Become an Investor Through Prosper
Want to become an investor but don't know where to start? To the stock market neophyte, dipping your financial toes into the world of investing can appear intimidating. We've all seen the chaotic scenes of people on Wall Street screaming amidst a sea of strewn ticker tape. Is it possible to avoid this chaos and still invest wisely?
The short answer is, "yes."
The Internet has opened up the world of investing to first-timers, so you can completely dodge the rabid day-trader scene. In fact, you can become an investor right from your own home. Let's explore some of these paths and see how easy it is. Be aware that each method carries its own risks and rewards.
Top Methods to Become an Investor
Mutual Funds - Broadly defined, mutual funds use a system wherein a professional management company buys, sells and trades stocks—relieving the investor of making such decisions. By stating their level of risk upfront, investors help the fund manager decide where to invest funds. Used by many, this method can effectively provide a shortcut to become an investor in the stock market without an MBA.
Bonds - A bond is essentially like a loan. As a bond holder, you agree to loan the bond issuer a set amount of money for a given period of time. There are many different types of bonds; each has its own differences regarding maturity and the disbursement of funds.
The Stock Market - For the average person, buying and trading stocks happens through a middleman, the broker. You may be able to ask the broker for advice on which stocks to pick, or simply make your own choices according to your investment strategies. As you might guess, this method is usually the most "hands on" in investing.
Each of these investment paths carries its own pros and cons. And if you're not careful in reading the fine print, hidden fees can cost you plenty. Mutual fund companies, while popular, can take quite a bite out of your dividends. And long-term bonds are notorious for not keeping up with inflation, which may lead to you earning very little over 20 - 30 years in terms of spending power.
Brokers also have their caveats. On average, they charge you for each buy or trade you make. This can add up quickly, especially if you want to make several transactions within a short period of time.
This may cast a shadow of doubt over a broker's advice. Follow the money: If a broker earns his commission on how many transactions you make—instead of how financially sound they may be—where does his loyalty really lie?
One idea that's helping people become an investor is peer-to-peer lending. It's an old concept that's getting a second look thanks to the Internet.
At Prosper, we provide the resources that allow all investors—both seasoned and novice—to make informed choices and mitigate their risks. Along with providing you the financial history of our borrowers, you'll also find their own personal stories of why they deserve your attention. In addition, we offer many financial tools to help you decide which bids to make, along with our popular Portfolio Plans, which add ease and convenience to investing, while allowing you to maintain flexibility and control.
But Prosper offers more than getting a great rate on return. There's an important social element present (called social lending) that many of our investors also enjoy. You can touch real people's lives. How so? Become an angel investor to someone who's looking to raise funds for a start-up business—one that reflects your beliefs and values.
If you've been searching for an easy way to invest, sign up as a Lender right now. There's no obligation. But once you see how easy investing is through Prosper, we're confident you'll be eager to start.
How Does Prosper Work?
Prosper lenders bid on listings and purchase Prosper Notes. Each Prosper Note corresponds to a listing which sets forth the relevant details about the loan, including loan amount, price, yield percentage, and borrower information. Any payment from a Prosper Note is dependent on payments Prosper receives on the corresponding loan.
The Notes that correspond to specific borrower listings are offered pursuant to the prospectus. Investors should read the complete description of the Notes and risks associated with making an investment in the Notes as well as other information about us and our platform in the prospectus.
Prosper Notes are risk bearing and speculative investments for suitable investors only. If a borrower fails to make payments on the corresponding borrower loan related to your Prosper Note, you will not receive payments on your Note. There is the potential that you will not receive any payments on a Prosper Note. You should review the Prospectus before bidding on loans. Not FDIC-insured. Notes may lose value. No Prosper or bank guarantee.
