Dear Jeanne and Leonard: I’ve always been close to the two children of my best friend since high school, who are now young adults. Several years ago, I lent the oldest $20,000 toward the down payment on a house, and he has never missed a due date in repaying me.
Now, his younger brother, “Jordan,” who knows about this loan, has asked to borrow $15,000 so that he and a friend can set up some sort of used-iPhone resale business. While Jordan is a good kid, he has always been lackadaisical and not very realistic about life. Moreover, he knows nothing about commerce. Even so, I’m sure his feelings will be hurt if I turn him down after having made a loan to his brother.
And it won’t be just his feelings; his parents romanticize everything this boy says or does (since he mentioned the iPhone idea, they think he’s about to be the next Steve Jobs).
So if I say “no,” they’ll see it as a rejection of their son, and they’ll be wounded, as well. What should I do?
– Friend of the Family, Kansas
Dear Friend: So how much money are his parents putting into the iPhone resale business? Or is their idea that you put up the cash and they supply the cheerleading?
Not that it matters. Unless you want to find yourself out 15 grand and being asked for more, say “no” now.
But first, ask to see Jordan’s business plan. His parents can’t object to that. And if he’s as lackadaisical as you say, he may never deliver one. Even if he does, though, his plan probably will provide you with something face-saving to point to as you say, “Sorry, but it’s just too risky.”
Dear Jeanne and Leonard: A friend and I hosted a party together. We held the event at her house (it’s a lot bigger) and did most of the preparation for the party in her kitchen.
Unfortunately, I broke one of her serving dishes. Even more unfortunately, she hadn’t really wanted me to use it because it had been a wedding present from a favorite aunt. Must I pay to replace it? My friend knows that what happened was a complete accident – she saw me trip. Plus she and her husband have much more money than I do.
While I feel terrible about breaking her dish, writing her a check for a couple of hundred dollars seems crazy.
– B.L., Texas
Dear B.L.: Not to us.
When you damage something that belongs to someone else, you need to offer to repair or replace it, period. Having less money than the owner of the broken object doesn’t exempt you from the obligation.
You didn’t mean to break the dish? Too bad, but people rarely do. Paying to replace it will be a stretch? That’s a thought better to have had before you insisted on using the dish.
P.S. If your richer friend offers to let you off the hook, don’t jump at it. This is the kind of minor irritation from which large resentments grow.
Please email your questions about money and relationships to Questions@MoneyManners.net.