Dave Ramsey is one of the most famous personal finance educators in the country. He has written several books, has a nationally syndicated TV and radio show, a newspaper column, and conducts what are billed as the largest live events in the nation on personal finance. He has an extremely dedicated following of people who listen closely to his advice.
So I was curious when I noticed on the weekend this newspaper column where someone asked him about peer to peer lending as an investment. I didn’t think he would be all that positive about it but I assumed he would at least provide a reasoned answer. I was wrong. Here is an excerpt of his advice:
Sorry, but as an investment strategy I think this kind of thing is pretty stupid. Most of these kinds of loans are not collateralized, which means they’re not checked out. I mean, would you loan someone money without really getting into their business and knowing something about them first?