Imagine your favorite diner. It's Saturday morning, and an old Gandolf-like man approaches your booth. He sits down, orders a coffee. You are confused, but before you can even ask a question he says: "I'm a distant relative, and a have a quick piece of business for you."

He slides a $100,000.00 check across the table. He says "This is for you, but there is one requirement. You must make exactly five private loans to friends or family members. You can make different loans, but do not loan anyone less than$5,000.00. Retaining principal is you primary objective. Tell me the names right now, so I can make a list."

Freeze-frame. What do you say? It's a tough ask on the spot. Your goto should be the five most credit-worthy people in your network. Here are some common traits they are likely to share:

Trait Indicators
Reliable Keeps social commitments; Loyal; Can keep a job; Can finish a project.
Organized Keeps a calendar; Maintains short and longterm goals; Doesn't complain about being too busy all that often (For more info: The One Thing).
Ethical Concerned with moral consistency in their decisions; Law abiding; Humanitarian.

You can rate potential borrowers on a dozen more traits. This list is a good starting point. I would argue that your five people who best exhbit these characteristics will be front-runners, in any case. For borrowers, ability to repay the loan and do no harm is paramount.

As you write down the five names & principal amounts for the borrower list, the old man pulls out his checkbook and writes up another $100,000.00 check. "Now, this check is for you to make five bets with me. I will give you 2:1 odds on each bet you make for the success of five friends or family members. Together, we'll define the measure of success for each bet, and I am not giving any easy ones." You ask "Can I place a bet on my brother producing a Grammy Winning Record?" Old Man: "Yes" You: "Mom making the New York Time's Best Seller list?" Old Man: "Yes" You: "My nephew learning to ride a bike?" Old Man: "No, most people do that." You: "College roommate owning 100 doors of real estate within the decade?" Old Man: "Yes, that is ambitious" Consider these bets as stand-ins for investment. Name some characteristics that make people worthy of investment: Trait Indicators Talented Praised by colleagues and experts for high performance; Demonstrates thoughtful interest and insight; Practices and builds credibility in chosen discipline. Persistent Takes longterm view on projects; Understands setbacks as opportunities for improvement; Maintains enthusiasm, encourages others. Influential Respected; Leads while serving others; Maintains strong, credible network; Good with people. It's been said that you invest in people not projects. Since he's given you 2:1 odds, you have considerably more to gain with this group. Since you're placing a bet, you also have more to lose. As you place your bets the old man slides one more check across the table. But unlike you guessed, it's a check for$200,000.00. "This check, is arguably the most important of the three. I want you to make five donations to friends or family who pledge to do the most good with the money."

At this point, you know the exercise. Let's take a look at the traits:

Trait Indicators
Convicted Has a heart for his/her cause; Willing to speak and educate others; Willing to give time and money.
Humble Lives modestly; Does not overstate abilities; Grateful; A good steward.
Prudent Longterm thinking; Never presents self in compromising light; Subscribes to mentors and wise counsel.

You complete your lists. The old man pays the bill. He says: "I'll see you in 2026, we'll settle those bets."

#### The Exercise

I recommend applying this process with your own network. This idea is a more investment-oriented approach to the conversation list concept by John Corcoran. John has built his business by networking and building relationships. He is quite an expert on the topic, and has inspired me to view my social and professional networks as a powerful form of investment.

For a balanced life, sticking to one form of investment is not going to do the trick. I encourage you to invest in traditional markets, yourself (see Personal Investment), your business, your network, and maybe even an alternative market if you have additional time or money.

#### Killer Takeaways

You'll have fifteen names when you make the lists. This is a little shy of the fifty names in the conversation list approach. Investment and charity take a great deal of your involvement, and should not be spread too thin.

The best people on the list are the ones who show up on more than one list. Got a name on all three? Stick close, sounds like a great future collaborator.

From here, be proactive. Have conversations with people on your lists, make sure they know you're supportive of their future plans. Eventually, when a friend asks you for money, you'll know how to check if they're a fit.

#### The Twist

The most important thing you can do: Be on someone else's list. You can't change the way your friends and family live, but you can change yourself.

Just because you know fifteen people who have the right characteristics for credit, investment, or donation, doesn't mean they will ever take you up on the offer. If you're on their list(s), then anything you want to accomplish is possible when you ask. If nothing else, it's a feedback loop. Don't be shocked if your investors come back to you for some investment.