A wonderful client of BDF once shared with me the following fable. I was reminded of it recently and how much it applies to modern day.
Hundreds of years ago in a faraway village, there was a man who lived in a house. The man in the house was the wealthiest man in the village. His name was Max.
It was well known that Max was the wealthiest man in the village. He had run his own business and saved wisely over his many years.
George, another resident of the village, one day asked Max if he would like to borrow some of George’s money. George had newly found wealth, and he was eager to lend his money to Max—someone he knew would pay him back and make timely interest payments.
So Max gladly accepted George’s terms and borrowed a moderate sum from George.
With no banks in this tiny village, the only outlet for borrowing money was from person to person. And Max was well aware of this as he had been approached daily by villagers for loans and gifts of all types. Max had always been the one being asked for money, and now it was Max’s turn to be the one asking.
So why would the wealthiest man in the village take out a loan and pay interest on money he didn’t need to borrow? It’s simple, Max no longer wanted to be the Bank of Max.
The next day when Max was approached by a villager in search of a loan, it was easy for Max to say, “I have no money to lend. In fact, I borrowed money from George just yesterday. You should ask him.”
And like that, Max was no longer the Bank of Max. George was the new lender in town.
I suppose there are many lessons to take from this fable, and I’m sure I’ll miss a few in my interpretation of it. But from a Working Wealthy standpoint, I think the message is clear. Creating and maintaining wealth may create a certain level of expectation from those around you that you can afford to help with or lend financial support.
While this may be true, it may not be in your best interest or even in the best interest of those you’re lending money to. This blog post is not meant to be a commentary on whether lending money is right or wrong.
More to my point, it’s important to remember that maintaining your own financial security and independence should be your primary goal.
It’s our hope at BDF that we can help steer our clients into making decisions that help them enjoy living a full life without jeopardizing their future.