Micro loans. A good idea?

[Balog]

Ok, what's your idea of decent?

Money market funds are highly secure, turn a little better than prime, and can be liquidated in 24 hours.
CDs can be purchased in many amounts, usually $1000 or more, and I see a few paying 3% APY for 30-day terms.
Bond funds (which aren't terribly different from money market funds) are highly regular and pay decent rates.  Some mixed funds (look for "income" funds) turn maybe 5% and contain some equities that also offer capital appreciation.

If you don't have a lot of emergency expenses, a short-term bond fund will probably provide sufficient liquidity, and will pay a bit more than a money market.

Well, as I've said about once per post, I don't know jack about investing. Can someone point me towards some decent resources to learn about my options?

[Azrael256]

There's a book that I highly recommend called "The Intelligent Investor" by Benjamin Graham.  You could very well read that book, nothing else at all, and make good returns for the rest of your life.  Nothing spectacular, mind you, but you would do better than most.

Then... fund an account somewhere.  I would stay away from straight-up trading services like e-trade.  They're just commission houses, and will provide little in the way of profitable funds.  Open an account with Schwab, Vanguard, etc. and engage in some of the safe trading that the book recommends to build the core of your investments.  Vanguard is, actually, the one I would recommend the most, as they usually have the lowest fees (watch out for "expense ratios" when you buy funds).

I would not recommend buying bonds or equities directly until you have built yourself a model portfolio and tested it for awhile.  You can learn by doing with Monopoly money just as easily as you can with real money, and it doesn't actually hurt you if you blow it completely.

[RaspberrySurprise]

To me a sentence with the words "emergency money" and "investing" in it about the same subject seems like saying "square wheel." Maybe I'm just paranoid though.

[Racehorse]

I didn't read through the whole thread, but the kind of people who would be borrowing your money are not likely to be a good credit risk. Why would they want a micro-loan at 15% interest? Probably because they can't get anything else. If they have good credit, they can get a credit card for 15% or sometimes less. If they don't have good credit, I wouldn't want to loan them my money. There's a reason (beyond greed) that the payday lenders charge astronomical rates of interest. They have to write of a substantial portion of the loans they make.

[Brad Johnson]

Why would they want a micro-loan at 15% interest? Probably because they can't get anything else. If they have good credit, they can get a credit card for 15% or sometimes less.

They aren't taking out the loan at 15% interest.  He's (supposedly) getting a 15% return on investment.  The borrowers are probably taking it out at 20, 30, or 40% interest with the middle-man pocketing the difference.

Brad

[DustinD]

What about paying extra principal on a home loan, or better yet on a car loan, if any exist? If you do that make sure to write "extra principal" on the comments section, check the fine print, or maybe call them first to make sure the extra money does not go towards interest due at the end of the loan, which in my opinion is borderline theft. Doing this on a home might a bit more long term than you wanted though.