I loaned a close college friend $7000 last year. Due to life circumstances and lack of family resources, he was stuck in a rural area with no developer jobs. He was having trouble landing a remote job and I ignorantly asked why he wasn’t applying to in-person jobs on the west coast.
He told me that he certainly wouldn’t be able to afford to move and I told him “don’t let that stop you”. Fronting him moving expenses was the best decision I ever made, even though it had a chance of not working out. Six months later he’s making 10x the wage he could get in his rural area, and I’ve been paid back with (unrequested) interest.
I guess my message is: sometimes loaning money won’t work out, but when it does, the ROI (emotionally and for society) is extremely high.
The risk of them not being able to pay you back and thus destroying the friendship is so high that I wouldn’t recommend this unless you are ok with losing that person as a friend OR you just give them the money without expectation of it being paid back.
When "loaning" money to family and friends as the "lender" assuming it's a gift from the get-go is crucial. Or you just mutually agree it's a gift and move on.
1) If you are going to be financially impacted in any way by not having the loan repaid you should't "loan" (gift) it. Like gambling don't do it if you can't afford to lose it.
2) Assuming #1, the overall psychological stress and potential impact on the relationship just isn't worth it. As the "lender" you should feel good about helping someone while learning something about them in the process.
Personally, in having this outlook with family and friends they essentially get one shot. If all parties agree it's a loan and the debtor doesn't pay back the funds I move on without impact to the friendship but mentally they have a "strike" in my mind that essentially says "they can still be a good person and friend, but money can never enter the relationship again".
That's the misunderstanding that sours so many relationships.
You have to go into the "loan" with the mindset that you will work to maintain the friendship if it doesn't work out.
In short, it's a grant, not a loan. You will become this person's benefactor, and you may learn a lot about how their mind/life works. Perhaps more than you want.
The GP is unclear as to whether the loan happened before or after the friend obtained a job offer. Loaning moving expenses money to someone who just got a high-paying job offer and needs the moving money to start the job does not sound that risky.
Have lent to many friends/family members over the years telling them to pay me back whatever/whenever they can, however they want. Some have taken decades. No one has not paid back. Few have needed a nudge, which I only give after they have climbed out of whatever hole. Honest people will always make an effort to repay their debts. The rest make lousy friends anyway.
Yeah, I couldn't loan that much. I'd gift a friend at most $ 2K and the expectation that I won't see it will ease my mind more than the expectation that they'd pay back $7K.
I've had favorable circumstances (parents that did ok, REALLY cheap rent in an expensive city, a regular job) and I've been able to have the same policy, every time my attitude is I will loan money that I could without being too broken up about it set on fire then and there and never with any explicit expectation of good use. if it's returned (some have, some havent been able to) it's a bonus.
now this is a SMALL amount compared to most people but I have friends who have had a really rough time financially.
If $7k destroys a friendship, it's not really that close of a friendship.
Sure, there should be some consequences for not paying it back, but incessant mockery and refusal to pay for McDonald's is probably a fair exchange.
"Give people lots of leeway, but only once" has worked out well so far. People can't fool you into making a big mistake twice, and once is just the cost of doing business^W^Wfriendship.
On the other hand, finding friends past age 30 is hard enough that paying random devs random sums of money isn't that bad of a deal.
>but it's really difficult to bootstrap when you don't have the means.
You have to aim a couple rungs up, not all the way up.
Starting from literally zero you can probably retire modestly but comfortably the owner of a respectable tax dodging container storage and dumpster rental business assuming a little luck and work in your formative years (maybe the local street gang will install the love of hustling for a buck into you) to set you down the right path.
Going from zero to C-suite manager type, not so tractable.
It's a bit weird for me. I've loaned out money in various amounts (from a few hundred to tens of thousands). The larger amounts are to people I trust deeply for things like mortgage payment etc. I've gotten paid back promptly but I guess because I was expecting them to pay me back it was more or less of a non event.
I've also loaned some amounts of money to people I figured wouldn't pay me back, but in smaller amounts. Often they behaved as expected and didn't pay me back, but because I was expecting it was also more or less of a non event.
My closest and longest friendship is a guy with a very similar background to me.
We both grew up really poor in a small town and it took us a big chunk of our adult lives to achieve some stability.
We both would have up and downs financially speaking, luckily almost never at the same time and over the years it was very common for one of them saving the other when the other was down. We never kept a balance of who owed how much to the other but we always knew we could count on each other.
Fast forward a lot of years we both now live comfortable lives and it has been a good number of years since we last had to help each other.
Sometimes I miss the struggling years though. I think that showing off each other our new German cars is not as good a foundation for a good friendship and love as helping each other and laughing about being saved by the other at the last moment from some dramatic stuff like an eviction or bankruptcy
One area of difference here might be that he didn't ask you for the loan, you suggested it. Also, the fact that the loan was specifically to make significantly more money than he'd ever had before meant that it would be easier to repay if it worked out.
It wasn't money, specifically, but when I moved to CA back at the start of 2008 it was because I was in a similar situation. I was effectively trapped in a rural place without the funds necessary to relocate and development jobs near me had completely dried up. A friend (someone I served with in the military and who owed me a favor or three) agreed to let me couch surf his place for 3 months. If it worked out, it worked out. If not, I was outta there. I had a software engineering job by the end of first or second week.
That's legit that you helped out your friend like that. I've had people look at me like I'm crazy for doing similar things for friends. A rising tide raises all boats.
I “loaned” a college friend a few thousand when they were in a tight spot (getting their life back after being charged with a crime they didn’t commit). I might be paid back someday, but I’m also perfectly happy for it to be a gift.
(I call it a “loan” because they preferred to think of it that way. I made clear at the time that it would be fine if they never paid me back.)
> I guess my message is: sometimes loaning money won’t work out, but when it does, the ROI (emotionally and for society) is extremely high.
My personal attitude has always been that you should loan money without the expectation that it be returned. You can't be let down if you had no expectations to begin with.
When I was younger I learned that loaning money to friends, and then asking to be repaid, sucks. You're made to feel like you're some sort of Scrooge character. Now I either simply give whatever is asked, and make it clear I do not wish to be paid back, or just say no.
Initially it seemed logical to say OK you need 100 bucks for this or that and you'll get me back. But then a month later I'd mention it and was met with this sort of "why are you being a jerk about it" response. Now I'm in a position that its not a big deal, but back then even that relatively small amount of money was a big deal. It was a tough lesson to learn that some people just use the term 'loan' to make themselves feel less guilty for asking, or maybe intend to ghost you regardless.
I think this also gets into Americans (or maybe just Southerners?) being weird about money and personal finance. Talking about money is taboo.
Neither a borrower nor a lender be,
For loan oft loses both itself and friend,
And borrowing dulls the edge of husbandry.
This above all: to thine own self be true,
And it must follow, as the night the day,
Thou canst not then be false to any man.
Farewell. My blessing season this in thee.
In cases where I feel I need to, I clarify it's a gift and if they really feel the need to repay later, they can pay it forward or gift back. The key is removing the guilt which is what kills friendship.
I live where I was a born, so naturally, all elders needing a hand for whatever (mostly computing obv.) get my assistance. They always want to pay or they feel really really bad.
Reminds me I need to read graeber's book about non currency debts.. it seems to discuss these relationships.
He tells an interesting story of a relationship between two vikings, where one receives an impressive gift from his friend, and immediately sets out to kill him, because there's no way he's going to spend a week (or however long) writing the kind of epic poetry that such a gift would deserve. I think in the end he misses him, and has to go home and write the poem.
The challenge is that friends and family are seen as the lowest priority for repayment. Despite the fact that a loan from them was already given in the most kind and generous way, there is an increased expectation for friendliness and leniency when it comes to leniency around repayment that just doesn't come with an institutionalized lender.
Complicating things is that the penalties for not paying others, like a bank, utility company, landlord, etc. are real and tangible. Whereas hurt feelings are much more readily dismissed than an eviction notice or a debt collector.
Well it took me borrowing one video game to learn that lesson. "No, you must've borrowed it to someone else" when I asked.
First game I bought for my own pocket money, which at time, in Poland, was a lot for a kid as it was full price title, Baldur's Gate 1 in nice box with manual and a map, and dubbed gloriously with then-radio/TV stars, hell, the narrator voice was better than original. Needless to say I was pretty salty.
Only for your edification, as your English is 1/0 (infinitely) better than my Polish. I believe you meant "lending / lent" in place of "borrowing / borrowed." We separate the words, so "to borrow" is to temporarily take the item, "to lend" is to temporarily give the item.
True but in some parts of the uk (north/midlands) 'lend' can mean borrow. As kids I'd be asked by someone at school 'can I lend your pencil?' (= can I borrow your pencil). Dunno if they use that any more though. Was decades ago.
I have two more. I don't think any English speaker really cares about them, but they're fun.
One: you "bring" things toward the speaker, and "take" them elsewhere. So "don't forget to bring your umbrella!" is incorrect.
Two: "like" compares, and "as" joins independent clauses. So "I wish I could communicate like tptacek does" should be "I wish I could communicate as tptacek does." A correct use of like might be "You, like tptacek, comment insightfully." A famous example of a controversial misuse of "like" was the 1970s slogan "Nobody can do it like McDonald's can." It should be "... as McDonald's can." When that came out, grammar aficionados lost their minds.
In Spanish they are the same word also -- "alquilar" -- "to rent" and "to rent out".
Do any linguistics geeks reading have a word I can google for this phenomenon? That is, a word that means something like "a word or phrase that is bidirectional in one language but part of a unidirectional pair in another"
I lent about $25 to someone when I was in college. It was a lot of money for me at the time, you could buy 5 day's worth of food with it or pay 1/5th of the rent for my room (yeah, some places in Europe were really cheap in the aughts). He promised that he would pay me back.
After a while he asked me for some more money, about $5 and swore he'd pay back really soon. I was so shocked that I broke all contact with that guy and never saw him again.
> Carmack, it seems, was comfortable with not being paid back.
That's not how I read the tweet, at all.
> It was a learning experience for me, calibrating some general people behavior. I don’t think anyone intended to not pay me back, but things often just don’t work out the way you plan
I remember being over $4K in debt in my mid-20s, sleeping on the floor under a desk in my friend's office and showering every morning at a gym a couple of subway stops away. I was evicted from my tiny studio after getting laid off, and couldn't find anything during summer time, was at first recovering from a severe burnout, and also everything is super slow during those months.
My first paycheck paid off all that debt, a couple weeks later I was living in a 1-bedroom apt minutes away from work. I had about $15K in my bank and that's when my self-employed friend needed money to pay rent so he could focus on and make his company successful. I ended up Venmo-ing him more than that (more money than I ever had before in my life back then) over next couple of months, so that he didn't have to stop working on his business and lay bricks instead, or do anything else but making his business a successful company. A couple of months later he got a large order and never struggled since. He's still working on increasing his sales and getting more clients, on a verge of becoming a millionaire. I get to do work and make money creating software for his company, so it wasn't just helping a friend, but a future (now current) source of income for me as well.
I wouldn't give money if I see the person lacks good morals or is an idiot, that never pays back. But looking back and asking myself, "what did I do that year?", I always feel happy that it cost me less than $20K to help save my friend's business and make sure he doesn't ever get his time wasted by idiot bosses or managers.
I was a technically a loan shark at school, in my early teens.
So I had a fairly small allowance which I mostly saved. Other kids were spending their afternoons at the malls shopping, buying cigarettes and eating fast food.
So the richer kids eventually had their allowances lowered by their parents because of some sort of misbehavior, and it turned out this wasn't very effective as they started asking around to borrow money to keep up their habits.
So I gave small sums of money and since I was a very distrustful teenager I had the following terms - if you don't pay me back by Friday I'm gonna round up the sum or increase it to some other arbitrary point. Usually what happened is they would obnoxiously blow me off, but I would get a concession about increasing the interest further. I didn't want to argue over small sums so I just increased them, giving them a way out of the impasse
In a few weeks the debt would simply balloon and I would start to get angry by the way they were treating me. I learned that I wouldn't get my money by cornering them alone someplace and they would make up credible payment arrangements as soon as possible. I ended up collecting everything with several hundred percent of profit. I learned later that interest rates are calculated yearly and these terms were absolutely insane.
Even though the profits were big the sums were in fact quite small for the trouble, so I just stopped lending out the next year and honestly my market was saturated by then.
My clients probably learned much more than me. At a later time in my life I read 'Poor Economics' and worked with fintechs in an IT capacity. What my teenage self was practicing was fairly common in poor developing countries with next payday or next week loans financing many lively hoods.
I have also never taken a loan, and I'm not planning to.
If you run a business, it becomes a necessity. The problem is that expenses like payroll have to be paid immediately, while accounts receivable are erratic. The choice is to keep a large amount of cash in a checking account earning 0 interest, or have a revolving line of credit at the bank.
Having the credit is cheaper than having large amounts of cash sitting idle as a buffer.
In fact, buffer is the right word. If you're a programmer, you use buffers to compensate for the mismatch between input and output.
It's psychologically and socially so interesting. We often want the benefits without knowing how to repay, manage or handle things.
Also you know that in the catholic middle ages, high lending rate was immoral, it was a big topic at the time (and apparently lead to some foreign groups to become the loan guys as an escape hatch in harsh times).
Meanwhile, I go through life wondering if I borrowed $20 from someone and forgot to pay them back for months and kinda hope they would just say something if I did.
I _constantly_ try to evaluate where I stand with people. If they bought the most recent round of drinks, the next one is on me. If we split dinner, I'm thinking about how their total averaged out compared to mine. If I paid for something, I'm thinking about how much I add to their ledger. I have a "disadvantange" threshold of ~$100 where I won't say anything, but if the imbalance continues to tilt in their favor and they don't do anything to correct it, I might start insulating myself from their financial involvement..
I'm sure most people don't care about it as much as I do, but I have this deep-seated need to make sure I'm as square with as many people as I can be and I expect the same from everyone else. It's not just about being owed, it's about owing, too. I wish I knew where it came from. I wish I was better about just letting it go.
"I _constantly_ try to evaluate where I stand with people. "
I am, or rather used to be, quite similar. Now I am much more relaxed, as I think I understand better what a gift is. It is free and comes ideally with no strings attached. Otherwise it is an transaction. And it is a bad idea, to mix them up. My default is to consider a gift as a gift and nothing more.
I just give and take freely.
If you think too much about it, it can destroy a lot.
Also, there is more than money. Maybe the one guy bought more rounds, but then he unloaded his problems on the others. Or not. So what? Life is not a balance sheet, that needs to sum up. But if you try to make it one, you might find the joy is getting lost somewhere in those numbers.
It's interesting because I — and as far as I can tell, most of my circle — do a similar sort of thing but it's much fuzzier. Nobody is really keeping track of particular dollar amounts, but we seem to have excellent group memory of who last bought who what, who paid for the last round of drinks, etc. I wonder which style (particular vs. fuzzy) is more common.
Thinking I could be insulated because of 10x $10 differences that I thought were close enough makes me sad. I think insulating can be fine, but hopefully your friends know you well enough to know why or you tell them explicitly. Could be in each transaction to split you making sure you're square, or doing a bulk square up.
Some therapists like specific goals like this, for fixed periods of time. Doesn't have to be open ended. Spend X weeks working through the challenges of letting this go.
> I go through life wondering if I borrowed $20 from someone and forgot to pay them back for months
Same. I sometimes ask my friends to tell me if they think I owe them anything. I try to keep things in mind, but I much prefer to hear if I forgot something than let the relationship detoriate.
Exactly, I don't tend to lend small quantities of money to people because I just assume other people are just as terrible at remembering these things as I am.
I'd rather just give money or buy meals now and then rather than have complicated obligations.
Obviously, it really comes down to who you're lending money to. I've lent money to a few people and generally been repaid fairly quickly. Mostly just a few hundred dollars to be repaid the next pay day, or maybe at tax return time. I suspect a final small repayment may have been missed here and there because those involved (myself included) forgot, but that's about it.
The largest loan I made (a few thousand dollars) was diligently repaid; a little each month once the borrower found work again. I also allowed the same person to stay with me, my wife and young daughter a few years later. To clarify - not because they were incapable of paying rent - they needed somewhere short term (couple of months) and I was happy to assist. Said person is now fairly significantly more wealthy than me and they've mentioned several times how thankful they are of what I did for them. I don't need (or want) anything from them, but if anything ever happens to me, and my family need help, I suspect they'd try help out if they could.
I started my first business when I was 25 back in the 1990s.
It had successes but in the end it went under after about 4 or 5 years operation.
I had to borrow from several friends to avoid being bankrupted.
Maybe around $80,000, which was alot of money at the time. The friends universally said "mate I don't care if you never pay it pack, you just sort out what you need to with it."
Paying the money back became my only life mission. Everything I did was focused on paying that money back.
It took me more than 5 years and I paid every cent back with 10% interest on top.
I operate on the principle that no-one should ever be worse off for backing me. I want people to see me as a person of integrity. Looking after the interests of others who have backed you should be your primary driver.
I can talk about it easily now as it's 25 years down the track, but the whole experience at the time was traumatic.
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He told me that he certainly wouldn’t be able to afford to move and I told him “don’t let that stop you”. Fronting him moving expenses was the best decision I ever made, even though it had a chance of not working out. Six months later he’s making 10x the wage he could get in his rural area, and I’ve been paid back with (unrequested) interest.
I guess my message is: sometimes loaning money won’t work out, but when it does, the ROI (emotionally and for society) is extremely high.
1) If you are going to be financially impacted in any way by not having the loan repaid you should't "loan" (gift) it. Like gambling don't do it if you can't afford to lose it.
2) Assuming #1, the overall psychological stress and potential impact on the relationship just isn't worth it. As the "lender" you should feel good about helping someone while learning something about them in the process.
Personally, in having this outlook with family and friends they essentially get one shot. If all parties agree it's a loan and the debtor doesn't pay back the funds I move on without impact to the friendship but mentally they have a "strike" in my mind that essentially says "they can still be a good person and friend, but money can never enter the relationship again".
I feel like it's a decent balance.
It's on the borrower to worry about paying me back. Me, I don't care.
You have to go into the "loan" with the mindset that you will work to maintain the friendship if it doesn't work out.
In short, it's a grant, not a loan. You will become this person's benefactor, and you may learn a lot about how their mind/life works. Perhaps more than you want.
Have lent to many friends/family members over the years telling them to pay me back whatever/whenever they can, however they want. Some have taken decades. No one has not paid back. Few have needed a nudge, which I only give after they have climbed out of whatever hole. Honest people will always make an effort to repay their debts. The rest make lousy friends anyway.
now this is a SMALL amount compared to most people but I have friends who have had a really rough time financially.
If it does it says more about you than the friend
But knowing yourself enough to know you can trust yourself to do this is not easy.
Sure, there should be some consequences for not paying it back, but incessant mockery and refusal to pay for McDonald's is probably a fair exchange.
"Give people lots of leeway, but only once" has worked out well so far. People can't fool you into making a big mistake twice, and once is just the cost of doing business^W^Wfriendship.
On the other hand, finding friends past age 30 is hard enough that paying random devs random sums of money isn't that bad of a deal.
1. Why poor stay poor (you need money to make money)
2. Why successful startup founders skew being from well-to-do families (they can afford to take the risk).
Really applaud you for helping your friend. You truly change their life.
America is definitely the "land of opportunity", more so than most countries, but it's really difficult to bootstrap when you don't have the means.
You have to aim a couple rungs up, not all the way up.
Starting from literally zero you can probably retire modestly but comfortably the owner of a respectable tax dodging container storage and dumpster rental business assuming a little luck and work in your formative years (maybe the local street gang will install the love of hustling for a buck into you) to set you down the right path.
Going from zero to C-suite manager type, not so tractable.
His thing was if a friend needs help and you can afford it then do it - and it’s not a loan. Making it a loan makes it a bad business transaction.
I took that to heart with that friend and later my daughter’s nanny needed help and asked for an advance and we gave her the money she needed.
Both amounts were significant but we could afford it and I’ve never regretted either.
I've also loaned some amounts of money to people I figured wouldn't pay me back, but in smaller amounts. Often they behaved as expected and didn't pay me back, but because I was expecting it was also more or less of a non event.
Fast forward a lot of years we both now live comfortable lives and it has been a good number of years since we last had to help each other.
Sometimes I miss the struggling years though. I think that showing off each other our new German cars is not as good a foundation for a good friendship and love as helping each other and laughing about being saved by the other at the last moment from some dramatic stuff like an eviction or bankruptcy
(I call it a “loan” because they preferred to think of it that way. I made clear at the time that it would be fine if they never paid me back.)
My personal attitude has always been that you should loan money without the expectation that it be returned. You can't be let down if you had no expectations to begin with.
But what if 90% of the time it doesn't work out?
Initially it seemed logical to say OK you need 100 bucks for this or that and you'll get me back. But then a month later I'd mention it and was met with this sort of "why are you being a jerk about it" response. Now I'm in a position that its not a big deal, but back then even that relatively small amount of money was a big deal. It was a tough lesson to learn that some people just use the term 'loan' to make themselves feel less guilty for asking, or maybe intend to ghost you regardless.
I think this also gets into Americans (or maybe just Southerners?) being weird about money and personal finance. Talking about money is taboo.
I live where I was a born, so naturally, all elders needing a hand for whatever (mostly computing obv.) get my assistance. They always want to pay or they feel really really bad.
Reminds me I need to read graeber's book about non currency debts.. it seems to discuss these relationships.
Complicating things is that the penalties for not paying others, like a bank, utility company, landlord, etc. are real and tangible. Whereas hurt feelings are much more readily dismissed than an eviction notice or a debt collector.
First game I bought for my own pocket money, which at time, in Poland, was a lot for a kid as it was full price title, Baldur's Gate 1 in nice box with manual and a map, and dubbed gloriously with then-radio/TV stars, hell, the narrator voice was better than original. Needless to say I was pretty salty.
One: you "bring" things toward the speaker, and "take" them elsewhere. So "don't forget to bring your umbrella!" is incorrect.
Two: "like" compares, and "as" joins independent clauses. So "I wish I could communicate like tptacek does" should be "I wish I could communicate as tptacek does." A correct use of like might be "You, like tptacek, comment insightfully." A famous example of a controversial misuse of "like" was the 1970s slogan "Nobody can do it like McDonald's can." It should be "... as McDonald's can." When that came out, grammar aficionados lost their minds.
Do any linguistics geeks reading have a word I can google for this phenomenon? That is, a word that means something like "a word or phrase that is bidirectional in one language but part of a unidirectional pair in another"
After a while he asked me for some more money, about $5 and swore he'd pay back really soon. I was so shocked that I broke all contact with that guy and never saw him again.
"Kuba pożyczył moj długopis" - Jakub borrowed my pen
"Kuba pożyczył mi jego długopos" - Jakub lent me his pen
I'm learning Polish slowly, living in Warsaw...
Surely a true Pole would say "kurwa Kuba pożyczył moj pierdolic długopis" ? ;-)
Deleted Comment
Carmack, it seems, was comfortable with not being paid back.
That's not how I read the tweet, at all.
> It was a learning experience for me, calibrating some general people behavior. I don’t think anyone intended to not pay me back, but things often just don’t work out the way you plan
My first paycheck paid off all that debt, a couple weeks later I was living in a 1-bedroom apt minutes away from work. I had about $15K in my bank and that's when my self-employed friend needed money to pay rent so he could focus on and make his company successful. I ended up Venmo-ing him more than that (more money than I ever had before in my life back then) over next couple of months, so that he didn't have to stop working on his business and lay bricks instead, or do anything else but making his business a successful company. A couple of months later he got a large order and never struggled since. He's still working on increasing his sales and getting more clients, on a verge of becoming a millionaire. I get to do work and make money creating software for his company, so it wasn't just helping a friend, but a future (now current) source of income for me as well. I wouldn't give money if I see the person lacks good morals or is an idiot, that never pays back. But looking back and asking myself, "what did I do that year?", I always feel happy that it cost me less than $20K to help save my friend's business and make sure he doesn't ever get his time wasted by idiot bosses or managers.
So I had a fairly small allowance which I mostly saved. Other kids were spending their afternoons at the malls shopping, buying cigarettes and eating fast food.
So the richer kids eventually had their allowances lowered by their parents because of some sort of misbehavior, and it turned out this wasn't very effective as they started asking around to borrow money to keep up their habits.
So I gave small sums of money and since I was a very distrustful teenager I had the following terms - if you don't pay me back by Friday I'm gonna round up the sum or increase it to some other arbitrary point. Usually what happened is they would obnoxiously blow me off, but I would get a concession about increasing the interest further. I didn't want to argue over small sums so I just increased them, giving them a way out of the impasse
In a few weeks the debt would simply balloon and I would start to get angry by the way they were treating me. I learned that I wouldn't get my money by cornering them alone someplace and they would make up credible payment arrangements as soon as possible. I ended up collecting everything with several hundred percent of profit. I learned later that interest rates are calculated yearly and these terms were absolutely insane.
Even though the profits were big the sums were in fact quite small for the trouble, so I just stopped lending out the next year and honestly my market was saturated by then.
My clients probably learned much more than me. At a later time in my life I read 'Poor Economics' and worked with fintechs in an IT capacity. What my teenage self was practicing was fairly common in poor developing countries with next payday or next week loans financing many lively hoods.
I have also never taken a loan, and I'm not planning to.
If you run a business, it becomes a necessity. The problem is that expenses like payroll have to be paid immediately, while accounts receivable are erratic. The choice is to keep a large amount of cash in a checking account earning 0 interest, or have a revolving line of credit at the bank.
Having the credit is cheaper than having large amounts of cash sitting idle as a buffer.
In fact, buffer is the right word. If you're a programmer, you use buffers to compensate for the mismatch between input and output.
Also you know that in the catholic middle ages, high lending rate was immoral, it was a big topic at the time (and apparently lead to some foreign groups to become the loan guys as an escape hatch in harsh times).
I'm sure most people don't care about it as much as I do, but I have this deep-seated need to make sure I'm as square with as many people as I can be and I expect the same from everyone else. It's not just about being owed, it's about owing, too. I wish I knew where it came from. I wish I was better about just letting it go.
I am, or rather used to be, quite similar. Now I am much more relaxed, as I think I understand better what a gift is. It is free and comes ideally with no strings attached. Otherwise it is an transaction. And it is a bad idea, to mix them up. My default is to consider a gift as a gift and nothing more.
I just give and take freely.
If you think too much about it, it can destroy a lot.
Also, there is more than money. Maybe the one guy bought more rounds, but then he unloaded his problems on the others. Or not. So what? Life is not a balance sheet, that needs to sum up. But if you try to make it one, you might find the joy is getting lost somewhere in those numbers.
Some therapists like specific goals like this, for fixed periods of time. Doesn't have to be open ended. Spend X weeks working through the challenges of letting this go.
Same. I sometimes ask my friends to tell me if they think I owe them anything. I try to keep things in mind, but I much prefer to hear if I forgot something than let the relationship detoriate.
I'd rather just give money or buy meals now and then rather than have complicated obligations.
The largest loan I made (a few thousand dollars) was diligently repaid; a little each month once the borrower found work again. I also allowed the same person to stay with me, my wife and young daughter a few years later. To clarify - not because they were incapable of paying rent - they needed somewhere short term (couple of months) and I was happy to assist. Said person is now fairly significantly more wealthy than me and they've mentioned several times how thankful they are of what I did for them. I don't need (or want) anything from them, but if anything ever happens to me, and my family need help, I suspect they'd try help out if they could.
It had successes but in the end it went under after about 4 or 5 years operation.
I had to borrow from several friends to avoid being bankrupted.
Maybe around $80,000, which was alot of money at the time. The friends universally said "mate I don't care if you never pay it pack, you just sort out what you need to with it."
Paying the money back became my only life mission. Everything I did was focused on paying that money back.
It took me more than 5 years and I paid every cent back with 10% interest on top.
I operate on the principle that no-one should ever be worse off for backing me. I want people to see me as a person of integrity. Looking after the interests of others who have backed you should be your primary driver.
I can talk about it easily now as it's 25 years down the track, but the whole experience at the time was traumatic.