I had a very poor childhood which has made me quite stingy with money. I still used to trust people back when I started working and made the mistake loaning out not so small amount to a couple of a*holes I used to consider friend. Now I can't help but feel no matter how well you know a person no one can be trusted with money. And I prefer to lose friends instead of lending or giving out even small amounts. I stress too much about financial security and don't think I can stop until I have a FIRE amount. (Even if I have it I'll probably end up worrying about collapse of economy etc). Tbh I don't want a luxurious life just a minimalistic, peaceful one. P.S- I am Asian and my parents don't earn & have no savings so I do send monthly expenditure to them which I don't mind but I don't offer any help or charity to anyone else. This also makes me feel like a single point of failure in this whole system. If I go down everything goes down. What do you guys do in these situations? Is my behavior justified or should I be more thoughtful towards others? TC : ~150K
I follow the rule of not expecting to get back any money you loan out. Iv loaned friends money before but mentally consider it lost the day I give it to them. If they didn't return it I would have forgotten about it. This basically forces you to only give out small amounts
I think the general consensus is loaning friends money is a slippery slope, and you should only loan amounts you are comfortable losing and basically treat it as giving them money instead of a loan. In general this is a tricky topic that can lead to stress on friendships and ruined friendships. I’m also low income and can completely empathize with your mindset + background. Kudos to you for supporting your parents. If you ever need someone to chat to about stuff like this/stress related to this feel free to dm
i only do gifts, never loans, with friends and family. sometimes I'll agree to a 99 year interest free loan arrangement if it makes them feel better
You need to learn to know people. I've dealt with hundreds of people and I can exactly tell which one of them I can trust with money and which one I can't. I've given interest-free loans (between 1k-100k) to different people who I knew I could trust with money and literally all of them have given the money back in the exact timeline they had promised. And when I was in need of help (not money), they came and helped me without me asking or expecting them at all. It's a great relationship I have with them, although some of the them are in a different continent. It's a very critical skill to learn to understand and know people so you can build a community around you (not just about loans, but in general in every aspect of life). P.S. My mom was (and still is) one of the most naive people in the world and up to my 20s everyone around me was a complete as$hole who I couldn't trust. So I had pretty enough bad examples around me to learn from.
Good that you got your money back but you were taking out an enormous risk with no upside. Best case scenario you get it back, but what have you gained? I’m I missing something?
You're definitely missing the point. Life is not just about money. Sure I didn't gain more than the money I loaned, but I gained a way more important bond in the relationship that no money can buy. I didn't make myself miserable by loaning the money, I simply invested it in a relationship and the gain was a lot more than extra money.
Only if you're ok of not getting any back. Substitute loaning with charity and you'd be fine.
Why would you give out money to friends? What’s in it for you? You’re taking on a financial and emotional risk, unless your charging points on the money and failure to pay is tied into their existing assets, there’s no upside for you.
Yes if you want to lose both money and friends
“It’s good to trust others, but not to is much better” - Mussolini
Find better friends, and if you don’t feel comfortable loaning money, say that you have financial obligations to your family that come first. Good friends will understand.
You can give friends money but don’t ever loan friends money.