Keep in mind I was unable to afford groceries many of these months.
In the end, they cleared out on that date and I never heard from them again. Even though we were quite close at one time.
Money well spent really.
With such a friend, whether to loan money is an easy question to answer: yes, as long as I can afford to.
With anyone else I figure I’m not a bank (or a loan shark), so I shouldn’t get into a bank’s business.
It's not "get" if it's a loan.
The IRS might also be interested if you treat this a taxable gift rather than a loan... (unlikely they'd care for $1000).
https://www.irs.gov/faqs/interest-dividends-other-types-of-i...
https://en.wikipedia.org/wiki/Gift_tax_in_the_United_States
> Second, gifts in excess of the annual exclusion may still be tax-free up to the lifetime estate basic exclusion amount ($11.58 million for 2020).[9] For estates over that amount, however, such gifts might result in an increase in estate taxes. Taxpayers that expect to have a taxable estate may sometimes prefer to pay gift taxes as they occur, rather than saving them up as part of the estate.
The per year limit for 2023 is 17,000. A 11M lifetime limit would mean 647 years of giving.
I think the 11M figure is just totally way off. Not sure where they are getting that from.
Scroll down to ”Basic Exclusion Amount for Year of Death”
The gift giver pays the tax, but only after they give someone more than the lifetime amount.
But given we're talking about loans and gifts while a person is living, I think the correct tax to invoke is the gift tax that has a limit of $17,000 per year.
https://www.irs.gov/businesses/small-businesses-self-employe...
Neither taxpayer A nor taxpayer B have a federal tax liability for gifting more than the annual exclusion amount.
So I do not see how the gift tax, which would implicitly involve a tax liability for the gift, has a limit of $17k.
Am I incorrect?
If A is alive when that happens then that is wrong. B will be taxed on the amount of $1M - 17k because the gift tax applies not the estate tax.
If A were dead and gifted B in their will, then you would be correct because the estate tax applies in this scenario.
Again, since we're taking about loans and gifts while a person is alive in this thread, the first scenario of the gift tax applies.
https://www.irs.gov/businesses/small-businesses-self-employe...
>Who pays the gift tax?
> The donor is generally responsible for paying the gift tax. Under special arrangements the donee may agree to pay the tax instead. Please visit with your tax professional if you are considering this type of arrangement.
The paperwork only starts when you gift one person more than $16k (2022 value) in one year, which is quite a large gift and the lifetime estate tax exemption is also very high (currently $12M), so even if you do need to file paperwork because a gift is taxable, the tax rate is likely to be 0% for almost everyone. And as much as people complain about death being taxable, most people don't have that many tears for the tax impact on people who had a $15M estate.
But I understand the rest. I simply did not know that the rules are very reasonable. Myself I am in Canada not the US.
The IRS does require you to report it if it goes over $16k from one individual to another. This is solely to keep track of that $12M lifetime gift limit.
Totally reasonable IMO unless you don't believe in inheritance taxes at all.
so you could do $48k from a couple to their child and child's spouse.
But I also like the IRS limits. It limits how much my family/in laws think I might be able to give them in a year :)
Further, that tax is payed by the donor, not the recipient.
In other words, the IRS won't care if you can't pay rent and somebody gifts you $1000.
Seems like a major jerk move to structure the "loan" in a way where you remove these people from your life.
If you want be charitable, there's certainly more efficient ways than giving free money to random people who ask you.
Yes, because i don't like to call myself a shitty human.
Usually they're choosing between a set of bad options.
I think the minority would call you a victim of 'temporarily embarrassed millionaire syndrome'.
Well, some most likely are.
Misplaced pride? Or lack of self-awareness and acceptation of their shortcomings? Guilt that builds upon itself (where just talking about it first could ... just clear things up)?
Or they don't know/understand/weren't explained how to repay it (even if that's as simple as just paying back, or only saying "thanks"). Social rituals definitely help here.
And honestly, habitually soliciting money from friends shares a lot of similarities with using venture capital -- the reasoning that it's better to explode with someone else's money than your own.
I was surprised by some of this, especially this last part.
Firstly, $40 is not a lot of money. Hardly a "big con".
Second, I think the "money well spent" part is that you helped her in some small amount, when it was obvious she was suffering, and you didn't expect anything in return.
I think if she had come back expecting continued/sustained support, then you'd be right to pull away. But that sounds like the story of somebody who struggled in that moment and you gave some small gesture of support. I think it's good. Hardly an "investment to get her to leave you alone". That sounds too cynical and harsh.
It seems you have been lucky enough to be living a sheltered life, without any acquaintance having tried to chat you up to their advantage.
Unfortunately there are plenty of people in the real world who are either takers or outright set to exploit you. Not many, but enough to have people learn the wisdom of saying "no" to sob stories.
I once came across a guy who apparently lived close to me who was asking for money for a taxi ride because he was out of gas and had to go to the hospital to check up on his kid who had an emergency and blablabla. I gave the guy 10€ and wished him well. Fast forward a couple of weeks and I stumble upon the same guy right on the same spot. He clearly didn't recognize me as he asked me again for money for a taxi ride because he ran out of gas and his kid was just admitted to the hospital and blablabla. I asked him if he didn't asked for that same request a few weeks ago, to which he just stood there looking at me without saying a word, and after a couple of seconds he turned back and proceeded to walk away and never be seen again.
In the pre mass online shopping days I also had a close friend who just moved to another city. Our friend group had thrown him a big farewell party and everyone promised to keep in touch and visit all the time and all those things. After a few days that friend reached out to us saying he now lived right next to a consumer electronics megashop, and if any of us wanted anything shipped then we could simply send him the cash and he would buy the stuff we needed. A couple of guys from the friend group took him on his offer and sent him cash transfers, and that friend proceeded to ghost everyone.
Sadly I have other personal anecdotes, some of which real sob stories.
It really depends on what you mean by helping people with a small amount. Those who profit from your actions do benefit from the money they get from you even if it's under false pretenses. Robbers who steal stuff from people around them are also helped by getting their hands on il gotten gains.
I'm sorry good sir or madam, I stopped reading here.
In my personal life experience with abusive people, I find it makes me want to be more in favor of unconditional help for others, not less. Though I have experienced the urge to want to help people less, which you seem stuck in, and I was formerly stuck. I think it's a stress response. It creates a lot of anxiety to keep sizing people up for how they're going to screw you, instead of just accepting them and treating them well. (Yes, there is a difference between treating them well and letting them abuse you.)
This has nothing to do with conditional or conditional help, or help at all. You feel compelled to fool yourself into believing you're not being exploited, but you're the only one believing that nonsense. You're dealt with like the mark in a con, and not exercising any common sense does not make you more pious, just an easy mark without self esteem.
The people that leech off of you are not the ones who need it the most. They are just the ones that don't mind profiting from less than ethical and moral means.
It's ok to be yourself around those people, to let down your proverbial guard, while having appropriate boundaries and not being exploited ... But over focus on who exploits and who is exploited blah blah blah ... All of that is quite toxic. It can make you just as miserable as the people you're accusing, if not more. And if you see every interaction this way, it's only a matter of time before you start seeing potential exploitation where it doesn't exist.
Let's be clear here: the "out of gas" story was almost certainly a lie and OP knew it. He helped her buy a small amount of drugs.
I have a sibling struggling with drug addiction for the past 6+ years, constantly "borrowing" money from others and never quite hitting a serious enough "rock bottom" to decide to get help/rehab. My brother "borrows" $10+k/year from my dad and it's poisoning their relationship and draining my dad's finances. (my dad recently took out a 401k loan because he's so cashflow-negative and that money's gone already) My dad enables him every day while dreaming about moving to another state and cutting off all contact.
$40 for OP to cut ties with someone like that is indeed money well spent, IMO.
I offered my seat on the subway to a young woman about my age who looked very tired. She didn't say anything, or even look in my direction: she just seemed like she was having a difficult time. She said "yes, thank you" and I got up.
When I got up, the dude I was standing next to whispered in my ear "can't believe you let yourself get conned out of your seat like that."
Some people just don't want others to be helped I guess.
I'd like to point out my experience of taking the loan and never repaying it. I felt guilty for decades and more distant from the loaner. They never brought it up but my guilty mind did.
So I'm not 100% sure it was a net positive for our relationship.
If I was to do loan money and they didn't pay back in some reasonable amount of time I think I'd tell them explicitly it was a gift. Though I'm not sure that would fix things in the guilty person's mind (yea, I get I'm projecting my feeling on guilt on them. They might not feel any guilt at all)
"Whoever is generous to the poor lends to the LORD, and he will repay him for his deed." – Proverbs 19:17
Edit: I don’t have fuck you money, so I am actually ignorant of the dynamic you’re describing. I’d rather be known as an asshole with backbone than a rich sap though. One of those looks more like a mark than the other.
It's unfortunate that some people seem incapable of feeling guilty. They have a victim mentality which only gets worse whenever people don't do anything nice for them.
If they're redeemable there is a point where you give them so much that they finally escape their problems and their attitude improves. Sadly this doesn't always happen and it doesn't always last.
If they scuttle off, then they weren’t real at all, and I got played. I guess this supports OPs point, so I kinda get it.
However this group of people is not very large, most people I know aren’t getting money willy-nilly.
It's normal to forgive a loan to family if circumstances change, or to give money no-strings-attached if they need it, but it's equally normal to loan money to help with cash flow problems and then expect repayment eventually.
Is this common? Such a thing is unthinkable to me, and even friends from more businesslike families than mine have expressed major shame to me that they had to get a couple grand from their dad to cover closing costs (paid back within weeks)
And I understand if it's a sick kid or some other kind of an emergency... but people overstretch for luxuries.
> when you see on earth the man who has encountered the shipwreck of poverty, do not judge him, do not seek an account of his life, but free him from his misfortune. Why do you make trouble for youself? God has excused you from all officiousness and meddlesomeness. How much most of us would complain, if God had bidden us first to examine each person's life exactly, to interfere with his behavior and his deeds, and only then to give alms? But as it is we are freed from all this kind of annoyance. A judge is one thing, an almsgiver is another.
Surely you've spent some amount of money on frivolity.
"Fuck you money" is "I could afford to burn every professional and personal bridge that exists in my life and still be fine"
As in, you can afford to say "Fuck you" to the entire world if you wanted to.
This may be your particular disposition, but it is by no means universal. Given these two choices, I would much rather be known as a rich sap.
I think it’s important to note that a person can knowingly run the risk of being ripped off, not because they’re too stupid to know better, but because of their philosophical attitude toward money and how they relate with their fellow humans.
If one came from a different environment, material concerns might not be as pressing, and it might be a better strategy to placate said crabs in order to not lose one’s social standing.
I used to do the same thing as you on a smaller scale (in the hundreds, never the thousands). I noticed that while loaning more money made more sense to me, whenever I did that it was a struggle to get the money back. Meanwhile when I loaned the exact amount, it more often came back.
I lost several friendships this way for a short while, with the only way to get the person out of the guilt cycle to surprise them at some random Christmas or birthday with "my gift to you this year is to give you the money you owe me". With them later telling me that they were feeling so guilty about the money they avoided talking to me because every conversation would make them feel miserable.
Now when I loan money, I enter the amount in an app we have in common and then actually put in place a (vague) payment plan. I find it helps people structure the entire situation and since they get to pay some money back the guilt is less present. It seem to remove the expectation that they need to gather the full amount before paying back.
Sometimes if you "loan" people money they will cut contact and disappear from your life.
The much more likely scenario is that you will get the reputation of someone who is generous with their money, and these requests and sob stories will increase 100x.
-Shakespear
I've just followed this my entire life and it has served me very well. Other than a mortgage, I never borrow, and other than family emergencies, I never lend.
> He is chief counsellor of the play's ultimate villain, Claudius, and the father of Laertes and Ophelia. Generally regarded as wrong in every judgment he makes over the course of the play, Polonius is described by William Hazlitt as a "sincere" father, but also "a busy-body, [who] is accordingly officious, garrulous, and impertinent".
I would just cut off contact with those people. I don't really get this much because I'm not rich, but if people ask me for loans just to get money out of me I will be the one breaking off contact.
On the other hand I have a friend of mine who has loaned money and never paid me back, but she is always in a financial hard spot and she is extremely generous to the community she drives. I never really expected to be paid back for that either but in this case I just wanted to help someone who cares more about others than herself.
The inequalities of capitalism are gross, but while we're here, that's the way the world works.
Sure, money or anything can be used as a test to determine someone's character. But you can do so without putting money on the line and save yourself some headache.
One way to determine someone's character is to spend time with them, listen to what they say about themselves and others, and whether or not their claims about themselves line up with their actions across time.
Maybe money is "cheaper" and "faster" than this route, but... Guess that's just been my go-to method to determine whether or not someone has integrity, is trustworthy, and has a sense of responsibility, parity, and respect for self and others.
Giving money without expecting it in return, or even being clear about expecting to be paid back, is more about having gauged people's characters & motivations, even when I get it wrong or things don't pan out as agreed-upon.
I've also asked friends for money and I've been incredibly grateful to have people who have had my back in that way. There's a sense of security there that's invaluable.
Some people are just perpetually bad with money and always come back for more, and that's okay too. As long as I can afford it, I don't mind helping somebody out of a tough spot, even if it's semi-regularly.
I wonder if Carmack ever regrets lending money to somebody.
1. Assume it's never getting paid back and only lend out money you're willing to lose.
2. Tell them if you get paid back in full, then later, they can ask for another loan.
3. If you don't get paid back, then consider it a gift, but no more loans to that person.
This way, you can continue helping people who are down on their luck but responsible about paying back, and you avoid being drained by deadbeats.
We had a guy at the racquetball club move away, and then about 10 people all mentioned how he owed them $20...
If you're going to be a loan shark you can't have people thinking they won't have to pay you back. You have to break their kneecaps.
This is an obvious fabrication by someone with little to no actual life experience.
- "I'm sorry but I've lost my job. I cannot afford this."
- "I'm sorry but no means no."
- If they insist: "Which part of the two letters in 'No' do you not understand?"
You aren't the jerk. Someone who doesn't accept "no" is the jerk.
There's places to go to to lend money, they're called banks. If you're not a bank it's not your job.
You might be right on the specifics in this case, I'll abstain from making judgement. But as a guideline, as a framework, "it's not your job" is monstrously insufficient.
There's no loss to my life if these people remove themselves from it.
They're thieves in disguise, nothing more. No value is lost if they leave.
And in fact, because money is stored time, my life becomes MORE if they leave, because I lose less of the time of my life to them.
And they left behind truckloads of trash.
How much have you lost to those?
I would speculate once you get to a sum this significant your perspective would change ;)
If you grew up rich, you didn't have friends or uncles or aunt's constantly asking for money and never paying it back so parent poster's mindset seems dramatic/extreme. It is not.
Sometimes people ask for a loan and insist they will repay me. Fine, I will call it a loan because that's what helps them frame things in their own heads. If they repay me, also fine, why would I turn down free money?
But for my own peace of mind, I think of these things as gifts to help a good person out. If I don't think of them as loans, I don't find myself chasing former friends for repayment.
I am not a bank. I am not a debt collector. I do not wish to become a bank or debt collector as a side hustle. If you ask me for more money than I can afford to gve you without repayment, it is far less stressful to say "no" and get the conflict over with on the spot.
This only works if the people have fucking shame.
I have a relative who has no shame and will keep taking as much money as you'll let him take.
So I limit what i give.
He keeps saying to me it's ok if I borrow and charge him points ... but in the Christian tradition usury is a sin so I don't and though I'm not a religious person, I was raised with mainly Christians principles that I adhere to because they just seem like good principles in general to live by.
Plus I'm pretty sure if I did charge interest I'd just be disappointed when he doesn't follow through with interest payments knowing how flaky he is with his money.
I'd rather just give money and give what's comfortable.
Kept asking me for money for some new reason every time I popped onto Facebook via Messenger until I stopped updating my active status. A bit later they deleted that profile and created a new one, and I decided not to become friends with him again.
Looking the guy up, and he was always posting GoFundMe's for some cause or family illness or another, and you'd see links to people in the industry asking for things on his behalf periodically across various websites, going back more than a decade.
I do believe he dug himself into a deep hole and he was in a hard place, but I also believe he's willing to take advantage of anyone as much and as often as possible until he can't get anything more from them, then moves on to the next person (well, probably multiple people at the same time).
So anyway, that's too fresh in my head, and I'm hesitant to give anyone money for anything right now. I've got plenty of crap going on for the forseeable future that needs a bunch of money anyway (implants, roof replacement, flooded basement, etc).
If you give money, the other side will always resent you when you try to get it back. They'll think "I'm struggling to pay this, and this person had it" however irrational that may seem.
If you care enough to give, just give. If you don't, don't.
The only way this makes sense to me, especially at that kind of money you're talking about, is if you are fairly wealthy.
And, man, to me what this says is that it's impossible to have real solid relationships with people if you are rich and they aren't. It makes me think of all these people who only are interested in you for your money, and your fear that people will think you're a jerk if you don't give them money (over and over again!) anyway because you have so much money, all these people approaching you with "sob stories." It seems like it makes it almost impossible to be real friends with people, if they aren't as wealthy as you.
I guess it's a reason to be glad I'm not that rich, after all.
Sometimes I get paid back. Usually not. It’s because people are aware I have money so various people ask.
The goal isn’t to get paid back. Often these acquaintances cut off all contact. The goal is to never be asked for money again and slowly bled out by frequent sob stories. If they know they are already into me for more than they thought they would get, they won’t come back, and I don’t look like a jerk.