I'm going to try and start a new series following my Lending Club account. I have been happy with my luck on this account. So far, everything has been coming up roses and I like it a lot.
One thing to keep in mind is the reality of eventual charge-offs where a borrower cannot pay the loan and I would lose any unpaid principle. Like I mentioned, I remain lucky again this month and below is the summary for November.
Summary
At statement-time my account stood at $1351.65 with 53 notes funding loans. You'll see that I was late in grabbing a screenshot and one loan did go into grace period. Hopefully that is as far as it goes and the borrower makes payment. I made $200 fresh investment this month and gained $12.25 in interest.
53 funded notes is too few and I need to strive to make it to a minimum of 100 notes. This helps with diversification. I also need to bring my account total up to $2500, this will unlock my access to the trading platform through Folio. Once in Folio, I can offer up notes that are under-performing for sale and cut my losses.
Return
My adjusted net annualized return (ANAR) stands at 13.16%. I use the default formula that LC offers, because I'm not smart enough (or ambitious enough) to gather up and report XIRR. I am fully expecting this number to fall somewhat as my notes age, but for now the numbers are nice to see.
The above graph provided by LC shows my return performance as compared to others on the platform. This graph shows comparison to others that have at least 100 notes. So again, my numbers are not true comparisons but it is nice to see.
Weight of Notes
My notes have been weighted towards mostly C and D interest rates. These notes carry higher interest rates, but with higher rates come higher risks.
Conclusion
LC has been a good investment for me and I hope to continue with my lucky streak. How about you?Do you invest into P2P lending or similar platforms? What kind of strategy to you employ?
A good start, and a wide range of diversification across the loan grades. Keep on working and building the account, and it will really start to turn over on itself. My P2P assets are now about $18k, so they are generating a good bit of interest income and are settling into their long-term expected rates as they've aged a good bit.
ReplyDeleteKeep on building that portfolio, you'll see some solid returns 7-10% over the long term.
My initial goal was to settle down in the 8-10% range. I would be very happy with that kind of return. Recently, I've been reading up on your own results and filters. Looks really good over there.
DeleteI know many of the DGI bloggers also use LC or Prosper to supplement their passive income stream and with some pretty decent success. To date, I still have not jumped onto that train even though I can see its growing popularity and penetration into the mainstream. Seem like you are doing OK with LC and have a pretty nice annualized return rate. Curious to see how this works out going forward. Thanks for sharing.
ReplyDeleteLike I posted above, I've been happy with my results so far, but am totally expecting a transition in returns as the months and years go forward. I believe this to be a good mid-range return investment vehicle in the long run.
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