If You Want to Lose a Friend, Loan Them Money

"Neither a borrower nor a lender be."

Posted Nov 13, 2019

I struggled financially in my younger years. I went back to school in my thirties and became more successful later in life. Back in the day, when I was struggling, friends helped me out, and I'll never forget those gifts. It’s also why I’m inclined to be generous. When someone I care about is in a bad place financially and has asked me for help, I’ve been inclined to say yes, and not because I’ve felt that I have too much—I’m far from that—but because of what friends did for me when I was younger.

Almost every time I’ve lent someone money, however, I’ve had to remind the other person to pay me back. It’s awkward at best. Some people have tried to avoid repaying me. This destroyed at least one friendship which had spanned a couple of decades. That friend and I were in a business together, and over the years I had lent him a good deal of money, which he always paid back—that is, he did until the final, really big loan. I actually had to take him to court over it.

How many times has something like this happened to you, and how do you prevent it from reoccurring?

The obvious answer is to stop lending money—at least, to close friends. Okay, I’ve done that. To mitigate future losses (both financial and personal), the Bank of Barton is now closed. Unfortunately, I can’t undo the past. It hurts when a friendship ends because one person decides that money is more important than the relationship. I hate it.

Still, it’s important to recognize that loaning money is completely different from giving it away. If you expect to be repaid, and that doesn’t happen, you will feel set up and used. Period. On the other hand, if someone were to say to you, “I really need this to make my life whole again, and I don’t know if I can ever pay you back,” and you have the ability and desire to help, I say, go for it. Real friends help each other out. I would never hesitate to help a close friend.

I’ve decided that I will continue to help people out, but I will no longer loan money or do business with people I care about, and that just stinks. If I listen only to my heart, it makes perfect sense to work with and trust the people whom I have let into my world. That being said, the outcomes are so clichéd. As Polonius advises in Hamlet, “Neither a borrower nor a lender be,” and Shakespeare was right.

I am grateful for my success, and one of my biggest joys is being able to share the wealth. But I have to set limits. If you have been stiffed by someone you care for, know that it wasn’t you, no matter how hard they try to tell you differently. Stick to your guns, and if you have to, walk away. If you suspect that someone is only around you for what they can get, it is best that you move them along.