ST Alpha - "As with any loan/investment, you can lose up to 100% of your investments." (Reading a Post)

SlickerTalk
Search Archives
The Leaderboard
The FAQ

Down to Post

Backboards:

Posts: 164

In response to "are you guaranteed your baseline investment in any way, or can you have 100% loss? -- nm" by colin

As with any loan/investment, you can lose up to 100% of your investments.

Posted by ty97 Apr 16 '13, 09:33

Loans can and do default. As with anything, you diversify across hundreds of different notes.

Like Kiva, you don't have to fund an entire note. You pay as little as $25 toward a note and do that for lots of different notes. Then if a few default, the interest from the others will offset to make for a worthy return still (if properly diversified, and in theory)

Responses:

one last question (i'm interested :) ) - how is income from these loans taxed? -- nm - colin Apr 16, 09:38 1
- They issues a 1099-OID apparently. It's interest so standard marginal tax rate applies. -- nm - ty97 Apr 16, 09:43

Post a message top

As with any loan/investment, you can lose up to 100% of your investments.

Replies are disabled on threads older than 7 days.