Two types of economic people: Lenders and Borrowers

Two types of economic people: Lenders and Borrowers
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two types of economic people-lenders and borrowersThere are two main types of economic people: Lenders and Borrowers. Lenders lend out money and make money by charging some amount on the money that they lend. Borrowers take money from the lenders and pay back to the lender more than the amount that they borrowed.

Over time the amount of extra money paid back can be substantial and can even exceed the total borrowed amount. Many borrowers may even continue to pay back money for their whole lives. Having to continually pay back money can be a major burden and can force a person to do things in life that they may really not be happy doing. In worst cases, their burden may become so high that they have to borrow more money just to keep up with paying back debts. So, great caution should be observed and much thought should be put into the consequences when borrowing money.

Rather than becoming a borrower, the goal should be to save and be able to lend money. Earning money on money is probably the easiest way to add to monetary wealth. The more money you lend the more you earn. These earnings free up some of the time that you spend accumulating monetary wealth and allow you to use that time to focus on social and intellectual wealth. This route is not fast, but over time your earnings can start to become substantial. Over longer time, this is the true path to becoming free from having to use a portion of your time accumulating monetary wealth, thus allowing you to put more time into increasing the other parts of wealth.

 

What are your thoughts on lending and borrowing? Please comment below.

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2 comments on “Two types of economic people: Lenders and Borrowers
  1. Andrew FS Cheong says:

    being a lender means finding ways to get passive income?

  2. S. P. Mast says:

    Right, I guess buy lender I mean having net positive economic wealth to lend. The return on lending could be safer passive income, more riskier investment return, or even some return on speculative investment. The lender would have some combination of these depending on their preference and situation. But you are right, the best type of lender is one that can generate enough safe passive income to meet his/her economic needs. Thanks

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