‘Financially paralyzed’ Canadians are turning to family for loans

[Admiral Beez]

‘Financially paralyzed’ Canadians are turning to family for loans. But there’s a right — and a wrong — way to ask

Do your research, set clear terms and be prepared to hear no before having what can be a difficult conversation with loved ones.

www.thestar.com

Paywall free: https://archive.is/qal89

I would never loan my adult children money. If they need money and I have it to spare, I’ll give it as an advance on their inheritance. If I do not have money to spare, sorry but I cannot spare it. One of my mother’s friends asked his Boomer mother for a loan to open the Il Fornello restaurant in the Beach(es). She remortgaged her home to support her son’s dream, and when the restaurant failed she lost the money, had to sell her home, and strained the relationship with her son. Never put your retirement or financial security at risk for your adult children. If you didn’t exist they’d have to sort it out without you anyway.

 

[lenaitch]

Many years ago when I needed some money for a down payment on a house (I had some - I just wanted more to reduce the mortgage) my dad loaned it to me but wanted it registered as a 2nd mortgage; no payments/no interest, so kind of the same thing as an advance on an inheritance. I did make some payments towards it and when estate time came the remaining amount was deducted first.

 

[Jonny5]

One of my mother’s friends asked his Boomer mother for a loan to open the Il Fornello restaurant in the Beach(es). She remortgaged her home to support her son’s dream, and when the restaurant failed she lost the money, had to sell her home, and strained the relationship with her son. Never put your retirement or financial security at risk for your adult children. If you didn’t exist they’d have to sort it out without you anyway.

That's amusing to me as just last week I had a conversation with a co-worker about how she said her long term plan was to open a full-service restaurant with her two siblings for their specific ethnic cuisine, and the first thing I said was "when you do business with family, get a lawyer and set it up properly as a separate corporation where your family money is all protected," and she brushed that off saying "we're family, so that doesn't matter," and I was like, going into business with family seems always destined to have the worst outcome, but especially in a volatile industry like the restaurant business, set it up properly so you have verified ownership and debt responsibilities because family squabbles on restaurants are legendary, and she still was like "Oh, that will never happen with my family" (and you can envision my eyes rolling here).

 

[Admiral Beez]

That's amusing to me as just last week I had a conversation with a co-worker about how she said her long term plan was to open a full-service restaurant with her two siblings....

At least your co-worker may not be loaning money to family, but investing together with them.

 

[gabe]

That's amusing to me as just last week I had a conversation with a co-worker about how she said her long term plan was to open a full-service restaurant with her two siblings for their specific ethnic cuisine, and the first thing I said was "when you do business with family, get a lawyer and set it up properly as a separate corporation where your family money is all protected," and she brushed that off saying "we're family, so that doesn't matter," and I was like, going into business with family seems always destined to have the worst outcome, but especially in a volatile industry like the restaurant business, set it up properly so you have verified ownership and debt responsibilities because family squabbles on restaurants are legendary, and she still was like "Oh, that will never happen with my family" (and you can envision my eyes rolling here).

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Once she sees the crazy prices of food thanks to new tariffs, she will think twice about opening a new restaurant.

The restaurant industry is about to get hit hard again because of the tariffs. I think consumers are already at their max with current menu prices and I don’t think food portions can get any smaller than what they currently are.