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P2P Lending

P2P lending: 2018 target $400 passive income

I’m slowly pulling our investment out of Prosper.com. I’m just not a very good investor there. You’d probably have better luck if you have time to carefully screen the loans. Our ROI is about 6.5% which isn’t bad. However, these unsecured loans won’t perform well when there is an economic downturn. P2P loans will be the first thing that borrowers default on when they run into financial problems. The economy seems to be doing quite well at the moment, but I’m just getting out while we’re ahead.

At this point, I prefer to invest in real estate crowdfunding. The loan is secured with real estate and I get better ROI. The only thing better with P2P lending is that you can start investing with a smaller amount. Investing in a real estate crowdfunding project can starts anywhere from $5,000 to $20,000.

You can see all of our passive income over on the Passive Income page. I will update these passive income pages monthly.

Currently, I have $3,626 in my account at Prosper.com. Most loans will be done by 2019 so my balance will drop quickly over the next couple of years.

2018 YTD P2P lending income = -$144

We’re starting 2018 in a hole. That’s one problem with P2P lending. Some months you have defaults and it will put you in the red. I’m seeing more defaults now so I don’t think 2018 is going to turn out well. Our ROI is 6.5%, but that’s over 5 years. We could be in the red this year and still has decent ROI overall.

Passive Income 2016 2017 2018 YTD
P2P Lending $579 $443 -$144


If you’re interested in P2P lending, check out Prosper.com.

Disclosure: We may receive a referral fee if you sign up with a service through a link on this page.

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Joe started Retire by 40 in 2010 to figure out how to retire early. He spent 16 years working in computer design and enjoyed the technical work immensely. However, he hated the corporate BS. He left his engineering career behind to become a stay-at-home dad/blogger at 38. At Retire by 40, Joe focuses on financial independence, early retirement, investing, saving, and passive income.

For 2018, Joe plans to diversify his passive income by investing in US heartland real estate through RealtyShares. He has 3 rental units in Portland and he believes the local market is getting overpriced.

Joe highly recommends Personal Capital for DIY investors. He logs on to Personal Capital almost daily to check his cash flow and net worth. They have many useful tools that will help every investor analyze their portfolio and plan for retirement.