The One Rule Kevin O’Leary Follows When It Comes to Lending Money to Family
The holidays are a time for joy and togetherness, sure, but they’re also a time for loved ones to to hit you up for money (just ask Uncle Jimmy from The Bear). While it may be tempting to give a loan to your nephew, especially if you have cash to spare, you might want to consider this advice from Shark Tank investor (and very rich man!) Kevin O’Leary: Don’t do it!
“I’ve been asked countless times about what to do when family members come looking for money. It’s a very complex issue because you don’t want to disvalue your brother, sister, or cousin,” he said in an interview with Business Insider. “But when it comes to mixing family and money, it’s often a bad outcome.”
Rather than agree to a loan, he says, he offers a gift. “I don’t want anyone to owe me or to drive a wedge in my family. So, instead, I’ll agree to a one-time gift,” he explains. “For example, if a family member asks for $150,000 to start a restaurant, I’ll give them a $50,000 gift that I never want back.” (He also stipulates that his recipient can never ask him for money again.)
Granted, the majority of us can’t offer the aspiring chef in our family tens of thousands of dollars (because the majority of us don’t have a net worth of $400 million), but the tip is a good one in theory. So here, kid, keep this dollar and pass me the yams.