William Shakespeare was a clever fellow. You may have heard of him. Cleverly (I told you), he wrote “Neither a borrower nor a lender be”. This was clever on two counts: first, it was his impersonation of Yoda, who wasn’t thought up until about 500 years later, and second, it’s really good advice.
We Oldsters often have more dough than them Youngsters. This is closely allied to the fact that older people are usually more sensible than their younger counterparts. Thus the prohibition against lending applies to Oldsters more often than does the other half, about borrowing. Indeed, so clever was old Shakespeare that he encompassed two completely different thoughts into a single concept. We’ll take them separately.
Lending: Lending is a fancy word for throwing money away. The person who wants to borrow from you has not, and never will have, the slightest intention of paying you back, and will hate you if you ever mention the debt. Shakespeare’s quote continues: “For loan oft loses both itself and friend …” With one exception, I’ve lost every friend I lent money to, and was glad to do so. They were bums and liars, I discovered, after they wouldn’t repay so much as a penny of my hard-earned money.
Borrowing: The basic rule is don’t, with one exception. It is generally considered OK to borrow to finance the acquisition or enhancement of an asset that will appreciate in value. For most of us, that means real estate (called ‘property’ in English English). An affordable mortgage, at an affordable rate, is just about the only kind of borrowing that won’t come back to bite you in the botty.
If you can’t afford it, you shouldn’t have it. The cost of borrowing racks up quickly, and that $1,000 sofa you must have can end up costing you $3,000 you don’t have. Not smart. Saving up for the sofa will enable you to have it for $1,000 and simultaneously feel good about having it.
I know you’re not listening; you don’t care; you’ll buy the sofa regardless of the cost or anything else, because you want it. But Shakespeare’s quote concludes: “… and borrowing dulls the edge of husbandry”. And he was quite clever, you may recall.
You’ll hear this wisdom often, because it’s Good Wisdom. I’ll cite a single example from my recent life to show you how it works.
A pal asked if he could borrow £60 ($100) to cover urgent necessities. Of course, I said, and handed it over. A few days later, he told me with pride that he’d bought his 13-year-old son a Stratocaster, a guitar like the one Eric Clapton often uses. A few weeks after that, I moved away from the block of flats we both lived in. My pal walked past the moving van and out of my life, with my £60 in his pocket. I’d go back and harass him, but I can’t bear the thought of ever seeing him again.
Did I learn my lesson? Probably not. But that doesn’t mean you shouldn’t.
Don’t lend; don’t borrow. Live long and prosper.