Comments on: Reader Story: What My Father Taught Me About Debt

By: Baddriver

Baddriver — Tue, 19 Jun 2007 14:28:30 +0000

Good story but I wish she left out the line about $400 cost me $100,000. What is the point of that? How much was that $160,000 condo in 1992, after the real estate crash? And they ended up buying in 88/89 right at the peak? Good story about building a credit score and being responsible. Bad story about trying to time the real estate market.

By: A Tentative Personal Finance Blog

A Tentative Personal Finance Blog — Mon, 18 Jun 2007 22:39:33 +0000

Nice story, my dad would never lend me money though. He’s cheap as all heck and never taught me anything about finances except that I should hoard money for myself.

By: Stop Spending Start Saving » Blog Archive » Suggested Reading For 06/18/07

Mon, 18 Jun 2007 13:35:06 +0000

[...] from yesterday and you will find them below. A reader shares a story with Get Rich Slowly titled What My Father Taught Me About Debt. I think the lesson that this father taught her daughter was very valuable. A very good [...]

By: Mike

Mike — Mon, 18 Jun 2007 13:18:18 +0000

I think the lesson that this father taught her daughter was very valuable even if it meant that she missed out on a great opportunity on that condo.

By: Liz

Liz — Sun, 17 Jun 2007 23:43:16 +0000

I’ve learned in my dealings with family - and with my family’s dealings with each other - better not to loan money to family at all. In my situation, my brother loaned me money and we didn’t talk about a repayment schedule. He decided to come down on me heavy when I was out of work, and in a bad mental/ physical state and couldn’t pay. He was right,in that I did need to pay him back, but he was being a bit of an arse in expecting me to pay him back immediately. My gut told me not to accept the money when he offered it, and I wish I would have stuck with it. But alas, you live you learn.

By: MVP

MVP — Sun, 17 Jun 2007 23:41:53 +0000

It would be nice if everyone had parents who taught them valuable financial lessons. Many parents are poor role models when it comes to handling money. They either support their kids into adulthood, or they themselves live paycheck-to-paycheck until they retire with no savings. I’m amazed by the stories I hear of adult children supporting their elderly parents, who insist on maxxing out their credit cards and using money gifts that are meant for food for flatscreen TVs instead. Be thankful if you were lucky enough to have parents who took their responsibility seriously and taught you some hard lessons early on. And consider being one of those parents to YOUR children.

By: Roadtoharvard

Roadtoharvard — Sun, 17 Jun 2007 17:30:44 +0000

It was a good basic lesson for the dad to teach his daughter. They should have probably borrowed from a bank for the house instead of her dad to build credit. The extra interest cost might hurt initially but it would be worth it in the long run as their credit score would have improved (this of course taking into account no delinquent payments on their part) . I would have probably gone the dad route myself except my parents severed that cord a long time ago.

Money, Dreams and the Harvard MBA

http://www.roadtoharvard.com

By: Danny at Money Socket

Danny at Money Socket — Sun, 17 Jun 2007 16:58:05 +0000

Loans to family or friends are very tough since theres a slight conflict of interest and a relationship at stake. Some people take advantage of that relationship. But wow, a $400 loan cost them over $100,000 I’d be so mad! lol. Well, its a lesson learned. Its like having bad credit and a great property becomes available under valued but you can’t pull the trigger. So at the end her father was teaching a valuable lesson.

By: MoneyChangesThings

MoneyChangesThings — Sun, 17 Jun 2007 15:58:05 +0000

I often comment from a parent’s perspective, which is less common on blogs since the crowd is young. Good parenting sets the child up for success, not failure. If the father did indeed expect to be repaid, he should have been clear about that, and what the consequences were if it was not repaid. To “forgive” the loan but refuse future help is a mixed message. This is very common in families, where parents are often conflicted between gifting and loaning, and kids pick up on the discomfort.
Don’t give up on interfamily loans, though! Just make sure the communication is clear, the expectations expressed, and the goals articulated. Then use a website service to manage the payments. Note that if the interest rate is below market value (one would hope it would be!) that there can be tax consequences. I wrote about this:
http://moneychangesthings.blogspot.com/2007/04/baby-boomer-national-bank-merges-with.html

By: RJ

RJ — Sun, 17 Jun 2007 15:56:55 +0000

Wow, a one-bedroom condo in the SF Bay Area for only $80,000 (back in ‘85)!! Those were the days.

By: plonkee

plonkee — Sun, 17 Jun 2007 14:47:52 +0000

I think the lesson that I would take here is not to borrow from people without an agreed way of paying it back - it could rebound on you in ways that you don’t expect.