42 Cents Closer to Financial Freedom

Recently, I just got paid interest. That’s right. I got paid interest just like one would pay interest on their car, home, business loan, or other line of credit. In this case, I’m the creditor and for the first time, I’m getting paid the interest.

There’s a quote I’ve seen different versions of that says something like this: “Those that understand interest earn it. Those that don’t, pay it.” Today I feel like I finally took a step toward earning it – 42 cents closer to be exact. See below.


This is my first interest payment using a website that connects lenders and borrowers. In my case, I am a lender who is helping finance loans people have for various things like debt consolidation, cars, wedding rings, etc… What’s unique and cool about what I’m using (Prosper.com) is that the lending is done in a “crowd funding” type of way where I only assume a small portion of the money lended for a given loan. This is called a “Note.”

In the case of the 42 cents earned, this was the first month of interest on a $100 note for a 3 year loan for debt consolidation. The 42 cents earned is 44 – a 2 cents Prosper fee for providing the website and handling.

What’s really cool is getting started was as simple as sitting in my basement in my underwear and making a bank transfer to the website. At that point, I can pick and choose loans or even do a “Quick Invest” which will break up the money into small chunks for many loans to reduce risk. Now I get to be a lender without much work.

There’s always the chance someone will default on a loan. I’m sure I’ll find a percentage of interest earned getting reduced from that, but I imagine that won’t be as high as the extra interest earned from the many notes I now have.

It takes some courage to do something new like this. It would be easy to be scared of investing my money and hoarding it in my savings account. But I’ll never learn until I get out and start trying things like this.

Was there a time you were afraid to invest? Do you invest your money as a lender in this way (or other way)? What is your biggest fear when investing your money?

Similar Posts:

2 thoughts on “42 Cents Closer to Financial Freedom

  1. I’m not sure I was ever scared to invest, but I certainly have been too lazy to invest before. I withdrew all the money from my trading account and stuck it into CDs because I don’t want to worry about the volatility in the markets all the time. Interest rates aren’t the best but they’re better than what my checking account was earning.

    1. Sydney, I hear you about being too lazy to invest. For the past two years, I’ve been thinking about it and am just now doing it. I do still have the fear in the back of my mind with market volatility, or what if the Prosper website shuts down and I lose all my money.

      If that does happen, I’ll at least go down knowing I gave it a go.

Comments are closed.