Wednesday, April 05, 2006

Borrowing or investing with family.

Is it a good idea?

I would like peoples opinions on this one. If for example as I am looking into investing in the housing market but could only raise 50% of the funds needed is it a good idea to borrow from family or invest with them or is it just a bad idea?

As I see it I think it is a good idea, but I have heard of problems borrowing from friends and family. Here are some reasons for:
  • It can save you money on having to borrow more.
  • It can help you invest the money sooner therefore avoiding any increases you may otherwise miss.
  • It benefits not only yourself but your family member.

I would love to hear of some real examples and any opinions.

3 Comments:

At 12:45 am, Anonymous mr p said...

Dave, I would say it mostly depends on you and your relationship with the people who you are dealing with. If you know them more closely and how they are with money, what their risk tolerance is, etc... I would say go ahead.

As it turns out we (a couple of cousins of mine) are close and dont mind investing together.

 
At 8:37 am, Anonymous Tim MMF said...

Hmm...the only family member of mine I'd invest with is my Mom. Still, it's a risky proposition that is bound to cause problems at some point. If you can make it work though... Then make that money! :)

 
At 8:55 am, Anonymous Dave said...

Thanks for the advice guys. It will be my brother and we are close, he is good with money, he trusts my knowledge of money so I don't think there should be much of a problem.

There is a lot to discuss before we go ahead but I just wanted to get a bit of feedback before I went ahead.

Cheers, appreciate the help.

 

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