Beginner's Guide to Lending 1: Patience

This is the first in my yet-to-be-determined-part series on lending tips, I'll start with tips for beginners and move on to more advanced stuff.

Patience isn't just a virtue, it's a good way to make money. By the time you've signed up to be a lending club lender you're already sold on the idea, if you add the time it takes for them to look over your account to the time it takes ACH to send money you're probably going to be so excited when the cash hits your account that you'll go spend it all that same day.

This is a terrible idea.

Let's say you start with $1,000 like I did, to test the waters. If you're investing $25 per note (which is what you should do, I'll write more about this in my guide on diversity) you have to find 40 notes to invest in, which doesn't sound like a really big number but I have trouble finding 2 notes for my bi-weekly note picks and I know what I'm looking for. You'll simply be overwhelmed if you're brand new to the game and look for 40 notes and you'll end up with notes you don't want.

This is why you should feel no pressure to invest all your money as soon as it's in your account. It's ok if it takes a month, or even 2 months, you need to be satisfied in your investment and you should never feel like you have to buy a note just to keep your money in something. New notes get listed all the time so check every day for a note that you really believe in. If you're lazy or want outside advice then you should definitely check out my note picks, I pick some high-interest ones to match my lending strategy, you can supplement safer notes with these or use them as a guide to pursue your own aggressive lending.

Once you have all your money invested it's smooth sailing. With $1000 you'll get back enough money to reinvest in 1-2 notes per month and then it's just maintenance. Once you're comfortable with the system and see your returns you'll probably want to add more money. It's a good idea to add money slowly to avoid the temptation of dumping it all into notes at once and to give you time to invest, I find that $1,000 per month is a quick enough pace for the investing to be exciting but still slow enough to give me time to invest. Again, once you've added all that you wish to add you just check in and reinvest. You can tell lendingmatch (which I don't recommend using) to email you every day (which I do recommend) when you have enough money to reinvest ($25+) which I do so I don't have to login if there is nothing to buy. I have just shy of $6,000 invested which gets me just over $200 a month in repayments, or enough to get 2 new notes a week, which is why I post note picks twice a week.

If you're impatient the temptation will be to break one of the many other rules I'll be giving later on and you'll hurt your returns.