One of the things that makes me somewhat unique with Lending Club and Prosper is I not only give them good ratings, but I actively invest in both. While I don’t think either service is for a beginner investor, I do think anyone that’s considered an accredited investor by the SEC should include it in their asset allocation.
I’ve decided to merge my quarterly updates for Lending Club and Prosper in one post.
Peer-to-peer investing is slowly becoming mainstream. Lending Club will soon reach $1 Billion in investments in the next month or so. I believe P2P will become one of the main alternative asset classes in the next five years. I was also interviewed by Peter Renton, of Lending Academy, for an upcoming E-book on both P2P lenders. Since my last update, I’ve added an additional $2,000 to my P2P investments. This brings my grand total invested to $12,423.61.
Since my last update, I have added an additional $2,000 to my Lending Club account. I decided to add $1,000 of new money to Lending Club. I also just had another 5-year CD mature and decided to put some of it into Lending Club. I recently deposited the other $1,000, and the summary does not reflect the additional $1,000 yet.
My new goal with Lending Club is to eventually reach $20,000 – $25,000 in the next 1-2 years with deposits and interest. Based upon current returns, it would mean approximately $200 – $250/month in free cashflow. It is still a means to juice my taxable fixed income/CD returns and is just a small portion of our net worth.
My NAR has increased from 10.24% to 10.76%. This is because of the new loans (higher rate of return), and the newer filtering I am performing on investments. I now have 3 more charged off notes and have added 81 new loans since July. Since then I’ve also seen a large amount of loans (35) get paid off early. I suspect as the economy improves this number will increase.
At the moment, I have not added any more money to my Prosper account. I’ve been finding it hard to pick loans that meet my filter criteria. Therefore, it’s taken me longer to find investments, and from this delaying adding new money.
It appears Prosper notes are of a slightly lower credit grade to my liking. Granted this also means much possible higher returns than what Lending Club offers, but I am not sure how much to invest in the risiker notes. In the amount of new loans Prosper receives monthly, it is about 1 1/2 years behind Lending Club. As of today, I have no issue finding loans in Lending Club that meet my criteria. If you you see my previous Lending Club updates, you will find it took sometimes 1 – 2 months to fill $1,000 worth of new deposits. I will continue to push forward with Prosper as well, though at a much slower pace.