If You Don’t Guard Your Wealth, Even Friends and Good Plans Can Ruin You

Darren had a tight-knit group of friends, one of whom, Marcus, was always coming up with new business schemes. One Friday, Marcus burst into Darren’s apartment, excited about a plan to buy vintage sneakers in bulk and resell them for huge profit. The numbers sounded big, and Marcus wanted Darren to “get in early” as a lender. The promise: double his $2,000 in two months.

Darren felt the usual urge to help out a friend, but something nagged at him. As the weekend wore on, Darren remembered a workshop he’d attended, which stressed the importance of only risking money with skilled people and with clear guarantees. Before agreeing, he checked with their accountant neighbor. She quickly caught several flaws: Marcus knew shoes but had never run an e-commerce supply chain, and he had no proof the inventory was authentic. Reluctantly, Darren declined, offering instead to help with a marketing plan if things went legit.

A few months later, the whole scheme crashed. Marcus lost his money to a supplier who ghosted him, and only then did he confess he’d been overwhelmed. Their friendship survived, but more importantly, Darren’s careful approach meant he didn’t lose his hard-earned safety net.

Research shows that novice investors and generous friends are especially at risk of losing funds when emotion overpowers caution. Behavioral science calls this the familiarity bias—being more likely to trust what “sounds good” coming from people you know. Setting strict processes for risk assessment, even with friends, is the shield that keeps wealth from leaking away.

Whenever an opportunity comes up to invest or loan a chunk of your savings, never say yes on the spot. Insist on waiting a day or two to review the details and check the track record of anyone asking for your support—do some digging, not just on their story but on their results. Show the idea to someone whose advice you respect, and listen carefully if they spot red flags. Beware, it’s almost never urgent, and your future self will thank you for staying cautious.