Do's and Don'ts of Investing Jointly
TABLE OF CONTENTS
Investing your own money can be quite tricky on its own. And when you add another person to the mix, the process of investing can get even more challenging. You have two sources of income to manage your investments - and that's a plus. But then, you have two people's goals to take care of.
To be successful when you're investing jointly, you and your spouse need to carefully manage the upsides offered by two incomes with the challenges of meeting two sets of goals. Once you learn to strike this balance, joint investments get so much easier!
But how do you get to that point? Here are some dos and don'ts that can help you and your spouse invest jointly.
Joint investments: 3 things you should do
Let's first take a look at three key things that you absolutely need to do when you're planning to invest jointly with your partner.
Do come up with a joint budget
If you are investing jointly, you and your spouse need a joint budget. It is always a good idea to get into joint investing with a solid budgeting plan in place. The percentage of contribution may vary based on your specific needs and preferences. It could be a neat 50-50, or it could be 70-30, 20-80, or even 100-0.
You may decide to use all of your income to meet your family's expenses, and set aside your partner's income for investments. Whatever you decide, ensure that you have a budget charted out as per your needs.
Do keep your partner informed
Your partner and you are jointly investing. So, it's only natural to keep them in the loop when you wish to make a new investment or switch up your current portfolio in any manner. It is also essential to discuss any new goals that you may need to save up for, so you can both come up with a joint investment decision for those goals.
For instance, say you start a joint investment plan right after you're married. At that point, your primary goals are to save up for a down payment on your dream home, and to create an emergency fund. Over the course of time, you have a couple of children. And now, there's a new goal on the horizon - saving up for their education. The two of you need to discuss this before investing in any new scheme for your new goal.
Similarly, you also need to keep your partner informed about any changes in your income or your expenses.
Do a good bit of research
There are several joint investment options in the Indian financial market. And they each offer different kinds of financial benefits. Some of them may offer higher returns than others, while other joint schemes may come with tax benefits. Before you choose any joint investment plan for your portfolio, make sure you do your research and choose the investment option that can help you meet your joint goals easily.
Joint investments: 2 things you should not do
And now, we'll discuss two things that you should never do in case you're investing jointly. These mistakes could cost you and your spouse greatly.
Don't lose sight of your individual goals
When you are investing jointly, it is essential to include common goals. However, it is also equally important to include your individual goals in your investment plan, particularly if you do not have any separate investment plan.
However, you may often get too caught up in your common goals and lose sight of your own goals in the process. You may then need to either modify your joint investment plan later, or let go of your individual goals altogether. Neither of these is a good option.
Don't overlook your partner's risk profile
Your joint investment plan should be comfortable for you as well as your spouse. And this can be quite challenging if the two of you have different risk profiles. For instance, if your spouse is willing to take on higher risk today, but you prefer a more conservative approach, it could be hard to create a common investment plan.
One way to resolve this dilemma is to have multiple accounts with varying degrees of risk. A low-risk investment plan can help balance out a more aggressive investment plan. So, you and your spouse can both have what you need. Another way to approach this puzzle is to work out exactly how much risk you and your partner can afford to take on at the moment, based on your income, expenses, debt and more, and create a plan that meets those risk levels.
That should simply joint investments considerably for you and your partner. As with most things in personal finance, it may seem daunting before you begin. But once you take the first step towards investing jointly, things get easier. Focus on your goals, keep the lines of communication open, and use the tips given above to make your joint investments work for you.
Read next: THE IMPORTANCE OF HAVING A NOMINEE FOR INVESTMENTS
Whether you choose to invest jointly or otherwise, there is one aspect of investing that is crucial. And that is assigning a nominee for your investments. Wondering why this is so significant? Why don't you check out our blog on this subject, which explores the importance of having a nominee for your investments?
WHY JUST INVEST JOINTLY, WHEN YOU CAN BE INSURED JOINTLY TOO?
With the ABSLI Assured Savings Plan, you can extend the benefit of a life cover to your spouse as well, thanks to the Joint Life Protection option.
This savings plan also gives you guaranteed1 benefits coupled with loyalty additions year on year. All in all, achieving your life goals just gets easier with this insurance plan, as does insuring your spouse.
1 Provided all due premiums are paid
ABSLI Assured Savings Plan (UIN: 109N134V02) is a non-participating traditional insurance plan.
ABSLI Life Shield Plan
A term insurance plan that offers you the flexibility of plan options suitable for your family's non- negotiable goals and ensure they need not compromise on their lifestyle. UIN: 109N109V06
- Choice of 8 plan options
- Cover your spouse under the same policy
- Longer Life cover till age 85
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