Prosper.com - Hedging the Bet
I found an article that talked about how to invest in prosper for a little over $1600 and then reuse the payments on a monthly basis to feed itself. The article was fairly good, but I am please to say that I have them beat. I am doing almost exactly what they suggested, except for half the cost.
Basically what I do is fund the difference between the payments (Prin. and Int.) and the next loan value at $50 on an approximately bi-weekly basis. I am now down to $40 personal investments to fund the difference between stacked loan payments and the next loan value and will be down to about $35 in another 2-3 loans.
And one more way to hedge the bet is that now for my 11th loan, I bid and won $51, while the next will be $52 and so on. This may seem small now, but the secret is in the stacking of the loans and later that extra few cents per month payment will snowball.
I have run the spreadsheets on these figures. Autonomy for one of two loans will actually be achieved in another 6 months, with total autonomy for two loans per month being actually around another 10-14 months. Since I am hedging the bid wins now with a dollar or two progression on each successive loan, I am hoping to shorten that. If anyone has a better way, I am always open to suggestions.
–ByteMark