Prosper

Most of the individuals who are fortunate enough to have amassed wealth so great that the wealth itself can work harder and earn more than the individual, have done so in an nontraditional manner. That is, they have done things that most of the rest us would not have considered or even desired to do.

Sacrifice and risk are both adjectives we all most definitely try to avoid, but are of course unavoidable in the land of investments. That is unless you are so obsessed with investing (like me) that you eat rice and noodles because you know the future compounded value of that $2.50 your saving. But not all investment require the same sacrifice, and they definitely don't all entail the same amount of risk.

Take Prosper.com for example. For those of you who do not know, Prosper.com is the finance world's response to Ebay. Prosper.com allows individuals to lend money to other individuals. It effectively cuts out the big banks who used to (and often still do) take all the profits. Prosper charges a very reasonable fee, about 1% to 1.5%. Rates are determined by a reverse dutch auction, that is, the borrower enters the amount they would like to borrow and the rate they would like, and lenders bid down the rate to lend money.

Making loans on Prosper can be addicting. It's exciting and a challenge to try and find the best loans to purchase at the best rates. I also enjoying knowing and choosing who my money is being lent to. For example, having had family members caught in the credit card trap, I enjoy lending to borrowers who are interested in consolidating high interest credit card debt, and I still earn a nice return!

I have to date made 14 loans, all of which are the minimum amount that can be lent, $50. You see, the 'lenders' are only purchasing a part of a loan that prosper actually makes. But prosper will only make the loan after they have enough lenders committed to buying the loan. The smallest portion of the loan that can be bought is $50.

Of my 14 loans, one is currently 3 days late. This is the first late payment I have had since I started my prosper career 3 months ago. Did I mention that I was earning an average return of 15.9%? I am still in the experimental stage of prosper.com investing, but do the math yourself, the prospects are quite enticing. Nontraditional and rather risky? Absolutely!