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Get married to become millionaires

I have discussed why having a simple wedding is key to becoming a millionaire, a study by the Federal Reserve caught my attention.  As of 2019, the median net worth for cohabiting couples age 25 to 34 was $17,372, a quarter that of the $68,210 for married couples of that same age range, according to data from the Federal Reserve Bank of St. Louis.

Chart showing net worth by marital status

Fewer couples are getting married but they are living together and even raising families

That is why it is troubling that their net worth is a quarter of what it could be if they were married.  So what could be the reasons.  Having been married for 20+ years, this is what I can hypothesize:

  1. When couples simply cohabit, if they feel like it, they can simply pack up and leave.  A married couple has to actually divorce, meaning interactions with lawyers, accountants, and maybe someone from their church (if they belong to one).  This forces them to work through their problems rather than end their relationship, which also means that they end up thinking long-term, which supports my other arguments that wealth requires patience.
  2. When you are married, you are more likely to combine your finances and invest jointly in retirement accounts.  My wife and I have joint investment accounts and in case one of us dies, the other will have access to all the money.  We always meet together with our financial adviser (in fact he will not hold a meeting if one of us is missing) for our quarterly review.
  3. Married couples are more likely to own a home together and I have discussed this before that home-ownership is one of the surest ways to increase your net worth and become a millionaire, as we have done.
  4. For us, we have just one bank account and all our money belongs to both of us.  We have no such thing as your and my money.  If one of us needs to buy something just for ourselves, we just talk about it.  There is no dispute or argument; we just discuss if it is the right thing to do.  I think this is one way for us not to waste our money on things like a car for each one of us.