My great aunt ran a sewer and drain cleaning business, which my uncle (her son) worked for as a parent/child partnership in the business. Since my aunt has been getting older, she decided to hang up the towel and close the business. I’m not sure if she offered the business to my uncle and he refused it, or she decided not to give it to him, but regardless he is not taking it over.
Unfortunately though, he became wholly dependent on the business more than anyone else knew. The business was paying for the gas that his family used, including all of his children. It paid for both of their houses (one is a vacation home), vehicles, etc.
In addition to this, he attempted to put money into the stock market as a method of getting a fast return and ended up losing $40,000, which put his family in even more dire straits.
– Submitted by: Ann
I hate to say it, because I don’t know the full situation, but it sounds like a classic case of being spoiled and lacking personal responsibility. However many years the uncle was working for his mother, he could have saved up a significant amount of money on his own. And having a wife and children really should negate the desire to invest a bunch of money in high-risk stocks.
At the same time, his mother letting him get away with this kind of dependency is also very much on her hands as well.
Beyond that, raising your kids to depend on money that you didn’t earn from the business, teaching them very poor financial habits, even giving them entitlement issues, is all very poor judgement. Kids need to be able to handle rough decisions and situations if they are going to grow up with any sort of independence. They need to be told “no” now and then, they need to go without, they need to work hard to achieve their goals, etc. You do more good for them by not giving them everything they want than you do trying to be their BFF.
Amount Flushed Down the Money Drain: $40,000