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| PLW recommends Lending Club |
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New investors who sign up via this link
earn a $25 bonus from Lending Club |
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Tell Friends
Everybody is either a borrower or an investor, and many are both! |
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| Yes! I would like to receive a quarterly analysis of peer lending site performance |
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Meeting your retirement goals is easier with Peer to Peer Lending. An IRA following the PeerLendingWealth plan means your money grows faster. |
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Why Your IRA should be in a smart Peer Lending portfolio |
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| The answer is in two words: COMPOUND INTEREST. One of the few favors the government provides you is the ability to grow your IRA tax free until your age-eligibility kicks in, when you pay the taxes on the total gain. This is deferred tax, not tax avoided, and everybody with an IRA should understand three things: |
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| 1) High interest rates make a huge difference. |
| 2) Compounded high interest rates can change your life. |
| 3) Compounding interest in a tax deferred IRA grows the same money faster than a regular taxed investment. |
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| Here's how it works. Per the chart below, the ten year effect of compound interest at 11% versus 3% is staggering: It's a difference of over 500% (a gain of $198,000 versus a gain of $35,000). What is even more staggering is the impact of compound interest over 15, 20 and 25 years. As you can see in the chart below, $100,000 at 11% grows to over $1.5 million in 25 years. This is how an average earner can create real wealth. |
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| Tax Deferred Compounding: In this example a $100,000 IRA is compounded without tax for 25 years, the gain would be taxed at the prevailing rate on a tax deferral basis. |
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I recommend experimenting with a compound interest calculator to get a better feel for what this really could mean for you. |
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I also recommend that you review historical stock market gains. The conventional wisdom is that you should target getting an 8% annual return from the stock market, but not on an annually predictable basic, but over the course of 10-15 years. We all know now from personal experience that the swings in the stock market can be devastating, and can come at the worst of possible times for some. |
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When you compare the predictability and liquidity of Peer Lending with other investment options, the choice is obvious. |
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Retiring Better |
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| Live Better, Retire Better: In today's economy people are relying more and more on their own savings for the lifestyle elements of retirement. Your government and pension incomes will keep you fed and comfortable, but they wont help you travel, buy new cars, enjoy country clubs, or pay for second homes. When you have your fixed income investments with Peer Lending, you increase your returns from 2%~3% today, to 9%~12%. That is a huge difference in your overall discretionary spending funds. |
| Example: In this example, we assume that a retired person wants to maximize the monthly income for twenty years drawing down the principal and interest gains, resulting in a zero balance. As shown above, $250,000 invested in Peer Lending with Lending Club earning 11% would pay over $2,500 per month, before taxes, for the full twenty years. This is nearly double the amount you could draw at 3%. It is not hard to imagine the difference that this can make for you. |
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Plan Now |
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If you are under 50 you are probably disillusioned with the stock market, and you can no longer count on the value of your house growing to become your retirement savings. Add to that the continued advancements in medicine which are extending life expectancy, you could live to be 85, or 95? What are you going to do? |
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The combination of moving your IRA, as well as a portion of your investments outside your IRA, to Peer Lending is powerful. You would reap the gains of twenty or more years of high compounded interest, and then start to withdraw from your monthly investment gains to fund a retirement that gives you freedom to do the things you've always wanted. |
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Example: 30 year-old |
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$5000 added to your Lending Club IRA every year from the age of 30 until 65, earning at 10% yields over $1.5 million when you reach 65. This allows you to withdraw $150,000 every year, pay taxes on the amount withdrawn, and still maintain the $1.5 million base you had at the point you reached 65. See your financial advisor for the best withdrawal strategies for your particular situation as you are required to withdraw from your IRA at a certain rate, but suffice it to say, you are setting yourself up quite well. Note that interest gains are taxed at the ordinary income rate, while stock growth gains are taxed at the prevailing capital gains tax rate, which will typically be less than the ordinary income tax rates. |
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Example: 48 year-old |
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You transfer your current IRA of $125,000 to Lending Club, and add $15,000 per year for 17 years (through age 65). At an earning rate of 10% per year, your pre-tax total grows to over $1.3 million. You can withdraw $130,000 per year after age 65 and maintain principle while still paying taxes. When added to your other retirement incomes, you have a substantial retirement budget. Most importantly, the Lending Club returns will most likely maintain a steady increase over inflation, so even in inflation adjusted dollars, you are well ahead. |
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 2009 Rosso Cavallo, inc. All rights reserved. The peerlendingwealth.com site, and its parent company, Rosso Cavallo, Inc. make no warranties, expressed or implied. Financial investing involves risk by nature and you need to evaluate your options with your own financial advisors. Questions or comments can be addressed to info@peerlendingwealth.com |
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