You Have two options:

1. Support her until you’re broke and miserable.

2. Leave her to fend for herself, in which case she might spend until she has nothing left. You think the baglady fate is only reserved for people outside your family?

I’m sorry for your situation as I have been in your shoes. There is no hope; she will end up broke and you’ll have to sacrifice your savings to support her. There’s no other way; these morons will always ruin it for their family members. All you can hope for is that she passes young.

Coming late to this blog but the sister may be developmentally disabled. I have a sister with Asperger’s (high functioning autistic) who works steadily but at low-paying service jobs. She just about makes rent but earns too much for most social service assistance programs. Part of her disorder includes impulse spending. We have managed to redirect her from high end jewelry stores to thrift shops but there are still months with more going out than coming in. The only savings she has is from an small inheritance from our mother, which our brother has put in trust for her. He will access it for her for emergencies but otherwise leaves it to grow.

As a CFP, I highly recommend you consider giving your sister a few hours with a fee-only financial planner. I have seen few happy outcomes, however well meaning, in these types of situations where family members thinking they are helping with investment decisions. Time with a planner who helps determine financial goals and provides objective advice (and tough love, if necessary) is a win/win for each family member.

Maybe Max could help, she’s a web based mentor designed to help people think through their spending decisions and help them resist the urge to splurge all their money on things they probably don’t need.
Max is on Modelminds.com

Related story: My oldest sister (now 43) received a large settlement windfall in 2000. She was a single mom with 2 children, no child support, scant job prospects afaik, and was in need of a car and a home. She had plans to go car shopping so I pleaded with her not to go to a dealership without me (or someone, anyone…). She walked out of a dealership a week later having paid $30,000+ cash for a new SUV that she would soon be unable to maintain.

A few years later, she traded her paid-for vehicle on a minivan for use in a short-lived courier job, and began to make payments again. Within a year, she lost her job and the second vehicle.

I was furious at the initial car purchase, confounded by the second, and it has taken me years to forgive her for squandering all of what seemed a miracle at the time.

I’ve since realized people like my sis are not natural financial nerds and struggle with the age-old problem of balancing wants and needs, or logical vs emotional purchases. Indeed, her comment in the face of criticism about the SUV purchase was “But I wanted it…”. She also had little experience handling large sums of money and probably behaved the way the majority of people would; realizing that helps not to overreact when she repeats the behavior on a smaller scale, like with tax refunds. Hopefully she will learn and probably has, but either way I still love her.

(Probably TMI, but I couldn’t resist the urge to commiserate.)

My sister is the same way as the sister in the article. She just can’t get her head around investing but she is now doing it after I showed her how. In fact I simply did it for her - set up the monthly check deduction that gets invested in a mix of cheap funds. I essentially manage it for her and I know she will never learn. I figure it is better I do the work now than having to help her out financially in our old age. She’s FAMILY and that’s really all the excuse you need to help her out.

Most people are not willing to devote any time or effort to saving and investing. It sounds like your sister falls into that category so the type of plan that’s most likely to succeed is one that she doesn’t have to put any effort into. Set her up with an account to put the money into and split it up into 3 or 4 different asset classes like US large cap, US small cap, Foreign, and Bonds. Buy low cost index funds for each category. Done. She doesn’t need to devote any effort at all now. If she needs to pull money out periodically then you’d want to add a money market to the mix.

I see myself in this “sister” case & will turn my life around starting now. The way to get out of a hole is to stop digging yourself in deeper. Give all your money to a trusted relative to pay off debt & then relative invests the rest of the money. Stop shopping now.

I agree with the adage “you can lead a horse to water, but you cant make him drink.” I am a wealth advisor for (what I feel is) the #1 investment bank on Wall Street requiring $500k minimum investments and despite my expertise it took years to manage my families money just because it is human nature to avoid what you don’t understand or that which may be painful/require adjustment.

REALTOR comment. It doesn’t sound like your brother is a very motivated realtor. Sounds like he needs buyers instead of sellers. There’s plenty of those. My business has never been better

I’d probably have her open an account with Scottrade or another broker and then invest the money into something that pays a decent dividend, something like BAC or even a company like ACAS.
I wouldn’t worry about trying to enroll in a dividend re-investment plan or anything like that. Tell her to take half the cash after each dividend payment and leave the other half in to pay taxes with.

It will simply be extra income for her each quarter. My guess is that the extra income each quarter will be something that she will need, and it might help her see that there is a benefit to investing.

You can lead a horse to water, but you can’t make him drink. And when it comes to family, you can give the greatest advice in the best possible way and it won’t make a hill of beans difference, especially when it comes to money. This seems most especially the case with siblings - left over rivalry or whatever. The best bet is to suggest what you might feel is the most appropriate thing to do and follow it immediately with a, “but I think you need to ponder the choices and do what works best for you.” And once said, neither dwell on it or rehash the topic. Love them for them, whatever they may do.

I would have to agree with Ted from Milwaukee. It is obvious that this woman at 53yrs probably has been this way all her life. She first needs to seek psychiatric help. Most people of her nature are usually diagnosed as being manic depressive/bi polar disorder. Once that is done, she might try to pay off some of her pending bills(unlikely). If she can’t handle just having a little bit of money that she has, there is no way that she is going to be saving this “gift” that she has received.

Most of these comments are ruthless. Family relationships are the most important thing! If you are smarter at money, then quit complaining and set her up with money she can’t touch that grows through interest or investment. You only get one family and maybe she will be the one taking care of you if you get cancer! Life is too short and love is more important than any material items like money. You can’t take it with you, so share everything together.

53 and unemployed…it is very difficult to find a job right now and at that age…just finished a job search at 43 and fortunately landed a job after convencing an interview panel of 25 year olds that I was reliable, dependable, hip and cool enough to join their team and my buddy hairstylist at Supercuts took ten years off my looks with an updated hairstyle and my teenager daughter dressed me and did my make-up…..now for the sister, recommend splitting half the money to put in a CD, work with her to find the best account and rates for her and help her fill out the applications and turn it in and the other half of the money help her evaluate how she wants to spend it with a household budget in mind and talk about her goals…..maybe she wants to use it take a class at the community college to upgrade her skills or pay off some credit card debt or pay off a heating bill….but a plan with a sounding board will help her stay on a good path….Unemployment is hard, please encourage to keep trying…keep building skills…I volunteered at the food bank while unemployed and looking for a job and received some of the best advice from the seniors who volunteer…plus the manager was so kind and knew I volunteered when my kids were in school and he always checked to make sure we had food for the kids and gave me bags of produce and milk when there was extra at the end of the day, but there is no better medicine than to give when times are tough because there is always somebody who needs help more than you.

So although unemployed, my kids always had food…sometimes the kids coming through the food bank lines had not eaten for days…broke my heart…glad they came to receive food from generous donations…best wishes with your sister, tell her to keep her chin up and never give up…keep trying…she is so blessed to have a brother who can help steer and support her onto the right path…

Money is a difficult subject for families and it is fraught with emotions. Even children raised in the same family have widely different views and circumstances. My husband and I both being the oldest in our educated but finacially struggling families were it seems by nature conservative with regards to money and have always lived well below our means long before we met and married.

We now have sibs and other relatives who have been in similar situations to the author’s sister. We offer our families advice when asked, cheerlead when they disclose sound decisons, try to mind our own bussiness when not asked,(sometimes very hard at least for me) and have offered finacial aid in dire circumstances, eg. paying for a funeral, buying a sib a water heater when unemployed etc. I was taught that familiy looks out for one another but that often you can’t make people change who our not ready to change. Sometimes we cringe at bad decisions made but try at least not to do or say anything that would cause a familal break. Things that seems obvious to us are not so for everyone much as I would like them to be.

We do try not to give cash outright when often the real need goes unmet as the cash may be squandred on consumer goods or risky schemes but have helped as we can in emergencies as well as educational attempts and preparing for a rainy day, ie subscription to MONEY or a financial book as a gift for a nephew going to school, AAA for a brother with a new car, making up first aide kits and giving them as gifts, or planning,and arranging and paying to make a home safer for an older relative, ie grab bars, and shower chairs etc.

Maybe that’s just how an accountant and a RN try to be prudent, and fiscally responsible while trying to practice our faiths. But it is a plan that we can live with and be at peace with. We have to remember our families accept us for who we our despite our “bossy, first-born type A, fixer, genes as well.

I think that if you are the financial whiz you believe you are, then you ought to be able to tell your sister how she might invest her little windfall. If she chooses not to heed your advice-fine- she’s 53, she can do as she pleases.

I did not know so many others are in the same financial condition as “my sister.” It must be due to a lack of “value programming” or maybe it is the misguided “Madison Avenue” sales promotions that cause people to want immediate gratification with no ability to pay one’s debts. It is not wrong of someone to want more because they have the same desires as those who can afford to buy what they want. It may take another depression for them to aquire the habits of those who survived the last great depression. Who made less count for more and survival the name of the game. How will they ever survive old age without financial aide from somewhere?

Knowing how your sister might feel, I would suggest something other than buying her a session with a financial planner. She will want to feel like she figured it out on her own with a few tips on where to get the right answers. It might give her some much needed confidence right now. Put some confidence in her and you might be surprised what comes out. “If I can learn to do it, you can learn to do it…” mentality.

Without a consistent income $5000.00-$10,000.00, no matter how it is invested is virtually worthless. GET A JOB!. It is blatantly obvious she is grossly financially irresponsible. Without question if she has access to this money it will be wasted on items she can’t afford. Via a signed legal contract, open a brokerage account for her. Invest the money in a target retirement fund. Do not allow her access to this money until a pre-set specified date.

This lady needs to learn how dividend reinvestment works. First you take that 10 grand and buy scrach-offs. With the proceeds you buy more scratch-offs and so on and so. Before long you will have earned enough through scratch-offs to buy a big gulp and a pack of lucky strikes. You all are laughing at my plan, but I bet it makes more sense to this lady. Most people are still dumb enough to think the government will take care of them when they get old.

Good comments. Glad they run the gamut. Be quick not to judge indeed.

Very simply there are two kinds of people in the world - “Ken” and “Ken’s sister.” People that get it done, and people that wait for it to be done for them. This issue is deeper than just someone who is not saving money. It’s about one’s view on the world and their place in it. If you are someone who thinks you can never catch a break and the world is bringing you down, the answer isn’t on that scratch-off ticket. It’s on that thing in your bathroom on the front of your medicine cabinet.

Tell her to put 10k in online savings like emigrant.com. Then each month she can log in and see $30 more in her account.

After a month of that, you can ask her what happened to the $10,030.

A fool and their money soon shall part.

have a nice day

The two worse things you can do to squander money:

1. Buy a new car, and replace it “too” frequently.

2. Get into credit card debt

Always buy a car that is at least 2 years old and inspected by a good mechanic, even if you have to pay for the inspection. Drive it for at least 8-10 years. Don’t buy an American car, but a Japanese or German one.

Cut up your credit cards, keeping only one for medical emergencies. Don’t buy latte’s or go to movies. You can rent movies from the libary for free. Cable TV is OK, because it is cheap entertainment. Don’t buy the most expensive plan.

Get books from the libary on “skin-flint” living. They are chuck full of amazing ideas to reduce spending and STILL live amazingly well.

Always ask for “manager’s discounts” even in main-stream stores. Don’t be embarrassed.

Skin-flint living can be fun and creative. It is amazing how well you can live by having those skills. Those skills are your best way to get out of credit card debt. Look for “skinflint” books on the Internet and buy them used. The people who write these books are true experts on extending dollars.

I’ve done it. I know. Using that technique I NEVER got into CC debt, even while being very poor.

sanjosemike

1) Pay down debt. Getting debt free should be the first goal

2) Start saving for a rainy day. Usually a 6 month emergency fund (minimum)

3) Then look at other alternatives for investing.

While we don’t know all the details about this lady who is having financial problems, the fact that she is asking for help is a good start. She realizes she doesn’t know it all. This is a good thing because the know it alls in this world usually have no money.

That being said, she probably is in over her head in debt but won’t admit it. You shouldn’t try to make her admit it either. It think the time bought with the financial planner is great stuff. It allows her to save face with her family and allows her to get good advice (usually) on what to do.

I use a simple strategy with CDs that works wonders. I have 4 CDs which each roles over 1 year. but,here’s a catch, the role over dates are 91, 182, 273, and 365 days so that roughly every 90 days, a CD comes due. Most creditors will agree to 90s for payments. This lets me get at emergency money every 3 months without paying fees for early withdraw. Certain withdraws from CDs are automatically waived of fees like certain hardships.

With this setup, she could do $1000 or $2000 per CD. Take the rest and pay off/down any credit card debt. She still needs to find a job. She can setup through a bank with a financial group an automatic draft from her checking into an IRA and setup automatic drafts from her paychecks to a company 401k. Talk about a putting your retirement on auto-pilot. With those term of life funds, you really don’t have to do anything with this setup other than work and fund it and by working, she’s automatically funding it.

One of the big problems I suspect she has which is fueling a lot of the credit problems most Americans are having (housing market included) is the “keeping up with the Jones” routine. That routine will kill us all. Even those of us that don’t do it. The mountain of debt is huge and the creditors want their money.

One thing that people in this country need to understand is that rich, middle, and poor are life style choices. How you live and what you do with your money determines whether you are rich, middle, or poor. Only about 5% of Americans can truely say they are were they are because of what life delt them. The rest of us, we chose whether to be rich, middle, or poor when we started deciding whether to listen to our elders or not. We decided it every time we saw that cute little sports car we just had to have or that ipod we just had to have because our friends had them.

I used to live like that and was in debt because of it. Now, I stop and think, “do you need it?” and “how about we sleep on it for a few days and rethink it?” My life has totally changed because of that. I now think, “ok. if I spend this money, how will it help me save money?” If I can answer the question with a positive answer, then I consider buying. If I cannot, then I put the item down and walk away. Don’t get me wrong, I do reward myself from time to time but my rule is, “whatever you saved this month, you can spend half of it. The other half goes into your savings.”

I came to this Country 1 1/2 year ago with $6,000 (had to buy a car, rent a house and a $38,000 job) My wife does not work (stay home mom) and to this date I have $7,000 (Roth IRA) saved and $ 2,500 (online savings account in case of emergency). It is so easy to acomplish what ever you want in life if you set your mind to it…..

You got to feel the need, because I came from a third world country you have the hunger to be succesful!!!

How is it that I came and have made more than someone who lived in the US??

How can you be 50 years old and think of what to buy instead of looking at other ways to save??

Are American happy with only having a flat TV and a car?? I DON’T THINK SO!!!

Your 53 year old sister needs to have that fire in her so she can get on her feet….

I think she should go and buy some tropical fish (brightly colored ones), a cruise around the Middle East, a lifetime subscription to Leprachaun Weekly and some bon-bons.

Life’s short - have fun!!

We should consider the facts stated above and be somewhat sympathetic to the issue at hand. $5 - $10K is not retirement money, but it is a start, nonetheless, to either fund a savings and/or have a monetary cushion. Look, it really doesn’t matter why she doesn’t work and there is no indication that there is no other source of income. She may have a husband who works or has been a homemaker for a long period of time. The reader doesn’t suggest she chooses to sit at home and collect welfare. I also highly doubt that someone in their 50’s is looking to start college, as someone suggested. Besides, how many 2 or 4 year programs can be completed anymore for $5 - 10K? It’s sad, but probably not many. I’m more concerned of people who suggested “put options” and spreading it across multiple accounts, hiring advisors, etc… Honestly, why make something so complex. Couldn’t she just as easily invest at ther local bank. The question above suggested she didn’t know how to invest, not that she was drowning in debt or a burden on society. Besides, haven’t we all wished that we would win the lotto? If you said no, you must be living outside of reality.

I liked the advice in the article. My husband and I have done well also and I would love to share what I have learned from him. Because, honestly, without my husband I would be in the same boat with the rest of my family. But I want to avoid what a lot of the comments here show - I don’t want to be the stuck up know it all (I’m the oldest and already get that kind of flack). I want to do it in a fashion that doesn’t look like I’m talking down to my family. Thus far, instead of advice, I recommend my favorite investment books. I gave one as a gift to my brother when he graduated and have sent others to family and friends.

Pay off debt, help her find a life coaching/ or work placement program, and take her out for dinner to discuss high interest accounts and the joys of saving.

Wow.. so many criticisms of the brother who only wants to help and of the sister that we know nothing about really.
I’ve struggled with money and knowing about money, all my life. A few poor choices and desiring to live a better life (I do not live extravagantly)and I’ve created some CC debt. Having said that.. I will never take money from my family (even tho it’s been offered) and have taken on addtional jobs in order to pay down debt. My creation, my responsibility.

Clearly the 5k or 10k is only a stop gap. She needs to find work or she will never recover. I have a to agree with W. Pond.. she needs to invest in her ability to earn money. Otherwise she will be right back to the same situation in no time.

The sister should spend her new-found money on material goods. She needs to do her part at stimulating the economy. Between her and Bush’s new plan, the economy should be doing quite fine in a few months.

We do not know all of the circumstances surrounding the 53 year old destitute sister. My feelings are these: If someone is overwhelmed by debt, unemployment, and destitution through no fault of their own, such as illness, medical bills, natural disaster, then those people deserve whatever help you can give them, especially family members. However, someone who is overwhelmed due to their own stupid behavior, i.e. they buy “stuff”, running up credit card debt, spending more than they make because they deserve it, making bad career choices, or are just lazy, then they deserve NO HELP. These people only deserve help AFTER they recognize their problem(s) and the behavior that caused it and initiate corrective action. In that regard it is like being an alcoholic. If they do not realize THEMSELVES what the problem, no one else can help them. And you shouldn’t waste your time or energy trying. Even, if they do recognize their problem and start a program to change, do NOT give them money. It is like giving a drunk a drink. You are an ENABLER.

BEING A REALTOR NOW IS LIKE BEING UNEMPLOYED

My brother is a Realtor, and has been for years. Somehow, he has managed to support himself. Being a Realtor now (for many) is like being “unemployed.” Fortunately he has no family to support, just himself. Recently he asked me for money. I did give him some, with the idea of taking some computer courses to “re-train” himself. I don’t think he ever took any. He probably used the money to live on or pay down his credit card debt. He doesn’t usually listen to me, feeling that since I am younger, he is still in the “authority” position.

I discussed with him the possiblity of taking part-time contract jobs, like receptionist, etc. and working for a temp agency. Some temp agencies will offer health insurance group plans if you work there long enough.

He is finally doing that now. So far it hasn’t led to a REAL job, but it provides him with food and some basic sustenance. I’m grateful he doesn’t have a family, otherwise it would be far worse. Fortunately he already owns his condo, which I helped him pay off by giving him my share of an inheretance we both got. I try to be a good brother, but keeping boundaries is difficult.

National Realtor associations should provide more direction for their professionals, who are now falling on really hard times.

Al B. from NYC

It doesn’t matter what you say or do. She is just going to blow through the money and be right back in the same spot in a month or two. Quit wasting your time and energy thinking and worrying about it, and focus on your finances and your family.

Let up on the brother. I know how it feels to be in a better financial situation than the bulk of my 7 siblings–we grew up working poor and never learned how to handle money. I married a very savvy guy and he is still teaching me how to watch my spending. I never stop feeling guilty whenever we get together with my family and they talk about how hard it is to live paycheck to paycheck, and how great it would be to get ahead. The same week we rolled over 100K from one 401K to another, my sister mentioned having a 401K. Somewhere. With a company she left 3 years ago. And she wants to find out where it is because she wants her $80 back.

Don’t hate on the brother for making wise decisions. Some of us might do well to ask him for financial advice.

I think someone said it best, 5-10K invested anywhere will not be enough for retirement, even if she gets a above average return.
The best thing is to see a planner, who will probably advise to pay down her high interest debt if she is carrying any.
The best thing to do after that would be to get some sort of training and try to get a job as there is no way she can save for retirement with what the situation is now.

I can’t believe people are accusing Ken of being condescending. He’s wisely recognizing that investments vary by income bracket and also being sensitive to the reality of the differences in their financial status.

I get incredibly uncomfortable when my in-laws bring up money matters because our situations are so different that it’s just awkward. We have lived below our means and have saved a large percentage of what we’ve made. We also understand that living below your means when you are college educated with good jobs is a heck of a lot easier than living below your means when you make minimum wage and have kids to feed.

I could get into the discussion about how my husband and I have made better decisions in general which led to us obtaining college degrees and good jobs but that would be another post.

Ken should encourage his sister to engage a financial advisor and not get personally involved.

She should just do what my sister does. She should have had 5 kids, got on welfare, claimed that her kids are disabled to get ssi, then she can claim disability (usually a back injusry because those are the hardest to prove) and then she can get ssi and live a long happy beggars life.

I’m very impressed that big brother still has the compassion left for his sister to go through the hassle of setting up a savings plan for her. Absolutely, she must pay off any high interest debt first - but surely big brother has already thought about that. The idea of splitting up the investments is also appealing to save her penalties and allow for some (but not unlimited) access to the savings.

How about a budgeting class? Some state cooperative extensions offer them, also check into local social service agencies (the same ones who do counselling on homebuyers assistance, emergency fuel, home revitalization work) - ours also offers budgeting courses. They are almost always free. Teach a sister to fish!

And I would also be suspicious of a mental health concern or substance abuse - getting her help will ensure that big brother has a more peaceful retirement.

53, unemployed, with an extra 5-10K, and asking big brother for some financial advice.

The smart thing to do is some conventional investing, like Walter suggested.

Usually when people ask me for financial advice though, what they’re asking is what stock to buy. If they won’t listen to safe suggestions, I pick a stock for them. I tell them it’s like gambling. Strangely, they really like that.

If the stock does well, I’ve done what they wanted.
If it does poorly, they don’t ask me for advice again.

To those who are quick to judge this woman:

None of you except perhaps her brother know the details of her situation. There may be a lot of reasons why she is unemployed. Everyone has choices and circumstances in their lives and not all of them result in the happy rosy life we all would like to live. Those who are perfect in every way should just keep to themselves.

From a 25 year banker, Let her use half to do something short term,ie. pay down debt, buy something she needs…….and definitely bury the other half in a target retirement account…..

Have her buy lottery tickets with the $10K. That way everyone wins.

My Sister is JUST PLAIN STUPID !! And That’s Putting it Mildly. My Dumb Brother-in-Law, who used to earn a good living years ago, socked away some money in a Sheltered Pay Plan, which was equivalent to a 401K. After my Brother-in-Law was terminated due to his ‘Big Shot’ attitude, he and my Sister rolled the money into a Traditional IRA to avoid IRS Tax Penalties. Now, you’re probably wondering, “What’s wrong with this picture?” Well, I’ll tell you. Because my Sister was such a QVC Home Shopping Network addict, she had accummulated SO MUCH DEBT on her Credit Cards that she actually convinced my DUMB BROTHER-IN-LAW to BREAK the Traditional 401K in order to pay their debts off and they did ALL of THIS in their early 50’s, thereby paying the High Price of Tax Penalties GALORE !! Truth of the Matter, I don’t believe there’s any Help for My DUMB SISTER AND BROTHER-IN-LAW !! They are Just TWO STUPID IDIOTS SITTING ON THE BRINK OF THE POORHOUSE !! Ask my Sister or Brother-in-Law what the definition of investing or saving for the future is, and they’ll give you a look as though you’re from another planet - SAD, BUT VERY, VERY TRUE, NONETHELESS !!

I absolutely second Ryan’s suggestion to pay off / reduce any credit card debt the sister might be carrying. The suggestions of creating CD ladders / money market accounts / Roth etc are valuable and very vaild if the size of the windfall was significantly larger than the $5-10K we are talking about.

My sister has never been great at money but I finally gave up on her. A couple of years ago when our mom was in poor health my brother and I decided to help our sister out. Since my bro and me are doing fine, before my mom died we made sure everything was in our sisters name. I had POA and had been working on my moms finances for a couple of years and knew where everything was at. My mom wasn’t rich but she had about $100,000 when she died, thought this would give my sister the help she always wanted. I pointed her to a good financial adviser and she said she was excited to have the chance to get on her feet, talking about investments and finally having a solid retirement Six months later she asks me if there is any more money from my mom. I asked where she invested it in and she says she didn’t get much, I laid out everything and asked what she didn’t get and we would find out what happened to it. She couldn’t remember what she got and what she didn’t get and told me not to worry about it. 6 months, $100,000 bucks, a new big screen TV, satellite radio for her and her loser husband, and a nice leather jacket from the local casino. Two years later she still complains that she never gets a break has no money in retirement or savings and if she could just win the lottery her life would change for the better. Yea right!

Isn’t the real answer here fairly obvious? The truth is, no ordinary investment on $5-10K is going to make any real difference to someone who’s unemployed. If she’s unemployed, the best investment would be to use the money to help her in getting a job, whether it’s through education or training to get better more saleable skills, relocation to a better job market, buying a car if she needs one in order to get a job, etc. Being able to support yourself should always be your first investment priority.

The big brother isn’t condescending, he’s full of loathsome anticipation of the day when his broke sister calls on him to bail her out (again). Also, he has probably reached the point in his life where his savings and investment plans are getting some traction, leaving a growing asset gap between him and his family. Alas, while he may be doing well, LW probably doesn’t have enough money to fill the fiscal sinkhole created by his sister and other family members. I feel his pain….

I have been where you are. My suggestion is first carefully ask your sister if she wants help deciding what to do with her windfall. If she is agreeable have a frank discussion about her current financial situation. If you have some financial acumen that should help you give her advice. Another option is go together to a financial counselor, my credit union has one on staff for free, and talk it over with a professional.

She may be better off paying off high interest debt, putting away money for a rainy day, or paying overdue bills if that is an issue, rather than tying it up in retirement. But that is for you and her to figure out. Again, if she is willing to seek your advice.

In the end, as I learned, even the best advice may not get followed and her windfall will disappear as quickly as it came.

Open that purse and let YOUR money flow!!!!

ADIOS DINERO!!!

Those convinced against their will are of the same opinion still. Lost cause, take your time and energy making yourself more money. Then after your lame sister is destitute then at least you can feed and cloth her. Sorry to be so crass, but some people just don’t want to do the work to win. Call it depression, lack of education…whatever, I call it laziness.

The answer is much simpler than it seems. If she is as bad with money as you say she is she is no doubt carrying a lot of debt. Probably some high interest credit card debt. Pay the debt off first! I guarantee it will yield the best return on investment.

My sister is the mirror image of this one, only she’s just 50. Her husband is the big spender, but she seems helpless to stop him, and unwilling to go get a job and earn her own money to invest. I’m the breadwinner and saver for my husband and kids, and finally realizing I’ll probably wind up supporting my sister and brother-in-law in retirement too.

Not being well informed on your sister’s financial standing myself my suggestion may not apply, but if she is currently carriying any sort of debt that can be paid off or paid down with this new found income I would suggest that is handled first. By paying down or off her current debts she can save herself the extra payments every month and chances are she is paying a higher interest rate on the debt than she would earn from a CD or MM account. If at all possible, get her to take the monthly payment that woudl be allocated to the credit payment and deposit that into an account that can then be invested in a CD or MM account.

I beleive the best way is to invest them as a long term high yield CD (2-5 years) as a best choice since their interest rate is really high and more securelly than stock market, them you can use this money, along with the profit, to make a down payment for your new house

Hey, “wiser bro” are you a multi-millionaire? Didn’t think so. So, don’t be so condescending. Seems like the both of you could use some help. I agree with Walter Updegrave’s answer…go see a financial planner.

I managed my sister’s money better than my own last yr. 19.5% in fidelity funds

Steve,

We all get depressed when we’re unemployed. Your idea would just suggest we take this money and spend it on Xanax or another anti-depressant. You work for a drug company?

Depending on how long she’s been unemployed, a Roth IRA account in a intermediate bond fund may be a better alternative than some of the CD’s–as it is a Roth, she still can withdraw it without paying taxes (but a 10% penalty if within the first 5 years) in an emergency. It also sounds like she would benefit from *some* income, so putting $2500 or so into a short-term bond fund that pays her $10-$12 per month (or $30-$36 per quarter) might help her a bit through this rough patch, plus help her self-esteem.

buy puts on the dow..will make her problems vanish in a few months

I think helping the 53 year old unemployed sister achieve some sort of financial coup is key for this caring brother! If she’s unemployed at 53 and doesn’t have a whole lot of savings, who do you think might end up supporting her? Perhaps her more savvy brother?

Put it in some type of retirement fund. I know the “waiting for the big lottery win” type, and, she will invariably find ways to spend the money. You would be doing her a favor. Also, make it easy on yourself.

“Pretty lame how 53 year olds can’t control their spending.”

A bit quick to judgement, aren’t we? There may be some valid circumstances; death, divorce, disability, etc.

Wow, aren’t we judgmental. You must be pretty powerful and perfect to call others “lame”. We all have our issues, for some (probably many) it’s money, for others (probably you), it’s being narrow minded.

You might want to suggest that she use the money to further her education since she is out of a job.

Pretty lame how 53 year olds can’t control their spending.

If she is unemployed, she may also be depressed, which could be hindering her ability to understand any financial advice that is given. Ken should Google ‘depression symptoms.’ If his sister exhibits any of those symptoms, then he can change his way to talk with her and/or get her some help. If she is severely depressed, than any help he can give her to beat the depression will be much better than any financial knowledge he could provide.