How to Achieve Financial Freedom by Lending Money

There are borrowers and there are lenders. On the other end of every foreclosure is someone benefiting. So why decry those making money -- just become one of them. People achieve financial freedom by lending money. Don't be scared -- it's just capitalism, baby.

The old adage "neither a borrower nor a lender be" isn't the whole story. The whole thing goes "neither a borrower nor a lender be if your friends are broke and you can't afford to do without the money you're lending."

If you can, you can achieve financial freedom by lending money, and you should.

Here's how to achieve financial freedom by lending money.Things You'll Need:

• Venture capital
• Risk tolerance
• Well-to-do borrowers

1. Achieve financial freedom by lending money to the bond market.

   Get your feet wet lending by lending to blue chip bonds.

   The bond market is nothing more than lending money! It's the same principle -- you are giving money that you could use in the present for someone else to use in the present, and charging them an interest rate to do so.

2. Achieve financial freedom by learning the credit rating system.

   Learn to decipher a credit rating, and creditworthiness.

   There are many small businesses which are considered a higher risk just because they are small. However, investing in up-and-comers is how you really achieve financial freedom by lending money, because you are compensated for that risk by charging a higher interest rate.

   Learn the ins and outs of what an A credit rating means vs. a BBB+. Or a D. There are good businesses out there with bad credit ratings, for a number of reasons, and their balance sheets and cash flow documents will show strong businesses.

3. Achieve financial freedom by lending money to undervalued companies.

   Once you learn the credit rating system, and you know when to break the rules, you can find undervalued businesses, and charge high interest rates to relatively safe businesses.

   Start by perusing websites like Sellaband.com and US.Zopa.com to learn the online social lending game. There are plenty of businesses to be funded, and you can achieve financial freedom by lending money to the right ones.

4. Achieve financial freedom by lending money to people with a successful track record.

   Check a business's credentials before you lend.

   Credible businesses should have registered with the Better Business Bureau and have a public corporate listing. See if you can Google the proprietors and get a financial history. The more you know about the personalities of the people in charge, the better your chances of achieving long term financial freedom.

5. Achieve financial freedom by lending money carefully person-to-person.

   After you learn the social lending scene, you may want to delve into personal, or consumer, loans. You have an advantage in these person-to-person loans in that you probably know the business proprietors somewhat well, and you can judge whether or not their idea is good, and if they have the wherewithall to achieve it.

   I highly recommend reading the book below in the Resources section, or one like it, before you delve into this much riskier lending practice.

Tips & Warnings

• Achieve financial freedom by lending money to people who are NOT your family. Family and business don't often mix.

Resources

• Top Book on Person-2-Person Lending
• Managing a Consumer Lending Business