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Help me handle THIS situation.......:(
08-29-2007, 09:18 AM
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#1
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Aug 2006
Posts: 12,483
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Help me handle THIS situation.......:(
DW and I are best friends with a couple. We see them frequently, and it's been that way for 13 years........
He makes a lot of money, but changes jobs frequently. They like toys, so I'm guessing that's where the money goes, and fancy trips. Biggest problem is NO emergency savings plan, which I have told him to do many times.
Now, he is hinting at wanting to borrow some money from us, because we are "doing so well". I would have no problem doing it, but does that open a can of worms?
I'm a little miffed because his DW keeps pressing my DW about our financial situation. I would rather them ask us upfront than play covert.
Advice??
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Consult with your own advisor or representative. My thoughts should not be construed as investment advice. Past performance is no guarantee of future results (love that one).......:)
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08-29-2007, 09:20 AM
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#2
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2006
Location: Boise
Posts: 7,866
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Wait until either asks upfront, then say "No".
2Cor521
__________________
"At times the world can seem an unfriendly and sinister place, but believe us when we say there is much more good in it than bad. All you have to do is look hard enough, and what might seem to be a series of unfortunate events, may in fact be the first steps of a journey." Violet Baudelaire.
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08-29-2007, 09:22 AM
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#3
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Moderator Emeritus
Join Date: Jan 2007
Location: New Orleans
Posts: 47,473
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Quote:
Originally Posted by FinanceDude
DW and I are best friends with a couple. We see them frequently, and it's been that way for 13 years........
He makes a lot of money, but changes jobs frequently. They like toys, so I'm guessing that's where the money goes, and fancy trips. Biggest problem is NO emergency savings plan, which I have told him to do many times.
Now, he is hinting at wanting to borrow some money from us, because we are "doing so well". I would have no problem doing it, but does that open a can of worms?
I'm a little miffed because his DW keeps pressing my DW about our financial situation. I would rather them ask us upfront than play covert.
Advice??
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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!
__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities. - - H. Melville, 1851.
Happily retired since 2009, at age 61. Best years of my life by far!
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08-29-2007, 09:26 AM
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#4
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Thinks s/he gets paid by the post
Join Date: Jun 2005
Posts: 4,005
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Just tell them the truth if they ask you for the money. Or mention this casually by "hinting" back at the guy. You don't really have any extra money laying around. Most of your money you have tied up in 401k's, IRA's, and other investment accounts that are long term investments. You would have significant tax burdens and headaches were you to sell anything now. What short term savings you do have you need to support your family and to fund short term spending needs ("sorry, we're saving for a new car or whatever).
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08-29-2007, 09:31 AM
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#5
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Recycles dryer sheets
Join Date: Jul 2007
Posts: 229
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I agree with 2Cor521. Wait and then say no. If you can't deal with waiting, both of you should find a way to work something into conversation that says up front "we never loan money because that opens the door to problems and unnecessary heartaches".
I believe you will regret it if you lend money and it can certainly bring a friendship to an end. If you don't loan the money and that offends them then it was not destined to be a long-term friendship anyway.
It would be different if a natural disaster blew them away and they just needed an uplift temporarily. But I suspect that their lifestyle is taking them under, and if you are not careful, they will reach out to grab you while they are going down. They sound like they are right on the edge of their own human-made disaster.
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08-29-2007, 09:33 AM
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#6
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Moderator Emeritus
Join Date: Feb 2006
Location: San Francisco
Posts: 8,827
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Tell them you value your friendship too much to enter into that kind of an arrangement. Then refer them to a banker you trust as an alternative. Maybe you can offer advice regarding how to get out of whatever hole they've dug for themselves.
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.
Lending money to friends (other than in a true rescue scenario) is a high risk practice any way you look at it.
__________________
Rich
San Francisco Area
ESR'd March 2010. FIRE'd January 2011.
As if you didn't know..If the above message contains medical content, it's NOT intended as advice, and may not be accurate, applicable or sufficient. Don't rely on it for any purpose. Consult your own doctor for all medical advice.
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08-29-2007, 09:33 AM
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#7
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Full time employment: Posting here.
Join Date: Mar 2007
Posts: 984
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I agree....don't loan them any money....you would just be enabling them. It's obvious the guy has the earning power....but no budgeting skills....like the saying you give a man a fish, it fills him for the moment--but if you show a man to fish....he will never go hungry.
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08-29-2007, 09:38 AM
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#8
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Thinks s/he gets paid by the post
Join Date: Jul 2007
Posts: 1,085
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There's an old saying that goes something like this. "Before you borrow money from a friend, ask yourself what you need more, the money or the friend" I think the same goes for lending money to a friend. Good luck.
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08-29-2007, 09:39 AM
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#9
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Thinks s/he gets paid by the post
Join Date: Oct 2004
Location: LaLa Land
Posts: 4,698
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If you choose to lend the money remember that even if it is a loan don't count on getting the money back. If you can afford to and want to lend them the money make it in your mind like a gift. This way if you get it back great and if you don't then it was a gift.
I think in many cases lending money to friends and family doesn't work out that well. Although I did lend money a few time and about 1/2 the time I got it back and the rest was a gift, I guess.
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08-29-2007, 09:40 AM
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#10
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Thinks s/he gets paid by the post
Join Date: Feb 2006
Location: Alexandria, Va
Posts: 1,053
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Hi,
I agree with the others. It sounds like they are living above their means, and it's not a good situation to lend to people who are like that. How will they pay you back? Money and friends often don't mix.
Now, having said that, I will cop to lending a friend money once...but it was an unusual temporary situation and it was only $750. She paid me back 2 months later.
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.
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08-29-2007, 09:40 AM
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#11
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Sep 2005
Location: Charleston, SC
Posts: 13,566
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Yeah, what they said!
We invited 20 people to our mortgage burning party Saturday night, and have been waiting to see if anyone comes sniffing around since we have "all that money" we aren't sending to the mortgage company any more! I'm ready...now that I've got a whole page of responses!
FD----JUST SAY NO!!!!!
Sarah
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“One day your life will flash before your eyes. Make sure it's worth watching.”
Gerard Arthur Way
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08-29-2007, 09:42 AM
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#12
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2002
Location: Texas: No Country for Old Men
Posts: 50,004
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What Justin said. My response would be that our funds are tied up in 401(k)s and IRAs and we couldn't withdraw from them without a big tax penalty.
Then I'd begin to distance myself from this "friendship".
__________________
Numbers is hard
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08-29-2007, 09:44 AM
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#13
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Thinks s/he gets paid by the post
Join Date: Oct 2004
Location: LaLa Land
Posts: 4,698
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Quote:
Originally Posted by REWahoo
What Justin said. My response would be that our funds are tied up in 401(k)s and IRAs and we couldn't withdraw from them without a big tax penalty.
Then I'd begin to distance myself from this "friendship".
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Tell them your saving up for a new dryer for DW. (heh)
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08-29-2007, 09:45 AM
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#14
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Thinks s/he gets paid by the post
Join Date: Jun 2005
Posts: 4,005
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Since you are some sort of a financial planner, maybe you could offer to take a look at their books and help them figure out a way to make the outflows be less than the inflows? I don't know how close your friendship is, since I wouldn't feel comfortable doing this for most friends/associates.
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08-29-2007, 10:07 AM
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#15
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Thinks s/he gets paid by the post
Join Date: Feb 2003
Posts: 2,395
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F/D, sounds like they are destined to be ex-friends real soon. It is their choice, driven by their recent actions.
I have found that in most circumstances, the best "NO", is just that... "NO", and no explanation or apology, etc. Explaining leads down a slippery slope, where the person who received the "NO" attempts to weedle it around to a "Yes'' after a while.
After saying "NO", there is often an uncomfortable silence, of which the person who said "NO" often says things that can undo their "NO" because they feel embarrassed. Instead, switch to something like "how 'bout those Cubs!", or insert whatever situation is in the news lately.
__________________
-- Telly, the D-I-Y guy --
Two fools dancing on the hands of time
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08-29-2007, 10:25 AM
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#16
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2004
Location: SW Ohio
Posts: 14,404
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I like Justin's approach. I'd be proactive and find a way to work it into the conversation with him/her ("Dang, I'd sure like a new car, our old one is on it's last legs. Still, all our funds are tied up and I'd have to pay a TON in penalties and taxes to get at them. I guess we'll just have to nurse the old jalopy along for another few years").
But, it sounds like you'll need to be prepared with a "NO" answer in case this doesn't work.
It's too bad it has come to this, but THEY are the cause of the problem, not you. Perhaps they can borrow money from a conventional source. If so, then they should do that. If they can't, then what kind of friends would ask you to assume a risk that the bank won't take?
I wouldn't offer to look over their finances. It sounds like the neighborly thing to do, but it will likely lead to resentment. If they show signs of having "turned the corner" toward a more responsible lifestyle and thereby demonstrated some commitment to a long-term improvement in their situation, then maybe you can offer to look over their stuff.
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08-29-2007, 10:30 AM
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#17
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Recycles dryer sheets
Join Date: Jun 2007
Posts: 377
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I would not even tell them your "funds" are tied up.
Poor mouth Poor mouth Poor mouth.
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08-29-2007, 10:31 AM
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#18
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Sep 2005
Location: Charleston, SC
Posts: 13,566
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Quote:
Originally Posted by Bigritchie
Poor mouth Poor mouth Poor mouth.
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I love that term! My dad says I do it all the time!
__________________
“One day your life will flash before your eyes. Make sure it's worth watching.”
Gerard Arthur Way
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08-29-2007, 10:48 AM
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#19
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Thinks s/he gets paid by the post
Join Date: Feb 2007
Posts: 3,679
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I agree with saying a polite "no" and then not saying anything else. You don't need to offer excuses (money is tied up, we need to replace a car soon).
But what do you do if the friend asks, "Why not?" Do you think one should tell the truth by saying something like, "I see you make plenty of money and I see how you spend it and I don't agree with your lifestyle/financial habits"?
Just saying no may risk the friendship. But I agree that you should not feel obligated to loan to them.
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08-29-2007, 10:49 AM
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#20
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Aug 2006
Posts: 12,483
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Quote:
Originally Posted by justin
Since you are some sort of a financial planner, maybe you could offer to take a look at their books and help them figure out a way to make the outflows be less than the inflows? I don't know how close your friendship is, since I wouldn't feel comfortable doing this for most friends/associates.
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Been there, done that. They won't "do the time" to fix things........
__________________
Consult with your own advisor or representative. My thoughts should not be construed as investment advice. Past performance is no guarantee of future results (love that one).......:)
This Thread is USELESS without pics.........:)
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