Last month my wife and I decided to donate 50% of all income from this site to charity. We chose Common Hope to receive these donations, an organization in Guatemala dedicated to the education of Guatemala’s children. I’m happy to report that in January 2008, DR received $846 in revenue, resulting in a donation to Common Hope of $423. That brings our total donations to Common Hope in 2008 to $1,333.
Financial goals are a critical component of financial planning, and charitable donation goals are no exception. So after giving a lot of thought to what we might expect in 2008, we’ve decided to set as a goal giving $10,000 to Common Hope in 2008. Of course, this depends on how much revenue this site generates, but $10,000 would be a real challenge and would go a long way to helping children in need. I’ve added a progress bar in the far right sidebar to track our contributions to Common Hope. This goal seems impossible, but why not aim high.
Of the remaining revenue, $23 went to the buying the B share through ShareBuilder. To date we’ve allocated a total of $933 to the B share. We are using ShareBuilder’s automated investment plan to make these purchases. It’s a convenient and inexpensive (just $4 per trade) way to make relatively small investments each month. (Update: As a reader pointed out, the $4 per trade applies when you set up automatic investments to occur on one or more Tuesdays per month. Otherwise, trades are $9.95.) I’ve initially set the plan to buy $500 worth of the B share on the first Tuesday of each month. The first transaction was executed yesterday. We’ll see if revenue from DR will be sufficient in coming months to continue investing $500 per month. If not, lowering the amount on ShareBuilder literally takes less than a minute.
I’ve invested the remaining $400 from January’s revenue in loans on Lending Club and Prosper. My current average interest rate is 14.85% at LC and 11.50% at Prosper. Of course, these loans are new and the interest rate does not reflect fees that must be paid to LC and Prosper, so I’ll update the data each month to track how these loans are performing. Also, I’ve taken a different, riskier approach at LC, which explains why my interest rate is higher on my LC loans than it is for my Prosper loans. I’ll write about that approach and the 3 major investment risks that P2P lending presents (borrower default is not the only risk of P2P lending!).
All in all I was happy with January income, and am even happier with the way February is shaping up. As always, when it comes to telling this part of my investing story, I do so to demonstrate the power of small, consistent investments. A year from now we’ll look back at this post and compare my ShareBuilder, Lending Club and Prosper accounts then with where they are now. I hope you’re not just reading along, but rather actively participating in your own investments.
Published or updated March 15, 2013.