Peer-to-Peer Lending


One cool alternative investment channel is peer-to-peer loans. You can buy fractional ownership of unsecured notes, and earn a healthy return for doing so.

The most common reasons people are borrowing money are for debt consolidation, home remodeling, or to start a business.

My experiment in peer-to-peer lending began with Prosper.com, and I now have over 5 years of performance history and double-digit returns.

Before You Get Started

Know your net worth. Your net worth is the sum of all your assets (cash, savings, mutual funds, equity in your home, etc.) minus your liabilities (student loans, credit card debt, mortgages, etc.).

One tool I like to help calculate your net worth is Personal Capital. It’s free!

I began by allocating only a very small percentage of my net worth to peer-to-peer investing. Don’t make any bets you can’t afford to lose.

Know your objective. What’s the goal of your investment? A goal of accumulating wealth to retire in 30 years is very different than a goal of earning $1000 a month in positive cash flow.

My Prosper loans spin off cash every month, so I consider it a good cash flow investment.


Peer-to-Peer Lending 5-Year Performance Update

My experiment with peer-to-peer lending at Prosper.com continues, and it’s been another busy year.

The platform has seen some impressive growth, both in terms of the number and volume of “originations,” and the number of lenders competing for the most attractive loans to lend on.

I used Lending Robot to automatically deploy idle cash for all of 2015, which has worked out pretty well so far.

Prosper.com Year 4 Performance Update

My experiment with peer-to-peer lending at Prosper.com continues, and it’s been another busy year.

The platform has seen some impressive growth, both in terms of the number and volume of “originations,” and the number of lenders competing for the most attractive loans to lend on.

As my idle cash began to grow, I sought out a smarter way to deploy it and began using Lending Robot, which has worked out pretty well so far.

Automating my Peer-to-Peer Lending with LendingRobot

In my last peer-to-peer lending update, I noted that the returns and cash flow were still strong, but that it was almost impossible to find good loans to lend on anymore.
Turns out the “professional” p2p lenders are all using automated software that snaps up the most attractive loans in seconds. My old-fashioned method of logging into the site at 9am and 5pm when new loans were released was not going to cut it.

Prosper.com Year 3 Performance Update

My experiment with peer-to-peer lending at Prosper.com continues, and it’s been another busy year. The platform has seen some impressive growth, both in terms of the number and volume of “originations,” and the number of lenders competing for the most attractive loans to lend on. In fact, there’s been a huge influx of institutional money […]

My Best and Worst Investments of the Year

This post will explore some of my best and worst investments of the year (2013, for those stumbling on this in the distant future).

I’ll look at what I did right, what I did wrong, and what I might do differently next year.

As someone who aspires to someday reside comfortably on the B/I side of the Cash Flow Quadrant, this sort of analysis can be helpful in seeing what’s working for you on a semi-short-term basis.

Some of my Favorite Prosper Listings

One great thing about peer-to-peer lending is the amazing variety of “peers” you come across. People have tons of reasons for needing to borrow money, and these are some of my favorites. These are the titles of actual Prosper listings from the past couple months. Debt Consolidation: Anything Worth Doing is Worth Learning How to […]