Partnering with Friends The Path Of Relationships and Money
Over the past few decades, many women have reassessed their approach to relationships. Women have gained new degrees of self-reliance they rarely enjoyed before, and some have taken advantage of this freedom to dramatically change their lives—sometimes by ending old relationships that were one-sided or abusive and starting new ones on terms that worked better for them. Through it all, one thing has been clear: Being self-reliant never meant being celibate! Instead, it suggests that women (and men) improve their partnership skills, and take responsibility for negotiating and maintaining mutually satisfying unions.
The same philosophy applies to a woman’s financial self-reliance. Freeing yourself from the White Knight Syndrome and taking full responsibility for your financial future, doesn’t mean that you shy away from investing with a partner—whether the partner is a spouse, a lover, or a friend. I’m advocating only that you do so with knowledge and confidence in your own competence and sense of being. Investing with a husband, domestic partner, friend, or family member requires that you maintain your sense of self while you enjoy the benefits of the relationship. And, it means finding your voice and communicating—not sticking your head in the sand or avoiding the money talk that you’d rather not have. It is about putting all the cards on the table, asking for what you need, and being bold about getting clarity. You can do this.
This chapter offers you a chance to look at investing with a partner through fresh eyes. Because we finally have the tools to make independent decisions, women now have the opportunity to enter into truly egalitarian financial partnerships in which they share responsibility and make joint decisions with comfort and style.
And whether you’re investing on your own or with someone else, just remember: It’s still your financial future, and that future will be the consequence of decisions you and your partner or partners make. You’re not alone in this, and whatever action you take also affects the financial health of someone else. Your partner is putting trust for the quality of his or her life into your hands by agreeing to invest with you.
Investing With a Partner Can Feed The Money Machine
Women have opened their lives to partners as a way to learn, to grow, to share themselves, and to experience with someone else the ups and downs of life. Choosing to partner in the money area of life offers many of the same benefits that are enjoyed in other areas. Investing with a partner can be enriching in every way—it can be great for the relationship and great for the Money Machine. But the temptation to give up your personal responsibility for your future is always lurking in any such partnership, and the process itself may have moments of challenge and frustration. At times, this partnership will require your absolute patience and conviction. This can be a positive aspect of this type of investing because you’ll be learning something new and stretching your mental and emotional muscles.
As in any alliance, the good has to outweigh the bad. You have to see some real economic beneﬁits in investing with your spouse, lover, or friend. What are those benefits? They can be building a financial future, creating the opportunity for your kids to go to college, ridding yourself of financial worries, investing, or finding a good coach. If the partnership isn’t working out for you—if it isn’t moving you forward—then the gutsy thing to do is to make a new plan. Although you may be in a marriage or a relationship and wish, with your heart of hearts, that you could move forward financially with the person you love, if you see that it’s not working, then you may have to set sail in your own ship and pursue a separate financial course.
I once met with a woman who had no financial plans or investments for her future. I’ll call her Gail. Gail’s husband, just forty-five years old, had suffered a heart attack. He was also overweight and diabetic. He had convinced himself that he wouldn’t live much longer. He had an insurance policy, with Gail as the beneficiary. But for the moment, Gail was financially adrift. She was also emotionally drained by her husband’s state of health. She hoped, of course, that he would survive his physical afflictions, but she knew that if he lived a normal lifespan, they were sure to have financial problems since they had done nothing to ensure their future.
After much agonizing, Gail stepped up: She set her own financial path. She went to work, saved some of her salaries, and used the savings to purchase a piece of rental property with her sister. The property is now an investment in Gail’s Money Machine, which is growing so that it will give her cash ﬂow in the future, no matter what happens.
The lesson to learn is that your investment decisions can’t be driven by your heart—your heart must be in support of your head. They must be securely planted in more pragmatic soil. Sometimes, the best thing to do when you love another is to stick by your standards and not compromise them, even when it means making choices he or she may not understand.
Partnering With Your Mate or Friend
A financial partnership is a lot like sex: To get it right, you definitely need to talk about it.
We talked in early articles about how Americans talk more freely about sex than they do about money, and as a financial coach privy to family money secrets, I know it’s true. A real financial partnership needs to start with a meeting of the minds, where you clearly identify and explore all the issues you’ll need to resolve in order to embark on an investment program together. And this financial summit begins with a commitment that there can’t be any secrets— and this includes secret feelings as well as facts.
Your understanding of your shared financial picture requires full disclosure on both sides. If there are assets in his name and you believe they should be in both your names, now is the time to make that change and be clear about how you feel they should be managed. If you consider your partner’s investment philosophy too risky and game-like, this is your chance to speak your mind about it—and then retool it together.
Is it uncomfortable for you to talk freely about money with your partner, or to ask the tough questions you know you should be asking? Many women feel that way. It may be helpful to conduct your financial summit meeting with the aid of an advocate—a financial planner or coach whom both of you respect and trust. A third party on hand can help defuse any tense moments that may arise and keep the discussion productive, nonjudgmental, and committed to full disclosure.
You remember Linette, who was wrestling with her financial future in the wake of a painful divorce. Living in her marriage was difficult on several levels—especially communication. There was none. Only after the breakup did Linette learn how Marshall had squandered much of their income and about the risky investments he had made. Most of the family assets had been listed in Marshall’s name only; this had made it easier for him to conceal his activities from Linette. Fortunately, Linette’s lawyer worked out a nice settlement for her during their divorce proceedings. Marshall will give her $55,000 in stock options and contribute monthly to the support of their daughter. The settlement helped jump-start Linette’s sluggish Money Machine. Now she thinks her life could be much better. If she had known about the family finances all along and participated equally in the decision making, think of the heartache she would have avoided and the money saved. Admittedly, open communication is something we often have to struggle to achieve. Here’s how I’ve seen how to hone and maintain the communication skills that foster fruitful partnership.
I coached Alice and Sam and they made a concerted effort to talk a lot about their visions for their family, careers, and financial life—three spokes on their Wheel of Life. Sometimes these discussions last several days; it may take that long for our real feelings and real truths to emerge.
They developed some great traditions that also help us maintain openness and closeness. Each year on their wedding anniversary, they go to a quiet spot—a country inn or a remote resort—and have dinner at a nice romantic restaurant. They take turns planning this anniversary trip, and whoever designs the vacation keeps the details a secret from the other. That adds a little fun and makes it a big surprise. They won’t even give a hint as to climate or activity! The mystified spouse has to try to guess by closely observing what the other packs: bathing suit and shorts, or heavy sweaters and jeans?
One year, Alice didn’t get the clue! Guessing mountain experience, she had packed a warm quilted jacket and woolen dress for dinner. When they arrived in sunny Puerto Vallarta, Mexico, Alice had to rush down to the beach that night and buy one of those gauzy cotton dresses from a beach vendor. Of course, glitches like this just add to the sweet memories.
Once they reach their destination, they enjoy being together, and then the fun really begins. Alice and Sam traditionally have a Saturday night dinner, and each comes prepared with a list—hopefully, not too long a list!—of things each would like to change or add in the marriage. They share their lists, and each does their best to sit patiently and listen while the other person rattles off the personal list of requests, suggestions, observations, and challenges. The tricky part is not to be defensive.
One year, Sam’s list included a request that Alice learns how to cook so she could make dinner once in a while. But Alice had never liked to cook—when Alice had a house built in Philadelphia, she asked the builder not to put in a kitchen! (He did, anyway.) But their annual tradition requires that each honor the other’s point of view—even when one or the other finds it difficult. So Alice honored Sam’s request and went off to cooking school. Alice is now a fairly competent chef, and nothing pleases her more than to share good food and good times with her husband, their family, and their friends.
Some years, their lists have included financial concerns. Sam thinks that we sometimes “put the cart before the horse” and need to slow down—that the pressures of life encourage us to move too fast and make financial decisions before we’re really ready. Alice has often felt that way, too. Their annual talk gives them a chance to get issues like this onto the table and to make changes needed to keep the relationship fresh and satisfying.
The point is that when you take time to sit down with your partner in order to think about things, and you each have an opportunity to be truthful, it’s amazing what you can learn and accomplish.
Here’s another tradition that I helped my coaching client to enjoy. Early in January, each year as a family, Cliff, Maria, and their son, Josh, find a quiet retreat away from the hustle and bustle of daily life and plan in the seven parts of our Wheel of Life. They ask themselves what they have accomplished in each of the seven areas—family, social, career, mental, financial physical, and spiritual—over the past year. They each make a chart, they told me, “we go around the table so that each family member can make a note about what’s occurred in a specific area of life”. Then they each make a second chart, this time we “note the developments. goals and plans we’d like to see occur in each part of our lives—for the coming year. This really helps us learn about one another, too.”
This shared exercise makes it pretty hard to ignore whether you’re improving the financial part of your life—as well as all the others. Some wonderful goals and accomplishments have grown out of this family tradition: I do this too and one year, writing my book “A Girl Needs Cash’ had a prominent place on my chart.
There have been times when I found that we’d been distracted from focusing on the financial part of my life. I have personally done this exercise for over thirty years and have all my journal charts that show me the path of my life, and what I was focusing on in the seven areas of life in each year. It’s a remarkable treasure.
Cliff and Maria learned that at times, they had not realized that they’ve neglected to create a common vision for their futures, or hadn’t asked themselves to maintain a higher standard of accomplishment so that their partnership could be stronger. Such oversights are okay; they happen in every relationship. Their annual Wheel of Life retreat provides a starting point for a discussion about who they are and how they are working together. Shortcomings can be addressed and remedied; successes can be celebrated. The place to begin in your relationship and life is wherever you are at the moment.
Planning Your First Money Talk
A partnership offers you an opportunity to get some honest feedback from someone who cares about who you are and where you’re going. I think that’s one of the main reasons that we form close relationships. It’s no different in your money life. If you and your mate have not talked about what your financial picture looks like, now is the time to start.
Your first discussion about your financial partnership will lay the groundwork for your money relationship, so it makes good sense to go into it with a written agenda, just as you would any important negotiation. An agenda will keep you sharp and focused, and it will keep you from feeling overwhelmed. Remember to bring your sense of humor! Here are some issues and topics you might include:
- Taking an inventory of each partner’s investment skills and deciding how each partner can be brought up to speed in any weak areas.
- Deciding who pays the bills in the partnership, who keeps track of the investments—and other roles for assisting the money partnership.
- Choosing an advocate for financial coaching.
- Setting ground rules for how an advocate will work with the partnership—for example, will it be acceptable for partners to meet individually with the advocate?
- Agreeing on a method for negotiating any disagreements about money strategies.
- Planning to go individually rather than together when philosophical differences can’t be reconciled.
- Changing the name(s) in which assets are held, if necessary.
- Making specific plans to expand the investments in your Money Machine.
- Deciding how your financial life will be monitored, and by whom.
- Agreeing on when and how the returns from the Money Machine may be used.
- Drafting wills, if necessary, or reviewing existing wills to make sure that they reflect your current situation and future plans.
These are the trees. But you’ll also want to explore the forest— the larger vision you each have of your financial lives and your future:
- Are you creeping through credit card hell, living on plastic and paying high-interest charges? If so, what steps will each of you take to change that picture?
- How do you both envision the future? Do you plan to stop working or to make a major change in your career at some point? If so, do you look forward to enjoying the same lifestyle as now or better?
- What assets are growing for you in your Money Machine? Will they provide the future income you need to live your dreams?
- What future responsibilities will you have beyond yourself (for example, supporting kids in school or a parent)?
- What needs to happen in your partnership so that you and your mate can live out the vision you both have? Do you both need to make compromises or changes?
- Do you both need to work out any issues about the future transfer of money to your mate, children, or other family members?
You may find that these topics prompt new discussions. Conversations on financial well-being will evolve much like the process of growing your Money Machine. As your crucial issues become resolved, the feeling of unease in your stomach will loosen up. I had the opportunity to visit a remarkable character-based prep school called the Hyde School, in Bath, Maine. Inside the doorway, a sign welcomes both parents and students alike with the following saying:
The Truth Will Set You Free…But First, it Will Make You Miserable.
This is no less true in our financial lives. Sometimes you will tackle tough issues. It may hurt. But you and your partner will find real freedom by airing these issues.
There’s a real reason that sex is easier to talk about than money, even between intimate partners: When it comes to investments, there’s no room for make-believe. There is room for romance, though. Taking a financial journey with someone else is a path of intimacy. But a woman should come to the table fully equipped with a knowledge of all her options and her own set of fully deﬁned money goals. Thus prepared, you and your partner may find that by formulating, implementing, and tracking your plans, you’re having the time of your lives and developing bonds more intimate than ever before.
June feels more connected with her husband ever since they began talking about their money life. She called the other day and told me that her husband had surprised her with a long weekend at a romantic little inn on Michigan’s Upper Peninsula. They hadn’t been away, alone, for nearly eighteen years. In fact, money talk— and the deeper talk about goals, dreams, wishes, and plans that money talk naturally opens—has broadened their intimacy and unveiled a whole new and spirited realm of conversation for them.
Investment Clubs Turned to On-Line Learning
Another way to beneﬁt from a financial partnership is to join others in person or on-line—where a group of people pool their knowledge and ideas and consider investments together. You can find these groups on MeetUp or Facebook. My friend Shelley has been in an investment club now for twenty-five years and speaks about the importance of the conversations and support that she’s enjoyed with this bonded group of friends.
Unfortunately, investment clubs are not enjoying the success that once heralded the Beardstown Ladies of Illinois, and the baker’s dozen of women in the 50s and 60s, called the Formerly Baroque. These groups delighted in learning all about the market from the Baltic Dry Index (the daily number given to the price of moving raw materials by sea) to their favorite stocks. Both of these Clubs racked up an impressive performance in their investment portfolios while they had oodles of fun.
I met the Beardstown Ladies at a Tony Robbins event. Several of their members were speaking at Tony Robbins’s Financial Mastery seminar—where I was a financial coach. Since I, too, am a midwesterner, I felt right at home with the Beardstown Ladies; talking with them was like talking with my own grandmother, aunt, or sister. I was so touched by their genuineness. At one point during the seminar, Tony spins a big prize wheel to give away various goodies. The year I met the Beardstown Ladies, one of the oldest members of their group won the grand prize—a Harley-Davidson motorcycle. She hopped right on the bike and posed for pictures!
I shared dinner with the Ladies one night, and we reminisced about growing up in the Midwest—Beardstown is only a stone’s throw from where I grew up in central Illinois. In a very sweet way, they were obviously relishing their newfound celebrity—even while being a bit awed by it—and for me, they were models of the investment success women were demonstrating—they were the women’s financial revolution.
And today—a story in the Wall Street Journal “Fun Fades at Investing Clubs” the article said that investment club membership fell from 400,000 in 1998 to a measly 39,000 in 2012 according to Better Investing.
This is perhaps because technology outpaced these old-fashioned clubs—and now the best learning is online. LearnVest planner Ellen Derrick said “I remember working with investors in late 1999 when they would all pool money to buy a couple shares of stock. Now you can cheaply buy ETFs which are much better in terms of diversification and trading costs.” So perhaps it makes sense that investment clubs have lost popularity.—and online is where you can go instead to grow your investment knowledge.
Investing with a knowledgeable partner or a good training—investing with others—is a great learning opportunity. It’s like tennis or any other sport: If you can play with athletes who are better than you, you’ll be challenged to improve your game.
Joan Perry is the publisher of www.WomensWealth.money, the national authority site for women and money. She is a Best Selling Author of ‘A Girl Needs Cash’, Random House; and Living Proof, Celebrating the Gifts that Came Wrapped in Sandpaper (co-authored with Lisa Nichols). Joan is also the creator of The Women’s Wealth Model, A Heroine’s Journey to True Wealth,. As a pioneer in the field of women’s wealth, she founded the first female-owned investment banking firm that underwrote and traded municipal bonds for major governmental entities. Now as a women’s wealth advocate, she serves as a teacher, coach, writer and speaker.