If one is doing well - but by no means wealthy - what is the best strategy for watching out for relatives who are less well off?
My wife and I are in our early 30s, and we have our finances under control: we have a healthy emergency fund, solid employer matches on both of our 401k plans, and after our expenses we still have funds left over for some additional investments.
One of our siblings is not doing as well. He graduated during the Great Recession, and like many he has been under-employed ever since. His parents are supportive, helping him to re-train into a more lucrative field, but we are concerned that the delay in getting on his feet is going to have long-term financial implications.
We are considering opening a S&P 500 Index fund earmarked for his use. We would put a few hundred dollars a month into this fund, and then if he has a major medical problem, is struggling to make the down payment on a home, or is approaching retirement age without sufficient funds we would provide assistance.
- Is there a better vehicle for this than an index fund?
- Are significant downsides to keeping the money in our name until he needs it?
- Are there any other considerations that we are overlooking?