Do you invest in P2P lending?
If yes, how much have you interested in it? Which company do you use? Do you feel safe about your investment? I have a little over $13k in Lending Club and gets $7-8% return, based on their calculations with projected/adjusted defaults and charge off rates. The actual return has been over 10%. It is been pretty stress free and close to 0 effort. I haven't bothered with opening a IRA account with them. I plan on continuing to invest about $100/month. Curious to know how others see the risk/reward about P2P lending.
Currently have 20% of investable assets in P2P, yielding just over 12% with no defaults/loss yet. I expect loss at some point, but am already well covered by the return. Surplus interest income is being funneled into more "traditional" investments, so said 20% investment will tend towards 15% over the next 12-18 months
No default? Maybe you haven't been doing this for too long? It seems to be impossible to get higher interest rate without lending to the riskier borrowers, which have higher default rate. I am happy with my P2P investment right now, as I do automatic investment base on my loan filter. It is virtually no work and pretty decent return. I just worry about the likely higher default rate during inevitable economic downturns.
It's a fair question... I've been in the market for 6yrs, the last 4 of which have a significant amount of capital. I'm sure it's a large proportion of luck, but I stick to asset-backed loans (property, jewelry etc.) at a 70% LTV, with professional valuations attached and I somewhat scrutinise the borrowers... any whiff of issue and I liquidate my position with that borrower. I'm sure I will hit some pain, but makin' hay when the sun is shining, and in the meantime I'm getting an increasing cover on the initial capital. Good luck to you also... the automatic/no work side will definitely increase your risk, but I'm sure you've calculated for that π
Cross posting in case interested in offer. [Blind] Check out this post! P2P lending 40% APR, immediate medical need - lending club (Misc.) https://us.teamblind.com/s/qvNrO6pz
I think P2P is a good way to diversify but it gets hit hard by tax imo. Long term capital gains or real estate (or REI funds) have preferred tax treatment.
I have VNQ and SCHH investment. I like their dividend but I am a bit worried about retail real estate been hammered by Amazon. I went into them too high too. Currently at about 5% loss. If things don't keep on getting worse for retail and interest rate don't go too high too fast, they would probably come back by their dividend alone over time.