How To Safely Invest Your Money
How To Safely Invest Your Money

What Is Peer to Peer Lending?

Most employers offer a retirement account like a 401K which we know very little about. Especially when it comes to understanding fully how our money even grows in that account.

In light, we are basically letting financial firms determine where our cash is placed and how it gets diversified. For most, this is an intimidating topic but I feel it MUST be addressed.

What if I explained to you a way to invest your money that is easy to understand and allows you to set your own risk levels?

Yes, this exists and it’s called Peer-to-Peer Lending. It can give you a real edge with your retirement account once we are familiar with the basics of the term, investment.

Peer-to-Peer Lending is the ultimate way to start getting into the habit of investing your hard earned cash or paying off credit cards with high fees and annual percentage rates.

Two of the most popular marketplaces for these types of investments are Prosper Marketplace and Lending Club. It has no affiliation with any banks and it’s ran by borrowers and investors like you and I. Once an account is created, it can be funded with as little as $100 OR if you are a more experienced investor then you have the option of rolling over your current 401k account from your employer.

With a variety of options offered, one of the simpler options is being able to determine who you want to lend your money to. The lower the borrower’s credit score, the higher the risk and the more percentage return can be made because of the amount of additional payments, and vice versa. After all your customized settings are in place, this all gets done in the background by an algorithm.

S&P 500 vs Prosper
S&P 500 vs Prosper

Above is an image of how Prosper, for example, stacks up against the overall markets. It is clear that your profits will not be as volatile as it currently is on your retirement account.

I would advise creating a small account to get the feel for it first and gradually increase your investments as you become more comfortable with the process.

Share your experiences and let us know how much profit you earned each month!

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