Joint Brokerage Account

#1

Hey everyone, I am about 2 months away from my wedding date, and now that the wife-to-be and I are done saving for that, we are redirecting our future efforts towards investing.
I am investing through Vanguard and I would like to know thoughts on a joint brokerage account. It seems to me that one account with 2 donors would compound growth more quickly than two separate accounts. My backup option is to get an individual account and just put her money in there as well.

I appreciate the feedback!

#2

Hi @tsouik! Congrats on your upcoming wedding! A couple quick things:

  1. whether you choose to open a joint account vs having separate individual accounts, won’t impact your ability to have compound growth over time. If you have two $10,000 accounts or one $20,000 account, they will both experience the same growth over time (all else equal).

  2. deciding on joint vs separate accounts is a personal decision. I’m a fan of having a joint account for mutual goals (buying a house, saving for a wedding, etc) and having separate accounts as well for individual expenses.

I think the most important thing with personal finances for a couple is to have clear expectations for joint accounts and have regular financial check ins to make sure you are on the same page with everything!

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#3

That makes sense to me, thanks. Maybe I’m missing something here, but it seems to me that we would get more long term growth with all our money in 1 place. For example, 20k in one place will grow faster than 10k in 2 different places.

#4

Let’s look at an example.

Let’s say you have two accounts that each have $10 and both earn 10% a year. After year one, both accounts will have $11 in it. After year two, both accounts will have $12.10 in it. For a total of $24.20.

But now let’s say instead of having two accounts, you combine accounts and have one account with $20 and earn 10% per year. After year one, you will have $22 in the account. After year two you will have $24.20 in the account!

The number of accounts won’t make a difference in compound growth, assuming all the accounts are invested properly.

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