Having a helping hand, someone to lean on or talk to at any moment on speed dial is the most comforting feeling. Knowing that any question you may ask will never be considered dumb is a relief.
Being able to openly talk with someone about anything, even with highly sensitive personal topics most notably personal finances, can be a more helpful tool than an emergency fund and is a very resourceful strategy for building wealth. Beyond trusting that person for their advice, you trust their attention, care, and time that they are here for you.
Having a financial advisor or spouse to lend you a hand provides a similar feeling if relied on correctly. Becoming too dependent on someone is also dangerous especially since the real source of financial independence, hidden in the name, is on your own, independently. However, this feeling of knowing there’s a backup and having an extra hand helps people sleep better at night and is a defining feature of financial security long-term.
Blending finances in a relationship can be a sticky situation, especially when deciding on your goals of marriage in the first place. Everyone has their own priorities and obligations, some choose to be rebels and not have a prenup for true love forever and others choose to marry for a specific reason while knowing it is also to build wealth with someone they love by making sure what they put in is what they will get out, financially and mentally.
Although the financial breakdown of married people and those living the single life varies based on far too many exogenous factors to count on from location, income, net worth status, and personality — most evidently flexibility and patience, educational background, ethnicity, etc. numbers don’t lie according to my expert algebra skills: 1+1=2 and those with a plus one, tend to be wealthier. Not always, but on average.
Now don’t get me wrong, what is wealth without happiness? After all, if you marry into wealth and aren’t happy, what is the point? You need to make sure your wealth is providing you with a better life which starts with getting the relationship right first.
More doesn’t always mean better but it certainly is a likely path towards accumulating more since it’s at 2x the rate after all.
Savings vs Income
As the financial gurus of the world including myself say, if it doesn’t hurt to save, you aren’t saving enough. Though up to a certain point, compared to your earnings, you can only save so much until your quality of life is dramatically reduced and it becomes difficult to live.
On the other hand, with income potential, it is exponential and limitless. There is no boundary to your earnings and is one of the main reasons people get married in the first place. Coincidentally, money is also the number one factor in divorce but we won’t focus on that here.
Money is involved in everything in our lives and at the end of the day, can dictate who we want to hang out with and the potential you have with someone to learn and produce more!
If there’s one key lesson when dealing with money in a relationship it’s to consume less and produce more. With your finances to aspirations, the more you get into the creator zone, the better, especially when it comes to IP (intellectual property) and creating your own vision to earn royalties, dividends, FCF, and recurring passive income for generations to come through a team effort.
Breakdown
According to the facts, figures, and logic of 1+1=2, those who are single, especially women not only earn considerably less than men over our lifetime equating to a difference of a couple million dollars by retirement, and have to deal with pink tax, but on average tend to also be less financially secure.
There’s nothing wrong with living on your own and following your own way of life on your own terms. In fact, oftentimes it may be easier for most to not have to commit and rely on someone in a relationship, yet over time it may naturally feel harder to be on your own given more responsibilities, older age, less energy, etc.
Marriage or being single both have their pros and cons however it is important to keep in mind the financial costs and headaches that may arise when living solo, not to mention the pressure many women face to marry in a window of time (age 22–45) to build more economic security.
As a real estate guru, I can tell you landlords prefer married over single tenants. Although it may not always be the case, being married adds more credibility and trustworthiness to your lease agreement given two people have signed the dotted line.
This leaves limited housing options for those who are single and having to spend roughly 39.8% of their annual income on housing, while couples and single men only spend on average 23.9% — 30.3%.
When it comes to retirement savings and lifetime expenses, there is also another cost barrier. Women who never married had less in their retirement savings compared to those who did and ended up spending more on health insurance, a major cost throughout life, roughly $15k more than married women.
Now the cost differences may sound daunting but I want you to remember that you have more control than you think and the person you must take care of first is yourself in order to take care of others. Being in a relationship and building wealth with someone may be a faster, possibly easier way in accumulating wealth but may not be realistic or right for you so please don’t rush it.
Being dependent on someone can be one of the most dangerous financial mistakes one can make since the only person you should be reliant upon is yourself.
Remember, in order to live a comfortable life, it isn’t based on how much you earn, it’s how much you save. Keep that in mind and you’ll be financially independent in a relationship or solo forever! Remember, nothing lasts forever so build your strongest balance sheet and don’t rush into any decision.