Llank ;)

P2p loans are a relatively new investment that is gaining traction. Prosper and Lending Club are some of the major players in this market. So what are they and how do you make money?

According to Prosper : “Prosper is an online community for lending and borrowing money. Bidding on borrowers’ loans, lenders get great returns by offering great rates.”

The Interest rates on Prosper go from anywhere to 6% to 30%. Their current average rate is advertised at 9.49-12.81%

Alright theres gotta be a catch right?

Lenders have to pay an annual loan-servicing fee based on grade of loan, this fee ranges from .5% to 1%. Lenders are also responsible for collection agency recovery fees on any loans that are more than a month late. This collection fee can range from 7.35% to 20% of the amount recovered.

The major risk on Prosper is the chance a loan will default or payments are made late. Loans that default can be sold off for a discount (sometimes as low as pennies on the dollar). This depends on the credit grade of the loan and once late, loans are turned over to a collection agency. As default rates increase, credit grade decreases; however, as credit grade decreases, interest rates increase. That should be obvious, as more risk should entitle higher rewards.

Another problem with Prosper and other P2P lending markets is the liquidity of loans. The only way to take money out of Prosper is to wait for the borrower to make payments on loans, which are over a three-year period. Just as this isn’t enough just to remind you that Prosper is taxed as ordinary income, which means up to 35% in Federal income tax

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Whether I like to admit it or not I’ve made mistakes and I’m guessing you have too. Sometimes the money at the end of the light can sever your good judgment. This article is to help you put it all back into perspective when the greed overcomes your senses. I’m going to try and speak from my experiences and what I’ve learned so far.

From selling online items in Diablo 2, making how to make money cds, selling on Ebay, and making websites money spoke. Even in my younger days just selling items in Diablo 2 I let greed blindsight my good judgement. I decided on purchasing bulk of 100 stone of jordans at the time which was approximately $1000(at 13 years old it was a hefty sum). After the purchase I was scammed with a stolen credit card and never recovered funds(Thanks Paypal!). I knew there were risks in buying and selling online items but in my younger days I didn’t know better.

Lesson learned: Take it one step at a time. It would have probably been safe if I bought and sold low quantities but to try and make the big bucks I took bad risks.

Everything you see sold on Ebay is not necessarily legal. Just because there is a guy selling it doesn’t mean its alright for you to sell it too. I’ve learned that the hard way. Looking for a solution manual for one of my classes I stumbled my way onto Ebay(gasps! Yes I know, I know). I managed to find many solution manuals and it looked very profitable at the time. So I did some research purchased several manuals and began to sell. Business was great, every few hours we logged a few sales and money was rolling in. What happened? Well lets just say there are copywrite laws in selling solutions and publishers aren’t very fond of Ebay sellers. After some scary lawyer phone calls and emails we had a hard lesson learned.

Lession Learned: Just because someone else is doing it doesn’t mean you should too. Quite obvious right? Lets hope it is for you.

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If your itching to make a website and can’t think of anything, maybe try one of these ideas. These website ideas are far from original but still profitable because the originals were so damn good. Here is the list of 5 sites that have been there done that and waiting for you to recreate.

Number 5: Pixel Advertising
Famous Website: http://www.milliondollarhomepage.com/

Alex Tew’s Famous idea of selling one million pixels for $1 each! He managed to $1,000,000 dollars worth of pixels and this website is forever is legacy. He sold the pixels as advertisements and because of sheer volume the site sold out quickly and the homepage still gets lots of traffic.

What you can do?

Because of the popularity of his website many other websites launched to copy. There are many pixel advertisement scripts out there for pay and for free. I’ve managed to find one free a while back but I can’t remember where. Google is your friend for finding one Set up a free pixel advertising website and slap on some Adsense ads

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Have you heard of High Yield Investment Programs(HYIP)? If you have, I hope you haven’t lost any money. If you haven’t lets try to keep you from wasting time and money. Now it might be unfair to label all HYIPs scams but the fact is the majority of them are and almost always fold within time.

So what exactly is an HYIP?

HYIPs refers to an investment that claims to give you outrageous return on your money within a short period of time. Many of these sites take your money and claim to do some sort of investment and in return give you very high interest rates. Rates and durations go anywhere from 15-1000% and days to months!

Searching for different ways to make money online I stumbled upon these programs. Many sites even have high group of followers and special sites in just reviewing the illegitimacy of all these sites. Most HYIPs have very little information about their investment, management and company. The information given is usually very vague but convincing for the money hungry.

If it sounds too good to be true then it most likely is! Now with that out of the way how exactly do they scam?

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Short answer: Yes

BUT it won’t be easy, now lets explain how and why.

If you are selling an item for $25 or less there will be an 8.75% final value fee (plus 3.50% for items over $25) . If Paypal is payment used there will be an additional .30 cents + 2.9% fee.So for an item around $25, Ebay will jack about 15% depending on your initial listing price. Here is a calculator you can play with: http://www.ebcalc.com

Now lets get to the real meet of the problem. Now I said its possible and you want to know how right?

Now these prices were listed if you wanted to sell your item one by one. For example if you use a dutch auction or have enough volume to create a Ebay store you can pay a monthly fee. Let me share an experience Nathan and I went through in our earlier Ebay careers. We were able to write and publish our own eguide to Final Fantasy XI. This was a great opportunity because the game was new and no others have had the idea yet. We sold the guide for $6.99 each and to our surprise we were able to sell upwards to 100 guides. The problem came when buyers of our guide began to sell our guide as theirs. Possible deterrents of this problem are to watermark your PDFs with your name and report listings to Ebay. In our situation Ebay was not too helpful in canceling fraudulent auctions. To counter this we updated our ebook and noted these updates within our auction.

You must be asking well what if I don’t want to write a ebook/eguide? How will this article be helpful for us? Well the second half of this article is for people like you. This idea will not make you rich beyond your dreams but if dedicated and with research you can make some extra money.

The best possible way to make money on Ebay is to sell something you have alot of and costs close to nothing. This is on the same line as selling ebooks and eguides but with a slight twist. Purchase ebooks and eguides that have full resell rights. If you have read this far then you have probably heard this before, so why is this idea special right?

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