4/20/14: Family Ties – Investing with the People Close to You

Would YOU invest with family?  SHOULD you?

It’s a controversial topic with lots of pros, cons and considerations.  The risks and rewards can be much more than financial.

Crowded around The Real Estate Guys™ mobile microphones for this episode:

  • Your son-of-a-gun host, Robert Helms
  • His father, investing partner and lifelong pal, Bob “The Godfather” Helms
  • Co-host and serial father, Russell Gray
  • First time guest and junior co-host, Sean Gray

Investing entails risk.  We usually think of those risks as financial, although most people realize there are human beings involved in all deals.

But when our only connection to the other party is the deal itself, if things go sideways, we know we can walk away (or into court) and when the dust settles we don’t need to ever see them again.  Or care much if we do.

HOWEVER, when your investment partner is your parent, sibling, child, grandparent or cousin, you have connections that run deeper than money.  They say blood is thicker than water (not really sure what that means), but what about money?  Or more specifically, the loss thereof?

Will YOUR personal relationship survive a sour deal?  It can be a scary prospect.  So why take the risk?

Well, on the other side of the equation is the joy of profiting together.  After all, if you REALLY believe in your deal, and you’re going to share with with someone, wouldn’t it be best to share it with someone you love?

And if you don’t really believe in your deal, should you be doing it all?  Is it right to put a stranger’s money at risk just because they’re a stranger?

Of course, there are other rewards to investing together.

There’s the camaraderie of searching for and researching opportunities; and sharing the challenge of working through issues.  Sometimes relationships grow stronger from pushing through life’s challenges together.

And what about the opportunity to mentor a child by involving them in your investing business?  When you pass on, do you really want to hand over your life’s work (your portfolio) to heirs that aren’t prepared to manage it successfully?

We’ve been actively working and investing with family members for years.  We’ve had ups and downs and made lots of mistakes.  Fortunately, family ties have proven stronger than financial setbacks.  And believe us, we’ve had some real setbacks.  Of course, we’ve also had some fun wins…so much so that we keep doing it!

So if you’re thinking about investing with the people your tethered to, listen in on this conversation and pluck some pearls of wisdom from three generations of experience.

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