If someone offers you an amazing business opportunity, or a trusted friend asks you to lend them some money, it’s tempting to say yes and jump right in.
But the smarter approach is to slow down and get a written contract to protect you in case something goes wrong.
Russell Whitney estimates that he’s lost $50,000 over the years from trusting in people and deals without a written contract.
In this video, filmed at the Titanium Mastermind in Jamaica, he explains the importance of written contracts when you do business.
WHAT HAPPENS WHEN THERE’S NO CONTRACT…
One time, Russell Whitney did business with an individual and lost a lot of money as a result.
You can’t fully know which business partners are going to betray you. The individual who Russell did business with seemed like a genuine great guy at first, but he turned out to be misdirected and had the wrong influences around him.
Russell’s mistake was to enter into the venture with no contract and no checks and balances. Because of this, when he lost money, he had no recourse to sue the individual and go after him. If he’d brought it to a court, they wouldn’t have been able to do anything.
Contracts are key. Always get something in writing before you do business, even if it’s on a napkin. Ideally, you’ll have a contract prepared by a lawyer or solicitor.
SHOULD YOU LEND TO FRIENDS?
When you start making a lot of money, you’re going to have people coming left and right wanting to do business with you or borrow money from you.
Russell Whitney won’t lend money – whether it’s $500 or $10,000 – unless there is a contract and a tangible asset he can take from the borrower should they default.
He’s made this rule for himself based on experience. Whenever he’s lent money without a contract, he’s usually lost it. It doesn’t mean people have bad intentions, but life will get in the way.
And be very careful making exceptions to this rule when it’s a friend. They can often be the worst people to lend to, because they are the ones whose excuses for not paying you’re most likely to accept.
Never lend money unless you have a solid contract to protect you.
The MOBE Titanium Mastermind goes into more depth on this topic. Members learn how to do joint ventures and scale their businesses through successive revenue ceilings. To learn more about the Titanium Mastermind, click HERE.