Popular financial columnist, Suze Orman, formerly VP Investments of Prudential Bache and an account officer for Merrill Lynch, authored the book: The Road To Wealth, which is a collection of her knowledge of all things financial. Her book is a treasure trove of information on stocks, bonds, insurance, debt, estate planning, and many more things, but I found one chapter very interesting–and this dealt with the subject of money and relationships.

Money can be a very sensitive issue, particularly for two people who are or are planning to live together but come from very different backgrounds, upbringing, and experience with finances. Suze’s chapter on Financial Intimacy can be a good start in understanding the role of money in the context of relationships.

Here’s an except of that chapter:

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Falling in love is simple–or so it often seems in retrospect. Sooner or later, however, disagreements crop up, and love becomes a much more complicated business. Can you guess one of the most common subjects of disagreement between couples, married and unmarried? No surprise here–it’s money. Everywhere I go, I hear the same complaint: “We’re fighting about money.” Arguments about money are the catalyst for more separations and divorces than you can imagine. Why? Because people’s attitudes and fears aout their money give it power–and the ability to wreak havoc on the most important relationships in their lives.

Yet there’s a simple answer. I have said it before and I’ll say it again: Place people first, money second. Whether you are falling in love, living with someone, getting divorced, or starting your life over again following the death of someone you love, the people in your life come fist. This doesn’t mean that money has no relevance to love, however.

Of all the kinds and degrees of intimacy that exist in the world–physical, emotional, social, professional, or domestic–financial intimacy is one of the most satisfying and perhaps the hardest to achieve. If you and your partner or spouse haven’t walked carefully through all the money matters that might come up in time, I promise you that money will one day become an obstacle in your relationship. When financial change comes to you–and, for better or worse, it will come–it will have the potential to become a minefield of undisclosed expectations or fears.

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The rest of the chapter continues with various questions and answers to sensitive money questions. There are of course too many to list here, but one question which I found very relevant, especially to traders who have spouses or partners to manage their trading activities with. The question is not limited to traders per se, but actually applies to any couple:

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What are the most common problems couples face concerning money?

Most couples think they have problems with money for one or more of the following reasons: one partner spends too much while the other spends too little; one partner doesn’t care enough about money while the other cares too much; or one partner has too much money, and therefore too much power, while the other has too little.

Sound familiar?

In my experience, however, the problems couples face have little to do with the money itself. They have more to do with how partners feel about money. Since most of us have been taught to view money as a kind of report card, signalling how well we’re doing relative to others, we tend to measure our self-worth by our earning potential, the size and location of our houses, the clothes we wear, the cars we drive, the schools we send our children to, our bank balances, and so on–and not by our thoughts, feelings, and deeds. We value the financial results of our actions more highly than we value the actions themselves or their effect on other people. This is especially true if we have come to believe, as so many of us have, that money is synonymous with security–that money and money alone will provide for us and keep us safe. When our perceptions and priorities are thus skewed and we put money before people, that is when we encounter problems in our relationships. Talking about money is an antidote. It lays bare some of these underlying issues, and that’s how problems can be prevented or solved.

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Great stuff from Suze Orman. Actually for that chapter alone the book is a great read.

Frank W. Abagnale, whose life story was featured in the movie Catch Me If You Can, was a master cheque forger. He now consults for banks and retailers and outlines some general guidelines for spotting bad cheques based on his own forging techniques:

• See if the cheque has perforations on one side. A false cheque has four smooth sides since the forger cuts them with a paper cutter after printing.
• The code numbers printed on a legitimate cheque reflect no light. They are printed with magnetic ink, which is dull.
• About 90% of all hot cheques are drawn in accounts less than one year old. The numbers on the upper right-hand corner of the cheque indicate the age of the account: Be suspicious of those that are numbered 101-150 or 1001-1050 (the starting numbers).

Few take advantage of the capital at their disposal. In most cases, the reason is that they simply don’t realize the opportunities they are passing by. There are a few simple ways to optimize resources. Consider:

• Converting passbook savings accounts into better investments. According to an annual survey, 80% of individuals still have money sitting in low-interest savings accounts when they could be so easily transferred to Certificates of Deposit (i.e. Time Deposits) at nearly double the savings yield. Just make a quick review of what you have now. Should you still be owning what you do? People often hold investments long after they have forgotten them.
• Borrow on insurance. Many folks who bought insurance 10 years ago could borrow back the money at relatively low rates and reinvest it in Certificates of Deposit at higher rates.
• Pay real estate taxes directly instead of through a bank. Most banks withold an amount on monthly mortgage payments for paying the homeowner’s real estate taxes. Yet annual tax bills are sent annually. The bank is earning interest on your money. However, people how elect to pay the taxes themselves must make the payments on time. Banks can call in your mortgage if the taxes are delinquent, and they’d just love to do it if you are fortunate enough to have a low-interest mortgage.
• Pre-pay mortgage principals. People who begin repaying mortgage principals immediately along with interest can reap enormous savings. Most mortages allow prepayment.
• Eliminate excessive witholding taxes. Review your tax returns annually to compute tax refunds and file them to offset against future taxes. Know about allowable tax deductions that most people don’t take advantage of.
• Conduct a garage sale. Turn unwanted items into cash. With the ease and availability of online marketplaces now it is fairly easy now to sell excess belongings.

How to invest the extra funds? If you can afford to part with the money for some time (hey it didn’t exist in the first place right?), you can place them in stocks, especially nowadays with the markets depressed. A one to two year holding period on stocks bought during depressed times can yield fantastic amounts, sometimes doubling your initial investment.