Prosper is My Gambling Account

I commented on a popular personal finance blog that my Prosper account is "like gambling." Let me clarify. I started on Prosper because someone I knew needed a small loan. I offered to help him write his request and fund a small percentage of it ( a few hundred bucks). I think that any loan to family or friends should probably be considered lost money. I hope they pay it back, but at the same time I wouldn't lend any money I couldn't live without.

So I invested a few hundred bucks I could live without. So far this person has made timely payments and I expect he will pay on time for 36 months. I then reinvest all proceeds into new loans. If all the loans default, I will not be that upset. If am skilled at picking good loans then I will be rewarded with a very small residual income stream. Either way, I will be fine.

I am not much of a gambler or a splurger. However, I certainly know people who have lost a couple hundred bucks at casinos or betting on the Superbowl. There are probably millions more who waste money ( on what I consider "stupid stuff") on an almost daily basis.

I highly doubt I will lose any money on Prosper. At worst I expect to break even. To me it's a fun and interesting use of time and relatively cheap. I probably will not be investing any more except the funds already in the account.