As we seek to make this lending more palatable for the average American investor, it’s a really good idea to buttress the narrative with emotional connection. Facts can only take us so far. For instance, you can try to use facts to convince your friend that his cigarette smoking is a terrible habit. But if you just dryly cite smoking as the leading cause of death in the nation, he will probably just laugh you off (emotion you off).
Emotion is More Powerful than Fact
If you want to actually have a shot at getting somebody to quit smoking, you have to get emotional, like through staging a community intervention. Being surrounded by a naysaying circle of his closest family and friends would communicate truth to your friend in a much more powerful way.
In many ways, peer to peer lending is no different. To become a common societal practice (like mutual fund investing is today), it will need to dislodge a portion of what is already there. And while it may make factual sense to include peer to peer lending as a portion of one’s investment (good returns, low volatility, liquidity, etc), many people just do not have the same emotional connection and trust with it like they do with investing in the stock market.
Reader Stories, launching today, will be permanent fixture of LendingMemo going forward. We hope to highlight the experiences of individual peer to peer lenders, turbocharging this asset class with emotion and trust.
Share Your Story, Get Coffee
Getting spotlighted on LendingMemo is simple. In 1-3 sentences each, answer the following questions:
- In a sentence, where do you live and what do you do for work?
- How did you discover peer to peer lending?
- What convinced you to take the plunge and open an account?
- What is your return today? Are you happy with it?
- What does your family or friends think of your investment?
- Has anything been disappointing or unexpected?
- What is the best part about peer to peer lending?
Email your answers to readerstories|at|lendingmemo.com with two attachments: (1) a picture of you or your family & (2) a screen grab of your Lending Club or Prosper home screen.
The Opus of Stumptown Coffee
Stumptown Coffee, for those not in the know, is one of the best coffee roasters in the world. They were recently rated #2 in the country by Thrillist (See: The Top Coffee Roasters in the US as Voted by Super-Serious Coffee Nerds). Plus, Stumptown has its Seattle roastery on the same street as LendingMemo’s 12th Ave office; it’s actually just a block away. So if your story gets selected for a post, I will personally send you a bag of just-roasted Stumptown coffee.
Now, let’s meet our first reader.
Reader Story #1: Huntly from New York
#1. Where do you live and what do you do for work?
I live in New York City and work in digital marketing.
#2. How did you discover peer to peer lending?
I heard about peer to peer lending around a year ago from a friend. I didn’t think much of it until I saw a few news articles about it and heard that Google had invested in Lending Club, the bigger of the two peer to peer lending companies.
#3. What convinced you to take the plunge and open an account?
After becoming interested, I started browsing the web to understand how it worked. After seeing the returns a lot of other people were getting, I wanted in on the action. Still a little suspicious, I asked my friend (the same one who told me about it in the first place) what he was earning, and he literally logged in and showed me how his account was earning 15%. I opened an account the next day. [Trust! – Ed]
#4. What is your return today? Are you happy with it?
My account is brand new, so the current return is really high: 19%. But compared with what almost every other investment out there is earning, I am definitely happy with this return.
#5. What do your family or friends think of your investment?
My friends who are on Lending Club or Prosper love my investment. Everyone else begins a bit skeptical, but once they understand how it works and that the seemingly high returns are possible, they become interested. As a result, two of my friends actually just opened their own accounts with Lending Club.
#6. Has anything been disappointing/unexpected?
The only thing that was unexpected was how much detail you get to see about each borrower before you decide to lend to them. For me that has meant thinking carefully about each loan I make, spending time learning a lot about investment strategy on websites like LendingMemo.
#7. What is the best part about peer to peer lending?
I would say the best part about peer to peer lending is that, as an lender, you are helping improve your financial situation while at the same time helping other people improve their financial situation. Investors get to earn high returns and borrowers get lower interest rates than those offered by banks. Everybody wins (except the banks).
Thanks Huntly. Can you email me your mailing address?
Want to be featured next? Email readerstories|at|lendingmemo.com.
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