Jaden borrowed the $15,000 from his brother Weston, but instead of using the money to resolve the problem, he continued trading and lost those funds as well. Although Jaden is now trying to recover financially and has made some payments to Weston, he still owes Weston $9,000 and still has some risky assets in his margin account, so he faces further losses.
He’s not sure how to make things right with his brother, and he’s afraid to even tell him what he’s done. So, how should Jaden handle the situation?
Come clean about the situation ASAP
The first thing that Jaden needs to do is actually admit the truth to his brother. Of course, that will undoubtedly be difficult.
“Tell your brother, and lead with the number rather than the apology,” Rod Mitchell, a psychologist and clinical director at Emotions Therapy Calgary, told Moneywise.
Mitchell said these conversations often go wrong when you lead with feelings rather than a straightforward recitation of the facts, so he advised Jaden to “give him four sentences before you say anything else.”
Those sentences: “The $15,000 is gone. I kept trading and lost it. I let you believe this loan was the end of it. I’m not going to ask you for any more money.” Starting the conversation this way is important so Weston knows he’s not being hit up for cash again, because, as Mitchell said, “A brother waiting for you to request more money won’t listen to an apology.”
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Recognize and admit the problem
Jaden didn’t just lie to his brother. He kept trading and got himself even deeper in the hole. And that is a major issue that must be addressed before Weston is likely to forgive him.
While the stats can vary by source, in general only around 3% of day traders make a profit, with just 1% doing so consistently. This is clearly not a winning strategy for Jaden, and since he lied about what he was doing with Weston’s money to trade more, it’s very possible that Jaden’s “trading” is actually a gambling addiction disguised as investing.
Dr. David Bowers, a marriage and family therapist at LifeWrx, urged Jaden to consider “admitting that there’s a larger problem and seeking outside help.” If Jaden sees a therapist or starts Gamblers Anonymous, those steps could show his brother that he’s serious about the situation. And Mitchell agrees about the importance of being open about his trading issues.
