Lending money to family member

Ldecisions2526 on 23/02/2022 - 19:54
Last edited 23/02/2022 - 19:56

I'm going to start by saying I know nothing about finance, but I am trying to learn.

My sister has just bought a house and has asked to borrow 120k from me (I have about 200k resting in a high interest bank account). I have no kids or debt, so am able to lend her the money. She and her husband have high paying jobs and have assured me that they can repay me within the year (with 2% interest on the loan).

My sister told me that she has 300k in EFTs, which she can sell to pay the deposit, but would prefer that I lend her the money. This has made me suspicious that perhaps she is trying to take advantage of my generosity by offering me a rate that is lower than what I would make either investing in a high interest account or in shares (I'm thinking about investing myself). My family are pressuring me to lend her the money as she has two young children to support. I want to help but I also think it should be reasonable.

Financial

Comments

  • john_conner on 24/02/2022 - 23:26
    +1
    1. Your sister has the means to pay her deposit
    2. She is well to do and being very particular in her “needs”

    Frankly she is trying to take advantage of you for her own gains. Seems she has co-opted your parents into supporting her cause in the name of looking after children. You should watch out for them because it’s obvious they don’t have your best interests at heart.

    She wants the best of both worlds, and it isn’t your job to give it to her.

    As others have mentioned, if she wants to retain the 300k share portfolio, she can cash out half and re-buy it again on margin.

    On principle it would be a bad idea to lend her this money because she obviously doesn’t have any respect for you or have your best interests at heart. On this basis it is doubtful she will repay you as expected, especially if things go south on her end. When she starts missing repayments, you will painted as the bad guy for not “thinking of the children” if you demand payment.

    If you don’t want the confrontation, just stall for a week and she’ll be forced to sell her shares, as otherwise her offer will expire if she can’t stump up the deposit.

    Or say you need that money to buy your own house and start a family.

    But I recommend calling her our on her selfishness so she gets the message she can’t walk all over you.

  • Koko34 on 24/02/2022 - 23:28

    What is the interest you are getting on your money

  • jaimex2 on 24/02/2022 - 23:58
    +2

    Nope.

    No good can come of it even in best case scenario.

    Tell your family pushing you to lend to lend their own money since its that easy.

  • ankor on 25/02/2022 - 00:02
    +2

    An unsecured loan from a family member in 6 figures.. what could go wrong?!

    Hell no, they can use their etfs.

  • gearboxtech on 25/02/2022 - 00:10

    https://www.nestlegal.com.au/loanagreements

    An interesting read.

    Essentially, if you decided to do this then I am sure your sister, a lawyer, will appreciate the reasoning of an enforceable agreement including a caveat on the property in question, which she will of course bear the costs of and pay a reasonable interest rate for the personal loan they are requesting to cover their lifestyle choices.

  • CalmLemons on 25/02/2022 - 00:14

    Well mate your sisters ETFs just lost 15% in the last 48 hours….

    • AdosHouse on 25/02/2022 - 17:33
      +1

      Ironically, should have sold them.

  • ameyas7 on 25/02/2022 - 00:15

    Have you considered the option of going 50-50. Support them with whatever you feel comfortable and explain them that you also need to save a bit for deposit for your house, marriage, starting a family or investments depending on your near future plans.

  • FareEvader on 25/02/2022 - 00:23

    Read a post on my profile on lending money to a friend. Just don't do it.

    The fact that she has $300k in ETFs is what pisses me off. It's not like she's struggling or asking for a small amount.

    It's a little odd to me that your family members are pressuring you. Out of curisoity, what your ethnic background is?

  • tikei on 25/02/2022 - 00:52

    Reminds me of my sister who was selling her car because the seat was bad and giving her bad aches. Mum tried to pressure me to buy it. I didn't have a car then, but why would I want one that is so uncomfortable that the owner is getting rid of it? Sis never asked me to buy, it was mum. I'm well aware and accept that I'm her least favourite child and I've learnt ntgaf.
    Hope OP does too.

  • AMLagonda on 25/02/2022 - 02:33
    +3

    the choices you have:

    1. No
    2. Nope
    3. not on your life
    4. GTF out of here
    5. um never
    6. https://www.dictionary.com/browse/no
  • berger on 25/02/2022 - 06:07

    More chance of family screwing you over than strangers.

    Don’t do it. If she had funds tied up elsewhere then she can take care of it herself with a high paying job

    Repay $120k + 2% in 52 weeks is a big ask. Surely in such a short time they can use their own money and ‘delay’ whatever they are doing with the $300k.

  • Bob Svargis on 25/02/2022 - 06:58
    +1

    She chose to bring children into the world. She has $300k. I find it exceedingly arrogant that it’s seen as ok for her to borrow your money when she can easily afford the house deposit and payments.

    It’s a want, not a need, and she isn’t on struggle street.

  • Retchey on 25/02/2022 - 08:25
    +2

    If you are going to lend money then do it like a bank , with a proper contract of mortgage setting out the interest repayment schedule etc… You will find that your sister will get upset and say things like you don't trust me etc…therefore you will not have to lend any money. When it come to money and family, it's what will ruin your relationship with your sister . Go through the correct process and do it so everyone is protected , most importantly YOU

  • kasp on 25/02/2022 - 08:45

    You have to realize what will happen if you give her that money.

    Lets say you get a partner and want to buy a house too bad that 120k is locked up until your sister feels like paying you back. She has more than enough in assets to cover the deposit. It's just not cool that she is asking for you to be out of pocket to fund this.

    She says she will pay you back in a year but that just isn't realistic. If she isn't willing to sell her ETF for the deposit she won't during the year so practically how could she manage to pay you back? Sure they might be well off but how will they manage to pay the mortgage, feed their kids and come up with an extra 2400 per week to pay you back? If they could do that they would never ask you for the money to begin with.

    Lets just say they are buying a million dollar property. The loan they would be getting is 850k the monthly repayments alone would be around 3800 per month now add your 10000 to pay you back in a year. Thats 13800 per month they need to come up with to do what they are talking about. They would both need to be on 200k jobs to afford that easily and well if they were they would never ask for this to begin with.

  • pompompom on 25/02/2022 - 08:49
    +2

    Depends how close you are to your family.
    For instance I would lend it and not even demand interest.
    Some relationships are more important than money.
    Yours may or may not be and that's for you to decide.

    • May4th on 25/02/2022 - 11:27

      likewise if it was a real emergency, no second thoughts. but from the information provided the sister obviously doesn't value the relationship or she wouldn't be asking

  • ziggy1312 on 25/02/2022 - 08:51
    +1

    Lend only what you can afford to loose. I doubt that 120K is the entire deposit, but if it is then alarm bells - sure they have high paying jobs , but that they are entering a home loan with out there own cash is just ridiculous. Bet they have massive car loans too, if the other loans they have exceed 100K inc credit card then I would so NONONONONONO.

    Like a bank you need to do a full credit study of the couple and see if the reality matches the fairytale, and then make a decision. If they dont want to then there is your justification

  • nightfever on 25/02/2022 - 09:09

    I don’t see how your sister buying a house is a problem of yours. If she needs to borrow that much money perhaps she shouldn’t have bought it.

    Why doesn’t she ask the bank for a bigger loan then if she’s wealthy and has high income along with her husband like you have indicated.

    Why isn’t her husband helping out to resolve the situation then? Tell her husband to ask his family member/s then.

    Tell them you have lied. Your ego has taken over your mind. You actually don’t have that much saving. You felt like you have to compete because your sister is very successful in your eyes!

  • screensaver on 25/02/2022 - 09:27

    Say to them something doesnt add up here and Why cant she get a proper bank loan like everyone else?

  • screensaver on 25/02/2022 - 09:30

    Ask her, as she is a lawyer to draw up a deed of loan and you will have your solicitorr check t.

  • fruxo on 25/02/2022 - 11:00
    +1

    Pretty sure I already read this exact thread on whirlpool.

    You still haven't actually talked to your sister? I mean for gods sake, can you just ask her why she needs to borrow the money instead of selling EFTs?

    Until you do that, this is just a pointless (and/or troll) thread.

    • decisions2526 on 27/02/2022 - 20:30

      She said that she is offering me a better interest rate than what I would get if I were to leave it in the bank (which is where my money currently is). I know nothing about finance and haven't ever invested before.

      • screensaver on 28/02/2022 - 03:46
        +1

        yes but the bank pay monthly, which then compounds. Hers is probably annually

  • Krankite on 25/02/2022 - 11:04

    Bottom line is she doesn't need the money so don't lend it to her, let her know that the money is there for her if she ever finds herself in genuinely hard times but not wanting to sell shares is a first world problem.
    Alternative would be to look into setting up a contract to use her ETFs as security but I suspect the costs of doing so and backlash from suggesting it and possibly needing to enforce it would be worse than just saying no.

  • PaperplaneXXX on 25/02/2022 - 11:34

    invest 120 k in russian stocks which were down 50% in one day ))
    in 3 years you will get a million if Putin dies and paradigm shifts.

    will be more productive that giving away 120 k to your sister, marred with a house.
    so may IFs …

  • kalithreaver on 25/02/2022 - 11:44
    +3

    umm no! if she has 300k worth of efts then she should sell them. 120k is a lot of money to lend.

  • ju2au on 25/02/2022 - 11:45
    +1

    Lending money to family is never a good idea as there's very little gain and you risk losing both your money and a relative.

    The whole economy is awashed with cheap money at the moment. If you can't get a loan in this environment, something is wrong.

  • super-zero on 25/02/2022 - 12:24
    +1

    Lend only as much you are willing to let go of. I have helped my family members many times. At least 70% of time I have either lost money or lost relationship or both.

  • ULT on 25/02/2022 - 12:34

    How much interest are you getting on the high interest account and with what bank? 2% back isnt worth the risk if your high interest account is close to 2% anyway, and you dont have to deal with the trouble of money related disputes should relationship turn sour

  • TSH on 25/02/2022 - 13:23
    +1

    I dont know how to break this to you but you should get a paternity test done.
    It would seem like your sister is your parents real child and you were scooped up from an orphanage.

    Im not kidding but recently a friend found out at 40 that he was adopted. The biological child, the sister was was always getting preferential treatment especially is financial matters.

    Food for thought.

  • Lucky13 on 25/02/2022 - 14:17
    +1

    Your family is pressuring you to lend her the money as they're looking out for her interests, but I feel they are not looking out for yours. That is a large amount of money and invested you could see reasonable returns on the money you worked hard to save. Also a few thousand dollars is one thing, but $120,000 is a whole new ballpark. A lot could go wrong lending someone that amount of money, which would later cause friction between you, your sister and your family. It seems a bit unfair your family is pressuring you to do this. I'd personally have to say no, but in a nice way. Maybe think about how you could say no in a nice way, because it certainly doesn't sound like a good idea.

  • roozmik on 25/02/2022 - 14:33

    Don't do this. Sounds stupid.

    She might be wanting to keep her money in the ETF to get a discount on the CGT when she cashes out.. but who gives a shit.

    More possible negative outcomes, than positive.

    120k after tax and life expenses, usually takes some time for most people to save up.

  • umoddbro on 25/02/2022 - 14:55
    +6

    "high interest bank account"… no such thing exists..

  • Eeples on 25/02/2022 - 15:11

    If you worked hard for your money don't lend it.

    You could also ask her to include yourself as a tenant in common proportional to the amount of deposit you have paid. And watch her face crumble :/

  • gups on 25/02/2022 - 15:26

    Buy 200k of ETFs and then say you don't want to sell your ETFs :)

    • Gaz1 on 25/02/2022 - 16:03
      +1

      This actually is a good point.
      Tell her you looked into ETF & they seem such a good investment you are doing this to save for your future needs.

  • pud311 on 25/02/2022 - 15:47
    +2

    "200k resting in a high interest bank account"

    High interest? :O I want to be with whatever bank that is xD

  • Orpheon on 25/02/2022 - 15:48

    Lend only what you're willing to lose and never see again.

  • UFO on 25/02/2022 - 16:40
    +1

    DON'T DO IT!

    She has the funds, but wants to use your cheap available money instead.

    Please please please don't let your family pressure you! She has a high paying job, and more than enough funds available elsewhere.
    If she can pay it off in a year or 2, great… go get a personal loan.

    But if her EFT's tank, you are the last person that will be paid back.

    And plus… its NONE OF YOUR FAMILIES BUSINESS where you have money tucked away. Whether they agree with your investment choice/risk profile is not up to them to judge. If you're happy squirreling away and taking less risk (not a bad idea with current world events), that's your business.

    If your family wants higher risk, that's their business… but they should do it with their money, not yours.

    Money and family never mix. Even if you do it officially and get contracts drawn up and you list their property as security, if things go bad you are up for a terrible decision and will destroy that family connection. DO NOT LEND MONEY TO FAMILY!

    • AdosHouse on 25/02/2022 - 17:35
      +3

      But it's so much easier to take risk when it's someone else's money, and there are zero personal consequences.

  • AzzaClazza on 25/02/2022 - 17:34

    I'm betting here that the house is in her name AND that of her partner, whereas the EFT's are in her name. If she cashes in the EFT's, the stands to lose half in the event of a divorce. Those EFT's are her security blanket that says she can leave that relationship at the drop of a hat and not be almost destitute.
    By putting half of your money on the line instead of hers, her exposure is massively reduced.
    Not only are you taking a hit on interest income, you're assuming a lot of her risk as well.
    Not that I'm advising against it. If it were my sister, I'd lend her the money no worries, but I also trust her husband.

    • May4th on 25/02/2022 - 17:49
      +2

      nothing's black and white in family court though, regardless of whose name it's in

  • iNeed2Pee on 25/02/2022 - 17:49
    +1

    I am so late to this party.

    Not a chance in hell.

  • whirlpool_guy on 25/02/2022 - 18:04
    +1

    OP's sister is very well off. Probably in the top 1-2% earning families in this country.

    They're doing really well. No need to lend to them.

  • Goliegosh on 25/02/2022 - 18:37

    Not sure if this is been said already - always loan what you’re prepared to lose

  • R4 on 25/02/2022 - 19:07

    Don't do it.

  • wjb on 25/02/2022 - 20:27
    +1

    This is ozbargain and the default answer you get is No.
    It depends on your relationship and trust with your sis but never involve money with family so your sis shouldn’t have asked that money in the first place.

    Good luck !

    • htc on 25/02/2022 - 23:29
      +1

      Agree, she should not have asked, asking is like being rude, particularly they have well pay job plus 300k investment, they probably bought a very big house and expect you to foot part of the bill. The only reason she can ask you if you have won 60 million yesterday, otherwise they shouldn't ask at all.

  • donkeydoc on 25/02/2022 - 21:37

    Purchase an asset that gives good return with low liquidity with that 200k, like a house in your sister's neighbourhood. Rent it to her for 2% less than market rate.

  • nobro25 on 25/02/2022 - 21:53

    Firstly dunno why your family would know how much you have in cash in the bank unless you have a joint account with them.

    Secondly which is more important is how well do you know your sister/brother in law. Are they big spenders? How have they dealt with difficult decision in the past/ conflict. Are you in good terms with your sister/ brother in law. Do you really want to help them or are you being coerced by your family to do so. Are you okay with not ever seeing the money? What concrete plans do you have for the money forward，or are you just letting it sit there earning interest.

    If you're happy and close to your sister and feel charitable then yea go for it. If you rarely talk to your sister or interact with them, or You've had some bad dealings with them in the past, then it's best to say no. Make up some excuse that you have plans for the money and say sorry can't do this. Granted they won't be happy but atleast you have analyzed the risk and had made a fair judgement.

    Doing this will stop you having regrets in the future as you had thought it through.

  • fredk1000 on 25/02/2022 - 22:26

    Hi Op,

    What percent is your high interest account paying? I did not think they existed still? >say 2%

  • Philthy on 25/02/2022 - 22:32

    1 ) No

    2) What if youre trying to buy a house. did they ever think of that?

  • Korban Dallas on 25/02/2022 - 23:09

    300k in ETFs?

    Far out just no.

    She's fine.

  • htc on 25/02/2022 - 23:10

    What if you have family and a kid one day? What if you met the one and could not pay deposit for a house because you find got stuck with her? Hopefully your sister will look after you even when they still have mortgage and 2 kids. Your sister family should convince her to give you 3 or 4% interest given she can avoid loss from selling ETF due to current stock market. Lending is ok, I feel very uncomfortable for you to pay the price because you haven't had a family yet.

  • htc on 25/02/2022 - 23:14

    Btw, I don't think your sister put herself in your shoe, she assumed you will not need the money this year and may be beyond. Sound like your sister thought of you as part of her asset.

  • htc on 25/02/2022 - 23:24

    Your sister took investment risk on eft, and also on high paying job, they had 2 children, still took risk with money investing on eft, so they always expect you to be their back up.

  • Drakesy on 25/02/2022 - 23:33
    +1

    Nup
    If she has the money in etfs
    She has the money to buy a house

    Wouldnt do it

    What if you want to buy a house

  • PopCounty on 26/02/2022 - 00:11
    +1

    Tell her you were considering of purchasing your own property and were hoping to get her help on this. You can pay her back.

    If your sixth sense says she could help you out, then you can change your story that you can purchase later and can offer help. But if you feel she’s dubious, stick to your story.

    • htc on 26/02/2022 - 07:24

      Spot on!

  • utopia on 26/02/2022 - 01:42
    +1

    Let her know you just put your 200k into ETF too. So you'll lose as much as she would. And probably more. Does she still want your $?

    • htc on 26/02/2022 - 07:25

      Actually good time to put it in as ASX dropped, op will make more money than her sister and turn the fortune around.

      • decisions2526 on 27/02/2022 - 20:38

        What ASX stocks are good to purchase? Isn't it a risky time to buy?

  • Warehouse on 26/02/2022 - 02:07

    I would not tie a large percentage of my money into someone else's problem(s).

    If you do, make it legal. Force non-payment after the initial year to assume a share of the property she is buying to the % the $120k represents. E.g. if it is 10% of the property, and she has not paid within 1 year, her debt to you will be equal to the market value of the house x 10%. ==> she messes around with you for 2 years and her $1.2m home goes up and grows to $1.8m…. that's a growth of 50% off your back and you get trickled a measly 2%………….

    Even then I personally wouldn't do it…. not worth the family drama either way….. I'd say I have plans to buy a place of my own and need the capital, hence why I haven't locked it away anywhere long term yet…….

    • htc on 26/02/2022 - 07:27

      Interesting op sister ask more than half of her brothers cash, how greedy, she would have liked to borrow all cash, put 120k into her mortgage and 80k into eft, she think op should never buy house or find someone.

  • htc on 26/02/2022 - 07:28

    Username checks out.

  • themedic on 26/02/2022 - 09:18
    +1

    hey OP,
    it sounds like a difficult situation you are going through,
    from the comments from your mum and sister it sounds like they are making it an obligation for you to provide the funds,
    its not wrong to be willing to do so but i'd definitely have a good think about what might happen,
    it might seem easier and better for the relationship to lend the money now, but what happens when,
    1. u need the money and she isn't able to pay it back at the time
    2. u get decide to get a large mortgage and would like to have the money as a buffer
    3. things get sour between your family (already is sounds strained for what u have said).

    there's no way to plan for this. but from what i'm hearing she's decided to buy a nice house, 1.6mil, and probably planned to use her own money through shares but found out u had "spare" money and she would be able to use ur money instead
    ur mum and sister are already trying to bully you into doing it - all red flags

    just make sure u look out for yourself. i think its fair to provide a small amount as an incredibly generous gift and house warming present and then tell them that you plan to buy (house/shares etc) after talking to friends (us) and experts (financial advisor).

    goodluck - feel free to DM me if you want a sounding board, i really don't mind what u do but i've seen this go pearshaped more times than its gone well

  • Hangryuman on 26/02/2022 - 09:26
    +3

    'She is a senior lawyer (8 yoe) and husband is marketing director. I would assume they would easily clear $200k a year combined'

    wow - she's a tax lawyer as well !?!?!?

    This just gets better and better - this story has Ukraine written all over it.

    As in disaster - geez - sister's next Range Rover won't buy itself, unless you give her $150K you'll never see again.

    I would say that relationship is already screwed - and in the Japanese fashion, bow politely, back out the door, and run.

    • decisions2526 on 27/02/2022 - 20:36

      Can I ask a stupid question. The ukraine situation has seen stocks plummet? Does that mean it is a good time to buy, but a bad time to sell?

      • Bren20 on 28/02/2022 - 09:55

        Not necessarily

        If things get a lot worse in Ukraine, then stocks will continue to plummet, meaning now is a good time to sell and a bad time to buy. But, if things peter out, then now is a great time to buy, and people who sold will be kicking themselves.

        Also, other world events happen which can send stocks either up or down.

  • htc on 26/02/2022 - 09:50
    +1

    Since when did the bank of sibling start to replace bank of mum and dad?

  • striker5950 on 26/02/2022 - 09:54
    +4

    i think im gonna say what everyone else here is thinking.
    my dude, STOP BEING A Pu$$y and stand up for yourself and say NO i will not lend it as i have other plans for it atm. end of story.

  • Djentleman on 26/02/2022 - 11:04
    +1

    Jeez, wouldnt want any of these bunch to be part of my family… I think if you’re apprehensive though, you should decline. In saying that, I’d like to offer a contrary view.

    If 2% is more than what you’re currently enjoying, why would it matter if it’s lower than what you “would make” IF you were to invest it. That’s speculative at best and the fact you have $200k sitting in a savings account in the current market with a record low cash rate suggests you don’t have the risk appetite/inclination to invest to begin with.

    You could be obtaining a higher return on your money while helping your sister save money at the same time.

    • May4th on 26/02/2022 - 15:29
      +1

      i think you are missing the part where he is giving away 120k to someone without any guarantee of ever seeing it again. as for investment you can park it in usdc and get close to 10% pa with minimal risk

  • sauce2k on 26/02/2022 - 11:53
    +1

    2% vs $300k on ETF…come on now lol don't do it mate, family is family but that's just straight up bs she's taking advantage of you!

  • aaa222 on 26/02/2022 - 12:39
    +3

    Refuse the loan and help your sister lower the risks she is taking.
    She seems to be looking to maximize her potential gains instead of lower her risks.
    With two small children this approach could be considered reckless.
    Perhaps you need to explain this to your parents.

    VAS is an Aus stock market index ETF. It basically is invested in the entire market and tracks the overall stock market.
    So her 300K is exposed to the risk of the stock market (up or down).
    In addition, she is now exposed to the risk of a large loan to buy the house.
    She wants to take on even more risk by borrowing money from you and committing a large chunk of her immediate income to repay within a year.
    If anything should go wrong in the next year (stock market crash, interest rates rise, job loss, illness etc etc) she would be very exposed as would her children.

    If she sells part of her ETF to pay the deposit, she will not only lower her exposure risk to the stock market but also have more flexibility with how she uses her income if costs suddenly rise or income suddenly falls.

  • Wiser on 26/02/2022 - 13:05
    +2

    First of all you shouldn't be disclosing what incvestments you have to anyone including family.
    Then with 2 high paying wages they shouldn't be asking you for money
    The family pressuring you is wrong as well

    Most likely you will not see that money again.
    Go and invest the money wisely.

    • htc on 26/02/2022 - 16:03
      +1

      Invest on a good financial education.

  • ozitguy on 26/02/2022 - 13:10
    +1

    This never happened.

  • Raj09 on 26/02/2022 - 13:27
    +2

    It's your money. You can say that your circumstances have changed and you need the money now. If you have any doubts on the use or what your family wants, you're free to use your money the way you want.

  • Freezies on 26/02/2022 - 16:11
    +1

    You never know which way life will turn. Even if you did decide to lend her the money, you don't know what your own situation may be in future. Do you think if you needed your money back that she would sell her EFT's or salary to pay you back fast? What if you want to buy a house? She should take smaller risks rather than wanting you to take big ones for the sake of her life.

    120k is a lot of money to be "loaning" someone who can already supposedly afford it, especially if there's no contract or chance of you legally getting it back otherwise. She's also a tax lawyer which means she she should know better from a legal standpoint which shows she is not considering you here at all.

    She is trying to convince you she can pay it back immediately giving examples as to how, then mentions they have two small children to support. So she can afford it but can't afford it? Use your common sense to say no citing her own words as the reasons why.

  • Mosher on 26/02/2022 - 16:25

    There is no way in hell I would lend it

    If the situation was on the other foot would she lend it to you? if no does that tell you about her

  • MrFrugalSpend on 26/02/2022 - 18:14
    +5

    DON'T DO IT ! ! !

    / thread

  • Sammy Boi on 26/02/2022 - 19:25

    I'll keep this short don't do it.
    Neverland this kind of money to a family member.
    My family members have known for a very long time that I have substantial savings and they have always did used that to their advantage.

  • neverlate on 26/02/2022 - 20:49

    in case u do decide to lend, only lend her less than 1/3.

  • picket23 on 26/02/2022 - 21:08

    Your sister should be showing you how to invest, not taking your money to save her investements. If she can afford to pay you back over a year, that means that she can put her money back into investments over 12 months also. There may be tax implications for her of course but still… It just seems selfish

  • Quaker on 27/02/2022 - 01:55
    +2

    OP don't do it!
    Your sister shouldn't have bought the house until she is willing to sell down her ETF to make up the deposit. She's selfish and your family who are pressuring you to lend her the money should find that money for her, if they are so worried about her selling down her ETF portfolio.
    The risk of lending money to family is that you may not get it back or it may be in a much longer timeframe than the 1 year that she's promised. I've experienced this and years later we are still waiting to be paid back (very doubtful we will get any back).

  • [Deactivated] on 27/02/2022 - 02:30

    unfortunately your relationship is probably already ruined, if you do do it and some kind of problem ends up happening, you're out 120 k and a good relationship with your family, if you don't, the sister and possibly parents might hate you. she really shouldn't have asked unless she was desperate and in a situation where she could not have foreseen this happening (not like here where they chose to do this and can afford it themselves) and genuinely needs financial help.

    this depends if you are close with your sister or not, if not then i would not do it, but if you are that might be a different story.

    it's just strange how she has 300 k that she can liquidate but she wants to use your money effectively for free, i don't understand why someone would do that to family unless they don't really care about them and just see them as an easy way to get a low interest loan.

    • thriftybunny on 27/02/2022 - 07:02
      +1

      If OP's relationship with sister and parents can only be good at the cost of OP ($120k to be exact), best to sever ties with toxic family members and cut loss early.

  • yokel on 27/02/2022 - 08:11

    Can I just say you should lend the money to your sister and her husband…. No just kidding you would have to have rocks in your head

  • yah00 on 27/02/2022 - 09:47
    +1

    HELL NO! she can wait another 1 year if she said she can pay you back in a year. OR she can borrow from bank for 1 year.

  • colaman on 27/02/2022 - 09:56

    Hmm, joins a bargain site to ask a finance question. How about ask a professional. Seek a contract or consider it a gift qith no regrets and be thankful if it does get paid back.

  • burns13 on 27/02/2022 - 12:24

    If she already has the money in ETF I don't see why you need to be apart of the equation. Taking the advantage there's nothing more to say on that. And the familial pressure on you sounds very inappropriate in my view.

  • TigerWoops on 27/02/2022 - 13:23
    +1

    In our traditional terms it is said "If you lend money whoever the person is you will lost the money AND the person."

  • hasher22 on 27/02/2022 - 13:30
    +7

    OP been quiet for 3 days, I hope you're ok. I don't another person to go under stress, delayed life goals because they made a bad financial decision cause of family members.

    I'll just add my 2c, not like it matters at this point lol

    TLDR: DON'T DO IT!

    Why? Reading your comments and the comments
    1 - It's your money
    2 - You are under no obligation to give the money, family or not.
    3 - She has kids, you will most likely not see the money back, as one said, it's a gift until its paid all back
    4 - You want a unit or house one day, this will push you back further, why should your life be pushed back because your sister has her own life and expect YOU to contribute
    5 - Your parents should help her not you
    6 - Your financial knowledge has nothing to do with lending money to other people
    7 - Usually giving money to friends and family doesn't end well
    8 - Your sister EXPECTED you to give the money, that's not right at all, and how do they know you have 200k in the bank?
    9 - She has ETFs, that should be in the situation, and tell her to sell them
    10 - She's a lawyer, she can afford to go to the bank and get the loan
    11 - Tell her to buy a house 120k less
    12 - The outcome of your relationship is going to be tarnished, either way, you lose 120k, she's happy and doesn't pay you back, your life is pushed back. You don't lend the money, your sister and parents will guilt trip you. There's no win/win situation. I don't give an eff what kind of people your sister or parents are, they could be the nicest, most caring people in the world, but when it comes to money, people's attitude changes.

    Off topic, just my story: I lent $1000 to my brother who was earning 3x more than me at the time (on 80k full time, I was on like 25k part time doing uni), I am good at saving money like you but he's not. He was in a pickle and I said I want $250 per month in repayments because I am earning jack all! He said yeah yeah, 1 month came, I said, I want $250 and he said no. 2 months later, he said no, 6 months later he said no. We got into a huge argument, then he made me the victim stating I should have a better paying job when he's the one with a spending problem. Anyways, I never saw the money and my relationship with my brother from that point onwards changed as I never trusted him with anything again, his ex-girlfriend came to me and said he wanted 2k from her, and I said no and explained my situation. She declined and surprise, surprise, they broke up. My brother is a piece of trash

  • Automatic on 27/02/2022 - 13:58
    +2

    Don't let peoples that have kids taking advantage of you. They will always say you don't have kids you don't know, and you don't need that much money…etc. Is you money. Don't do it, you more likely to lose that money and also your relationship with her will be F**k even you don't lend it to her.

  • Spootage on 27/02/2022 - 14:18
    +3

    How’s it going OP? Any updates?

    • htc on 27/02/2022 - 20:17

      We are keen to get update, although I have a feeling op has lend his money and I have a feeling he will get begged if he post this.

  • Goldenra1n on 27/02/2022 - 15:12

    She needs to be accountable and sell her ETFs and not take advantage of you.

Login or Join to leave a comment
Login Join