Easy Change

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...

This evening, I decided I would log in and check on my current portfolio of prosper loans. Not long ago, I railed against prosper and now it appears that there is definitely something big going on over at prosper. The message from their website: start of message Prosper Filing Registration Statement; Enters Quiet Period Prosper has started a process to register, with the appropriate securities authorities, promissory notes that may be offered and sold to lenders through our site in the future. Until we complete the registration process, we will not accept new lender registrations or allow new commitments from existing lenders. If you're an existing lender, your current lender agreements will be unaffected; your existing loans will continue to be serviced; you'll be able to track and monitor your loans; and you'll be able to withdraw funds from your Prosper account. If you're a borrower with an existing loan, you will continue with your current borrower agreement and be ...

It has been quite some time since I wrote about Prosper loans. Prosper, like many sites now available, is a site where peers can lend to other peers. Prosper effectively removes the banks from the transaction and that is the value that they are selling. The upside for the borrower is a lower interest rate than would be possible through a conventional loan. This is ultimately where I think that the average lender is starting to get screwed. I don't blame prosper here. As a borrower, it is enticing to see that you have a chance to make serious money in double digit percentage rates on a loan when your high-yield savings account is yielding only 2 or 3 percent. The upside for the lender is supposed to be a higher interest rate and therefore more income per dollar invested. However, it is easy for the average investor to consider returns without considering some of the more fundamental concepts of Modern Portfolio Theory . Risk and reward are related, even within the Prosperous world o...

Well, things have turned out ok on prosper. After doing some checking up recently, I found that my loan that was late has been paid back. That is a good feeling for me because I was starting to get a little concerned since I expect only about a 5% default rate on my loans; otherwise it just isn't worth it for me. And now that my loan got paid, I made another small deposit into my account and I've bid on another loan. And I think that will bring the amount of money I will be investing in prosper to a close for a while. I will just continue to keep an eye on the money and if there is a significant sum, I might do another loan, but I think for the next few months my focus is going to be on paying down my personal debt.

Well, it appears that I have my first delinquent prosper loan. I am wondering if I should worry. It is less than 30 days late right now and this is a person who has been paying for a little while so far. However, now I realize that if this person should decide to not pay, basically all of the profit that I have made using prosper so far is gone. I knew from the beginning that it was a risk, so I suppose that it is ok. But it makes me wonder if it wouldn't have been better to just put the money in an ING or some other FDIC insured account from the beginning. Hopefully it works out; if not, file under, lessons learned.

Not long ago I was riding the commuter train home from work. And while I was on the train I remember someone discussing their retirement account that had about 70k in it. This seemed amazing, if not impossible since I knew that I was only able to contribute a mere fraction of that. I felt discouraged as I went home. All of this despite the fact that this was a guy that was at least 10 years older than I was. But here I was thinking that I should have much much more in my account and that there was no way for someone like me to achieve this. If you're looking for a great ending, stop now. There isn't one. I don't have that kind of money....yet. But I have learned to let go of this fear, this resentment toward people with nice and fat net worths. It seems all too easy for people to give up or become resentful against the rich since they think, hey, I can't even do that if I wanted to. Laura Rowley takes this attitude on with an amazing column on Yahoo Finance this week. h...

One of the more interesting developments in the world of personal finance has been Prosper. Prosper has done right by me so far. So I figure that I would talk about my small experiences related to prosper. I'm just your average pf blogger who learned about prosper and thought it would be a good idea. When I went to college, there were tons of places that advertised payday loans and such and I always got a little peeved at the idea of predatory lending. Don't even get me started about this whole sub prime mortgage mess. But now that I've been using it for several months, I thought I'd provide an update: Right now I have about 300 bucks in prosper loans. Each loan is 50 bucks a piece. I slowly am filtering in some of my side income into these loans. And overall these loans are earning an average of 13 percent each. Surely it's not big money, especially when compared with possible long-term returns of the stock market or of the safer returns of a high-interest savings ...