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Loaned money to a family member. Could do with some advice.

2

Answers

  • Moderators, Business & Finance Moderators Posts: 9,974 Mod ✭✭✭✭Jim2007


    Get real, you are talking about next to nothing in interest or inflation and I very much doubt you have done anything more than leave on deposit for the last five years as you don’t seem to be very well up on financial affairs, if anything you might have lost a large chunk of it.

    You harp on about the relationship being more important so demonstrate that and move on.



  • Registered Users Posts: 59 ✭✭Sallywag37


    I wouldn't expect anything as dramatic as fifteen grand or eight grand Big Bag of Chips, but in his shoes I'd consider it the decent thing to give back a couple of thousand on top of the loan in acknowledgement that it had been over five years and fifty grand today did not have anything like the purchasing power it had at the time of the loan. And no, he couldn't have gone to the bank or anywhere official then for a loan as he was balls to the wall and creditors were chasing him at the time.



  • Administrators Posts: 13,733 Admin ✭✭✭✭✭Big Bag of Chips


    So just say it to him then...



  • Registered Users Posts: 375 ✭✭Iodine1


    This is exactly the point! You wouldn't have invested in anything or you would have done so beforehand, and your interest earned would be much less than 1%. Inflation was only significant recently and your relative is not responsible for that, you would have suffered it anyway. You are now getting narky about very little and are indeed lucky to be getting it back at all. Most people with money trouble continue on to have money troubles and the loans just follow the rest of it, thus why they can't get anymore from the lending institutions.



  • Registered Users Posts: 18,988 ✭✭✭✭Donald Trump


    If it were me, I'd be happy to just get it back. And I'd wait until the money was in my account before bringing up interest for the remainder. I wouldn't expect to be receiving any though.



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  • Registered Users Posts: 10,773 ✭✭✭✭the_amazing_raisin


    As others have said, you're probably lucky to be getting the money back at all, often loans to family members seem to just get written off


    In principle, you didn't agree any kind of interest on top of the loan. He might have said he'd pay you something but that doesn't constitute an agreement. Technically he could give you one cent over the original amount and he'd have fulfilled his stated obligation


    I would say that regarding family loans, if there's no agreed interest repayment then it's sort of implied that it's interest free

    As others have said, measuring the opportunity cost is tricky. You'd at most have made a few euros in interest on a deposit account

    Maybe you'd have bet big on Tesla stock and ended up with a fortune, or you could easily have lost it all. So I don't think any kind of stock market argument will work


    It really depends on what you were planning to do with that money in the first place. For example if you were going to pay off debt then there's a definite opportunity cost which could be quantified. €50k off your mortgage 5 years ago for example would have saved a lot of interest

    If this is the case then you could argue there was a genuine cost to you. If he's a decent sort then if you explain that to him he may offer to pay the additional amount

    I would be very careful in how you approach this, you could appear to be shaking him down after the fact.

    And I'll be brutally honest here, if I've got my back against the wall financially, I don't try to drag my family down with me by asking for €50k that I might never repay. As I said, you're lucky you're getting the money back at all, he might have just decided to "forget" about those loans or fob you off forever

    In future, don't lend anything more than pocket change to family, it never ends well

    "The internet never fails to misremember" - Sebastian Ruiz, aka Frost



  • Registered Users Posts: 212 ✭✭hello2020


    Can you not think of him as someone who you can count on when you are in need? I will think of that as the best return than interest.

    Life is full of ups and downs and yesterday he had to borrow ..tomorrow you may need his help in different shape or way...I will be glad that he is in good position to repay you as normally they never recover to pay back..



  • Registered Users Posts: 59 ✭✭Sallywag37


    You've come closer to guessing what I'd intended to do with the money than anyone else on the thread, but I'm not getting into that as some posters seem determined to believe I'd intended to leave it sitting in a deposit account for some reason and I couldn't be bothered arguing with anyone who thinks they know more that I do about my own life. Thank you for your thoughts and suggestions. They were very helpful, and I'll definitely be taking your final suggestion on board going forward.



  • Registered Users Posts: 4,958 ✭✭✭kirk.


    Haven't read the whole thread

    I'd get the 50 back first before raising any other queries. Might set something off otherwise



  • Registered Users Posts: 59 ✭✭Sallywag37


    I'd hope we'd always be able to rely on each other when we're in need, I'd assume so too. We are family after all. But I do take your point.



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  • Registered Users Posts: 14,297 ✭✭✭✭callaway92


    I can’t believe you’re not getting stick for wanting interest on the 50k

    He’s obviously had to grind to get back on his feet and is paying it all back

    That’s a fair deal as far as families go. You did a very nice deed helping him out and he’s been decent enough to not ‘forget’ about the loan

    If you start mentioning interest you sound less like family and more like a loan shark

    I’d go as far as saying it’s kinda scummy that you’re even thinking about it, to be blunt



  • Registered Users Posts: 14,297 ✭✭✭✭callaway92


    Very easy to say all of this in hindsight - It’s always something that you’d have ‘made’ money on and never ‘lost’ money on somehow….



  • Registered Users Posts: 1,573 ✭✭✭Squatman


    this post reeks of false modesty. you gave the loan as a favour to someone in need, as is the altruistic thing to do - Kudos!!!!

    you saw this person struggling and stepped in and potentially saved his life. He is since in an excellent position, and in a short period, has been able to return significant chunks of hte capital. Now, you are jealous or resentful that he or they have been able to repay, withoud duly bowing to their overlord. Keep it in the spirit it was given. dont succumb to jealousy or otherwise because the person is now doing well for themselves. I dont for a second believe that this relationship is worth a crumb to you, #"I care a lot more about my relationships that i do about money" - if this were true you wouldnt be creating a post online slating your family for a perceived good deal. Similarly, you wouldn't resent their good fortunes since. oo late, too late will be the cry when the man with the bargains has passed you by - The terms we A, you shouldnt look to make them B, because of jealousy or otherwise.

    they may as a gesture of goodwill offer over and above what was agreed, but you will most likely decline this offer due to your good nature and the value you place on relationships.


    PS, who the fudge has 50k spare to lend to people. id wager most the pople commenting, myself included have never had the smell of 50k, Count your lucky blessings before they hatch :)



  • Registered Users Posts: 1,573 ✭✭✭Squatman


    not an old saying, a quote from polonius, from shakespeare



  • Registered Users Posts: 59 ✭✭Sallywag37


    If my thinking about interest makes me "scummy" I'd assume his offering interest must make him "scummy" too, unless your logic only runs in one direction, which I suspect it does.



  • Registered Users Posts: 4,958 ✭✭✭kirk.


    Sweeping statement that's not always true if you're at the poorer end of society

    Borrow and lend payday twenties and tenners all the time without issue

    If I need a twenty I turn to them

    Quid pro quo and works ok

    50k is madness



  • Registered Users Posts: 59 ✭✭Sallywag37


    Do you genuinely think that over five years is "in a short period"?



  • Registered Users Posts: 490 ✭✭Shauna677


    its not when you 50 but its a long period of time if you are only 18



  • Registered Users Posts: 59 ✭✭Sallywag37


    I can't imagine five years being a short period of time unless we all lived for a few centuries at least!



  • Registered Users Posts: 1,478 ✭✭✭kaymin


    Why didn't you ask for it back before now if you knew he was back on his feet?



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  • Registered Users Posts: 78,231 ✭✭✭✭Victor


    Get the €30,000 back first, in case talk of interest causes ... slowness.

    The Consumer Price Index from December 2017 to December 2022 increase about 11.5%, with most of that happening in 2022. https://www.cso.ie/en/releasesandpublications/ep/p-cpi/consumerpriceindexdecember2022/

    Money in an investment account would have, hopefully earned substantially more than that.



  • Registered Users Posts: 59 ✭✭Sallywag37


    That's a good question. I suppose I just found the conversation difficult.



  • Registered Users Posts: 24,743 ✭✭✭✭Strumms


    You loaned him the money interest free for all intents and purposes. How can he be taking the piss ? he’s paying back as agreed. A sweet deal for him for sure but you can’t change the terms of the agreement now.

    it’s not going to be a good look saying..” ok thanks for paying it back but you can add another 2/3 grand, let’s call it interest “

    what probably should have happened…a conversation at the second loan request …

    ” we are getting into serious money now, I’m going to need interest from you to cover my end, the depreciation of value of that cash etc…”



  • Registered Users Posts: 24,208 ✭✭✭✭recode the site


    OP might well have otherwise have been planning to or just about to spend it, say, on improving his house (an investment in itself), but then when a family connection in really bad financial trouble manifests, he thought “I have the means, I could help” and forfeited the idea of his own spend. That’s an example of the type of thing OP might have had in mind.

    Sometimes it happens that you forfeit something yourself to afford another person a means of easing a situation in their life. There would have been an urgency about the initially situation that prompted the loan, the lender immediately puts the family member/friend first, then when things go somewhat unsatisfactorily, there would be a natural feeling of, at best, being taken for granted.

    It is very hard to disguise resentment, it pops to the surface from time to time like in a boiling cauldron, so it has to be dealt with one way or the other. Here, OP’s relative is a person very well-versed in finances, so OP feels “well he, of ALL the people in the world, he ought to know the value of my loan and volunteer something extra”. Maybe because of the borrower’s very immersion in the world of finance he took a bad gamble or two and OP is subconsciously factoring that in too. OP can’t turn back the clock but now feels resentment at being taken for granted, so he must assert himself in whatever way he can that doesn’t also cause a lifelong rift if he wants to keep family relationships in an even keel. That’s extremely tricky.

    I know the way my own father would have dealt with something like that, he was an extremely helpful type of man, but like anyone he didn’t like being made a fool of. I can hear him saying something like this “I always want us to get on well and I would like if you would do something for me, the way I helped you back then. I had been going to get a new kitchen (or new windows etc) at that time, but I put that off. Mary’s been saying she’d really like us to get that now, but they’ve gone up in price since then and I can’t as easily stretch to that. Would you be ok about gifting me some of the extra towards it?” Something like that would be assertive but not quite aggressive. The risk is relative might reply that he couldn’t afford to gift any extra, and fair enough if that’s genuine. But it might give him the opportunity of conceding to that, and maybe even gladly so for all you know.

    Can I get away with anything if I pay the piper, so to speak?



  • Registered Users Posts: 24,208 ✭✭✭✭recode the site


    He should have volunteered repaying when he was on his feet; it’s quite telling that he didn’t, any fair minded person would do.

    Can I get away with anything if I pay the piper, so to speak?



  • Registered Users Posts: 12,078 ✭✭✭✭blade1


    I say do.

    It's a great way of ridding you of leaches.



  • Registered Users Posts: 1,742 ✭✭✭oceanman


    i get that and i do the same myself...but loaning 50k to a friend or family member is...as you say madness.



  • Registered Users Posts: 4,615 ✭✭✭maninasia


    Everybody could have more money in hindsight. In hindsight we are all geniuses.

    In the end getting the money back isn't too bad.


    And who is to say that 50k didn't go on a bad stock investmment?



  • Registered Users Posts: 1,573 ✭✭✭Squatman


    Yes. Don't forget, altruistic you, lent money to someone who had to turn their lives around. You made no arrangements for installments, and they have duly turned their lives around and lumped 20k on you. Theres **** all people here with 20k in an account to hand over on a loan or otherwise.



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  • Registered Users Posts: 467 ✭✭Kurooi


    Interest in line with inflation? Charging a family interest on a loan I understand but only a loan shark would consider rates that high.

    You loaned him money you didn't have use for, check the rate on your deposit savings account , probably close to 0.0%, that's how much you as a person get in interest.



This discussion has been closed.
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