Should you buy a vacation home with your siblings?
In some cultures multiple generations live together in the same household, sharing chores such as child care, cleaning, cooking AND sharing finances. Did you get that last part? It’s an efficient way for everyone to pool resources and get the most bang for the buck. Families may be emotionally closer (than in our culture) due to the living arrangements. And we would bet that feuding is dealt with differently. It’s harder to go “independent.” In these same cultures, families often work and share business ventures together too.
But in mainstream America we definitely have the independent attitude. Our family structure and finances are strongly influenced by it. Our lives are a lot more separated, as are our wallets. So the real question here is, with families being independent as they are in our culture, should finances be mixed in any way - as in investing money in something together?
Finances should be totally “mixed” for married couples without a doubt. But other than that it is not a good idea to “go in” with a family member (whether parents, kids, siblings, cousins, or in-laws) for investments of any kind, whether a business, land, home, vacation home or even a timeshare. But if you have money you don’t mind losing, and truly won’t have hard feelings against the family members who didn’t put in their fair share of effort before the stuff hit the fan, then go ahead and invest away! Otherwise, consider these two big reasons not to invest money with family.
First, when a family member has a financial hardship (which is a given) and needs some cash, they’re probably going to want to get that cash from selling their share of the investment that you all went in on together. The problem is, unless others are well off financially (which probably is NOT the case – otherwise you wouldn’t have pooled your money together), they won’t be able to buy you out. And that is when the resentments will start. Family get-togethers and Thanksgiving dinners will never be the same.
The second problem in this independent, lawsuit-happy culture is...well, you can guess the possible outcome scenarios. You never think a family will go to court against each other, but it is more common than you might think. Here’s a truth: When people are broke and desperate and money is on the line, they can get ugly - even with family. We’ve seen it over and over. That’s the last thing any family needs!
Please…don’t chance ruining relationships with your family all because you bought something together that none of you could afford to buy. Instead, you can all go on vacations together, stay in seedy motels, enjoy sub-standard cleaning and lumpy pillows and still have a lot more fun!
In some cultures multiple generations live together in the same household, sharing chores such as child care, cleaning, cooking AND sharing finances. Did you get that last part? It’s an efficient way for everyone to pool resources and get the most bang for the buck. Families may be emotionally closer (than in our culture) due to the living arrangements. And we would bet that feuding is dealt with differently. It’s harder to go “independent.” In these same cultures, families often work and share business ventures together too.
But in mainstream America we definitely have the independent attitude. Our family structure and finances are strongly influenced by it. Our lives are a lot more separated, as are our wallets. So the real question here is, with families being independent as they are in our culture, should finances be mixed in any way - as in investing money in something together?
Finances should be totally “mixed” for married couples without a doubt. But other than that it is not a good idea to “go in” with a family member (whether parents, kids, siblings, cousins, or in-laws) for investments of any kind, whether a business, land, home, vacation home or even a timeshare. But if you have money you don’t mind losing, and truly won’t have hard feelings against the family members who didn’t put in their fair share of effort before the stuff hit the fan, then go ahead and invest away! Otherwise, consider these two big reasons not to invest money with family.
First, when a family member has a financial hardship (which is a given) and needs some cash, they’re probably going to want to get that cash from selling their share of the investment that you all went in on together. The problem is, unless others are well off financially (which probably is NOT the case – otherwise you wouldn’t have pooled your money together), they won’t be able to buy you out. And that is when the resentments will start. Family get-togethers and Thanksgiving dinners will never be the same.
The second problem in this independent, lawsuit-happy culture is...well, you can guess the possible outcome scenarios. You never think a family will go to court against each other, but it is more common than you might think. Here’s a truth: When people are broke and desperate and money is on the line, they can get ugly - even with family. We’ve seen it over and over. That’s the last thing any family needs!
Please…don’t chance ruining relationships with your family all because you bought something together that none of you could afford to buy. Instead, you can all go on vacations together, stay in seedy motels, enjoy sub-standard cleaning and lumpy pillows and still have a lot more fun!
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