I believe investing can significantly improve quality of life. I want my family to benefit from investing, not just me individually.
Problem: My brother doesn't invest. He's too scared of losing money.
Over the long term I think it's much riskier to not invest at all. I want to get my brother into investing, because over the next 30 years, our whole family will be better off if he does.
Solution: I offered my brother a deal to eliminate his risk and transfer that risk to me.
The deal: My brother puts $8k into the market. One year from now, if the value of his investment is less than $8k, I will give him the difference. If his investment is more than $8k, he keeps the gain— up to double his initial investment. If the investment more than doubles, I keep anything past the doubling.
I doubt his investments will double, so I'm not really doing it for my own upside (but if it did more than double, hey, I feel like I deserve some upside, no? 😅).
The main reason to do this is to give my brother no excuse for getting invested in the market. He can't lose, so it's better for him to put his money to work then let it sit in a bank account collecting dust.
On my end, I'm taking on a lot more risk, but I have set aside some money in the event his investments go down. In my mind, that is a fee worth paying in order to get my brother engaged in the markets and investing... hopefully for the long term.
So what do y'all think? Am I an Idiot for Offering this Investing Deal to my Brother?
Would you ever consider doing something similar?