TO P2P OR NOT TO P2P, THAT IS THE QUESTION: It’s a few months old, but we just discovered a post at Wealth Informatics which has some sound advice on not losing money in peer-to-peer (P2P) lending. For those of you not in the know, this is the practice of lending your money directly to strangers and cutting out the middleman, aka the bank. Prosper and Lending Club are the two best known P2P sites.
We have not tried out P2P yet, but given the lousy returns currently offered by savings accounts it’s on our list of things to look at in the new year. From what we can tell, you can get returns a good bit higher than the 1% you can get from savings accounts without too much more effort.
One of the best ways to learn is by making mistakes, but if you don’t have the time or money to make your own mistakes, then the next best thing is to learn from others’ mistakes. Fortunately for us, Suba at Wealth Informatics shares her experience losing the first $500 she invested without even getting an interest payment. Among the mistakes she describes:
- Lack of diversification
- Mixing charity with investing
- Connecting emotionally with the borrower
- Confirmation bias (loyal PFD readers may recall we covered this one recently)
- Herding behavior
That’s the gist of it, but the full article is worth a read.
2 APPS AT ONCE IS 2 MUCH FOR BARCLAYS: Rapid Travel Chai, in its continuing app-o-rama coverage, has pointed out that you can’t do two USAir applications at once, but you can do one every 91 days. That card has a reputation for being churnable, and this is another data point which backs that up.
Recent Comments