Sunday, December 05, 2010

Looking Back At Prosper

Given the time of year, things are drawing to a close and one of the things to think about is what has worked and what hasn't as far as your personal finance plan goes. For me, one of the things that I tried about 3 years ago was using propser loans. My record isn't that bad, and in some ways, Prosper did exactly what I wanted it to--it secured a series of funds to achieve a higher interest rate than I could get otherwise if the money remained entirely liquid.

You can see my track record with prosper. For many people, like Pensonier, it doesn't work out so well. Personally, for legal reasons, it is not possible to invest with them anymore. As for me, I am withdrawing the money now and slowly building up my roth IRA for retirement by dollar-cost averaging. What is most telling about the process of lending money is that there is so much involved in making the loans, that it really tricks you into thinking that the investments are somewhat safe.

Personally, for the amounts I was lending, the most I could do was look at the information available and considering everything that I have going on, it certainly was more of a hobby than what I would consider a really good investment. On some level, it was a lot of fun, and really informative when the whole credit crunch happened over the past few years, this experience of lending on Prosper really brought it back home.

Now, I continue to invest for retirement as I stated and also continue to build up my emergency fund and also set aside money for large, short-to-medium term expenses that I know are coming. So, in all, I think that prosper was valuable, but more as a tool to learn about credit and see what it is really like on the front line for people needing to borrow money; knowing that you have money out there that people are paying back makes you even more sensitive and aware of the flows of the macroeconomic data etc since you wonder how it could affect your investment. As for me, for now, in this economic climate, I am happy to pay down more debt and save my dollars before lending them back out.