Market Forces, Clenched
Guidelines for Money Changing
My first boss often said, "once people find out you have some money, they get in line to try and get some".
At this job, I was making $2.00/hour, and my moms boyfriend was drifting between jobs. He would borrow $5 and then repay it. Then he would borrow $10 and repay it. Then he would borrow $20 and repay it...
Unbeknownst to me, this is a classic "confidence man" trick. He was winning my confidence by honoring his word multiple times with increasing dollar amounts and frequency.
Eventually, he had borrowed $750, and I was completely confident he would pay it back. That was 20 years ago, and I have never seen the money.
Do some math and figure out how many hours of my labor he f*cked me out of. 375 hours isn't the answer, because I paid income tax on that money.
Later, a wise woman told me, "If you loan someone $20 and never see them again, it was probably worth it."
She is very correct, but what about the guy who borrows $20, and then comes back next week to "borrow" $20 more?
There are people in my life who only contact me when they want something, and one guy in particular is a habitual "money borrower"
At one time, he worked in a packinghouse doing what I know to be (literally) back-breaking work. The man has ongoing job related medical problems, and he fought tooth-and-nail to get on SSI.
So now he has a regular (or what seniors call "fixed") income, but he just can't seem to make ends meet month after month after month...
I frequently walk into the corner convenience store and he will be standing there playing lottery tickets. As a mathematician, I abhor the lottery and the state officials who take advantage of the mathematically illiterate, but I digress... I have my own vices, so who am I to judge?
Soon after I get home, I get a knock on the door. It's the guy who I just saw playing lottery tickets 10 minutes ago, and now he needs to "borrow" money for gas, or food, or some other cause that most compassionate people would have trouble saying "no" to...
I think, but don't ask, "Why do you need money from me? Can't you just buy your gas or food with your lottery winnings?"
After a few encounters like this, I simply quit answering the door, which isn't a problem for him because he can just call me on my house and/or mobile phone... which eventually I quit answering, too.
So now when I *don't* answer the door and/or phone, the next time he sees me he's like, "Dude!!! I had your money for you. I tried knocking on your door to give it to you, but you weren't home. I called your house and cell, too, but you must have been busy..."
So, it's basically a crap shoot when I talk to this guy; He could be wanting to give me money for repaying a loan, or he could be wanting to ask me for more money. As a realist, I guess Ill just take my chances by not answering the door and phone. He can keep the money I lent him.
Herein lies some problems with lending people money;
1) If someone can't make ends meet this month, how will they make ends meet *next* month AND pay you back the money they want to borrow "till next month". The answer is, "they can't". When you loan them money, you are helping them kick the financial-problems-can down the road, and digging both the borrower and lender into a deeper and deeper hole.
2) These borrowing-lending relationships tend to be increasing based on money, which moves the relationship from the neighborly-friendly realm to the business-formal realm. Soon, you will literally be *running a bank*, when people *only* come to see you about money. Since I *am not* a bank, I do not have access to credit information so as to be able to judge peoples credit-worthiness. I suspect that if these people were credit-worthy, they wouldn't be sitting in my living room asking for a loan.
3) At one time, I was interested in lending money, but soon it became too time consuming, so I farmed it out to the credit union. I leave my money in the credit union, and my agents, also known as "loan officers" will be happy to assist you with a loan. :)
Will I co-sign for a loan? NO. Get a different loan. Obviously my agents have determined that you are too risky for a certain loan. Why would I over-rule them?
4) I do not charge interest, as I believe usury is an abominable sin, and most of the worlds religions frown on the practice. This gives little incentive for people to repay the money quickly, and gives me little incentive to loan money that could be put to better use elsewhere... like paying off any principle I happen to be paying interest on, or improving my own property.
5) If there is a special circumstance or there is a chance that the loan will eventually put more money in the borrowers pocket, that is another story. For example, if someone's car isn't running properly, they will be wasting fuel, which is not good for anybody, or the environment. If someone's house needs insulation or windows, or some improvement that will reduce heating cooling expenses will eventually pay itself back and keep more money in their pocket for years to come, that is a wise place to invest money.
6) If you see a niche opportunity in the marketplace, but lack a small capital investment to get started, that is another special circumstance. I am a huge proponent of capitalism, not to be confused with corporatism, or Ferengi capitalism, which are more abominable sins.
I believe that if you put the right tools in front of the right people, people will be incredibly productive. Conversely, I believe if you put the wrong tools, aka "weapons" in front of the wrong people, people will be incredibly destructive. The capitalists who profiteer via trade in this ghoulish foreign policy are called war piggs
In a contrived example, say a man in a 3rd world country needs to dig 1 hole, but for lack of $20, does not have a shovel. I have several extra shovels that go unused most of the time. I could send him a shovel, and the man may be able to dig his hole and dig more holes to make a living using that shovel. To him, capital is unavailable, but to me, this capital is sitting around unused. @www.kiva.org
8) If I were inclined to lend you money, I already understand that it would be very difficult if not impossible for you to repay the loan, so I look at requests as charity cases. Is this loan going to improve this persons situation by providing them access to the means of production or by reducing their expenses long-term?
If so, I will likely just *give* you the money. But my funds are limited, just like anyone else's, so I must carefully consider how I want to direct this charity money. As my wise grandmother once noticed, "charities want to share your information with other charities. That's fine, but my charity funds are limited, and the more I give to others, the less I have available to give you"
I will be more inclined to give to causes that make a person more productive as I understand that "a raising tide lifts all ships", and when me neighbors do well, I do well.
9) In short, NO, I will not loan you money. Go see the credit union. That is what the credit union is for. If you have money for vices, then you must you have money for gas or food. If you can't get by this month, what makes me think next month will be any better? If I enable you to continue the habits that got you in your situation, you will never change, which is bad for both of us as your financial shortcomings "snowball" month after month, dragging us *both* underwater.
10) I love economics, engineering, and the environment, and want to help people make good environmental decisions by using natural market forces and engineering. To that end, I am looking for working models of energy self-sufficient, economically viable real-estate in Iowa... Then I want to help people replicate the models that look most promising... hopefully, a few charity cases with the "pay it forward" understanding could help bootstrap the whole neighborhood to energy self-sufficiency. I believe we can change the world, one person at a time, starting with ourselves...
At this job, I was making $2.00/hour, and my moms boyfriend was drifting between jobs. He would borrow $5 and then repay it. Then he would borrow $10 and repay it. Then he would borrow $20 and repay it...
Unbeknownst to me, this is a classic "confidence man" trick. He was winning my confidence by honoring his word multiple times with increasing dollar amounts and frequency.
Eventually, he had borrowed $750, and I was completely confident he would pay it back. That was 20 years ago, and I have never seen the money.
Do some math and figure out how many hours of my labor he f*cked me out of. 375 hours isn't the answer, because I paid income tax on that money.
Later, a wise woman told me, "If you loan someone $20 and never see them again, it was probably worth it."
She is very correct, but what about the guy who borrows $20, and then comes back next week to "borrow" $20 more?
There are people in my life who only contact me when they want something, and one guy in particular is a habitual "money borrower"
At one time, he worked in a packinghouse doing what I know to be (literally) back-breaking work. The man has ongoing job related medical problems, and he fought tooth-and-nail to get on SSI.
So now he has a regular (or what seniors call "fixed") income, but he just can't seem to make ends meet month after month after month...
I frequently walk into the corner convenience store and he will be standing there playing lottery tickets. As a mathematician, I abhor the lottery and the state officials who take advantage of the mathematically illiterate, but I digress... I have my own vices, so who am I to judge?
Soon after I get home, I get a knock on the door. It's the guy who I just saw playing lottery tickets 10 minutes ago, and now he needs to "borrow" money for gas, or food, or some other cause that most compassionate people would have trouble saying "no" to...
I think, but don't ask, "Why do you need money from me? Can't you just buy your gas or food with your lottery winnings?"
After a few encounters like this, I simply quit answering the door, which isn't a problem for him because he can just call me on my house and/or mobile phone... which eventually I quit answering, too.
So now when I *don't* answer the door and/or phone, the next time he sees me he's like, "Dude!!! I had your money for you. I tried knocking on your door to give it to you, but you weren't home. I called your house and cell, too, but you must have been busy..."
So, it's basically a crap shoot when I talk to this guy; He could be wanting to give me money for repaying a loan, or he could be wanting to ask me for more money. As a realist, I guess Ill just take my chances by not answering the door and phone. He can keep the money I lent him.
Herein lies some problems with lending people money;
1) If someone can't make ends meet this month, how will they make ends meet *next* month AND pay you back the money they want to borrow "till next month". The answer is, "they can't". When you loan them money, you are helping them kick the financial-problems-can down the road, and digging both the borrower and lender into a deeper and deeper hole.
2) These borrowing-lending relationships tend to be increasing based on money, which moves the relationship from the neighborly-friendly realm to the business-formal realm. Soon, you will literally be *running a bank*, when people *only* come to see you about money. Since I *am not* a bank, I do not have access to credit information so as to be able to judge peoples credit-worthiness. I suspect that if these people were credit-worthy, they wouldn't be sitting in my living room asking for a loan.
3) At one time, I was interested in lending money, but soon it became too time consuming, so I farmed it out to the credit union. I leave my money in the credit union, and my agents, also known as "loan officers" will be happy to assist you with a loan. :)
Will I co-sign for a loan? NO. Get a different loan. Obviously my agents have determined that you are too risky for a certain loan. Why would I over-rule them?
4) I do not charge interest, as I believe usury is an abominable sin, and most of the worlds religions frown on the practice. This gives little incentive for people to repay the money quickly, and gives me little incentive to loan money that could be put to better use elsewhere... like paying off any principle I happen to be paying interest on, or improving my own property.
5) If there is a special circumstance or there is a chance that the loan will eventually put more money in the borrowers pocket, that is another story. For example, if someone's car isn't running properly, they will be wasting fuel, which is not good for anybody, or the environment. If someone's house needs insulation or windows, or some improvement that will reduce heating cooling expenses will eventually pay itself back and keep more money in their pocket for years to come, that is a wise place to invest money.
6) If you see a niche opportunity in the marketplace, but lack a small capital investment to get started, that is another special circumstance. I am a huge proponent of capitalism, not to be confused with corporatism, or Ferengi capitalism, which are more abominable sins.
I believe that if you put the right tools in front of the right people, people will be incredibly productive. Conversely, I believe if you put the wrong tools, aka "weapons" in front of the wrong people, people will be incredibly destructive. The capitalists who profiteer via trade in this ghoulish foreign policy are called war piggs
In a contrived example, say a man in a 3rd world country needs to dig 1 hole, but for lack of $20, does not have a shovel. I have several extra shovels that go unused most of the time. I could send him a shovel, and the man may be able to dig his hole and dig more holes to make a living using that shovel. To him, capital is unavailable, but to me, this capital is sitting around unused. @www.kiva.org
8) If I were inclined to lend you money, I already understand that it would be very difficult if not impossible for you to repay the loan, so I look at requests as charity cases. Is this loan going to improve this persons situation by providing them access to the means of production or by reducing their expenses long-term?
If so, I will likely just *give* you the money. But my funds are limited, just like anyone else's, so I must carefully consider how I want to direct this charity money. As my wise grandmother once noticed, "charities want to share your information with other charities. That's fine, but my charity funds are limited, and the more I give to others, the less I have available to give you"
I will be more inclined to give to causes that make a person more productive as I understand that "a raising tide lifts all ships", and when me neighbors do well, I do well.
9) In short, NO, I will not loan you money. Go see the credit union. That is what the credit union is for. If you have money for vices, then you must you have money for gas or food. If you can't get by this month, what makes me think next month will be any better? If I enable you to continue the habits that got you in your situation, you will never change, which is bad for both of us as your financial shortcomings "snowball" month after month, dragging us *both* underwater.
10) I love economics, engineering, and the environment, and want to help people make good environmental decisions by using natural market forces and engineering. To that end, I am looking for working models of energy self-sufficient, economically viable real-estate in Iowa... Then I want to help people replicate the models that look most promising... hopefully, a few charity cases with the "pay it forward" understanding could help bootstrap the whole neighborhood to energy self-sufficiency. I believe we can change the world, one person at a time, starting with ourselves...
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