Peer to Peer Lending Small notes Vs Large Notes
"I started with lending club about a year ago.  I love it.  It has been insightful.  Off topic, but I am in a loan to a guy who make 120K a year and is regularly late and has a pretty high interest rate.  Crazy. You gain some economies of scale by going with a bigger note.  I have $100 notes that I get hit for 2 or 3 cents for a fee, where $25 notes are always a penny.  However, I don't think that should be your deciding factor. I scale my note purchases based on how much I like the status of the borrower.  For example, I did $100 (which is currently my max) for a guy with a reasonable loan amount 16K, a stable work history (15+ years), a great credit history, and a great interest rate (16.9%).  If one of those things were a bit out of ""whack"".  I might go $50, two $25.   I prefer 36 month notes, really 5 years to get out of debt?  It is unlikely to happen IMHO. Keep in mind that if you invest $100 in a loan, then you get one $100 note.  You can't break them up into 4 $25 notes.  For that reason, if you are likely to want to sell the note prematurely, keep it at $25.  The market is greater.   I've had a lot of success using the trading account, buying further discounted notes for people who want out of lending club, or get spooked by a couple of late payments and a change in billing date.   Another advantage of using the trading account is you start earning interest day 1.  I've had new notes take a couple of weeks to go through.   To summarize: There are some other things, but that is the main stuff I look at."
Peer to peer lending such as Kiva, Lending Club, Funding Circle(small business), SoFi(student loans), Prosper, and various other services provide you with access to the 'basic form' of investing you described in your question.  Other funds: You may find the documentary '97% Owned' fascinating as it provides an overview of the monetary system of England, with parallels to US, showing only 3% of money supply is used in exchange of goods and services, 97% is engaged in some form of speculation.   If speculative activities are of concern, you may need to denounce many forms of currency. Lastly, be careful of taking the term addiction too lightly and deeming something unethical too quickly.  You may be surprised to learn there are many people like yourself working at 'unethical' companies changing them within. Back end fees should not really matter much in DCA vs VA as they are both ways of deploying money in the markets and back end fees happen when selling not deploying.  The only difference I can think of would be if the back end fees have a holding period and if you need to take the money out before that period end some money may be subject to a higher fee.  The difference should not generally be large and since it is largely random whether DCA or VA deploys the capital more quickly it makes little difference. On a related note, DCA or VA makes little difference and when transaction fees are significant or time frames are long (retirement) generally, on average, both lose to lump-sum investing. Finally, as Chris mentioned mutual funds with load fees (especially back end but even front end) are considered poor investment choices as the vast majority don't give excess returns that justify the heavy fee load. Financial analysis is as much art as science, you need context to give advice on what to show.    If they hired you they believe in you and want you to succeed.  My advice is to take a lot of notes and ask a few questions but not too many, then think about situation and go back to ask a few more thoughtful questions.  Always ask if there's something been done before that may be helpful, as well as who might have done something similar recently.   Sorry if sounds condescending, not remotely intended to be, I've trained a lot of new peeps over the years.    Helpful if you can find someone who has been there a bit longer than You, but that you don't work for.  They tend to like to help bc they just went through what you're going through and know how best to informally help.  Also network with peers from school that have started similar jobs... good to have a few people to call to discuss/learn with.  Good luck. If you think you can manage the risk and the spread is ultimately worth it to you, there's nothing stopping you. I know in the U.S., in CA specifically, you need to have $85,000 annual income or net worth over some threshold to be able to loan more than $2,500 via peer-to-peer loan investing.  I've had an account at prosper since around 2010, it does pretty well.  It's made my taxes a bit more complicated each year, but it's been profitable for me.  I wouldn't lever up on it though. My Prosper Experience My experience with Prosper has generally been positive.  My real motivation for starting the account was generating a dataset that I could analyze, here's some of that analysis. I started the account by trickling $100 /month in to buy four $25 loans.  Any payments received from these loans were used to buy more $25 loans.  I've kept my risk to an average of about A- (AA, A, B, C, D, E, HR are the grades); though the interest rates have reduced over time.  At this point, I have a few hundred loans outstanding in various stages of completion.  In calendar 2015 I had a monthly average of 0.75% of my loans charged-off and about 3% of loans at some stage of delinquency.   I receive about 5.5% of my principle value in receipts on average each month, including loan pay-offs and charge-offs.  Interest and other non-principle payments comprise just shy of 20% of my monthly receipts.  Prosper's 1% maintenance fee translates to about 8% of my monthly non-principle receipts.  It's all a pretty fine line, it wouldn't take many defaults to turn my annual return negative; though in 5 years it hasn't happened yet.  Considering only monthly charge-offs against monthly non-principle receipts I had two net negative months in 2015.  I made about a net 4.5% annual return on my average monthly outstanding principle for calendar 2015.  When I log in to my Prosper account it claims my return  is closer to 7.5% (I'm not sure how that number is calculated). The key is diversifying your risk just like a bank would.  I don't know how the other services function at a nuts and bolts level.  With prosper I choose which loans to fund which means I determine my risk level.  I assume the other services function similarly.   Regarding collection of charged-off loans.  I don't know how much real effort is expended by Prosper.  I've had a few notes sold for about 10% of the outstanding balance; and I don't know who they were sold to.  Comically, I have loan that's made more payments in collections than when it was in good standing.  There is definitely more to this than handing over $15,000 and receiving 6% on it. But what about the following scenario which is my paraphrasing of a Nanex article (I'm hoping you can help clarify this for me).  1. I observe a 1,000 lot @$10 advertised for Sell on a lit exchange.  2. I try to lift the 1,000 by placing a limit order @10.  3. My order goes through some kind of order routing process. First, 3 orders get executed on a dark pool. Let's say I got a 50 lot filled (so available offer reduces to 950).  4. My order hits a lit exchange. I get a partial fill for 100 (offer shrinks to 850); but the offered size shrinks instead to 500. Or 0.  5. Now, in order to execute my trade, I will have to take a higher price than the original advertised liquidity.  My question (maybe you can answer this) is why did my original order size of 1,000 appear in smaller blocks? Is this because the order routing algorithm breaks up the size?  Or is it that market makers only post offers in small block sizes (e.g. 100) So even if the order book looked like:  100 @ 10  100 @ 10  100 @ 10  100 @ 10  100 @ 10  100 @ 10  All the way to 1,000 total -- as soon as the first 100 shares were lifted, the MM can immediately cancel the remainder of the advertised liquidity -- in practical terms making it impossible to execute large orders at an advertised price. "That argument is an argument for investing generally, not peer-to-peer lending per se, and the argument as phrased (""thus you should invest your money at a Peer-to-peer loan platform"") is a false dichotomy. That said, as soon as one is investing as opposed to just getting a small but guaranteed return, then risk comes into play.  In that sense, any savings account is fundamentally different from any investment, and, in that reading, the two shouldn't be compared as different approaches to ""investing"".  Peer-to-peer lending as an investment could be aptly compared with stock market investing, for one." This is supposed to be a comment, as this is anecdotal, but I can't post comments.  Also, this information relates to the UK.  I used to work in a Licensed Betting Office, or a bookies to use the informal word for it, and we had to deal with this issue all the time.   The pens didn't really work all that well as the forgers found out that dipping forged notes in fabric softener nullified the effects of the pens, and some of the copies were incredibly good. Generally, we would take two or three notes per week. "I read up on it and saw that the IRS can ""charge"" the loan provider on   interest even if the loan provider doesn't charge interest, but this   is normally mitigated by the 0% interest being considered a gift and   as long as it's below X amount your fine. Yes, this sums it up. X is the amount of the gift exemption, the $14K. However, you must differ between loan with no interest and loan with no paying back. With loan with no interest you're still giving a statutory gift of the IRS mandated minimum interest. However, the principal is expected to be repaid to you and you must show that this expectation is reasonably fulfilled. If you cannot (i.e.: you gave a ""loan"" with no intention of it being paid back), then the IRS will recharacterize the whole amount as the gift, and you'll be on the hook for gift tax for the amounts above the exemption. What defines a loan vs a gift in terms of the IRS, is it simply that   the loan will be paid back, or is it only considered a loan if a   promisary note is made? As I said - you must be able to show that the loan is indeed a loan, even if it is with no interest. I.e.: it is being repaid, it is treated as a loan by all parties, and is not an attempt to evade gift tax. Promissory note is not a must, but will definitely be helpful in showing that. But without the de-facto repayment of the loan, it will be hard to argue that it is not a gift, even if you have a promissory note. That means, you should make a loan in such a way that the borrower will (begin) repaying it reasonably soon, so that you can show payment schedule being followed and money moving back to you. Reasonably soon is not of course defined in a statute, so do consult with a EA/CPA licensed in your state on how to structure the loan so that it will not appear as an attempt to evade the gift tax. Are there any limits on how big a loan can be? No, but keep in mind that even with statutory interest charges (published by the IRS monthly, see the link), with large enough loan you can exceed the gift tax exemption. Also, keep in mind that interest is taxable income to you. Even if you gift it back (i.e.: the statutory interest)."