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Let's talk about money and friends. Should you lend money to friends? What if we flip the situation, and you're the one in need. Would you borrow money from friends? It is a tricky situation. There's no absolute rule saying whether you should or shouldn't. But let’s admit it, friendships have been broken because of unpaid debts. In this week's episode, Sharran shares his experience being on both sides of the situation and the framework he uses to consider whether to lend money to someone.
At one point in your life, you may be in this situation. So it's best to create your rules to help you decide. Also, you need to consider which is more important -- the relationship or the money?
Do you want to know the personal finance secrets of the most successful entrepreneurs? Get the Money Multiplier System - moneymultiplier.info.
“It is a mutual agreement to help each other have a better life together.”
- Sharran Srivatsaa
Timestamps:
00:00 Three questions you should ask before loaning money to friends
00:58 At one point in your life, this will happen to you
01:50 A positive experience for Sharran
03:37 How does it feel to lose $13K and a friend?
04:26 Three things that can happen when you lend money to a friend
04:54 Is the relationship more important than the money?
05:24 Sharran's 80/20 rule for loaning money (and the single most important factor)
06:56 Time to create your own rules
08:14 The “four goods” to help you decide if it’s a good idea to lend money
12:40 Why you should write a loan agreement like you're dealing with a stranger
13:24 How do you keep the relationship no matter what happens?
17:20 A small investment with a large result
Resources:
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- Grab Sharran’s 4-Week MBA for Free
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