For years, I have been a student of personal finance and investing.
Out of which to-date, I have accomplished many feats as an individual. To name a few, they include having income raised, money saved, properties invested and a dividend portfolio built. Now, as I’m dating and contemplating marriage, I had discovered how different money management is at a ‘couple level’ as compared to an ‘individual level’.
It’s no longer a sole proprietorship but a partnership. The ball game is different.
There is a mindset shift from ‘my wants and your wants’ to ‘our shared goals’. It involves some ‘gives and takes’, sacrifices and investments and also to make key pertinent decisions together as a unit. All these are easier said than done and it takes two to be wise, vested, humble, and tolerant to work. Trust me. There is a lot more going on than just determining who and what is ‘right or wrong’.
So, how can we go about this harmoniously?
Well, while many couples choose to sort all these out by themselves, I believe it is suitable to have a licensed financial planner as a core team member to advise and assist us in optimising the potential of our current financial status and thus, elevating our financial standings to the next level.
Here, I would like to share 4 practical reasons for such a decision made:
Reason #1: 50:50 Split Doesn’t Work on All Things
Let’s keep this to me and my girlfriend, Miss K.
Besides family background, our financial status is different. First, in terms of our earnings, Miss K’s income is more ‘fixed’ and my income is ‘variable’. This is due to Miss K’s choice of vocation as an employee and mine as self-employed. Next, in terms of our expenses, I’m relatively frugal and Miss K values short getaways, simple gifts and gatherings with friends and family members.
In terms of assets, I tend to be more intentional and strategic in how I invest. As such, I have stronger asset allocation into both stocks and real estate. Whereas, for Miss K, her EPF and FDs constitute a huge proportion of her financial wealth today. Finally, in terms of liabilities, my debt commitments are higher than Miss K as my outstanding mortgage balance is higher.
With contrasting financial standings, it is impractical to split our finances 50:50.
Rather, a financial planner can help us review our finances, assess our strengths and weaknesses and share possibilities and responsibilities to maximise wealth, both individually and as a couple unit. They would enable us to develop a much better understanding of each other and therefore, allow us to work on a unique plan that is based on our circumstances to improve our finances.
Reason #2: Spotting Blindspots
Finance is like sports. The best players improve and remain consistently good as they are trained by great coaches. Personally, I like that for our finances.
Now, here is a question: ‘If I can earn and save money by myself, is there a need for a financial planner?’.
Well, the answer is still a yes. This is because financial intelligence is assessed in 5 different aspects: Earn it, Keep it, Invest it, Protect it, and Donate it. For most, we could be good in one, two or even three areas but show weakness in maybe the other areas. Typically, if one falls short even in just one or two areas, there’s a possibility for him or her to be less financially stable.
Hence, this is where a financial planner steps in. He would study our finances in detail, spot financial blindspots that we may have and offer suggestions to work on them. Such studies are quite comprehensive as he will cover factors namely:
1. Cash flow.
2. Net worth.
3. Debt commitments.
5. Tax planning.
6. Family planning.
7. Estate planning.
8. Retirement funding.
Of which, a financial planner will come out with a clear and effective strategy to help us attain our financial aspirations as quickly and safely as possible.
Reason #3: Facilitate Discussions on Key Decisions
For some, major conversations like marriage, buying a residence, insurance and estate planning can be easy. But, for many other couples, they can be tricky and tough as these conversations are serious and can impact a couple’s financial life quite severely.
Usually, such discussions could either be elevated into arguments or be avoided altogether as both have different aspirations and are too ‘vested’ into their own agendas, which once again, could neither be right or wrong. After all, being in a relationship is about two different people coming together as one.
Should the one with the ‘money’ or the ‘voice’ be dominating such decisions?
Well, it may work for some couples, especially if one is more dominant whereas the other is more submissive. But personally, I prefer not as I don’t like this idea of being dominant or submissive, either for me or for Miss K. I like partnerships, where our stakes and values are being heard and appreciated by one another.
So, instead of ‘sorting things’ ourselves, an experienced financial planner would be able to facilitate such discussions with the backing of our financial standings.
This is possible because the financial planner is a third party, who is ‘unblinded’, less emotional, and more evenly vested on both individuals in a couple. He may step in to suggest amicable solutions that allow both individuals to work on and thus, progressing towards more practical outcomes from such discussions.
Such suggestions could be the ‘solutions’ a couple is looking for and they would be worth their weight in gold.
Reason #4: Licensed by Securities Commission (SC)
Financial planners are required to be licensed under Securities Commission (SC) and their advisory activities should be carried out under Bank Negara Malaysia (BNM)’s approved financial advisors.
Personally, as Miss K and I have 6-figures in income and net worth, I believe our requirements for financial advice should be highly professional. It may not be in our best interests to receive ‘advice’ from non-professionals, like friends, family members, colleagues, social media, and other financial sales personnels as they did not study our financials in great detail as compared to a financial planner.
So, it is time to have ‘quality control’ on our financial advice and not take advice based on merely ‘relationships’.
Conclusion: Are the Fees Worth it?
Well, only you can really answer this. As for Miss K and myself, I believe that we can best realise our financial aspirations with guidance from a licensed financial planner. As we started our journey to manage our finances together, I believe in our case, it is helpful to have a financial planner who is married, has kids, and is highly relatable to our shared challenges.
So, if your circumstances are similar to Miss K and myself, you may want to consider getting comprehensive holistic financial planning services from licensed financial planners from Wealth Vantage Advisory Sdn Bhd (WVA).
Link: Get complimentary initial consultation session with a licensed financial planner (WVA)
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