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Discussion Starter · #1 ·
Hello, all. I am a long-time lurker and I so appreciate this forum.

I have a bit of a dilemma, and I will try to concise.
My father-in-law (my husband's step-dad) has always made a nice chunk of money-and both he and my mil have very expensive taste. They are well-off but most definitely not multi-millionaires and live beyond their means, in my opinion at least. As an example, it is not unusual for them to lose 50K over the course of a year at the local casino, and they often eat every meal out at nice restaurants.

At 74, after being bored out of his retired mind- FIL decided to start another business. Because I have skills related to this arena, I became loosely affiliated with this venture, and I now share an office with his business partner and also receive ( a few) client referrals from them for which I pay a small commission.

My dilemma is this: his business partner (whom I will call Sandy) and I have become friends and often chat about the business. In short, the business has HUGE expenses that way outweigh any revenue, and as a result, Sandy is essentially losing three thousand dollars a month. She even bounced her part of the rent once, and is stressed out of her mind. I have come to find out that my FIL is losing a good deal of money too-and what is more--he is always throwing considerable sums of money into what seems like a business destined for failure. They have been at it for three years and the margins are BAD. I know that he is funding this all with his (and my mil's) retirement fund.

What I am struggling with is the fact that my mother-in-law thinks he is making good money. He clearly doesn't show her his books. This is not my business-I realize-except that I feel like I am watching an elderly woman in precarious health have the wool pulled over her eyes. I have no concrete proof of what he is losing-and so I can't make any solid claims. But I know that I know that things are financially bad with this business.

My husband is torn as well, as you might imagine. I just don't understand how someone could be 75 years old and spending retirement funds like this. Longevity runs in his family--his mom died just a year ago!--and the rate I suspect he is burning through money they won't have adequate resources to last another ten or fifteen years.

Should I speak to him privately, should I ignore all of this--what should I do? I know he won't welcome any questions, but I feel some sort of obligation here. Maybe I shouldn't.

What do you all think?
 

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~I would butt out. As long as they didn't expect me to take care of them if/when their funds are gone, they are free to spend the money how they wish. And you never know, the business could pick up and soar before too long. Your FIL obviously thinks so since I'm assuming he isn't mentally unstable in any way. And if your MIL wanted to know everything about the finances, she'd know everything about the finances. This is probably the same dynamic they've had for years, right?

I think the only instance in which I'd butt in is if I had personally witnessed outright lying from one partner to the other. I equate truth with love so I'd never want someone I loved to find out later that I knew the truth and didn't stand up to the lie.~
 

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Was your FIL a successful businessman? Why is "Sandy" staying around? Does she have hope that the business will turn around or that it is just in it's infancy phase and losses are typical?

There may be more here than you realize. Many times businesses lose money at the beginning because of initial costs and start-up expenses.

Is FIL using MIL's retirement funds as well as his own?

I would ask that DH have a talk with FIL to see how things are really going rather than speculate.
 

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Discussion Starter · #5 ·
Was your FIL a successful businessman? Why is "Sandy" staying around? Does she have hope that the business will turn around or that it is just in it's infancy phase and losses are typical?

There may be more here than you realize. Many times businesses lose money at the beginning because of initial costs and start-up expenses.

Is FIL using MIL's retirement funds as well as his own?

I would ask that DH have a talk with FIL to see how things are really going rather than speculate.
Thank you for your replies. Yes, at one time my FIL was very successful. However, he always had a business partner who "held down the fort" so to speak, who kept him grounded. He is a dreamer--he has a real gambler mentality--and his visions have often (not always) panned out-but not without his partner who ran the numbers and held his feet to the fire.
This new partner is not at all like that--she is quite bit younger than him-and thinks very differently. Frankly-she gets pushed into all sorts of schemes by him--although I know she is a grown woman who is making her own choices.

Anyway-I know I am getting of track here. Basically-I do believe he is using their joint funds-although I can't be sure.

I would just shrug all of this off, but lately-the spending has accelerated-and he has even made statements to me such as " you have to be willing to spend it all to gain it all" which is just plain nuts at 75.

I just feel like I (or my husband) needs to have a quite chat with him about what he sees for this business. It is in no way profitable--and the way it is being run-I don't see how it can be. And yes-I fear we may be expected to "chip in" later on if they run low on funds for their retirement. Their other kids live across the country too.
 

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Discussion Starter · #6 ·
And as far as why Sandy is sticking around--she feels she has invested so many tens of thousands of dollars that to jump ship now would be signaling that the whole thing was a gigantic mistake.

If this business were brand new-I could see some of this-but this has been going on for almost three years now.

My FIL wants to play the long game, I think, where he may be profitable in a few years-but this seems like a weird way of thinking when you are of advanced years.
 

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You mentioned two phrases "in-law" and "no proof". Right there, my advice is "butt out".

You should also get out of the business.

Sandy is a gossip and you're listening. I would be telling Sandy to not talk negatively to you about your own in-laws.
 

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I'd butt out. And that's saying a lot for me. lol They are both adults and I am assuming mentally competent. No small children are being harmed? Gotta let people make their own mistakes and they haven't come to you for advice. DH should say something on his own before you.
 

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I'm not sure i understand what joint retirement funds are. Is he using her pension, IRA, 401k, Social Security or other accounts that are hers?
 

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If I was in your position, I would tell my husband and let him figure out what to do. If I was in your husband's position, I would discuss it with my mother and step-father.

However, I am not one to keep things that are bothering me to myself. I confront (tactfully, usually) and then either work to resolution or move on, depending on the response from the person I'm confronting.
 

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Discussion Starter · #11 ·
I'm not sure i understand what joint retirement funds are. Is he using her pension, IRA, 401k, Social Security or other accounts that are hers?
I don't know the nature of their retirement funds so I can't speak to what he is tapping into. I just know that money is being spent at what I think is an alarming rate.

But-despite my fear that my MIL is having her financial future jeopardized by my FIL's visions of success in this business, you all have convinced me that I should keep quiet about it.

Good judgement has never been my FIL's strong suit--he even tried to talk us into a Ponzi scheme once even after the state's attorney started an investigation into it. ( FIL knew about the investigation and essentially told me he wanted to make some money before it got shut down).

Frankly-I have no faith in his decision making despite past business successes. But--you are correct-he is not my father and MIL is not my mother and they are adults who will have to live with their choices--my FIL throwing money out the window and my MIL turning a blind eye to it all.
 

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Sorry you are going through this. It would be incredibly tough for me not to speak up.

But, worst case, they won't go hungry if they get social security. It's usually enough to keep food on the table...assuming it's enough to rent a place cheap if they lose their assets.
 

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Giro, you forgot medical... medicine/health insurance might be a big problem on SS.
 

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Giro, you forgot medical... medicine/health insurance might be a big problem on SS.
If they really did blow thru their savings and assets, they would be eligible for medicaid or at minimum large federal subsidy for health insurance.
 
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