What our past teaches us about investing with your family?

My husband and I traveled to Seattle for a week to celebrate our two-year anniversary. Yipeee! In addition to the respite and fun, we came back with so many revelations, one of which has implications for how you can invest in the future.  

SIDE NOTE: If you haven’t visited Seattle, put it on your destination list because the city is rich in culture, a paradise for seafood lovers like me, and a great place for the family photographer to take plenty of pictures of spectacular views. It only rained two days while we were there, so make sure you go in August or September to stay away from the mist. And, the city just smells like lavender and pine – ahh, I miss it already! 


The American Studies major in me could not help but dissect the city through the lens of race, gender, and class. And, the Economics major in me always makes me question how wealth is distributed in communities.


Thus, I learned that Asian-immigrant families who settled in Seattle during the turn of the 20th century invested in each other’s businesses and pooled their money together for the benefit of the entire community. These immigrant families did not have much individually, but collectively, they were a force to be reckoned with.


Our revelation came as we visited the Wing Luke Museum of the Asian Pacific American Experience, set in Seattle’s Chinatown. I engrossed myself in the stories of the Asian Pacific immigrant experience in Seattle and along the coast. These stories are also a part of my history; My paternal grandfather immigrated to California from the Philippines in the early 1920s when he was 13-years old.


Early immigrants set up organizations called family associations to help fellow immigrants settle. Martial artist and philosopher Bruce Lee directly benefited from the Lee Chinese family association, which helped fund his akido dojo that trained and developed many marital artists from around the country. If your Caribbean American, I’m sure you’re very familiar with the susu concept, which is basically a group savings vehicle.


It sounds simple and logical to fund businesses with pooled family money, right? Then why don’t many families follow this example, or maybe it is happening and I’m just not hearing about it (or seeing it in action en masse). If you invest or pool your money with your family, I want to hear your story so we can all learn about your successes. I must admit, however, my extended family tried to invest together about eight years ago. But, we faced a few hurdles - finding an idea we could all could rally behind, family members were at different places financially, and finding a legal structure that worked.


Perhaps, it is time for us, and for you, to (re)visit an opportunity to pool your money. If you experienced some roadblocks in the past, then maybe it’s time to take another look. Here are a few questions you should ask yourself and your family if you want to invest together.


  1. How do you define family for investment purposes? If you have a ton of family, ask yourself whether you like each other enough to try and invest together. Remember, there is benefit to large numbers but not at the cost of wrecking havoc on those relationships. If you can invest with your blood family, then you are blessed. If not, then I am also a big believer that your family is what you make it.


If have friends who are like family, then consider widening the circle to include them. Finally, perhaps you attended business school together or are members of the same religious community. In this case, you probably have similar values, and this can be your family for investing together. However you define family, cling together and get to work.


If you are amongst the fortunate who knows others who are part of successful family investment endeavors, ask them for their perspective and advice.


  1. How can you exploit each other’s talents? Every family is a collection of gifts and talents. Each of you probably is really good at one thing, whether it’s selling, singing, or remaining silent, which is a wonderful gift! We are better as a whole than our individual parts, so how can you find your whole self through your other members? I took a flight to New York a few weeks ago and I met the CEO of Cooper’s Hawk Winery & Restaurant, which offers handcrafted wine and modern casual dining. Before introducing myself, I observed how he perused through 5 industry magazines in about 10 minutes and ripped out articles from restaurant success to sources of capital for wineries. Yes, I was stalking him because I was fascinated by his commitment to his craft!


He eventually told me that he started his restaurant with his wife after pooling money with family and friends. He use to work in restaurants as a kid and this endeavor was a natural extension for him even though he had no formal business training. The whole community rallied behind him and invested together. We can all learn from this success story.


  1. How do you want to make your first move? Don’t get trapped in analysis paralysis so that you do not do anything. Instead, have at least one meeting with your family members and define what success if for you – do you want to make money, support each other, and/or provide opportunity or a legacy for the younger or disadvantaged members of your family? Even if you do not spend the entire meeting discussing the “family business,” the important thing is to have this topic as part of the agenda. If your family is spread out around the world, then there’s a huge opportunity for cross-pollination of ideas over Skype of Google Hangout.


And, then decide what you want to invest in. For some families, it will be investing in a business together or their time to work on a business together. For other families, investing will take the form of a stock investment club or real estate ventures. Whatever your flavor of investing, do some research on the best way to organize yourselves. There are plenty of tools out there to help you create your own susu or investment club.


Get Moving

Now, I know that some of you may still be skeptical about investing with your family. I say to you, taste and see – you might surprise yourself. We have a lot to learn from our ancestors. If immigrant communities can make it work in Seattle, I have no doubt that you can make it work.