MW 'My father was a teetotaling, fair-minded, liberal-leaning capitalist': And yet I allowed 'friends' to borrow $120K. How do I deal with the fallout?
By Quentin Fottrell
'Of the original 10 I had earmarked for removal from my life, I'm still in contact with two'
Dear Quentin,
My father was a teetotaling, fair-minded, liberal-leaning capitalist. He would help anyone who was trying to help themselves. He was trained as a schoolteacher but left that world to go into business, where he went from zero to financial security in his lifetime. He gave me some very simple advice in 1976, and that was his greatest gift to me.
When I was 11, my father told me: "Write down your goals, ideas and thoughts." When I was around 16 or so that's exactly what I started to do, and many of my life goals have been achieved owing to this simple advice. Thanks for everything, Dad. It helped me through many good and bad times.
He died in 2021 after a long illness. In my grief, I went back to his simple advice, but this time with a more pressing need: Get rid of people from my life. I narrowed my written list to 10 people who I had to sever all ties with. Most were tenants, a few were business partners and a few were family members.
They all had the following in common: These "friends" were users and abusers, from people who had a dependency on drugs and alcohol and refused to seek help to nonpayers or "one-way" partners using me for my expertise. It was "Adios, amigos!" This was costly and time-consuming. I paid legal fees, wrote off money owed to me, etc.
The financial cost of removing these people from my life was $120,000. Of the original 10 I had earmarked for removal from my life, I'm still in contact with two. These are siblings, unfortunately. But they must exit my life (they want money, of course) and exit they will. This will take about another year.
How do I deal with the aftermath? Was I wrong?
Grateful Son
Related: 'I'm struggling with grief and loss': I inherited seven figures after my parents died young. Why do I feel guilty?
Dear Grateful,
Don't spend your life chasing bad debts.
It's an expensive lesson to learn, but like all expensive lessons, it's worth learning now instead of one year or five or 10 from now. You remained in these relationships - which had various effects on your emotional and financial life - because you had not learned what you were supposed to learn. Once you learned it, you were able to draw a line and move on.
Your father sounds like a wise man. He not only instilled in you the importance of having goals and something to shoot for, but he also planted a seed that actions you take (or do not take) now will have long-term effects. It's an almost impossible task to encourage young people to think about the future and to understand that life is all about small steps leading to big rewards, but he did it.
The one lesson you had to learn for yourself is boundaries. You worked hard enough to have savings and to become a target - perhaps a dramatic word - for others who saw you as a solution for their problems. It's hard to say no sometimes, but it's easier to say "Alas, no," or, "I'm sorry, no," or simply "No, thank you." You should only ever loan what you can afford to lose.
You are one of millions of people who have been hit up by friends and relatives for money. Those who have the gumption to ask a friend or relative for money are - and this is not based on a nationally representative sample - probably most likely to rely on the same chutzpah to say "no" without any real apology when the time comes to pay it back.
It may take three or four years for an orchard to start producing apples, but it only takes someone walking by five seconds to pick one.
Nearly a third of Americans in this survey said a loved one owes them money - with $400 the median amount - and nearly half said they regretted lending money. Respondents said that those asking for a loan were most commonly friends (49%), siblings (26%), romantic partners (20%), extended family members (19%), parents (18%) and children (16%).
Apps like Zelle, PayPal (PYPL) and Venmo make it easier for young people to loan money, says Matt Schulz, chief credit analyst at the personal-finance site LendingTree, which published the survey. "They've been using Venmo for as long as they've had any money to spend," he says. "No one cares as much about your money as you do, so you need to do what is necessary to protect it."
That's a great point. You have respect for your father, your values, your integrity and your achievements, but others are not going to have the same respect for anything that has taken you blood, sweat, tears and time to earn. It may take three or four years for an orchard to start producing apples, but it only takes someone walking by five seconds to pick one.
Were you wrong? Not if you have now learned what you were supposed to learn. You did the best you could at the time, and now you have woken up to the reality that some people will only view you and your relationship through a transactional perspective. What do you have to offer? How can you help them? Is there a way they can gain your trust and sympathy?
Grief does many things to people. It can rupture families when there is an inheritance at stake, and it can lead you to make some decisions about who you allow into your life in order to conserve your emotional and physical energy. Without a notarized loan agreement, you can either spend years chasing people for money, or you can walk away.
Choose the path that gives you the best quality of life and upholds the lessons your father taught you.
Related: 'I have zero regrets': I'm 84 and estranged from my two adult sons. My 48-year-old wife will get my seven-figure estate. Is that selfish?
The Moneyist regrets he cannot reply to questions individually.
More columns from Quentin Fottrell:
'I'm horrified and heartbroken': I gave my family cash gifts for summer. One person bought AR-15 rifles and handguns. What should I do?
'He forced me to take Social Security at 62': My husband inherited millions, but never gave me a penny. If I divorce him, would I get any of it?
'My mom still has his original will': A few months before he died, my father went online and made a secret will, cutting off my mother. Can he do this?
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-Quentin Fottrell
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(END) Dow Jones Newswires
November 16, 2024 10:32 ET (15:32 GMT)
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