Investment is not a one-time affair but a continuous process that has to be practised for your entire life. Having a partner can make your long investment journey more fruitful and in many ways. There can be several roadblocks in the investment journey that can be resolved easily if there’s a partner along the journey. When we say ‘partner’, it can also be your spouse, close friend, a business partner or someone with whom you expect to stay connected for the rest of your life.
Here’s a list of factors that show why it’s important to let your partner know your investment details.
To estimate your financial goals correctly and invest accordingly
When you talk to your partner and exchange financial goals with each other, you’ll be able to explore many things which you would have not recognized earlier. For example, for decisions like children’s education, their marriage, your retirement corpus, etc., you with your partner can mutually make a better estimation of the timeline and exact fund requirement. It can help you take a more accurate investment decision.
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To know the risks capacity in a better way
Investments are subject to several risks. It’s important that you know about the level of risk that your investment carries and match the same with your risk appetite. Your partner can help you in knowing how much risk you can take while investing money. Your capacity of taking a risk could be lower than the joint risk-taking capacity of you and your partner. So, together you and your partner can take an appropriate level of risk to choose investments that have the potential to offer a higher return.
For example, when you invest with your spouse who also earns money, you can adjust the common expenses when calculating the total monthly saving, and thus together both can contribute money in investments that can generate a higher return. Partners can enhance their risk-taking capacity by investing together.
Mutual understanding can help better diversification of the combined portfolio
When the husband and wife are unaware of each other’s investment details, they may end up choosing the same investment plan. Thus, there can be diversification overlap.
Adhil Shetty, CEO, BankBazaar.com, says, “If both partners are aware of each other’s investments, they can make an informed decision when selecting instruments to achieve the adequate level of diversification in their portfolio. A combined portfolio that is balanced can help them lower their investment risk and secure better returns on their investments.”
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For claiming the corpus when you are no more
When you will leave for the heavenly abode, who will ensure that your investment corpus and legacy are handed over to your true legal heir? Who will be aware of your investments in different assets? Well, if you have a partner you can trust and share all the details of your investments, he/she can be the one who’ll ensure that your investment reaches the hand of the true heir. There is a huge corpus lying unclaimed with banks, life insurance companies and other institutions because of their investor’s death and no one in the family of the deceased are aware of such fund. If those investors would have shared details with their partners, those unclaimed funds would have easily reached the right hand.
Advice from your partner can help you make the right decision when your investment is not doing well. It’s important to keep details of all your investments in one place and share a copy of the same with your trusted partner or partners. Your trusted partner can be your wife, son, parents, close friends or anyone on whom you can rely completely. Apart from investments, you can also share the details of your assets, liabilities, Will, bank accounts, etc. To avoid ambiguity, you must keep KYC and the nominee details in all your investments and bank accounts.