How to Lend Money to Put Money in Your Wealth Building Bank!

Learn how to lend money professionally so you can better diversify your portfolio and make money with a descent return on investment. Knowing where and when to lend money is a great start. That means tapping into the right network is key!

If you have a significant amount of money, such as greater than two hundred thousand dollars, then you can contact your bank or a credit union and actually fund mortgage loans you can back. If you do the math on a fixed rate mortgage loan at five percent interest on two hundred thousand dollars, you will make more in interest over the thirty-year life of the loan than the principle you put up for the loan.

However, if you do not quite have that much money, but do have a fair amount, say two thousand dollars, you can still lend money to people who really need it and make a descent return on it.

Why do you want to learn how to lend money? Well, say you have your two thousand dollars in a standard savings account earning maybe two percent interest or in numeric terms .02 percent. The bank usually calculates that interest over a period of twelve months or one year. That is only 0.00167 per month interest you are receiving for your savings. Anyway, in one month, your two thousand dollars may yield $3.34 (three dollars and thirty-four cents). Unfortunately, it's very difficult to find any kind of savings account with that much interest per year.

Now let's learn how to lend money and make a lot more return on your investment. Say you lend out your two thousand dollars at ten percent (.10) annual percentage rate or .0083 per month for a term of one year. For the first month, you will receive your principle payment plus interest. The interest for the first month is $8.33. As the loan is paid down, the amount of interest you receive is less and less, but all in all you will earn $109.52 over the life of the loan which is one year.

In the previous example in your savings account, the amount of interest you gain, considering that your account compounds your savings and earned interest every month, totals about $40.45 in one year.

I know, if you calculate the same loan at two percent, you actually lose money in this deal, but that is what is great about learning how to lend money vice saving money. Lending money not only gives you the power to set the interest rate (legally and ethically), but it gives you more return on your investment.

So, where can you start lending money and learning how to lend money in smaller terms that you can afford right from the get go? Well, I highly recommend checking out Prosper.com to learn how to lend money to people who really need your help.

This company helps people find lenders and helps lenders find people who need money. It allows people just like you to lend money to people who really need it and pays you your principle with interest back. They do all of the managing while you just put your money to work and sit back.

If you are afraid of the risks involved with lending money, you really need to read all of the information Prosper has on their site about lending. The risks are very low considering the reward for successful loans. This company does all of the legal stuff for you so all you have to do is put up the money for the loans. It is a very simple way to get in the door to lending money with low risk.

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