Anyone Tried Prosper?

[Geo]

Because of its low fees, Vanguard S&P index fund is highly regarded. (I don't own it.) Vanguard has a website, and you can do it all online.

Thank you thank you. Anyone else recommend an Index?

 

[Smiling JOe]

You can also buy Spyders (S&P Depository Receipts), aka -SPY on the American Exchange and other market indexes without paying any management fees. Both Spyders and the S&P500 Index, are designed to mimic the S&P 500. You can set up a brokerage account with a brokerage company, like Ameritrade, and pay $15 per trade. You can continually add to your position with monthly deposits and buys, or maybe you do so quarterly, or annually. I'm sure if you google Spyders, you will have more reading that you want. Fool.com is a good source for general and specific info on stocks.

If you are more interesting in the NASDAQ stocks, you might try the NASDAQ 100, aka - QQQQ. One share gives you a small ownership in each of the top 100 companies on the NASDAQ board. Again, you can purchase through brokers such as Ameritrade, and buy on a regular basis, dollar cost averaging.

 

[Geo]

You can also buy Spyders (S&P Depository Receipts), aka -SPY on the American Exchange and other market indexes without paying any management fees. Both Spyders and the S&P500 Index, are designed to mimic the S&P 500. You can set up a brokerage account with a brokerage company, like Ameritrade, and pay $15 per trade. You can continually add to your position with monthly deposits and buys, or maybe you do so quarterly, or annually. I'm sure if you google Spyders, you will have more reading that you want. Fool.com is a good source for general and specific info on stocks.

If you are more interesting in the NASDAQ stocks, you might try the NASDAQ 100, aka - QQQQ. One share gives you a small ownership in each of the top 100 companies on the NASDAQ board. Again, you can purchase through brokers such as Ameritrade, and buy on a regular basis, dollar cost averaging.

Dumb question-

If I was wanting to put aside something for my son- say $200 a month in a Spyder. If it costs me $15 per trade then I am paying 7.5% each month. Yes??? Am I supposed to do something with my taxes to get this money back? If this is just how it is then wouldn't I just be better off with my 5% online savings account???

Thx for the help.

G

 

[Smiling JOe]

You are correct about the $15 cost per trade being 7.5% of the $200. That is why I pointed out that one might want to save up monthly, depositing less frequently, like quarterly or annually, thereby decreasing the costs. $200 per month for six months = $1200. $15 cost on that amount is now 1.25%. Save it for 12 months, and the cost for buying is now only .625%. I will note that there are advantages of purchasing 4 times a year compared to one time per year, the biggest being dollar cost averaging. You may pay $15 per trade four times a year compared to only one time, but you may also be making up the difference of the $45 by buying in at lower market prices when you buy more frequently, such as quarterly. What if you decided to save the $45 by buying only once per year, after you have been holding the money for 12 months? You are not allowing that money to work for you, and you might purchase on the day the market was at it highest. By spreading out the investments into quarterly or semi-annually purchases, you may be able to get in at more of an average price for the stock. I'm not sure how old your kid is, but the earlier you start, the more the value should appreciate.

As for your question of whether you are better off with a %5 savings account, it all depends, but over time, the stock market has averaged returns of somewhere around 10% per year. Compare that to your 5%. Also calculate in the taxes you will pay on the interest earned in your savings account. With the QQQ or SPY, you pay taxes on the growth when you sell the stock, thereby giving you the ability to use the growth to compound, rather than letting the gov't reap the benefits of compounding interest in the way of taxes.

Sounds like you would be a good candidate for hiring a CFP (Certified Financial Planner), who charges a flat fee for services. If they try to charge a percentage of your portfolio, RUN, do not walk, to the closest exit.

 

[SHELLY]

OK Shelly. No get rich quick schemes. No speculating. No trying to beat the market with mutual funds that have costly fees. Just go with an Index so that over time I am guaranteed to do as well as the market which historically for any long period of time will get anyone rich. I recognize that you are not giving me any advice here.

So a few questions-

If I wanted to regularly put money into an index which ones are highly regarded? What is the best way to go about it? Who would I call? What website can I go to to make it happen?

Read the book...no shortcuts. I swear it is short and easy to read with no big words.


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[SHELLY]

Thanks for the explanation. That makes better sense. Are you able to see how much more is needed to completely fund each loan? I wonder if there is any momentum lending.

SJ,
Here's a link to the stories of the folks wanting loans: http://www.prosper.com/lend/?cg=HR&...,3,4,5&hd=True&lq=&m=1&nc=True&pg=2&sf=8&tg=1

Some of the most interesting ones are the folks begging for cash to start or expand their businesses. Usually folks looking to get small business loans from a reputable source (read: bank) must actually do some homework and come prepared with a business plan that includes data on marketing, cashflow, profit, expenses, etc. On Prosper, some have only come up with a one paragraph plea--that sometimes doesn't even explain the product or service they are selling. Amazing.

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[Geo]

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

 

[Busta Hustle]

Old Man Potter, please report to the white courtesy phone.

 

[SHELLY]

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.


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[Smiling JOe]

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.