So yesterday I got a loan from a friend. It's a rarity this period having people lend you money but he did and I am grateful for that fact. Prior to him giving me the money I requested for, we had to agree on the terms of the loan. Luckily for me, my word was good enough. However, there is always that fear when it comes to giving people money even family and friends. There is a saying that you should never borrow money to a friend or loved one you're not willing to lose (if you value the relationship). I've seen relationships destroyed because of money or financial related issues. I happen to be very free with money. I honestly find it difficult to say 'no' to the people I care about and when I lend them money I always have it at the back of my mind I may never get it back. I won't want material things to get in the way of a good relationship. If that be the case then I would rather not offer any help.
TRUST
I am actually flattered that people actually trust me with their funds. Being someone people can trust is a big thing. To be honest I am not so good with money. I tend to be very impulsive and make risky decisions but at the same time, I won't risk losing the trust of people who value me. Personally, I rather not be in charge of someone's funds or owe anyone but that's really a very difficult thing to do. However, I make it a personal principle to pay every penny I owe. It is one of the most uncomfortable positions for being in debt. For the most part of this year, I have had to pay a series of debt which were due to some unforeseen circumstance but I am slowly regaining my financial independence.
HOW IMPORTANT IS TRUST IN BUSINESS?
Personally, I think before trust can be established a persons credibility must be verified. You might have a good friend or loved one who isn't good with money. You might trust them with any other thing except money. Money management is a skill and many people do not have that skill. So it is very dicey.
YOU DONT HAVE TO RELY ON TRUST
When you go to the bank to borrow money you're required to provide collateral--an asset which serves as security for your loan--if they consider it. I do understand how awkward it might sound asking for collateral from a friend. The relationship and trust you've built over the years should serve as security but that should not be the case. Always have things documented. I am speaking from a place of experience. Family and friends can screw you over in ways you cannot begin to imagine and your only defence will be your documents/agreements. I heard of a story of a young man who had lived abroad for several years and while he was away he sends his family most of what he earned to build a house for him. On getting here he discovered that nothing was. The young man was devasted. Things like this are rampant here as most people leave the shores of this country for better lives abroad and return home to nothing after sending almost everything they worked for here. This is because of the lack of accountability from friends and family. My girlfriend wanted to buy some crypto and asked that I manage her funds. I refused because I didn't want her to get into something she knew nothing about. She can trust me with her money because we are both in love and she trusts that I won't do anything to hurt her. What she fails to realise now is that it might not be done intentionally. I might buy or speculate on something that is very risky. If she knows nothing about it there is no way she can stop me even if I try to explain it to her.
So the message here today is to always do your due diligence. Even when you trust people make sure you do not leave room for laxity. When it comes to your finances always makes sure you are in a position you can afford to lose.
hiveblocks