All Posts Tagged With: "Planning"
Building My Prosper Plan
After having been a Prosper lender for a little over a year now, I have been examining my approach to investing in this area. Since lending is a form of investment, specifically related to my own personal finances, it is important to question my prosper strategy to ensure I am on track with my goals.
Rule of 72
Knowledge gives you choices.
By knowing what the Rule of 72 is about, you are giving yourself the knowledge to make decisions regarding your personal finances. Knowing whether you want to see your money double in 3 years or 18 years will help you figure out what kind of annual return you will need.
Keeping a Rule of 72 chart handy in your investment folder will help you know what to expect when you are researching investment opportunities. There are many kinds of opportunities ranging from Certificate of Deposits to commodities. An annual interest rate of 4 percent or 28 percent will be an important factor in determining your investment horizon should you desire to see your original investment returned to you sooner than later.
Setting A Retirement Portfolio Goal
Each time I think about the word “retirement”, all I can conjure up in my mind is a mysterious shroud. I have no idea what retirement means to me.
The only thing that comes to my mind immediately is the impression of retirement which means I am no longer working for someone else. I am sure you can identify with that, a desire to no longer be an employee doing someone’s else bidding.
Still, this does not lift the veil of mystery as to what retirement means to me. For example, does it mean I am to completely stop working?
While I may not want to work for someone else, I certainly would not mind working for myself operating my own bed and breakfast in paradise or volunteer to help with primate conservation efforts. I am sure you have something in mind for yourself.
Another piece of the mystery troubles me, what if I were to “retire” by the age of 40 but continue working for myself until I was 80? Or perhaps “retire” at the age 60 and dabble in some business part-time for myself for the next 20 years?
You and I both have heard stories of the old and new “retirees” who retired from their employment lifestyle and yet they still continue to find a way to make themselves useful working for themselves or supporting a cause.
I think the word “retirement” is a myth perpetuated by financial companies in the business of making money off you from the cradle to the grave. That’s just me.
It could be my 30-something self talking out loud but then again, it’s hard to dispute it when there are so many people out there who have shown us otherwise.
One thing I know for sure is that if “retirement” means I am no longer working for someone else, then I have free time to do whatever I want.
Either way, it is important to all of us who are interested in retiring at some point to set a retirement goal for our retirement portfolios.
Whether your retirement is in the near future or 50 years from now, you need to set a goal to have a specific amount of funds you can draw from to make your retirement lifestyle comfortable enough for you to do what you want to do with your free time.
Question Your Prosper Strategy
Prosper, a popular peer to peer lending program where prospective borrowers can request a loan up to $25,000 at an interest rate to be determine through a bid-down system by individual lenders.
Since Prosper loans are unsecured loans, if the borrower defaults on the loan, you may or may not get your money back if any at all. You are really making a bet the borrower will pay back the loan in full with interest.
The results can vary from borrower to borrower. By having a strategy in place, you can minimize your exposure to more riskier loan requests and maximize your return with loans that tend to be more safer. It is important to realize all loans have an inherent risk built in.
When building a portfolio or a strategy, you should be asking yourself questions to cover all the bases. By finding out your answers, you will have a more clearer idea of what you want to achieve.