Isn't having money grand? Being in a position to help someone out is truly a blessing, especially in these economic times... right? Well sorta. Sometimes being too free with your money can put you in the same position as the people you are lending it to. You don't want to be heartless like some of the banks, so what are the rules for the Plutocrat with a generous spirit? There are some unwritten laws that Men have to follow, and here's a guide to making sure you don't become a Scrouge.
Family
Do: Specify whether it is a gift, loan, or investment. All three of these things are very different and can determine whether you're going to court or going to business together.
A gift is obvious and something you are doing without any repayment.
A loan is money that you are lending BUT expect to be returned. It's usually no interest added with family, but regardless, it's important to write down the amount and terms. This is easy when the request is made via text, but if they ask in person, send a confirmation text anyway. Most times, we are cash apping or wiring the money anyway, so let them know that the money is sent and that it's no problem spotting them until the specified date of repayment.
An investment is money given with the expectation to do further business with that individual. There is plenty of leeway with all of these options, but it's important to know where the lines stop.
Do: Make a schedule of repayment. True, you have money, but that doesn't mean you are rich. Even if you are, you might have somethings coming up that may need liquid assets. One slow or non-payment can quickly turn bad if you do not make sure the other party knows just much "grace" is under their grace period.
Do: Alert other family members if you are unable to help. If you can't tackle the whole sum by yourself, don't put yourself at risk by taking on a burden you aren't ready for. Regardless of your family dynamic, you are not the sole person responsible for their well-being. Family is there for these reasons, and there is a lot more power in numbers
Don't: Assume that they will do the same for you. Just because you put up money for someone doesn't mean that they will return the favor. People are different, and even though you would like to think that they would honor your initial aid, it is foolish to expect that they will do the same. Guilting families into this only puts a strain on relationships, so avoid it at all costs.
Don't: Give money if you are in a financial crisis of your own. This happens when people are too proud and caught up in appearances, to be honest with one another. If you need that money badly, quit the act. You might not be viewed as the rich cousins anymore, but that's better than the cousin who took them on Judge Joe Brown over $200. Don't embarrass yourself, and don't embarrass your family. If you don't have it, you don't have it.
Friends
For friends, all of the rules for family apply, but there are some additional things that's you need to consider. Unlike family, they aren't stuck with you, you have limited personal information about them, and you have less people to hold them accountable.
Do: Use tact and respect for the borrower. Don't joke or hold lending them money over their head as a tool to rank them or show them as inferior. You never know how things can turn around, and you could easily be in their situation. In addition, You also shouldn't involve anyone else in the matter. This is only between the consenting parties and has nothing to do with the mutual friends you share. Even if things go sour, don't ruin relationships by making friends choose sides over something that does not concern them.
Do: Use your best judgment in terms of the credibility of what the funds are going to. Yes, people lie, friends and family alike, but if you have a shady friend, it's probably not a good idea to give them $1,000 for his new-age medicine business. If they are resistant to questions, just let them know that you aren't trying to go jail, that's all. Funding illegal activity will not only bring you down, but it will cost you a lot more money than you ever envisioned gaining from the venture. Just don't do it, you're smarter and better than that.
Don't: Give it to them if you can't deal with it never returning. Things happen, people have great intentions, and sometimes things fall through. As a friend, you, of all people, know the person you lent to. Of course, you want to be re-payed, but if they can't get it to you, just chalk it up as a loss. Of course, you never let them borrow from you again, or at least until it's repaid (and even then very small sums). You're not a chump, but sometimes that's just a hump that real friendships get over. Don't throw it in their face or demean them, but don't forget it either. If they pester you about why you won't give them extra cash, be honest. You have a legitimate reason, and that will be enough.
Don't: Be blackmailed or coerced to give friends money. Anytime people say they "lend me this or I'll tell...." immediately dismiss them. Let them know that you will never respond to that or have your hand forced by it. If you made a mistake in the past, you would rather deal with the consequences than bend to an underhanded trick like that. At the end of the day, it's your money, and you chose what you desire to do with it. Just like America, Plutocrats don't negotiate with terrorists. People using these tactics aren't your friends and will not stop after getting what they want. Don't be terrorized by them, be a man, accept responsibility and move on... without them.