intended as investment, legal or tax planning advice. Please consult a financial adviser, attorney or tax specialist for advice specific to your financial situation. The people interviewed in this piece are neither clients, employees nor affiliates of LearnVest Planning Services. LearnVest Planning Services and any third-parties listed, discussed, identified or otherwise appearing herein are separate and unaffiliated and are not responsible for each other's products, services or policies.

Chase Blueprint® is a free set of features on Chase credit cards that helps customers avoid interest and pay down balances faster. Chase Blueprint® is committed to providing mindful spending research and information to help consumers take steps toward a better financial future.

—Christine Ryan Jyoti

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