How to determine the length of time you are willing to lend your money.

Your personality type and goals will help you to determine the length of time you are willing to lend money. However, it is important to recognize that time plays a crucial and constant role in controlling investments.

When it comes to time and investments you have to choose between three options:
1. short term
2. intermediate term
3. long term
Each of these three time frames mean different investment choices, and different returns. So, to determine the length of time you are willing to lend your money, take a look at the following, then evaluate your personality type and goals.

Short term
You will only want to lend your money short term if you fit any of the following criteria:
- You can't trust that your money will be used with respect for your needs.
- If you expect to need your money soon.
If this is the case, these are your investment options:
- You can invest in a savings account.
- You can invest in a money market fun.

What does this mean? It means that the money is only invested for a short period of time. This can be overnight even. These short term investments do not leave much time for things to go wrong, and thus there is little risk. Also, the people using your money take little to no chance with it. So, in other words, you have little risk. However, this translates to little return. You only earn a small amount.

Intermediate term
You will want to lend your money for an intermediate term if you fit any of the following criteria:
- Want to earn more than you would with short term.
- Still maintain a small amount of risk.
If this is the case, you would them make investments that allow people to use your money for longer (generally this is a 5 to 15 year payback time). In exchange for the time you make more money. However, because it is a longer period of time, you also run the risk of having more difficulty getting your money, or higher risk of not earning what you expect. However, in most cases, you can sell your investment to someone else, which means you will get some or all of your money back and let someone else take the risk.

Long term
You will want to lend your money for a long term if you fit any of the following criteria:
- Don't need your money right away
- Don't mind risk
- Want a higher return
If this is the case, what happens is you make a long term investment. You can generally earn the most doing this, as you allow others to use your money for long periods of time. For example, with bonds it is 30 years. Since you are willing to let people use your money that long, they generally compensate you with a higher reward.in other words you get a higher interest rate, and you make more money. Now, you do not have to stay invested that long (like the 30 years of a bond). You can sell your investment to someone else, and let them take the risks and rewards that come along with it.

So, what do you want? Low risk, confident return, high risk, high potential? It really just depends on your need for the money. If you have to have the money within a year or two for an expense, short term is really your only option. However, if the money is more disposable, you can look more long term. However, no one can know that but you, so look at your needs, and how much you like risk, and determine what level of risk you are willing to be compensated for.