Comments on: Stopping My Prosper Contributions

By: kleinguy

kleinguy — Sat, 29 Sep 2007 23:48:36 +0000

Great PF blog. I was one of the earliest lenders in Prosper and loved the idea, at least for a while. After lending out well into the 5 figures the net result of my investing/social experiment is a whopping 8% return after 18 months. Of course that 8% is all taxable as ordinary income plus if any loans do end up defaulting then one’s taxes become exceedingly messy! It’s somewhat deceiving to compare an 8% rate earned on Prosper to an 8% tax deferred rate earned in the stock market as they do. All in all I’ve enjoyed the “experiment” but have been actively withdrawing money as my borrower’s payments are being made.

By: {Rodeo} The Lazy Sunday Edition

{Rodeo} The Lazy Sunday Edition — Sun, 16 Sep 2007 10:01:14 +0000

[...] Man has stopped his Prosper contributions. I am not a fan of the risk that Prosper entails, and would much rather see my money in a less [...]

By: Tom

Tom — Thu, 13 Sep 2007 02:21:25 +0000

I agree with you and the other posters. It makes sense to pay towards your 401K first.

By: Personal finance at KMull.com

Personal finance at KMull.com — Mon, 10 Sep 2007 18:54:25 +0000

[...] Lazy Man and Money is stopping his Prosper Contributions. [...]

By: Posts I Enjoyed Last Week | The Sun’s Financial Diary | A Personal Finance Blog on Saving and Investing

Mon, 10 Sep 2007 03:31:04 +0000

[...] Lazy Man at Lazy Man and Money said he will stop contributing to Prosper. [...]

By: Personal Finance Review - I Have No Pension Edition » Money Smart Life

Personal Finance Review - I Have No Pension Edition » Money Smart Life — Mon, 10 Sep 2007 02:07:42 +0000

[...] -Stopping My Prosper Contributions @ Lazy Man & Money [...]

By: Joseph Sangl

Joseph Sangl — Sat, 08 Sep 2007 18:54:50 +0000

Good points. Now maybe you can start saving to pay for a baby and the associated college, wedding, camps, cars, and other costs!

The most important point here is that you have a plan that you have thought through. If only everyone thought through their financial decisions this much …

By: RateLadder

RateLadder — Sat, 08 Sep 2007 15:43:51 +0000

By the way… for those of you that are interested in the correct way to eventually predict Prosper ROI (Eric is closer in the long run than Lending Stats in my opinion.)
I continue to update my late curves, which eventually will yield a Markov Model that can be solved.
1 Month Late Curves on Prosper. Markov Model.

By: Lazy Man

Lazy Man — Sat, 08 Sep 2007 05:15:12 +0000

Yes, I’m continuing to reinvest.

By: RateLadder

RateLadder — Sat, 08 Sep 2007 05:05:49 +0000

I just contributed another $500 after a small new money hiatus while on vacation… (Spending money on other things.) I want to get to around 10K and hold new money (another $1500 or so)… 10K is about 5% of my investments (including retirement). I don’t really want to go to a higher portion of my portfolio than that until I KNOW I am making a good return. Time will tell…

And just to be clear. You no longer adding funds, you are continuing to reinvest. ???

By: Patrick

Patrick — Sat, 08 Sep 2007 02:42:02 +0000

I never got into Prosper, so I can’t say whether or not it is a good investment. But contributing more to your retirement fund as well as paying off debt are probably much better than the possible short term gains from Prosper. I think you are doing the right thing.

By: Brian

Brian — Fri, 07 Sep 2007 22:08:36 +0000

Look into stocks with a nice dividend. BAC, WB, C (all banks) have a nice dividend that will earn you at least 5%/yr not including what you’ll earn on the stock price itself. Also, dividends are taxed differently (15%) which is typically much lower than most middle class income tax brackets.

By: The Decision Strategist

The Decision Strategist — Fri, 07 Sep 2007 20:51:20 +0000

I’ve really appreciated your prosper posts. The site looks interesting to me as well, but I’m just getting out of debt now and only beginning to look at ways of investing. Its a little intimidating to invest in a new site with little knowledge of how it works.

Your posts are helping me figure out how it works. Thanks

By: mapgirl

mapgirl — Fri, 07 Sep 2007 18:59:22 +0000

Jaime, that is the estimated ROI based on an assumption that 50% of late loans will default. There is a FAQ about the calculation since it can be misleading. That is not the actual ROI based on payments, but a future projection.

By: Lazy Man

Lazy Man — Fri, 07 Sep 2007 18:58:26 +0000

I'm not sure if they are a correct scenario or not. I've talked with people who put more time into the math and they aren't impressed with LendingStats. According to Eric's CC, I'm making 7+%. Lastly, the way that makes the most sense to me, RateLadder's IRR Game, I'm a worst case scenario of around -4% and a best case of around 16%. I like to take the average of that range. This is why it's difficult to quantify exactly.

By: Jaime

Jaime — Fri, 07 Sep 2007 18:28:23 +0000

How are you calculating your ROI???
According to http://www.lendingstats.com/memberProfile?lenderId=TechnologyGuy you’re negative. Are lendingstats site statistics for worst scenario??

By: rstlne

rstlne — Fri, 07 Sep 2007 15:35:58 +0000

I stopped contributing to Prosper when I got to $2000. However, it was mainly because I was having trouble finding good loans in which to invest. So now, I just dip into Prosper twice a month to reinvest loan payments.

By: Mike

Mike — Fri, 07 Sep 2007 14:40:12 +0000

I’ve got to agree with your choice to back off of money into Prosper. I’ve always thought that Prosper should be down on the list after paying off high(er) interest rate debt and funding your tax sheltered retirement accounts (401k, Roth or regular IRA).