Rolling P2P Streams

Relying on P2P income streams alone is unlikely to make you rich unless you have a big lump sum of cash to begin with. But it's a nice additional way to make extra money with no real work. Consider it a 'background task' to leave running while you focus on other things. You can just set up the accounts and leave them to build, and slowly create lots of little 'pots' of growing investments. For those of you who get bored easily, it makes things a bit more interesting.

I've been using P2P sites such as Ratesetter, Lend Invest and Funding Circle for several years now (note: some of these platforms may be temporarily refusing new accounts during the coronavirus epidemic, so be patient). There are far more platforms out there compared to when I first started, so it's worth hunting around for the best offers.

Bear in mind that the less established platforms may be a bit riskier than those with a proven track record. And not all of them have a security fund to back up investments if (like we saw recently) the economy takes a hit. So do a bit of research before you hand over your money. I only link to platforms that myself and my family have personally used for a while.

How it works

Here is a badly drawn diagram highlighting the basic process...

To begin with, you save up a lump sum to invest. Obviously, the bigger the starting lump sum, the more interest you will earn, and the faster the process will be. But I began with just £1000.

Pick a platform to invest on. I chose Ratesetter when I first started out. Mainly because it was one of the only P2P platforms out there.

Now for the hardest bit: wait for the interest to build up on that £1000 investment. This can take a while. Trust me when I say you will get bored waiting for it to build up and will start chipping in an extra £10 to £50 a month here and there. In the meantime, go away and work on one of your other less passive income streams.

Once you finally have a decent amount of interest (£500, as an example), take out the initial £1000 plus whatever extra you've added over time and open another P2P account elsewhere. Leave the £500 in the Ratesetter account to continue accumulating interest and repeat the process ad infinitum with different platforms until you have multiple passive P2P income streams.

If you've ever played the game Cookie Clicker, that highlights the process fairly well! You'll end up with a field of growing asset shoots that will slowly grow into trees.