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Old 08-29-2007, 11:51 AM   #21
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Just saying no may risk the friendship. But I agree that you should not feel obligated to loan to them.
Agree. Note that the decision to place the friendship at risk was made by the borrower side, not the lender side. So I agree, a simple "No, sorry" should do it. As to "Why not?" might try something like, "I don't make loans. But I do know a banker who seems to be pretty fair." End of discussion.
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Old 08-29-2007, 11:53 AM   #22
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some friendships last a lifetime. others come with an expiration date.

mom had two friends come to her for money after the ol'man died. one from a friend who never had much money and one from my ol'man's family who never would have asked for money while he was alive. that couple always spent well above their means, fancy house, fancy furniture, porsche in the garage. they all asked for money within few months of the ol'man's funeral. my mother could not have been more hurt. she denied them and lost those friends.

money can heal in places but also it can open wounds that never seem to close. i've already lost a good friend since inheritance which i never would have expected. in fact i recall an earlier thread where i declared that none of my friends would ever so turn on me. yet within two years, she became so jealous of my retirement that she actually said to me "you don't know what it is like to have to work everyday." wow, where did that come from?

your friends have placed you in an impossible situation. it is sad but that was their doing.
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Old 08-29-2007, 11:53 AM   #23
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But, I'd also ask: what is the money for? Some emergency? Hardship? Sounds like they'd want a pretty big amount, right? Tell them to get a HELOC. It's not worth putting a strain on your friendship. And, they are taking advantage of your friendship to ask - assuming it is not for some hardship or something.
They already HAVE a 2nd, and 100% of their home equity is gone........:confused:

Their credit cards are maxed out, and the int rates are around 29%..........
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Old 08-29-2007, 11:55 AM   #24
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Thanks for the replies.......they are along the lines of what I was thinking.......

The friendship is worth keeping, but it seems funny that ALL the good advice I've given them for free over the years has been wasted..........
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Old 08-29-2007, 11:56 AM   #25
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Offer them a free financial plan instead.
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Old 08-29-2007, 11:56 AM   #26
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some friendships last a lifetime. others come with an expiration date.

mom had two friends come to her for money after the ol'man died. one from a friend who never had much money and one from my ol'man's family who never would have asked for money while he was alive. that couple always spent well above their means, fancy house, fancy furniture, porsche in the garage. they all asked for money within few months of the ol'man's funeral. my mother could not have been more hurt. she denied them and lost those friends.

money can heal in places but also it can open wounds that never seem to close. i've already lost a good friend since inheritance which i never would have expected. in fact i recall an earlier thread where i declared that none of my friends would ever so turn on me. yet within two years, she became so jealous of my retirement that she actually said to me "you don't know what it is like to have to work everyday." wow, where did that come from?

your friends have placed you in an impossible situation. it is sad but that was their doing.
Well said. What LGNB is saying is sad, but so true for many of those who have money and have to deal with situations like this.
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Old 08-29-2007, 12:03 PM   #27
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At this point in my life I'd have no problem saying no however some friends I've been a little more patient with.

First I ask if they're wanting a loan or gift? If wanting a loan ask them to provide their monthly budget and a written contract spelling out the loan specifics. In some cases they never return with the information and in some cases they never return period but friends that let money come between us are not the friends I want to keep anyway. IMHO good friendships are defined when rough times come, not when everything is smooth.
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Old 08-29-2007, 12:09 PM   #28
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FD,

All I can say is run as fast as you can . . . . These folks are just about to go completely over the edge for a roll in the bottomless pit.

If you care about your friendship, you should initiate a conversation where you and DW can work in some new information. Say something like "you know, I've never loaned anyone money because I believe that opens the door to seriously damaging the friendship. In fact, I hope I am never asked by any of my friends for a loan because I'd have to say no." Then switch the topic to the need to teach kids (don't know if you have kids) that they should never ask their friends for money because they would really be doing a disservice to the friendship. Just say that you hope you have always set the proper example for them in that area.

Obviously, the answer is no, and it will be painful. I imagine this causes you and DW some stress so I would be inclined to nip it in the bud.

Of course, I have no idea what you talk about when you are together, and this subject may come right out of the blue and hit them between the eyes.

That might not be all bad.
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Old 08-29-2007, 12:59 PM   #29
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They already HAVE a 2nd, and 100% of their home equity is gone........:confused:

Their credit cards are maxed out, and the int rates are around 29%..........

I am with the others.... don't lie by saying it is tied up etc... if he listened to you he knows you have 'ready cash' for emergencies (since I am sure you told him HE needs some)...

Just say "no" and go on... he got himself into this situation and is trying to drag you into it.... I am sure he can 'fix' the problem by selling some things and reducing debt... but that is to much to ask him I am sure..


I know what you mean by will not do the 'time'... I have a friend who is always in financial trouble... and she calls up every so often crying about this or that. and wants me to 'help' her with financial advice (and she is not looking for cash unless I am completely clueless)... I tell her, figure out where all your money has gone the last 6 months and I will be happy to come over and review it with her.... never does it... Oh well..
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Old 08-29-2007, 01:17 PM   #30
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Amid all the it-can-never-work stories, I just want to add in that I have borrowed money from a friend, and it worked out well. He gave me money to pay off my car (about 5k), and I paid him back over time. I got a better rate than my car loan, and he got a better rate than most investments. On top of that he didn't screw me over like a bank would've the one time I missed a payment. Of course he knows I have a good job, can pay it, etc. (And we did write up a contract with payment schedule.) My point is it can work out really well.

I have lent some money to family, but only to people who don't have as much money/money skills as I do. I think of those loans as a gift. Sometimes they pay back. Sometimes they don't.

As for this specific instance. Only loan them the money if you don't mind not getting paid back. (And really, if they have a fancy car I say sell it, buy a beater, and use the difference for whatever their money need is.)

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Old 08-29-2007, 01:22 PM   #31
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I usually say that my mother told me, "Neither a borrower nor a lender be" ...
If I remember my high school English, the next sentence in that quote was "for loan most often looses both itself and friend"

The others have it right, 'just say no'.
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Old 08-29-2007, 01:28 PM   #32
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First talk to your wife and come to an agreement on a script for this issue. The bottom line is you are not in the loan business.

Given your profession you may know a good financial advisor (NOT YOU) who would be willing to work with them in confidence to help them come up with a solution. At the most I would offer that service which you would be willing to pay for (within limits) if the advisor told you that they were implementing the recommended program.

Many employers offer Employee Assistance Programs (EAPs) that include financial counselors. These programs are confidential, the phone number is typically on employee bbs. The program itself won't contact the employer unless the service provided extends beyond their contracted commitment (or reveals information that puts the company or others at risk).
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Old 08-29-2007, 01:39 PM   #33
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Sounds like the friendship may already be in some jeopardy if they disrespect your privacy boundaries by digging around to find out your net worth.
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Been there, done that. They won't "do the time" to fix things........
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The friendship is worth keeping, but it seems funny that ALL the good advice I've given them for free over the years has been wasted..........
Let's see, in the 13 years you've known them these alleged friends have been unwilling to put forth the effort to follow your advice, ignored your recommendation about an emergency fund, and now they're digging into your finances to get a "loan" from the "institution of last resort".

You may be friendly, but when you're getting treated with that lack of respect it sounds like you need a new set of friends.

If you give them a loan then you may never see them again. And considering how they've treated you it'll probably be worth it...
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Old 08-29-2007, 01:39 PM   #34
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I usually say that my mother told me, "Neither a borrower nor a lender be" (she did), and that in deference to her, I never borrow nor lend to/from friends.

That usually shuts people up, though I don't know what they say behind my back.

Today, a co-worker is retiring after 25+ years. I am not attending her retirement luncheon because it costs $28 just for the lunch alone, more than I ever spent for lunch in my life. I gave her my best wishes several times in person and hope she isn't offended if she notices. LBYM sometimes means dealing with situations that high rollers don't have to deal with.

WARNING: If you lend money to this couple, that will NOT be the end of it. Trust me. I have seen this happen many times, going through the wife to pressure the husband. It never ends, they will resent you even more if you say "no" later, and you will regret it!
Yes if I was the 25 year retiree and I heard that you didn't want to pay $28, I wouldn't say a thing. But I would be hurt.

She probably had nothing to do with the arrangements. When you don't show and the word gets round that you were too cheap to attend your status will be a few rungs lower.

That is one moment in time that you may regret in the future.
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Old 08-29-2007, 01:46 PM   #35
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Add me to the "don't lend him money since it is not that he can't get the money but doesn't know how to use it wisely." He is obviously making money so good luck to him. If he and DW were starving, I would lend him money (with the risk of not seeing it again). However, I would offer to sit down and explain budgeting to him. He hasn't listened before it hopefully will make him drop the subject.
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Old 08-29-2007, 01:47 PM   #36
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I am with the others.... don't lie by saying it is tied up etc... if he listened to you he knows you have 'ready cash' for emergencies (since I am sure you told him HE needs some)...
I don't know that saying "it is all tied up" is necessarily lying in this case. FD's emergency fund is earmarked for FD's family emergencies. FD's family friend needing a new beemer probably doesn't count as an emergency in FD's book (it wouldn't in mine!). FD's investments are long term and even selling taxable investments would potentially require cap gains taxes to be paid, plus there might be a short term holding fee to be paid.

FD - what is the money needed for? Debt reduction - ie getting them out from under 29% interest credit cards? New toys? I could maybe see considering lending them money if it was something critical - like both of them lost their high-paying jobs in the mortgage industry and they are 4 months behind on house payments and will lose their family's house in the next few months w/o help. Or a medical situation that for some reason requires cash up front for a life-saving procedure? Very few cases though. And it would probably be a gift.
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Old 08-29-2007, 02:01 PM   #37
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FD - what is the money needed for? Debt reduction - ie getting them out from under 29% interest credit cards? New toys? I could maybe see considering lending them money if it was something critical - like both of them lost their high-paying jobs in the mortgage industry and they are 4 months behind on house payments and will lose their family's house in the next few months w/o help. Or a medical situation that for some reason requires cash up front for a life-saving procedure? Very few cases though. And it would probably be a gift.
Pretty much debt reduction, he ran them up when he switched jobs (new homes sales), and didn't sell anything for 4-5 months in the Midwest winter.......

He's selling now, but has big draws to pay back and such. His wife went back to work fulltime and has gotten a promotion, but he is the primary breadwinner.......

Not in danger of losing the house, just in an uncomfortable situation. However, DW had a good point, when she said: "He made $180,000 2 years ago, where's that money"?

See, I married the RIGHT woman...........

I went to a CE class with a bunch of other advisors last week. If my little survey is any indication, Cadillac is going to have a banner year...........not a lot of LBYM going on.........
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Old 08-29-2007, 02:42 PM   #38
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Amid all the it-can-never-work stories, I just want to add in that I have borrowed money from a friend, and it worked out well. He gave me money to pay off my car (about 5k), and I paid him back over time. I got a better rate than my car loan, and he got a better rate than most investments. On top of that he didn't screw me over like a bank would've the one time I missed a payment. Of course he knows I have a good job, can pay it, etc. (And we did write up a contract with payment schedule.) My point is it can work out really well.

I have lent some money to family, but only to people who don't have as much money/money skills as I do. I think of those loans as a gift. Sometimes they pay back. Sometimes they don't.

As for this specific instance. Only loan them the money if you don't mind not getting paid back. (And really, if they have a fancy car I say sell it, buy a beater, and use the difference for whatever their money need is.)

Tim

Tim...

I agree, it can work... but not likely with the info given... he is highly paid, maxed out on every asset, maxed out on every CC, and wants MORE money...

I have a few friends that I would not have a single problem lending money because they show they are responsible... but if they show they are not... not a dime...

BTW, my mom used to lend to us all... but then one BIL started to take advantage of the rate and borrowed way to much from her... I found out and said she needed to call ALL loans (including MINE).. everybody paid back except one who we know will never have the money (just don't make much, with two kids in college etc..)...

so, yes, I agree it can work if the situation is right..
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Old 08-29-2007, 02:47 PM   #39
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They already HAVE a 2nd, and 100% of their home equity is gone........:confused:

Their credit cards are maxed out, and the int rates are around 29%..........
jeez - FD do you like pouring your money down a black hole? didn't think so...

It's hard to watch friends in hard times - but i think it's a little obnoxious of them to be eyeing your stash!

It's also hard to have friends with different values - i go through that a lot! But if you do enjoy the friendship, than just make sure you draw clear boundaries and don't waffle (they can smell it).

You could say, "i'm sorry, I have my financial plan and have to stick to it if i want to reach our goals for our family, and as a personal rule, I don't lend out money to friends, because I value our friendship too much" - wouldn't they be jerks to take you off your path? and it also points out their lack of one.

good luck navigating this one!
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Old 08-29-2007, 02:49 PM   #40
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I'd say if they can't manage their own money it is less than likely they will manage yours.

Asking for a loan risks the friendship. Make the loan and my prediction is you have neither the friends NOR the money.

If it is an amount you can write off - perhaps it will be the price of learning their true character.
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