Wednesday, February 01, 2006

Lending Money to Friends

Let's set the record straight on this one. Lending money to friends is a no win situation. It's an arrangement that cannot possibly work out well. In the last 5 years, I've lent what I consider a serious amount of money (say, over $500) to friends on about 6 occasions. I've observed two broad results: 1) That the % of the time I get paid back promptly and at the prearranged time is exactly 0.00%, and 2) that somehow, perversely, I've gotten this reputation as some stingy tightwad who cracks the whip on his friends for every last cent.

Addressing the second point first. I stepped up. I opened my wallet and lent out hundreds, and sometimes thousands of dollars to friends in need. Where the hell were the rest of you? I have never denied anyone a personal loan, ever - except when they have a history of burning me on loans in the past. I once drained my checking account to the last $100 so that a friend could fix his car, with only the friend's word as collateral. And then, months later, when I corner the guy and insist on being paid back - now I'm a tightwad. Now I'm an asshole.

That's the strange result of my generosity. Somehow, it makes me the asshole. I've observed this a dozen times. All I want is to be paid back at the time we agreed on - and by insisting, suddenly I'm Satan himself. And the attitude I get from the lendee's. How dare I ask for my money back. Don't I know they're going through a rough time? They slink away from me. They avoid me. When I confront them they get defensive and accusatory.

A typical scenario is this one: The date of repayment has been pushed back a second time. The new repayment day is approaching. Gingerly, and with extreme sensitivity, I broach the subject with the lendee. "Hey bro. Just wanted to ask. Is everything still cool for giving me $200 on this payday?" And the reply: "Dude - how am I supposed to pay you back this week? They're going to shut off my water in two days if I don't make a payment. We need to wait two more pay periods."

So many things fly through my head when this happen. What's the point of sitting down and commiting to a repayment schedule if you can't anticipate something like "the water bill". "Oh no, the water bill! Who could have seen that coming! Damn you water company and your surprise bills out of nowhere! How can we possibly plan and budget our lives when at any time - say once a month - you hit us with a bill!" Secondly, if you're going to miss a payment, shouldn't you be volunteering that information to me? Shouldn't you find me, get me up to date on the situation, a propose a new repayment schedule out of your own initiative? Why is it up to me to hound you? And the attitude of frustration and annoyance with my gentle requests to have my money back? WTF?

I BAILED YOUR ASS OUT. The only attitude I should ever see from you is gratitude. Every conversation should start with profuse thanks. My very appearance should elicit a warm smile and a hearty hello. And if you presented me with a small gift - say a box of homemade pecan sandies in that white crinkly paper - well that would be entirely appropriate.

My friends don't deliberately set out to burn me. None of them ever thinks "Hah, that's the last he'll see of his money. I'll never pay him back!" That's not how it works. The reason they burn me is simple: shit comes up. Shit will always come up. Shit cannot fail to come up. Any loan arrangement between friends has to be predicated on the idea of a certain amount of shit coming up, and must deliberately take that into account. What happens is that when the shit comes up (Oh no, the water bill! Damn you cruel fate!) paying back the generous friend becomes the last priority on the list. The water company can shut off your water. The repo man can come take back the car. What the fuck can I do? Basically all I can do is gingerly and gently prod you, falling over myself with politeness and sensitivity, as you swat me away like some enormous, Jewish horsefly.

So I should just stop giving anybody a loan, is what you're saying? I should stop being naive? Stop giving money to degenerates. Well, I don't know. I can't do that. It's ingrained in me to help a friend in need who sincerely and honorably asks for my help. Money in the bank is nothing but a tool to make things happen. Helping a friend in need is what money is for. I can't say no. Then at least I should have some sort of contract drawn up, right? Make them sign something? Get their signature? Well, that's smart advice. But it leads you to a dilemma a bit like asking your fiance for a pre-nup. You can't ask your fiance for a pre-nup. And similarly, it's very difficult to ask your friend for a document that will hold up in court, should you ever have to sue them.

And make no mistake. I will sue you. I will spend $2000 to get back $500. Why, you ask? It's a bit like this. You know all that worthless shit you buy all the time? Rims? Designer clothes? Down payments on cars you don't need? Huge televisions that don't even make sense given the size of the room? Why do you buy all that worthless shit? Because it makes you happy, right? Well you know what makes me happy? Spending thousands of dollars to show you what happens when you burn me on a loan. That's what makes me happy. Having your paycheck garnished for a year and a half so that every week you can be reminded what happens when you burn me. That's what makes me happy.

I make the same $12 an hour that you do. I open my wallet and give you weeks worth of pay so you can get your life back on track. I do it because you ask me, and ask for nothing but your word in return. Then you burn me. Not once or sometimes, but every single time. And when I ask for the cash, I'm an asshole.

It's a raw deal, is what I'm saying.

6 comments:

Anonymous said...

I think I might be the subject of this blog, so let me set the record straight. Rowsdower, you ARE a tightwad. About three years ago you lent me a couple of grand, and every fucking six months or so, you'd be at my door, hat in hand, like a beggar. Like I didn't have to pay rent that month, or go to the movies, or invest some spending money in a sure thing.

You're a monkey on my back, and it's too much! I moved - you followed me. I changed my number - you sent letters. When are you going to get the hint that you and I are through?? We can't be friends anymore if you're going to Shylock me like this! You're too much of a damn tightwad. Stop calling. Also, I need a loan.

Rowsdower said...

I didn't have you in mind in particular Hector, but by all means we can add your transgressions to the pile.

Matt Vella said...

I'd say it's time to close the Bank of Rowsdower. You're already getting called a tightwad, so what the hell. They'll learn to get along without ya, man.

Unknown said...

I agree. Close the bank. If your so called "friends" are going to call you a tightwad after you loan them money, because you expect them to do the right thing and pay you back, then stop giving out loans. If you were such a tightwad you would not have helped them out to begin with. People like that aren't real friends, they are such leached, and they will drain you dry and not think twice.

It almost sounds like they never had any intentions of paying you back in the first place. Why else would they get defensive when you do the natural thing and expect them to hold up their end of the deal.

Maybe they need to struggle a little financially. It might teach them to be more responsible with their own money so future loans aren't necessary.

Unknown said...

I will break down my experience lending money, and the lessons I learned from this one experience.

Lesson #1: People respect you more if you say NO to them, this is true in friendship, in business, your love life, any in any other aspect of your personal life.

Lesson #2: Banks are there to loan money, so you don't have to. Friends are for moral support, back-yard barbecues, football games, and hanging-out.

Lesson #3: Generally avoid the type of people who ask you for money. They tend to suck at life. And, if you want to get anywhere in life, surround yourself with winners.

Lesson #4: If your friend takes your rejection personally, then you don't need that friend.

Lesson #5: If you want to keep "goodwill" with some people, just GIVE them the money, though make it seem like you are loaning it to them. I gave one of my relatives $1000, knowing that the loser would never pay it back. So the few parasite "relatives" and "friends"of mine ask me for $5,000 or $10,000, I play the victim and tell them, "hey, I'm still waiting to collect on a 'significant' loan to uncle Bob three years ago." This is the thing to do, especially if you have money and everyone around you knows it. But that $1000 was an investment, and a MAJOR parasite repellent.

Lesson #6: Before you do something for someone, ask, what has this person done for me, or, better yet, what can this person do for me in the future? Keep things balanced. Don't be that person who does too much for people, and gets little in return.

Unknown said...

Wow! Are you on the money! No pun intended.