‘And then 2022 happened’: I borrowed $500,000 from friends and family to invest in the stock market, foolishly promising a 10% return. What's my next move?

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‘I am not in a place where I have funds left to pay back those friends and family.’

Dear Quentin, I am a budding options/futures trader with my own sole proprietor investment business. Heading into 2022, I took on a large cash infusion of $500,000 from friends and family under the guise of a promise I made to issue a 10% return on their money. This promise was made via a signed promissory note, and the return was less than the annual return I had been experiencing years before.

I still plan to make financial restitution to everyone, but since then I have to rebuild my finances almost from scratch. The question I have is twofold: What’s the best way to mend and repair the relationships with friends and family, and to what extent could I be faced with punitive legal action? Your advice is greatly appreciated.

A promissory note, as its name suggests, is a legally binding promise to repay a debt. This is a good time to take a closer look at the notes you signed to ensure they are enforceable. Most promissory notes have terms that ensure they are valid. They must be deemed fair to both parties, and be signed by both parties, and state the exact amount of money borrowed, in addition to the interest rate, the frequency of payments and the term of the loan.

Stock-market returns are highly unpredictable, and you should expect wild fluctuations from time to time, according to a recent report by management consulting company McKinsey. Since about 1800, stocks have consistently returned an average of 6.5% to 7% per year after inflation, according to an analysis by McKinsey economists. What’s more, their analysis concluded that market returns over the past 25 years are within that historical range.

You can email The Moneyist with any financial and ethical questions related to coronavirus at qfottrell@marketwatch.com, and follow Quentin Fottrell on Twitter.

 

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Who talked you into that?

Bruh

Well you can cry if you want or you can always buy some gold and silver to save your self.

The streets

I smell a little WallStreetBets action.

Ask em for another 500k

Yeesh. This sounds like a future pyramid schemer.

Ask Bernie Madoff

Hide. Get off grid. Fake your death. So good news is you have some options. Bad news is none of them are good.

Have your head examined ?

'Can I avoid legal action...'

coba kau punya uang....apa bisa kau seperti esa....?

making the classic mistake of borrowing to invest, well 🤔

🛀 and 🔌📺

You all gambled and lost. To not expect 2022 with all the blatant news of a global recession leading up to 2022 shows your lack of understanding economics

Pay back the money you borrowed and smarten up !!!!!!!!!!!!

Nice friends.

Give that to me I will give 20%

Boycott Tesla

Wow that made me oddly better about my relatively small investing mistakes by comparison.

Move to Russia.

And your 500k turned into 50k…..

Tell them to be patient

Get new friends and family, preferably abroad.

To prison…

You can ask them to wait another year and promise 20% return

Get a 2nd job and pay them back!

Never a borrower or a lender be. --Poor Richard

Is that you Sam?

Go to jail for illegally guaranteeing a “return” on a public market security.

Invest all your money with paul pelosi. He is a better trader than Warren Buffet. The fact that his wife can use her connections to affect the prices of stock they buy is irrelevant. He is a genius and definitely not insider trading.

Come up with a debt repayment plan.

'and then 2022 happened' ? The S&P fell less than 20% last year lol if someone can't handle navigating a very mild bear market that only lasted a year, they have no business managing money (putting aside the fact that guaranteeing any kind of returns to anyone is insane)

1 don't... 2 just hold for now

😂😂😂😂

Ponzi scheme. Keep it rolling till you can’t.

Delete the app, block their contacts in your phone. Problem solved.

Borrow another $500k to pay the first $500k you borrowed and just keep the cycle going

Seek asylum in Russia.

borrow another 500k and buy the dips

Just leave it in the market, give your friends and family the dividends, and wait for things to recover. The worst thing this person could do right now is sell.

Um you probably shouldn’t have done that?

Go to jail

Lesson: 'Dont be this person, get by with less'

'Your account has been liquidated'

Create a Ponzi scheme

What was the timeline?

Give them their ten percent return

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