Saying No Is Hard To Do

by Mr. Cheap

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A comment John T. Reed makes is that if you’re unable to look a grown adult in the eye, listen to them passionately argue why you should do something, then say “No” to them, you shouldn’t be a real estate investor. It’s an easy thing to hypothetically say “sure, I’d just say no”, but the reality can be much harder.

Beyond real estate, this holds true for almost all investments. My grandmother got pulled into mutual funds when she got talking to an investment advisor years ago. No one in the family believes for a second that she understood what she was purchasing. We’re all happy that they worked out OK for her (although she had one fund that’s been averaging about 0.5% for the last 5 years), but she invested because she couldn’t say “No” to the guy trying to sell to her. NOT because she thought it was a good investment.

Some time ago I rented a room from a friend of the family. He and I got talking when I mentioned that I was interested in learning about real estate and would like to take him out for a beer and pick his brain sometime. One thing lead to another, and once he’d figured out I had some cash, he wanted me to loan it to him. Hesitantly I told him I’d consider it if he provided me with full details about his financial situation and credit history (including his credit report) and let me discuss it with a friend who was a banker. A period of time went by and one day he left me a message saying his lawyer would contact me to arrange the money transfer. After I couldn’t get in touch with him, eventually the lawyer called me and I told him I hadn’t been given the paperwork I needed for the loan. Things heated up when my landlord demanded the loan, threatened to end our “friendship” if I didn’t go through with the deal (without any of the paperwork he’d promised to provide) and eventually he evicted me. This actually created a conflict with the family member I knew him through and we no longer talk (my family member or the landlord friend).

Saying “No” can be tough, especially if you have a sweet, sensitive soul like Mr. Cheap.

Multi-level marketing schemes (such as Amway) are built on it being hard to say “No”. People pressure their friends, who join and get indoctrinated into pressuring more people to join. Most people wouldn’t be interested in the “opportunity”, but having a friend or family member passionately trying to convince us, it takes a strong heart to listen to them out, smile and say “No thanks”. When someone you care about starts getting angry that you aren’t agreeing with them, a little voice in the back of your head always seems to chime in “why not just go along with them?”.

A blog post I read sometime back (can’t remember the site or I’d link to it) detailed the difficulty the blogger had in being the heavy and telling her tenants that they couldn’t have a party. This is part of being a landlord, and if you can’t hack it, stick to ETFs.

I love to learn about new investments and business ideas, but it’s tough to talk to someone about it for a while than say “thanks for the info, but I’m not interested”. I’ve had people get quite upset with me when I wasn’t interested in being a part of their business venture (and they got even more upset when they pushed and I explained the problems with their business and why I wasn’t interested). Venture capitalists love to say to people that they “aren’t ready to invest right away but they’d love to talk to the principals when they get the business more developed”. Newbies don’t realize this is a nice way of saying “No”.

Most of the bad financial situations I’ve gotten into in life, I had a bad feeling going into it, but just found it too hard to tell the person “No”.

What have you said “Yes” to and immediately regretted? Has anyone gone from being a “Yes (wo)man” to a “No (wo)man” and how did you do it?

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{ 14 comments… read them below or add one }

1 Four Pillars

Wow, very interesting post. Sounds like the “friend of the family” was a con artist – nice guy!

I’ve gotten better at learning to say “no” but I’m still pretty wimpy I have to admit. I guess at some point you have to get out of the “I want to be liked by everyone” and into the “I’m running a business” mindset.

Mike

2 Mr. Cheap

Yeah, its tough if its someone who you want to keep liking you (like a friend or a family member).

Maybe this is a good reason not to do business with friends and family. It seems like a shame that we can’t do business with the people we should be able to trust most though…

3 Million Dollar Journey

Yea it’s strange. For some reason “money + friends” usually doesn’t work out. Great post.

4 Leslie

Unless I’m actively pursuing an investment or buying opportunity I tell people ‘no’ upfront & they’d just be wasting their time to talk to me about it. This applies to telemarketers, timeshare salespeople, friends with a hot tip or sure win business opportunity, and assorted others seeking to part me from my money. One of the best investing tenets is, ‘know thyself’ and I’ve learned about myself that I’m a spineless marshmallow & have a hard time saying no so I don’t even let people get started. Even friends have a tough time when you tell them their proposal doesn’t stand on its own merits so you have to say no–it’s like you’re saying no to them personally, or that their idea or business is flawed and ergo they are as well.

It’s only reasonable for you or any lender of funds to want a description of the use of the funds, the return risk (capital & interest), and repayment schedule, or in the case of a partnership, the terms of your involvement and ROI. I can understand the landlord is a jerk & not speaking with you, but not the family member. That being said, maybe the family member is of the same character of the landlord and that’s why they’re friends.

5 Canadian Dream

Mmm, I really don’t get that many ‘offers’ from people looking for investment money. Perhaps because in my personal life I really don’t discuss money that much even with my extended family.

So I find saying ‘No’ actually fairly easy when it comes to money. I find it harder with personal requests, but I’m working on that too.

Tim

6 nobleea

Excellent post, Mr. Cheap. Other than a few hundred dollars here and there, I’ve never lent money to friends or family. Or friends of family.

If the business/investment idea is so good, they shouldn’t need to come to some small time investor to get the cash.

7 Mr. Cheap

Leslie: That’s smart, its easier to say “No” when they’re just getting going then after they’ve given you their whole spiel. I’m often curious to hear what they have to say (and we all know what curiosity did to the cat).

nobleea: That’s probably a good policy. I flip flop on whether a blanket stance like that is a good idea or not.

MDJ: Thanks :-)

Tim: I’m very good at saying no to stangers, its peronal requests that are the tough ones.

8 Canadian Money

I have always done best when I went into a “meeting” with some preparation. I will take a few minutes and think about things. What issues might come up? What questions should I ask? What questions might others raise? Will I be agreeing to anything today? What kind of people am I dealing with?

When it comes to “saying no” my secret is to force myself to do it…in as nice a way as I can. That’s when I get to practice my “courage skill”.

9 DebtKid

One way I’ve become more of a “no” man when it comes to expenses is just by not putting myself in situations where I’ll feel pressured to spend money I don’t have.

10 quietreose

Great post, Mr. Cheap! It takes a lot of practice to be able to say “No!” and not feel like you are being too mean or uncaring. I think it’s about being assertive and having your needs be as important as the person who is trying to sell you something.

11 growthinvalue

Reminds me of the time, just after university, that a roommate of mine (and still a good friend) was trying to get started in insurance (he quickly stopped) and was trying to convince me of the benefits of a single guy like me with no dependents buying life insurance. “It’s cheap,” he said “and it helps build credit history, and you can actually borrow against it.” All of which is true, by the way, but I just couldn’t shake my initial instinct of “yes, but if I die, there’s not a single person who’s going to be financially vulnerable, so for me, am i not better off taking that money and saving it for when I can get it?”

It went on for weeks at a slow burn and he was just never able to answer that.

If it had been a pure investment like a mutual fund, or stock, or private company or real estate something or other, I may have considered it. But i just couldn’t fathom how a payout for my non-existent dependants or my ability to borrow against it for myself was possibly a better option than a savings account.

I think that made it easier to say no. Repeatedly.

12 centsprout

i’m with debtkid, if i think there might be a situation in which i might feel pressured to spend money, i’ll avoid the situation or having access to money.

a couple of years ago a friend of mine invited me to a landmark education forum. i’d heard about it previously, and worked for an employer that paid for all their managers to take the course so i was curious about it and this was a free session. but knowing i wasn’t seriously interested in taking a course (they are quite pricey) i purposely didn’t bring my wallet with credit card or other method of payment.

after the session one of the ‘educators’ singled me out and had quite a long conversation with me, had me in tears over supposed ‘mental blocks’ i had built up and had to take the course in order to overcome. i would have signed up right then and there because the pressure was just so great, and she’d obviously been able to manipulate my emotions. but thankfully, there was no way i could put a deposit down since i hadn’t brought my wallet. and the next day i was back to my senses and not about to get suckered into signing up.

13 Dividends4Life

I am the bad guy in our family. Whenever my wife wants to say “no”, she just says “you’ll have to ask my husband, he makes those decisions.” Now when she says that, most people don’t even bother asking me.

Best Wishes,
D4L

14 Mr. Cheap

D4L: I love it! And I guess you’re clued in as well, if someone comes up to you and says “your wife told me to talk to you about XYZ”, you know that you’re supposed to say “No”.

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