Kevin O’Leary of “Shark Tank” fame isn’t shy about sharing business, investing and financial advice with the masses. And that’s what he did in a recent interview with FOX Business’ Stuart Varney.
It’s common for married couples to combine their finances.
Combining finances can make it easier to manage household expenses, save for future goals and work together on a financial plan that supports both partners’ aspirations.
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But Not So Fast
O’Leary isn’t on board with the idea of forgoing financial identity after tying the knot.
“You must, in this society, maintain your own financial identity,” he said. “Fifty percent of marriages end in divorce for financial stress over the first five years of marriage, and even if you have a long-term situation and anything would happen to your spouse, such as death … [and] you don’t have your own financial identity, you’re in the wilderness in America.”
He makes a good point. When finances are combined, there’s less opportunity for each partner to develop their own financial identity.
“You must have a credit rating and a financial identity and an account and your own investment accounts just for your own survival, so when people tell me, ‘We’re going to merge our account,’ I said, ‘What, are you nuts? Absolutely not.’”
While many high-profile financial gurus spew advice they never follow, the same holds for O’Leary. He made it clear that he forbids the sharing of finances in his own family.
Trending: Can you guess how many Americans successfully retire with $1,000,000 saved? The percentage may shock you.
O’Leary Takes It One Step Further
Along the same lines as maintaining separate finances, O’Leary also discussed prenuptial agreements.
He believes so much in prenuptial agreements that he invested in Hello Prenup Inc., an online service that makes it fast and efficient to create this legal document.
“If you’re building that financial pillar together, it’s because you want that harmony to last,” he said. “I’d argue the prenup helps a lot more.”
On the flip side, there’s reason to believe that O’Leary’s advice may not be as straightforward as it sounds.
According to research from the Indiana University Kelley School of Business, married couples with joint bank accounts have better relationships and fight less over money.
“When we surveyed people of varying relationship lengths, those who had merged accounts reported higher levels of communality within their marriage compared to people with separate accounts, or even those who partially merged their finances,” said Jenny Olson, assistant professor of marketing at the school of business. “They frequently told us they felt more like they were ‘in this together.”
Just like anything related to your finances, take advice with a grain of salt. Consider all options before making a final decision.
Consulting a financial adviser can help you better understand how to manage your finances as part of a married couple. A professional can offer personalized advice to help you make the best possible short- and long-term decisions.
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*This information is not financial advice, and personalized guidance from a financial adviser is recommended for making well-informed decisions.
Chris Bibey has written about personal finance and investment for the past 15 years in a variety of publications and for a variety of financial companies. He is not a licensed financial adviser, and the content herein is for information purposes only and is not, and does not constitute or intend to constitute, investment advice or any investment service. While Bibey believes the information contained herein is reliable and derived from reliable sources, there is no representation, warranty or undertaking, stated or implied, as to the accuracy or completeness of the information.
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This article Kevin O’Leary Warns Couples: ‘Maintain Your Own Financial Identity’ — But Indiana University Study Says Differently originally appeared on Benzinga.com
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