The full title of this Rule should actually be: Never lend money – to a friend or your children or siblings or even parents – unless you are prepared to write off either the money or the relationship.

There is a lovely story told, I think, about Oscar Wilde (correct me if I’ve got the wrong person) who borrowed a book from a friend and forgot to return it. His friend turned up and demanded the book back, by which time young Oscar had lost it. His friend asked Oscar if he wasn’t jeopardizing the friendship by not returning the book. Oscar Wilde merely replied, ‘Yes. But aren’t you also doing the same thing by demanding it back?’

If you lend money – or a book or anything else – don’t do it unless you are prepared for it to be lost, forgotten, not returned, broken, ignored, whatever.

If you are precious about it, then don’t lend it in the first place. If it means a lot to you, keep it safe. If you do lend anything, including money, then don’t expect to get it back if you value the friendship – or relationship. If you do get it back then that is a bonus. If you don’t, well you were prepared for that in the first place.

Lots of parents make the mistake of lending money to their children and then getting all hurt and disappointed when they don’t get repaid. But they have spent the child’s entire life giving them money and then as soon as they get a bit grown up and go away to university or whatever, the parents suddenly start saying it’s a loan and demand repayment. Of course the child isn’t going to repay it. They haven’t been trained to. It is unrealistic to expect them to do so. If they do, count your blessings and be grateful for the bonus.

Same with friends. Don’t lend them anything if the non-return is going to matter to you. It is your choice after all. You don’t have to lend anything to anyone. If you choose to do so, be prepared to write it off or don’t do it. Obviously if the money means more to you than the friendship, then of course demand to be repaid – and add interest as well.

And the same goes for siblings or parents (goodness, don’t ever lend money to them, they’ll never pay it back). So who should you lend money to? Strangers of course. And they won’t pay it back either.