Hey, I just met you, and this is Lazy... get these fast finance fixes and mail me, maybe?

Prosper is Just too Much Fun

6
Comments
Written by

One of the reasons why I find Prosper.com appealing dawned on me this morning. It's not a good reason, but I'm not so sure it's bad, either .  It's probably just a feature of their business model. The fact of the matter is that Prosper is just fun.  Here's why:

  • The Human Connection. You get a picture and story of the person you are helping.
  • Daily Gains. Unlike mutual funds which can go up and down, you can see your Total Account Value grow each day. This is a huge motivational factor for me. Right now I'm just getting little over $1 a day in this area, but psychologically a $10 a day growth would feel like a lot of freedom.
  • Reinvesting the Gains. It's a very good feeling to see that enough people have paid you to make yet another loan. In 6 months, my Total Account Value has grown by $125, so I've been able to make two extra loans on just the interest.
  • The Gains Themselves. I choose to take on a lot more risk than many might. That's just part of my nature. So when I'm making an average of 20+% on the money lent, it feels like I'm beating the system. It is a lot of fun to expand that growth rate with a calculator. Logically, I know I'm not going to get that when risk is factored in, but that doesn't kill the fun factor for me. Even when I factor the risk in and look at it logically, it seems like a good deal.

Posted on December 8, 2006.

This post deals with: ... and focuses on:

Investing, Prosper

Don't forget to these five minute financial fixes to save thousands!

6 Responses to “Prosper is Just too Much Fun”

  1. Other Voices: Links for 12/8/06…

    Advice on money… Ben Stein: If you're not rich, please don't show off at this time of year by spending money you don't have. My Open Wallet: …I do tend to enjoy business travel, and of course some of the……

  2. fin_indie says:

    Lazy, I’m with you. Prosper does have a certain draw for the reasons you cite. I especially like the “I’m funding new loans on the interest alone!” comment. It’s true, how can you not like that??

    I just added more money to the system and am looking for more loans to fund myself:

    http://retiringearly.blogspot.com/2006/12/more-on-prospercom.html

  3. Major says:

    How are taxes figured? Being as it is interest accrued, wouldn’t that be taxed at your highest rate? If so, what is the effect of taxes (and defaults) on your realized rate of return?

  4. I believe you are right about the taxes Major. I wish it would be a little more tax efficient. At my tax bracket (I think it’s going to be at 25% or 28% – I haven’t full calculated it), the 15%+ estimated, risk-adjusted, gain is pretty good. I think that’s better than can I do with more tax-efficient investments.

  5. […] Even though Prosper is fun, I need to make more disciplined payments to my down HELOC.  While I still believe I’m earning a little more in Prosper, I don’t want to put all my eggs in that basket. […]

  6. I totally agree with the human connection, it is the addictive part of the process. It can be a bit of a soap opera, we laugh, we cry, in the end were all looking to improve our lives… (Editor’s note: removed commercial promotion)

Leave a Reply

Your email address will not be published. Required fields are marked *

Previous: Welcome Five Cent Nickel Readers!
Next: I’m at a Carnival
 
Also from Lazy Man and Money
Lazy Man and Health | MLM Myth | Health MLM Scam | MonaVie Scam | Protandim Scams | How To Fix | How To Car | How To Computer