Money for the Masses

A venue to discuss how person-to-person lending could benefit borrower, lender and our global society.

Tuesday, October 31, 2006

Baby Boomers Heart Prosper.com?

Of the 100,000 members of Prosper.com, I was wondering how much Prosper (or Zopa) has focused on one particular demographic, the Baby Boomers. Here is a class of lenders that might be more than happy to participate in this medium. In a climate where pensions are drying up or disappearing altogether, layoffs are rampant and a huge amount of people are steadily moving toward retirement age without having good ways of preparing for it (read: investments) - this "new asset class" could very well become just that. According to the Prosper.com site a very low risk (AA borrowers default 0.20%) loan can return anywhere from 9-12% conservatively. In the current investment climate, with questions about the repercussions of the housing boom still weighing heavily we can't know how the stock or real estate market will react. At the time of writing, some of the top yielding savings options are (according to http://www.bankrate.com):
  • For 1 Year CDs: 5.71% APY
  • Savings Accounts: 5.5% APY
  • Corporate Bond Funds: 5.32-6.28% (2 years, 30 years) according to rates published in WSJ last Friday.
Well...you get the idea. Prosper offers an opportunity like no other. And now it seems like there are people catching on. With usernames like "pensioner" and over $100k invested, I'm guessing that I'm late to this piece of analysis :). A more complete accounting of What's in It for You.

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