LIVING OFF DIVIDENDS & PASSIVE INCOME

This isn’t going to be some post about why I think payday loans are a great investment. I’ve never gotten a payday loan myself, so I’m not talking about my personal user experience either. I’m not even going to discuss whether payday loans are good or bad.

What I’m talking about is how payday loans are helping me get a good return on my money! No, I’m haven’t started a check advance loan business that lends money out to people at 200% per year. I’m just helping out people who are already stuck in the vicious cycle of payday loans and who can’t seem to get out of it.  Read more... (445 words, 8 images, estimated 1:47 mins reading time)

Micro-lending is one of my 20 passive income streams. I currently have 45 loans on Prosper.com, lent out at an average rate of 19.55%. Even though I’ve had a few delinquencies, my capital has grown 14.5% in the 15 months I’ve been a lender. I’ve learnt a few things about lending and how to protect your principle. While I won’t explain how to lend money on prosper, I will explain how not to lend money!!

Here are the Top Ten Worst reasons to lend money to borrowers:  Read more... (270 words, 8 images, estimated 1:05 mins reading time)

1. You think they’re hot!
2. You feel sorry for them.
3. They have a picture of a cute kitten or puppy (or supermodel) in their profile.
4. They’re 95 and need money for medical bills.
   
5. They’re a Californian real estate investor and are willing to pay 20% interest for a remodel.

I’ve been lending money on Prosper.com for nearly a year now. I’ve been getting a pretty decent rate of return, despite having had a couple of borrowers default.

I’ve also made over $200 from referrals fees! Whenever anyone signs up using the referral link and funds atleast $50, we both get $25. If a borrower signs up, I get $125.

And to add to that, Prosper is now a paid advertiser on my blog. Not only are they offering referrals rewards, but they’re also paying me to put their link up!

I guess they’ve had such success with the program that they can afford to be extremely generous. If you have a blog you can start making extra money by doing just 3 very simple things:  Read more... (264 words, 11 images, estimated 1:03 mins reading time)

1. Sign up using this referral link.

I started lending money on Prosper.com about 10 months ago. I started out with a total of $1900 in my account. I’ve been mainly targeting people with D and E credit who seem have steady jobs but got into the payday loan trap and can’t get out. My average interest rate is about 19.4% right now and I usually lend out the minimum $50.

I’ve been reinvesting all the interest payments I’ve received. So far I’ve made loans to 40 people and I’ve had 2 defaults and 1 currently late loan – two of which were from Prosper’s auto-pay, which I don’t really recommend using. One of the defaults had a B rating!

Currently my account is worth about $2106, which gives me an annualized return of about 13%. Not bad at all.  Read more... (206 words, 8 images, estimated 49 secs reading time)

Lending money to friends and family can be a strain on the relationship (not to mention your finances). Seeing that you’re doing well, everyone wants to hit you up for a small loan. If its a short-term thing its fine, but if you’re worried about the borrowers ability to repay your loan either due to poor financial responsiblity or income limitations it sometimes becomes difficult to say no.

One way is to steer them towards micro-finance sites like Prosper.com. Tell them that if they sign up on Prosper, you’ll contribute as much as you can towards their request and also give you a recommendation.

This helps you in several ways:

1. It doesn’t sound like you’re saying no. You’re trying to help them and will even
contribute towards their loan.

2. You get paid interest. This is based on their credit history. The better they’re
credit history, the lower the rate.  Read more... (389 words, 9 images, estimated 1:33 mins reading time)

Prosper.com has now started giving out $25 referral fees if you sign up through an affiliate link!

It doesn’t matter whether you’re a lender or a borrower, you still get the $25. Don’t know when it started but it ends on August 31st 2007.