> Give small loans to your extended family and friends instead.
I feel like amongst the entire HN userbase that this will touch, somebody has to chime in and say the opposite on why you shouldn't do this?
I feel like amongst the entire HN userbase that this will touch, somebody has to chime in and say the opposite on why you shouldn't do this?
We've seen too many people who've had relationships ruined over it. In our view, the two primary cases simply don't have good outcomes:
* A situation where the borrower has made many, significant financial decisions. Lending them money isn't going to fix their problems.
* A loan that is far too large. While this is not the poor decisions of point 1, it's often a purchase that has more affordable options. E.g. they can afford a $10k car, but want to purchase a $20k car.
Maybe, but you are also blinded by your emotional attachment. I suspect for most people that would far outweigh any benefit from knowing your friend's character.
As far as profiting goes - well is it a gift or is it a loan? Even if you get the principle back exactly you are still losing money due to the time value of money. Maybe your ok with that. Maybe you are ok with not getting it back at all. In which case it is more a gift then a loan. Which is fine as long as you are honest with yourself about your expectations.
This is a person who works as a teacher at a public school so has a regular job and is a US citizen by birth. The only crime if you can call it that is they don't want to send their father back to jail just so they can have a bank account.
If the same thing happened to you, you probably would also blame your friend as well. E.g. if your friend's father pretended to be your friend, borrowed money, and then when you asked about it, the friend claimed that he himself did it because he didn't want you mad at the father, you would probably blame the friend not the father.
This still doesn't solve all the kinds of drama and conflict that can come up (e.g. siblings can get annoyed with each other when 1 pays back a family loan and the other doesn't), but it helps a bit.
I limit lending amounts to what I can sensibly afford, and I still have to apply judgement. I also gently knock back requests for "more" loans where there's been a large amount unpaid in the past.
This is really the key part. Because if you're going to be upset when they don't pay you back (totally understandable) you're going to be losing a friend because some of them will not pay you back.
If you do loan money do it with the implicit assumption that it’s a gift you may never get back.
Those communities that are more homogenous and well-knit (think of their community as an extension of their family) tend to have better success stories in escaping poverty than those that aren't.
And I'd guess it's precisely that positive feedback loop where the rich informally help the poor, and when the poor get rich, the loop repeats.
but I still think the sentiment stands
I mean, if your goal is financial equality, this is a terrible way to get there. People are usually friends and family with people of similar ecconomic class. Giving loans to people you know just continues the status quo of rich people having access to credit and poor people not.
Duplicating debt systems with those closest to you by even calling it a loan is a way to persist a system of oppression in the places young people grow up in. An alternative would be to practice freely giving, especially to needs, never calling things loans or favors, and maybe include with the gifts some lighthearted & light reading material on how to culturally dismantle systems of oppression.
> Duplicating debt systems with those closest to you by even calling it a loan is a way to persist a system of oppression in the places young people grow up in.
Giving money to friends and family is oppressive, is what this is saying. Which is just wild to claim. And kind of cheapens the phrase "system of oppression".
> An alternative would be to practice freely giving, especially to needs, never calling things loans or favors, and maybe include with the gifts some lighthearted & light reading material on how to culturally dismantle systems of oppression.
The first bit is fine, but the last thing is super patronizing. How would it look if your friend asked you for $500 and you gave them some woke manual on how to dismantle "systems of oppression", whatever that means?
This sounds "Hacker News"-y because there are a lot of smug programmers here who think they're borderline genius and can solve society's problems just because they read a couple philosophy books and have access to JSTOR.
I kinda left my comment sarcastically, but I'm trying to being serious with this bit of advice. Just try less with your writing. The more your try, the faker it sounds.
To be clear, I was trying to say with the first part that loaning money, instead of giving it, is oppressive. Also, myself and some friends would love the gift of a zine or funny comic about dismantling systems of oppression. It'd be pretty in-character for me to give or receive it. I also don't claim ownership over things, though, so shrug
And by "systems of oppression," I mean organizations/cultures that harm through keeping people from getting what they need or making it way harder for some than others. Debt is one such system. Same for nonvoluntary governments. Caste systems. Just as some examples.
Well, parent did qualify it with the word "small".
If a small[1] amount of money is liable to cause strained familial relationships, then the loan doesn't matter, because that relationship is already fragile.
The other side of the coin, especially with the qualifier "small", is that you can quickly figure out in your familial network is reliable and who is not. This knowledge is useful for more than just money.
As someone famous once said, "If I lend a friend $100 and never see them again, that was money well spent".
[1] Relative to the people involved, that is.
Less emotional pain when you realize this.