Friend got my advice wrong..

[investor2009]

I have a friend who is always in financial trouble.
Sadly, he's an alcoholic and smokes fags like they're going out of fashion.
He has also been battling physcological/mental wars for a very long time and I have distanced myself for the past few years and rarely see him anymore unfortunately.

He recently divorced and ended up buying out his X's half share of PPOR and now has 100% loan in his name, which is good.

He now has a new fiancee, which is good again, shes a nice girl.

He has asked me to lend him money on more than one occasion and I declined, but offered help where I could. I learned from the first time when I bought him somethig that he never payed me back for.

So, a while ago they were both asking me for advice on investment property, I lent them Ed Chan's book called 'How to achieve wealth for life', My personal favourite and very easy to comprehend.

So, he popped in the other day to share the news that he'd pulled $50k from his equity, topping up the loan they already struggle on to pay bills and upgrade their rundown PPOR. I know this is going to cause financial hardship in the future.

He got the the borrowing to fund lifestyle costs thing a bit wrong..
I hope it turns out o.k for them..

I just wanted to share with everyone here, a morrel that if you cannot learn how to control money, it will control you.

 

[coastymike]

Someone who does need help in life but not a friend I would be having.

 

[investor2009]

He was my best man, at my wedding not long ago because we were best mates for many years before he went bad.
I'm his best man too in 5 months time.
It's a little difficult.

He's beyond help though so has to figure this one out on his own.
The grog creates 90% of his troubles.

 

[Television]

He was my best man, at my wedding not long ago because we were best mates for many years before he went bad.
I'm his best man too in 5 months time.
It's a little difficult.

He's beyond help though so has to figure this one out on his own.
The grog creates 90% of his troubles.

Sticky situation mate, sorry to hear about it.

"Alcohol: The cause of, and solution to, all of life's problems"

 

[zed_kid]

So, he popped in the other day to share the news that he'd pulled $50k from his equity, topping up the loan they already struggle on to pay bills and upgrade their rundown PPOR. I know this is going to cause financial hardship in the future.

Wait, so he pulled 50k equity to upgrade his PPoR? That’s not too bad... it’s not like he pulled 50k to buy a new SS commodore. He won’t get tax deductions but if he does the upgrade well he could add substantial value to his PPoR... all things considered and if they can keep up with repayment, not a bad move?

 

[softmonkey]

Good idea to avoid giving any verbal advice whatsoever. Even if they take it incorrectly, you are forever linked with the action they took.

 

[investor2009]

Yea, he wonders why I don't go around there no more, I just don't have the heart to tell him, but also, I'm married now and my wife and I love spending most of our time together.
We lead a very healthy and happy lifestyle together. And our dog, too

This raises another good topic, the argument of living on equity.
There are many people who won't consider the option because of the bank's 'tight' lending criterea..
Um.. This dude's leveraged to the hilt. Paying P&I repayments, all in his own name, and can pull money wit no worries. Thats been my experience too so I don't know where people get this. I possibly think it's people who refinance through brokers, instead of just go for a straight 'cash out'

 

[investor2009]

Yea, not a bad idea. But he can't afford the rep[ayments as they were let alone once the money has run out. His attitude towards money is terrible.
We went to the bottle shop once to grab a 6-pack.
He proceeded to buy a carton, pack of cigs, and a bottle of scotch, then complain how tight money was.

Wait, so he pulled 50k equity to upgrade his PPoR? That’s not too bad... it’s not like he pulled 50k to buy a new SS commodore. He won’t get tax deductions but if he does the upgrade well he could add substantial value to his PPoR... all things considered and if they can keep up with repayment, not a bad move?

 

[investor2009]

The book explains responsible use of equity. Common sense explains the rest.
I hope everything turns out great for them, I honestly do and who knows, if he manages to wise up, then it could turn out great.

Good idea to avoid giving any verbal advice whatsoever. Even if they take it incorrectly, you are forever linked with the action they took.

 

[MarkB]

Yea, he wonders why I don't go around there no more, I just don't have the heart to tell him...

Find the heart.

Seriously, either be straight up with this guy and tell him that he needs to make major changes.

Or quit being a pretend friend.

 

[alexlee]

This raises another good topic, the argument of living on equity.
There are many people who won't consider the option because of the bank's 'tight' lending criterea..
Um.. This dude's leveraged to the hilt. Paying P&I repayments, all in his own name, and can pull money wit no worries. Thats been my experience too so I don't know where people get this. I possibly think it's people who refinance through brokers, instead of just go for a straight 'cash out'

Or maybe you're not at the level when banks start to say no. Bank criteria tend to fit the 'standard' person. And that's usually a person with no investments but a salary.

You give a sharp knife to a guy. They MIGHT make a delicious meal. Or they might cut off a finger.

 

[kathryn d]

Nothing will change until he stops drinking.

 

[VYBerlinaV8]

Or maybe you're not at the level when banks start to say no. Bank criteria tend to fit the 'standard' person. And that's usually a person with no investments but a salary.

You give a sharp knife to a guy. They MIGHT make a delicious meal. Or they might cut off a finger.

I quite like fried finger with soy and chili.

 

[wobbycarly]

I quite like fried finger with soy and chili.

That joke is in "bad taste".

 

[Aaron Sice]

the only thing i'm going to say is that you know deep down what you should be doing.

so bugger the politics and just do it.

 

[Ms Jade]

Mark B and Aaron are right. It will take something for you to stand up for your friend when he may not be capable of doing that himself right now.
It sounds like you miss the friendship that you had & that you are worried about what he's doing to himself. So tell him. You will find a way to say what he needs to hear if you do it from a place of love for a friend rather than from a place of judging him. Maybe he will change, maybe he won't. But at least you will know that you were straight and did what you could, and you'll have opened the door for him to be straight with you & himself about what's going on - when he's ready.

 

[weg]

Could it be he's gained a 50K debt as well as a whole second income through the nice fiance .

Are you sure that this was not well thought out between them (as different as it is to how you would do it)? They're obviously planning a future together.

You never know, he might not make a delicious meal, but then he might not cut off his finger either.

I'd focus more on helping him clean up a bit, if it's that much of a big problem - the drinking and smoking. Hopefully the fiance is too.

 

[investor2009]

Well, his fiancee keeps quitting jobs and hasn't been working for a good 3 weeks..


I don't really value what we had as best friends now, in the past I did but thats exactly where I'd like to leave it. People change.

We were alcoholics together but I just 'liked' getting on it a few times a week when I was a bit younger, he 'needed' to get on it and still does. Our friendship was totally based on drinking and whatever we did, we were drinking while we did it.

I have now pretty well totally stopped drinking all together because I just don't enjoy any part of it anymore and find I have a better time drinking coke zero. My wife is the same, we both used to drink quite heavily before we met each other but have settled into a really great life together, and now we both go to the party and BOTH of us are able to drive home

 

[Nathan]

He was my best man, at my wedding not long ago because we were best mates for many years before he went bad.
I'm his best man too in 5 months time.
It's a little difficult.

He's beyond help though so has to figure this one out on his own.
The grog creates 90% of his troubles.

I got mates like this aswell.

I realised a while back you have two types of mates, the ones who you can talk business with and life and ones who you are best suited to hang out at the pub with and talk crap over a drink. If you mix business with pub talk you end up knocking your head against the wall.

Can be a tough one.

 

[Mr. Fabulous]

Technically, you didn't give him any advice. All you did was give him a book.