Friday
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After posting I realized this is crazy. Of course this isn't a valid or reasonable boundary. I can't tell him or anyone how to live their life. I have to either give him the money or not. And it must be freely given with no strings.
I didn't post originally to your Q because... Yeah. This. ^^^^ The moment I give someone money, it's theirs, to do with as they wish. ((I also don't loan money. If someone wants to pay me back? Sweet! But the moment it leaves my hands, it's theirs, as far as my head goes. I'm not willing to lose a friendship over cash. And I have, before. So if I can't stand to lose it, I don't loan it -or in my case give it. ))
HOWEVER...
That doesn't mean I also don't give people my 2 cents ;)
I THINK that might be where you're conflating issues? There are some things going on in your friends life that you want to weigh in on, while at the same time don't feel comfortable loaning cash because of those issues (totally fair) // if those issues were addressed you wouldn't hesitate to loan the cash... So the struggle is that even if he hadn't asked for money.... You'd be wanting to have this convo with him? But the ask for money makes them inescapably entwined?
Maybe that's a way to go about it, however? Regardless of how he stabilizes his life, you'd want to see some stability before loaning him the capital for business = a totally fair boundary to draw IMO.