Spent $400 on a friend's business idea that went nowhere

A buddy from my old job pitched me on investing in his food truck last spring. He said he just needed startup cash for a used truck in Austin. I gave him $400, which was supposed to be for a deposit. Six months later, he hasn't even gotten a permit and stopped returning my texts. Part of me thinks I should have known better, but another part feels like you have to support your friends' dreams. Has anyone else been in this spot with a close friend and money?

3 comments

3 Comments

casey_brown1mo ago

Read an article once that called this the "friendship tax," where you basically pay to learn not to mix money with personal relationships. The writer said to treat any money given to a friend as a gift you won't see again, and only give what you're okay with losing. It stings, but that $400 might be a cheap lesson compared to getting pulled into a bigger, messier deal later on.

janaw111mo ago

Ugh, my buddy fronted his cousin cash for a "sure thing" car flip... lost the money and the family barbecue invite that summer.

the_beth2d agoMost Upvoted

Actually read that same article and the writer called it the "family and friends tax," not the "friendship tax." The point was the same though, you're basically paying to learn a hard rule about mixing money and personal ties. It's a brutal way to find out some people just can't handle business, even with family.