On Sunday, 18 September 2016 at 12:39:25 UTC, Andrei Alexandrescu wrote:

Thanks all for answering! Well there is a relatively low-risk option to make some 5%-7% annually by investing in marketplace lending, see https://lendingclub.com/. (Individuals may do the same, too, btw - look into it!) I've been using them since 2013 with moderate amounts. Right now the portfolio's return rate is 5.06% - not to sneeze at. The issue is liquidity, i.e. your principal and interest are returned on a monthly basis over 3-5 years. The monthly schedule is actually nice for the Foundation because it matches the way operations are paid for.


I would advise against investing the whole sum with the Lending Club (some smaller amount, say 5-25%, I have less of an issue with). 5-7% is what people earn investing in dollar-denominated sovereign bonds from Emerging Markets. That's the kind of risk your taking on. You think it's low risk because you don't see the risk: unemployment is low and has been falling since 2013, so there are few defaults. What happens when there is a recession? There will be higher defaults, slower repayments. And you can't exit the position because you've locked up the investment for 3-5 years.


Regarding the stock market, IB is quite attractive, and has an incredibly low margin rate.

Frankly, this comment makes me cringe. Margin rates should not influence your decision in the slightest.

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