Lending money

At what point should you lend someone money and how much I've also listened to @James altucher the 15 rules of not going broke   

1. Never lend money to family or friends

2. Lending money is like investing in a business you know nothing about

3. The higher the interest rate, the lower the risk

4. If you lend $100 and they pay you back $110 then it was a good investment

5. It's not about the amount of money but it's about the relationship

If you can't afford to lose that relationship then don't lend money even if it seems like a safe bet

6. When someone borrows money from you, consider it as if they stole $100 from you. Then set up boundaries to make sure they can't steal anymore. It's ok for them to owe you but don't let them take advantage of your generosity ever again.

e.g., with my kids, I used to give them an allowance when they were young and now that they are older I still give them an allowance but only because I want to keep track of their spending habits (I'm not as generous now). But if one of my kids borrowed me $20 I would never give them another cent until they paid me back and I would be very strict with any future spending or borrowing (even though I know they will pay me back). This way they won't think that all of a sudden I am "rich" and will start giving them more than what is fair (because this has happened before when I was younger).

But also...

I've lent money to friends who have just gone through divorce or had other financial problems and there's no way that i would ever expect repayment on those loans given the circumstances that caused those problems.

The key is knowing who is going through tough times and who is not (and being honest with yourself) so that you can help out without letting people take advantage of your kindness in the future.

Also, if someone doesn't pay you back, don't worry about it too much. There are plenty more opportunities for investments out there so just move on and keep learning how to do this better next time (and remember why this person did not pay you back so next time around perhaps avoid lending money to people like this).