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Alternative Investments: Peer-to-Peer Lending

On Minimalist Wealth

Key Points:

+P2P Lending has a history of high returns and low volatility, particularly for larger investors.

+The time and skill requirement is low, making it great for passive investors.

-It is tax-inefficient, particularly for investors of high risk loans

A unique way of investing that has been around for less than a decade is Peer-to-Peer Lending. In P2P lending, loan-seekers seek loans directly from individuals rather than banks (who loan money using deposits from individuals). This is how the process works:

What is a Credit Score?

On Minimalist Wealth

If you will ever need a credit card, loan, or mortgage, then credit score is very important to your wealth. It is an essential component of minimalist wealth because getting good credit takes little effort but reaps huge rewards.

A credit score is what lenders use to determine how likely you are to pay them back.

Why is Credit Score Important?

If you have a low credit score, lenders will lend you less money at higher interest rates or even not at all. It part of why being poor is so expensive. Failure to be prudent about credit will result in lots of pain when you inevitably need a loan and are only eligible for loans with terrible terms from loan sharks like Frankie “The Scalpel” Vito and Wells “We Don't Give a Fuck About You” Fargo.

How Can I Get From Good to Excellent Credit?

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