Could money issues ruin your relationship?

Myth No. 5: If we don't talk about money, everything will work out okay.
Fact No. 5: If the two of you don't start talking about money, you'll more than likely die broke.

I'm a very positive person, but when it comes to North Americans and wealth management, the facts are frightening. The rich are getting richer and the poor are going nowhere fast. Statistics Canada reported in a survey in 1999 that there were more than 310,000 families in Canada with a net worth of more than $1 million. Sounds like a lot of rich folks, right? Not when you consider that there are more than 12 million families in Canada. Do the math. Only about 2.5 percent of us belong to millionaire families.

So what, you say? You don't have to be a millionaire to be doing all right -- and most everyone else is still doing pretty well, aren't they?

Hardly. According to the same study the net worth of the top 20 percent of families went up by 39 percent in real terms over the previous 15 years. The lowest 20 percent had a net worth of -$600. In other words, their debts exceeded their assets by $600. The second-lowest 20 percent increased their net worth by only $300 over the previous 15 years.

And what of those baby boomers we keep hearing so much about? They're not so well off, either. Four in ten families in Canada have hardly increased their net worth in the last 15 years. And more than 40 percent of Canadians who make $75,000 a year or more say they can't afford a retirement lifestyle the equal of what they enjoyed while they were working.

So what's the deal? How is it possible that in the booming economy of the 1990s, most people were watching Who Wants to Be a Millionaire? instead of investing to be one? The answer is that while the economy as a whole was roaring along, most people did not really take advantage of the situation to accumulate wealth. People may be earning decent incomes these days, but most of us are not saving much money. As of March 2002, the Canadian savings rate had dropped to 4.7 percent. (Twenty years ago, it was 19 percent.)

Later on in this book, we will spend a great deal of time on how much money you and your partner will need to save in order to become wealthy and live rich. For now, rest assured that the average Canadian is doing a pitiful job of saving for the future. So if the two of you feel like you're not doing enough right now to build a nest egg, there's no need to beat yourselves up about it. You are clearly not alone and you probably do a better job than your friends.

Then again, your goal is not to be average. It's to live and finish rich, and that means doing what most other people won't do.

So where do you start? That's easy. As in so many other aspects of life, the place to start getting your finances in shape is at home. Specifically, you and your partner must learn to talk about money together. The reason I say this is that in most families money is something of a "taboo" subject. Relatively few of us grew up in homes where Mom and Dad talked freely about the family finances with each other -- let alone with the kids at the dinner table. As a result, most of us have grown up knowing nothing about money, including how to talk about it -- even with the person with whom we've chosen to spend our life.

Smart couples talk about money all the time
The fact that most of us are not raised to talk about money is a real tragedy. Show me a couple who doesn't talk about money and plan their finances together, and I will show you a couple headed for financial trouble -- if they're not already in it. When you work together on your finances, you can compound the results. When you don't, the same can be said for the mistakes you will invariably make. In general, two heads are always better than one. No matter what your specific goal happens to be, having a partner working on it with you, providing encouragement and ideas, makes achieving that goal much easier. More specifically, the two of you will probably find it easier to save more money together than either of you can save separately. Which leads me to one of the basic points of this book...

Couples who plan together have a better chance of being happy together
This, in a nutshell, is what this book is all about. By planning your finances together as a couple, you will significantly improve your chances of becoming wealthy and being happier together.

Of course, nothing worthwhile comes without some effort. Because of the need for cooperation, it can sometimes seem more difficult for a couple to make financial plans together than for a single person to do the job on his or her own. But that's misleading. The trick is to get on the same page early on and then move forward as a team. So the place to start is by sharing your feelings about money with your partner.

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Excerpted from Smart Couples Finish Rich by David Bach. Copyright 2003 by David Bach. Excerpted by permission of Doubleday Canada, a division of Random House of Canada Limited. All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.