Can you share your wealth with family and friends? Yes, but if you want to retain your sanity I would strongly suggest you don’t lend anyone any money unless, mentally, you are prepared to write it off. That way when they don’t repay you – and I bet they won’t – you’ll feel just fine about it. If you expect them to repay you and they don’t, imagine how hurt and let down you are going to feel.

I know. I have sons. But my money is for them as much as it is for me, so we play this game of them asking for a loan and me giving it to them. Sometimes they pay it back and I am pleasantly surprised but sometimes they don’t and I write it off and that’s fine too. (I really hope they don’t read this or I’ll be cornered like a rat in my own home.)

I value them and their relationship with me and I wouldn’t want to fall out with them over something as squalid as money when there are so many better things to fall out with them over anyway.

If you do lend money to friends and don’t get it back, you lose more than just the money – you lose the friendship as well. They feel embarrassed because they aren’t repaying you and thus don’t come round to see you. You feel grieved and don’t invite them because of it. Result: end of friendship.

Write it off though and you’ll still be happy to see them and they’ll quickly forget the embarrassment and regard you as one of a kind.

Of course you don’t have to do either. You can just say no (see Rule 100). Or you could just give them money (see Rule 101).

I’ve been reading an advice blog on the web about a young man who lent his room-mate at college $350 – not a huge amount – but the repayment never materialized. He had asked various friends first if they had ever lent his room-mate money and they said he had paid them back. Now he has of course fallen out big time with his room-mate – despite offering him the option of repayment terms at $50 a month. Worse still, he has fallen out with all his other friends because they ‘approved’ the loan in his eyes.

The advice was to take the friend to court but I figure he won’t see the money anyway and will cop a lot of legal expense into the bargain. Better to chalk it up to experience and walk away whistling. I know, for him, it is a lot of money but any decent education doesn’t come cheap. The discussion did go on into his rights to ‘seize’ his room-mate’s possessions etc. I still say walk away whistling and don’t ever do it again.