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Old 03-15-2018, 02:32 PM   #41
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Originally Posted by redduck View Post
"Hmnn, wonder what would happen if I asked this guy for $50,000? Maybe he would just reach in his pocket and just hand it to me."
I have a younger brother who would hand me that kind of dough if I asked (the proverbial shirt off his back). The same with a former w*rk colleague whom I've known for 35 years and consider a close friend. Both of these individuals have the scratch to do it, BTW.
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Old 03-15-2018, 02:38 PM   #42
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Originally Posted by omni550 View Post
So, if you've thought about it and are meeting folks who might be prone to give you the money, and have a unique and interesting approach, why haven't you done it already?

omni
It's more of a funny/amusing thought to me. But for sure, I don't follow up on most of my thoughts. Does anybody? I don't know, maybe many of the people here do.
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Old 03-15-2018, 02:39 PM   #43
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DW and I bought our first home from her parents back in the early '80s. It was a rental they'd owned for awhile. Since it was the 80s and rates were fairly high, they let us borrow at the same rate they'd have been able to get in a CD. That was a tad lower than the existing mortgage rates. It was a 30 year loan, but we paid it off in about 9 and 1/2 years. We could do that because salaries were also zooming up at the time, and we applied pretty much all of my increases (DW was a SAHM then) directly to the mortgage. We'd have had a mortgage either way, but it was a great way for us to get started as home owners.

We made a similar offer to DD and her husband last year, to buy the townhouse they were renting from us at our purchase price. But they decided to buy a different place, and used his VA loan capability. That's fine, but it would have been nice to help them out too the way we were helped getting started. I've always appreciated the in-law's kindness and was pleased we were so responsible with their generosity.
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Old 03-15-2018, 02:47 PM   #44
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It's more of a funny/amusing thought to me.
It would seem to be more than that. Presumably you're seriously considering it, given that you took the initiative to start this thread and seek community input.
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Old 03-15-2018, 02:53 PM   #45
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Nope. Not considering it. Just a thought. I wasn't asking for advice, I was just asking.
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Old 03-15-2018, 03:18 PM   #46
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I don’t like being “beholden” to anyone, but my parents offered, and I accepted, the car loan of £1000. We saw it as a cash flow management issue. I needed a reliable car, they needed their car, I had been working for a year and saving like a demon, so they knew I would be good for the money.

There followed a decade during which time I had no debt at all. Then, at age 34, I bought a house. By this time, I had saved about 70% of the cost of the house, so I took out a small mortgage and paid it off completely in 18 months. Again, I was using debt as a cash flow management tool to buy something I needed and wanted, which was modest compared to my borrowing potential.

After the house mortgage was paid off, I had another debt free period, this time for 15 years. My NW was now in 7 figures. By this time I had had some business education. I was in a career path with no pension in sight and wanted to diversify my future sources of income. I was concerned about the market, and decided to begin investing in income producing real estate. I borrowed modest amounts, never more than 5% of my NW. I now own several income producing properties and own ~75% equity in them overall. Some I own free and clear. I have a slightly positive cash flow and in a few years will have a steady income from them when the remaining mortgages have been paid using OPM (other people’s money). The ROI on them is higher with some leverage, so I am not throwing money at these mortgages. During the crash of 2008-2009, my real estate income continued uninterrupted and was very reassuring.

OTOH, I keep only two credit cards, and one is for emergency use. I pay them off completely every month.

My attitude to debt is that it is a helpful wealth building tool when used judiciously, and always with the intent to pay it off completely. Taking on debt to buy consumables or experiences is not wise. Using debt to buy a right-sized home that meets your need for shelter and comfort, and which will appreciate at least at the rate of inflation, makes sense, provided you can ensure you will not default on the debt. Using debt to buy an asset that will produce a reliable income stream is good financial management in my opinion.
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Old 03-15-2018, 03:29 PM   #47
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No. However I have loaned money to friends before and it turned into a gift both times. What's that quote-"Neither a lender nor borrower be". Something like that.

Looks like Car guy beat me to the quote.
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Old 03-15-2018, 03:49 PM   #48
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No way. My late DB used to ask for money all the time and was a very good salesman. In my younger, more naive days I fell for his line a couple of times. Once he swore he was down to his last nickel so I loaned him a grand or so. One month later he and his wife bought a new Ethan Allen bedroom set and a car, but somehow didn't have the money to pay me back. No more money for DB after that!
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Old 03-15-2018, 04:07 PM   #49
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Yes. Out of convenience and not actual need, we borrowed $100K from MIL to buy the house we're currently in while we sold the other one. We didn't make any payments or anything like that, we just gave the money back when we sold our house. I allowed us to pay cash for this house and not have to liquidate any stocks or take out a mortgage. MIL now is getting worse with Alzheimer's and she'll likely need to live with us for a number of years (the years between not being able to live alone and needing to be in a full term care situation), so I'm comfortable in calling it even. We've been a family that helped each other out from time to time, but everyone in that circle has there financial stuff together and they have been more of a float than a loan. No one in the family likes paying interest.
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Old 03-15-2018, 04:15 PM   #50
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You guys never thought about it? Was that due to lack of imagination or fantasy life, or was there nobody around that you could ask or even thinking about asking?
Door No. 2 for me.....
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Old 03-15-2018, 04:21 PM   #51
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Yes. Out of convenience and not actual need... We've been a family that helped each other out from time to time, but everyone in that circle has there financial stuff together and they have been more of a float than a loan. No one in the family likes paying interest.
That's pretty much how we've done it. Has always worked out well. I don't know what a float is, but that term sounds right.
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Old 03-15-2018, 04:35 PM   #52
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When I was 20'ish and in university, my friend and I attended a Subway franchising seminar. This was early glory days of their expansion in the early 90's and they were the fastest growing franchise operation in North America. Start up costs were around $150k'ish and my friend and I only had like less than $20k. I floated the idea to my family to see if they would help financially support get a Subway franchise. The idea didn't gain traction among my family so that was that.
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Old 03-15-2018, 05:03 PM   #53
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I was in college and my sister had just gotten married. They were broke and wanted to move to NY to be closer to BIL family. She asked for a loan of $250. She had a history of money "issues" and I am a natural saver from childhood. I loaned it to her and they moved. It took a few months before they paid it back.

She is now married to husband #2 and conveniently he had plenty when they got married and now they have more than they could ever spend.

She has not forgotten that it was little old me (the frugal kid sister) who helped her out when she asked.
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Old 03-15-2018, 05:32 PM   #54
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Borrowed money from my father for my first car after college. My credit report wasn't great and they were going to charge me 14% interest instead of the 6% that was the standard rate. When I told my dad, he offered to loan me the money at 8%. Never missed a payment.

I loaned a good friend several hundred dollars when I was in grad school. We were both totally broke, so a lot of money at the time. I told her not to worry about paying me back until it was easy for her. Never thought twice about it and considered it a gift. Her future husband stuck twice the money in my suitcase several years later when I was visiting them.

In general, I don't loan money. If I do, I always consider it a gift in my head.
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Old 03-15-2018, 05:55 PM   #55
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When I was a young adult I borrowed for a house down payment from parents. More recently I’ve lent to friends and relatives. Overall I’ve always gotten paid back, but it’s always uncomfortable and I hope not to be their lender in the future.
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Old 03-15-2018, 05:58 PM   #56
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No. I would not have had anybody to ask and would have been to proud to ask even if there would have been someone.
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Old 03-15-2018, 06:01 PM   #57
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Here's the closest I ever got in the form of a loan from family:
It was 45 years ago but it was so unusual I remember it to this day.

I was 18 and had just bought a brand new VW Beetle for $1904. The dealer lived a few streets over so he drove the car over to my house. I handed him an envelope of $100's but after all the paperwork and fees, I was short 85 cents. I was stumped!

Dad was standing there in the kitchen and....reached into his pocket, counted it out and gave the guy the extra 85 cents.

And, no, I never paid him back either! So I guess I was a bad son.
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Old 03-15-2018, 06:41 PM   #58
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When I was maybe 11 years old there was going to be a big livestock auction. My folks were jonesing for Herefords and I had $135 from berry picking. Lent it to them and later got a Hereford calf as payment. It grazed on their land and ate their hay and when it sold I made money! Hmm. Since then I've made a very few loans to family members - helped pay a divorce lawyer once and was repaid in a few years. Mostly my family doesn't ask for or need loans from me. On the other hand, I've been happy to make some substantial loans to a few friends. Thing is, I trust them and admire the way they conduct their lives. I ask that they keep the loans silent and don't talk about them. I view it as backing their play, but as a silent backer. Things would have to go very badly for my friends not to pay us back - so badly that I think I'd lose the money with equanimity.
Some personal loans to others didn't pay back - eh - one was a caregiver to MIL and I just view it as a well earned gratuity, another the guy's life went downhill fast - no point pecking at him, just let it go.
Mostly though I'm a first mortgage kinda guy - I want my borrowers to succeed and make a lot of money, I want them to pay me interest as agreed, but if things go badly I'm foreclosing and have a property to market.
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Old 03-15-2018, 06:44 PM   #59
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As an adult (define this however you want) have you ever borrowed or thought of borrowing a large sum of money (define this however you want) from a friend or relative?
No, that's what banks are for.

About 15 years ago, I loaned $3000 to a friend so that he could get divorced and get rid of that gold digger, cheating wife of his (DW's cousin who we had warned him about to no avail).
He paid me back within a year.

That is the best money that he's ever spent, and the best loan that I ever made.
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Old 03-15-2018, 07:10 PM   #60
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I have it done it. Maybe I am too prideful, but I could never see myself borrowing money from a friend or relative, it would feel like a heavy weight on me. I would rather get another job/paying task if I needed additional money. That I have done, instead of borrowing.
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