Asset Junkie ! dot Com

Is the old notion of getting married, opening joint bank accounts and moving all your money and investments nearly over? It should have been over a long time ago!

Too many couples face the problem, sooner or later, who is in charge of whos money? Whether one person spends more, or someone is better at financial management than the other there is always a problem over money concerns. A friend of mine got married and immediatly had to put everything he had into a joint account with his wife. This was forced on him by his family and by hers. On one hand I understand the seriousness of marriage and how it is the joining of two people both spritually and legally. On the other hand it is not 1832 anymore and people get divorced more then they stay together.

Personal safety is a must in todays worlds of on again and off again relationships and marriages. Making sure your future and family are cared for is not selfish, it’s smart. Keeping a safety net of funds in another bank or investment is not bad and you can even have it automatically turned over to your spouse in the chance you die or become unable to care for yourself. The truth is, in marriage, family and business you are only as strong as the weakest link. Couples can hid from the truth or focus their abilities on strengths.

Divided-Diversification is a term I coined meaning – diversified joint funds in a seperate location and management. If you take a married couple divide there assets equally or not and then diversify the investments in accordance with their natural investment styles you have a strong chance capital preservation. If the wife is a financial analyst and knows the ins and outs of the stock and bond markets and the husband is a real estate agent split the investment responsiblity accordingly.

Using a around number, $1,000,000 (common joint value of investable capital – 401k, stock accounts, etc) here is an example of how this can be achieved.

The wife being an educated financial analyst might be better positioned to manage $600k through stocks, bonds, and cash accounts. The husband being a real estate agent should know the local market and thus is better suited to make investments on behalf of the family in tangible assets such as rental property, land and a second home up to the remaining $400k.

With the economy “in recovery” and investments climbing higher on a magic carpet that no body can figure out how it’s flying, we come to a question; how do we invest in this situation?

Investing is not as complex as people make it out to be. Remember, I said Investing not day trading or picking stocks because those are different beast all together. Investing is the means in which a person or group (investment club, orgainization, etc. ) purchases assets which produce security and growth over time.

Over a long investment horizon all financial advisor suggest someone be invested in equities more heavily than other assets. The point financial advisor do not understand is equity mean ownership in something, not just stocks on an exchange. Stocks are liquid most of the time making them quick in and quick out but there are other investments to be had as an equity asset.

Here is a list of some equity assets:

• Real property (land, real estate, water rights, etc.)
• ownership in private companies (sounds like you need a million dollars for this type of investment doesn’t it? Well you don’t have to have lots of money. You can invest as a business lender to a friend or local business wanting to expand by offering cash for ownership rights – ex: $10,000 for 5% ownership and profit.)
• Foreign property – though this is identical to the above you can avoid paying hefty property tax, etc. by owning land or a home in another country.
• Invest in your company. If you own something you rent, or do consulting, etc. you can create a company and write off expenses associated with that company***. (*** be sure to consult an attorney or CPA for specific advice)