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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. Don’t lend money to friends and family

    2. Never lend money to someone who can’t pay you back

    Ever

    3. Always make sure there is collateral

    4. If they can’t pay you back, don’t be their friend

    It doesn’t work

    5. Interest is the price of a loan

    The higher the interest rate, the riskier the loan
    Know this before you lend your money

    6. Lending money is like buying a stock at $10 and selling it at $15

    You want to see a nice increase in value before you sell it or get paid back
    You might even hold on for more if there are still nice gains to be made
    This is called “being greedy when others are afraid” (by @jimcramer) and it works in all aspects of life, not just investing but lending as well
    It also means that sometimes you have to wait longer than you would like to get paid back so that the profits are worth it for both parties involved in the transaction

    7. Charge interest! If someone can’t afford to pay you back, then they probably can’t afford high interest rates either.</p>

    If someone can barely afford food, then they probably can’t afford a car payment or rent either (this is from @Jamesaltucher).

    This is why I charge my kids rent when they come over on weekends (they don't like this rule).

    I also charge them for every meal they eat here (they don't like this rule either).

    But I want them to learn how difficult it is to make ends meet if you have no income and how important savings are if you want any luxuries later on in life .

    It's easier for me than for them because I've been through this many times over and over again throughout my entire life so far but they haven't yet (and neither has anyone else their age). So let's see how well they do with these rules!

    Also, I've lent money without interest before and people didn't pay me back AND they were angry at me for asking for interest when I was willing to give them more time without interest while waiting for repayment . So...interest seems necessary even if it's painful sometimes .
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