Author Topic: How to do Lending Club right?  (Read 4932 times)

RyanHesson

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How to do Lending Club right?
« on: August 01, 2014, 11:35:55 AM »
I was committing some money to forex, which looks to have been a failure, and I'll probably end this experiment. I am looking to probably 20K or so from non-retirement accounts, and about 15K from retirement accounts. Is lending club still a good bet? What's the best way to set things up to make money there?

Additionally, looking into it, it looked like I could trade notes. If I get the "good" notes when they appear before the automatic thing buys them all up, I can flip them for a profit. Is that true? How can I tell what a good note is?

matchewed

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Re: How to do Lending Club right?
« Reply #1 on: August 01, 2014, 12:01:18 PM »
No offense but the fact that you don't know how to tell what a good note is means you shouldn't probably invest in Lending Club. Understanding the investments is a key step in investing.

With that being said you are under the impression that you can somehow be faster than an automated computer program? Or even the fact that Lending Club probably offers the prime stuff to institutions first...

I'd stick with the foundations for investing and then do research.

*Edit* And didn't you learn your lesson from forex? Quick money is not quick and often burns you.

RyanHesson

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Re: How to do Lending Club right?
« Reply #2 on: August 01, 2014, 12:14:32 PM »
As for buying them before the auto buyers take them up, I was under the impression that the automated things wait a couple of hours after a note has been posted.

matchewed

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Re: How to do Lending Club right?
« Reply #3 on: August 01, 2014, 12:24:50 PM »
Why would they wait?

chasesfish

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Re: How to do Lending Club right?
« Reply #4 on: August 01, 2014, 12:57:31 PM »
Lending club is interesting and has been decent to me.  My portfolio runs in the low 7% range after being with them for 3+ years.

arebelspy

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Re: How to do Lending Club right?
« Reply #5 on: August 26, 2014, 08:05:40 AM »
It sounds like you want to gamble.  LendingClub is not the optimal platform for that.

The secondary market isn't as liquid as you're thinking, and you're not going to be able to find a "good" note before it's funded to flip.

I think you need to read up on investing vs. speculating.

Lending club is interesting and has been decent to me.  My portfolio runs in the low 7% range after being with them for 3+ years.

Sounds like you have all of the downside of investing in real businesses (i.e. could lose it all), but none of the upside (i.e. there's no chance your money doubles, and if inflation hits, you have no way to keep up).
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beltim

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Re: How to do Lending Club right?
« Reply #6 on: August 26, 2014, 08:18:57 AM »
Lending club is interesting and has been decent to me.  My portfolio runs in the low 7% range after being with them for 3+ years.

Sounds like you have all of the downside of investing in real businesses (i.e. could lose it all), but none of the upside (i.e. there's no chance your money doubles, and if inflation hits, you have no way to keep up).

Just like a bond!

usmarine1975

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Re: How to do Lending Club right?
« Reply #7 on: August 26, 2014, 08:42:31 AM »
I jumped into the Lending Club when it became available in my State.  I have to buy notes on the secondary market so I don't get the pickings from the beginning.  For that reason I only put a very small deposit into my account.  Currently I sit at just under 20% according to the Lending Club.  My own calculations put's my return at 11.55 % to date.

Currently I have 1 loan that is in the grace period.  This has happened before and I haven't had any go into non payment or that have been charged off.  I opened my account (I just looked) a year ago.  Again I put a very small amount in to try it out.  You might even laugh if I told you how little.  But I figured it would be better to get a handle on it before adding too much of my liquid assets and taking that risk. 

My take on it so far is that it has been a good steady stream of income on the amount that I have invested.  As always the debate is should I put more in.  I may in the future at this point I have in it what I am comfortable with. 

I agree with others you need to understand what you are doing before you commit large sums of money. 

I tried the Forex game a number of years ago similarly to the lending club put a little money in to see what would happen.  I found it to be a gambling venture in which most trades executed not in the timing that I would have preferred.  It's possible I didn't know what I was doing but the set up didn't work for me and interestingly enough you have to fill out paperwork to get your money back from Forex it's not a simple online withdrawal request (at least at that time)  And I later found that they charged you for having money sit idle.  I lost the small amount that I put into it and let the account disappear from my mind. 

Warren Buffet's investing philosophy is to only buy what he understands.


Ryan_8099

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Re: How to do Lending Club right?
« Reply #8 on: August 26, 2014, 09:05:57 AM »
As for buying them before the auto buyers take them up, I was under the impression that the automated things wait a couple of hours after a note has been posted.

Far from the truth. There are many tools that execute orders right at release time. 

As far as the secondary market, there are people who are able to make a profit by flipping notes. There are also buy and hold strategies.  With that being said, it is time consuming and you need to have an understanding of the secondary market.  Things change often.

P2P Lending in my opinion has a pretty big learning curve to start out with. It isn't hard, but it just takes time to understand the investments you make and how to maximize your returns (or minimize your risk). If you are looking for a completely hands off method, you can always go through a fund (min 25k)  However, there is plenty of free information out there that you can do everything yourself.  There are a lot of considerations to make too like liquidity, tax efficiency among others.  I've been very happy with my returns so far and have even opened an account with Prosper.  I'd recommend to start small and grow your account as you feel more comfortable.

Anus Hurricane

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Re: How to do Lending Club right?
« Reply #9 on: December 25, 2014, 02:01:20 PM »
Where I live it says I need $70,000 net worth to lend.  Have others encountered this?  Is it an issue?

chasesfish

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Re: How to do Lending Club right?
« Reply #10 on: December 25, 2014, 04:51:46 PM »

Lending club is interesting and has been decent to me.  My portfolio runs in the low 7% range after being with them for 3+ years.

Sounds like you have all of the downside of investing in real businesses (i.e. could lose it all), but none of the upside (i.e. there's no chance your money doubles, and if inflation hits, you have no way to keep up).

Just like a bond!

Yes, like a bond but less liquid.  You have to take your individual notes to market and figure out the price.  I recently moved to Texas and now have to let my account unwind.  The almighty state government doesn't think this is an acceptable investment