What would you do if you won a million dollars? Most people think of how they would spend it. But what if you just invested it and lived off the interest?
Just 10% of $1,000,000 is $100,000! Could you live off of that for a year? What if you could earn even more? Say 15% or even 20%? That’s $150,000 and $200,000 respectively, in case you were wondering.
Yesterday, I had the opportunity to attend a live webinar, along with other personal finance bloggers SVB of The Digerati Life, Lazy Man and Money, Bobby of 2 Minute Finance, Barbara of Barbara Friedberg Personal Finance, Peter of Social Lending, and others at the Prosper office in downtown San Francisco.
Prosper is a P2P lending marketplace. That means you can either lend or borrow money from others instead of through a bank. And since you bypass a bank, you can get a higher interest rate on returns or borrow at a lower interest rate.
Current bank savings interest rates are less than 1%, not worth even putting your money into. Prosper’s return has been 10.69%.
The current personal loan rate at Wells Fargo is 19.5%. At Prosper, rates start at 6.59%.
It’s like a win-win proposition. If you lend money, you’ll earn a higher rate of return and if you’re borrowing money, you’ll get a lower interest rate.
Mind you, there are risks associated with this kind of investment. But if you looked at what has happened in the stock market the past years, it’s risky too and more complex to understand than peer to peer lending.
You can choose your level of risk. If you choose riskier investments, you can earn more. If you choose safer investments, you’ll earn less.
I first learned about Peer to Peer Lending in 2006, when I got a flyer off the street from Lending Club, which is a competitor of Prosper. Peer to peer lending has only been around since 2005, only 6 years. So it’s a relatively new concept for most people.
With the current backlash at banks for being too greedy, it’s the perfect time for peer to peer lending to step in.
I’m no expert in this topic, maybe some of you are, but I’m learning. I think it’s a great way to make your money grow. Most people who are wealthy, invest their money.
What has always bothered me is why don’t more women learn about investing? If you look at most women’s magazines, they tackle issues on frugality, cleaning, fashion, and relationships.
What about investing? You’ll never see an article on investing!
We put all of our effort into saving our money, but then what do we do with the money we saved? Do we just let it sit in the bank? Do we hold onto it in cash?
What if we could make our money work for us? What if it made money for us without us having to do a thing?
Are you investing your money? How do you invest it? Please share your thoughts below. I would love to hear from you!
Photo Credit: jollyUK