business deal

I recently blogged about how a close family member wanted me to loan him money. I really had to think about it because this money was what I have been able to save over the past 9 months.

Update: I have decided to go ahead and loan him the money. How could I not really? It’s a favour for him, and in the end it will be a favour for me as well. This is really my first time loaning anyone money. I made a few mental notes for myself to follow to ensure that everything is done properly.

1. Evaluate: I had to evaluation my situation. Can I survive without this money? If there were an emergency, could I pay for the situation in advance? Also, I have to evaluate his situation. He is a reliable, professional person, and truly only asks for money for serious issues, not leisure or wasteful reasons. For example: Without any offensive feelings, I would not be loaning money to anyone if the money were going to such things as drugs, alcohol, or any other addictions.

2. Same expectations: Going into this we both have to want the same expectations. For example: Same interest return rate, same initial amount of money to be loaned. We both have to understand when he needs to money exactly, and when I will receive the money back. Having different expectations will only lead to tension, and bad feelings.

3. Writing: Always, always, always make sure that everything is in writing. Not only do I follow this in my personal life, but I follow this in my work life as well. I document everything, and ensure that proper processes are followed. For this situation, he and I signed off on paper agreements, which is essentially a business agreement.

All in all, I feel happy that I am able to help family and friends. Sometimes we have to look at our situation, and realize that in the big scheme of things, most of us are pretty comfortable and have a wonderful standard of living.

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