prosper.com

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soccerdad12
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prosper.com

Post by soccerdad12 » Thu Apr 12, 2012 8:04 am

I like the idea of investing in other people to help them out. They show all of the average returns here (even with the expected busted loans): http://www.prosper.com/welcome/marketplace.aspx

Has anyone done this? If so, what has your experience been?

I am not looking at this as in lieu of my normal index fund investing, but just using 2-3k of play money to try it out.

Thanks!

alanf56
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Re: prosper.com

Post by alanf56 » Thu Apr 12, 2012 8:17 am

I put a small amount into this years ago and really didn't make out well. Even though I stuck to high rated risks there were still 4 defaults that brought down any amount of money to be made.


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Rob5TCP
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Re: prosper.com

Post by Rob5TCP » Thu Apr 12, 2012 9:10 am

These are results for loans made 2005-2009 as of 12-31-2011


Loans Originated November, 2005 - June, 2009
Seasoned Returns as of December 31, 2011

Prosper Rating(4) Loans (#) $ Amount Loans Avg Loan Amt Yield(1,5) Loss Rate(1,5) Return(1,5) Weighted Average
Credit Score
AA-B 2,707 $ 14,177,970 $ 5,238 8.24% 4.18% 4.05% 780
C-E 4,113 $ 29,128,133 $ 7,082 11.36% 11.18% 0.18% 725
HR 6,903 $ 67,672,605 $ 9,803 13.52% 23.33% -9.82% 705
Total AA-HR 13,723 $ 110,978,708 $ 8,087 12.29% 17.78% -5.48% 720
N/A*** 15,226 $ 67,609,614 $ 4,440 15.77% 22.20% -6.43% 598

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PaddyMac
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Re: prosper.com

Post by PaddyMac » Thu Apr 12, 2012 12:12 pm

I haven't tried prosper.com. But I do have a couple of K at Microplace.com. Interest rates are 1-3%. These loans are not to individuals, but to large microlender banks.

Be sure to turn on the option to get your money back at the end of the investment, as they have a tendency of automatically rolling them over into investments paying 0.5%. I guess I wasn't the only one who complained, as they now give you more control over reinvesting when the loan is completed.

manuvns
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Re: prosper.com

Post by manuvns » Thu Apr 12, 2012 12:41 pm

it's hard to make money on prosper . early years had 25% defaults . now it's getting better .

http://www.ericscc.com/lenders/manuvns

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White Coat Investor
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Re: prosper.com

Post by White Coat Investor » Thu Apr 12, 2012 1:52 pm

First of all, don't rely on their published data. Use an independent source like lendstats.com.

You'll notice that Prosper had a pre-July 2009 period, and a post July 2009 period (Prosper 2.0.) Most people ended up with negative returns in Prosper 1.0 due to high defaults (up to 40%). Some argue that's due to a downturn in the economy or a flawed business model. Others argue that Prosper fixed the problem with risk-control issues in Prosper 2.0. I believe more in the second argument. But there isn't enough data to prove it one way or the other.

I've invested $500 at Prosper. I have 20 notes. None have defaulted. My yields range from 13 to 32%. They claim I have a return of 11.86%. I calculate a return of 8.14% (took some time to get the money invested.) I've only been investing there for a few months. You can read more here: http://whitecoatinvestor.com/my-initial ... o-prosper/

I've been investing with their competitor, Lending Club for a little over 6 months with $1000. I've had 48 notes. One was paid in full, I sold two early for nearly full price because they kept paying either in the grace period or late, and I have 45 current notes. No defaults. My yields range from 6% to 24%. They calculate my return at 9.61%. I calculate it at 15.35% (I count the bonus I get from my credit card for funding the account with a credit card.) You can read more here: http://whitecoatinvestor.com/7-ways-to- ... ding-club/

Personally, I think this is a legitimate alternative asset class. It is far more high risk than treasuries or even junk bonds, but with proper diversification I expect long term returns in the 6-12% range. I anticipate dedicating a 5% slice of my fixed income portfolio to it. I'm still undecided whether to use mainly Prosper (higher risk but probably higher returns) mainly Lending Club (lower risk, lower returns, easier to sell notes on Folio, and you can fund it with a credit card) or both.

Hope that's helpful.
1) Invest you must 2) Time is your friend 3) Impulse is your enemy | 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course

manuvns
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Re: prosper.com

Post by manuvns » Sat Apr 14, 2012 2:24 pm

here are my rules for investing on lendingclub

- invest maximum $25 on a note
- stick to a, b c or d grade loan only
- buy notes on trading platform which have made minimum 2 payment and are current
- make sure credit score is up or same
- no delinquency or late payments, public record in credit report
- pay maximum of 1-2% premium on the notes .

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Rob5TCP
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Re: prosper.com

Post by Rob5TCP » Sun Apr 15, 2012 2:06 pm


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auntie
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Re: prosper.com

Post by auntie » Sun Apr 15, 2012 2:16 pm

prospers.org has a lot of discussion and details about the prosper.com program. I'd suggest you do some reading before you decide to invest with them. I wouldn't touch them with a 10 foot pole.
High risk does not equal high reward. It equals high risk of no reward.

555
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Re: prosper.com

Post by 555 » Sun Apr 15, 2012 9:04 pm

Sounds horrible for taxes. High interest and capital losses is about as bad as it gets.

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robolove
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Re: prosper.com

Post by robolove » Mon Apr 16, 2012 2:40 am

KIVA?

One of their sponsors is giving 25 USD to first time lenders
Last edited by robolove on Wed Dec 20, 2017 5:07 am, edited 1 time in total.

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PaddyMac
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Re: prosper.com

Post by PaddyMac » Thu Apr 26, 2012 2:11 pm

robolove wrote:KIVA?

One of their sponsors is giving 25 USD to first time lenders....

http://www.kiva.org/invitedby/joshua2010 8-)
I have a little in KIVA but note that it is a charity, not an investment. The best you can do is to get your original money back, less inflation.

Watch that when you fund a $25 loan, that you disable the $3.75 donation to KIVA. if you keep adding $3.75 to every reinvestment, your initial money won't last long! Plus, when you are being repaid, you don't get to reinvest until your account reaches $25 again, so ALL those $0.01 to $24.99 accounts are earning interest that goes to KIVA. I feel that is enough. I'm also sure that they must be charging something to the loan companies. At the end of the day, it's a win-win for the loan companies and KIVA, not for the "investors".

That's why I have more at MicroPlace. At least you are keeping up with inflation with 1-3% returns, and it's less risk. I do $300 - $500 loans there.

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Jerilynn
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Re: prosper.com

Post by Jerilynn » Thu Apr 26, 2012 2:31 pm

In the article, it says "It's not something that should be for money that can't handle risk," says William Jordan of William Jordan Associates, an Orange County, Calif., wealth-management firm. "But used properly, you can get much better returns than in other areas of the market." Mr. Jordan last October launched a fund that invests solely in Prosper loans."

Does anyone know what this fund is? I'd love to look at it's performance.
Cordially, Jeri . . . 100% all natural asset allocation. (no supernatural methods used)

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