With stocks down and the yield curve pointing to a soft patch, maybe investors should use this Valentine's Day to say "I do" -- to being rich.
From the sucking-the-romance-out-of-marriage file comes news that the net worth of married people rises much faster than that of their single or divorced counterparts, according to a study published by Ohio State University researcher Jay Zagorsky.
The study followed 9,055 baby boomers who are now between 41 and 48 years old over the course of 26 years.
At the end of the day, people who remained single saw their wealth grow from a base of less than $2,000 in 1985 to an average of $11,000 after 15 years. Using the same $2,000 starting point, people who got married and stayed married saw their wealth run up to an average $43,000 after just a decade of marriage, according to the study published earlier this year in the
Journal of Sociology
"There are great economies of scale in being married," says Zagorsky, boiling the results down to the fact that two can live cheaper than one. For example, there's only one mortgage to split and half the utility costs.
Couples in the study also saw their worth increase by 4% a year "just as a result of being married," when all other factors remained the same. That's a better dividend than on
Transportation is the one subcategory in which a married couple spends more than two single people.
But what about kids? Aren't they huge money suckers?
"One of the biggest costs is college, and not many people in the survey had put kids in college yet," says Zagorsky. "Wait a few more years in the survey and see what's going on."
There could be more to this than simple buy-one, get-one-free math, says Russell Bosworth, a certified financial planner and head of Manhattan-based Bosworth Financial Services.
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"Like every other aspect of life, married people on the same page make better decisions together ... that would include financial decisions," says Bosworth, pointing out that the couples who made their marriages work saw positive financial results.
On the other hand, if a communication breakdown is so bad that the marriage ends, discussions about the financial future might have gotten lost in the shuffle, he says.
Perhaps this is one reason why participants who got divorced saw their wealth sink long before the decree was finalized, with total wealth bottoming out the year prior to divorce to an average of $3,500. And divorce also reduced a person's wealth by 77%, compared with that of a single person.
Even a decade after a divorce, the median net worth of an individual remained below $10,000, according to the study.
There are tangible costs associated with divorce that contribute to this, including lawyers and moving expenses.
"Budgeting early in the process may cut down on the risk of overspending, but divorced spouses setting up new homes may not be able to resist," according to a paper by the Financial Planning Association. "For some, spending makes them feel better, and this is one of the biggest reasons ex-spouses face financial disaster after divorce."
So if you think the season of romance could equal a lifetime of financial return, investor beware.
"Getting married and staying happily married is a wonderful way to increase your wealth," says Zagorsky. "But getting married with the idea that it will make you rich is a terrible idea because ... divorce will destroy your wealth."