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Lending at 5% per month

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  1. #41

    Join Date
    May 2019
    Posts
    527
    Quote Originally Posted by periphery831:
    My apologies guys, yes, 5% PA.

    She got back to me saying the banks are charging her 4.99%, so she's giving me 5% as she'd rather I invest with her than get my feet wet in the stock market.

    You can see her reasons hahaha.

    So, is it a decent proposition?

    Term is indefinite and I need to give her 6 months notice if I want the money back.
    Good god in Govan. A fool and and their money ineed.
    periphery831 likes this.

  2. #42

    Join Date
    Aug 2011
    Location
    Hong Kong
    Posts
    466

    As a minimum you need to register a charge with the land registry. Don't need a lawyer for that just a conveyancer. Then support it with a proper contract. To do anything less just makes you a mug.

    periphery831 likes this.

  3. #43

    Join Date
    Feb 2011
    Posts
    529
    Quote Originally Posted by Kowloon72:
    Good god in Govan. A fool and and their money ineed.
    That's why I've got all you lovely little munchkins.

  4. #44

    Join Date
    Nov 2019
    Posts
    584

    Is this just a family run pyramid scheme with minimum 6 month lock in period?

    Can you also offer this deal to GeoExpat subscribers?

    Let's assume you have $50M.

    You can give $5M to your relative and get $20,833 per month

    You can give $5M to 9 other GeoExpat subscribers and get 9 x $20,833 per month = $187,497
    I think we can find 9 subscribers....Now do you have the money?

    periphery831 likes this.

  5. #45

    Join Date
    Mar 2008
    Posts
    887
    Quote Originally Posted by periphery831:
    100%

    Being as I've lived in her apartment for over 10 years rent free, I feel obliged at this point.
    Ten years rent wouldnt possibly cost you 5m unless its a ultra lux flat. Youre better off paying her rent than lending such sum. The written loan agreement wont help you get repaid if she dies, as you just become an unsecured creditor and have to wait for payment out of her estate after all other secured debts such as mortgages are paid and released.
    periphery831 likes this.

  6. #46

    Join Date
    Feb 2012
    Location
    Park Island, Hong Kong
    Posts
    229

    @periphery831 Instead of loaning her 5m, why don't you get her to help you buy a property if you think she is wise in that regard? You could also split the ownership equal to portions based on whatever amounts you'll each contribute.

    If your relative helps you buy a property that you both think is worth buying, then treat her like a property agent and give her like 1% or whatever % makes sense to you both for her on the ground work of finding a property worth buying.

    Think long and hard about what you're trying to accomplish and maybe there will be more than one way to do it. If you feel you owe your relative 1m, then pay her 1m if that helps you sleep at night. If she let you live in a flat unconditionally for 10 years then I'm not sure why you feel you owe her 1m because that was her choice to let you have free rent and your choice to take it.

    Many wise people and many people have learned the hard way that that lending money to family should be treated as a potential gift, and if you can't treat it as such you shouldn't lend it. Lending institutions exist for a reason, and few are charities. If you want to be a charity and you think your relative is the person/organization most worthy of your dollars that's fine.

    It was alluded to that a fool and his money are soon parted. Do you want do be the fool that loaned/gave money to a relative? Why not think of something else that makes more sense than a loan.


  7. #47

    Join Date
    Feb 2011
    Posts
    529

    Thanks for all the advise everyone, lots to think about.

    chuckster007 likes this.

  8. #48

    Join Date
    Nov 2019
    Posts
    584

    As everyone has pointed out, the moral of this story today....”A fool and his money are soon parted”.

    The choice is yours.

    Let

    periphery831 likes this.

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