I put together a few easy tips to help you say no to bad investments without becoming the bad guy.
1. Don't say no right away. If you say no right away your friend will resent you for not even considering the idea. Ask to see a presentation packet and take it home. Do look it over. Even if you already made up your mind and are going to say know. After all, this is your friend and he or she deserves an hour of your time. Jot down a few ideas where the presentation packet can be improved upon. The next time you see your friend, bring back the packet with the notes. Explain that you don't feel you are the right person to invest in this project. Provide your friend with your notes and suggest he or she keep trying to obtain other investors because the idea has promise.
Don't, whatever you do, blame your spouse. This will cause friction in the relationship with your spouse. You can tell your friend no without using your relatives as a scapegoat. Another trick is to tell your friend that you're not considering investments at this time but you will be happy to help him or her promote the idea to other investors via social media. If you can become involved with the concept by providing resources and not money, your friend will feel like you are investing in the business concept.
There is never a right or wrong answer when letting a friend know that you will not be forking over cash to promote their business concept. Remember, it is not what you say but how you say it!