This isn't exactly real estate but I put it here because this seems like the best fit of our forum choices for general investment postings...
Has anyone invested with Proser (prosper.com)???
I started doing a year and a half ago and was hot and heavy with it and then totally forgot about it...
It is pretty cool-
you can lend people money there (or borrow)...
Let's say Jane wants to borrow $5000. She opens a prosper account and submits her loan to all Prosper's lender community. Jane submits that she will pay up to 13% for the loan. When a lender wants part of the action they can lend as little as $50 to Jane and specify the minimum interest rate they would take for this loan. Once enough lenders have jumped in to equal the total of $5000 the loan is then funded. Each month Jane pays on her loan to Prosper and Prosper distributes the funds...
The more stellar a loan applicant is, the lower the risk and the lower the return. The lower a borrower's credit rating and higher their debt to income ratio is, the higher the risk and the higher the return...
What's cool about it is you can diversify money across loans and you can set up "Standing Orders" so that the system automatically funds loans based on preset criteria you establish in whatever $ increments you specify...
Check it out... Let me know your thoughts/experiences...
I'm told that math professors and statisticians are making a killing on this site. I have just been experimenting with lending based on my gut...
Let me know if anyone is interested in starting a Prosper lenders group.
Cheers, GW
Replies
32
Beach FanaticAuthor
Read the book...no shortcuts. I swear it is short and easy to read with no big words.
.
While you might think I am dumb for playing with Prosper, I'm actually a fairly bright guy and am not afraid of books with big words.
Admittedly, I was going to try to skip the read if you told me that I nailed its theme in one or another of my previous posts. But alas, I will take your advice and read it.
Cheers and thx again. I am going to let this one die now...
GW
Beach Fanatic
Old Man Potter, please report to the white courtesy phone.
SoWal Insider
While you might think I am dumb for playing with Prosper, I'm actually a fairly bright guy and am not afraid of books with big words.
Admittedly, I was going to try to skip the read if you told me that I nailed its theme in one or another of my previous posts. But alas, I will take your advice and read it.
Cheers and thx again. I am going to let this one die now...
GW
I don't think you are dumb....but I can guarantee that you will be a heck of a lot smarter after you read the book.
I'll be interested in hearing from you after you've read it. If you tell me that you think it was just rubbish and a waste of your time--I'll donate the cost of the book to a charity of your choosing.
.
SoWal Expert
OMG, Shelly. That was a funny page of loan requests. I especially liked this one, wanting $11,000 with 20.47APR interest for 3 years. Why does he want the loan? Because he wants to get rid of his credit card, which has high interest. I thought my credit card interest of around 11% was high, but damn -- if he is willing to pay 19%, I'd hate to see what his credit card company charges.
SoWal Insider
OMG, Shelly. That was a funny page of loan requests. I especially liked this one, wanting $11,000 with 20.47APR interest for 3 years. Why does he want the loan? Because he wants to get rid of his credit card, which has high interest. I thought my credit card interest of around 11% was high, but damn -- if he is willing to pay 19%, I'd hate to see what his credit card company charges.
But wait! That's not all! This same guy got approved for a $4,000 loan in April '07 so he could......wait for it.......pay off credit card debt: http://www.prosper.com/groups/member_home.aspx?screen_name=hardworkindad&display_mode=3
Don't you love the snapshot of him in the Aloha shirt holding the golf club?
There was another sad story of a guy begging for bucks to pay off the credit cards which included a photo of him with his son riding their Skidoo.
If I was going to lend these folks money I'd be looking for an ad that included a photo of the guy cutting up all his credit cards and another of him working a second job as a school night janitor.
.
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Edited
Beach Fanatic
Thank you thank you. Anyone else recommend an Index?
If you opt for an index fund, say the sp500, then theoretically they should all return the same rate as the sp500 and you should go with the fund that has the lowest expenses/fees.
Most companies will not charge you any transaction fee if you are on an automatic monthly deduction from a checking account. That is usually true even if you are buying a no-load managed fund as opposed to an index fund. You can still research management fees for those funds but on no-load funds, the management fees are reflected in the share price and not deducted from your investment.
Beach Lover
i will just put in my 2 cents quickly...
i have looked into prosper as way to invest in a vehicle that has little correlation with the overall stock mkt, in this research i found that many of the lenders where very dissapointed by proper's collection process...prosper makes money by lending but it really has little incentive to collect since it is basically a loan broker and doesnt take the credit risk...i think this is an inherrient weakness in the model.
although academically it is interesting...not for serious investors who want to place decent sums of money imho.
i have looked into prosper as way to invest in a vehicle that has little correlation with the overall stock mkt, in this research i found that many of the lenders where very dissapointed by proper's collection process...prosper makes money by lending but it really has little incentive to collect since it is basically a loan broker and doesnt take the credit risk...i think this is an inherrient weakness in the model.
although academically it is interesting...not for serious investors who want to place decent sums of money imho.
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