A few days ago I posted about Loaning Money to Family and Friends , since then I have caught nothing but flack in my comments and I have tried to make a case there. It appears to not be working so I am going to once again attempt to explain things to my readers that may be a little slow or sucking on a crack pipe. I have at no time ever stated that you should not feed a hungry person, nor have I said you should see family or friends homeless. I would never advise anyone to do anything like that. However, there are just as many times, if not more when saying "NO" to someone attempting to borrow money from you is the right thing to do. Would you loan money to a crack head to pay his rent after he just blew all his pay on rock? How about an alcoholic whom you have never seen sober in 5 years? What about your friend with the gambling habit, sure he's just down on his luck and the next poker game will be his big win? Maybe you can overlook your friends brand new Hummer when he mentions his rent is late and he just needs a small loan?Never mind thats the same excuse he gives you every month.
These are all people that need to get their life straight and the sad thing is most of them never will as long as they have people saving their asses. Sometimes you just have to let a person fall down because they have to hit rock bottom before they begin to realize change must take place.
One of my readers has said anyone that would not help family is either
1. "those that resent their own family because they were never helped"
2."cheap arse tight wads just using excuses not to help"
3."they don't generally like the person who is asking for help"
4."greedy S.O.B. who won't help unless they get back something much bigger"
I would like that same reader to please tell me what category I would fall into in each of the above named circumstances for saying "No".
Sunday, March 30, 2008
Quote of The Day
"The most valuable thing you can make is a mistake-You can't learn anything from being perfect"
Adam Osborne
Adam Osborne
Saturday, March 29, 2008
Loaning Money to Family and Friends
Most of us have been approached at some time by either a family member or a friend that wants / needs to borrow money for one reason or another. I am going to teach you how to handle these situations. Repeat after me..."NO! "
It's that simple really, just say "no". It may cause you an argument now but at least you will still have your cash. To say yes will only postpone the argument (and it will come when you don't get repaid) and then you will lose not only a friend but your cash as well. If you must say yes, be sure to get something in writing that details when you will get repaid, interest charged, and any late fees that may accrue due to a late payment. I know many people will say charging interest on a loan to family or friends is just evil but hear me out, at what time did you become a bank? Loans come from banks and if I am going to be treated as a bank, I am going to charge interest on a loan just as every bank in America would.
Let's think about the situation further, You as the lender are being asked to loan your hard earned money to someone without a credit check or any collateral. These are things all banks would require to even consider giving a loan. If you were not to loan this money, you could conceivably keep it in an interest earning account, thus by loaning the money and not charging interest, you actually lose it's potential to grow larger.
As you start to accumulate savings, your family and friends with less than perfect spending habits, will start to view you as a bank. DO NOT let their habits become your problems.
It's that simple really, just say "no". It may cause you an argument now but at least you will still have your cash. To say yes will only postpone the argument (and it will come when you don't get repaid) and then you will lose not only a friend but your cash as well. If you must say yes, be sure to get something in writing that details when you will get repaid, interest charged, and any late fees that may accrue due to a late payment. I know many people will say charging interest on a loan to family or friends is just evil but hear me out, at what time did you become a bank? Loans come from banks and if I am going to be treated as a bank, I am going to charge interest on a loan just as every bank in America would.
Let's think about the situation further, You as the lender are being asked to loan your hard earned money to someone without a credit check or any collateral. These are things all banks would require to even consider giving a loan. If you were not to loan this money, you could conceivably keep it in an interest earning account, thus by loaning the money and not charging interest, you actually lose it's potential to grow larger.
As you start to accumulate savings, your family and friends with less than perfect spending habits, will start to view you as a bank. DO NOT let their habits become your problems.
Wednesday, March 26, 2008
Whats in Your Wallet?
Whats in your wallet? More importantly, do you know how to correctly use it and no I am not referring to that unopened Trojan from your high school glory days, throw that away and buy a new one already. I am referring to that credit card or credit cards as the case may be.
With credit cards come huge responsibilities, the biggest of which is making sure to pay on time every month lest you incur late fees and interest on late fees. It really doesn't take long for that little debt to become a hole of debt too deep to easily dig yourself out of.
Many people fail to even read the contract when applying for a credit card and fail to realize that the low interest rate promised when you first get the card is often accompanies by a clause stating that failure to make timely payments can mean an increase in the interest rates as high as 24.99% in many cases. This can be imposed the first time your payment is late.
Failure to manage your credit card wisely can also have a large affect on your FICO score and in the long run, maybe even years after you pay the card off, affect you being able to get that new home or car. A large part of your FICO score is based upon available credit, if your maxed out its not good and if you have too much available credit it can also be a hinderance as many lenders view this as a possible way for you to over extend yourself. I personally recommend carrying no more than 2 credit cards and only using those when you have the money to pay cash.
There will be emergencies(read past posts about setting up an emergency fund) from time to time that will pop up and you may even have to charge your way out of it. In these circumstances, you should do everything you can to insure paying this accrued balance down as fast as possible.
Credit cards can be a life saver at times but should be used wisely and not for frivolous items such as buying that $200 dog figurine from the home shopping network.Through proper control, you can and will improve both your FICO score and your own financial stability. Until the government institutes a mandatory test of ones intelligence prior to being issued a credit card, remember nobody can control your spending but you. Shop Wisely and Good Luck!
With credit cards come huge responsibilities, the biggest of which is making sure to pay on time every month lest you incur late fees and interest on late fees. It really doesn't take long for that little debt to become a hole of debt too deep to easily dig yourself out of.
Many people fail to even read the contract when applying for a credit card and fail to realize that the low interest rate promised when you first get the card is often accompanies by a clause stating that failure to make timely payments can mean an increase in the interest rates as high as 24.99% in many cases. This can be imposed the first time your payment is late.
Failure to manage your credit card wisely can also have a large affect on your FICO score and in the long run, maybe even years after you pay the card off, affect you being able to get that new home or car. A large part of your FICO score is based upon available credit, if your maxed out its not good and if you have too much available credit it can also be a hinderance as many lenders view this as a possible way for you to over extend yourself. I personally recommend carrying no more than 2 credit cards and only using those when you have the money to pay cash.
There will be emergencies(read past posts about setting up an emergency fund) from time to time that will pop up and you may even have to charge your way out of it. In these circumstances, you should do everything you can to insure paying this accrued balance down as fast as possible.
Credit cards can be a life saver at times but should be used wisely and not for frivolous items such as buying that $200 dog figurine from the home shopping network.Through proper control, you can and will improve both your FICO score and your own financial stability. Until the government institutes a mandatory test of ones intelligence prior to being issued a credit card, remember nobody can control your spending but you. Shop Wisely and Good Luck!
Monday, March 24, 2008
When is Enough Truly Enough?
This week has proven to be a challenge to me with all the additional work brought in by my salesperson. I was completely overwhelmed at first wondering how I was gonna get everything accomplished on time and under budget without letting any of my existing clients down in the process. Somehow I have gotten things back to manageable even with all the added work. This afternoon, I received a call from the same salesperson that put all this together only to hear that she is working on not one but two more huge deals for me. As the work flows like water, Niagra Falls, to be more precise, I find myself wondering "when is enough truly enough?"
I'm not sure of the answer to that question as of yet but for now, I built this monster and I intend to ride it until either it or I break.Sit back, strap yourselves in, this is gonna be a heck of a ride!
I'm not sure of the answer to that question as of yet but for now, I built this monster and I intend to ride it until either it or I break.Sit back, strap yourselves in, this is gonna be a heck of a ride!
Subscribe to:
Posts (Atom)
