Author Topic: Peer to Peer Asset Allocation  (Read 1597 times)

Mr stuble

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Peer to Peer Asset Allocation
« on: October 20, 2016, 09:33:10 AM »
Hi All,

I am a UK based Mustachian! And while I love the blog the one downside for me is the lack of a like for like UK replacement for your Vanguard funds. There are Vanguard funds and similar over here, however most if not all require you to invest through a platform which in turn racks up the fees. As a result of this on the whole I have avoided investing in stocks.

I currently have something in the region of 33,500 in assets. Of which I intend to put 16,500 as the down payment on a flat I have agreed to buy (Completion date 4/Nov/2016). I am getting a great deal of 1.65% on the mortgage of 95,000 fixed for two years so I am not necessarily in a hurry to invest extra in to this. I can overpay up to 10% per year and this is probably what I will do leading up to the end of the fixed period.

Pretty normal right? The only problem is that currently my cash is in three seperate accounts 29,500 is in a current account paying 0.025% (I know I am a sucka). I then have 3,000 in a Zopa Plus account which is projected to earn me 6.7% a year, and finally 1,000 in a Fixed one year Ratesetter account paying 3% (Plus a 100 bonus if I stay with them for a year so 13%).

As a result of the extra crappy rates and falling value of the pound (Making buying FTSE 100 stocks very expensive) would it really be such a stupid decision to invest a much larger portion of my money into Zopa? say 10k all together?

This would give me a much higher risk I understand and I have thought about spreading the money through a couple of p2p companies, however for a bit of perspective, Zopa is the biggest peer to peer lender in the UK by some distance (They are bigger than the rest of the market combined) they also have quite a good record of paying investors back.

I also like the idea that the money can be accessed as and when I need it. What are your thoughts? Please note that In my head i have made up my mind, I know the risk is higher than with stocks but I can't think of a better idea for my money in the short term (The next five years). If you can or if you have had a good experience using another P2P lender I would be interested to know your thoughts!

Thanks for reading everyone!