Best of the Week
Most Popular
1. 2019 From A Fourth Turning Perspective - James_Quinn
2.Beware the Young Stocks Bear Market! - Zeal_LLC
3.Safe Havens are Surging. What this Means for Stocks 2019 - Troy_Bombardia
4.Most Popular Financial Markets Analysis of 2018 - Trump and BrExit Chaos Dominate - Nadeem_Walayat
5.January 2019 Financial Markets Analysis and Forecasts - Nadeem_Walayat
6.Silver Price Trend Analysis 2019 - Nadeem_Walayat
7.Why 90% of Traders Lose - Nadeem_Walayat
8.What to do With Your Money in a Stocks Bear Market - Stephen_McBride
9.Stock Market What to Expect in the First 3~5 Months of 2019 - Chris_Vermeulen
10.China, Global Economy has Tipped over: The Surging Dollar and the Rallying Yen - FXCOT
Last 7 days
Does Fed Know Something Gold Investors Do Not Know? - 21st Mar 19
Gold …Some Confirmations to Watch For - 21st Mar 19
UKIP No Longer About BrExit, Becomes BNP 2.0, Muslim Hate Party - 21st Mar 19
A Message to the Gold Bulls: Relying on the CoT Gives You A False Sense of Security - 20th Mar 19
The Secret to Funding a Green New Deal - 20th Mar 19
Vietnam, Part I: Colonialism and National Liberation - 20th Mar 19
Will the Fed Cut its Interest Rate Forecast, Pushing Gold Higher? - 20th Mar 19
Dow Jones Stock Market Topping Pattern - 20th Mar 19
Gold Stocks Outperform Gold but Not Stocks - 20th Mar 19
Here’s What You’re Not Hearing About the US - China Trade War - 20th Mar 19
US Overdosing on Debt - 19th Mar 19
Looking at the Economic Winter Season Ahead - 19th Mar 19
Will the Stock Market Crash Like 1937? - 19th Mar 19
Stock Market VIX Volaility Analysis - 19th Mar 19
FREE Access to Stock and Finanacial Markets Trading Analysis Worth $1229! - 19th Mar 19
US Stock Markets Price Anomaly Setup Continues - 19th Mar 19
Gold Price Confirmation of the Warning - 18th Mar 19
Split Stock Market Warning - 18th Mar 19
Stock Market Trend Analysis 2019 - Video - 18th Mar 19
Best Precious Metals Investment and Trades for 2019 - 18th Mar 19
Hurdles for Gold Stocks - 18th Mar 19
Pento: Coming QE & Low Rates Will Be ‘Rocket Fuel for Gold’ - 18th Mar 19
"This is for Tommy Robinson" Shouts Knife Wielding White Supremacist Terrorist in London - 18th Mar 19
This Is How You Create the Biggest Credit Bubble in History - 17th Mar 19
Crude Oil Bulls - For Whom the Bell Tolls - 17th Mar 19
Gold Mining Stocks Fundamentals - 17th Mar 19
Why Buy a Land Rover - Range Rover vs Huge Tree Branch Falling on its Roof - 17th Mar 19
UKIP Urged to Change Name to BNP 2.0 So BrExit Party Can Fight a 2nd EU Referendum - 17th Mar 19
Tommy Robinson Looks Set to Become New UKIP Leader - 16th Mar 19
Gold Final Warning: Here Are the Stunning Implications of Plunging Gold Price - 16th Mar 19
Towards the End of a Stocks Bull Market, Short term Timing Becomes Difficult - 16th Mar 19
UKIP Brexit Facebook Groups Reveling in the New Zealand Terror Attacks Blaming Muslim Victims - 16th Mar 19
Gold – US Dollar vs US Dollar Index - 16th Mar 19
Islamophobic Hate Preachers Tommy Robinson and Katie Hopkins have Killed UKIP and Brexit - 16th Mar 19
Countdown to The Precious Metals Gold and Silver Breakout Rally - 15th Mar 19
Shale Oil Splutters: Brent on Track for $70 Target $100 in 2020 - 15th Mar 19
Setting up a Business Just Got Easier - 15th Mar 19
Stock Market Elliott Wave Analysis Trend Forercast - Video - 15th Mar 19
Gold Warning - Here Are the Stunning Implications of Plunging Gold Price - Part 1 - 15th Mar 19
UK Weather SHOCK - Trees Dropping Branches onto Cars in Stormy Winds - Sheffield - 15th Mar 19
Best Time to Trade Forex - 15th Mar 19
Why the Green New Deal Will Send Uranium Price Through the Roof - 14th Mar 19
S&P 500's New Medium-Term High, but Will Stock Market Uptrend Continue? - 14th Mar 19
US Conservatism - 14th Mar 19
Gold in the Age of High-speed Electronic Trading - 14th Mar 19
Britain's Demographic Time Bomb Has Gone Off! - 14th Mar 19
Why Walmart Will Crush Amazon - 14th Mar 19
2019 Economic Predictions - 14th Mar 19
Tax Avoidance Bills Sent to Thousands of Workers - 14th Mar 19

Market Oracle FREE Newsletter

Stock Market Trend Forecast March to September 2019

Never Loan Money to Your Friends and Family

Personal_Finance / Debt & Loans Mar 30, 2014 - 09:41 PM GMT

By: DailyWealth

Personal_Finance

"Never loan money to your friends. It's a good way to lose your money... and your friend."

A friend of mine owed me a lot of money...

I gave my friend Jack a personal loan a few years ago, as he was starting his own business.


As a financial guy, I take loans seriously. If you borrow, then you owe.

As a moral human being, you pay your debts, both financial and personal. Gotta keep the karma police away. Can't let the scales tip too far away from you.

Jack's business was promising. I was excited for him. But sometimes life doesn't roll the way you think it should.

In time, this debt loomed large over Jack and me. In our relationship, this loan eventually became the elephant in the room.

My brother (an attorney) wrote up the original loan properly, so legally I was protected. My brother filed a "UCC" with the state – in short, legally I could take Jack's assets (his collateral) to cover myself, as part of our loan agreement.

But the assets I could "take" (his patents) weren't really worth anything – to me personally – anyway. Those were just collateral for a loan. I didn't want to use them to start a business like Jack did.

It was clear the loan couldn't be paid. Jack's business hadn't taken off yet.

Jack felt terrible about it. Meanwhile, I really didn't want to collect on my friend – and bankrupt him and take his patents.

What was I supposed to do?

Then I remembered something my grandmother told me a quarter of a century ago...

"Never loan money to your friends. It's a good way to lose your money, and your friend."

I never forgot that. (Well, up until Jack.)

I don't know where she came up with that nugget of wisdom. My grandparents didn't have a lot of money. And she wasn't known for her financial advice.

I assume she heard it from somewhere else... But back then, she said it with such authority, I felt like it came from her. And it sounded right.

I'd forgotten Grandma's advice with this loan to Jack. But now I had a decision to make.

The money was already gone... At this point, the question is: "Am I going to lose a friend, too?"

This week, I remembered Grandma's advice. And I forgave the loan.

I lost the money, but not the friend.

A loan shark – it turns out – I am not.

Then a surprising thing happened... I felt better.

The weight was supposed to be lifted off of my friend...

And it was. His debt was wiped out. Right out of the blue.

But a big burden was lifted off of me too, in a way that I didn't expect.

I didn't realize it, but I had been stressing over this debt too. And I felt like I was stuck in it with Jack.

Now, I am free, too, in some way. And I won't lose a friend. And I don't resent him for not being able to pay. It is simply reality.

My feeling here might not be morally consistent. But I am okay with that. Here's what I'm thinking:

1) I strongly believe morally in paying your debts – in fulfilling your promises.

2) I wiped out my friend's debt with me, breaking his promise to me.

3) Somehow, I feel a lot better.

While I "feel better," this is not something I want to go through again.

Next time, I'll remember this experience. And I'll remember Grandma's advice...

"Never loan money to your friends... It's a good way to lose your money, and your friend."

Don't forget it.

Good investing,

Steve
P.S. Sometimes in life, you may feel like you need to break this rule to really help someone in need. Just realize this going in: Chances are much higher than you think that you'll never see that money again. If you're going to lend the money anyway, do it with your eyes open... Do it knowing that you may never be repaid...

http://www.dailywealth.com

The DailyWealth Investment Philosophy: In a nutshell, my investment philosophy is this: Buy things of extraordinary value at a time when nobody else wants them. Then sell when people are willing to pay any price. You see, at DailyWealth, we believe most investors take way too much risk. Our mission is to show you how to avoid risky investments, and how to avoid what the average investor is doing. I believe that you can make a lot of money – and do it safely – by simply doing the opposite of what is most popular.

Customer Service: 1-888-261-2693 – Copyright 2013 Stansberry & Associates Investment Research. All Rights Reserved. Protected by copyright laws of the United States and international treaties. This e-letter may only be used pursuant to the subscription agreement and any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), in whole or in part, is strictly prohibited without the express written permission of Stansberry & Associates Investment Research, LLC. 1217 Saint Paul Street, Baltimore MD 21202

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Daily Wealth Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules