The Biggest Financial Decision of Your Life

There is a single business decision you will make in your life that could end up as the most important: marriage. Marriage can be a wealth creator or a wealth destroyer, so it is a decision that should not be taken lightly. 

A good marriage is one of support and compromise. Two people come together to work towards common goals, split the costs of living, generate multiple sources of income and build a sound foundation for a family. From this perspective, marriage can bear fruit that cannot be grown by one person alone. 

In contrast, when a marriage fails it can destroy the wealth of two people. Mel Gibson’s divorce from Robyn Moore Gibson cost about $425 million. Neil Diamond’s divorce from Marcia Murphey cost about $150 million. Steven Spielberg’s divorce from Amy Irving cost about $100 million. Of course, these examples are high-profile, patriarchal examples (in which the male pays the female a headline-grabbing sum of money) that don’t represent the average. In general, assets are split, the lower income earner turns to a meager lifestyle supported in part by the higher income earner, who loses a portion of his or her income. Divorce is economically survivable, but when compared to marriage it is a lose-lose proposition that can set the wealth creation goals for both parties back by decades. Compounding the economic effects, divorced couples lose the ability to divide tasks (such as household chores, parenting) in an optimal way to build wealth. Time is money – if they choose, a married couple can divide time to allocate to the most wealth-creating activities. A divorced couple simply doubles-up on tasks by performing them twice at separate households. It becomes a lot more difficult to pursue a great opportunity when you’re the only person who’s at home to cook dinner and help the kids with their homework. 

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Unfortunately, the significant economic decision to marry someone is often made by a brain raging with lust and irrationality. People tend to overlook faults and overestimate their ability to change someone when hormones are in charge. The marriage proposition – like any business decision – requires rational consideration. This means you need to separate the emotions out of one of the most emotional decisions of your life. That is not to say that you shouldn’t feel an emotional connection to your potential mate. Quite the opposite. There needs to be a strong emotional tie to make marriage work, but there also many practical considerations to make. 

So how should you evaluate a potential life mate? Here are just a few tough (aka very unromantic) questions you should ask yourself before getting married: 

  • Does my partner have a history of compromise? 
  • Do we tend to make big decisions together?
  • Do we have the same attitudes towards spending and saving?
  • What economic (income, assets or household management) benefits will my partner bring to the marriage?
  • How financially responsible is my partner’s family? Will we be supporting them?
  • Do our career ambitions clash?
  • What are my partner’s attitudes about fidelity?

Love is great. But you know what else is great? Being in love AND not being broke. Think very carefully before taking on the marriage project.

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