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Guys/Gals it's posted in the meme community, clearly this did not happen. The joke is funnier in the first person.
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this post was submitted on 23 Dec 2023
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I could shame OP for falling for the crypto hype but I think the more important lesson here is to never ever mix family and finances.
Even if you know for 100% fact that you have a slam dunk investment, it’s not worth it. Money corrupts.
Never loan money, even if you don’t expect it to get paid back. It creates a power imbalance. Envy and resentment for you having money is better than creating any financial ties.
Never go into business with family.
Don’t mix finances and family. Family is more important than money.
Yes, times a thousand. But I would go even further.
Never give investment advice. You might explain what investments you have made and why you made them, but never give advice and never urge or prompt someone to invest. You should also end every conversation with "but that's not advice and I'm not an expert." It is too easy for either the investment to not work out, or for them to do it wrong (wrong timing, panic sale, misunderstood the options, etc).
The last thing you want on your conscience is someone investing a life changing amount of money just for it to go down in flames. I might invest $1000 in something that I think might pay off, tell someone they should invest, and next thing you know they drop in $40k and panic sell on a dip in two weeks, when I was planning to hold for five years. You never know.
Honestly, this kind of goes for everything that's more complicated than average people can understand. (By "average" I mean "anyone not familiar with this particular knowledge." I have in depth IT knowledge but very weak automobile maintenance knowledge, for example. This makes me "average" when it comes to automobile maintenance.)
I don't give out IT advice for the most part, because the number of people who will come hounding you because they misunderstood, did something wrong, or missed several steps, is too damn high. Doesn't matter that they made the choice to take initiative to do it on their own, now it's your fault for suggesting it when their PC blows up in their face.
That's a great generalization! Don't give lay people knowledge they can use to harm themselves, and recognize when you are the lay person.
"But son, aren't you a literal investment advisor?"
In that case, never mix business and family. 😂
Disclaimer: not financial advice, also the stuff mentioned here is specific to a certain country and to my mom's situation.
I'll share a slightly uplifting story I guess? My mom has asked me for advice after she asked me what I was doing with my money and found out I was doing well with it. It wasn't unsolicited advice so that probably helps. I don't have some crazy life hack or some crypto scheme. I just presented her the facts that stock market indexes (NASDAQ specifically) tend to avg around 10% YoY and it's an ok investment if you don't need the money for the next 5 to 10 years at least. I also disclosed risks and suggested bonds if it's too risky or at least open a high interest savings account with an insured bank (FDIC or CDIC).
I helped her set up a bank account with a bank that offered competitive high interest savings account and she agreed to the risk so we dumped the rest of her extra money into index funds. She's up 20% since she started so she's happy.
Honestly in my other comment I said never give investing advice, but as far as it goes, recommending investment in indexed funds is probably there exception with the caveat that it is a multi-year investment and there are dips.
Imagine suggesting that and they dump 20k and two month after the index does - 10% and they panic and sell.
Right. Which gets us full circle, to never give investment advice, lol. That being said, at some point someone may sincerely look too you for guidance and you need to make a call as to whether you want to take that risk, what advice you give, and are you sure it is good advice.
I used to mentor student employees years ago, and when they wanted advice I always told them to max out workplace matches first, and then after that if they can save more, put it in tax advantaged savings programs that let you buy into indexed funds and never sell. In those cases you usually can't even sell unless certain conditions are met and you sign disclosures, unlike most brokerages. Now, students you are giving them advice for the rest of there life and they likely don't have $40k to panic sell/buy/sell to zero.
Lmao. Yeah you have to be careful to make sure they understand the risks. They need to understand 10% average YoY is not the same as 10% every year. I've no background in finance so I don't know if I know enough to make sure I gave her the best advice but it was based on my understanding and prior experience.
Also, I think a friend of hers was trying to get her to sell covered calls. While well intentioned and technically low risk, it's complex. If you screw anything up setting up the covered calls it can end disastrous. Also it will complicate your taxes.
Wanna buy an extra brother, then? I've been having compatibility problems with one of mine for over 37 years now and am looking to downsize.
A lesson sadly so many will never learn.
I wish my parents had learned it.
It seems like OP's family may not feel the same way.
Sigh, too true.
Something tells me you didn't read this in a book.