How to start investing with a modest income

As much as I’ve always wanted to invest, I always found the process of investing in stocks too mysterious. I know the premise, but I’ve always had the nagging feeling that no matter how many times it’s explained to me, I’d have no idea what I was doing when it comes to selecting them. I realize that’s the purpose of a broker but I didn’t have enough money to even go to a broker! Other people suggest investing in real estate which again I don’t have the money for. All of that led to my being intrigued by the concept of peer to peer lending. Once I knew I could just start with $25.00 and my money was actually going towards something I’d have a slightly better visual on, I knew that it was right for me. I started investing very small amounts, just 25.00 a month and two years later, while I have a long way to go, I love the amount of control I maintain. Another plus is that the interest I receive is higher than a savings account. Is it risky? Yes, like all investments it’s risky but I have yet to have someone default on a loan. I do all my investing manually and I pick loans that I am comfortable investing in between A to D applicants. A grade applicants have the best credit scores but lowest interest rates. I tend to stick to people reauesting loans for Home Improvement and small businesses and avoid ones that are for vacations or debt pay off. I’m not saying my criteria is perfect, just that this is what I’m comfortable with. Once you start getting paid back regularly, which will take a few months, I highly recommend reinvesting the money you’ve been paid back. Currently I’m using Lending Club but do hope to explore other investment options in the future. I also hope to take the plunge and invest a higher amount in Lending Club so I can give a nice review of the results to inspire you to do the same!

 

monopoly man.jpg

 

3 thoughts on “How to start investing with a modest income

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s