I finally understand why I haven’t been able to shake off the little stresses I’ve been feeling lately. I write less, do business, and exercise less, but I still feel this gnawing pressure because I have the responsibility to invest my immediate family’s money.
When investing family money, I always feel that family money is more important than simply investing my own money. Making the wrong investment decision with your own money can make you feel bad. However, you either work hard to recoup your losses, or you internalize the pain and move on.
But when you make the mistake of investing your partner’s money, your kids’ money, or your parents’ money, you feel like a big ass! feel like you’ve let your family down.
That sense of shame is why I don’t want to manage anyone’s money but my own. I’m just sharing what I do with my money. It’s up to you to decide what you want to do with yourself.
Too many financial accounts to manage, too many questions to think about
A family of four must manage and track over 30 accounts. And managing them all can be overwhelming.
For example, consider the two 529 plans we launched for children in 2017 and 2019.
- To add a Superfund to my son’s account in 2017 or not. The stock market looked dangerous at the time, and in 2018 it actually sold off.
- If I superfund, should my wife superfund too? Or should I broaden my contribution due to possible corrections and bear markets?
- Should I accept donations from my parents? If so, what is the appropriate amount? I don’t know exactly how much money my parents have, so will they have enough money left over to be comfortable in retirement? Since they were civil servants, they did not have a large income.
- Should 529 contributions be invested in a Target Date Index Fund or a Target Date Active Fund managed by a provider? Target Date Index Fund. But years later, I realized I had to make a choice.
- May I resume contributing to my son’s 529 plan in July 2022 for the first time in five years? Or will he have to wait until 2023, the next calendar year?
- How much more do I need to contribute to my daughter’s 529 plan so that when she turns 18, her balance will be approximately the same as my son’s 529 plan balance? , wrote 529 plan amounts by age to provide a guide for all parents.
- What are the penalties for contributing too much and how can I fix it?
Luckily, I run a personal finance site to answer these questions and get feedback from my readers!
Many financial accounts to manage
Here is a snapshot of various financial accounts in 2015.
![Invest Family Money and Maintain a Complex Net Worth](https://i2.wp.com/financialsamurai.com/wp-content/uploads/2023/03/financial-samurai-net-worth.png?fit=1456,9999)
donation snafu
My mother was always generous with money. Since 2017, she regularly contributes gift tax caps to help fund both of her children’s 529 plans. This is despite her never making more than $50,000 a year in her life and falling far short of her inheritance tax threshold.
In early 2023, she wrote me two checks and asked me to deposit them. Getting money from her family might make her feel better. But for me it adds an extra level of responsibility. She doesn’t want to let her down.
The only thing I have is enough money to ask my parents for help. But I also want to respect my parents’ desire to contribute. In the process of declining or ignoring her requests, she begins to object to my actions.
Determining how to invest funds
For one of two new $17,000 checks, I needed to determine the appropriate time to deposit the check into my daughter’s 529 plan. I wasn’t worried about other checks on my son’s 529 plan. won’t I will deposit it. His 529 his plan has enough and I don’t want to take that much money from his mother. My mother finally agreed!
Despite my mother’s caution to deposit checks regularly, I patiently waited two months for the S&P 500 to correct from its high of 4,195 to 3,950 before depositing it. Psychologically, even if the S&P 500 were to fall further, I would prefer to deposit below 4,000.
As soon as I deposited the check through the Fidelity mobile app, I immediately emailed my mother so she could transfer the money from my savings account to my checking account. Her savings account pays much higher interest rates.
she replied.
It Wasn’t Meant To Be
After depositing the check, the S&P 500 started to rally. it was good! In just four days, the $17,000 check was his 3% in-the-money. A whopping 510 yen! Whoo! I’m a great Family Money Chief Investment Officer (CIO).
Then I got an email from Fidelity saying my check was bounced. $17,000 of funds were deducted from my daughter’s 529 plan account and all profits were lost. How sad.
When I told my mother about the news and asked what had happened, she said she had not been informed that I would deposit the check.
When I forwarded her an email confirming the notification, she said, “Oh, I spent hours opening that dance video of the kids you sent me in another app.” she was distracted.
Lesson learned. When sending important information, keep your message as simple as possible.
Please try again.
My mother wants to write another check, but I told her not to. I still have her bounce check.
She may have transferred enough funds to her checking account that you can try to reload. But if so, we’ll have to wait a few days to see if it gets rejected again.
If it bounces, would you ask your mom to write another check?
forced fate no the way. I did my best to wait for the right time to invest. I raised my head to her. Yet the check still bounces. it wasn’t meant to be.
Besides, what if I deposited her check and the S&P 500 started to fall again? Then I felt like the stock market gods were laughing at me. It’s best for her mother to spend the money as she pleases.
I could now successfully decline both her checks without guilt.
My daughter’s 529 plan will be invested for the next 15 years and I’m still upset that I missed the rebound. The whole process reminds me that day trading is a waste of time and money. I experience too many emotions when investing in listed stocks.
Investing family money can be stressful
The more family you have and the more you want to look after them financially, the more stress you have. The more we care about our parents, the more we worry about their health.
A bear market amplifies the fears of family money CIOs due to the growing disappointment and shame they may feel over losing other people’s money. At some point, your losses may become so great that working hard to earn an active income may not be enough to cover your losses.
I have something to say about keeping finances as simple as possible. It also has the advantage of not always having extra cash to invest.
Imagine spending all your money every time it comes in and not investing it for the future. How liberating! You will never feel the pain of losing money because you can enjoy it anytime.
In the current situation, investing family money can feel like a full-time job.
Fortunately or unfortunately, I have too much money exposed in risky assets to pay close attention to. One wrong decision could cost our family a year, five years of living expenses for her.
An alternative way to manage your family’s money yourself
Investing in private funds is my main stress relief solution. It’s nice to have someone manage your money.
Once you commit a certain amount of capital to each private fund, there is no turning back. When the capital call is due, I will gladly pay it. It’s also good that the daily value of the fund is not shown.
If managing your family’s money is stressful, consider the following solutions. Each solution should relieve some stress.
- Hire a Financial Advisor Like Hiring a Property Manager
- We provide equity and fixed income investment portfolios to Digital Wealth Advisors such as Empower, Betterment and Vanguard.
Be kind to the family money manager
Next, if your partner or spouse is feeling more stressed than usual and you don’t know why, it could be because they’re busy investing their family’s money.
Maybe they screwed up a deal or re-guessed one of their rebalancing decisions.
If the clan’s wealth manager is in capital conservation mode and there is a bear market, they may experience mental turmoil. So please understand and try to reduce their slack.
Asking people to take on more work beyond their day-to-day work and the responsibility of investing their family’s money can lead to fights.
Don’t take for granted what the family money manager does. Instead, support them whenever possible. After all, they are investing in everyone’s future.
Reader Questions and Suggestions
Do you manage your family’s finances? Do you ever feel stressed by doing so? Have you ever felt managing your family’s finances was a full-time job? What are your strategies for reducing the stress of managing your finances?
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