King February 26, 2019

Image result for Podcast | Invest O Cast episode 7: Investment advice for married couplesHrishi K:Hello listeners, welcome to NSE Presents: Invest–O–Cast (An exclusive investor podcast) Powered by Moneycontrol.  My name is Hrishi K and I’m your host on the show and this podcast is all about getting your money to make better investments for you in the new financial year.

Congrats on your big day! Yes, I am talking to all you newlyweds. Shortly after your stroll down the aisle, reality sets in. As a married couple, you’ll inevitably be cohabitating, coexisting, cospending and saving. You’ll begin to build your life together; you would talk more often about money. While it may not be easy, the number one rule is, to be honest.

After all, it’s all about building a strong foundation for your relationship. Newlywed finances can be a tricky thing. Hence we are dedicating today’s podcast to get you the best investment advice and make sure you and your partner achieve your financial goals together.

Well in my experience, newly married couples don’t really want to have the money talk. Money is a topic that many of us would rather not jump into, but we need to — especially with our partners.

But you don’t have to worry, because we are here to help you commit to your mutual financial goals as a couple, in today’s podcast. Sit back relax and listen to the best of advice from the industry expert of the day in Invest–O–Cast.

Hrishi K: National Stock Exchange (NSE) with the help of Invest – O- Cast (An exclusive investor podcast) Powered by Moneycontrol is committed to break the limitations of geographical boundaries and reach investors across the country. In today’s episode we talk about, Investment advice for newly married couples.

To help us with that it’s Vishal Dhawan in studio, the Founder & CEO, Plan Ahead Wealth Advisors. Vishal is Certified Financial Planner, with over 20+ years of rich experience in providing personal financial advice to families, individuals and businesses at various life stages. He regularly commits to spreading financial literacy through regular appearances on television channels such as CNBC-TV18 and a regular contributor to personal finance articles in business dailies and general interest newspapers and magazines.

Hrishi K: Welcome back again on the show Vishal! And I am sure you are going to give out a disclaimer on saying you are not a marriage counsellor.

Vishal Dhawan: Absolutely.

Hrishi K: You mentioned that financial literacy for people is your way of giving back. Now let’s presume somebody didn’t hear you the last time you were here tell us from your experience, the different stages of life where people seek help in financial planning more often then and now.

Vishal Dhawan: So we actually see that financial planning needs are very evident when people are either undergoing a transition or likely to go through one. So if you look back and look at stages in life you find young people getting their first job, they need financial help and financial planning. You have individuals or single people starting to planning to getting married and who are actually getting married suddenly needing the financial advice because they are going through what I call is major transition from being married to 20 years. You then have situations which they deal with a first child, maybe a second child, children going to college, planning their own retirement so these are all big transition to plan for to help them with their financial planning.

Hrishi K: Vishal, it’s obvious that you have been providing personal financial advice to families and individuals for over two decades. It’ll be really interesting to have your perspective on financial planning for newlyweds. Let’s start right with the top, why do newlyweds need to plan their investments in the first place.

Vishal Dhawan: So the starting point of all of this is essentially that money is a very ‘taboo’ subject in India in terms of conversation. You see parents talk about all kind of things but there are 2 things that people don’t talk about at all. One of them is money and I will leave the other one to your imagination.

Hrishi K: A vivid one at that.

Vishal Dhawan: So as far as money is concerned I think a lot of people are not very comfortable opening up with the money conversations and they actually don’t know where to start. And therefore one of the first things that we suggest is rather than bringing money to fore, you actually bring your life and your life expectations to the fore. Once that is clear money is just a conduit. It is just a way to get you there and therefore if you want to plan your investments you first got to start defining, what you really like to pitch your life to be like. As a couple invariably there will be periods along the way where you will have the other peoples to support as well, maybe parents who are ageing, maybe parents who need financial help, maybe one of you will go through health challenges, you will have children who will go through their own challenges and of course as much as you don’t want to think about it one day one of us is not going to be there with the other. And therefore you need to be able to plan right by having those money conversations in the right manner and then building your investment strategies around that.

Hrishi K: Well, I have got to say this Vishal there are so many lady friends of mine who have no idea where their husbands have stashed away the money. You ask them an elementary question saying how much does he have a reserve or an emergency fund or a future corpus and they used to shrug their shoulders and say we never had that conversation. So they can be honest to you about everything but honesty about money is somehow them the back-burner, isn’t it?

Vishal Dhawan: Well absolutely, we all tend to create these compartments and departments that each of us are aware of as much as we’ve kind of gone forward on that, we see there are role modelling kind of role and that does tend to happen between couples. So the husband will take care of the money and the wife will take care of the kids for example, which is very very archaic but unfortunately most of the people still have to struggle through that and therefore women tend to believe that this is someone else’s job and who doesn’t like delegating things to someone else, so, unfortunately, you do end up in a situation where you have a lot of women who do not give it the necessary attention. In fact we keep saying this all the time that we think that women are great at managing money, they probably do that in a very informal manner I think they just need to open up their minds by understanding that personal finance is not so much about numbers but it is a lot of about what and how you define your objectives and then just work step by step, step by step, step by step in a discipline manner to get there.

Hrishi K: Wonderful insights. You are listening to NSE Presents: Invest – O- Cast (An exclusive investor podcast) Powered by Moneycontrol is all about helping people learn about their finances on the go… Now Vishal we would like to understand a little bit more from you about investment planning for new couples? Especially, where to start and how to go about it?

Vishal Dhawan: So the starting point actually is about setting a budget. I think we are all told that you know old and fuddy-duddy people to write diaries with budgets, so let’s do the cool thing and let’s use excel and let’s use software but you got to do it anyway.

Hrishi K: Or just note on the phone.

Vishal Dhawan: Absolutely, we just got to do it somewhere right? And what you need to do very importantly is being able to separate out needs and wants in more financial parlance that’s called fixed expenses VS the discretionary expenses. If you are able to put it out and define saying that you know I think I am going to have some expenses that I cannot do anything about rent, food, clothes, the normal ones and then you have the discretionary expenses which are eating out, travel and doing all those cool things that you can show on Facebook and Instagram.

Hrishi K: There is so much social media pressure.

Vishal Dhawan: Absolutely, so what you do is you kind of separate both these things out and set your budgets very very tightly, give yourselves a little bit of space because I think there are always going to be things which couples are going to disapprove of spending habits of each other but that is ok, I think as long as you are keeping that under control broadly I think things are good. Second is accept that we are dealing with 2 different individuals who will not agree on everything and therefore sometimes you need a mediator. Get in a financial planner, that’s largely a role that we see, we are not marriage counsellors but we end up being objective in terms of what can really happen and what can’t.

Hrishi K: We counsel on numbers in a marriage.

Vishal Dhawan: Absolutely.

Hrishi K: If you were to just pinpoint what are the most important things that couples should discuss when it comes to investments? I mean I can think of financial backgrounds, spending behaviours, anything you would like to add in that list?

Vishal Dhawan: So in addition to that it is important to bring forth all the loans that you have, all those credit cards that you may not have paid off and believe that you know an outstanding on credit card is somewhat good enough because we have paid the minimum amount on your credit card I think I need to bring all of this on table because ultimately great conversations happen when all the data is on table and all the people are all talking completely truthfully about everything as far as their money lives are concerned. So get that on the table, understand that there could be 2 people who are living very different lives because one of you could be salaried, one of you could be professional and self-employed and therefore your needs are very different, how you behave with money could be different, so bring it up on the table, talk about it, understand that tax saving is important because it saves your money but it is not the end of financial planning. So once you have done that get to, try to understand how important it is for you all to have coverage. For example medical coverage, everyone who is young and newly married believes he is invincible. I think the reality is we see a lot of young people getting caught up in the stresses of life nowadays and all of a sudden you find that you don’t have enough money to be able to support those expenses. So get your medical insurance going, get a good term life cover going, and don’t try to do everything 50-50. It’s not necessary to do that; it may be more efficient in the case of a certain partner to actually invest in a certain kind of asset. For example, if someone is in higher tax bracket he might find a tax free bond is a very efficient instrument if someone is in a low tax bracket he might find bank Fixed Deposits as a very interesting instrument. So think about this prudentially and last but not the least, ensure that you are thinking not just one year out but you are also thinking that 5, 10, 15, 20 years out. It is important that marriages which are made in heaven stay there and your money matters don’t take you to hell.

Hrishi K: I remember you are saying you are not a counsellor as yet but you are getting there my friend. Now obviously when you are together, you have to have mutually beneficial financial goals, it is not about solo financial goals any more. So how can partners have mutually beneficial financial goals of investments once they are married?

Vishal Dhawan: So once you have actually started defining the goals and of course you need to remember inflation is going to hit them whether you like it or not, you can then work backwards and try to figure out what is really possible and what’s not. What we find really often is a cause of constant stress in relationships is that expectations get set very very high and then this disappointment along the way. I think you need to be very rational in terms of how you set goals for yourself, we are not asking you to give up on thinking big but we are just asking you to stay real because if you will stay real, your marriage also stays very very real and the conversations that you have are very real world. So what we suggest is get your conversations going real, build a model where you can actually take your investment strategy, align it to those financial goals and monitor it carefully along the way. Because what’s gonna happen is, these goals are going to change. There is going to be a situation where suddenly a child arrives, maybe one of you will have to take time off to support the child, that’s going to be a time where suddenly income is going to drop. You going to have friends and you are going to go ahead as far as money is concerned or at least you are going to think so and therefore what is very very important is that you stay focused on your own financial goals, what you want your money to achieve, if you don’t care about the kind of house that you live in its ok, I mean you don’t need to live your life as if it’s someone else’s, you could just be happy in a suburban home in a 2 bedroom apartment, again someone else who want to live in the nicest part of town in a 4 bedroom and remember that he or she is going to make some tradeoffs along with the way which may not be the tradeoffs that you really want to do. So as long as I think couples stay focused on what they want to achieve…Life is good.

Hrishi K: I am going to put you on the spot now. What’s your most important investment advice for the newlyweds?

Vishal Dhawan: Don’t overdo loans and we see that happen all the time because what happens is when you going to go and buy a car, for example, it’s just a little more to buy the next level of car, it’s just a little more to convert your house from a 2 bedroom to a 3 bedroom, it is just a little more to go on a holiday in South East Asia VS the Middle East and therefore as you keep doing just little more, you keep spreading your finances thinner and thinner and you keep taking more and more loans and then suddenly the baby arrives or suddenly one of you lose a job and that’s a real problem because then you are comfortable life becomes night merish, so it is very very critical that you constantly monitor what kind of debt you are running, we need to understand that we live in a very young country because we live in a very young country we will find that our careers our jobs, maybe much shorter than what we had thought when we were young and therefore the better you can keep your liabilities under control the better off your investments can do for you.

Hrishi K: Well Marriage does come with some of the perks Vishal. Now common pool of finances is one of those perks, can you tell our listeners on how they can make the most of a common pool of finances?

Vishal Dhawan: 3 things that can work very well one is when you are taking loans the advantage of having 2 sets of income is that you have the ability to borrow more, be careful about what you borrow for, do it for the right reasons. So for example, if you want to study and upscale yourself the fact that there are 2 incomes allows you the liberty to be able to do that. For example, if you want to set up a business or one partner needs to set up a business and the other one has a steady income, it allows them to still continue, to do to what you want to do. The second thing that joint income allows you to do is that allows you to think of things jointly and avoid what we call off the cuff decisions. You know when you are making your own decisions, sometimes you are so emotional about it that you don’t even realise what you’re doing and you need an alter ego which I call my ‘wife, they actually come and tell me that you know what, I think this is a really bad idea and number 3 is that when you are building all of these financial goals that you want to build, sometimes having those moneys jointly just allows you to plan much bigger because it’s just so useful to know that even if there is a job lost along the way, hopefully, both of you will not be going through the same situation at the same time.

Hrishi K: Final words from you for the newlyweds to make sure their financial journey in marriage is smooth sailing Vishal.

Vishal Dhawan: Be realistic, understand that you’re 2 separate individuals but the marriage of the minds needs to follow with the marriage of money. Once you get this all integrated together it is very very helpful, it is very very powerful for you to know that you and your partner are walking this path together towards what you all believe is most important to you’ll. For most people, we think that answer lies in financial freedom. The ability to do what they want to do, when they want to do it without worrying about what it means for their money.

Hrishi K: So newlyweds and all the married couples, we have had some really insightful points on investments for married couples. I am going to take you through some of the key points listed out by our guest Mr Vishal Dhawan in our “Wisdom in the bank” segment. Hope you find them useful and will definitely implement them in your life.

    • Get comfortable talking about money with your spouse

    • Learn budgeting

    • Separate joint accounts from individual accounts

    • Don’t forget your risk management

    • And keep loans under control

Thanks, Vishal, for taking us through the important investment advice for newly married couples today. It was an absolute pleasure having you on the show.

Vishal Dhawan: It was wonderful being here, Thanks so much Hrishi.

Hrishi K: Marriages bring a lot of things together along with love, care and families. You have shared responsibilities, rents, loans etc. Hence planning your finances and investments with your partner is key. In such a scenario both the partners can share the load when necessary and not one person is burdened by all. Likewise, the savings and investments when done right can help both the partners achieve their goals individually and as a couple. Just talk about money a little more openly and make sure you are on a similar page when it comes to investments.

And that is a wrap on our show NSE presents Invest–O–Cast! I’m your host Hrishi K for the NSE Presents: Invest–O–Cast (An exclusive investor podcast) Powered by Moneycontrol. To know more about our podcast, log on to and visit the podcast section. In case you would like us to address any of your investment queries on our show do write to us at: [email protected] You can also reach out to us on Twitter @moneycontrolcom or Facebook, do remember to use #nseinvestocast

Thank you for listening!