Finance Travels

I posted several times about my success/failure with Prosper.com.  For those that don’t know, Prosper is a micro-lending site.  People list loans requests and they get filled by “the community” based upon the loaner’s credentials, story, etc.  The company is currently in a “holding period” with the SEC and may or may not get approval to continue business in the future.

I had great hopes in the company and at one point had about $1,200 in Prosper loans.  The interest rates I was getting on the loans was anywhere between 10 and 15 percent.  I played it fairly conservatively, usually bidding only on listings for people with a high(er) credit score.

I had successfully bid on 51 loans.  Most of those bids were for $50, but there were some between $50-$100.

As of today, 21 loans are current, 18 have been paid in full, and 12 are either charged-off or delinquent.  These unpaid loans represent about $275.

To make matters even worse, this data from Fred93′s Blog shows that Prosper’s unpaid loan rate is hovering around 38-42%:

Click on image for full size

Fred93′s blog goes into great detail on these numbers, so I’m not going to rehash them here.  But in short, they suck.

I still have about $600 in the system and I’m pulling it out of Prosper as fast as I can.

So would I recommend Prosper.com to the casual investor?  Hell no. It was an interesting experiment and that is all.  Fortunately, I didn’t have a whole lot of cash tied up in this thing.  There were a lot of people that lost a heck of a lot more money than I did.  Many of their stories can be found at Prospers.org.

Another good month:

• 2001 Mercury Sable sold for about $500 more than than the value I had been reporting.
• Investments continue their positive games, accounting for over $5,000 in growth.
• Spending was on par with previous months.

Some upcoming news:

• The township in which we reside is trying to force us to connect to the city water supply (we have a well).  If this happens, it will be over $3,000 just to do the connection, plus a new bill every month.  We are fighting this as hard as we can with our neighbors and may have to get a lawyer involved, but I’m not optimistic that we’ll be able to stop it from happening.
• I’ve decided to pay off the remaining $5,000 vehicle loan ASAP.  This means I’ll be delaying any Roth IRA or college fund deposits until the loan is paid off.  At that point, I will be focusing on doubling the size of our emergency fund.  I’ve starting listening to and taking the advice of Dave Ramsey and while I’m not convinced that paying off our house in full is a great idea at this point, I do want to get out of as much debt as possible.
• Our yearly beach vacation will take place in June, so I expect our spending will be higher for the month.