I’m addicted to Money blogs. One that I read with monotonous regularity is Five Cent Nickel. I know that’s a US site, but a lot of it still holds valid, irrespective of the particular market you apply the principles to. One of their posts on The Lending Club got me started looking for alternatives.

I’d been thinking about “where do I put my money once all my debts are paid?”, but this truly spurned me into going from ‘thinking’ to ‘doing’.

An ISA is a must – it is, after all, tax free. Most are offering about 3% at the moment. But I can only put £3,600 in one each year. That won’t take long.

A Regular Savings Account comes next, where you save an amount every month and get a bonus at the end of the term. Most of these are coming out at 5% right now. However, there are limits on how much you can save each month and they seem to range between £250 and £500. That won’t cover everything.

That just leaves a standard savings account for the rest, paying (if I’m lucky) 0.75%.

Rubbish! So I’ve been considering alternatives.

Stock trading is one option. Play your cards right and you could see compounding returns year on year. Are we at the bottom of the stock market crash right now? Who knows. That is the question. There’s also index funds, OIEC’s, mutual funds, futures, and almost as many stock investment options as there are people in the world. Stock trading is a risky venture but it does come with some reasonable rates of return for careful choices. But to make the most, you need to risk the most. That doesn’t sit comfortable with me right now but I’m working on myself. You have to speculate to accumulate, after all.

Then, there’s Zopa. It’s effectively a Lending Club. Loans cutting out the middle man (e.g. the bank). You lend as little as £10 and up to £25,000, to people at different rates. They’re all credit checked, and Zopa does any debt chasing on your behalf. Seems interesting. Returns are upwards of 12% in some markets, and if you lend short-term to A-rated borrowers, still around 6% (after fees and bad debts) so it’s still better than any of the High Street saving products out there.

I’ve just put my first £10 on the market to play with.

What do you do?

UPDATE: Yikes! In the time it took me to write this post, my £10 offered has been taken out! A Young borrower from York looking to finance a holiday has taken it as part of a 36-month loan at a rate of 10.4%.  In 3 years I may, if all goes well, have £11.04 My £10 only makes up a small fraction of the £2,000 he borrowed in total. Good luck megzanator! Hope you enjoy your holiday!

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