Comments on: Lending Club – 10 Months After with 5 Figures Invested http://moneyning.com/review/lending-club-10-months-after-with-5-figures-invested/ A personal finance blog where we share insights on carefully saving money, investing, frugal living, coupons, promo codes because the little things matter in achieving financial freedom! Fri, 25 May 2012 04:39:22 +0000 hourly 1 http://wordpress.org/?v=3.3.2 By: Randy Katz http://moneyning.com/review/lending-club-10-months-after-with-5-figures-invested/comment-page-1/#comment-54874 Randy Katz Mon, 24 Oct 2011 03:40:03 +0000 http://moneyning.com/?p=4474#comment-54874 Let's develop a dialogue and see where it goes from there, please contact me through my blog which should be linked to my name (above). Let’s develop a dialogue and see where it goes from there, please contact me through my blog which should be linked to my name (above).

]]> By: GIC http://moneyning.com/review/lending-club-10-months-after-with-5-figures-invested/comment-page-1/#comment-54873 GIC Mon, 24 Oct 2011 03:30:59 +0000 http://moneyning.com/?p=4474#comment-54873 Hi, I was not expecting you to replace the whole note. everything over $5K is reasonable. I am trying to reach other investors as I am working on establishing positive review and history of repayments. Similar to returning borrower at LC. Actually this is very safe investment as the property is valued to $400K and already producing cashflow, and it can also be backed up by property itself. So if I default you would even make more money... much safer and predictable then LC. Right now I owe to one person $175K and he is getting regular payments form me, and he is ready to borrow me again if I want to get another property as I am great borrower. I am trying to get a pool of investors like him so that is why I offer other people to get into my deals. Hi,

I was not expecting you to replace the whole note. everything over $5K is reasonable. I am trying to reach other investors as I am working on establishing positive review and history of repayments. Similar to returning borrower at LC. Actually this is very safe investment as the property is valued to $400K and already producing cashflow, and it can also be backed up by property itself. So if I default you would even make more money… much safer and predictable then LC.
Right now I owe to one person $175K and he is getting regular payments form me, and he is ready to borrow me again if I want to get another property as I am great borrower. I am trying to get a pool of investors like him so that is why I offer other people to get into my deals.

]]> By: Randy Katz http://moneyning.com/review/lending-club-10-months-after-with-5-figures-invested/comment-page-1/#comment-54755 Randy Katz Sun, 23 Oct 2011 10:13:29 +0000 http://moneyning.com/?p=4474#comment-54755 Hi, thanks but no thanks, not up to putting that much into a single note at this time. Also, it would not be much different then lendingclub except principle is much much higher and all the risk is based on one person's performance (well actually that person and their tenants). Hi, thanks but no thanks, not up to putting that much into a single note at this time. Also, it would not be much
different then lendingclub except principle is much much higher and all the risk is based on one person’s performance (well actually that person and their tenants).

]]> By: GIC http://moneyning.com/review/lending-club-10-months-after-with-5-figures-invested/comment-page-1/#comment-54726 GIC Sun, 23 Oct 2011 06:16:30 +0000 http://moneyning.com/?p=4474#comment-54726 If you are looking to diversify, I have a $175K private note on my rental property that I am paying %10 so if you want to make %8 on safe investment with already establish cash flow. I am looking to lower my monthly payments. If you are looking to diversify, I have a $175K private note on my rental property that I am paying %10 so if you want to make %8 on safe investment with already establish cash flow. I am looking to lower my monthly payments.

]]> By: Randy Katz http://moneyning.com/review/lending-club-10-months-after-with-5-figures-invested/comment-page-1/#comment-54674 Randy Katz Sat, 22 Oct 2011 22:55:54 +0000 http://moneyning.com/?p=4474#comment-54674 I just wanted to extend my thinking in my example above. I am not sure if my approach is similar or opposite others. I have heard some that pull out 80% and reinvest 20% which would make the above have a cash out value of around $64/mo and a reinvest growth of $16/mo which would be very slow growth unless more funds were invested from other sources continually. In my example about with reinvesting 80% it should be noted that after 12 months the $16/mo would grow to around $23/mo if returns (profit) remained similar. I always am thinking about that figure against the total base investment and against certain monthly expenses. So if my auto payment were $500/mo I would think what would I need to have as a base in lendingclub in order to pull $500/mo out if I were pulling out 20% still, well it would seem to need to be around $310K invested! I just wanted to extend my thinking in my example above. I am not sure if my approach is similar or opposite others. I have heard some that pull out 80% and reinvest 20% which would make the above have a cash out value of around $64/mo and a reinvest growth of $16/mo which would be very slow growth unless more funds were invested from other sources continually. In my example about with reinvesting 80% it should be noted that after 12 months the $16/mo would grow to around $23/mo if returns (profit) remained similar. I always am thinking about that figure against the total base investment and against certain monthly expenses. So if my auto payment were $500/mo I would think what would I need to have as a base in lendingclub in order to pull $500/mo out if I were pulling out 20% still, well it would seem to need to be around $310K invested!

]]> By: Randy Katz http://moneyning.com/review/lending-club-10-months-after-with-5-figures-invested/comment-page-1/#comment-54669 Randy Katz Sat, 22 Oct 2011 22:26:49 +0000 http://moneyning.com/?p=4474#comment-54669 Hi, it has been a while and I have gathered experience with lendingclub.com and have seen a) how cash flow works with a larger amount of notes b) how defaults work! and c) how the overall biz of this sort of lending goes. The main issue I have is that it is quite a boring business and I am always thinking about what the alternative would be. So at this point I have seen slightly higher then average returns using a selection criteria that I am comfortable with, however, I am never investing more then $25 in each note as I have seen a few default and they are very hard to predict! When I say it is a boring business, take the example of $10K invested, $25/note, so now you have 400 notes. And let's say your return is average, around 9.68%, so your cash flow above base investment (or interest received) is around $81/mo. And let's say you reinvest everything except you retain (hold back) 20% of "profit". So you are pocketing around $16/mo and able to buy 2 1/2 new notes per month with the 80% reinvested. So now that $16/mo does not seem like much at all, however, as your loaned base increases it also increases, but quite slowly unless you put other moneys into the pool periodically. And you must set your notification criteria so you see when a reinvestment needs to happen, the notification emails are pretty good in my opinion there could be a few more granular controls but overall they are fine, not much is lost in the flux (I said a potential of 0.75/mo on a $10K investment above it could be a bit more or a bit less depending on what you do, once a week/month or immediately after receiving the report). The largest question I have after doing this for a while is this: What are my other options for growth on my cash? Especially what are my other options for growth on cash in such a diversified manner? I only came up with a few others, including buying stock in corporations, I wish there were more options! Hi, it has been a while and I have gathered experience with lendingclub.com and have seen a) how cash flow works with a larger amount of notes b) how defaults work! and c) how the overall biz of this sort of lending goes. The main issue I have is that it is quite a boring business and I am always thinking about what the alternative would be. So at this point I have seen slightly higher then average returns using a selection criteria that I am comfortable with, however, I am never investing more then $25 in each note as I have seen a few default and they are very hard to predict! When I say it is a boring business, take the example of $10K invested, $25/note, so now you have 400 notes. And let’s say your return is average, around 9.68%, so your cash flow above base investment (or interest received) is around $81/mo. And let’s say you reinvest everything except you retain (hold back) 20% of “profit”. So you are pocketing around $16/mo and able to buy 2 1/2 new notes per month with the 80% reinvested. So now that $16/mo does not seem like much at all, however, as your loaned base increases it also increases, but quite slowly unless you put other moneys into the pool periodically. And you must set your notification criteria so you see when a reinvestment needs to happen, the notification emails are pretty good in my opinion there could be a few more granular controls but overall they are fine, not much is lost in the flux (I said a potential of 0.75/mo on a $10K investment above it could be a bit more or a bit less depending on what you do, once a week/month or immediately after receiving the report). The largest question I have after doing this for a while is this: What are my other options for growth on my cash? Especially what are my other options for growth on cash in such a diversified manner? I only came up with a few others, including buying stock in corporations, I wish there were more options!

]]> By: John Doe. http://moneyning.com/review/lending-club-10-months-after-with-5-figures-invested/comment-page-1/#comment-54644 John Doe. Sat, 22 Oct 2011 18:00:57 +0000 http://moneyning.com/?p=4474#comment-54644 I have accounts with lending club totaling $137 K. This amount was ramped up to now - starting out around $75K. I've been investing with them for almost 2 years now. Initially, I invested using the automated features they have to choose notes. So 1/2 of the $137K was done that way. The other half I used my own criteria. The amounts are well diversifed over all A-G interest rate classifications. I'm now typically investing $300 per note. Daily, I login in to all accounts and re-invest any moneny sitting idle. One criteria I use is to look for notes that just got listed recently & look at where the smart money is flowing. So that means that 1/3 or more of a candidate note is already allocated by investers. I then apply my other criteria. This process is quick and takes only 10 mins daily. Im investing in 3 and 5 year notes although the 5 year ones make me more nervous but there is limited opportunity with all the competition. My rate of return for everything is 9.5% which is right in the middle of the average. My advice is to try to develop your own methodology rather than use LC's automatic investing features. My returns increased doing this. I also suggest not to invest in A (top quality) loans. The return is just not enough inherent to the risk. LC has proven to hold up well in the 2007 recession. The biggest risk I can see is that of a depression and very high unemployment. If that happens I will try to sell all notes (all 1000 of them) ASAP at a slight discount maybe 1% or less before things start to get really grt bad. Of course, everyone else may sell too so that is the major risk. Other advise is to invest in only 3 year notes. This is the equvillant to a short term corporate bond except riskier in my case. The idea is if the economy goes to hell you will be liquid in cash in only 3 years. The reason Im not doing this is that its harder to invest this large amount of money in only 3 year notes. I wish they never offered the 5 years-too much risk! They do pay a premium for investing in the 5 yr notes of about 2-3% over the 5 years-but your paying for it in risk. Overall, I recommend LC. I've found their customer service to be good when I have a question. People seem to be overly worried about defaults. According to LC I think only about 5% of a defaulted loan on average is ever recovered. The system offsets the defaults by charging interest. My investment average % is about 14%. After LC's fee of 1% and losing 3% to defaults I hope to end up with 10% and so far Im near that. So dont worry about defaults. DIVERSIFY to offset them. So if you have $10K you can put it in 400 loans. I have accounts with lending club totaling $137 K. This amount was ramped up to now – starting out around $75K.
I’ve been investing with them for almost 2 years now. Initially, I invested using the automated features they have to choose notes. So 1/2 of the $137K was done that way. The other half I used my own criteria. The amounts are well diversifed over all A-G interest rate classifications. I’m now typically investing $300 per note. Daily, I login in to all accounts and re-invest any moneny sitting idle. One criteria I use is to look for notes that just got listed recently & look at where the smart money is flowing. So that means that 1/3 or more of a candidate note is already allocated by investers. I then apply my other criteria. This process is quick and takes only 10 mins daily. Im investing in 3 and 5 year notes although the 5 year ones make me more nervous but there is limited opportunity with all the competition. My rate of return for everything is 9.5% which is right in the middle of the average.
My advice is to try to develop your own methodology rather than use LC’s automatic investing features. My returns increased doing this. I also suggest not to invest in A (top quality) loans. The return is just not enough inherent to the risk. LC has proven to hold up well in the 2007 recession. The biggest risk I can see is that of a depression and very high unemployment. If that happens I will try to sell all notes (all 1000 of them) ASAP at a slight discount maybe 1% or less before things start to get really grt bad. Of course, everyone else may sell too so that is the major risk. Other advise is to invest in only 3 year notes. This is the equvillant to a short term corporate bond except riskier in my case. The idea is if the economy goes to hell you will be liquid in cash in only 3 years. The reason Im not doing this is that its harder to invest this large amount of money in only 3 year notes. I wish they never offered the 5 years-too much risk! They do pay a premium for investing in the 5 yr notes of about 2-3% over the 5 years-but your paying for it in risk.

Overall, I recommend LC. I’ve found their customer service to be good when I have a question. People seem to be overly worried about defaults. According to LC I think only about 5% of a defaulted loan on average is ever recovered. The system offsets the defaults by charging interest. My investment average % is about 14%. After LC’s fee of 1% and losing 3% to defaults I hope to end up with 10% and so far Im near that. So dont worry about defaults. DIVERSIFY to offset them. So if you have $10K you can put it in 400 loans.

]]> By: Randy Katz http://moneyning.com/review/lending-club-10-months-after-with-5-figures-invested/comment-page-1/#comment-37679 Randy Katz Mon, 17 Jan 2011 09:53:33 +0000 http://moneyning.com/?p=4474#comment-37679 @phlexicon - you do not appear to be one to actually invest, perhaps time to take action. Thank you for adjusting your numbers back towards mine. I was also eyeballing the figures, but I have a working template. @phlexicon – you do not appear to be one to actually invest, perhaps time to take action. Thank you for adjusting your numbers back towards mine. I was also eyeballing the figures, but I have a working template.

]]> By: phlexicon http://moneyning.com/review/lending-club-10-months-after-with-5-figures-invested/comment-page-1/#comment-37678 phlexicon Mon, 17 Jan 2011 09:03:40 +0000 http://moneyning.com/?p=4474#comment-37678 and now i stopped working on th back of a napkin and actually ran th #s for my above example: ~1/5 of 1 % loss or ~ $5/mo definitely not worth worrying about. th float is insignificant i stand corrected and now i stopped working on th back of a napkin and actually ran th #s for my above example: ~1/5 of 1 % loss or ~ $5/mo
definitely not worth worrying about. th float is insignificant
i stand corrected

]]> By: phlexicon http://moneyning.com/review/lending-club-10-months-after-with-5-figures-invested/comment-page-1/#comment-37676 phlexicon Mon, 17 Jan 2011 08:42:26 +0000 http://moneyning.com/?p=4474#comment-37676 oops, got in a hurry there. i forgot to divide by 12 thats 375/yr or just 31/mo so if your time is worth more or less than $6.25/hr be less or more active :-) oops, got in a hurry there.
i forgot to divide by 12
thats 375/yr or just 31/mo
so if your time is worth more or less than $6.25/hr be less or more active :-)

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