Hey guys! My aim if going to be the exact opposite of your kooky relative who is always giving you unsolicited stock tips. Instead, I would like to discuss and write about thoughtful, useful, and actionable financial ideas.
So, I decided to take the time to explore two alternative methods I might go to build some side income. My goal is to research and develop a process that would allow all my hard work keep earning me residual income. GAH! Pretty pretentious sounding, but stick with me.
Idea 1 - Digital Cash Machine
I'm currently user of Prosper.com, where I have noticed that there is a considerable difference between the rate at which an AA level borrower pays versus that of an A or B would. There is definitely room for arbitrage there. The process would look like this:
I borrow $2000 at ~7.4%(I'm around AA or A), then re loan those funds across notes on the level directly below me. The overall net would be only about 1%($20), but that's money I didn't have to work for AND it would boost my credit score.
Would this be worth the amount of risk/exposure I'd have? I'd be responsible to pay back the loan even if I didn't collect all that I had received. Of course I could pay it back faster than required and therefore make a better margin. Hmm.
Idea 2 - The Dividend Delivery
After looking at dividends .com, I've found a number of stocks that have a 30 year history of paying regular dividends. Most of these range between 3-5% of their current market value, meaning that's my effective earnings each year regardless of if there value goes up or down.
Please let me know your thoughts!
http://www.addpoll.com/solomonsk5/poll/202616
Ps. Does anyone know how to embed a poll directly into a site? Simple would be preferable to refined, but any suggestion or thoughts help. Have a great day!
----------------------------UPDATE 5/14/12----------------------------
So I have decided to use Scottrade as my online broker. Their $7/trade is competitive and the minimum balance is only $500. When you sign up they ask you to fund it and drop-off a sign-up form at a local office, but seem fairly lenient about enforcing it- It's been setup for about two weeks now and I haven't been warned or anything.
Oh yeah- Free trades for both of us if you'd like to let them know I pointed you in their direction!
Idea 1 - Digital Cash Machine
I'm currently user of Prosper.com, where I have noticed that there is a considerable difference between the rate at which an AA level borrower pays versus that of an A or B would. There is definitely room for arbitrage there. The process would look like this:
I borrow $2000 at ~7.4%(I'm around AA or A), then re loan those funds across notes on the level directly below me. The overall net would be only about 1%($20), but that's money I didn't have to work for AND it would boost my credit score.
Would this be worth the amount of risk/exposure I'd have? I'd be responsible to pay back the loan even if I didn't collect all that I had received. Of course I could pay it back faster than required and therefore make a better margin. Hmm.
Idea 2 - The Dividend Delivery
After looking at dividends .com, I've found a number of stocks that have a 30 year history of paying regular dividends. Most of these range between 3-5% of their current market value, meaning that's my effective earnings each year regardless of if there value goes up or down.
Please let me know your thoughts!
http://www.addpoll.com/solomonsk5/poll/202616
Ps. Does anyone know how to embed a poll directly into a site? Simple would be preferable to refined, but any suggestion or thoughts help. Have a great day!
----------------------------UPDATE 5/14/12----------------------------
So I have decided to use Scottrade as my online broker. Their $7/trade is competitive and the minimum balance is only $500. When you sign up they ask you to fund it and drop-off a sign-up form at a local office, but seem fairly lenient about enforcing it- It's been setup for about two weeks now and I haven't been warned or anything.
Oh yeah- Free trades for both of us if you'd like to let them know I pointed you in their direction!
Referred by: SOLOMON KNOWLTON
ReferALL code: OPRH6640
ReferALL code: OPRH6640
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