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Creditors have better memories than debtors.
—– Benjamin Franklin, Poor Richard’s Almanac (1758)
Have you ever lent someone some money and then wondered how to get them to pay you back? Maybe you KNEW you shouldn’t lend it, but you felt pressured to help them out. Maybe you dropped a few hints, maybe you even brought it up outright. Maybe you DID ask repeatedly, but you were always hit with, “Times are just so tight right now, can you wait a little while longer?” As if you really had a choice…
Few people understand this simple concept and as a result, don’t understand why no one else wants to lend them money.
I’m not so much interested in the return ON my money as I am in the return OF my money.
—–Will Rogers
Dave Ramsey is fond of quoting the Bible verse: “The borrower is slave to the lender.” I agree, but in another way, the lender is a slave as well. The lender is a slave to the worry that the debt won’t be repaid. He’s a slave to sleepless nights wondering if he made the right decision. He’s a slave to wondering if he was too aggressive with the interest rate or if he left money on the table.
I used to work at a bank that fired loan officers who had default rates above a certain percentage and those who had default rates that were too low. Seems the bank expected a certain amount of loan defaults to insure they were being as aggressive as they should be. Lenders worry about those sorts of things.
Several years ago, I lent someone a pretty large sum of money. To this day, I’ve never been repaid. And I can’t help it, but every time I see that person, I remember. I truly don’t think he does. Ben Franklin was right…creditors DO have better memories than debtors.
What about you? Have YOU ever lent money and worried about getting it back?
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A bank officer told me once that she would much rather see a debtor come up with all kinds of stories to try to convince her that the loan would be repaid, than those that try to avoid her.
Loans can and will go bad for many reasons. What must not go bad is the borrower’s attempts to make good.
Ron 's reply:
June 17th, 2008
LOL! Either way, the loan may go bad. At least she could be entertained with the stories!
But you’re right. It all boils down to basic integrity. Unfortunately, there seems to be a growing segment of the population that thinks “the bank has plenty of money and it won’t hurt them if I don’t repay this loan.”
Once I realized that the only person I’m accountable to for financial support is myself (meaning my household), it became far easier for me to determine where to lend or give my money and where not to send money down the drain. It’s not an easy lesson to learn.
lending money can destroy relationships.
Ron 's reply:
June 17th, 2008
You got that right. I borrowed money from a roommate when I was in college and it bothered me for a long long time. It was only $150 but I was unable to pay him back for 2 years. When I did, I sent him the money plus compounded interest and a sincere thank you note. But you know, things never were the same.
[...] Wisdom Journal reminds us that Creditors Have Better Memories than Debtors. I’ve been on both sides of the lending fence, and he’s [...]
If I lent someone money and expected it back, I couldn’t possibly not say anything.
Mike