Do you trust your wife?
Because if you do trust her…
If you want to keep that money, all of it, just give it to your wife.
- Andy Dufresne in Shawshank Redemption
I have almost all of my money and make almost all major financial and other life decisions in common with my wife. But here is why I say “almost”.
Demutualizations
My worst performer was +10% and best was +50% upon demutualizing, with many doubles or better within a relatively short period of time. These have extraordinarily good rates of return, even better expected values, and suffer only from having capped exposures. Offerings are virtually always set at $10 per share. A small allocation has been 50k shares and a large has been a million (if one subscribes for a full position, occasionally they come back and let you buy some more). But individuals can only get so many shares and groups can sometimes get more (often not twice as many but frequently 50% more). So get separate deposit accounts to get separate (separatish — the group is still worse than if there were no connection between the two) allocations.
In the case of Eastern (EBC), holders could get 200k shares for $10 each. They opened up, doubled in six months, and then ours got called away at $20 per share, which was a quick and safe double (or slightly better net of dividends and call premium.
Odd-lots
Odd-lots have also been great IRRs/EVs through the years but are even more capped in terms of scale. Separate brokerage accounts for wives help this opportunity too. Recent examples include both Monster (MNST) and Talen (TLNE).
529s
There is a $500k balance cap for contributing to my favorite 529 tax-advantaged fund. Max out this contribution for each family member including your wife in order to compound tax-free for decades. There will be many good ways to eventually use this money. The tax savings are real. The constraints are manageable.
P2
A wife is like having a second player or “P2” in the video game of life. You can harvest all of the sign up bonuses twice and many referral bonuses allow you to refer to her. The worst that they can say is “no” so it is always worth a try. My favorite current one to double with a P2 is Robinhood (HOOD) and Robinhood Gold. Get separate accounts a few months apart so that you can have four instead of two months of 5.25% APY on your cash before it reverts to 5% and $2k instead of $1k of free margin. Within the next few weeks, you can get a 1% transfer bonus (more on that soon), and get a new account (for, among other things, executing the demutualizations and odd-lots described above). Their growth has been meteoric, driven by these aggressive sign up bonuses and above market deals for their Gold members.
Their >$20 billion of cash sweeps deposits is 8x as much as when they launched Robinhood Gold less than two years ago.
Trust
It is nice to have a wife you (think you) can trust for these and other reasons. It is still optimal to have a prenup (I botched this step). Plan B: be lovable or at least tolerable. The Science of Happily Ever After: What Really Matters in the Quest for Enduring Love is worth reading on the subject. Tl; dr: the secret is that there is no secret. Just be kind and generous. While the conversation was in jest, I was discussing a New Yorker friend’s impending tenth anniversary which apparently is the deadline (which I’ve long ago missed) for getting divorced without having to make alimony payments. Besides the misery that such outcomes entail, they are financial horror shows in which everyone tries to destroy each other, largely succeeds, and enriches only the lawyers. So, as Andy asked in Shawshank Redemption,
What I mean is, do you think she’d go behind your back? Try to hamstring you?
Ask yourself that question before you get married then find someone worth betting it all on from day one until well past your tenth anniversary.
