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  #1  
Old September 28th, 2010, 02:58 PM
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Trending Paiisaa - Return over 10% in this market

Do anybody use Peer to Peer lending like Prosper or Lendingclub to invest.

The returns they are showing are more than 10% APR.

Ideas??
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Paiisaa - Return over 10% in this market
Trending Topic - Week Fri, Oct 8, 2010
Original forum: Economy
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  #2  
Old September 29th, 2010, 09:15 AM
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Re: Paiisaa - Return over 10% in this market

Quote:
Originally Posted by Premi View Post
Do anybody use Peer to Peer lending like Prosper or Lendingclub to invest.

The returns they are showing are more than 10% APR.

Ideas??

premiji lending club seems to be a good idea.. Prosper i'd heard of a while back and did not appeal to me as such.. but let me dig deeper into lendingclub..

i will come back to you with my feedback.
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Old September 29th, 2010, 09:30 AM
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Re: Paiisaa - Return over 10% in this market

Quote:
Originally Posted by Premi View Post
Do anybody use Peer to Peer lending like Prosper or Lendingclub to invest.

The returns they are showing are more than 10% APR.

Ideas??
Idhar la re baba tera paisa,kitna jaldi double chahiye bol de
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Old September 29th, 2010, 10:07 AM
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Re: Paiisaa - Return over 10% in this market

Quote:
Originally Posted by Premi View Post
Do anybody use Peer to Peer lending like Prosper or Lendingclub to invest.

The returns they are showing are more than 10% APR.

Ideas??
Dont believe the numbers always. The 10%+ return is gross return. Net it of unpaid loans and fees the real rate of return is typically in the 4-6 % range. The people you are lending money to are not able to get it from a bank. There is a REASON for that. Many of them will default on their loans and not just due to fraud. They want money to invest in business. Statistics show that a majority of all new small businesses fail within the first year.

So - be careful. Spread your risk around. This will lower your return, but also lower your risk. Plan for a default rate of 10%. This means your principal has also gone. So you will need to make 15% off all the remaining loans to net you 4-5 %.
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Old September 29th, 2010, 10:53 AM
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Re: Paiisaa - Return over 10% in this market

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Originally Posted by smellyfinger View Post
Dont believe the numbers always. The 10%+ return is gross return. Net it of unpaid loans and fees the real rate of return is typically in the 4-6 % range. The people you are lending money to are not able to get it from a bank. There is a REASON for that. Many of them will default on their loans and not just due to fraud. They want money to invest in business. Statistics show that a majority of all new small businesses fail within the first year.

So - be careful. Spread your risk around. This will lower your return, but also lower your risk. Plan for a default rate of 10%. This means your principal has also gone. So you will need to make 15% off all the remaining loans to net you 4-5 %.

unpaid loans are taken care of by the company you are dealing with, with their share of premium they deal withit through collection agencies to make it current if any payment becomes late ... these are personal loans but under agreement. and you can check credit scores adn their salary and the reason they want to borrow the money for.

risks are always there if you want to make money, but how tolerable are the risks.
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Old September 29th, 2010, 10:56 AM
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Re: Paiisaa - Return over 10% in this market

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Originally Posted by swami View Post
Idhar la re baba tera paisa,kitna jaldi double chahiye bol de

bachpan main bante( kanche ) khelta tha main, koi eik do ke liye naatak karta tha to 4 phaink deta tha uski taraf ki le gAAnd main le liyo double ho jayenge...

wahi technique to nahi use karega na ... smelly eik hi bahut hai idhar ,,, money returns smelly nahi maangta
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Old September 29th, 2010, 10:59 AM
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Re: Paiisaa - Return over 10% in this market

Quote:
Originally Posted by Premi View Post
unpaid loans are taken care of by the company you are dealing with, with their share of premium they deal withit through collection agencies to make it current if any payment becomes late ... these are personal loans but under agreement. and you can check credit scores adn their salary and the reason they want to borrow the money for.

risks are always there if you want to make money, but how tolerable are the risks.
All I am saying - if it sounds too good to be true, it probably is. Just expressing that there is a risk and rewards are sometimes over-inflated by fans of the system.

Honestly, its better to buy high yield corporate junk bonds. They can also return > 10% but at least you know you are investing in a company.
Risk is there of default due to bankruptcy as always.
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Old September 29th, 2010, 11:04 AM
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Re: Paiisaa - Return over 10% in this market

Quote:
Originally Posted by smellyfinger View Post
Dont believe the numbers always. The 10%+ return is gross return. Net it of unpaid loans and fees the real rate of return is typically in the 4-6 % range. The people you are lending money to are not able to get it from a bank. There is a REASON for that. Many of them will default on their loans and not just due to fraud. They want money to invest in business. Statistics show that a majority of all new small businesses fail within the first year.

So - be careful. Spread your risk around. This will lower your return, but also lower your risk. Plan for a default rate of 10%. This means your principal has also gone. So you will need to make 15% off all the remaining loans to net you 4-5 %.
also melly you are spot on with regards to spreading risk around.. if you take $2500 and put it on 100 notes of $25 each.. you lost $25 bucks at a time in case of default..

also there seems to be a trading platform for these notes.. where you can sell/trade your underperforming notes (the ones where payments are late) etc.. and there by mitigate any risk (you would be getting cents on the dollar, but you are not going to get wiped out)

so yeah social lending networks seem to have evolved into a pretty interesting investment proposition since the last time i looked..
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Old September 29th, 2010, 11:13 AM
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Re: Paiisaa - Return over 10% in this market

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Originally Posted by smellyfinger View Post
A
Honestly, its better to buy high yield corporate junk bonds. They can also return > 10% but at least you know you are investing in a company.
Risk is there of default due to bankruptcy as always.

Any reccomendations? on ones where you have been making money ?
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Old September 29th, 2010, 11:16 AM
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Re: Paiisaa - Return over 10% in this market

Quote:
Originally Posted by smellyfinger View Post
All I am saying - if it sounds too good to be true, it probably is. Just expressing that there is a risk and rewards are sometimes over-inflated by fans of the system.

Honestly, its better to buy high yield corporate junk bonds. They can also return > 10% but at least you know you are investing in a company.
Risk is there of default due to bankruptcy as always.
Example.... ??

I ve lost money ( a lot of ) in companies like GE and sun micro... only company I made some money is microsoft cos I get their stocks at premium rates.




Quote:
Originally Posted by razzrhino View Post
also melly you are spot on with regards to spreading risk around.. if you take $2500 and put it on 100 notes of $25 each.. you lost $25 bucks at a time in case of default..

also there seems to be a trading platform for these notes.. where you can sell/trade your underperforming notes (the ones where payments are late) etc.. and there by mitigate any risk (you would be getting cents on the dollar, but you are not going to get wiped out)

so yeah social lending networks seem to have evolved into a pretty interesting investment proposition since the last time i looked..
you can do the same thing in this type of sompay too, instead of putting all ur investment money in one loan spread it out ... 10 loans of 1000 each still you make good money..

I know this type of investment is NOT the only option but it is one of the options one might want to explore before investing their hard earned money in this market.

research before you invest.
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Old September 29th, 2010, 11:27 AM
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Re: Paiisaa - Return over 10% in this market

Eh.. what is this lendingclub thing?? Does it exist here in India? Can anyone explain please.

These days precious metals are the in thing for short term (6mth-1 year). Silver is considered the best bet.

In India, for those wanting lower risk, the government schemes are giving pretty good yields. The PF interest rate has recently been increased to 9.5% !! I am sure it will reflect on PPF also. Another thing that people are following is to invest the principal in monthly income schemes of the post office and invest the interest monthly in equity market SIPs.
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Old September 29th, 2010, 11:36 AM
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Re: Paiisaa - Return over 10% in this market

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Originally Posted by raniraja View Post
Eh.. what is this lendingclub thing?? Does it exist here in India? Can anyone explain please.

.
lendingclub is a social lending network.. the concept is somewhat like this..

it's an online forum where lenders and borrowers get together.. If you need a loan you post the need and then lenders can get together and finance it..

you eliminate the banker and thereby it's a win win for everyone..

for ex: a bank may charge you 14% interest for a loan and give you 1% interest for your savings account..

with the lending network,borrowers may be able to get a loan @ 10% interest whereas lenders may get 7-8% interest
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Old September 29th, 2010, 11:47 AM
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Re: Paiisaa - Return over 10% in this market

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Originally Posted by razzrhino View Post
lendingclub is a social lending network.. the concept is somewhat like this..

it's an online forum where lenders and borrowers get together.. If you need a loan you post the need and then lenders can get together and finance it..

you eliminate the banker and thereby it's a win win for everyone..

for ex: a bank may charge you 14% interest for a loan and give you 1% interest for your savings account..

with the lending network,borrowers may be able to get a loan @ 10% interest whereas lenders may get 7-8% interest
A sort of co-operative credit society. Sounds like a very very risky investment. Who takes care of recovery and defaulters?
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Old September 29th, 2010, 11:58 AM
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Re: Paiisaa - Return over 10% in this market

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Originally Posted by raniraja View Post
A sort of co-operative credit society. Sounds like a very very risky investment. Who takes care of recovery and defaulters?

technically the forum is supposed to help with recovery and deal with defaulters.. but yes.. this appears to be the risky/weak spot in the operation
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Old September 29th, 2010, 12:02 PM
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Re: Paiisaa - Return over 10% in this market

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Originally Posted by Premi View Post
Example.... ??

I ve lost money ( a lot of ) in companies like GE and sun micro... only company I made some money is microsoft cos I get their stocks at premium rates.





.
Not stocks - corporate bonds. You cant lose money in a bond unless the company files for bankruptcy protection if you hold until maturity.

For example, if you want to invest in Brookstone bonds

http://reports.finance.yahoo.com/z1?is=brookstone

The main problem with bonds is that its hard to buy them as an individual investor, but there are ways.
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