Join Now   Sign In | Help


Invest Your Tax Rebate AND Help the Economy

02/13/08 posted by Prosper Blog    

Guest post by Brett of Personal Loan Portfolio

Although the tax rebate is not yet finalized, many people are already mentally spending the money. Most people only consider the options: save or spend. I have noticed many finance bloggers already announcing their plans to save the rebate. Other people feel it is a patriotic duty to spend it. I believe that the choice is personal, but I have an idea to help resolve this dilemma.

Paying off high interest debt or saving an emergency fund should be your first choice of uses for the money. But if you do not need the money for those purposes, should you invest or spend the money? When congress passes a rebate, they hope that Americans will spend the money to lift the economy. However, the majority of Americans saved, invested, or paid off debt with their 2001 tax rebate. According to one study, only 22% of people said that they spent the money.

Investing in stocks (with the exception of a public offering) does not help a business grow. Investing in the stock market only passes money between investors. There is an alternative to investing in stocks that will allow you to invest your rebate and stimulate the economy - Prosper loans. With a Prosper loan, you can put your rebate in the hands of people who will spend the money stimulating the economy. Dilemma resolved. You can earn a reasonable return on your investment and do your part to help the economy with your tax rebate.

As you search for Prosper loans, limit an advanced loan search to borrowers who need the money for Small Business or Home Improvements. Personal loans and Other loans may also be good categories but you must read the descriptions to ensure that the borrower is planning to spend the money. Funding a vacation, a kitchen remodel, or a wedding are just a few of the opportunities regularly available for lending on Prosper where the money will be used to help the economy.

Investing your tax rebate on other people’s spending using Prosper loans eliminates the false choice of spend versus save. When someone asks if you are spending or saving your tax rebate, you can honestly answer “Both!”

Brett is a relatively new Prosper lender who writes about his lending experiences on the blog Personal Loan Portfolio.


Leave a Comment

(required)
(required) Email will not be published.
 

Comment Policy

 

*
To prove you're a person (not a spam script), type the security word shown in the picture. Click on the picture to hear an audio file of the word.
Click to hear an audio file of the anti-spam word

2 Responses


bignosebob | February 13th, 2008 at 4:12 pm

I would only like to add the option to “give” as opposed to just saving or spending the rebate–as in always setting aside some amount of money for charitable causes that match your values. I suggest doing all three (assuming you have an emergency fund and are taking care of your family’s needs).


Chrisfs | February 14th, 2008 at 12:28 am

If you have a decent amount in your emergency fund, and no high interest debt, then Prosper is a good place to put it. Ironically, I was wondering today, how many suggestions on what to do with your rebate, will be produced between now and May. I can see stores having sales, mutual fund companies doing mailings, nonprofits doing mailings, debt collectors making extra calls. Everyone is going to want a piece of it.


Posted in Borrowers, Get A Loan, Lenders, Personal Finance Education

 

Get Involved

Subscribe to Blog RSS Feed
  • Google Reader or Homepage
  • Add to My Yahoo!
  • Subscribe with Bloglines
  • Subscribe in NewsGator Online
  • Add to My AOL

Want to contribute to the blog? Submit a Post

Lenders

The Results From the Legal Collections Test

By Doug Fuller on 11/3/09   [ ]

Before discussing the results of the test, let’s review what we were testing. In November 2007, 74 loans that would have been included in the December Debt Sale were selected for a test of applying a legal collections strategy. These loans had an outstanding principal balance of approximately $705,000. They were placed at Hunt & Henriques, a prominent [...]

Read More

Collections – Hardship Arrangement are Benefiting Lenders

By Doug Fuller on 11/2/09   [ ]

One of the key challenges in collecting on unsecured installment loans is providing the borrower an incentive to continue to making payments when they come under financial distress. If you don’t make a payment  on a credit card you can’t keep charging on it. In the case of a house or a vehicle loan, the lender [...]

Read More

$50 Sign-Up Bonus for New Lenders!

By Prosper Blog on 10/23/09   [ ]

Starting today new lenders will receive a $50 sign-up bonus to use for their first two bids on Prosper loan listings. This promotion will last until 1,000 new lenders have signed up and received their $50 bonus.
Prosper lenders have been experiencing positive returns from investing in our new borrower loans, (with an average borrower credit score [...]

Read More

« Older Entries

Monthly Archive

Home | Personal Loans | Invest | Trade | Online Investing | About Us | Help
Site Map | Developers | Investment Opportunities | Privacy & Security | Policies | Terms of Use | Legal Agreements | Legal Compliance | Prospectus

Prosper, Prosper.com, and the Prosper logo are registered trademarks or service marks of Prosper Marketplace, Inc.
Copyright © 2005-2009 Prosper Marketplace, Inc. All rights reserved.
This site has chosen a Thawte Certificate to improve Web site security Site privacy statement reviewed by TRUSTe