Newly married! combining investing philosophies

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TN Bogle
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Newly married! combining investing philosophies

Post by TN Bogle »

Hello all

I am newly married to my wonderful bride. We are in our late 20s, early 30s. We both have very different financial backgrounds and upbringings. My history is that I have lived quite frugally through medical school residency and have basically formed my investing philosophy through reading and interacting with The White Coat Investor and with you fine people here at Bogleheads.org. I've paid off my student loans and continue to have a monthly budget similar to that of when I was in residency, roughly $3000 per month (have been an attending for 2.5 years). She is also wise with money and by no means a spendthrift. I am just quiet a bit more on the frugal side of the spectrum than your average American, and I understand that. I have no problem compromising on that and she is also happy to live a reasonably modest lifestyle in exchange for achieving our future goals. We communicate well and don't have any issues discussing difficult subjects.

My questions center more on the combining of investment philosophies. I have been a DIY investor, living well below my means and investing everything in low cost mutual funds primarily with Vanguard but also Fidelity in my 401k. Both companies are fine for me and I feel comfortable investing on my own thanks to the education you all have provided for me.

She has a relationship with a financial adviser. Her brokerage account (if you call it that?) is with this company, as are the non workplace associated accounts (401ks) of her entire family. I am not certain of the services this company provides. I don't know if they just do a fee for service advisory business, or directing investments or charging an AUM or what. I need more info on this piece of the puzzle.

My question is, what is a good way for me to be a loving husband as we explore how we want to handle our investments together but also make sure we are wisely investing and stewarding the money that we have. She does not really feel comfortable investing our own, and has expressed a desire to remain with the "family firm" for our marital investments. I guess I am ok with this if we have the option of designing a low cost Boglehead style account, but what do I do if the investment options are limited to high fee accounts or individual stock picking?

Any advice appreciated.
Jack FFR1846
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Re: Newly married! combining investing philosophies

Post by Jack FFR1846 »

I tend to be a numbers guy (what? An engineer who's a numbers guy? Can't be!). Ask if you can go over her latest statement. Then find all the fees. This is a future looking task in "Where's Waldo" if you plan to someday have kids. This likely won't be easy. You're looking for all the fees including exit fees, maintenance fees, loads, ERs and 12b-1 fees. Put them all together. In the end, you'll be able to point to a simple total funds, % in total fees and $ in total fees.

Then do the same for your portfolio. Are there vast differences? If there are, ask "Why would we pay $xxxxxx a year?". As you know, investing is NOT rocket science. It really isn't. Setting an AA and simply sticking to it with low cost index funds is as boring as it gets.

Good luck. In the end, you may have to let her keep her clown advisor and hold your own investments as you have been. This clown, seeing your occupation probably has $$ in his eyes and will pressure her to bring him your money so he can siphon as much from you as he does from her and her family.
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Dottie57
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Re: Newly married! combining investing philosophies

Post by Dottie57 »

I would not put my money with an advisor. You know the objections. You should be able to do a nice spreadsheet on the costs she is paying.

Exchange info on current funds and track what has happened. Use portfoliovisualizer.com to backtest and compare funds,


Good luck..

Introduce her to the fabulous bogleheads wiki.

P.S. i had advisors and know how much they took for very little work. Not a good feeling.
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climber2020
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Re: Newly married! combining investing philosophies

Post by climber2020 »

Jack FFR1846 wrote: Tue Jan 14, 2020 3:33 pm I tend to be a numbers guy (what? An engineer who's a numbers guy? Can't be!). Ask if you can go over her latest statement. Then find all the fees. This is a future looking task in "Where's Waldo" if you plan to someday have kids. This likely won't be easy. You're looking for all the fees including exit fees, maintenance fees, loads, ERs and 12b-1 fees. Put them all together. In the end, you'll be able to point to a simple total funds, % in total fees and $ in total fees.

Then do the same for your portfolio. Are there vast differences? If there are, ask "Why would we pay $xxxxxx a year?".
All of this, then plug the resulting numbers into a compounding interest calculator (moneychimp has an easy one) to illustrate the massive difference that even a 1% fee can make over the span of 30 years.
ohai
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Re: Newly married! combining investing philosophies

Post by ohai »

Does your wife actually care about how the money is managed, as long as it is handled responsibly? She might have just put it with an FA because she doesn't know or care about details of investing. In that case, you might just want to take over all the incoming savings and invest them in a low cost way. Eventually, take the money from the FA when the time makes sense. From what I have seen, most household investments are managed by one person. My wife has no idea how we are invested (admittedly, not great if something happens to me, but arguably it won't matter to me...).
soccerrules
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Re: Newly married! combining investing philosophies

Post by soccerrules »

Ask her if she would be open about the combined investment strategy. As someone eluded to-- she may be like me, I didn't know what I didn't know.

I would ask her if she would be willing to read "Common Sense Investing Guide" by John Bogle -- quick and easy.

What hit me was the ER's and the 1% Fee. Furthermore as most tend to operate somewhere around the SRW of 4% (or variable) --that the 1% represented 25% of my SWR.

Take it slow you are newly married. Joining lives together is not an easy thing, especially if you have been on your own.

You could review 2019 Year End Statements and have a financial meeting and look at how yours/hers money performed. Then talk about any differences, costs, benefit of FA. Tell her why you DIY and the impacts of ER/1% over the next 20-30 years.

Best of luck and congrats.
Don't let your outflow exceed your income or your upkeep will be your downfall.
financeperchance
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Re: Newly married! combining investing philosophies

Post by financeperchance »

Deleting this. Thanks.
Last edited by financeperchance on Tue Jan 14, 2020 8:12 pm, edited 1 time in total.
sailaway
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Re: Newly married! combining investing philosophies

Post by sailaway »

OP says they talked about it and the wife wants to stick with the FA. At this point, pushing to take over all the finances is just poor communication, no matter how many strangers on the internet suggest it.

The first step is to ask if OP and spouse can meet with the FA or at least if OP can see the account details to understand fees and investments. Looks like that hasn't even happened yet.

What have y'all agreed on so far? How are bills being paid? Are there any joint accounts? Do you intend to make every non retirement account joint or keep some or all separate? Perhaps you could keep your current separate accounts and find an acceptable split for future assets. How often and in what format will you share financial information with each other?

Whatever you decide now is not set in stone. Changes can come with future updates. Work on an acceptable compromise for now and a reasonable check-in schedule. I find that DH frequently comes across new information that suddenly makes old information click. Most recently, he has agreed to leave the HSA funds untouched for regular medical expenses. This was just part of our normal semi annual snapshot and discussion. It wasn't the first time I made the suggestion, it was just the first time he processed the reasoning.
Lexi
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Re: Newly married! combining investing philosophies

Post by Lexi »

TN Bogle wrote: Tue Jan 14, 2020 3:25 pm Hello all

I am newly married to my wonderful bride. We are in our late 20s, early 30s. We both have very different financial backgrounds and upbringings. My history is that I have lived quite frugally through medical school residency and have basically formed my investing philosophy through reading and interacting with The White Coat Investor and with you fine people here at Bogleheads.org. I've paid off my student loans and continue to have a monthly budget similar to that of when I was in residency, roughly $3000 per month (have been an attending for 2.5 years). She is also wise with money and by no means a spendthrift. I am just quiet a bit more on the frugal side of the spectrum than your average American, and I understand that. I have no problem compromising on that and she is also happy to live a reasonably modest lifestyle in exchange for achieving our future goals. We communicate well and don't have any issues discussing difficult subjects.

My questions center more on the combining of investment philosophies. I have been a DIY investor, living well below my means and investing everything in low cost mutual funds primarily with Vanguard but also Fidelity in my 401k. Both companies are fine for me and I feel comfortable investing on my own thanks to the education you all have provided for me.

She has a relationship with a financial adviser. Her brokerage account (if you call it that?) is with this company, as are the non workplace associated accounts (401ks) of her entire family. I am not certain of the services this company provides. I don't know if they just do a fee for service advisory business, or directing investments or charging an AUM or what. I need more info on this piece of the puzzle.

My question is, what is a good way for me to be a loving husband as we explore how we want to handle our investments together but also make sure we are wisely investing and stewarding the money that we have. She does not really feel comfortable investing our own, and has expressed a desire to remain with the "family firm" for our marital investments. I guess I am ok with this if we have the option of designing a low cost Boglehead style account, but what do I do if the investment options are limited to high fee accounts or individual stock picking?

Any advice appreciated.
You say that you communicate well, so just do that on an ongoing basis. You do not have to merge accounts or use the same approach immediately. Just compare your approaches and results on a regular schedule. If your results are better than hers, she will probably decide to go that way as well, maybe not all at once but in steps.
It is simpler to have a combined approach but in the meantime talk about your goals, what each contributes, and how you can get to your short, medium, and long term goals.
Also, realize that this communication should be a two-way street. It is very admirable that you have paid off your student loans already, but it is or will soon be time to loosen the budget a bit. That does not mean wild spending, but rather an ability to think about achieving bigger dreams.
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Sandi_k
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Re: Newly married! combining investing philosophies

Post by Sandi_k »

I agree with the suggestion to pull out your 2019 statements and doing a comparison. Also a YES to the idea of charts showing losses to the portfolio based on the AUM model.

I have an immediate family member who is a broker. Early in his career, I got a lot of pressure to turn over investment accounts to boost his "book." Rather than argue endlessly, I turned over one IRA, and followed his advice for 2 years. I also self-managed a different IRA. My management did better. So I moved the first IRA back to Fidelity.=, out of his management, which shut up the older generation. :D After 2 years, he had enough other friends and family accounts that I was a small fish...and thus the blowback was minimal.

And...as a result, my sister comes to me for investing suggestions, after asking the "pro" for his recommendations for her new work account. His suggestions were expensive, slice-and-dice, and overly complicated.

I suspect that if you "try it" for a year or two, and self-manage your existing accounts with your philosophy, you will have additional evidence of your investing preferences. As long as you're saving, a year or two exploring her preferences could be very powerful.

And for the poster who suggested that the OP should just tell the little lady not to worry her head about it, and the Big Smart Man would take care of it.... :oops: :oops: :oops:
delamer
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Re: Newly married! combining investing philosophies

Post by delamer »

If your wife is willing, give her this short (16 page) document to read: https://www.etf.com/docs/IfYouCan.pdf

It might help to bring her around to your perspective.

Good luck.
bling
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Re: Newly married! combining investing philosophies

Post by bling »

Comparing portfolios for past performance sounds like a terrible idea. All it takes is a difference in AA or tilt in any particular sector to make the entire exercise pointless.

"My FA is totally worth the fee! Look how much better my portfolio did because of all these positions on the tech giants!!"
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alec
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Re: Newly married! combining investing philosophies

Post by alec »

TN Bogle wrote: Tue Jan 14, 2020 3:25 pm I need more info on this piece of the puzzle....

She does not really feel comfortable investing our own, and has expressed a desire to remain with the "family firm" for our marital investments. I guess I am ok with this if we have the option of designing a low cost Boglehead style account, but what do I do if the investment options are limited to high fee accounts or individual stock picking?
Yes, you need more info. It's way too early to make an informed decision. Look at the recent quarterly/annual statements from your wife's account and see what the money is invested in. There's no real rush. Life is long.

I don't see why it has to be totally 100% DIY your style or totally 100% with the "family firm". After you do some more research, and assuming (1) you're not comfortable with putting all the post marriage investments with this firm and (2) you both have jobs/income, you can always split the difference. I've seen married couples organize their finances in many different ways - put it all together in one pot, have totally all separate accounts, have some combined and some separate, etc.

You and your wife are both adults, so after you have enough info to make a decision, just explain your decision.
"It is difficult to get a man to understand something, when his salary depends upon his not understanding it!" - Upton Sinclair
RadAudit
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Re: Newly married! combining investing philosophies

Post by RadAudit »

Did your wife ask you for any input in how to manage her share of the family portfolio? If she didn't ask, I'd avoid doing any mansplaining as to why her approach is wrong.

An approach that might work would be to figure out a spreadsheet that would compare the before and after taxes / fees returns of the two sides of the portfolio and let your DW see the relative performance.

Beyond that, I'd just avoid the discussion until she was interested.

Good luck.
FI is the best revenge. LBYM. Invest the rest. Stay the course. - PS: The cavalry isn't coming, kids. You are on your own.
David S
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Re: Newly married! combining investing philosophies

Post by David S »

The February issue of Kiplinger’s magazine has an article that addresses this subject, “Couples and Money: When Together is Better.”

https://www.kiplinger.com/article/savin ... etter.html

It discusses a range of issues – checking accounts, spending habits, retirement accounts - not just investing. It likely doesn’t have all the answers you’re looking for, but it may be a starting point for further discussion of your shared finances, when the time is right.

Part of growing into a marriage is growing out of, and beyond, the family you grew up in. And this doesn’t happen overnight.

Congratulations and good luck to you both.
beehivehave
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Re: Newly married! combining investing philosophies

Post by beehivehave »

Why do you have to combine accounts?
Try the tactics suggested above and if those all fail, resign yourself to separate accounts - it's not the end of the world (especially if you make more than her). She has agreed to live frugally, which is the most important thing, and you may convince her that living frugally also means limiting investments expenses.
sylph
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Re: Newly married! combining investing philosophies

Post by sylph »

I and my husband were in similar situation. We got married a year ago. I am in late 20's and he is in early 30's. I am a boglehead style investor and he is not. In fact he wanted to invest some of our savings in his Brother's Business (pretty stable business, nice return, good relationship) and he didn't have much stomach for DIY investing or on stock market. He is/was just too scared to invest, fearing about loosing money.

1 year fast forward, We invested ~20% of our total income Boglehead style. Here's how we achieved it:

1. Before getting married I proposed to him that we will save one persons salary entirely - he agreed to this and was enthusiastic about it. This helped in realizing we are working towards same goal. After getting married we sat one day with excel sheet to make our budget. That was the first real talk with him on finance and was ice breaker.
2. In subsequent conversations I started talking about what total market index's are, gave him some details about boglehead style investing. Gave him numbers on how much 1% fee will eat up investment in 30 years and other facts. Eventually, he started realizing I am serious about DIY investing and have done my research. One day he was convinced and said that we can put small % of our assets in index funds.
3. I started giving him updates like: the 5K we invest is this much today. I came up with a detailed asset allocation plan and showed him the how the risk reduces to AA and diversification. I had pretty charts for all the funds and how each contribution was doing.

During all these steps I didn't say him "No, we shouldn't invest in Family business". Whenever he asked me for investing there, I said "OK but let's only invest X amount instead of Y". We ended up investing <10% of our income in Family business. I am sure in 2020 it will be even less.

Having conversation with supporting data helped me(We both are engineers, backing data was imp :P).

To summarize: It won’t happen in a day or in one conversation. Start small and take steps in which both partner feel confident. 😀
Financologist
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Re: Newly married! combining investing philosophies

Post by Financologist »

I told dw early on that I love managing investments. She has allowed me this privilege from the beginning. I also told her I dont like doing dishes. Not as much luck on that front.

Seriously, maximizing you portfolio is great, but maximizing marital harmony is wayyyyyyy greater. Let her know that you've been heavily influenced by a particular philosophy and a strange cult following of it. You're open to ongoing conversations on the topic etc.. she'll hopefully recognize your passion and kick the responsibility to you when she's ready to. And if not, then lean her way a bit and see what you learn.

Happy wife...
Good luck
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4nursebee
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Re: Newly married! combining investing philosophies

Post by 4nursebee »

I bet someone wrote a book that made all the salient points.
Don’t make it a marital issue, just plant the seed.
Allow trust to continue to develop.
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corpmd
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Re: Newly married! combining investing philosophies

Post by corpmd »

I am an amused Bogleheads observer. Elements of this post come very close to relationship advice, the rules of which seem subjective to a casual observer but....

If you are a Bogleheads user, the objective advice here was probably known to you. Presumably you are looking for affirmation of your principles in "neutral" territory.

To avoid relationship advice but offer life experience for your consideration.....

About a year after my marriage my father-in-law bought a whole life insurance policy for my life with my wife as beneficiary. Needless to say, he loved his daughter a lot and may have had his doubts about his son in law's ability to take care of her. At the time, the whole life policy was probably 60% of our net worth. (We were both graduate students.) I actually did not know enough to know how dumb whole life policies were by Boglehead philosophy.

All families bring different financial philosophies and beliefs that may need reconciliation over time.

For me after children, grandchildren and the death of my wonderful father in law later, my wife continues to pay the premium on that whole life policy. It gives her pleasure. She smiles when she writes the check. She remembers her dad. As I reconcile the accounts, just before I get all huffy, I try to remember to smile because I know how much he gave to her, and to me. That dumb whole life policy is such an un-measurably small part of our net worth that I don't even bother to track it.

The fees and perhaps bad investments of your wife's account(s) guided by the previously most important people in her life will be very small beans at some point, if you are so fortunate. Think forward fifty years to a moment when you together have created something.

In your life planning together this is going to be a much smaller issue than it may appear at the moment.

Give it some time.
PQ12$
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Re: Newly married! combining investing philosophies

Post by PQ12$ »

I agree with corpmd - give it time. The reason many people go/stay with an advisor is they fear what they don't know and it makes them "feel" safer. It is not a bad strategy and often the primary role of the advisor is to not let them do something stupid in the heat of the moment. That can be a valuable role and worth the money.

It took me devoting 300 hours of research, education, BH, etc. at 52 (while on a 1-year sabbatical) to get comfortable taking over my investment portfolio. She might need a few years to get comfortable with any moves, so I say give it to her. Focus on the savings rate and living below your means and regardless you're gonna do great.
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CyclingDuo
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Re: Newly married! combining investing philosophies

Post by CyclingDuo »

TN Bogle wrote: Tue Jan 14, 2020 3:25 pm Hello all

I am newly married to my wonderful bride. We are in our late 20s, early 30s. We both have very different financial backgrounds and upbringings. My history is that I have lived quite frugally through medical school residency and have basically formed my investing philosophy through reading and interacting with The White Coat Investor and with you fine people here at Bogleheads.org. I've paid off my student loans and continue to have a monthly budget similar to that of when I was in residency, roughly $3000 per month (have been an attending for 2.5 years). She is also wise with money and by no means a spendthrift. I am just quiet a bit more on the frugal side of the spectrum than your average American, and I understand that. I have no problem compromising on that and she is also happy to live a reasonably modest lifestyle in exchange for achieving our future goals. We communicate well and don't have any issues discussing difficult subjects.

My questions center more on the combining of investment philosophies. I have been a DIY investor, living well below my means and investing everything in low cost mutual funds primarily with Vanguard but also Fidelity in my 401k. Both companies are fine for me and I feel comfortable investing on my own thanks to the education you all have provided for me.

She has a relationship with a financial adviser. Her brokerage account (if you call it that?) is with this company, as are the non workplace associated accounts (401ks) of her entire family. I am not certain of the services this company provides. I don't know if they just do a fee for service advisory business, or directing investments or charging an AUM or what. I need more info on this piece of the puzzle.

My question is, what is a good way for me to be a loving husband as we explore how we want to handle our investments together but also make sure we are wisely investing and stewarding the money that we have. She does not really feel comfortable investing our own, and has expressed a desire to remain with the "family firm" for our marital investments. I guess I am ok with this if we have the option of designing a low cost Boglehead style account, but what do I do if the investment options are limited to high fee accounts or individual stock picking?

Any advice appreciated.
The Physician on Fire Blog had a recent post that both you and your wife should read. Written from the standpoint as a confession from an ex-AUM Financial Advisor, it was quite telling. Perhaps nothing new here for Bogleheads, but well worth the time for your wife to read.

The blog post/article is entitled "Confessions of an Ex-AUM Financial Advisor":

https://www.physicianonfire.com/financi ... V2UqCYjIsk
"Save like a pessimist, invest like an optimist." - Morgan Housel
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dratkinson
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Re: Newly married! combining investing philosophies

Post by dratkinson »

Congratulations on your wedding and starting your career.

I like the idea of running parallel investment strategies as the least threatening course. See how it goes when you compare year-end statements over a few year. Let your spouse decide the wiser investment course.


For later use, here is a snippet from a wallet handout I give to folks. Google the tools.
Free tools to compare your results to market index portfolio: VTSAX+VTIAX+VBTLX, or VTI+VXUS+BND.
--“Morningstar, Portfolio X-Ray Tool”. (Free access from public library PC. What is your investing style?)
--“FINRA, Fund Analyzer”. (What are your investments’ costs? Doesn’t include costs added by FA.)
--“Portfolio Visualizer, Backtest Portfolio”. (Return doesn’t include FA costs: higher costs = low return.)
--“Excel1040.com”. (Test planned change against last fed tax return. What is effect on after-tax income?)
Look for information tabs associated with each tool.
Example: Recall Morningstar tool has tabs which identify overlapping investments and tax costs.
Example: FINRA tool identifies internal costs associated with each investment.

The combination of tools could lead one to question the need to pay an FA's AUM fee for overlapping, tax-inefficient, expensive, under-performing investments... as compared to a market index portfolio, which you also run through the same tools.


Best wishes.
d.r.a., not dr.a. | I'm a novice investor, you are forewarned.
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KingRiggs
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Re: Newly married! combining investing philosophies

Post by KingRiggs »

At your ages and stage in your earning lives, she probably thinks that the fees she's paying are no big deal. I felt that way paying 1% AUM until my portfolio grew and that annual fee became "real money", ie., about half of my annual 401k contribution!

It takes different stimuli to get different people's attention. At this point, while her balance is most likely low, don't sweat it. Continue to manage your accounts the way you like, and allow her to do the same with hers. Over time, you will likely have many conversations about money, investing, and so on. She will eventually get comfortable with your investment style and UNCOMFORTABLE with hers as her fees increase. For jointly-held accounts, meet somewhere in the middle.
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MotoTrojan
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Re: Newly married! combining investing philosophies

Post by MotoTrojan »

Paying 1% on any money I earned would drive me insane. I’m very fortunate to have a frugal partner who also trusts me to run the finances.
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