I was reading an interesting post at Well Heeled Blog and I thought I’ll share a similar experience I had years back.
The general consensus is it is a very bad idea. I learnt this the hard way.
I had a very good friend whom I had lost touch with. One day out of the blue he came on IM and he asked me for a thousand dollars since he had moved out of the country and was doing badly financially.
I knew him well (or so I thought) and didn’t think twice before rushing a check for a thousand dollars. Didn’t ask him when he’s going to return it; he didn’t tell me when he’ll repay back.
He thanked me and we were in touch via email and chat and neither of us would bring up this topic. Months turned to years and one day I decided to ask him if he was in a position to repay. (I knew he was since he had moved out and had a good, decent job and was doing well). I got no reply. A few days later, I reminded him again about this. He suddenly disappeared from IM. He stopped responding to emails.
To this day I have no idea why he behaved the way he did. Had he asked for more time, I would’ve gladly said yes. I wasn’t even asking for interest and would’ve been perfectly fine if he were to pay in small increments.
In the end, I managed to get a portion of my money, lost a good friend and was out a good chunk of the thousand dollars.
Here’s my thought on this subject – don’t lend money to family or friends if you cannot afford to lose it. People have strange ideas about money which might be very different from what you think.
Have you had a similar experience? What’s your thought on this subject?