My thoughts on lending money to family or friends

My recent conversation with a very good friend made me realize that I have a very different view on lending money to family or friends. I don’t believe in it.

I’ve been on a couple of situations where a family member asked for a loan. The first one was from an uncle that I haven’t seen for years. I was really surprised when that happened. My grandma approached me and asked if I can  loan my uncle some money. I flat out said no. I didn’t put thoughts to it. I was even annoyed since I haven’t seen my uncle for years. I’m not closed to him. I was a recent graduate, saving to buy a place. I’m not comfortable parting from my hard earned money. To this day, I am really glad that I stick to that decision. It also set the tone to my family.

The second time was a bit more difficult. I am pretty comfortable financially. My brother needed a car and my father is helping him find one. They found one and I got a phone call from my father asking if I can put a downpayment. Hmmm… this is different. This is for my brother. I want to help out, but I don’t necessarily want to give a loan. So I ask for more information about the purchase. He wants to buy a sports car. I know he needed a car, but heck he doesn’t need that kind of car! I told my father no, I can’t lend the money. I didn’t give any reason. I can tell that he was surprised. That evening I searched craigslist for a reliable car and I send him the details.. well he decided that he doesn’t want my “taste”. Eventually, my father co-sign a car loan with no downpayment.

Looking back, I know I made the right decision. My sister lend my brother some money and I can tell that it’s so awkward when he brag about his business, making some dough… and he can’t even re-pay my sister. More so, when he needed some money, he will “borrow” from my sister. My sister then eventually stopped. Lessons were learned the hard way.

I try to think that I’m generous when it comes to my family. I’ve been very lucky with my situation and I owe them that. Instead of lending money, I actually just give it. I can tell if my parents are on a difficult situation — they don’t need to ask for my help, it’s always there. But I also don’t like to enable a purchase decision that I know is not good in the long run financially.

I will probably assess every situation differently, but I know that I’ll be more comfortable not loaning the money than asking for it back.

 

Road less travel

We hit the mid year of 2015. This year had been promising so far. Milestones are attained and I could have never asked for anything more. I’m very grateful and feels very privilege to be where I am right now. This year, we managed to buy a house. I don’t consider this a starter home, but our home, where I can see myself building a family. You can say that this is a lifestyle inflation and I will not disagree. This is something that I thought about for a while and decided that I want to spend on this. This purchase makes me happy.

At the same time, I sold my condo. Selling my first property is very personal, but I did it for peace of mind. I’m lucky that I purchased the condo when the market was down and was able to sell it when everyone else seems to want to buy a place. I also got lucky that my former neighborhood changed so much in the last five years. Overall, I have enough to cover for down payment for the new house with a lot more left. I’m really just moving my investment from one real estate to another without touching any of my other investment.

The move made me very conscious of the stuff I own. We more than double the size of our house but I can’t seem to get myself to buy anything. In contrast, I actually start selling my stuff and my goal is to get rid of more. So why did I buy a new place? First, I actually want a house, a yard, a kitchen that can fit more than one person and a place that I can grow into, while staying in the city that I love. This house is perfect, in a great neighborhood and is just about 5 miles from work. I can honestly say that we got a bargain on this house.

When I first started blogging, I wrote about paying off my mortgage within 5 years. Life changed this past year. I got into an accident and all of a sudden, my focus is on getting better.  Health will always be my number 1 priority. I’ve always been financially conscious. I got my own CD when I was 17 and learned more about savings and investment. I have to do this on my own. I grew up in a very loving family but unfortunately, my parents aren’t financially savvy. For some reason, I always have this fear of being poor. Lack of money has always been an issue with my parents and most of their fights are about that. I told myself that I will always have enough. Not a lot but enough.

And so this blog started. I’ve always been different from my peers financially or just my generation in general. I never carried a credit card debt and mortgage is the only outstanding debt I have. I need to get a student loan but it was paid within 5 years. I used to buy stuff, not a lot but enough for me to go to the mall and found all these trinkets and stuff that I’ve used once or maybe twice but will honestly never use again. To that point, I asked myself, what exactly do I need to survive? How can I purposely live my life that I will never worry about lack of money and actually use my precious time for things that makes me happy?

Cute, but I never used it and is a bit small for me. Sold on ebay

I have everything that I want and more. I don’t mind my job but at some point I want to take some time to travel, write, dance and experience life outside of the 9-5 routine. It might not be popular, but I know that this will make me happy.