We’ve been talking about consistency this week. About developing small habits that lead to big results.
For me, one of those habits is to add $100 worth of new notes to my crowdlending portfolio every Monday morning. This doesn’t have much impact on my finances at first… but over time it becomes quite meaningful.
Now, crowdlending is an alternative to traditional bank financing. It allows investors to become the bank and lend money to borrowers for a specific purpose. Debt consolidation, home improvement, and medical expenses are three of the most common purposes.
This is done through a crowdlending platform.
Borrowers apply for the loan and provide their financial information. Then the platform pulls their credit report and assigns the loan a specific risk rating. This is what determines the interest rate.
From there the loan is added to the platform’s investor portal. This allows investors to browse the listings and choose which loans they want to contribute to. And in return, they receive monthly principal and interest payments… just like a bank.
What I love about this approach is that, if we’re consistently growing our loan portfolio, our passive income snowballs in a big way. Let’s illustrate this with a few examples.
Suppose we start with $500 and begin building our crowdlending portfolio. And let’s say we follow the rules of success and kick in an extra $100 every week.
If we assume a 9.2% return on the portfolio, which is what I’ve experienced, we’ll have a nest egg of $25,923 in four years’ time. Not too shabby.
Now let’s say we start with the same $500, and then we kick in $200 more every week.
Assuming the same rate of return, our portfolio will balloon to $51,182 in four years. Who wouldn’t want to turn $500 into $50,000 in just four years?
And here’s the thing – there’s no market risk involved here. Unlike a stock portfolio, our loan portfolio will not fluctuate in value every day based on how the stock market moves.
That makes it possible to earn a high rate of return consistently.
Sure, some loans won’t work out for us. But we account for that with equal position-sizing. Which is to say, we put the same amount of money into every loan we fund. If we’re kicking in $100 or $200 a week, $25 per loan will do the trick.
So this is a simple yet powerful way to build a small nest egg. The key is to take consistent action.
And that’s why we recently put together a new course on the matter. We call it The Income Snowball Strategy.
The course lays out all the steps to building a crowdlending portfolio. We also teach an expert approach to risk assessment. If we’re going to become the bank, we better think like the bank.
And here’s the best part – right now we’ve got this course bundled together with our flagship program on strategic asset allocation. The bundle enables investors to get both courses for the price of one.
This offering will be live until Saturday at midnight Eastern. More details right here: