I’ve been doing micro loans on Prosper for a few months now. I have 31 loans with $1910 loaned out. I’ve only transferred in about $1750 which means that my interest is now being loaned out too!
Thats the secret to attaining true wealth – Compound Interest. Have your interest earn you interest!
Unfortunately, there’s no way to shield this from taxes, but maybe if my corporation were to open an account, I could atleast have some deductions against it. Or maybe get a self-directed IRA!
The good thing about Prosper is you can start out with very little money. Yes, your money is illiquid but you’re getting pretty good rates of return. I’m getting around 18.6% interest.
Nowhere close to the 21-23% that other people are getting, but I haven’t had a delinquency yet.
I’ve also lent out some money on a private trust deed at 25%, which actually pays out 2% every month. Since I could invest that in some else too, that also qualifies as compound interest.
I also have some Canadian Energy Trusts that pay out a decent 11-15% dividend yield (they show up in my account every month). Since I don’t withdraw this money but instead reinvest the dividends, they’re all compound too!
Hopefully many years from now, I’ll be able to live off the dividends generated by the investments I make today.
I love compounding interest!!!!