A few friends and I had met up the other day to have dinner and catch up on a few things. We had a good time, talking about kids and pets and books and life. Little did I know that the conversation would turn towards personal finance. And that's ok. Clearly, I don't mind talking about that stuff. But for many, it is still too taboo to talk about in more than a superficial way.

Really, it was just one person who brought it up, and since I was the only one who felt comfortable talking about money, the conversation was mostly between he and I. Once again, I don't mind talking about this stuff, and since he brought it up, I'm happy to discuss. I certainly am far too modest to push the conversation that way, and would likely have said a lot less had he not asked for our opinions during the discussion. What he was talking about was an investment proposal, and I could tell is was really weighing heavy on his heart. That's when I knew that as a friend, and as someone knows a bit about this stuff, that I had to speak up.

Without saying too much about my friend, I'll frame this out first with just a few details. They have money. They haven't always, but are doing quite well and business has been booming for the last few years. They are a they - married with children. They have strong morals and values, and always try to put God and family first. With that out of the way...

My friend had been hit with a business proposal by some colleagues. It didn't sound like a terrible deal - no pyramids, or get rich quick deals. The ones who had proposed it had a well thought out plan. They had run the proposal past lawyers and industry professionals and had gotten the thumbs up from everyone. The real details aren't important here, but there were a couple that set off the alarms in my head. First, this deal would be a partnership, planning to last at least 10 years. Not a fan of these what for the lack of control - 1/4 ownership = 1/4 control. Also, you're multiplying your risk by the number of partners. Dave Ramsey talks about this a lot, and the gist of his argument is usually that a law suit or divorce involving one of the partners could throw the entire partnership into a tailspin - you could lose your shirt on the deal, what for someone else's stupidity, OR end up with an unwanted and hostile new partner (ex-wife #1). We talked about this, and though he listened, I could tell that he was undaunted.

But then he said the phrase that sealed the deal for me as a resounding "NO".

"The part that has me up at night is that this would be everything - all the savings, college funds, everything - and we'll have to save up for a bit just to have enough." (emphasis added)

That told the story. Forget the lack of emergency fund. Forget the lack of tax free growth on college savings. Forget the lack of diversification. His heart was telling him not to do this, and his brain was trying to block that. I gave him the best advice that I could. I talked about some of the things that we learned and would teach in FPU and how it's all not just a math equation. The math and the theory of the deal was sound, but this was not a deal that he was ready for and his heart knew it - there was just too much risk and the deal didn't even involve debt! I did my best in explaining this to him and why my answer was a 'no'.

I don't know what he has decided to do, and I may never know. It's none of my business unless he makes it so. But we had a good discussion about life and money, and naturally a lot of Dave's advice. Not that I want to lean on Dave Ramsey so much, but the man does know a thing or two about this stuff. As a parting though, I did challenge him to pray about it and listen to Dave's radio show. I told him that these topics come up all the time, and if not, then call in.

Ever been in this position? What advice would you have given?