A Brother's Obligations: Ask Noah

The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

NEW YORK ( TheStreet) -- Q: My brother and I have always been close. As adults; I have become financially successful and he has struggled. He has often asked me to lend him money for a variety of reasons. I've always felt obligated to him and have loaned him the money.

Recently he asked me to finance a project of his as an investor. I am very wary of this plan and feel uncomfortable investing. I would like nothing more than to trust him here, and yet my discomfort reigns. Please advise me on how to proceed.

A: The financial generosity is admirable.

However, it is creating an unhealthy family dynamic and cannot continue in it's present form.

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This "unjustified" obligation toward your brother is breeding "justified" resentment. "Investment" in his projects brings with it obvious concern.

You've mentioned confidence in your current financial status. Circumstances change quickly these days. Protecting your own net worth is still a factor.

You must be fair about your role in this exchange. You have free will, and have been writing the checks. Yes, it was out of love . . . . However, it has created dependence.

An honest discussion with your brother is needed now. And you have to accept that feelings on both sides may be quite intense . . .

Will he or you feel guilty? Will he or you get angry? Will he or you be apologetic?

This is not a one-sided deal. No one can be silenced, because vocalized, honest reactions are essential ingredients to moving forward.

Of course reality is often not as clean or clear as this.

When a beloved family member is struggling, one wants to help out in any way they can -- this is an understandable quandary. The old adage really comes to play here: "If you can't count on your family, who can you count on?"

Questions you might consider before giving/lending money to a family member include:

1. Are they going to and can they actually repay you? Do I create a timeframe with a contract? Can I charge interest?

2. What are they using the money for?

3. Can anyone else lend them the money?

4. If more money is lent, can the contract set up indicate when that next installment should be repaid?

A functional analysis of the financial exchange, as well as a paper contract or document protects both parties from future reconstructed truths.

It also defines the exchange. It is business not family. However, and you need to hear this...You are still allowed to "Just say no!"

When someone asks for something, it does not mean we have to give it to them. Family included.

Do not let money ruin the strong bond you have with your brother. Tell your brother this, and it will help him hear what you have to say.

I wish you the best of luck, and look forward to hearing his response.

Please keep sending any questions or comments to "Ask Noah" at nskass@gmail.com

Have a profitable and peaceful week,


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