Comments on: Broker Debt Consolidation for Others – Dave Answered

By: Debt Slavery - What it is and Ways Out

Debt Slavery - What it is and Ways Out — Wed, 20 Jan 2010 14:52:03 +0000

[...] + interest = more debt] [income - more debt = less savings & less investing] [more debt + less savings + less investing = more labor & less [...]

By: BG

BG — Tue, 05 Jan 2010 18:58:07 +0000

I think the key here is in Dave’s final sentence: Short Term. Money intended for Short Term periods should be invested in very safe (read FDIC insured) plain savings accounts or short-term 1,3,6 month CDs.

By: nickel

nickel — Mon, 04 Jan 2010 21:32:49 +0000

I agree that there is risk involved with P2P lending. In fact, anytime you’re earning significantly more than you can get with a “riskless” investment, you have to assume that you’re putting your money at risk. That being said, Lending Club has been pretty transparent through all of this, as they make their data regarding historical repayment rates, etc. publicly available.

By: Matt Jabs

Matt Jabs — Mon, 04 Jan 2010 19:36:45 +0000

Dan is right Dave… always be cautious and calculated in respect to your investment strategies.

My Lending Club Review does include testimonials from 4 active investors, so be sure to read about their experiences to help formulate your decision.

Also remember… if you are seeking higher returns, you must also take on more risk. At this point the total risk involved in being a Lending Club investor is not fully known (due to the age of the social lending itself), although it currently appears very stable.

By: Dan

Dan — Mon, 04 Jan 2010 19:22:18 +0000

As a Prosper lender, I say that your staunch advocacy to lend via Lending Club should be tempered a bit. As a financial asset, the value of these cashflows is still unknown, and therefore only speculative. Funds invested in this manner must be funds that one is will to place totally at risk, and consequently, lose.

My advice would be to lend cautiously, until one has a good feel for the P2P climate, and not lend on the basis of a favorable experience from a borrower. (That’s not a jab at the author, btw.)

(And, TBH, one should avoid Prosper altogether… loans originated these days aren’t owned by the lender, and if Prosper ceases operation, which is a non-trivial possibility, the lender becomes an unsecured creditor.)