Loaning money to a friend
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16-06-2017, 05:15 PM
Loaning money to a friend
A dear friend of mine is in a pretty serious financial bind. Alas, the problem he's having is entirely of his own making.

He's asked me if I could help him out "a little." A "little" is mid-4 figures.

This isn't the first time he's been in financial dire straits. He's actually had to claim bankruptcy twice: once as a result of a bad investment (not really his fault the market tanked) and once he just got in over his head giving his wife all the shiny baubles and things (including horses) she wanted.

I don't ever expect he'll be able to pay me back and if I have to kiss that money goodbye then so be it, I won't go hungry.

So, two questions to the thoughtful denizens of TTA:
  1. Would it be appropriate for me to put him in touch with a financial planner or someone who knows about budgeting to help him get back on track as a condition to giving him the money?
  2. Do you think I have the right - maybe even responsibility - to tell him how he should spend what I give him (if I do give him anything)?

*edited for spelling*
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16-06-2017, 05:35 PM
Loaning money to a friend
I only loan money to people that I feel will pay me back. If I know they can't pay me back then I make it a gift to them. That way there are no hard feelings.
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16-06-2017, 06:01 PM
RE: Loaning money to a friend
(16-06-2017 05:15 PM)Heath_Tierney Wrote:  So, two questions to the thoughtful denizens of TTA:
  1. Would it be appropriate for me to put him in touch with a financial planner or someone who knows about budgeting to help him get back on track as a condition to giving him the money?
  2. Do you think I have the right - maybe even responsibility - to tell him how he should spend what I give him (if I do give him anything)?

*edited for spelling*

1. Any friend close enough to be able to ask for, and get, a 4-figure "loan" is close enough to listen to any advice you think appropriate.

2. I'd assume he's pretty much explained what he needs the money for already; if he squanders it then any future "loans" would be made by sending the money to his creditors.

When I've loaned money to friends it's with the expectation that I'll probably never see it again. I find it impossible to put a dollar value on friendship.

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16-06-2017, 06:02 PM
RE: Loaning money to a friend
Imo, No to both questions. That said, I don't think there's anything wrong with *suggesting* the financial planner, I just wouldn't do it in a way where he feels like you are telling him what to do.
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16-06-2017, 06:06 PM
RE: Loaning money to a friend
(16-06-2017 05:15 PM)Heath_Tierney Wrote:  A dear friend of mine is in a pretty serious financial bind. Alas, the problem he's having is entirely of his own making.

He's asked me if I could help him out "a little." A "little" is mid-4 figures.

This isn't the first time he's been in financial dire straits. He's actually had to claim bankruptcy twice: once as a result of a bad investment (not really his fault the market tanked) and once he just got in over his head giving his wife all the shiny baubles and things (including horses) she wanted.

I don't ever expect he'll be able to pay me back and if I have to kiss that money goodbye then so be it, I won't go hungry.

So, two questions to the thoughtful denizens of TTA:
  1. Would it be appropriate for me to put him in touch with a financial planner or someone who knows about budgeting to help him get back on track as a condition to giving him the money?
  2. Do you think I have the right - maybe even responsibility - to tell him how he should spend what I give him (if I do give him anything)?

*edited for spelling*

No, on both counts. Although a financial planner would probably be a good idea it really needs to come from him. Telling him how to spend the money (whether or not he's going to pay it back) isn't right. Once you handed the cash, it's really his money and yeah he could go out and buy a new PS4 and spend the rest on hookers and blow OR he could be completely responsible with it. The point is that money with huge strings attached will probably destroy the relationship.

Give him what you can afford without expecting repayment.


But as if to knock me down, reality came around
And without so much as a mere touch, cut me into little pieces

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16-06-2017, 07:24 PM
RE: Loaning money to a friend
Wanna send me a few bucks too? $500 would be fine.
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16-06-2017, 08:17 PM
RE: Loaning money to a friend
Sounds like my brother-in-law!

No, I wouldn't make a recommendation for a financial planner or stipulate how the money's to be spent. Although if it's a business venture of some kind that's going, you could buy essential equipment or stock instead of giving money, if you want to help with a bit of control.

I wouldn't loan money to this person. I'd either give some money (whatever amount you feel is appropriate) or just say no, I can't make a loan. Those IMO are the best way to keep your friendship. If you loan the money, you already know it's not coming back, and the most psychologically easy way for someone who doesn't pay stuff back to justify it to themselves is to pick a fight that gives them a reason not to repay. So it's easier to either give outright or refuse to lend. (That's what we do with my BIL--give what we feel is appropriate and say that's it)
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16-06-2017, 08:30 PM (This post was last modified: 16-06-2017 08:34 PM by Aliza.)
RE: Loaning money to a friend
I don't loan. It's a gift or nothing.

I don't get asked a lot. I try not to appear too approachable because money issues get sticky, fast. If I catch wind that someone is in trouble, I might give the money through an intermediary so I can remain anonymous. I don't like stuff like that adding friction to my relationships.
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16-06-2017, 08:46 PM
RE: Loaning money to a friend
I had dear friend ask me for a “little help” 32 years ago. I gave him $6,600. Never heard from him again but taught me a great lesson. Gift the money or say no.

IMO your friend should not be putting you in this position to begin with.

“I am quite sure now that often, very often, in matters concerning religion and politics a man’s reasoning powers are not above the monkey’s.”~Mark Twain
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18-06-2017, 12:27 PM
RE: Loaning money to a friend
Loaning money to friends or family is a good way to ruin a friendship. Give it as a gift or not at all.

A true gift is no strings attached. Feel free to suggest a financial advisor but not as a condition of the money.

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