Become an Investor Through Prosper
Want to become an investor but don't know where to start? If you’re a stock market novice, dipping your financial toes into the world of investing can be intimidating. We've all seen the chaotic images of traders 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 easily dodge the rabid day-trader scene. In fact, you can become an investor right from your own home.
Top Traditional Ways to Become an Investor
Every investing method carries its own risks and rewards. Here’s a simplified breakdown of some of the main ways that people have traditionally invested:
- Mutual Funds
A professional management company buys, sells, and trades stocks—relieving the investor of making such decisions. By stating their preferred level of risk up front, investors help the fund manager decide where to invest funds. Mutual funds can effectively provide a shortcut to become an investor in the stock market without an MBA.
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; they all have 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 can ask a 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" investing tactic.
Each of these investment paths has pros and cons. And if you're not careful in reading the fine print, hidden fees can cost you. Mutual fund companies, while popular, can take quite a bite out of your dividends. Long-term bonds are notorious for not keeping up with inflation, which may earn you very little spending power over twenty to thirty years.
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. And this pay-per-transaction model may cast into doubt 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?
Learn How to Be Your Own Investor
Peer-to-peer lending helps people to invest on their own. The concept is an age-old community-based one, given a second, modern look thanks to the power of the Internet. At Prosper, we provide the resources that allow all types of investors—from the seasoned to the novice—to make informed choices and mitigate their risks. In addition, we offer many financial tools to help you choose which loans to invest in, including Quick Invest, which enables you to set criteria in order to find entire batches of loans at once. This adds ease and convenience to investing on Prosper while providing you with flexibility and control.
But Prosper offers more than just 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. You can become an “angel investor” for 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 an investor 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?
Investors create an account, set their parameters, and purchase Prosper Notes. Each Prosper Note corresponds to a listing which sets forth the relevant details about the loan, including loan amount, Note rate, yield percentage, and borrower information. Any payment from a Prosper Note is dependent on the payments Prosper receives on the corresponding loan.
The Notes that correspond to specific borrower listings are offered by 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 the Prosper model 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 investing through Prosper. Not FDIC-insured. Notes may lose value. No Prosper or bank guarantee.