Author Topic: Managing couple's investments  (Read 2301 times)

Shooter_D

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Managing couple's investments
« on: February 03, 2016, 07:20:36 AM »
My SO is new to the investing party. He put his first bit of cash into investments last year while I had more savings coming into the relationship and have been investing for longer. My investments are in ETFs in the old Canadian Couch Potato funds (Can, US, EM, EAFE, Bonds and I have some REITs). I have my set asset classes split between my RRSP, TFSA, and Margin accounts. I put his first invested chunk of money into CBN.TO (https://www.blackrock.com/ca/individual/en/products/239447/ishares-balanced-growth-coreportfoliotm-fund) which is composed of ETFs that more-or-less mirror our desired asset allocation. But now as he prepares to put some more money in, I'd like to switch him to a 3-fund ETF portfolio (Can, Ex-Can, Bond). I feel like now there is enough money in his name to split things up into a few funds, plus the MER will be a lot lower (CBN.TO MER is 0.78%).

How do you manage your family's asset allocation over multiple accounts? I am thinking of having us both with separate ETFs of all asset classes so that one of us is not exposed to considerably more or less risk. His accounts are all tax-sheltered/tax-free so I'm not worried about tax implications. Also, since the whole stock market is a bit depressed lately, is it fine to sell one fund that has dropped in value to buy others that are presumably less-valuable as well? I don't want to get into market-timing stuff, but I do hesitate to lock in losses.

financialfreedom

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Re: Managing couple's investments
« Reply #1 on: February 03, 2016, 07:27:16 AM »
My wife and I have one fund each, and our business has two. Keeps things easy to track and organise, and we count everything as joint anyway.

Shooter_D

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Re: Managing couple's investments
« Reply #2 on: February 03, 2016, 07:30:35 AM »
My wife and I have one fund each, and our business has two. Keeps things easy to track and organise, and we count everything as joint anyway.

Thanks for the reply financialfreedom. Are you 100% invested in equities? Or does the one fund have multiple asset classes?

bearkat

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Re: Managing couple's investments
« Reply #3 on: February 03, 2016, 07:34:19 AM »
We (as a couple) handle it by determining our AA for all of our investments as one big bucket and then put different funds in the pre-tax, Roth, or taxable sub-buckets that make since with tax minimization and account balances.

For example, my wife's Roth IRA has only REITs in it, and we have very little REITs in any other account. I'm not concerned about spreading the return or the risk equally across individuals or accounts because we never look at them in isolation. If something ever did happen where we split, then we each get half the total anyway.

We do it this way because we're just a few years into investing and all of our accounts (except my 401k) have less than $25k in them. It wouldn't make sense for us to try to re-create our overall AA in every account.

This link may be helpful: https://www.bogleheads.org/wiki/Asset_allocation_in_multiple_accounts

financialfreedom

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Re: Managing couple's investments
« Reply #4 on: February 03, 2016, 07:55:01 AM »
Quote
Thanks for the reply financialfreedom. Are you 100% invested in equities? Or does the one fund have multiple asset classes?

We are 100% in equities over 4 funds in total. Although the largest of these is Vanguard Dev Wld Ex UK (we are in the UK) so we are pretty diversified worldwide.


dude

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Re: Managing couple's investments
« Reply #5 on: February 03, 2016, 08:04:34 AM »
My wife and I have a 7 year age difference between us (me 50, her 43), and had VERY different saving profiles coming into our marriage, and different retirement timelines.  We keep one joint account that is for the most part our cash account/equivalent (mostly GNMA Fund).  My 401k is 68/32 split.  She has two accounts: a rollover IRA from an old job, and her current 401k.  Her current 401k is legal theft-- a 0.99% management fee from the company that manages the 401k, on top of the expense ratios for the various funds offered, MANY of which are over 1%.  The only low-cost option available to her in that 401k is the Vanguard S&P 500 fund (0.05%), for which she has to pay 1.04% on account of the 0.99% management fee (such bullshit).  So I have 100% of her current 401k money going there.  I diversify her overall by using her IRA, where she's got some TIPs, REITs, and an additional equity index fund.  Overall, she's 80/20.


Shooter_D

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Re: Managing couple's investments
« Reply #7 on: February 03, 2016, 09:47:17 AM »
We (as a couple) handle it by determining our AA for all of our investments as one big bucket and then put different funds in the pre-tax, Roth, or taxable sub-buckets that make since with tax minimization and account balances.

For example, my wife's Roth IRA has only REITs in it, and we have very little REITs in any other account. I'm not concerned about spreading the return or the risk equally across individuals or accounts because we never look at them in isolation. If something ever did happen where we split, then we each get half the total anyway.

We do it this way because we're just a few years into investing and all of our accounts (except my 401k) have less than $25k in them. It wouldn't make sense for us to try to re-create our overall AA in every account.

This link may be helpful: https://www.bogleheads.org/wiki/Asset_allocation_in_multiple_accounts

I'll check out the link bearkat, and good points. My difficulty is coming from having my accounts all set up with a certain AA, and then starting up my SO's investments. I don't want to tweak my investments (I just re-balanced), which is why I was thinking of the 3-fund approach for him.

My wife and I have a 7 year age difference between us (me 50, her 43), and had VERY different saving profiles coming into our marriage, and different retirement timelines.  We keep one joint account that is for the most part our cash account/equivalent (mostly GNMA Fund).  My 401k is 68/32 split.  She has two accounts: a rollover IRA from an old job, and her current 401k.  Her current 401k is legal theft-- a 0.99% management fee from the company that manages the 401k, on top of the expense ratios for the various funds offered, MANY of which are over 1%.  The only low-cost option available to her in that 401k is the Vanguard S&P 500 fund (0.05%), for which she has to pay 1.04% on account of the 0.99% management fee (such bullshit).  So I have 100% of her current 401k money going there.  I diversify her overall by using her IRA, where she's got some TIPs, REITs, and an additional equity index fund.  Overall, she's 80/20.

Thanks dude. Sounds like I'm in a similar boat with the different investment/savings profiles. We also have a joint account for common expenses and such but keep most other things separate. Those MERs sound similar if not a bit low compared to those for funds in Canad; my previous advisor had me in one with a fee of 2.5%, hence my heading to a discount brokerage to invest in ETFs!

here's my method. 

http://forum.mrmoneymustache.com/investor-alley/canadian-first-time-setting-up-investment-plan-please-help!/msg731934/#msg731934



I'll check out the link Heckler, thanks!