Is Money Hurting Your Relationships? Here’s How to Protect Both

Many of us have experienced this situation: a friend or close relative approaches us with an exciting investment opportunity, promising quick and substantial rewards. The idea sounds enticing—but what often seals the deal is not the investment itself, but the strength of the relationship. Unfortunately, "A great relationship doesn't guarantee a great investment."

We subconsciously equate the trustworthiness of the person with the soundness of the opportunity. We think, “If I trust them, I can trust what they’re offering.” Unfortunately, this emotional shortcut can lead to financial loss—and worse, broken relationships.

Too often, money is lost not through strangers, but through familiar faces—friends, family, neighbors, or even fellow church members. People hand over their savings with hopes of multiplying their value, only to be met with disappointment. And while losing money is painful, the real damage often lies in the toll it takes on personal connections. Bad investments and financial entanglements have been known to permanently fracture healthy relationships.

So, how do you invest with friends or family in a way that ensures both financial success and the preservation of your bond?

The short answer: don’t—especially if the relationship is truly important to you. As the saying goes: “Never hire someone you can’t fire.” If you can’t hold someone accountable without damaging the relationship, you’re setting both the venture and the relationship up for failure. If the cost of a damaged relationship is too high, it’s wise to think twice before getting financially involved—because every investment carries risk.

However, if you do decide to invest, here are three essential principles to follow:

1. Set Clear Boundaries Up Front

Make it clear from the outset that you reserve the right to say “no.” Say something like, “I care about you deeply, but I may not say yes to this opportunity—and I hope that wouldn’t affect our relationship.” This establishes realistic expectations and helps separate the quality of the relationship from the quality of the investment. By doing this, you allow yourself the space to assess the opportunity objectively.

2. Take Your Time

Almost all pressure-based investment opportunities should be avoided. If you don’t have time to properly evaluate an investment, you don’t have time to invest. Never rush—because rushing is the easiest way to lose money. Time allows for research, critical thinking, and the sober judgment that emotion often clouds.

3. Only Invest What You Can Afford to Lose

No one likes to lose money, but the pain of a $1,000 loss is very different from losing $10,000—especially if you earn $50,000 a year. Always consider the impact of the potential loss, not just on your finances, but on your relationships. Don’t invest more than you can afford to lose comfortably. Protect your peace of mind and the value of your personal connections.

By keeping these principles in mind, investing with friends and family can be a more thoughtful, intentional process. More importantly, it ensures that your relationships—arguably more valuable than any financial gain—remain intact, even if the investment doesn’t work out.