GIVE A HUG, NOT A LOAN

One challenge you may face as you’re beginning to build wealth is responding to requests for money from friends and family. They will see that you are able to afford a home and/or a car and assume that you have money to spare. Be very careful here. Set aside a friends-and-family fund at the beginning of the year. Once the fund is gone, so is your ability to share money.Also, consider giving the money away instead of loaning it. Doing so will preserve your important relationships. Further, chances are that anyone who borrows money from you will have trouble paying it back. Just think, if their loved one needed to pay for an operation on the same day that they were supposed to pay you back, who would get the money? The doctor or you?

Another thing to consider is that even if you don’t have debt and you have saved money to cover at a year or more of expenses, you do not have money to spare. That money is to be used as a seed to help grow your wealth. It should be used to purchase income producing assets like real estate, stocks, bonds, and businesses.

Once you start to be disciplined about your friends-and-family fund, you may encounter resistance and even anger from those who have been used to treating you like a bank. Be strong. Remember why you love yourself. Anyone who harasses, insults or tries to guilt you into giving them money isn’t someone who you need in your inner circle. No matter who they are: sister, brother, friend or mother, they are not acting in support of you and your objectives. If they really love you, they’ll accept a hug instead of a loan when all your money is gone.

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