Just curious...any reason in particular that you chose to make it the Lost in the FOOD CHAIN: Prosper Lender Group rather than say a more generic ONet group?

Thought about Ned but that seemed to...Neddish. The :Prosper Lending Group part is just the name of this thread...fwiw.

So what happens next?

Well, I think we all need wait until they make the two small deposits in our personal checking/savings via EFT (like booting up a PayPal account, as I remember from years ago).

Once that happens, then we can see if anyone here is interested in the Travel Loan for the conference. If not, we can work together or individually to invest our own $$$ in $50 increments.

Peer to peer banking...possibly pretty nifty stuff. The management team is kick-ass, the model is very interesting, and the fact ON invested in it gives them a pretty strong seal of approval.

When I see stuff like http://www.zillow.com I wonder how real estate agents feel late at night. When I see things like prosper...I sense twitchy bankers too.

Hmm. I didn't give them any banking information and I can't figure out how to do so. Am I missing something?

The link is under Your Account, then Accounts tab

But, just to clarify, nothing is debited from our account until we approve a loan, right? Just not sure why I would add my bank information already.

Also, wondering whether funding decisions occur when all of us vote about it, or whether we individually offer money to individuals (though they individually come to us as a group).

Maybe I'll call you tomorrow to figure this out, Mark. Off to clean up the kitchen now.

Wicked, I've been wanting to play around with P2P banking for a while.

Count me in for 100 yankee beans, to go into the loan monkey slush fund to try and lend some mates some cash so they can come to the Chicago group hug.

Somebody tell me what to do next.

Great idea to start this up Mark, thanks. I was checking out Prosper the other day and I think it's a very exciting model, but it's a bit daunting to join if you don't know anyone in any of the groups. I've accepted your invite now and joined up and requested to join the Food Chain group.

Question: Was anyone else suprised how high the rates money is being leant at seemed? I found rates to be suprisingly high. When I first heard about Prosper I was thinking of applying for a loan to get some more working capital for my business, but after looking around I decided I could borrow much cheaper elsewhere and probably make money on the spread lending on Prosper... I'm not actually going to do that mind you ;) but I do find the rates to be surprisingly high. I'd like to help this site to Prosper--I agree that this could make bankers lose sleep and I love the thought of that!

What actions could we take now that would most help this site to really take off? It has the potential to go nuts, just as Paypal and Ebay did.

Mark Grimes said:

The link is under Your Account, then Accounts tab

There was no Accounts tab there under "Your Account" for me, but I followed your link and that worked. I looked for it over and over, finally searched the page to make sure I was not too sleepy. Thanks for the link.

Same for me. :-)

Off to a meeting, gotta be quick.

Greg, I'll send you an invite to join the group via email.

Stefan, wow...welcome back. Nice to see you here again, and nice to see you as part of the FOOD CHAIN prosper group.

Ted and Stefan, ahha...I think I know. First sign is as a member, then...

Click the lend tab at the top, then go thru the Become a lender now process.

I think that might work.

Glad to talk through it with you, Mark, and figure out a bit more how it might work.

What would people think about non-o.net folk joining the group? I have a few people who are intrigued by the P2P model and will throw in some money (though can't say whether that would be for the Chicago get-together). As I understand the group thing, it simply means that we share some kind of a bond, but all investment decisions are made individually.

>>What would people think about non-o.net folk joining the group?<<

You bet. As long as you know them. Right now anyway the group is set up in such a way that you must be "asked" or "invited" in. One of the members that joined FOOD CHAIN Prosper yesterday is a friend and CEO of a national wireless software company located in Portland.

>>I have a few people who are intrigued by the P2P model and will throw in some money (though can't say whether that would be for the Chicago get-together). As I understand the group thing, it simply means that we share some kind of a bond, but all investment decisions are made individually.<<

We share a bond as a group, but decide on the loans per person, and only with your own money. I'll let in people I know, and anyone that is a FOOD CHAIN member know can let in anyone they know too.

OK. It takes 2-3 days for Prosper.com two small deposits to hit your account. Once that's live (mine hit today), you confirm those amounts on their site then you can transfer some lending capital into your Prosper account...which can take 4-5 days. Following that, you can start lending.

The loans members are taking here are tied right into their FICO scores just like a credit card or any other instrument...if they default, a collection agency does their work.

lost in the FOOD CHAIN: Prosper Lending Group now has 9 members.

zounds.

So any money in my Prosper account is earning interest for Prosper, correct? Is there any reason you can think of to transfer into Prosper more than 4-5 days ahead of when you plan to make a loan?

Correct, no interest when it's just sitting there.

Keep in mind, you're going to be paid back in 36 monthly installments...with each loan you make. So you put in $100 loan and $2.77 plus interest comes back 30 days later.

I'm considering depositing one amount per month (not much, trust me)...then putting it, plus repayments up to that date back in thru the loan system.

Mark, thanks for the warm welcome. I'm very interested in helping the P2P lending concept grow. I'm happy to help with the O.net Chicago get together, but that's not my primary interest. Since I have been away from O.net, about a year though lurking a bit lately, I quit my day job of the last 10 years (consulting to non-profits on fund development) and have been building a business I started on Ebay 5 years ago as a hobby. That's really taken off now, I've just hired my first employee and I'm getting to where I have time and money to give again.

At some point I want to write something on the serious burn-out I went through and the exhiliration of being back in the for-profit sector where I make far more money for much easier work, receive a lot more appreciation in general, have less stress and get to work from home. I have gained some insight about the non-profit world that, when I get a second wind, I will be excited to go back and work on.

As I was raising millions of dollars for non-profits I used to teach my fundraising students that the competition is not other non-profits seeking donations, the real competition is the merchants of luxury and the money managers. Now that I have gone over to the dark side and become a merchant of luxury myself, I do feel the occasional twinge of guilt. But I'm having such a better quality of life with my family that the guilt quickly dissipates.

Without Ebay and Paypal and the shifts in commerce that they have driven, I would not be able to do what I am doing. Those shifts are allowing me to operate a high-end audio video dealership from an organic farm at the edge of a wilderness area 200 miles from the nearest city. Today, a truck came and brought me 3 sets of speakers that sell for $60,000. They had to drive through 2 herds of cattle to get down here. It's a funny picture really! Tomorrow I will ship one set of the speakers to a guy at Microsoft. Pssstt...don't tell him about the catle! I commute about 40 steps to my office building and spend time with my family throughout the day. My consulting practice used to keep me on the road up to 200 days a year. So this is very cush. 10 years ago, there is no way I could have done this. Now, it barely matters where I am--I can serve customers everywhere.

What all this is leading to is that I think the Prosper thing can be a very powerful tool for social change. It has the potential to allow people who cannot easily access capital to do so, and perhaps even more important for decisions about what to fund to encompass criteria that go way beyond FICO scores. I would be very interested in supporting certain people and certain kinds of business and I see Prosper as a way for people to find one another and make and receive mutually beneficial loans. Before online commerce grew to a certain stage there is no way I could fnd buyers for my esoteric high-end gear from here, but now it's easy. My hope is that the P2P lending concept will succeed tremendously and that social benefit will become a key factor in the pricing of loans, leading to a better world for all of us.

For example, we own and live on an organic farm. The money it loses has nearly bankrupted us (when I was working for non-profits) but we love it and have no desire to give it up. We pay market rates for our mortgage, and on principle we refuse government subsidies. But I believe there are people out there who support small organic farms and would loan to us at a lower rate because they would get an intangible return from being a part of something they felt was good. But I have no pratical way to reach those people or access that capital, so I pay a big bank. I would far rather that interest money go to somebidy nice.

I think the market for loan making that takes criteria of social benefit into account is huge and I would love to do anything I can to stimulate it (whether or not I ever get a below market mortgage for my farm). I am glad O.net is investing in Prosper (thanks!) and if I had big money to invest I would want to do that too.

So while I am happy to loan some money to help folks come to Chicago, I'd really like to see hundreds of millions of dollars getting moved into the P2P lending market and see the results from those shifts.

Stefan, I found your post fascinating, and experienced a twinge of envy reading about your organic farm. Nice one.

Mark, finally researched Prosper, love it. But Lenders need to be US citizens with all the associated numbers. I still want to play however. Happy to shoot you the cash and you invest it for me. Does that work for you?

Stefan. Great post and agree with you on so many levels.

Greg. Let me think about what we might be able to do. Investing someone else's money sounds challenging while maintaining separate records within one account sounds potentially cumbersome (and not sure what the personal tax consequences might be). Will ponder.

I hope you don't mind if I hop in here to ask you all to check off a short related poll.

Haney. Betcha coffee the 20-30% number is low. (though I hope it's right, heck, I hope that's high) Read something the other day about 55%+ of people (Americans) carrying balances of 7K+ on credit cards.

Can someone explain "merchant of luxury", and where the term originates if it is not original above?

I completed the poll but answered incorrectly (blame it on my sinus cold). I'd recommend revising it to read:

1. I have consumer debt (including car loans and credit cards; not including student loans or mortgages)

(I think that if you look at consumer debt you need to consider both credit cards and car loans.)

2. I have other debt (not including student loans or mortgages)

However, I'm really not sure what #2 is -- are you talking loan sharks, loans from family members and friends?

And I'm not sure how relevant the question about "I know someone who has debt" question is. Certainly that's everyone.

Anyway.

Michael Maranda said:

Can someone explain "merchant of luxury", and where the term originates if it is not original above?

Michael, I have used the term for years but I have no idea whether I coined it or picked it up somewhere (probably the latter). In the context of my work as a major gift fundraiser, I used the term to refer to the people who were always trying to sell my donors and prospective donors expensives houses, cars, planes, boats, toys of all kinds, and other luxury items.

Non-profits I worked with tended to worry about whether donors were giving more money to them or to other causes. They took a myopic focus on how the donor's total giving was being apportioned between groups. I focus on the opportunity to make the pie bigger. If, for example, a major donor is giving away 2% of her income, there is way more upside in getting her up to 5% than in beating out other causes for a bigger slice of the 2%. My thesis was that we, as fundraisers, should always remain focused on the fact that many (and probably most but I am being polite here) of our biggest donors were only giving a tiny percentage of their income to non-profits. Much more of their disposable incomes were being consumed on luxury items (or just stashed with money managers but that is a another discussion). Therefore, if we could replace the emotional need for many of these luxury items through meaningful engagement with the charity and its mission (for example, replace some of the satisfaction the donor could get from buying a new yacht with the satisfaction of buying a new center for special needs children) then this would be a more effective strategy to increase donations to our group than to attack the weaknesses of competing charities and try to get the donor to shift more of his giving to our group.

I have definitely seen cases where donors found the satisfaction of their philanthropic engagement (including giving, volunteer and board service, and other activities) replaced other very expensive hobbies and habits and became a source of tremendous joy. I think the main job of a fundraiser today is to cultivate these practices. It's NOT simply to get checks for your organization, but to build deep and lasting relationships that support the growth of philanthropy as what Peter Tavernise called a "Transformational Practice" in one of the early O.net threads.

Not only is there enormous societal benefit in channeling more money to good NPO's over luxury items, but there are huge environmental benefits as well. Many of the donors I worked with over the years had numerous homes, fleets of cars at each one, planes, yachts, and so on. All of these items embody a tremendous amount of energy including fossil fuels and require tremendous energy to maintain as they sit unused most of the time. The "need" to have these items is an emotional one and it's one that can be replaced or transcended by engagement in a greater purpose.

And hence my occasional pang of guilt now that I have gone over to the dark side of peddling luxury items to the rich myself! It is just so easy, and fun really, compared to working in non-profits with people constantly focusing on scarcity and lack and complaining about nearly every piece of political and economic news that comes down the pipe.

Sorry to be off topic here though--this really isn't relevant to Mark's topic in this space. I had a great time over at Prosper.com yesterday and discovered their discussion forums which really led to a lot more insight into how things actually work over there.

Maybe I should start another thread somewhere else for this. I have been away from O.net so long I don't actually remember how to do that though.