8% pa on a guaranteed capital preservation, page-2

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    Hi @bthotcop,

    8% is astounding, essentially they are offering you 8% risk free; which leads to me ask you a few questions:

    1 - Why is the mate borrowing the funds from you?
    2 - What are the funds to be used for?
    3 - When is your capital returned to you?

    The reason I ask these questions is my parents were offered something similar back in 2007 (15% back then, 2x risk free rate).

    The friend was using the funds to buy property. What we didn't know is they were hitting up all of their friends for cash.

    You need to really ask yourself, "why would my friend borrow my money @ 8% when they can get money for 4% from a bank?" as a result of this question, I talked my parents out of the investment. Everyone I know that got involved lost most of the money they invested, because it was essentially a Ponzi scheme; when house prices stopped rising the money ran out.

    Personally I think you can get a better return elsewhere.

    Hope this helps
 
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