Never Borrow Money from Friends or Family (but you Can Allow Them to Invest)
I think we might need to have a quick recap of what friends and family are there for—and what you are there for, for them as well. Friends are for
· Advising—and getting advice from
· Having fun with
Nowhere in that lot does it mention
· Borrowing from
· Stealing from
Put simply, it is very bad manners to borrow from friends and family. It sets up too many issues and agendas. Its cases resentments and recriminations and suspicions. It jeopardizes relationships that are important. Don’t do it.
Besides which, friends and family aren’t proper sources of loans because they aren’t licensed for it. I’m not talking here of the odd $20 to get a round of drinks in but significantly large amounts—how much that is will depend on your circumstance’s. You do need to be licensed to be a credit broker (no seriously) and if you borrow from friends (or conversely lend to the same) you have no legal recourse if it all goes wrong—and it will, as sure as the sun rises.
I know technically you could get proper agreements drawn up and all that but even then, and even if they are charging you the proper interest rates, it’s dangerous. If you fail to pay them back—due to circumstances beyond your control of course—you risk losing their friendship, which of course would mean much more to you than the loan would in the first place.
The only exception to this is it family and friends want to invest in say a business you are starting, and they fully infer stand that, like any investment, they may not see a return and all the usual risks apply. What you can’t afford is for it to cause a rift if things don’t work out. Family and friends are too important for that.
This Article is Take fromThe Rule of Money.
Life & Business Related Problem’s Find Here
Written by Arshad. A