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Posted: 12/24/2005 8:23:13 AM EDT
[Last Edit: 12/25/2005 7:06:06 PM EDT by Peak_Oil]
I didn't think this would happen, but it did. My future brother in law has finally convinced my mom to invest a substantial chunk of her retirement assets in an illiquid real estate venture. The rate of return on the rent is very small, maybe 3%. She won't have enough ownership to force the sale of the land if she needs her money back. She doesn't have faith in the judgement of one of the other partners.

Essentially, her outlook is this. Stocks don't look good, bonds are down a little... therefore this must be good.

I am a thousand percent against this. In my opinion, the only scenario in which this pays out for her is one in which the value of the property increases by 30-50% over the next 3-5 years and then they sell. It's happened before, maybe it'll happen again, right? You can't lose money on real estate, can you? It's guaranteed!

My sister has been pushing mom into this for a couple of months and it sounds like mom just got tired of resisting and is going to do it despite her misgivings. I really don't think she has any idea about what happens when you lose money with your family. As it is, I feel very much stabbed in the back. She personally stands to gain quite a bit if this goes well and loses nothing if it goes badly. A 73 year old widow should not be taking these risks.

If my future BIL showed up at my door I would not be able to control myself.

I thought about going down there and straightening things out, but mom is agreeing to this whole thing and has been informed about the downside. She's just not listening. Her greed has overcome her discipline.

It has become clear that my mom no longer trusts my judgement, and that my sister will do anything to get money. And that my new BIL is a snake charmer.

UPDATE:

I broke it down one more time for Mom in an email and it looks like the spell may be broken. Once you bust out the calculator it puts a lot of things into perspective. The phoenix rises from the ashes once again!

Now though, I need to figure out how to deal with mom. She doesn't use logic to solve problems and refuses to educate herself about basic things, and probably wouldn't sign a durable power of attorney. It's pretty frustrating. I kind of want to distance myself from her decisions. OTOH, she obviously has vipers whispering in her ear. Bottom line is that this is mom, I need to stand by her. She could have thrown me in a Dumpster when I was a baby if she wanted to, and I know for a fact that I cried a lot.
Link Posted: 12/24/2005 8:27:25 AM EDT



Maybe she heard the whole Peak Oil theory and figured the end is nigh, so what the hell..........




Link Posted: 12/24/2005 8:28:01 AM EDT
Link Posted: 12/24/2005 8:32:30 AM EDT

Originally Posted By Paul:
At 72 years old 3% is a fine return unless she planned poorly and doesn't have enough income now. She should be taking ZERO risk as she's pretty old and has ZERO time to recover any losses that she might need to live off of.

Your sister is lower than a snake's belly.



ING direct orange account, with zero risk, is paying 3.75% and is totally liquid.
Link Posted: 12/24/2005 8:42:11 AM EDT
Never invest a dime with a family member if you want family harmony. So how long til you have to bail your Mom out? I've seen it time and time again and it always sucks.
Link Posted: 12/24/2005 9:24:40 AM EDT

Originally Posted By fxntime:
Never invest a dime with a family member if you want family harmony. So how long til you have to bail your Mom out? I've seen it time and time again and it always sucks.



RIGHT THERE!!! that advice is fucking GOLD!
Link Posted: 12/24/2005 1:57:21 PM EDT
You need to make one more attempt to convince her otherwise. Maybe a few printouts from some "test runs" of various investments such as the ING account vs risk. Something that clearly lays out the different potential payback, liquidity potential and risk potential.

Do it in a calm detached "these are the facts" manner. Then drop it. Never mention it again, nor allow her to speak to you about it if the deal goes either good or bad.

See if you can quietly pull you sister to one side for a bit of a polite chat. Remember clam, quiet no shouting or threatening, No name calling. Ask her if she's going to take on "Moms" bills when "Mom" runs out of money because of questionable real estate deals because you won't be doing it.

Then let it go. I've seen bad family financial deals tear apart many a family. There is no reason for you to ruin your life over this, sounds like they are all adults and no one is senile or no longer in a reasonable mental state.

If you chose to have nothing further to do with your sister then leave it at that. No sniping back and forth. If you chose to continue to speak with your mother remember what I said, no discussions of financial issues. And don't be the one to offer to pick up the pieces if it does go south. Adults made adult decisions, you have your own life.

Real estate deals in Cali still bringing in the big $. Thought CA was leading the bubble burst?
Link Posted: 12/24/2005 2:02:06 PM EDT
At that age investment grade bonds and preferred stock should be her primary investments, not speculative real estate. Sorry to hear it. However, my 83-year-old grand mother is in the hospital this Christmas so realize that money isn't everything.
Link Posted: 12/24/2005 4:56:47 PM EDT
[Last Edit: 12/24/2005 4:57:19 PM EDT by Merlin]

Originally Posted By Peak_Oil:
.....

It has become clear that my mom no longer trusts my judgement, ......



After years of babbling about P/O, this is a surprise?
Link Posted: 12/24/2005 5:10:25 PM EDT

Originally Posted By Merlin:

Originally Posted By Peak_Oil:
.....

It has become clear that my mom no longer trusts my judgement, ......



After years of babbling about P/O, this is a surprise?



I bought silver at 7.41 early this summer. I bought SU last March. I bought FSNGX about three months ago (which I'll admit is a small loser right now). I bought stocks consistently all the way through the downward dip in 02-03. Every which way there was to go I made money. I sold bonds and bought annuities two years ago, bonds are down and annuities held value.

Guess how I knew what to pick? It's cause I research the facts and have a pretty good idea what's coming next.

My next recommendation: Buy two-year puts on the S&P.
Link Posted: 12/24/2005 5:40:59 PM EDT
What's in it for him? He has to profit somehow.. Either thru some under the table stuff or a huge commission.
Link Posted: 12/24/2005 5:51:47 PM EDT
Peak_Oil,

I would distance myself from the situation as much as I could. I remember reading your previous post about this situation and all the efforts you made to get her to do the right thing. There is no sense getting yourself in trouble with the law over this ie. 'domestic' violence charge for getting into a fight with your sister or BIL.

Keep your chin up and the world will turn.
Link Posted: 12/24/2005 6:10:40 PM EDT

Originally Posted By Peak_Oil:

Originally Posted By Paul:
At 72 years old 3% is a fine return unless she planned poorly and doesn't have enough income now. She should be taking ZERO risk as she's pretty old and has ZERO time to recover any losses that she might need to live off of.

Your sister is lower than a snake's belly.



ING direct orange account, with zero risk, is paying 3.75% and is totally liquid.



looking into this myself. do you have any information on the " Under Federal law, we must reserve the right to require you to give us at least 7 days written notice before you take money out of your OSA. " If i want to transfer money to a different accoutn at a different bank, you have to give 7 days notice?


Sorry man. It sucks that your mom is falling for it. But she's still your mom.
Link Posted: 12/24/2005 6:15:03 PM EDT

Originally Posted By Peak_Oil:

Originally Posted By Merlin:

Originally Posted By Peak_Oil:
.....

It has become clear that my mom no longer trusts my judgement, ......



After years of babbling about P/O, this is a surprise?



I bought silver at 7.41 early this summer. I bought SU last March. I bought FSNGX about three months ago (which I'll admit is a small loser right now). I bought stocks consistently all the way through the downward dip in 02-03. Every which way there was to go I made money. I sold bonds and bought annuities two years ago, bonds are down and annuities held value.

Guess how I knew what to pick? It's cause I research the facts and have a pretty good idea what's coming next.

My next recommendation: Buy two-year puts on the S&P.



Gee, that's funny, I just read an article that pointed strongly to the Dow being overpriced, relative to the S&P.
Link Posted: 12/24/2005 6:15:35 PM EDT

Very sad Christmas Eve this year. Family is splitting up.


I'm missing something. How is your family splitting up? You are leaving because you don't like them?
Link Posted: 12/24/2005 6:20:25 PM EDT

Originally Posted By Merlin:

Originally Posted By Peak_Oil:
.....

It has become clear that my mom no longer trusts my judgement, ......



After years of babbling about P/O, this is a surprise?



I hope your fucking family goes bankrupt and ends up in the hospital.

just so i can be just like you, and come in and make fun of you.

Fucking scum.
Link Posted: 12/24/2005 6:24:36 PM EDT
Peak, you're going long on SPX LEAPS puts? I think you may be right. I think the economy is built on sand right now. With mass outsourcing, GM and F looking like they're at bankruptcy's door, and oil edging ever higher, things seem shaky. Imagine if Iran, N Korea, or China/Taiwan goes bad.

While employment is still high, I know of a lot of people who used to be making 60 & 70k now making 30k.

Plus, never invest, do business, loan money, etc. with family.

Semper FI
Link Posted: 12/24/2005 6:27:53 PM EDT

Originally Posted By DrFrige:

Originally Posted By fxntime:
Never invest a dime with a family member if you want family harmony. So how long til you have to bail your Mom out? I've seen it time and time again and it always sucks.



RIGHT THERE!!! that advice is fucking GOLD!



+1x100
Link Posted: 12/24/2005 6:33:19 PM EDT

Originally Posted By Specop_007:

Originally Posted By Merlin:

Originally Posted By Peak_Oil:
.....

It has become clear that my mom no longer trusts my judgement, ......



After years of babbling about P/O, this is a surprise?



I hope your fucking family goes bankrupt and ends up in the hospital.

just so i can be just like you, and come in and make fun of you.

Fucking scum.



I wasn't making fun of anyone. It was a serious question: After years of pushing the P/O agenda, are YOU surprised that anyone would trust his judgement? Would you trust the judgement of a liberal with your money life savings? Would you?

Merry Christmas.

Merlin
Link Posted: 12/24/2005 6:37:03 PM EDT

Originally Posted By Paul:
At 72 years old 3% is a fine return unless she planned poorly and doesn't have enough income now. She should be taking ZERO risk as she's pretty old and has ZERO time to recover any losses that she might need to live off of.

Your sister is lower than a snake's belly.



Emmigrant Bank (of which I am a member) is paying 4% return right now on a standard liquid Savings account. No-brainer here.

My wife's mother got scammed by her own son on a "gifting" scheme that was ostensibly a Christina organization - took her for quite a loss.

This sort of shit pisses me off.
Link Posted: 12/24/2005 6:37:56 PM EDT
Link Posted: 12/24/2005 7:01:50 PM EDT

Originally Posted By C-4:
Peak_Oil,

I would distance myself from the situation as much as I could. I remember reading your previous post about this situation and all the efforts you made to get her to do the right thing. There is no sense getting yourself in trouble with the law over this ie. 'domestic' violence charge for getting into a fight with your sister or BIL.

Keep your chin up and the world will turn.



Agree fully as I also remember your initial thread.
Back off, not your problem anymore nor your responsibility to bail ANYONE out later. So don't, you owe it to yourself. Hang in their bro, keep you chin up and Merry Christmas.
Link Posted: 12/24/2005 7:04:32 PM EDT
[Last Edit: 12/24/2005 7:06:32 PM EDT by olyarms]
It's a very risky market right now. Pretty stupid brother in law if you ask me. He way have just cost your mother 40-50% of what she invested. You should let him know he needs to keep to himself hes not even part of the family yet.

ETA: And such a large investment should pay back more than 3% thats just fucking crazy
Link Posted: 12/24/2005 7:04:54 PM EDT
3%?
a fucking bank cd pays more than that right now
or an I-Bond
both federally insured
Link Posted: 12/24/2005 7:10:57 PM EDT

Originally Posted By olyarms:
It's a very risky market right now. Pretty stupid brother in law if you ask me. He way have just cost your mother 40-50% of what she invested. You should let him know he needs to keep to himself hes not even part of the family yet.

ETA: And such a large investment should pay back more than 3% thats just fucking crazy



From the first thread it sounded as though this ws just a way to bleed Peak Oil's Mom of her money. Future BIL is putting nothing in IIRC and will get a substantial interest in the "deal".
Whole thing is a scam from what Peak Oil said.
Link Posted: 12/24/2005 7:15:12 PM EDT
[Last Edit: 12/24/2005 7:15:53 PM EDT by HeavyMetal]
Link Posted: 12/24/2005 7:15:21 PM EDT
Your sister sounds pretty venomous.
Link Posted: 12/25/2005 6:47:17 AM EDT

Originally Posted By Merlin:

Originally Posted By Specop_007:

Originally Posted By Merlin:

Originally Posted By Peak_Oil:
.....

It has become clear that my mom no longer trusts my judgement, ......



After years of babbling about P/O, this is a surprise?



I hope your fucking family goes bankrupt and ends up in the hospital.

just so i can be just like you, and come in and make fun of you.

Fucking scum.



I wasn't making fun of anyone. It was a serious question: After years of pushing the P/O agenda, are YOU surprised that anyone would trust his judgement? Would you trust the judgement of a liberal with your money life savings? Would you?

Merry Christmas.

Merlin



When I was a broker at Morgan Stanley, many people wrote me a check for their life savings. And I did right by them. I have a set of Morgan Stanley golf clubs in the corner right now, a couple of really nice Morgan Stanley Herman Miller clocks on my table, a pile of MS shirts... all won as prizes for performance in sales. It was when I found out about PO that I left the business... I couldn't think of anything for people to invest in that I could sell at Morgan. And trust me, I'm hardly a liberal. Also, I'm right about oil depletion, but time will make more converts than reason. That's another thread.

I've done very well by my family with regards to investments and have worked very hard to make sure my mom was going to be OK. Everything she has in the whole world is in the markets. I've spent many a sleepless night thinking about how to shore up her future. If I blew it, she'd be on my couch for the rest of her life. I agree wholeheartedly about harmonious family relations being disrupted by investments and that's why I was so careful. This is going to blow up in their faces and create rifts.

Here comes my sister and sees a buck in it for her (husband) self, and she throws caution and mom's financial stability to the wind. I'm very disappointed in her. This is about as cold as you can get. I had them speak to an attorney local to them who was 26 years in the financial planning, real estate development, business planning industry... and who warned them off... and STILL they're going through with this.

I just don't want to give up yet. The check hasn't been cashed so it's not over. You never know, maybe I can still turn the ship.
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