Comments on: Lending Person-to-Person Helps You Beat the S&P http://www.bustachange.com/lending-person-to-person-helps-you-beat-the-sp/ Fanatic About Innovation Fri, 15 Jan 2010 13:34:48 -0800 http://wordpress.org/?v=2.8.2 hourly 1 By: Luciano's Safe Car http://www.bustachange.com/lending-person-to-person-helps-you-beat-the-sp/comment-page-1/#comment-983 Luciano's Safe Car Sat, 08 Mar 2008 19:55:28 +0000 http://www.bustachange.com/lending-person-to-person-helps-you-beat-the-sp/#comment-983 What would prevent the borrower from defaulting right away? Who goes after the borrower? Certainly not the 100 lenders. What would prevent the borrower from defaulting right away? Who goes after the borrower? Certainly not the 100 lenders.

]]> By: Jerad Kaliher http://www.bustachange.com/lending-person-to-person-helps-you-beat-the-sp/comment-page-1/#comment-432 Jerad Kaliher Wed, 28 Nov 2007 18:09:55 +0000 http://www.bustachange.com/lending-person-to-person-helps-you-beat-the-sp/#comment-432 @Mike, I agree, the default rate does put a damper on really high percentage gains. Even with all the fees and defaults factored in, the return is still competitive and quite high compared to the market norms. @Mike, I agree, the default rate does put a damper on really high percentage gains. Even with all the fees and defaults factored in, the return is still competitive and quite high compared to the market norms.

]]> By: Mike http://www.bustachange.com/lending-person-to-person-helps-you-beat-the-sp/comment-page-1/#comment-431 Mike Wed, 28 Nov 2007 17:01:01 +0000 http://www.bustachange.com/lending-person-to-person-helps-you-beat-the-sp/#comment-431 That 20% looks good up until some loans go bad. Lenders have to be careful to plan for some defaults because nothing is full-proof. That 20% looks good up until some loans go bad. Lenders have to be careful to plan for some defaults because nothing is full-proof.

]]> By: Jerad Kaliher http://www.bustachange.com/lending-person-to-person-helps-you-beat-the-sp/comment-page-1/#comment-413 Jerad Kaliher Sun, 25 Nov 2007 11:10:21 +0000 http://www.bustachange.com/lending-person-to-person-helps-you-beat-the-sp/#comment-413 @Neece, not only diversify within the loans themselves, but it gives you another route to diversify your entire portfolio. @Neece, not only diversify within the loans themselves, but it gives you another route to diversify your entire portfolio.

]]> By: Neece http://www.bustachange.com/lending-person-to-person-helps-you-beat-the-sp/comment-page-1/#comment-411 Neece Sun, 25 Nov 2007 06:20:26 +0000 http://www.bustachange.com/lending-person-to-person-helps-you-beat-the-sp/#comment-411 I've never heard of p2p lending before so this is quite interesting. It sounds like if you diversify, which you need to do in any form of investing, it could really be profitable. I’ve never heard of p2p lending before so this is quite interesting. It sounds like if you diversify, which you need to do in any form of investing, it could really be profitable.

]]> By: Jerad Kaliher http://www.bustachange.com/lending-person-to-person-helps-you-beat-the-sp/comment-page-1/#comment-406 Jerad Kaliher Sat, 24 Nov 2007 23:18:24 +0000 http://www.bustachange.com/lending-person-to-person-helps-you-beat-the-sp/#comment-406 @Walt Chamberlain, that's very interesting. I guess I was so caught up on the investor side that I didn't do too much research into the borrower end. It seems that if you pay your bills on time and don't push them into the red most people don't have a problem. I used to work in the finance industry and I noticed similar complaints from people who were either denied financing or put themselves in a strange position. @Walt Chamberlain, that’s very interesting. I guess I was so caught up on the investor side that I didn’t do too much research into the borrower end.

It seems that if you pay your bills on time and don’t push them into the red most people don’t have a problem.

I used to work in the finance industry and I noticed similar complaints from people who were either denied financing or put themselves in a strange position.

]]> By: Walt Chamberlain http://www.bustachange.com/lending-person-to-person-helps-you-beat-the-sp/comment-page-1/#comment-378 Walt Chamberlain Wed, 21 Nov 2007 08:14:35 +0000 http://www.bustachange.com/lending-person-to-person-helps-you-beat-the-sp/#comment-378 I've investigated propser.com as a borrower. While the concept is innovative and the numbers look good, there are negatives. Prosper seems to be a clone of a system in the United Kingdom. In the U.K. it ran foul with accusations of bad business practices. A quick google of "prosper scam" resulted in quite a few complaints. These were along the lines of what we are seeing in the paycheck loan business. Repayment strong arming, harassing phones and such. As in any business decision: "Investigate before you invest." I’ve investigated propser.com as a borrower. While the concept is innovative and the numbers look good, there are negatives. Prosper seems to be a clone of a system in the United Kingdom. In the U.K. it ran foul with accusations of bad business practices. A quick google of “prosper scam” resulted in quite a few complaints. These were along the lines of what we are seeing in the paycheck loan business. Repayment strong arming, harassing phones and such.

As in any business decision:
“Investigate before you invest.”

]]> By: Jerad Kaliher http://www.bustachange.com/lending-person-to-person-helps-you-beat-the-sp/comment-page-1/#comment-375 Jerad Kaliher Wed, 21 Nov 2007 07:38:41 +0000 http://www.bustachange.com/lending-person-to-person-helps-you-beat-the-sp/#comment-375 @Andy Bailey, you're right. Vehicles like this make me feel like I have power again with my decisions. I can hedge against credit grades and judge for myself. Is that a perceived value or a real one? I'd argue a little of both, but at least it takes my money out of the markets and into the most lucrative concept in human history - lending. @Andy Bailey, you’re right. Vehicles like this make me feel like I have power again with my decisions. I can hedge against credit grades and judge for myself. Is that a perceived value or a real one? I’d argue a little of both, but at least it takes my money out of the markets and into the most lucrative concept in human history – lending.

]]> By: Andy Bailey http://www.bustachange.com/lending-person-to-person-helps-you-beat-the-sp/comment-page-1/#comment-372 Andy Bailey Tue, 20 Nov 2007 19:24:16 +0000 http://www.bustachange.com/lending-person-to-person-helps-you-beat-the-sp/#comment-372 lol, the captcha word for this comment is 'trust' :-) at first it sounds risky but like Drew says, you have to pay fees for stock selling and buying, this allows you to spread your money over many smaller transactions. good site, thanks! lol, the captcha word for this comment is ‘trust’ :-)

at first it sounds risky but like Drew says, you have to pay fees for stock selling and buying, this allows you to spread your money over many smaller transactions.

good site, thanks!

]]> By: Jerad Kaliher http://www.bustachange.com/lending-person-to-person-helps-you-beat-the-sp/comment-page-1/#comment-374 Jerad Kaliher Tue, 20 Nov 2007 07:37:13 +0000 http://www.bustachange.com/lending-person-to-person-helps-you-beat-the-sp/#comment-374 @Drew Smith, if you can historically hit the average of any of the major indexes you are home free. Just like you said, the problem begins when those index funds begin to suck you dry with fee after fee. It may seem like a great proposition at the average 10%, but after a thoughtful crunch of the numbers many times you come out with significantly less. That all fluctuates with the amount of money invested, of course, but my measily $5k is going to get virtually pillaged by the end of the year. I'm not sure I would recommend any investment method as an end-all be-all. Most people would agree that diversification is a sound strategy to foster wealth. Personally I've always associated hyper growth with well placed risks. I like the idea of putting all my eggs in one basket after very careful consideration. I guess thats just the entreprenuer in me. But the next time I do I'll be sure to keep one or two out of the dozen for p2p lending. Mostly because you are completely right, p2p lending isn't a new idea and it is the opposite of what is perceived as high risk. That shows clearly enough in the numbers. It's also interesting that you bring up the fundamental principal of how fund managers and brokers make money. Via transaction and fees, NOT by building wealth. Most people tend to not even approach their money managers with a contract stipulation that dictates they need to make them money. For me, that is simply madness. @Drew Smith, if you can historically hit the average of any of the major indexes you are home free. Just like you said, the problem begins when those index funds begin to suck you dry with fee after fee. It may seem like a great proposition at the average 10%, but after a thoughtful crunch of the numbers many times you come out with significantly less. That all fluctuates with the amount of money invested, of course, but my measily $5k is going to get virtually pillaged by the end of the year.

I’m not sure I would recommend any investment method as an end-all be-all. Most people would agree that diversification is a sound strategy to foster wealth. Personally I’ve always associated hyper growth with well placed risks. I like the idea of putting all my eggs in one basket after very careful consideration. I guess thats just the entreprenuer in me.

But the next time I do I’ll be sure to keep one or two out of the dozen for p2p lending. Mostly because you are completely right, p2p lending isn’t a new idea and it is the opposite of what is perceived as high risk. That shows clearly enough in the numbers.

It’s also interesting that you bring up the fundamental principal of how fund managers and brokers make money. Via transaction and fees, NOT by building wealth. Most people tend to not even approach their money managers with a contract stipulation that dictates they need to make them money. For me, that is simply madness.

]]>