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-   -   Loaning money (https://www.early-retirement.org/forums/f28/loaning-money-28786.html)

FIREd 07-11-2007 10:23 PM

I never talk about money with anyone outside the family (except of course with you guys). I don't mind talking about the usual taboos (politics, sex and religion), but I quickly bail out when the topic of money comes up in the conversation whether it is about investments, retirement or whatever. It seems to work: I have never been asked for money by anyone outside the family. I think that lending money to a friend is the best way to spoil that friendship. Lending money to family members is just as bad, the difference is that blood ties are harder to break (By the way when it comes to lending money to family, I am 0 and 3 on getting that money back).

Outtahere 07-12-2007 06:15 AM

Dh lends friends small amounts, nothing over $100, we lend to his kids and they've been very good about paying us back. When lending to the kids I look at it as a gift, if they pay us back it's a bonus. I tell him if his friends don't pay him back then they weren't friends to begin with, he's only lost one friend for non payment.

JohnDoe 07-12-2007 07:00 AM

I usually don't lend money either, but I made an exception.

This is a debt consolidation loan for a friend. I pretty much know his financial situation and income level, etc. This will help him bump up his credit score by clearing all the CC debt that his X-spouse ran up and help him keep his house.

Everyone knows people that fall into 3 categories...people who you would never lend money to, people who would probably pay you back, and people who will do what ever it takes to pay you back. My friend falls into the last one.

I remember about 16 years my F-I-L lent my wife and I 5k to help us buy our 1st house. We've come a long way since then.

I knew this topic would start a big discussion. ;)

Outtahere 07-12-2007 07:27 AM

Quote:

Originally Posted by JohnDoe (Post 535128)
I usually don't lend money either, but I made an exception.

This is a debt consolidation loan for a friend. I pretty much know his financial situation and income level, etc. This will help him bump up his credit score by clearing all the CC debt that his X-spouse ran up and help him keep his house.

We did this for my stepson, he needed to pay off the soon to be exwife and consolidate his bills. We drew up a loan agreement, he went over his finances with me and things looked okay. Dh was concerned but so far things have gone well, he pays the agreed amount on time every month.

Sue J 07-12-2007 08:16 AM

About 34 years ago I was a college freshman and my older sister was a college senior and newly married. I had always been a saver and she had always been a spender. Even after returning all their wedding gifts for cash, she and her husband were broke. They wanted to move and get a new start. She asked my parents for money and was refused. She asked me for a small loan and I said yes. I had the money, wasn't using it and wanted to help them out. They paid me back within about 6 months.

Here we are in 2007. I am still a saver, she is still a spender. But her husband #2 is in far better circumstances than the first one and can accommodate her retail lifestyle. We never mention that I loaned her that money back when she was in a tough spot. She is very kind and generous towards me and my family. I think we just have an understanding.

I don't think I would do that for anyone else.

Bigritchie 07-12-2007 10:25 AM

I am pretty much against loaning to friends and family too, but I must say I would not be where I am financially, if it were not for a family member loaning me $9,999 dollars to have extra cash in the bank to start my business, the person also cosigned on my loan, as banks were very unwilling to loan a 21 year old 100 grand.

Long story short, I wouldn't be about to retire at 30 without the persons generosity and love. They even let me pay my business loan off early, and then pay them back (they refused money till I was debt free).

That being said this was a situation with utter trust on both sides, and they knew I would do well. They knew I had been saving since a child to open my business.

bssc 07-12-2007 12:41 PM

I lent money to a friend twice, knowing that she was receiving divorce settlements to cover it. I told her after the second time that it was the last time I was going to do so and then said no when she came back a third time after blowing through her settlement.

Otherwise, no.

d 07-12-2007 07:31 PM

with some exceptions, i have lent money always assuming it would never be repaid, and that i would be reasonably comfortable with having made that "gift". as you might expect, i don't do this very often.

thefed 07-12-2007 08:31 PM

Quote:

Originally Posted by Bigritchie (Post 535210)
I am pretty much against loaning to friends and family too, but I must say I would not be where I am financially, if it were not for a family member loaning me $9,999 dollars to have extra cash in the bank to start my business, the person also cosigned on my loan, as banks were very unwilling to loan a 21 year old 100 grand.

Long story short, I wouldn't be about to retire at 30 without the persons generosity and love. They even let me pay my business loan off early, and then pay them back (they refused money till I was debt free).

That being said this was a situation with utter trust on both sides, and they knew I would do well. They knew I had been saving since a child to open my business.

what kind of business did you start, if i may ask

Bigritchie 07-12-2007 09:53 PM

Restaurant.

Webzter 07-12-2007 10:27 PM

Send your friend to prosper.com and offer to vet their finances and write an endorsement so they can get the money more easily.

Peaceful_Warrior 07-12-2007 10:31 PM

I have a group on Prosper.com and loan money on there.


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