When Spouses Invest Together with Rachel McDonough

What's most important to you when it comes to choosing your financial advisor? Someone who's aligned with your biblical values. How about someone who will take the time to explain your options? Certified Kingdom Advisors are professionals who meet high standards in competence and integrity and have been trained to offer biblical financial advice. To find a Certified Kingdom Advisor in your area, visit faithfi.com and click Find a CKA. Two become one in marriage, but what does that mean exactly when it comes to investing?

I am Rob West. Should both spouses be included in investment decisions? Rachel McDonough certainly thinks so, and today she'll tell us about the benefits of both husband and wife engaging in that process. Then it's on to your calls at 800-525-7000.

That's 800-525-7000. This is faith and finance, biblical wisdom for your financial decisions. Well, Rachel McDonough is our guest today.

She's a Certified Financial Planner and Certified Kingdom Advisor. Rachel is also an expert in helping folks align their investments with a Christian worldview. And Rachel, it's great to have you back with us. Thank you, Rob.

Glad to be here. Rachel, we've got to lay some groundwork, perhaps, before we start talking about married couples investing. So maybe you could start with the differences between how men and women tend to think or approach life. Yeah, let's just start with some broad generalities about men and women and then keeping in mind that these are not going to fit for every couple, but I bet at least a few of them will resonate.

So as you think through this list, think of which descriptions apply to you and your spouse. First of all, builders versus beautifiers. Men tend to focus more on function and women tend to focus more on form.

Next, risk takers versus nest builders. We find often when we do a risk tolerance score, a man's risk tolerance tends to be higher than his wife's. How about task-focused versus relationship-focused, big picture versus detail-oriented, factual versus intuitive, and often men are more compartmentalized, whereas women are more centralized, seeing everything as interconnected. And then this is my favorite, men tend to be the head of the home, whereas women are the heart of the home. So regardless of whether your unique marriage fits with these generalities about men and women, I also just want to remind us of the old adage that opposites attract.

In many couples, there will be one person who is more of the thinker and one who is more of a feeler, and of course, both are equally important. Yeah, that's so true, Rachel, and so helpful. You know Ron Blue well, of course, one of my mentors, and Ron would often tell the story of a well-known pastor that was a client of his who was also a Bible teacher, has written many books, and he would have dinner once a year with this pastor and his wife, and they would go over the finances, and she'd want to go over every line of the financial plan, and at some point during the dinner, and Ron said this would happen every year, he would get up to excuse himself to go to the restroom, Ron would go with him, and on the way he would say, so how are we doing? And Ron would say, you're doing fine, and he'd say great, and that was all he wanted to know, and I think it highlights exactly what you're talking about. Now Rachel, how do these differences though show up in financial decisions?

Obviously I gave one example there, but how have you seen it show up? Yeah, I've seen a few patterns, so one of the common ones is that the husband may focus more on big picture retirement planning, big dollar amount decisions like big investments, and the wife may be the one who actually pays the bills, right? The husband might lead the process when it comes to acquiring a big ticket item like buying a home or buying a car, whereas the wife may cumulatively be spending more money over the course of their lifetimes by just shopping for household items or groceries. And then the one that we talked about already was, I just think it's worth mentioning again, men tend to have a higher risk tolerance than women do, and yet if they will come together and meet in the middle, they often find that the compromise is really the best fit for the family.

Well I think that's exactly right, Rachel. So what are some of the reasons that you found that couples operate this way, where only one of them is overseeing the investments? Well the big one I think is busyness, and there's sort of the need in marriage to implement a specialization of labor, right? The need to just divide and conquer in order to get through the to-do list for the family. But there's also a really positive reason that sometimes this occurs, and that is that there's something in the heart of a man, I think in particular, that wants to provide for his family and feels blessed when his wife will just trust him with the investment decisions and feel confident that he's able to do that.

I think you're exactly right. Well we're going to continue to unpack this man and woman, husband and wife managing investments. What are the benefits of doing that together? We're joined today by Rachel McDonough, certified financial planner and certified kingdom advisor with WealthSquared. You'll find them online at WealthSQ.com.

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I'm Rob West. I'm joined today by Rachel McDonough, certified kingdom advisor. Her firm is called WealthSquared and we're talking about investing together as a married couple and just before the break, Rachel, you were talking to us about how men being the head of the home and the woman being the heart of the home, we might think of that as thinker and feeler. So how does that apply specifically to investing? The thinking spouse may tend to ask, as you might guess, more technical questions about a potential investment to discover the financial pros and cons, focusing on factual understanding of all the options. So for example, the thinker may ask, how much return could I expect or how much risk would I be taking?

How long might my capital be locked up for or what are the fees? On the other hand, the feeling spouse, the heart of the home may be more concerned about ensuring that the investment is going to be safe or available for the needs of the family. Let's say there are tuition payments coming up for a kid who's heading off to college. The feeler might be more concerned about the relational component. Also, studies have shown that women are actually really interested in socially responsible investing and thinking about how the investment aligns with the family's values. Are the portfolio companies acting ethically?

Are they engaged in exploitation through child labor or something that's happening in their factories abroad? The studies, the research showed that this is actually very important to women, although I have seen it important to both men and women. Yeah. Well, those are really important differences and I think really highlight the opportunity here by doing this together to make a better investment decision with their advisor. Let's talk about some of the potential dangers of having just one spouse make the investment and long-term planning decisions. Yeah, Rob. I think the most obvious danger is that women tend to live five to six years longer than men on average and so I have walked several recently widowed women through the steep learning curve on investing and making real estate transactions, thinking about retirement planning and other financial concepts that are complicated all at a time when they really just need space to grieve.

Yeah. So, I actually have a word of encouragement for both types of spouses, the thinker and the feeler, in addition to just the likelihood of longevity. Let's remember that if you're the feeler and you see your spouse as more financially savvy or more analytical and that's caused you to be supportive or more passive in this area, let's just back up for one minute and recognize that you may be putting a massive responsibility on his shoulders if you're intentionally or unintentionally disengaging from that long-term planning and investment decision-making process. So, you would not expect your spouse to unilaterally plot out your career path or dictate how you're going to spend your time, but if we're abdicating responsibility and not engaging in the process, we really are putting a burden on our spouses. And it's likely that at some point, we're not going to be happy with the outcome that our spouse's decisions achieve, which can cause friction in the marriage. On the other hand, if you are the thinker, the more financially savvy of the couple perhaps, who may be leading the investment decisions, there's a different sort of danger for you. I was reminded recently of a story from Larry Burkett, where the husband was about to invest a large sum of money with a well-respected businessman.

Now, he had crunched all the numbers, done all of his analysis, reviewed all the facts, and the investment appeared very sound. But when he introduced his wife to this man, she was not impressed. She thought, this guy kind of gives me the creeps, there's just something off about him. And he did push through and made the investment decision anyway, despite her concerns, and it ended up that they did lose a lot of money. So, you never want to be in a position where you've kind of pushed forward in that decision-making process without pausing to listen. Sometimes the voice of the Lord will come through our spouse, and there's a protection for us in just slowing down and listening. Yeah, that discernment factor is huge.

We don't want to miss that opportunity. Rachel, do both spouses need to be involved in all financial tasks for the family, or are there only some that are really critical? I would say, Rob, when it comes to smaller decisions, like, should we renew the $5,000 CD for another six months, or paying off monthly bills, that kind of thing, it's really obviously not important for both to be involved. However, whenever significant dollars are at stake, whenever there's a long-term outcome that's trying to be achieved, we want both spouses to have their values, their priorities, their perspectives, and their goals represented in that plan, and in the investment decision.

Yeah, that's really helpful. All right, Rachel, sum this up for us. What is the potential benefit of making both investment and major financial decisions together? Well, Genesis 1-28 reminds us that in the image of God, He created them. Both male and female, He created them.

So there are different attributes of God that are represented in the masculine and in the feminine, and we know that we have a better perspective when we come together. Also, Genesis 2-18, the Lord said, is not good for the man to be alone. I will make a helper that is suitable for him. And I think sometimes, ladies, we tend to let the man take control and let him make decisions, but we don't want to leave him out there by himself.

We don't want to hang him out to dry, and he needs the support of his helpmate. Ecclesiastes 4-9 tells us that two are better than one, and wow, is that true. If both spouses are engaged, they have the power of helping one another to discern the right course of action. They agreed when they got married, for richer or for poorer, but I find that it's better when significant investment decisions that really can result in the richer or poorer are made prayerfully and in unity. I often tell clients I'd rather that they make the right decision the right way, going through each step of their own decision-making process, than to make a rushed decision.

That's really helpful. Rachel, we have just a minute or so left for that spouse that's hearing this today and says, yes, that's what I desire. But her spouse, let's say, has been managing everything, and she wants to be a part of it. How would you encourage her to approach that conversation?

Well, I think delicately, you know, first of all, I think, you know, men, especially those who've been seeing this as a way that they serve their wives and their families, you don't want to come up with an approach that's very confrontational, but a gentle approach that says, you know, statistically, women are likely to live longer than men. What do you think I need to know about the way that we're investing in order to just kind of get myself up to speed? And if I've put too much responsibility on your shoulders in this area, I want you to help me get educated and involved and get engaged with our investment choices.

Yeah, that's really helpful. Unfortunately, we're going to have to leave it there for today. Rachel, so grateful to have you stop by. By the way, folks, if you're a woman in the Denver or Colorado Springs area and you'd like to meet Rachel and hear more on this topic, you may want to grab a pen. The National Christian Foundation will be hosting two women's events, October 4th and 5th with Rachel as the speaker. She'll be diving deeper on the topic of men, women and investing for impact.

And you can request information at Rocky Mountains at NCF giving dot com. Rachel, thanks for joining us today. Thank you. That's Rachel McDonough, certified financial planner and certified kingdom advisor. You can find out more at WealthSQ.com. That's WealthSQ.com. All right. Your calls are next, 800-525-7000. That's 800-525-7000. I'm Rob West and this is Faith and Finance.

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For licensing information, please visit NMLS consumer access dot org. Welcome back to Faith and Finance. I'm Rob West.

All right. It's time to take your calls and questions today. The number is 800-525-7000. Perhaps there's something you've been thinking about financially.

You want some help in really applying the Council of Scripture to your financial decisions and choices today. We'll help you move forward with confidence. We just need your phone call first. The number is 800-525-7000 and we have several lines open today. Let's head to Georgetown, Texas to begin today. Shay, thank you for calling. Go right ahead.

Thanks for taking my call. My situation is that I retired three years ago and at the time, by the advice of my CPA, I had taken out 100,000 from my traditional IRA, put into index annuity. It's a fixed annuity and also has a piggyback ride over long-term care in the event of what I would need. My concern is that it's been two years and it has not grown at all. As you know, nowadays you can see the rate average about four or five percent. My thought has been, well, it's not growing.

Chances are it may not grow. So I'm thinking about taking it out and putting it into IRA, since it came out from IRA, IRA CD. I browse through some of the websites I know, so there's some CD that I could give five percent within the IRA. However, there will be surrender charging involved, at least it's going to go up around about 12,000. So I'm thinking it's a calculation, well, if I were to get five percent, maybe I could make it up for within two, three years, so what I'd lose. I don't know.

I'm just agonizing over, I'm facing this kind of decision by myself because I'm a widow and I just don't know what to do, what would be the right thing for me. I just want to hear what you, I've been listening to you and I'd like to give you a call. Sure.

Well, I appreciate that background, Shea. That was really helpful. Let me just clarify a couple of things. So you said you put a hundred thousand from your IRA into this annuity. Is it a fixed annuity with a guaranteed rate of return or is it what they call an indexed annuity where the performance is tied to a market index? Right. It is an indexed annuity, but it hasn't grown at all within the last two years. Sure.

Okay. You know, I think it'd probably be better to stay right where you're at. I mean, if it's an indexed annuity, it's pegged to a market index. The market hasn't done great the last couple of years. That's why.

I mean, we've seen somewhat of a recovery this year, but it's been fairly narrow in terms of the total number of stocks participating in the rally and largely many stocks are still down from, you know, where they were a couple of years ago. So I think that's why you're experiencing that and given that high penalty that you would be facing, I don't think it makes sense, especially if you're going to pull it out into CDs. You'd really just be kind of making a lateral move. And what's likely the case is every year you hang on to this annuity, you have the ability for the surrender charges to come down. So if you wanted to roll it out later, you'd be able to do that with less penalty and hopefully the indexes that are inside the annuity begin to perform, you know, as the market recovers, perhaps next year more broadly.

So I think my first preference would be for you to leave it right there. The only other thing I might do is for you to visit with an advisor who could just look at your overall financial picture. Do you have a trusted advisor that you would want to engage to do some planning and evaluate what you have and really suggest how you move forward? Is that the person that puts you into this? Or do you feel like you'd need somebody else to come to the table? Well, basically, when I retired, yeah, I started the CFAP, financial planner, right. And so that was the one time a year, and that was done within the North Carolina line-up and if I moved here. So to answer your question, I don't have ongoing advisor other than that this was the recommendation I was given that is conserving in the event of a debt if I were to need a long-term care.

Yeah, very good. Right now I am 65, I am healthy, and I'm just thinking, well, maybe I should give a chance for this money to grow rather than just sustain it. Well, I certainly wouldn't make a decision right away to pull it out. I think apart from somebody to look at what you've got and advise you on your overall financial picture, I'd probably stay right where you're at.

But I think this does make sense. You know, at 65, you could still get a separate long-term care insurance policy, which if you can afford it, makes a lot of sense because 70% of Americans 65 and older will need long-term care at some level, and it's very expensive. So I like the idea that you would offset this risk. You're doing it as a rider to an insurance product.

You could buy it as a separate policy if you decided at some point down the road to pull out of this annuity. But I think your next step, Shay, is to have an advisor locally that you could have evaluate the annuity, look at your other investable assets, help you evaluate how to cover the cost of long-term care, and come up with a holistic plan as opposed to just making the decision purely on do I stay or leave this annuity. We recommend, if you listen to this program, you've heard me talk about the Certified Kingdom Advisor designation. These are men and women who have met high standards in character and competence and experience.

They've had a regulatory review, pastoring client references, but also they've been trained to bring a biblical worldview of financial decision-making. I would connect with a couple of CKAs there in Texas and interview them, find the one that's the best fit. You would do that at our website, faithfi.com. Just click Find a CKA.

I think that's your best next step to have somebody evaluate this, but I wouldn't be quick to move out of that without somebody analyzing it. Also, I'd like to send you a gift. You stay on the line. Tahira is going to pick up the phone and get your contact information. We're going to send you a book called Wise Women Managing Money. I think it'll be a great blessing to you. It is written by a wonderful lady who was a widow. She and her daughter put this together for women who are widows to help them just understand all of the opportunities they have with God's money. To the extent you're uncomfortable with financial matters, she can give you some, I think, just really helpful insight into how you should view your finances and how you can have more confidence in making decisions in the future. It's Miriam Neff and Valerie Neff-Hogan that put it together.

Again, it's called Wise Women Managing Money. It's our gift to you. We'd be delighted to send it to you, Shay.

You stay on the line. We'll get your information and get that right out to you. We appreciate you being on the program today.

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