Prosper: Great for Beginner Investing
If you're thinking about becoming an investor—but aren't quite sure where to start—consider Prosper. We've structured our marketplace so it's easy for the first-time investor to jump right in.
We realize you may not have the time to pour over hundreds of financial reports, so we offer a streamlined, simplified process—for both investors and borrowers.
The Beginner Investor and Wall Street
Smart investing requires equally smart information, and playing the investment game on Wall Street isn't for everyone.
Unless you're an accountant, it can be difficult to keep up with the myriad rules and regulations of the stock market. The same labyrinthine complexity can apply to mutual funds, despite their general reputation for ease of use. Unless you are able to distill all of the market information accurately, it may be difficult to draw a direct line between your investments and returns.
While both of these paths can provide prudent growth for some, they're not the only investment game in town. Peer-to-peer lending is an idea that's been around for a long time, and it's now making a strong return in today's economy.
At Prosper, America's largest peer-to-peer loan marketplace, we feel there are several financial tenets that one should consider for smart investing—making it more transparent and easier for financial wizards and novices alike to invest with our platform.
Transparency—Essential for Beginner Investing
Transparency is one of our core values. We feel it's essential to maintaining the solid foundation of trust you deserve as an investor.
Prosper makes it easy to see all of the relevant investing information you need to make the decisions that befit your investment strategy. From a borrower's credit information, to providing you with clear, concise updates throughout the entire investment process, you will always know where your money stands with us.
And unlike many mutual funds, Prosper offers a simple fee structure—there are no hidden charges buried in fine print. Our 1% annual servicing fee is accrued daily, and is based on the current outstanding loan principal. It's that simple.
There's also an important social aspect present when you invest through Prosper: you will always know who you're helping and for what purpose. Our borrowers are real people—not faceless corporations that offer no insight into how your investment is being used.
This is part of what defines the process of investing at Prosper. Our long-term investors love this transparency, and we think you will, too.
Investment Tips for Beginners
There are many, many books out there that can walk you through the rudiments of investing. It may be helpful to seek out a few in the beginning. You may want to ask around in your circle of trusted sources.
Our one, three, and five-year terms on loans mean that you could start seeing an outcome on your decisions relatively quickly—without all of the fees and penalties of frequent trades tied to the stock market.
Does this mean that Prosper carries no risks for investing money for beginners? No. We are not FDIC insured. And as with all investments, there are risks. Because of our non-traditional structure, there isn't historical performance information dating back over ten years or more for you to review.
Also, there is always a chance some of our borrowers will default. This is part of why we believe that it may be a good idea to diversify your portfolio. You can spread your risk by holding multiple Notes—like diversifying assets does for your entire portfolio—which may reduce the impact of any one default.
Prosper makes this easy to do with Quick Invest, our proprietary tool that allows you to set lending criteria and invest in a group of loans all at once. You can invest by Prosper Rating or set more detailed lending criteria, and you can save your search for repeat investing.
At Prosper, we want to make beginner investing as simple as possible.
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.