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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 not a very good investor there. You’d probably have better luck if you have time to carefully screen the loans. Our overall 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 borrowers default on when they run into financial problems. The economy seems to be doing well at the moment, but I want to get 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 small amount of money. Investing in a real estate crowdfunding project can start 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 $2,549 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 = -$70

2018 isn’t turning out well with P2P lending. We had many defaults and we’re losing money this year. That’s the problem with P2P lending. Some months you have defaults and it will put you in the red. Our ROI is 6.5%, but that’s over 5 years. Once you stop reinvesting, the ROI will drop quickly due to defaults. If you keep reinvesting, new loans will prop up the returns.

Passive Income 2016 2017 2018 YTD
P2P Lending $579 $443 -$70


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.