peer to peer lending http://www.wisebread.com/taxonomy/term/12512/all en-US 10 Places to Stash Your Money Besides a Savings Account http://www.wisebread.com/10-places-to-stash-your-money-besides-a-savings-account <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/10-places-to-stash-your-money-besides-a-savings-account" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/star_wars_lego_000021962705.jpg" alt="Finding places to stash money besides a savings account" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>The long-awaited interest rate hike from the Fed finally arrived on December 16, 2015. But as of May 2016, it still hasn't affected the interest rate of most savings accounts. The national average savings account interest rate currently stands at a measly 0.06%, according to data from the Federal Deposit Insurance Corporation (FDIC). And some brick-and-mortar banks are offering rates as low as a pitiful 0.01%!</p> <p>There are far better places to park your hard-earning savings. Let's review 10 places to stash cash besides a traditional bank savings account.</p> <h2>1. Online High Yield Savings Account</h2> <p>With the Internet taking over pretty much everything, it's not a surprise that it has also taken over banking. By putting your funds in an online savings account, you'll have access to higher yields. As of April 2016, you can find high-interest savings accounts with yields ranging from 0.75% with the Capital One 360 Savings Account, to 1.05% with the Synchrony Bank High Yield Savings Account. Make sure to read the fine print, though, because they may require minimum deposits and limit the times you can access funds per month. (See also: <a href="http://www.wisebread.com/5-best-online-savings-accounts?ref=seealso">5 Best Online Savings Accounts</a>)</p> <h2>2. Certificate of Deposit</h2> <p>By tying up your money for a longer period of time, banks and credit unions are willing to offer you a higher interest rate. With terms ranging from one to 60 months, a certificate of deposit (CD) is a financial vehicle insured by the Federal Deposit Insurance Corporation (FDIC) for up to $250,000 per account per depositor. Certificates of deposit can easily beat that 1.10%. For example, a credit union in Honolulu, Hawaii is currently offering 16-month and 60-month CDs with a 1.20% and 1.78% APR, respectively.</p> <h2>3. Series I Savings Bond</h2> <p>Backed by the full faith and credit of the U.S. government, Series I Savings Bonds (also referred to as &quot;I Bonds&quot;) are adjusted for inflation every six months so the purchasing power of your savings stays intact. Earnings are exempt from state and local taxes and can be entirely tax-free when used for qualifying post-secondary education expenses. I Bonds are available on small denominations starting at $50 and can be bought online via <a href="http://www.treasurydirect.gov/indiv/products/prod_ibonds_glance.htm">TreasuryDirect</a> or through your tax return using <a href="http://www.irs.gov/pub/irs-pdf/f8888.pdf">Form 8888, Allocation of Refund (Including Savings Bond Purchases)</a>.</p> <h2>4. Gold</h2> <p>For a long time, several countries, including the U.S. and the U.K., committed to fix the prices of their domestic currencies in terms of the market value of a specified amount of gold. Even though the market price of gold has proven to be quite volatile, it still could work as a good way to stash your savings, depending on your timing. When it comes to gold, history has proven that it's best to buy and hold for a long time. On May 1, 2006, the price of gold per ounce was $670.30 and on April 18, 2016, it was $1,245.68. That's a 85% total return for about 10 years. This is why investors still use gold to hedge against uncertainty and inflation.</p> <h2>5. Exchange Traded Fund for Precious Metals</h2> <p>Of course, buying and selling coins, bars, or privately minted coins of gold and silver requires skill, storage space, and knowledge of the commodities market. An alternative way to put your savings in gold and silver is to buy an exchange traded fund (ETF) that tracks the market price of those precious metals. Some examples include the iShares Silver Trust [<a href="http://finance.yahoo.com/q?s=SLV">NYSEArca: SLV</a>], SPDR Gold Shares [<a href="http://finance.yahoo.com/q?s=GLD">NYSEArca: GLD</a>], ETFS Physical Silver [<a href="http://finance.yahoo.com/q?s=SIVR">NYSEArca: SIVR</a>], and iShares Gold Trust [<a href="http://finance.yahoo.com/q?s=IAU">NYSEArca: IAU</a>].</p> <h2>6. Lego Sets</h2> <p>If the investment returns from gold impress you, wait until you hear that of Lego Sets:</p> <ul> <li>Imperial Star Destroyer was <a href="http://time.com/money/4162059/lego-investment-compare-gold-return/">worth $249.99 in 2002</a> and today is worth about $2,185 (return: 774%)<br /> &nbsp;</li> <li>Death Star II was worth $372 in 2005 and today is worth about $2,270 (return: 510%)<br /> &nbsp;</li> <li>Taj Mahal was worth $134 in 2007 and today is worth about $2,753 (return: 1,954%)</li> </ul> <p>Of course, you'll have to do some research to identify the most promising sets. With about 80 stores in the U.S., you'll have plenty of opportunities to play&hellip; ahem!... I mean, research.</p> <h2>7. Discount Gift Cards at Costco</h2> <p>Bulk buying 170 oz. detergent jugs and $4.99 roasted chickens aren't the only ways to let your dollar go the extra mile at Costco. You can stash your savings in discounted gift cards. For example, you can currently get two $50 gift cards for Buca di Beppo for $76.99 ($74.99 plus $2 for shipping and handling) at the Costco website. By planning out your purchases of discount gift cards for restaurants and other retailers, you can get a better return than that of a savings account.</p> <h2>8. Christmas Club</h2> <p>Another alternative to savings accounts is the Christmas club, which will hold money put aside for future holiday spending. Also known as Christmas savings accounts, Christmas clubs are available at over 70% of U.S. credit unions. By committing to hold your funds in the account for a predetermined period (e.g. November 1st), a credit union will pay you a higher interest rate than that of its regular savings account. The catch is that if you withdraw the funds before the deadline, you'll be charged a steep fee that nullifies all your interest gains. (See also: <a href="http://www.wisebread.com/9-good-reasons-to-choose-a-credit-union-instead-of-a-bank?ref=seealso">9 Good Reasons to Choose a Credit Union Instead of a Bank</a>)</p> <h2>9. Peer-to-Peer Lending</h2> <p>Banks make a profit by taking your deposits and offering those monies as loans to other individuals at a higher interest rate. You, too, can take a crack at profiting from lending through peer-to-peer lending at sites including <a href="http://www.wisebread.com/how-to-make-money-with-peer-to-peer-lending-service-prosper">Prosper</a> and <a href="http://www.wisebread.com/everything-you-need-to-know-about-peer-to-peer-investing-with-lending-club">Lending Club</a>. With a minimum investment of $25, you could start investing in loans with an average annual interest rates ranging from <a href="https://www.lendingclub.com/info/demand-and-credit-profile.action">5.23% to 9.11%</a>. By sticking with the highest grade of investment loans, you have a good chance at beating the annual percentage yield (APY) of any savings account.</p> <h2>10. Secured Credit Card</h2> <p>While <a href="http://www.wisebread.com/what-are-secured-credit-cards?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=article">secured credit cards</a> can be useful to building or repairing your credit history, some of these cards also allow you to gain interest on your security deposit. For example, the <a href="http://www.wisebread.com/usaa-secured-card-american-express?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=article">USAA Secured Card American Express</a> lets you gain 0.54% per year through a two-year CD. If you're considering to apply for a secured credit card, getting one that lets you make money on your secure deposit would let you kill two birds with one stone.</p> <p><em>What are other great places to stash away your savings?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/damian-davila">Damian Davila</a> of <a href="http://www.wisebread.com/10-places-to-stash-your-money-besides-a-savings-account">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-smart-ways-to-use-old-savings-bonds">6 Smart Ways to Use Old Savings Bonds</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/11-ways-life-is-amazing-with-an-emergency-fund">11 Ways Life Is Amazing With an Emergency Fund</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/12-easy-ways-to-manage-your-finances-before-during-and-after-a-military-deployment">12 Easy Ways to Manage Your Finances Before, During, and After a Military Deployment</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/when-to-use-savings-to-pay-off-debt">When to Use Savings to Pay Off Debt</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-do-money-like-a-grown-up">How to Do Money Like a Grown-Up</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance certificate of deposit christmas funds gift cards gold peer to peer lending savings savings bonds Tue, 10 May 2016 09:30:24 +0000 Damian Davila 1703947 at http://www.wisebread.com 6 Ways Peer Lending Can Boost Your Wallet http://www.wisebread.com/6-ways-peer-lending-can-boost-your-wallet <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/6-ways-peer-lending-can-boost-your-wallet" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/hand_holding_piggybank_000018119999.jpg" alt="Learning ways peer lending can boost your wallet" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Alternative finance is a seriously hot topic right now. From worthy projects like a <a href="https://www.indiegogo.com/projects/flow-hive-honey-on-tap-directly-from-your-beehive#/">beehive design </a>that received millions on Indiegogo &mdash; to the completely comic, like the crowdfunding campaign to <a href="http://www.huffingtonpost.com/2014/09/28/potato-salad-kickstarter-party_n_5893386.html">make a potato salad</a> &mdash; you can't really avoid the media buzz about alternative finance.</p> <p>But there is more to alternative finance than hype. And there could be ways that the new products, services, and platforms can benefit you. (No potato salad required.) Here's how.</p> <h2>1. Invest While You Help Others With Peer Lending</h2> <p>Peer-to-peer lending is an increasingly popular choice for individual investors, who lend out their spare cash in the form of loans to individuals and small businesses. Peer lending is an attractive investment because it&rsquo;s simple to get started, returns can be solid, and you can open accounts with very low minimum investments. The segment is getting increasingly sophisticated, with prospective borrowers vetted and classified according to risk, allowing investors to diversify their portfolio of investments according to their risk tolerance levels (riskier loans produce higher potential returns). Both <a href="http://prosper.evyy.net/c/27771/27132/994">Prosper</a> and <a href="http://track.flexlinks.com/a.ashx?foid=1029882.227343&amp;fot=9999&amp;foc=1">Lending Club</a> also offer tax-smart IRA products. (See also: <a href="http://www.wisebread.com/everything-you-need-to-know-about-peer-to-peer-investing-with-lending-club">Everything You Need to Know About Peer Lending</a>)</p> <p>The key to investing intelligently in peer lending is in diversification. By splitting your money across dozens or even hundreds of different loans, you reduce your exposure to default.</p> <h2>2. Get a Loan Without Visiting a Bank</h2> <p>Peer lending, of course, works both ways. Not only can you invest your money, you can also become a borrower using one of the alternative finance platforms listed above. Accessing funds this way tends to involve less paperwork than visiting a bank, although interest rates will vary according to your circumstances.</p> <p>There are peer lending platforms offering consumer and business loans, both secured and unsecured, ranging from small loans for individuals to the greater funds you might need for expanding your business. For example, <a href="https://www.fundingcircle.com/us/">Funding Circle</a> offer loans to small businesses that might not be able to access finance through mainstream institutions. If you're thinking of taking a loan, it is worth evaluating alternative providers alongside traditional bank offerings. You might be pleasantly surprised.</p> <h2>3. Kickstart Your Business Idea With Crowdfunding</h2> <p>Alternative finance offers several options if you're thinking of starting a business. One popular option is reward-based crowdfunding, where backers pledge money in return for non-financial rewards. Not only does this provide a way of collecting some cash, but you can also test the feasibility of your idea &mdash; if people fund your campaign, then you've likely got a viable product!</p> <p><a href="https://www.kickstarter.com/">Kickstarter</a> is one of the best known crowdfunding sites and accepts &ldquo;creative&rdquo; projects &mdash; perfect if you're a writer, artist, chef, or looking to fund a business in the world of art, design, technology, or music. The rules prohibit offering financial incentives to backers, so you have to get inventive to come up with ways to say thank you to the people who fund your campaign!</p> <p><a href="https://www.indiegogo.com/">Indiegogo</a> is another great alternative. Simply sign up to start a campaign, and receive funding through PayPal from backers all over the world.</p> <p>If reward-based crowdfunding doesn't suit your project, then you could look to equity-based crowdfunding from a platform like <a href="https://www.crowdfunder.com/">Crowdfunder</a>, or find an &ldquo;angel investor&rdquo; over at <a href="https://angel.co/">AngelList</a>.</p> <h2>4. Use Crowdfunding to Fund Your Worthy Cause</h2> <p>Donation-based crowdfunding allows individuals, charities, and nonprofit organizations to raise funds for specific projects, with no reward or payback to the individuals who choose to become backers.</p> <p><a href="https://www.gofundme.com/">Gofundme</a> is the go-to site for donation based crowdfunding &mdash; whether you are raising cash to study abroad, pay for medical expenses, or upgrade your home. The site focuses on charitable causes, which can really take off if the cause is good and has viral appeal. Some popular Gofundme causes have received hundreds of thousands of dollars in donations.</p> <h2>5. Become a Business Part-Owner With Equity-Based Crowdfunding</h2> <p>If you have money to invest, but aren&rsquo;t ready to start your own entrepreneurial endeavor just yet, then equity-based crowdfunding can offer a way to become a part-owner of a business you believe in.</p> <p>With equity-based crowdfunding, entrepreneurs offer a slice of their business to investors in return for their cash. You might choose a project you're excited about in your neighborhood, a product that makes sense to you, or an entrepreneur who has the energy and passion needed to really make their idea a success. Equity-based crowdfunding is working right now for many investors and small businesses &mdash; an impressive 120,000 backers have backed over 30,000 projects so far on Crowdfunder, alone.</p> <h2>6. Get Discounts and Offers Through Reward-Based Crowdfunding</h2> <p>Reward-based crowdfunding projects offer some form of non-monetary reward to those who back them. This might mean that you can get your hands on an early edition or personalized version of the product you're backing, have your contribution acknowledged on the company website or magazine, or get some form of exclusive reward direct from the founders. Generally, rewards are tiered based on the level of money put up, meaning the more you offer, the better the reward you can get your hands on.</p> <p>Kickstarter and Indiegogo are two of the best-known sites for reward-based crowdfunding, but there are also niche sites which might suit your particular interests. If you're into music and love discovering new sounds, then specialist sites help budding artists raise funds in return for great gifts to backers. Give <a href="http://www.pledgemusic.com/">Pledge Music</a> a whirl if this is your bag.</p> <p><em>Have you crowdfunded a business or project? How'd it go?</em><em><br /> </em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/claire-millard">Claire Millard</a> of <a href="http://www.wisebread.com/6-ways-peer-lending-can-boost-your-wallet">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-4"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/never-borrow-money-for-these-5-buys">Never Borrow Money for These 5 Buys</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-moves-to-make-if-your-loan-gets-denied">5 Moves to Make If Your Loan Gets Denied</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-places-to-stash-your-money-besides-a-savings-account">10 Places to Stash Your Money Besides a Savings Account</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-do-money-like-a-grown-up">How to Do Money Like a Grown-Up</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-things-you-need-to-know-about-credit-scores">5 Things You Need to Know About Credit Scores</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance alternative finance crowdfunding loans peer to peer lending Thu, 25 Feb 2016 10:30:34 +0000 Claire Millard 1662556 at http://www.wisebread.com Everything You Need to Know About Peer-to-Peer Investing With Lending Club http://www.wisebread.com/everything-you-need-to-know-about-peer-to-peer-investing-with-lending-club <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/everything-you-need-to-know-about-peer-to-peer-investing-with-lending-club" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_laptop_000038703478.jpg" alt="Woman working on her laptop" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p><a target="_blank" rel="nofollow" href="http://track.flexlinks.com/a.ashx?foid=1029882.227343&amp;fot=1076&amp;foc=1">Lending Club</a> is a peer-to-peer lending firm, which matches private lenders with individual borrowers. You join, set up an account, search for matches based on your criteria, get more information if needed, and make a selection to invest your money or time. The process is relatively fast and convenient. There are risks, but also possibly great rewards. Here's what you need to know to get started investing with Lending Club. (See also: <a href="http://www.wisebread.com/how-to-make-money-with-peer-to-peer-lending-service-prosper?ref=seealso">How to Make Money with Peer-to-Peer Lending with Prosper</a>)</p> <h2>1. Lenders Are Really Investors</h2> <p>Peer-to-peer lending firms provide a platform to match lenders with borrowers. The loans presented by Lending Club are funded by an outside bank and as a lender/investor, you purchase an investment associated with specific loans.</p> <p>So, as a &quot;lender&quot; you are not lending directly to borrowers; instead you are investing in Lending Club notes tied to specific loans, which you have chosen. Your earnings (or losses) are based on interest rates, loan terms, repayment, etc. relating to the loans in your portfolio.</p> <h2>2. The Minimum Amount for Investing Is $25</h2> <p>You can get started by investing $25 in one loan.</p> <p>Lending Club recommends that you invest in 100 loans for the purpose of creating a diversified loan portfolio. By investing $25 in 100 loans (for a total of $2,500), your investment risk is spread over multiple loans with various risk criteria. If borrowers default on some of your loans, you can still make money on the remaining loans.</p> <h2>3. You Can Open a Regular Account or an IRA</h2> <p>Your money with Lending Club can be held in a taxable investment account or a tax-advantaged retirement account. According to its website, you may be eligible to open and maintain a Traditional IRA, Roth IRA, Simple IRA, and/or SEP-IRA.</p> <p>There is a $100 annual account fee for an IRA. This charge is waived if your initial investment is $5,000 or more in Lending Club notes and you hold the investment for 12 months in your first year; or you maintain a minimum of $10,000 in Lending Club notes throughout the year.</p> <p>Other account types, such as trust, custodial/minors, and corporate, are also available.</p> <h2>3. There Are Two Ways to Choose Loans</h2> <p>Once you've set up an account and added funds, you are ready to choose loans. There are two main ways to select loans and create an investment portfolio.</p> <h3>Let Lending Club Choose Loans for You</h3> <p>Get Lending Club to select loans on your behalf. Go to the &quot;Invest&quot; section, where various options are presented. You may see &quot;Option 1&quot; with an interest rate of 8%; &quot;Option 2,&quot; 12%; and &quot;Option 3,&quot; 15%. These are the average interest rates associated with loans in the pre-designed portfolio. Note that your actual returns will vary because of defaults and fees.</p> <p>Choose among options based on your desired level of return and risk. Continue with the prompts to invest your money.</p> <h3>Select Loans Yourself to Build a Portfolio</h3> <p>Use tools provided by Lending Club to build a customized portfolio. Go to the &quot;Browse Notes&quot; tab. Apply filters to specify your criteria. For example, choose notes based on loan grades and sub-grades (ranging from A1 to G5), borrowers' credit scores, verified income levels, loan purposes, delinquencies, and more.</p> <p>Lending Club will provide results and allow you to get additional information for risk analysis. You may be able to learn about the borrower's employment and current debt-to-income ratio for example. Select and then invest in notes to add them to your portfolio.</p> <h2>4. Earn Money When and if Loans Are Repaid by Borrowers</h2> <p>As an investor, you'll receive monthly cash payments comprised of loan principal repayments and interest. You can then reinvest cash in another loan note, hold cash within your account, or transfer cash to your bank account for other purposes.</p> <p>Note that fees will be deducted from these monthly payouts, reducing overall returns.</p> <p>To tap cash quickly, trade your notes through a separate platform as long as these investments are held in a regular, taxable account. The value of these notes may vary, just as stock and bond prices fluctuate.</p> <h2>5. Fees Are 1% of Monthly Loan Payments Collected and Up</h2> <p>You'll pay fees on all money collected from borrowers. If the borrower pays on time (or within 15 days of the payment due date), 1% of the loan payment amount assigned to you will be deducted from your cash receipts. This fee is called a &quot;service charge.&quot;</p> <p>However, if the borrower is late and Lending Club must expend effort to collect payment, then you'll incur much higher fees. Investors pay a prorated portion relating to &quot;18% of the amount recovered if the loan is 16 or more days late and no litigation is involved,&quot; or &quot;30% of hourly attorneys' fees, plus costs, if litigation is involved,&quot; but no more than the original investment.</p> <h2>6. Lending Club Is Available in Several States</h2> <p>Currently, you can become a lender/investor at Lending Club only if you reside in one of these states: California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Kentucky, Louisiana, Maine, Minnesota, Mississippi, Montana, New Hampshire, Nevada, New York, Rhode Island, South Dakota, Utah, Vermont, Virginia, Washington, Wisconsin, West Virginia, and Wyoming.</p> <p>Further, there are age, citizenship, income, and net worth requirements. You must be 18 years of age and have a valid social security number, and, generally, have an annual income and net worth of $70,000 or more or have a net worth of $250,000 (not counting your primary residence and vehicles). Rules and restrictions vary by state.</p> <p>You may be able to purchase notes on the secondary market through FOLIOfn Investments, Inc. Note Trading Platform if your state does not allow you to invest directly in Lending Club Notes. However, there are additional costs and risks associated with this method.</p> <h2>7. Returns Are Not Guaranteed</h2> <p>Lending Club operates as an intermediary between lenders and borrowers. But just because the firm behaves in a bank-like manner doesn't mean the money you deposit is guaranteed to be safely returned to you with interest. Your investments are subject to risk as borrowers may default on loans, leaving you with nothing to show for your lending/investing efforts.</p> <p>To become an active member and lend to your peers in hopes of earning money, join Lending Club, fund your account, choose notes for your portfolio, and click to invest.</p> <p>According to its website, Lending Club has funded over $5 billion in consumer loans and paid over $494 million in interest since its inception in 2007. Historical returns for borrowers graded from A to C are 5% to 8.67%; however, historical performance does not predict future performance. Invest at your own risk.</p> <p><strong><a target="_blank" rel="nofollow" href="http://track.flexlinks.com/a.ashx?foid=1029882.227343&amp;fot=1076&amp;foc=1">Create your account and start investing at Lending Club today!</a></strong></p> <p><em>Have you invested in Lending Club Notes? Did you make or lose money?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/julie-rains">Julie Rains</a> of <a href="http://www.wisebread.com/everything-you-need-to-know-about-peer-to-peer-investing-with-lending-club">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/peer-to-peer-lending-prosper-marketplace-or-lending-club">Peer to Peer Lending: Prosper Marketplace or Lending Club?</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-only-8-rules-of-investing-you-need-to-know">The Only 8 Rules of Investing You Need to Know</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-investors-with-better-returns-than-warren-buffett">5 Investors With Better Returns Than Warren Buffett</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-crucial-things-you-should-know-about-bonds">5 Crucial Things You Should Know About Bonds</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/should-you-trust-your-money-with-these-4-popular-financial-robo-advisers">Should You Trust Your Money With These 4 Popular Financial Robo-Advisers?</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment investing lending club peer to peer lending Fri, 06 Mar 2015 22:00:11 +0000 Julie Rains 1322637 at http://www.wisebread.com From Beanie Babies to Baubles: 5 Unconventional Investments http://www.wisebread.com/from-beanie-babies-to-baubles-5-unconventional-investments <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/from-beanie-babies-to-baubles-5-unconventional-investments" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/3403444306_4218e18d89_z.jpg" alt="beanie babies" title="beanie babies" class="imagecache imagecache-250w" width="250" height="168" /></a> </div> </div> </div> <p>If you're bored with stocks and bonds and seeking a taste of the exotic, you might be interested in unconventional investments.</p> <p>Unconventional investments can help protect you against stock market volatility because they don't drop &mdash; and might even rise &mdash; when stocks sink. At least that's the theory, anyway. And if you're lucky or savvy, an alternative investment can produce an outsize return.</p> <p>On the other hand, many unconventional investments are illiquid &mdash; you can't quickly sell them for quick cash. Many are risky and difficult for ordinary folks to understand. For that reason, it's best to allot only a small part of your savings to unconventional investments and to carefully analyze potential risks.</p> <p>Here's six top unconventional investments. (See also: <a href="http://www.wisebread.com/7-great-investments-for-first-timers">7 Great Investments for First-Timers</a>)</p> <h2>1. Collectibles</h2> <p>If you buy collectibles, you can invest in something you love and understand. But you might end up owning a lot of stuff and not really making money. Knowing how much someone will pay for a collectible several years from now is hard to predict. Consumers are fickle and fashions change. What's a hot collectible now may latter be just another yard sale item. Remember Cabbage Patch kids?</p> <p>If you want to invest in collectibles, say wine, stamps, or baseball cards, buy only what you understand well &mdash; ideally what you're expert in. Try to be realistic about how much an item will sell for in the future.</p> <p>The danger of collectibles is that they can be stolen, lost, or destroyed. You might consider insurance or a safe deposit box, but those costs diminish your profit. Owning artwork you hope to sell for a gain may end up costing money.</p> <h2>2. Jewelry</h2> <p>Some jewelry owners do make great profits reselling jewelry, but they're experts selling very high-quality gems. Most jewelry appreciates very little or nothing at all. Even though gold has increased greatly in years, you might not get as much as you hope when <a href="http://www.wisebread.com/how-to-sell-gold-without-getting-ripped-off">selling gold jewelry</a>. Buyers take a sizeable cut, and the price is based on the jewelry's gold content, which may be lower than you expect. Most people, experts warn, should buy jewelry for its beauty and avoid it as an investment.</p> <p>Some people argue that jewelry and collectibles are not real investments, as they don't make money for you while you own them &mdash; what's called an internal rate of return. A condo can generate rent. Stocks can generate dividends. But a diamond just sits there looking pretty until you sell it.</p> <h2>3. Precious Minerals</h2> <p>How about some uranium or palladium? You can invest in almost anything by owning a specialized exchange traded fund&nbsp;(ETF). Like <a href="http://www.wisebread.com/the-duel-etfs-vs-mutual-funds">mutual funds</a>, ETFs are baskets of assets but can be traded throughout the day like stocks. Typically tracking an index, ETFs can hold anything from biotech firm stocks to utilities to currencies to bonds from small countries you can't pronounce. Some are even designed to increase in value when stock markets fall.&nbsp;They can track gold, silver, platinum, natural gas, oil, or uranium to name a few, as well as baskets of different precious metals.</p> <p>While ETFs, which boast low costs and tax efficiency, have plenty of supporters, critics say they more like speculating than investing, have high trading costs, and don't offer diversification.</p> <h2>4. Frontier Investing</h2> <p>If you're fearless as Davy Crocket, you might consider investing in frontier markets &mdash; countries like Romania, Kenya, or Pakistan. Don't laugh. Not too long most people thought buying shares of companies in Brazil, Russia, India, and China was dangerous, but those who did garnered robust returns and now investing is those countries, the so-called BRICs, is considered quite normal. Countries like Columbia and Vietnam, often blessed with a growing middle class, may soon graduate from the frontier and into a group with catchy acronym.</p> <p>Rather than traveling to Tanzania or Indonesia yourself, you can put money into a mutual fund or ETF specializing in frontier markets.</p> <p><h2non-traded h2=""> </h2non-traded></p> <p>Real estate investment trusts, or REITs, own commercial properties like office buildings and shopping centers and pay dividends based on rents they collect. As their name indicates, non-exchange traded or non-traded REITs are not traded on stock markets. They are supposed to be more stable than publicly traded REITs because their values don't gyrate with the stock market, and they are not hurt by interest rate swings because rents they get are set for years.</p> <p>However, financial regulators warn that their shares are illiquid and can't be easily traded. They are more difficult to value, and fees for selling can diminish your returns. Money you think you're getting as a distribution may actually be funds the REIT is borrowing or your principal being returned. Make sure you do your homework, and read its prospectus and its SEC filings to avoid being burned.</p> <h2>5. Peer-to-Peer Lending</h2> <p>In peer-to-peer, also called <a href="http://www.wisebread.com/peer-to-peer-lending-prosper-marketplace-or-lending-club">person-to-person or social lending</a>, you lend money to other people through websites, such as <a href="http://www.wisebread.com/redir/prosper">Prosper</a> or <a href="http://www.wisebread.com/redir/lendingclub">Lending Club</a>. Instead of lending to a government by investing in bonds, you lend to other people by investing in online listings. You review their criteria like debt-to-income ratios and credit scores, pick loans to your liking, decide how much of the loan you'll fund, and then get part of the monthly payment after the online intermediary takes its portion.&nbsp;</p> <p>P2P networks say they provide investors better returns than typical fixed-income investments and less volatility than stocks. That depends if borrowers you pick repay their loans.&nbsp;</p> <p>Lending to strangers, some with imperfect credit histories, is certainly risky. Tips: Spread loans around to many different borrowers, start slowing by initially lending only to the highest-rated borrowers, and don't expect to P2P lending to be a main income source.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/michael-kling">Michael Kling</a> of <a href="http://www.wisebread.com/from-beanie-babies-to-baubles-5-unconventional-investments">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/everything-you-need-to-know-about-peer-to-peer-investing-with-lending-club">Everything You Need to Know About Peer-to-Peer Investing With Lending Club</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/peer-to-peer-lending-prosper-marketplace-or-lending-club">Peer to Peer Lending: Prosper Marketplace or Lending Club?</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-only-8-rules-of-investing-you-need-to-know">The Only 8 Rules of Investing You Need to Know</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/never-borrow-money-for-these-5-buys">Never Borrow Money for These 5 Buys</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/9-investing-questions-youre-too-embarrassed-to-ask">9 Investing Questions You&#039;re Too Embarrassed to Ask</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment collecting jewelry peer to peer lending unconventional investments Mon, 17 Dec 2012 10:48:37 +0000 Michael Kling 955654 at http://www.wisebread.com Peer to Peer Lending: Prosper Marketplace or Lending Club? http://www.wisebread.com/peer-to-peer-lending-prosper-marketplace-or-lending-club <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/peer-to-peer-lending-prosper-marketplace-or-lending-club" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/cash_000045501838.jpg" alt="Handing out cash" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Peer to peer lenders allow people to lend and borrow from each other. The two largest companies in this business are <a target="_blank" rel="nofollow" href="http://track.linkoffers.net/a.aspx?foid=22959155&amp;fot=1286&amp;foc=1">Lending Club</a> and <a rel="nofollow" target="_blank" href="http://prosper.evyy.net/c/27771/52702/994">Prosper</a>. I have been a customer of both for several years, and here is a quick comparison guide on which company's service you should choose if you are looking to borrow or lend money.</p> <h2>For Borrowers</h2> <p>If you are a borrower who wants the lowest rate for your loan, then <a rel="nofollow" target="_blank" href="http://prosper.evyy.net/c/27771/52702/994">Prosper Marketplace</a> has a slight edge over <a target="_blank" rel="nofollow" href="http://track.flexlinks.com/a.ashx?foid=1029882.1527976&amp;fot=1075&amp;foc=1">Lending Club</a>. The reason is that Prosper's credit requirements are less strict than Lending Club. The minimum credit score requirement at Prosper is 640, whereas it is 660 at Lending Club. You can also set up your loan request as an auction at Prosper. From my experience, those with decent credit profiles get lower rates at Prosper than they would at Lending Club because lenders bid down the rates of the good borrowers quite a bit.</p> <p>Additionally, borrowers that could qualify as an AA rating at Prosper may only be rated a C or D at Lending Club because Lending Club's rating formula takes into account factors such as debt-to-income ratio and loan size. Even though Lending Club's fixed interest rates are lower than Prosper's for certain credit ranges, it is possible that most borrowers would be rated higher at Prosper and consequently receive a lower rate.</p> <p>In addition to the interest rate, you have to consider the origination fee. Once again, the fees are lower at Prosper for most borrowers. At Prosper, the origination fee for a person with AA credit is only 0.50% with no minimum, where as at Lending Club the lowest origination fee is 2.25% for a 36-month loan. The origination fee has a $75 cap at Prosper no matter what your credit score is, but at Lending Club it could be as high as 5% of the loan. So if you have a credit rating in the lowest range of both marketplaces, then the difference in just the origination fee on a $25,000 loan could be as high as $1175. The bottom line is that Prosper is cheaper for borrowers.</p> <p>However, for those borrowers with lower-amount loans and credit in the middle ranges, then Lending Club's origination fee could be a little cheaper. For example, a person with a $2000 loan request with a credit rating of A would be charged $45 at Lending Club, but he or she would be charged 3% or $60 at Prosper. However, since Prosper is more lenient on the credit assessment, it is very likely that an A borrower from Lending Club could be rated AA at Prosper and receive a 0.50% origination fee.</p> <p>Although it seems that Prosper would give a borrower the lower rate, you do have to consider that Lending Club is the only one that offers 5-year loans. If you want a lower monthly payment and a longer repayment period, then Lending Club is the way to go. Also, another reason for a borrower to consider Lending Club is that almost all of Lending Club's borrowing requests are funded because they approve a smaller pool of borrowers, whereas at Prosper there are many borrowing requests that do not completely fund.<strong><br /> </strong></p> <p><strong><a href="http://prosper.evyy.net/c/27771/52702/994">Click here to sign up for a loan at Prosper today!</a></strong></p> <h2>For Lenders</h2> <p>If you are a lender, then <a target="_blank" rel="nofollow" href="http://track.flexlinks.com/a.ashx?foid=1029882.227343&amp;fot=1075&amp;foc=1">Lending Club</a> is the platform for better returns. One big reason is that it seems that the screening Lending Club uses for borrowers is just much stricter. Most loan requests are rejected outright so the quality of borrowers is higher. Additionally, as I already pointed out, the fees for borrowers with lower credit is fairly high, which turns many borrowers away.</p> <p>From my experience in the past three years, I have had one default at Lending Club, while at <a href="http://prosper.evyy.net/c/27771/52702/994">Prosper</a> nearly half of the borrowers have defaulted. I chose the highest-rated borrowers in both marketplaces, so it would seem that the pool at Lending Club is just better. Lending Club also has a very good collection process that starts as soon as the loan goes late, and you are updated on the collection process. I have had a couple late loans that were actually cured by Lending Club, whereas at Prosper there is very little transparency to how they collect on late loans.</p> <p>Additionally, Lending Club has an IRA program where you can let your investments grow tax free. This is great for those who are looking to invest long term because the interest paid from peer to peer loans are usually taxed at your highest marginal tax rate if it isn't tax sheltered. Lending Club also offers bonuses from time to time for doing various tasks, such as setting up recurring deposits.</p> <p>Personally, I am lending at Lending Club exclusively now because the default rate has been quite low and the returns has been consistent. I have had one loan default after two-and-a-half years and the overall return is around 9%. I have been monitoring my loans once every week and selling off the loans that show drastic changes in the borrower's credit score. I usually sell those loans at a slight discount of 0.5 to 1% and they usually sell within a day, so I would say that the liquidity is fairly good. Prosper also has a note trading system, but it seems that the notes I put up for sale are just not moving as fast because they have already defaulted.</p> <p>Although I am no longer adding more money to Prosper, I have to say that if you have a high tolerance for risk then there are loans at Prosper that offer better rates than at Lending Club. I do have a few performing loans at Prosper that are paying 30%, and that is a rate not reachable at Lending Club.</p> <p><strong><a target="_blank" rel="nofollow" href="http://track.flexlinks.com/a.ashx?foid=1029882.164689&amp;fot=1075&amp;foc=1&amp;foc2=531292">Click here to start investing at Lending Club today</a></strong></p> <p>The bottom line is that these peer to peer lending marketplaces do facilitate money lending between people, but you as a consumer should always research which option is the best for you. If you are looking for a personal loan of $25,000 or less and have a credit score of at least 640, then it doesn't hurt to check out these peer to peer lending companies. The loans are much cheaper than getting a payday loan and I think the fees are very reasonable. If you are an investor looking for a better return on your idle cash, then Lending Club might be the better choice for getting your feet wet. After three years, I think that the peer to peer lending industry has improved quite a bit, and I hope that it is here to stay because it is a good alternative to many other loan options.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/xin-lu">Xin Lu</a> of <a href="http://www.wisebread.com/peer-to-peer-lending-prosper-marketplace-or-lending-club">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/everything-you-need-to-know-about-peer-to-peer-investing-with-lending-club">Everything You Need to Know About Peer-to-Peer Investing With Lending Club</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-ways-to-boost-your-odds-of-retiring-early">5 Ways to Boost Your Odds of Retiring Early</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/great-ways-to-generate-passive-income">Great Ways to Generate Passive Income</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/saving-for-retirement-and-other-long-term-goals-on-a-variable-income">Saving for Retirement (and Other Long-Term Goals) on a Variable Income</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/from-beanie-babies-to-baubles-5-unconventional-investments">From Beanie Babies to Baubles: 5 Unconventional Investments</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Entrepreneurship Investment lending club peer to peer lending prosper marketplace Wed, 22 Sep 2010 13:00:17 +0000 Xin Lu 243674 at http://www.wisebread.com