I have a friend who recently passed away after a prolonged illness. Before he died, he confided to me that he was at peace with his unfortunate situation. His affairs were in order, and there was more than enough money in their brokerage account for his wife to live on and enjoy the rest of her life. I reassured him that he had been a good provider and done his job well. Now, I'm not so sure.
One of my wife's friends mentioned at their weekly girls' luncheon that her husband has handled everything concerning their financial affairs over the 50 years of their marriage. Another gal – a recent widow – chimed in and said, “No! When my husband died, I didn't even know how to write a check. You have to learn that stuff while he can still teach you.”
She went on to explain that she and her husband had a financial planner for years. While she went along with him to their meetings, she confessed she never really paid attention. Now she has plenty of money and is being faced with decisions that have to be made with no understanding at all of what to do. She is concerned, and as my wife echoed, “She should be!”
At one point in our life we bought a motorhome and decided to attend a conference called Life on Wheels. The husband and wife team started the conference by discussing pink jobs and blue jobs. This was well past the time of the women's movement, so the first question was, “What is a pink job and what is a blue job?”
“Anything the two of you decide,” the wife answered. If a couple is going to travel the country in a small space, they need to work out a system of chores that they are comfortable with fairly quickly. While a traveling in a motorhome is a blast, having a workable routine makes life a lot easier.
Most everyone we know who has been married for any length of time knows that's also good advice for a marriage.
But we've seen too many cases where the partner who looked after all the finances was the first to die, and the surviving spouse had no clue. While the couple had a nice nest egg and could have easily been set for life, what happened to the survivor has often been bad. Some married financial predators.
One friend told us that one of the things she liked about her new husband was that he knew about “those things.” After several cruises and trips, the money was almost gone, but they still had a lot of life left ahead of them. Others have just made mistakes or received bad advice from their children, well-meaning friends, or financial advisors. Regardless of the cause, the widow or widower is terrified, helpless, and knows he or she is vulnerable. There are just times in life when a do-over is not an option.
As my wife and I began accumulating our own nest egg, I got quite a shock. We were celebrating reaching a financial milestone, having dinner, and I was feeling rather proud of myself for having done my job as a good provider and primary breadwinner. My wife quickly corrected me, “You have only done half your job.”
She was right. When I was working 60-80 hours a week, the pink and blue jobs were a matter of efficiency. They allowed us to enjoy what little free time we had together. Now we had an empty nest and a lot more free time, so we needed to rethink the entire pink and blue allocation which had made us function as a team for twenty years.
Here's what we did:
Immediately the check writing duties were reversed, not only for our personal accounts but also for our business accounts. That included balancing the bank statements on all accounts.
My wife also took over all the filing, including the financial papers. She committed to looking at things and asking about what she didn't understand.
When it comes to online trading, she is now sitting next to me and will soon be making trades.
When we became active investors, I began reading newsletters 2-3 hours a day. If I see one that I feel she should understand, it goes on her reading table. Her commitment is to read it, no matter how boring or complicated, and mark those areas where she has questions.
And finally, what makes it work? There are no dumb questions! Frustration with each other is avoided at all cost. Just because one is uneducated in a particular subject does not mean that one is dumb!
Our goal is not to make my wife an experienced, level-III options trader. The purpose is to educate her to the point where she has a darn good understanding of our financial affairs. The loss of a long-time partner is difficult enough without adding financial worries.
My wife is now comfortable with the basics. While she may need some help, she's capable of learning and would not allow her money to go into an investment she didn't understand.
Until next week…